SHARJAH: The Deputy Director of Paris-Sorbonne University Abu Dhabi campus has urged setting up a timetable for the economic and monetary union of the Gulf Cooperation Council (GCC) states, saying this will spur investment.
Dr Fatima Saeed Al Shamsi was on Saturday discussing a paper titled “The Complementary Gulf Economies: What is Needed to Attain Economic Union?” during the one-day 14th Dar Al Khaleej Conference in Sharjah. The event was held under the theme: “The GCC: Reality and Ambition.”
She said the policies of monetary and economic union necessitate setting a timetable for implementation of the unity, “which is our ambition.”
“This will attract investments both locally and globally, help overcome financial crises and lessen the burden on foreign transactions,” she said, adding; “This will further create an insightful financial market and upgrade the effectiveness of banks by raising the size of deposits and strengthening their ability to fund financial projects.”
Dr Fatima hoped that the current shortcomings in the Arab World do not pose barriers capable of sabotaging the Gulf countries economic trend.
She said there should be an implementation framework to oversee the execution of all earlier decisions taken by the GCC through a body that has authority and resources.
“The major obstacle as regards a unified Gulf economy is the failure to implement earlier decisions and recommendations.”
She gave an example when a unified Gulf currency was expected by the end of 2010, “but there was no authority established to follow up its implementation.”
“Secondly,” argued the Emirati scholar, “there is a necessity to have official reserves that could cover imports of at least four months and the financial deficit in the Gross Domestic Product (GDP) should not exceed three per cent, and the general debt should be below 60 per cent of the product.
“There should be equilibrium in the interest rates and there should not be great contrast in the inflation rates.”
Withdrawal a challenge
Dr Fatima said that the withdrawal of both the UAE and Oman from the monetary union is a challenge that prevents the total achievement of a successful economic integration,.
“It was a big challenge when the UAE and Oman pulled out. Among the major necessities of a monetary union are the coordination and harmony of both the economic and monetary policies. Another necessity is monetary and fiscal convergence.”
The don listed some of the steps taken in realising unity, including focusing on measures that lead to economic diversity away from the dependence on oil and gas returns.
Others include unifying the laws governing investments and rights of companies in the GCC area and establishing an advanced database covering markets and investment opportunities in young economies, as well as “establishing a committee to oversee infrastructural projects and tasked with evaluating and encouraging the achievement of projects on a regional basis.”