Gulf currency reviewed

13/12/2015 08:10 AST

The pros and cons of a unified Gulf currency were discussed at an economic lecture held on Thursday at the Isa Cultural Centre.

The event, which was held by the Shura Council in conjunction with the Gulf Monetary Council, was an overview of the issues with a unified currency, which has been discussed for several years.

Shura Council economic affairs committee chairman Khalid Maskati told the GDN that the aim of the lecture was to have the Gulf Monetary Council “present their case”.

“They are presenting the case and letting us know as a legislative body the details ahead of making a decision,” he said.

“That decision needs to be made on basis of knowledge, so we were discussing the advantages and disadvantages.

“Our main topics were the reality of the economies in the Gulf countries and the important of variety and investment.

“We compared Gulf countries to certain Asian countries, for instance Singapore and Korea, with similar economic situations, and how without having natural resources or reserves they managed to build a robust economy with a bigger income than us.

“We discussed the challenges in the dip in oil prices at the moment and how we can diversify our economy so that when we have dry years, we are still successful, while utilising savings used from more bountiful years.”

He said Bahrain would mostly benefit from a unified currency due to the small nature of its market.

“In Bahrain, we will benefit from it, and will make our economy stronger because we’re a small market,” he said.

“Europe had even more issues than us before unifying, in terms of language, geography, history, and it still didn’t cause barriers for them.

“For us, to have a unified Gulf would make a difference to having four separate markets and put us in a stronger position for imports and exports.”

He said the Gulf Monetary Council is currently made up of four countries – Saudi, Bahrain, Kuwait and Qatar, while “waiting on UAE and Oman”, which had their reservations.

“The disadvantages are well-known, which is mostly the concessions one country might have to make when another is in trouble, such as Greece in the Euro at the moment,” he said.

“All decisions would also be made from a central bank for the Gulf, rather than one for each country.”

Gulf Daily News