Reuters AlertNet Lite - Monetary union, Iran top Gulf Arab summit agenda

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Monetary union, Iran top Gulf Arab summit agenda

09 Dec 2006 09:05:19 GMT
Source: Reuters

RIYADH, Dec 9 (Reuters) - Gulf Arab leaders gather in Saudi Arabia on Saturday for a meeting to help resolve problems over a planned monetary union in 2010 and raise concerns over Iranian influence in the region.

The two-day summit will assess progress on the customs union and the monetary union, said a spokesman for the Gulf Cooperation Council (GCC), which groups Saudi Arabia, Qatar, Bahrain, Oman, Kuwait and the United Arab Emirates.

Oman recently cast doubt on the timetable for the single currency project, suggesting the agreed 2010 deadline might not be met and that other nations shared this concern.

The six countries have agreed five criteria for European Union-style economic union, including capping budget deficits at 3 percent of gross domestic product, public debt at 60 percent of GDP, and inflation at the GCC average plus 2 percent.

Interest rates are to be no higher than the average of the lowest three states plus 2 percent and countries must have foreign exchange reserves to cover 4-6 months of imports.

The economic targets are achievable but Gulf states had made little progress on a customs union that went into effect in 2003 to help prepare for integration, Oman's central bank governor Hamood Sangour Al Zadjali said last month.

GCC secretary general Abdul-Rahman al-Attiya said later the launch of a single currency was still on track for 2010 and he had not received any request for a delay.

The summit is also expected to consider a proposal made last year to limit to six years the stay of expatriate workers.

An estimated 12 million foreigners live in GCC countries and represent more than 80 percent of the population in some cases.

The summit of some of the world's richest nations in terms of energy resources is also expected to discuss sectarian violence in Iraq, Tehran's nuclear programme and rising tension in Lebanon.

Saudi Arabia, the world's largest oil exporter and home to Islam's holiest sites, wants to check what it views as the creeping influence of Shi'ite power Iran in the Arab region through support for Lebanese group Hezbollah, Shi'ite parties in Iraq and its alliance with Damascus.

The GCC countries are mainly Sunni, with Shi'ite minorities, though Shi'ites are a majority in the island state of Bahrain.

The UAE has a long-standing dispute with Iran over three islands occupied by Tehran.

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Last updated:Sat Dec 9 09:08:50 2006