MUSCAT — Governors of AGCC central banks yesterday reaffirmed their commitment to introducing a common currency for the six-member Arab states, as Gulf economies are gradually embracing the idea of globalisation and financial sector liberalisation.
In fact, the changeover to a single currency on January 1, 2010, which is about seven years from now, would be a momentous turning point for the six-member Arab states, as it would provide nearly 32 million people with a common currency.
As a first step towards regional integration, the much-publicised AGCC customs union would become a reality on January 1, 2003
Most participants described the move towards customs union, monetary union and common currency, as a historic step that would benefit the entire Gulf and other Arab nations for rebuilding the Arab financial sector, as one of the strongest in the world.
The Arab financial sector was once the leading and strongest in the world. It is said that during the glory days of Muslim hegemony, Arabs invented numbers, algebra, credit systems, and managed the world's trade and financial system.
"Over the last decade, the role of banking has undergone a profound transformation as a consequence of fast evolving changes in the global financial arena. AGCC financial sector is confronted with the task of making a choice and implementing an appropriate model which would genuinely meet the objectives of regional financial sector liberalisation, deregulation and transparency," Hamood bin Sangour Al Zadjali, executive president of the Central Bank of Oman (CBO) told the conference.
In his keynote address, Talal Abu-Ghazaleh, vice-chairman of United Nations Information and Communication Technologies Task Force, said there were no borders, no customs, no tariffs and no impediments to the free trade in goods, services and money.
"Trade cannot thrive without a healthy and developed financial system, and financial system will not likely be healthy without free trade. When we constrain trade, we constrain finance and when we constrain finance and trade we constrain our economy in particular and society in general," Abu-Ghazaleh added.
...The European Central Bank has already been appointed to carry out a study to help implement the single currency and the monetary union as scheduled.