Middle East Focus-Arabia Deserta: GCC Gulf Monetary Union Charade, Of Sovereignty and Hegemony………..

Arabia Deserta

GCC Gulf Monetary Union Charade, Of Sovereignty and Hegemony………..

“Muhammad Al-Jasser of the Saudi Arabian Monetary Agency will be the first chairman of the Gulf monetary council, expected to be the precursor to a common central bank, Jasser said on Tuesday. The deputy will be Rasheed al-Maraj, the central bank governor of Bahrain, according to a statement read out by Jasser at a meeting of the four Gulf States taking part in the common currency project, Saudi Arabia, Bahrain, Qatar and Kuwait. Central bankers from four Gulf oil producing states launched on Tuesday the joint monetary council, which is expected to lay the foundations for a regional central bank and prepare the launch of a single currency in a nearly decade-old plan. “

A smart move to not set a date that they cannot meet. Last time around they had set 2010 as a date for the introduction of the common currency, and I commented here that it was absurdly unrealistic. I expected it to be postponed, at the least. Not only they had failed to seriously deal with trade issues, they had also neglected serious budgetary and monetary coordination. I noted all this over the past few years, and of course I was right (I know the people and the issues).
Now Oman and UAE have no interest in the project and have firmly withdrawn. Only Saudi Arabia, Kuwait, Bahrain, and Qatar (for now) are involved. They first picked Riyadh as the “capital” for the potential GCC central bank, now they have been forced to accept the Saudi governor of SAMA as chairman and potential governor. This is a very aggressive push by the Saudis, and I expect the Qataris to push back soon or more likely withdraw once they understand the full implications for their sovereignty.
They have left one way out thogh: no timeline set. This thing could go on for another quarter century (it has already been under study for 35 years).
The late old king Ibn Saud and his Ikhwan would indeed be frustrated, wherever they are now.
Cheers
mhg

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