Business | Opinion
Detecting chain effect in economic union
The 27th summit of the Gulf Cooperation Council (GCC) will kick off in Riyadh on December 9 with various economic, political and security issues on its agenda.
- Dr. Mohammad Al Asoomi, Special to Gulf News
- Published: 00:00 December 7, 2006
The 27th summit of the Gulf Cooperation Council (GCC) will kick off in Riyadh on December 9 with various economic, political and security issues on its agenda.
The summit is expected to be one of the most important gatherings since the creation of the GCC. That is because the Middle East has been witnessing rapid developments and changes, which may lead to further imbalances in the regional power structure.
In fact, the GCC leaders and citizens pay a great attention to economic issues, which will top the summit's agenda. Yet, many important economy-related decisions have not yet been put into action due to the inability of the concerned authorities to deal with them.
Since these decisions are connected, any delay in implementation will drastically lead to impeding the implementation of other decisions.
For instance, obstacles that hinder the implementation of the Customs Union prove that current procedures do not allow the creation of the GCC common market by 2007.
The Customs Union does not adhere to the GCC Free Trade Area Agreement, which was signed two decades ago, and stipulates that goods produced in any of the GCC states must be treated as national products.
Another decisions is the adoption of a single currency in 2010, which cannot be achieved unless the previous decisions are taken into effect.
The GCC countries need to begin the unification of their economic policies in preparation for the setting up of a common market. This will help strengthen the economies of the GCC countries in order to be able to face the economic challenges in the age of globalisation.
Oman's Minister of Economy has said that the implementation of some decisions that pave the way for the setting up of the common market faces may obstacles.
"Among these is the non-compliance with the decisions relating to the national treatment, which were issued by the Supreme Council of the GCC," the minister said.
This principle of 'national treatment' needs to be truly applied if GCC states are seriously striving for economic integration.
The question is whether the solution is issuing new decisions or removing the obstacles that hinder the full implementation.
The only possible solution is taking the necessary procedures to facilitate the processes and mechanisms of implementing the decisions that pave the way for setting up the common market and adopting a single currency.
Many statements were issued regarding the possibility of postponing the adoption of the GCC single currency. To avoid such a deadlock, the GCC countries should learn lessons from the experience of the Arab League, which have issued many decisions which are yet to see the light.
There is, for example, the Arab common market, which was issued in 1964. Four decades later and it has not seen much progress.
The experience of the GCC may be different due to the great achievements that have been made since its creation, and have significantly boosted economic developments in its member states.
However, there is a similarity in the mechanism of decision implementation in most Arab organisations as a result of the poor culture of management in the entire Arab world.
GCC citizens are looking forward to seeing the next summit come up with firm and constructive decisions that would add significantly to the growing GCC structure to become a strong bloc and be expanded to see other Arab countries joining it.
The writer is a UAE economic expert.
More from Business Opinion
More from Business
Business Editor's choice
-
‘Wrong Way' Krugman
The source of our economic malfunction lies with government-mandated bank regulations
-
Greek exit could make Eurozone stronger
Departure will show limits of bailouts and allow remaining members to act much more like a unit
-
UAE upholds values of free trade
Recently released statistics confirm an established fact, namely that of the UAE embracing the free trade principle in general and imports in particular
