GCC business execs endorse common currency

Survey says 74% believe currency plans will have positive influence on investment activity.
GCC business execs endorse common currency
By Shane McGinley
Wed 28 Apr 2010 12:39 PM

Nearly three quarters of top executives in the GCC believe the region will benefit from the introduction of a common currency, according to the results of a survey released on Wednesday.

The survey of 75 top corporate executives in the GCC, which was carried out by international law firm Blake, Cassels and Graydon, found that 74 percent of those surveyed believe plans for a common currency by Bahrain, Qatar, Saudi Arabia and Kuwait will have a positive influence on investment activity in the region.

“The economies are similar… and the political systems are similar. We are not Europe and we have a lot in common and it will be a great development for the Gulf countries. Investment activity will increase [and] it will make it easier to move goods and services,” said Dr Saud Al Ammari, managing partner of Blake, Cassels and Graydon for Saudi Arabia and the Gulf region.

Saudi Arabia’s insistence on dominating the monetary union, with a planned single Gulf Arab currency, risks adding to disgruntled voices in the six-member Gulf Cooperation Council, an analyst warned earlier this month.

“The Saudis will definitely dominate the currency union and eventually get more political influence, which will have a geopolitical impact," said Mustafa Alani of Dubai-based Gulf Research Centre.

That was natural in a union comprised of one big state and five smaller ones, he said.

"This is the problem for the GCC and the source of the existing sensitivity and mistrust: The belief that the big brother is trying to dominate us."

While the UAE has opted out of the common currency, Al Ammari believes that “business will go on as usual” and that “it is a matter of time before the UAE and Oman join the common currency.”

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