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The agenda of the GCC summit, which begins on Monday, will revolve around the money matters in Dubai and the creation of a new currency.
December 13, 2009 1:54 by Aarti Nagraj
The main agenda for the Gulf Cooperation Council (GCC) summit held in Kuwait on Monday is obvious; Dubai’s recent debt problems have been making news headlines across the world. The Dubai government announced a six month debt-standstill for Dubai World last month, and its property subsidiary Nakheel, has a $3.52 billion Islamic bond maturing on Monday.
Regional stock markets fell heavily after the announcement, and analysts have warned that investors may be spooked off from the region because of the Dubai’s financial issues.
But many of the GCC states have said that the impact of Dubai crisis is minimal; Sheikh Salem Abdulaziz al-Sabah, Kuwait’s Central Bank governor said earlier this month that banks in the country have limited exposure to Dubai and that they were “sound.”
He said that only two Kuwaiti banks were involved with Dubai’s debt issue: Al-Ahli Bank of Kuwait bought $20 million worth of bonds from Nakheel, while Gulf Bank has a $28 million risk exposure to Dubai World.
The governor of the Saudi Arabian Monetary Agency (Sama) also downplayed the impact of Dubai’s debt problems in the kingdom. “The group’s [of Saudi banks] exposure to Dubai World is very limited,” Muhammad al-Jasser told Al-Arabiya television. “If we look at the total balance of all Saudi banks … exposure to Dubai World is less than 2 in a thousand,” he said.