State of the union dated but insightful

Review: Currency Union and Exchange Rate Issues, edited by Ronald MacDonald and Abdulrazak al Faris

The possibility of a Gulf currency union has been one of the most significant economic debates in recent years.

This new collection of essays offers an impressive array of writers who provide a thorough rundown of what's involved for any country considering embarking on such an ambitious project.

However, it may be a bit much for the casual reader. Peppered with complex formulas and exchange rate tables, the book is aimed at economists and finance professionals.

Editors Ronald MacDonald, the professor of political economy at the University of Glasgow, and Abdulrazak al Faris, the chief economist and chief executive of research at Dubai Economic Council, have assembled a variety of writers from academia and public life.

From Willem Buiter, the chief economist of Citibank, to Warren Coats, the director of the Cayman Islands Monetary Authority, their experience gives the book gravitas.

But there are problems, too.

Some of the content is outdated. The introduction starts with the sentence: "The GCC - the United Arab Emirates, the State of Bahrain, the Kingdom of Saudi Arabia, the Sultanate of Oman, the State of Qatar and the State of Kuwait - has an objective … the formation of a monetary union in 2010."

While that point may have been accurate at the time of writing, it is no longer the case.

Both the UAE and Oman have since pulled out of the plans, while the original deadline of last year has come and gone.

Nonetheless, the GCC states still involved appear committed so the overall thrust remains valid.

Disappointingly, the essay on the European experience was written before the outbreak of the sovereign debt crisis in the euro zone.

Even so, this is an insightful analysis on a topic that will continue to gain importance in the region.

The Quote: "The credibility of the US dollar peg has been greatly undermined by recent events and especially given the asymmetric nature of the US and UAE economies." Ronald McDonald, professor of political economy at the University of Glasgow

tarnold@thenational.ae