Could the GCC form a single currency?
During April 2012, a queue of thousands of trucks built up at the Al Ghuwaifat border crossing between the United Arab Emirates and Saudi Arabia, because of a slow customs clearance process. This incident underlined the difficulties faced by the six rich oil exporting countries of the GCC.
Saudi Arabia, the biggest Arab economy, is leading moves towards political and economic cooperation, which it believes would give the Gulf States more power to withstand any confrontation with Iran. Closer business ties within the GCC, which consists of Saudi Arabia, the UAE, Kuwait, Qatar, Oman and Bahrain and has a combined annual output of about $1.4 trillion, could have big repercussions for companies and consumers.
Projects already underway or under study include a customs union, a joint value-added tax and even the introduction of single currency. "They have the deadline of 2014 to finish everything. Distribution of customs revenues is the main thing, said a Gulf official familiar with the process. "It's more about how to solve it, the distribution and rates.
Options include dividing revenue from customs according to the level of imports, population or the share of gross domestic product of individual countries, a GCC official said. Labour movement is free for GCC citizens, but this is less important than it might seem since so many workers in the Gulf are expatriates, brought in to man oil rigs and retail and service businesses.
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