Business | Opinion
GCC states should sort out issues of cooperation
The GCC Leaders Advisory Summit, which was held earlier this month, stressed on the importance of implementing the economic agreements that were previously concluded - particularly the unified custom tariff and the GCC Market.
- By Dr Mohammad Al Asoomi, Special to Gulf News
- Published: 00:10 May 29, 2008
The GCC Leaders Advisory Summit, which was held earlier this month, stressed on the importance of implementing the economic agreements that were previously concluded - particularly the unified custom tariff and the GCC Market.
Accordingly, it is clear that the GCC leadership is keen on enhancing economic cooperation among the member states. However, bureaucracy remains a challenge in implementing the agreements, against the wishes of the GCC people and governments.
Is there an exit? Bureaucracy and red tape cannot be easily sorted out, but they can be neutralised through limiting their powers and encouraging human resources that are capable of coping with the needs of the Gulf cooperation era and the Common Gulf Market requirements.
If we take into consideration the obstacles that face the application of the Unified Customs Tariff, we will find several problems, such as the distribution of custom revenues through clearance.
Solving this complicated problem does not come through a ministerial committee's decision, where a company is asked for its vision about how to distribute unified custom's revenues.
There has to be an additional decision by which customs tariffs are cancelled in all GCC countries, and applying the added value tax of five per cent, as an equivalent substitute.
Every country will be able to take its share of sold commodities inside its borders, regardless of the entry port of the merchandise. This procedure will remove a major obstacle in the way of the Gulf common market.
Likewise, bureaucratic bodies can be overstepped so that the problems facing the implementation of Arab summit decisions are solved. These decisions are important and essential in Arab Gulf cooperation, and in the joint interests of GCC countries.
Pending fields
The Common Market agreement includes several fields of cooperation that are still pending, such as the ownerships of stocks, opening national bank branches, property ownership and other relevant details that will take the cooperation among Gulf countries to a higher level.
Looking into the issue of stock ownership for instance, why don't Gulf bourse directors meet up and decide to apply the terms of the common market agreement and other related decisions?
Why should such important issues be left in the hands of the directing boards of joint stock companies, instead of their abiding by decisions taken by the Gulf bourse heads?
Implementation issues can be solved if there is a dynamic application process. Any delay under the international prevailing circumstances means a loss of an important chance in development.
The increase in oil prices has provided an unprecedented money flow into the GCC countries, where oil revenues by the end of this year are expected to hit $700 billion. Interrupting the course of cooperation in the area of investment will force the Gulf investor to invest funds abroad.
Hindering the implementation of these decisions means new decisions will not be taken, such as the issuance of a unified Gulf currency on time in 2010.
The treatment of decision implementation delays is exceptionally important. Without it, delayed issues will accumulate, leading to more complications.
The Arab League is an example of accumulated decisions that have not been applied or implemented. With time, the process becomes an old machine that cannot be re-started.
The writer is a UAE economic expert.
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