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Gulf is our future… but maybe not the single currency

Gulf is our future… but maybe not the single currency

The UAE Economy Minister says the country still hopes to join a unified Gulf currency ‘one day.’ He is right that the Gulf is our future, but could be wrong about the currency.

December 5, 2010 2:48 by

Meanwhile, as well as his currency quote, Al Mansouri also said ahead of the GCC summit this week: “We in the Emirates believe our destiny is in the common Gulf region, whether economically, politically or socially.”

Now that he has got right. The countries of the GCC have far more similarities than they do differences, and it is in every country’s interest to work together to foster economic and social development. And by working together, goals of stability and security throughout the region are more likely to be achieved.

And of course, there’s the not so small matter of trade. Inter GCC trade amounted to $76 billion in 2009 according to Emirates 24-7, a huge leap from the $65 billion in 2008 (and the $6 billion in 1983). The GCC’s combined GDP was a whopping $1,076 billion in 2008, and is expected to be $1,010 billion this year. Inter GCC trade soared by 40 percent in 2009.

And because of these numbers, aside from the single currency (in fact, as a prelude to it), there are other areas of economic cooperation afoot. Emirates 24-7 reports that representatives of the Gulf countries will discuss allowing local companies to operate in every GCC market when they meet this week. Such a move would be a big step on the way to a common market, and could also lead to customs union, according to the paper.

“A recommendation will be presented to the GCC heads of state at their upcoming summit in Abu Dhabi to allow local companies to open branches in all member countries on part of national firms in each member,” GCC Secretary General Abdul Rahman Al Atiyya said in statements last week. “There is no doubt this will largely expand the GCC common market and facilitate the movement of goods and services among member states.”

A closer GCC is without doubt a persuasive argument; that its interests will be best served by a single currency is less convincing.

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