Many economists in the GCC countries have explained that the support expected to be provided by the single Gulf currency, if issued, will support the economies of all GCC countries and increase trade negotiating power with the rest of the world, and will contribute to eliminating the risks related to Gulf currency exchange rates, solving intra-GCC trade issues and deepening the concept of the single market.
Many economists in the GCC countries have explained that the support expected to be provided by the single Gulf currency, if issued, will support the economies of all GCC countries.
Financial strength
<Economist Dr. Abdullah Al-Mughlouth said: “There is no doubt that the GCC countries have an economic weight in the world because of their exports and imports dealing in strong currencies such as the dollar and the pound sterling,” if we compare that with the presence of the Gulf currency, there will be a strength that makes those countries more prestigious and deal in the financial and economic center, especially since the Gulf countries are one of the global oil exporting groups whose reserves collectively exceed some European countries, as the Gulf's oil exports to the European Union are estimated to be more than some European countries. Gulf oil exports to the European Union countries are estimated at 70% of European imports, and this requires the existence of a unified Gulf monetary currency that makes the Gulf entity strong in dealing and an increase in the rate of reserves, and will make banking and financial transactions in banking institutions considerations that facilitate all Gulf investors and their counterparts in the countries of the world, stressing that the unified currency will be one of the sources of economic blocs in the world.Emphasizing that the GCC countries have reserves of all types of cash and metals that are not negligible at the level of advanced European countries in commercial and industrial dealings on the global economy for decades, the Gulf region has now become more dealings and reserves than some European countries that have been put as the GCC countries will push the scales of the global economy and the value of liquidity with the single currency.
Unification of regulations.
Systems standardization
From the United Arab Emirates, the founder of the Emirates Club for Businesswomen and Free Professions Sheikha Dr. Hind Al Qasimi stressed that the union of the GCC countries in the monetary currency will achieve many mergers in various economic fields to which many businessmen and women in the Arabian Gulf aspire, and overcome all the obstacles facing them by unifying all the regulations and laws of the GCC countries related to import and export among them and investment in general, so that what applies to the Emirati investor applies to Gulf investors, in addition to it will integrate the Gulf markets among them, as it becomes one market expanded in terms of pilgrimage Dr. Al Qasimi hoped that the unified currency will be the beginning of the journey of the Arab Gulf Union in various fields that will make it a great economic power in the world, stressing that the countries of the Union will face risks united, such as the impact of the unified currency on the rise and fall of the dollar currency, which gives it an economic strength that is not achieved for the currencies if they are individually.
Dr. Al Qasimi said. Inflation deflation
BDB Group CEO Nidal Saleh Al Aujan said that there is no doubt that collective power is greater, more influential and effective than individual power in various fields, and therefore the monetary unity of the GCC group will form a strong economic bloc, regardless of the divergent opinions in this regard, as six unified economies are much better than one economy separately, meaning that the single currency will certainly contribute to achieving economic integration and transparency between the GCC countries, which will have many positive consequences and tangible advantages such as the possibility of controlling inflation and deflation, and the issue of the single currency will certainly contribute to the achievement of economic integration and transparency between the GCC countries, which will have many positive consequences and tangible advantages such as the possibility of controlling inflation and deflation, and the issue of the <Aujan explained that comparisons between entities that differ in many features, data and tools are considered unfair to some of them and fair to others, as there are some points in favor of the GCC countries and some in favor of the European Union, as the role that the euro plays in the global monetary market and in global foreign exchange reserves is clearly increasing, but the inherent disadvantages of linking the single GCC currency to the euro are the disadvantages of linking the currency to the euro. This system is a step towards achieving greater stability in the exchange rate of the unified Gulf currency, as it means determining a specific weight for each of the currencies within the basket, depending on the importance of the volume of trade and investment in the countries owning those currencies, on the other hand, the Gulf countries are superior in that they do not face issues related to immigration In contrast, the large number of countries with stable economies in the European Union has protected the monetary union from the negative repercussions that could have resulted from the absence of Britain from the union, and therefore the GCC countries should fulfill the necessary requirements in order to establish a good currency area, and this does not mean that regulating matters related to unemployment rates between the Gulf countries is impossible, but rather it will be much easier once the Gulf Monetary Union comes into effect, and it must be taken into account that the union
