GCC 'failed to draw up unified policy'

Abu Dhabi: The common market announced by the Gulf Cooperation Council (GCC) last January has failed to establish a unified policy among its members in the face of the financial turmoil that swept through the region's stock markets, officials said on Tuesday.

According to the proposition, GCC countries should have enjoyed the free flow of goods, capital, and people - an arrangement that should have enhanced the ability of the GCC to deal with the sudden collapse of its stock markets.

"Although it can be considered a matter of sover-eignty for each individual state as to the method applied to salvage its financial system, the GCC failed to develop the kind of unity demonstrated by the European Union in the face of crisis," Abdul Rahim Hassan Naqi, secretary-general of the Federation of GCC Chambers of Commerce, said on Tuesday.

"I have suggested today the establishment of a GCC investment fund through a partnership between the public and private sectors in the GCC countries to intervene in times of crisis and to maintain the stability of the GCC bourses," he said at a forum for GCC financial brokers in the capital yesterday.

The chamber federation will form a taskforce to assess the situation, followed by a conference to implement the initiative.

Many officials blame foreign funds for the stock markets' collapse in the GCC and Arab world as a whole.

"GCC and Arab stock markets will be better off if they place caps or even taxation on short-term foreign investments, to prevent foreign funds from hurting our econ-omies," suggested Mervat Tallawy, coordinator general of the Arab Economic and Social Development Summit at the Arab League.

A summit for the business community will take place in Kuwait next January 17 to 20 to discuss means of enhancing Arab economic cooperation.

"It will precede the summit of the heads of state which will follow on January 19 and 20," she said.

Do you think the GCC should look for a comprehensive solution for the economic crisis? How do you see the credit crunch affecting the region's economy?