x Abu Dhabi, UAESaturday 22 July 2017

Monetary union key to annual GCC meeting

Gulf monetary union, the inauguration of a regional power grid and a planned rail network are among issues to be discussed at a summit starting today.

KUWAIT CITY // Gulf monetary union, the inauguration of a regional power grid and a planned rail network are among issues to be discussed at a summit starting today as regional leaders seek to boost economic co-operation. The rulers of all six GCC states - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE - are expected to attend the 30th annual two-day GCC summit to discuss security and economics. Political issues high on the agenda will include the fighting between Saudi Arabia and Houthi rebels near the Yemeni border and the possible threat of a nuclear-armed Iran.

However, the region's economists will be watching developments relating to the planned common currency. A GCC monetary union pact signed earlier this year could be launched at the summit and lead to the establishment of a central bank. The common currency suffered a setback earlier this year when the UAE became the second country, along with Oman, to pull out. The remaining four GCC countries might use the meetings to try and persuade the outcasts back into the fold.

Despite increasing scepticism from economists, officials from the group have said the single currency would launch next year. "We hope that the Kuwaiti summit will see the launch of GCC monetary union, paving the way for a common Gulf currency." said Sheikh Sabah al Jaber al Ahmed al Sabah, Kuwait's emir, yesterday. Even if the monetary union pact is launched, it could be a while before GCC notes and coins are in the streets. Kuwait's minister of foreign affairs said last week the establishment of a unified currency could still take another 10 years.

The summit will also discuss major projects designed to increase co-operation between GCC members, including the establishment of a railway authority to build a rail network between major Gulf cities. Established in 1981 as a loose economic and political bloc, the GCC has often been criticised for its slow pace of economic integration and delays in key projects. "There have been great economic achievements, but ambitions are far greater," the Saudi economist and former GCC official Abdullah al Kuwaiz said.

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