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The Viability, Practicability, and Effects of a Currency/Monetary Union for the Gulf Cooperation Council - Essay Example

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The Gulf Cooperation Council (GCC), more formally known as the Cooperation Council for the Arab States of the Gulf, is a trade bloc wherein six Arab states of the Persian Gulf carry with them many economic and social objectives. …
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The Viability, Practicability, and Effects of a Currency/Monetary Union for the Gulf Cooperation Council

Download file to see previous pages... The Iraq-Iran War, Iranian Revolution and Soviet invasion of Afghanistan were all major reasons the six countries mentioned above decided to form the GCC. This was primarily because they had the same vision of how their economies should be. They also agreed on what kind of defense is most effective against entities that could damage their countries.
The council was created on May 25, 1981 while on November 11, 1981, a unified economic agreement was signed between the partner countries. After the signing of the agreement in Riyadh, Saudi Arabia, the member countries were referred to as the Gulf Cooperative Countries.
The countries around the Persian Gulf are not all council members. Even nations like Iran or Iraq which border the Persian Gulf, did not come on board with the council. Meanwhile, Yemen seems to be warming up to the thought of joining the said cooperation.
Also, its headquarters may be found in Saudi Arabia. The council, having an administrative structure, meets about twice every year. For its governing bodies, there is a supreme council, a council of foreign ministers, an arbitration commission, and a general secretariat.
After implementing most of the provisions in their said agreement by the 1990s, the GCC decided to act on the security issues of their countries. By 1984, a deployment unit called the Peninsula Shield Force with a force of 5,000 men was formed for the council. With such, the member countries went on board with a mutual understanding of a way by which they are to defend against foreign attacks, effectively increasing the force’s number to 22,000.'s number to 22,000.
But aside from being able to deal it out in the field, the council has also ventured into talks that would help end territorial disputes between their own members and other non-member countries.
On January 1, 2008, the council's common market was introduced to the people of the gulf. This venture allowed the member people and companies of the cooperation to get over hurdles in cross country investments and services trade.
GCC has many objectives. One of them is to be able to formulate regulations in industries like the economy, finance, trade, customs, tourism, legislation and administration. It also aims to cultivate advancements in mining, agriculture, water and animal resources. It also wants to set up various partnered ventures, strengthen the relationship between their people, establish many scientific research centers and be able to encourage additional help from the private sectors.
Moreover, the council dreams of establishing a common monetary unit to be named Khaleeji by the year 2010.
Recognizably, due to the richness of the six member countries from their oil, petroleum and natural gas reserves, their economies are some of the fastest growing in the world. Over $900 billion in assets are being maintained by UAE investors in order to create a tax base and economic foundation before their natural resources finally run out.
According to the International Monetary Fund (IMF), the said region's 2006 Gross Domestic Product (GDP) was pegged at $717.8 billion. This was primarily because of the sudden economic growth in Qatar and the UAE. Just a year after, it became a whopping $1,022.62 billion. With the way it is going, the IMF predicts that it will reach about $1,112.076 billion by the end of this year and $1,210.112 by the end of 2009. A member country, Qatar, is also pegged to outrank Luxembourg as the topmost per capita grosser in GDP.
Aside from their economies, their region has also been recently been the venue for ...Download file to see next pagesRead More
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