<He stressed that there is no doubt that according to the opinions of experts and specialists, the launch of the unified Gulf currency for the GCC countries after the transition from the stage of “cooperation” to the stage of “union” will increase the strength and stability of the Gulf economy, which at the same time contributes to increasing the trade negotiating power with the rest of the world, and it will contribute to eliminating the risks related to the exchange rates of Gulf currencies and resolving the issues of inter-trade and deepening the concept of the single market and effectively contribute to the development and integration of the Gulf financial markets, on the other hand, there will be diversification of GCC economies that are mainly dependent on oil. <This is not pessimism, of course, but this is what the European Union applied before announcing a single currency, as it is necessary to prepare the appropriate arrangements for the launch of this currency before we see it on the ground, such as determining the name of this currency, its design, its categories, the basis for determining its exchange rate, determining the quantities issued from it, where it will be issued, and how to distribute this issuance The basic roles that the GCC Central Bank will play in managing this currency, in addition to determining the size of the foreign exchange reserves needed to ensure the stability of this currency, and determining the length of the transition period before the issuance of the currency, its start and end date, and the rest of this long list of arrangements, which are undoubtedly topics that need a long time to address, before we see the unified currency as a living reality in our hands.
Protection laws
From the State of Kuwait, economist Maitham Al-Muhsin pointed out that the use of the Gulf currency, if issued, will create a major economic force that contributes to reducing the value of inflation and unifying issues in the Gulf region when used, as happened with the euro currency when it was issued in Europe, due to the ease of trading and the existence of the single economic transaction, in light of its protection from price fluctuations in currencies and illegal operations such as speculation, and the breadth of work with the single currency.
When the single currency is issued, it will create a major economic force. He emphasized that if some global economic risks occur, such as the previous and unexpected global financial crisis, the drop in the price of oil by a high percentage, and the decline in the price of the currency linked to the single currency, it will be a risk to the single currency, so the economic value becomes disparate.
According to the comparison of the market value of the single currency, the economic value of the single currency will vary. <Comparing its market value with the euro currency, the person emphasized: When the euro currency was issued, it was linked to other currencies and metals, so the Gulf currency will be in the same framework, as for the process of replacing it, the Gulf is completely different from the European Union in terms of proximity of prices traded in the real estate sector, as well as some food products in European countries were very high compared to other countries, and this led to a great difference in the use of the currency in the European Union region in practical encirclement, especially with traders who deal with this union as a single block.
Emphasizing that the real impact that scares some economists is when the GCC countries export one similar product from one country to another at different prices and here it is possible to cause damage, and this is what we saw in the Eurozone, when the export of steel to other regions compared to the United States of America, where the reduction in the price of the dollar led to an increase in demand for steel from the United States and a decrease in demand for the same product from the European Union, and this gave a negative reflection on the currency.
The person emphasized that the real impact that scares some economists is when GCC countries export a similar product from one country to another at different prices and here it is possible that damage may occur. The person stressed that the high Gulf economies in the event that the unified currency is traded will be the support for other Gulf countries with an average economy, or suffering from high inflation and budget deficits, but this matter is theoretical and we cannot confirm it, but it may strengthen the currency of some Gulf Union countries or those whose dependence on oil began to decline due to low exports and limited reserves.
With regard to the outlook for the currency, the person stressed that it will strengthen the currency of some GCC countries or those whose dependence on oil began to decline due to low exports and limited reserves.
<Regarding the expectations of its value compared to the dollar and the euro during its adoption, economist Maitham Al-Mohammad said: “I think that there will be an auction system (Auction) on two theories, the first is that this auction will be open to the public bidding system (supply and demand) in the market, and the other theory is that this currency will be linked to a basket of currencies consisting of, for example, euros, pounds and dollars or metals such as gold, and this linkage will undoubtedly be determined by the World Bank.”
Source: Today's newspaper
