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Abu Dhabi: The UAE is committed to the collective monetary policy of the Gulf Cooperation Council, especially in relation to the pegging the local currencies to the US dollar, according to officials.
"The only exception, which is Kuwait, diverted from the general on the grounds that it is the oldest regime in the region, and can accordingly afford the move, building on previous shocks that provided it with the immunity to face the fluctuations that swept the region's financial markets in 2004-2005," Sultan Bin Nasser Al Suwaidi, UAE governor of the Central Bank, said at the annual conference of the Emirates Centre for Strategic Studies and Research.
The relatively new markets of the region resulted in the soaring liquidity, increasing number of listed companies, as well as the appreciating values and currency exchange.
Contribution
"The International Monetary Fund (IMF) is contributing to the development of the Gulf economies which are heading towards greater openness. Nevertheless, the negative aspect associated with these foreign investors is that they tend to withdraw whenever bleak market conditions prevail," Al Suwaidi said.
Other senior participants reiterated that oil is not the only source of wealth for Gulf countries, as there are other factors contributing to the growing wealth.
"Non-oil Gross Domestic Production (GDP) is growing at rates comparable to India. This is also demonstrated by the rise of per capita income in the GCC," said Dr Moshin S Khan, Director, Middle East and Central Asia Department, IMF. "Behind GDP lie investments. Investments increased significantly in 2007, with a major portion of public investments targeting the oil and gas sectors. Foreign investment has also increased."
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