By Andrew White
We've had denials, disappointment and debate - but as the dollar continues to dip, still no firm single currency decisions.
We've had denials, disappointment and debate - but still no decisions. The end of the GCC summit in Doha was maddening for those of us who like a nice clean resolution; those of us who still see 2010 as a hugely ambitious target for monetary union; and those of us who are still watching our real earnings dwindle as the dollar slumps to new lows.
We had hoped, perhaps, for a rescheduling of the timetable for a GCC single currency. The ‘Gulfo' will happen, but it has to happen at a time that best suits all parties.
With Oman opting not to join by 2010, and Kuwait depegging its currency from the dollar in May of this year, most expected an admission that the initial schedule was unrealistic, as there remain a number of formidable kinks to iron out across the Gulf. What price 2012, ladies and gentlemen?
In the weeks approaching the conference, the consensus among analysts and market movers was that we were also likely to see decisive movement towards revaluation or - hold your breath - even a ditching of the dollar peg in favour of a currency basket, Kuwait-style. What's more, the dollar's fall has been so traumatic for the Gulf's expat community that the man on the street was equally obsessed by the potential for a revaluation.
The dollar peg has become the issue du jour in coffee shops as well as conference rooms, and this was neatly encapsulated by the admission of UAE central bank governor Sultan Nasser Al-Suweidi, that he was under growing social and economic pressure to drop the peg.
Now, we are no closer to closure, and the currency markets are beside themselves with disappointment. The communique issued at the end of the summit said the GCC remained committed to a 2010 target date for monetary union, and did nothing to calm financial markets.
While the door has been left open for Gulf nations to revalue or sever their pegs, policymakers at the summit even tried to insist that the issue had not been on the agenda - credit then to Qatar's Prime Minister Sheikh Hamad bin Jassim Bin Jabr Al-Thani, who more sensibly reminded reporters that any talks on how to cope with the dollar's decline would have been held in secret.
Gulf currencies immediately weakened against the dollar as expectations of a near-term change in exchange rate policy waned, and the Saudi riyal sulked to a two-week low.
At least we did get the decision to establish a common market starting in 2008. Under the provisions, citizens of the six member states will share the same economic rights in areas including ownership of real estate, stock, capital movement, taxation, pensions and social security.
The worrying question is - if the twin pressures of the dollar peg and soaring inflation across the Gulf are not addressed sooner rather than later - whether there will there be many expats left here to enjoy the benefits.