Gulf nations agree on single currency

Ulhas Joglekar ulhasj at SPAMbom4.vsnl.net.in
Sat Jan 6 19:38:20 MST 2001


Tuesday
2 January 2001

Gulf nations agree on single currency
MANAMA: Leaders of six oil-rich Gulf states on Sunday approved steps to
issue a unified currency but failed to agree on an earlier timetable for the
introduction of common tariffs.
The move to create common tariffs is part of a wider plan by the group for a
regional currency and a unified trade zone, and is designed to speed up free
trade talks with the region's biggest trading partner, the European Union.
A free trade agreement has eluded the two blocs for several years.
GCC officials said leaders of Saudi Arabia, Kuwait, Oman, Qatar, Bahrain and
the United Arab Emirates -- members of the Gulf Cooperation Council (GCC)
had discussed a plan to introduce the common tariffs in 2003, two years
earlier than originally agreed.
But a final communique at the end of a two-day summit said the unified
tariffs would be implemented "at the originally agreed time".
"It has been decided to keep the date for introduction the common tariffs in
2005. Each member state can speed up implementing the agreement on its own,"
Bahraini Foreign Minister Sheikh Mohammed bin Mubarak al-Khalifa told a news
conference after the summit.
Sheikh Mohammed did not say which countries had objected to the plan that
would unify the tariffs within the targeted range of between 5.5 percent and
7.5 percent.
Bahrain last week said it would go ahead with the plan and would cut tariffs
on consumer goods and imported cars by 2003.
GCC AGREE UNIFIED CURRENCY
"The higher (GCC) council has agreed a currency denomination for the
currencies of council states as a first step to achieve this target," the
final communique said.
Sheikh Mohammed said the U.S. dollar would be the common denominator for a
unified currency. "This is the first step which will be followed by others.
Unifying the currency is not an easy issue," he said.
Currencies of all GCC states, with the exception of Kuwait, are pegged to
the U.S. dollar, in which their main crude oil export is traded. Kuwait's
dinar is currently linked to a basket of currencies.
The leaders also asked central banks in the member states to agree on a
programme with a timetable for the unified currency that would be discussed
at the next summit in Muscat, Oman in 2001. (Reuters)
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