Sangour said the meeting will discuss a number of vital issues, including measures taken by GCC states to address the negative impacts of the global financial crisis, GCC Supreme Council’s decisions pertaining to the GCC consultative authority’s recommendations on handling the problems of inflation, employment of GCC nationals and the GCC Monetary Union.
Sangour observed that the global financial crisis started in the United States in mid 2007 and moved to all countries of the world with varying degrees depending on the involvement of each country with the global economy. He noted that the communiqué of the G-20 held in London on April 2 included undertakings by these countries to introduce necessary measures to reform their financial systems, restore lending activities and have tighter control over the fiscal systems, with a view to restoring confidence.
The G-20 also undertook to finance and repair the global financial institutions to help them overcome the negative impact of the current global financial and liquidity crises and avoid similar crisis in future, Sangour added. He explained that the recent developments in the world economy have had significant impact on GCC economies. The main factor that affected the GCC economy is the fluctuation of oil prices and its downside trend which led to fluctuation and decline in oil revenues which constitute the bulk of GCC exports, Sangour said.
He also highlighted the economic, financial and banking developments witnessed by the Sultanate recently. He pointed out that, during 2008, the Sultanate witnessed an impressive economic growth that reached 2 per cent during the period from January to September 2008 as compared to the previous year. The Sultanate’s current account also witnessed a remarkable improvement. The state budget surplus witnessed substantial growth; thanks to the high average of oil prices, Sangour said.
“GCC banks and banking audit authorities face a number of challenges. Banks will face challenges related to the degree of risks and how to alleviate” these risks. Banks audit and inspection authorities always face the challenge of how to maintain the integrity of the banking system”, he added. “GCC countries are at a juncture point due to the current global economic and political conditions therefore we are required to enhance our level of co-operation and integration to achieve the aims outlined by GCC leaders. We have also to double our constructive efforts to reduce reliance on oil and increase our economic diversification according to a standard GCC strategy in this respect”, he concluded.
On his part Mohammed bin Ubaid al Mazrouey, Assistant GCC Secretary- General for Economic Affairs at the GCC Secretariat General delivered a speech in which he explained that the first meeting in 2009 comes after the GCC Supreme Council approved in its 29th session held in Muscat in December 2008, the Monetary Union agreement. The council gave directives that the member countries should approve the agreement at the earliest so that the GCC Monetary Council can be set up and start operating not later than the end of 2009. It also comes after approving the basic statute of the Monetary Council.
“The approval of the agreement is an important step towards setting up the Monetary Union and issuing the unified currency”, he added. In a statement after the opening session, Al Zadjali said that the meeting comes in the backdrop of the global financial crisis which rocks the world. “The meeting will look into the global financial crisis and the measures taken by the GCC countries to address the crisis”, he added.
“One of the major outcomes of this meeting is co-ordination of stances among the GCC countries, exchange of expertise and approximating the monetary and banking legislations in the GCC countries”, he furthered. The meeting will discuss a number of issues related to banking system’s supervision and control, the GCC Monetary Union, balance of payment, empowerment of the GCC nationals at the banking and financial institutions, as well as, the measures taken by the GCC countries to address the global financial crisis. The meeting will also approve minutes of the meetings of the technical committee for the Monetary Union, the committee for the GCC banking and financial institute and the technical committee for the balance of payment.
