GCC economy merger in discussion

Muscat: The centre of gravity for global economic power is moving from the West to the East and the GCC bloc has immense potential to drive it forward, believes a leading Oman-based economic researcher.

"Integration of GCC economies is good for the future of the member states and they seem to be moving in that direction," Gus Freeman, Managing Director of the Arabian Research Bureau, told Gulf News yesterday on the sidelines of the 29th GCC Summit in Muscat.

Freeman, who helped Oman's National Economy and Finance Ministry prepare a report on Trade Links between Oman and the rest of GCC pointed out that in the last five years the combined GCC GDP had climbed. "in 2003 the combined GCC GDP was 17th and today it is 13th and all the signs are that it would go even further than that," he added.

Strong economic bloc

And, to make the GCC a stronger economic bloc, Freeman advocates single currency. He agreed that when leaders decided on the monetary union in Muscat today Oman will not be part of it but was quick to add: "Oman has not shut the door, in fact they have kept their options open to join the common currency at a later date."

Freeman said "The economic unification is a way forward and common currency is an important step in that."

Talking about the GCC railways and common electricity grid, Freeman said these were infrastructure projects which would further boost the GCC economy.

Rail network

The GCC rail network is expected to connect the six member states. A feasibility study is almost complete and GCC leaders will announce their decision on the study and a future course of action at the end of the two-day Summit today.

"Power and transport are key fundamental components for taking ahead any economy and joint power grid and railways would only boost the process of integrating the GCC economy," he believes.

According to Mohammad Al Mazroui, GCC Assistant Secretary General for Economic Affairs the GCC electricity grid could be opened next year (2009).

The railway feasibility study could get the approval of the leaders at the end of the Summit today. "The GCC has some reservations about the financial aspects of the project the consultant will have to make some amendments and then incorporate it into the study."

MONEY: NAME FOR GCC CURRENCY

The leaders of the six GCC states could give a final approval for the common GCC currency at the end of the 29th GCC Summit today although hosts Oman are staying our it as they are 'not prepared yet'.

According to sources a different name for the currency would be found to avoid using currency names already being used in GCC countries such as dinar, riyal and dirhams. "I can tell you that 'Khaleeji' is being seriously considered for the name of the new common GCC currency," a source told Gulf News on condition of anonymity.

However, the name is not final but one being strongly considered and is the only remaining issue that needs to be ironed out before the decision on monetary union is of GCC Central Bank.

"Three states have staked claim to have the GCC Central Bank in their country," a GCC source said. It is believed that Saudi Arabia are very keen to host the Central Bank, so are the UAE and Qatar.

Oman pulled out of the common currency programme in 2005 and informed other member states during the 2005 Summit in Saudi Arabia. Oman has also agreed for the other five countries to continue with the agenda and even agreed to give final shape to the monetary union pact when they hosting the summit.