It seems that the UAE was right all the way when it pulled out of the new GCC Monetary Council after Saudi Arabia, home to the world’s largest proven reserves of crude oil, was selected to house the proposed central bank.
Last week, Saudi Arabian Monetary Agency (SAMA) governor Mohammed Al-Jasser was elected the first chairman of the GCC Monetary Council in Riyadh and Rasheed Al-Maraj, Bahrain Central Bank governor, was chosen as his deputy. Both will hold the positions for one year before the slots rotate to Kuwait and Qatar.
The Appointment of Mohammed Al-Jasser underscores Saudi Arabia’s dominance in the single currency project. Back in May 2009, the UAE withdrew from the GCC Monetary Council when Riyadh was chosen to host the Gulf Monetary Council. It feared that Saudi Arabia would have more control over the union since Riyadh was the headquarter of the GCC council. Well, today we can all agree that Saudi Arabia obviously wants it all! While at first it was only fair that Saudi Arabia would host the Council as it is the largest economy in the Gulf region. (47% of GCC GDP) Today, it’s nothing close to fair when compared to the European Central Bank, where the two largest economies share control of the ECB.
“From Saudi Arabia’s position, it shows a clear commitment to bring all the countries closer together and move toward the currency union,” said John Sfakianakis, chief economist at the Riyadh-based Banque Saudi Fransi-Credit Agricole Group.
Is Saudi Arabia really demonstrating a clear commitment to bring all the countries together and more towards the monetary union? Or is it simple enjoys control..END
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