GCC conference to focus on economic issues

The 29th annual summit of the Gulf Cooperation Council (GCC) is meeting today in Muscat, Oman's capital.

The two-day meeting is regarded as a key step in helping the Gulf Cooperation Council's six member states realise their goal of a common currency and broader economic unity.

Economic integration and regional security are expected to top the agenda.

During their summit, the six leaders are scheduled to secure agreements on an array of issues, chiefly the Israeli-Palestinian conflict, particularly the the air strikes by Israel on the Gaza strip, the situation in the war-torn Iraq, Lebanon-Syria relations, Darfur in Sudan and the Iran-UAE islands dispute, especially Israel's deadly attack on Gaza started from Saturday.

They are widely expected to announce a final roadmap for the Gulf monetary union, which involves the framework of a unified Gulf monetary authority and the single currency, and examine the implementation of the convergence criteria amid the current global economic crisis. 

The push is made all the more relevant by the global economic crisis that has hit hard even these oil rich nations.

Omani information minister Hamed al-Rashid said the Palestinian issue is always on the minds of the GCC leaders and "without doubt, the events in Gaza will be at the forefront of the upcoming meetings."

A common currency
Gulf Cooperation Council (GCC) Monetary Union will be a landmark development in the formation of common currency and monetary policy for the Gulf countries once it approved by the member countries.

This year, leaders will sign the long-awaited monetary union. Oman, however, has dropped out of the plan (See: Oman opts out of the Gulf's single currency monetary plan)

Another obstacle is the issue of the currency peg. All GCC states peg their currencies to the dollar except Kuwait, which pegs it a basket of currencies dominated by the dollar. GCC foreign ministers met yesterday to prepare for the summit.

Dr Giyas Gokkent, the chief economist at the National Bank of Abu Dhabi (NBAD) said that the agreement would establish a Monetary Authority as a precursor to the formation of the GCC Central Bank. The members of the European Union had also formed a similar EU Monetary Council prior to the formation of the EU Central Bank (ECB).
 
GCC and its objectives
Headquartered in the Saudi capital of Riyadh, the GCC is a political and economic alliance made up of six Gulf Arab states --Saudi Arabia, Kuwait, the United Arab Emirates (UAE), Oman, Qatar and Bahrain.

The bloc was formed at a summit in the UAE capital of Abu Dhabi in May 1981 against the backdrop of the 1979 Islamic Revolution in Iran and the Iraq-Iran war which broke out in 1980 and lasted till1988.

It aims at boosting wide-ranging cooperation between members through collective security, to guard against any outside threat and Islamic extremism. In 1984, the GCC created a collective defense force -- the Saudi-based Peninsula Shield.

Striving for economic integration, the bloc launched a free trade area, which later witnessed a six-fold increase in inter-GCC trade volumes. A customs union was established in 2003 and a common market came into being in 2007. Convinced by the success of euro zone, the Gulf leaders decided in 2001 to set up a monetary union and adopt a single currency in 2010.

GCC countries pump about 16 million barrels of crude oil per day and possess about 45 per cent of the world's proven crude reserves.

The main functioning bodies of the GCC are the supreme council, the ministerial council and the secretariat-general.

The supreme council is the highest decision-making body of the alliance, consisting of six heads of state. The council's yearly presidency rotates among the six countries in Arabic alphabetical order. The council meets every year-end. Unanimous approval is required for any key decisions.

The ministerial council is composed of foreign ministers or other ministers. It proposes policies, works out the agenda of the annual GCC summit and carries out the decisions.

The secretariat-general, the administrative body of GCC's dailywork, is made up of a secretary-general and three assistant secretary-generals. The secretary-general is appointed by the Supreme Council with a three-year term. The incumbent is Abdul Rahman al-Attiya, a former Qatari Foreign Ministry official.