Gulf Monetary Union Blues. Of Trade Wars, Dead Warrior Kings, and Shekels
I love it when interesting issues come along, like the Gulf monetary topic of this posting. Makes me feel younger and wilder again (well, not sure about the wilder bit).
Four GCC ministers agreed earlier this month to go ahead with the currency union plan for four (Persian) Gulf states, but they left a way out: they did not set a new timetable. With Oman and the United Arab Emirates (UAE) opting out, that leaves Saudi Arabia and the three smallest states of the GCC. This is full of a certain kind of symbolism, but let’s not worry; King Abdulaziz Ibn Saud is not around anymore. He was the old desert warrior chief who had an appetite for expanding his domain- he also had an appetite for women and procreating, but that is beside the point here (it wasn’t beside the point in his day).
Oman opted out early, for technical reasons. Oman is apparently forgiven.
The UAE opted out last month, apparently being miffed at the arbitrary choice of Riyadh (the Saudi capital, and one of the most boring cities on earth) as site of the future monetary council and central bank. The UAE probably had other, more serious, misgivings about the project, and could have used the site dispute to pull out. UAE has a lot of two-way trade with many countries and regions, and may not necessarily have seen the currency union as an economic plus- not enough to offset its negative political implications. And there are probably more political implications than economic ones here.
The point is that UAE has been under attack by Saudi media recently: initially subtle attack, then more direct criticism. The media battle continued from both sides. They often use writers from other Arab countries to attack their opponents, but most readers know who is writing for whom.
Now the rift between UAE and Saudi Arabia has extended to trade- the limited trade has been a sensitive and contentious issue within the GCC. UAE media complain that long lines of their freight trucks are being held at the Saudi border, prevented from entering Saudi Arabia (they also need to cross Saudi Arabia in order to get to Qatar, Kuwait, and Iraq). At one point the truck owners, with piling monetary losses, threatened to file complaints with the Arab League. Imagine: filing a complaint against Saudi Arabia with the Arab League!
Saudis claimed that the truck blockade had nothing to do with the currency union rift. There are claims this week that the problem of the trucks was resolved. We shall see.
Shekel or Dinar: What is in a currency name?
The GCC has postponed naming the future one currency. I am personally keen on this particular issue, having done some work on it in my wilder days. The remaining members are divided between two likely names: Dinar (Kuwait, Bahrain), and Rial, Riyal (Saudi Arabia, Qatar), which happen to be the names of their respective national currency units.
I am keen to see how they resolve this thorny issue of the name, something I wrote about earlier here. There has been talk of giving the currency an Arab or Islamic touch. The problem with that is all Islamic currencies throughout history were named for foreign currencies.
At the risk of repeating myself: Dinar comes from the Roman Denarius, the currency of Rome long before Caesar: it is a pagan name! Rial, Riyal comes from the Spanish Real, meaning'royal'- a totally Catholic name! A new name like the 'Islami' evokes thoughts of Afghanistan and the Taliban (not to mention local Salafis). But then again the mullahs in Iran kept the shah's 'Rial'.
Some might suggest that they might as well call the new currency the Shekel- actually there is more to that than meets the eye- but later on that.
They may opt for a Khaleeji (Gulfie) although it is heavy on the tongue. They probably would decline to call it the "Farsi" (Persian) as in Persian Gulf, either. How does “Najdi” sound, since all four ruling families hail from that part of Central Arabia and are at least tribally related (those of UAE and Oman do not and are not). We can also call it the ‘Tribal’ but this may not be PC, i.e. kosher.
There is something to Real, since it means 'royal', and we are all tres 'royalists' on the Gulf these days, n’est-ce pas?
Cheers
mhg
Mon Email
Comments