|
Riyadh, Muscat, Manama: The Gulf Cooperation Council (GCC) common market, which was launched on Tuesday, faces a number of challenges, according to economists.
The monetary policies in the GCC states, mounting inflation rates and laws and regulations related to investment will be among the main challenges for the common market. Strategies should be worked out to surmount these hurdles, they said.
Saudi economic experts, however, expressed confidence that the six GCC countries will work through their respective agencies and in collaboration with the GCC General Secretariat to remove these obstacles.
"The GCC states may encounter some problems and obstacles, particularly since some member states have signed bilateral economic agreements with non-GCC countries. This can undermine chances of a joint economic forum," said Abdul Aziz Al Abdul Kareem, professor of econ-omics at King Abdul Aziz University.
He said that the real implementation of the GCC common market would require months and that this period was needed to have the local rules and regulations amended to match the requirements of the common market.
Economic analyst Mansour Al Abdul Aziz said that the GCC common market would grant the countries strong competitive tools with which to face the global economic challenges.
"The common market is the beginning of a new phase for the activation of GCC economic integration.," he said.
"The difference in currency exchange rates between one GCC state to the other will create problems for the common market," Muneera Al Sulaiman, a member of the Saudi Econ-omic Association, said.
"Another problem will be the varying rates of inflation and growth as well as rates of gross domestic product (GDP)," she said.
"It is one of the major positive steps in the GCC march," Haider Abdullah Redha Dawood, who works in the Economic Research and Statistics Department at the Central Bank of Oman, told Gulf News.
He said the movement of GCC nationals across borders would increase with the GCC common market in place. "Those who are qualified will have a bigger [GCC] spectrum to find jobs," he said.
Haider said that there could be negative effects from the decision but urged patience. "Give some time for the experiment to work before passing any judgement," he advised sceptics.
Abdullah Bin Salem Al Salmi, chairman of the Muscat Securities Market (MSM), said all countries would benefit from the common market.
"We need easy inflow and outflow of funds from one market to another," he said and that the new development would help achieve that aim.
"I don't see any problem in the common market as it is going to benefit all six countries. The GCC states are small economies and integration will make them one big economy which can withstand competition in world markets," Al Salmi said.
This is a step ahead in the economic integration of GCC states. "The next step will be a single currency."
For the formation of the common market, various markets will have to be opened up and regulations harmonised. "Oman has always been open to GCC investors. It was the first GCC state to allow up to 49 per cent foreign ownership, way back in the 1970s. Now this limit has been raised to 70 per cent in the wake of the Sultanate joining the World Trade Organisation," he said.
Trade promotion
The launch of the common market will promote trade between the six states and the rest of the world by 25 per cent within the next two years, Bahrain Chamber of Commerce and Industry Chairman Esam Fakhro said.
"The formation of the market will also increase trade among the six countries, and I believe that trade between Bahrain and its closest neighbour, Saudi Arabia, for example, will reach $1.9 billion, up from $952.43 million in 2005," Fakhro said in a statement.
"This is an outstanding achievement and will give greater weight to the Gulf alliance as an international trading partner and will also spur the launch of a Gulf currency," he said.
|
