'GCC should focus on developing economies'
KUWAIT CITY: Former minister of Commerce and Industry Yousuf Al-Zalzalah is not very optimistic about the common GCC currency, which was to be adopted by all GCC member countries by 2010, reports Al-Watan daily. Indicating that the region is not yet prepared for a common currency, Al-Zalzalah says the project should be postponed a little further. "A common currency will play a very important role but it will have adverse affects in the regional market until 2020 and only a very high level of cooperation between GCC members can guarantee the success of such a project," he added. The economic scenario is more or less similar in the Gulf and even the style of governance is similar, which are good reasons for establishing a common currency but the region will reel under its negative impacts like shortsightedness and failure to achieve goals, he noted.
"Though GCC Council has existed for many years it did very little substantial work compared to other international government unions like European Union (EU)," he added. According to the former minister, GCC Council has a penchant for putting the wrong man in the right place, which is very common in GCC governments too as many officials nominated for top government posts do not have the required qualifications and expertise needed for the post. Speaking about advantages of GCC over other unions, he said GCC countries share a common language and culture and the religion unites them more than any other union like EU. Criticizing the proposal to peg the common GCC currency to US Dollar, Al-Zalzalah said, "earlier Kuwaiti dinar was linked to three currencies but later it was pegged only to US dollar and it reflected badly on the national economy."
Also the current value of GCC currencies vary from nation to nation due to the government and economy of the member state and hence I feel the region is not mature enough to adopt a common currency, he stated. Speaking on the issue, MP Waleed Al-Tabtabaei says since GCC countries have a lot in common, including common embassies, defense and foreign policies a common currency should be adopted even if it has ill-effects in the beginning.
Unite
According to Al-Tabtabaei, a common currency will unite all GCC countries and will make them a stronger union, both in terms of defense and economically. But he too rejected the proposal of pegging the common currency to US dollar."In spite of having different languages and cultures, EU has become a strong union because of the common currency," he noted. Chairman of Parliament Committee for Finance and Economic Affairs MP Ahmed Baqer said delay in taking decisions, bureaucracy and 'routine' system in GCC countries hinder the project of adopting a common currency. Stating that economies should be sound enough to qualify for a common currency system, Baqer said, "GCC countries should focus on developing their economies and stop depending entirely on oil revenues."
According to the MP, GCC governments should work on common social service system, justice and laws before jumping for a common currency. Speaking on the issue, Vice Dean of Consultation and Training Department at the Administration Science Faculty in Kuwait University Dr Adel Al-Waqyan said exchange market and money transfers will suffer due to a common currency. He added that GCC governments should work on removing economic obstacles in the region before going for a common currency. Calling for a deeper study on the matter, Al-Waqyan said GCC governments should work on their national budgets and cut off all unnecessary expenditures. However, member of Kuwait Economic Society Dr Bahul Deen Al-Saleem is of the opinion that a common currency will boost the economic strength of GCC countries in the long-term.
© Arab Times 2007
