“Monetary union is not a farce but a very important reality for the region’s future growth and development as it will pave the way for political and economic integration,” Salim N. Al-Gudhea, head of monetary union at the GCC Secretariat told the banking conference participants.
Addressing the session titled “governments in GCC and Monetary Union” Salim said that member states had different political, social and economic views but the creation of monetary union would put everything under one umbrella.
The GCC natural economic convergence, he said, would bring high levels of homogeneity to GCC economies. “This will also create identical monetary and exchange rate policies as well as high economic and monetary convergence specially along the trend line,” he said.
On the opening day of the conference an official from the GCC Secretariat told reporters that the member states would likely extend the 2010 deadline for a single currency. The official told reporters that a new time-table would be sought by the GCC countries.
“By all definitions GCC is a better candidate for economic integration and the political will of the leadership of all stake-holders will play a central role in achieving this project,” he added.
Erwin Niercop, from the European Central Bank, in his presentation highlighted the EU experience and what the GCC could learn from European experience.
“A stable and credible single currency requires a robust institutional, operational and regulatory framework. Other monetary unions in the making, including the GCC, will have to tailor such frameworks to their specific requirements and the EU model can be helpful,” he said.
“The changeover to a single currency is a major event, which has to be prepared carefully in order to avoid disruption in many different areas of economic and financial activities,” he said.
The 9th GCC Banking Conference concluded yesterday on a positive note as the GCC countries agreed to work together in achieving deadlines for monetary union and other strategic projects.
The event attracted over 600 delegates from across the world and the experts shared their views on GCC economies and the global economic turmoil.
