Doha set to witness history in December

Doha set to witness history in December
Dr Jasim Ali, Special to Gulf News Published: September 08, 2007, 23:14

The stage is being set for the announcement of implementation of common market project amongst the six-nation Gulf Cooperation Council (GCC) by year-end. The declaration would most likely be made during the 28th GCC summit scheduled to be organised in the Qatari capital of Doha in December.

Muscat was due to host the summit, but opted to swap its opportunity with Doha. This became essential in the aftermath of cyclone Gonu that hit the Sultanate in June.

GCC General Secretary Abdul Rahman Al Attiyah has described the upcoming summit in his home state of Qatar, as the summit of economic achievements. He expects the leaders to formally announce commencement of the long-awaited common market status.

The common market notion requires free movement of factors of production amongst member-states. Over the past two years, the member-states agreed to widen the scope of activities granted to GCC subjects. In 2006, three activities were added to the list, namely engaging in insurance, clearance of official documents in governmental departments and transport. In 2005, three other additions were made, specifically recruitment offices, car rentals and most cultural activities.

Over the past few weeks, the member-states kept announcing one after another of granting citizens of fellow GCC states unrestricted access to local stock markets.

In particular, Saudi Arabia proclaimed that GCC subjects have the right to trade in shares listed on its stock exchange. This marked a major step forward, as traditionally Saudi Arabia tends to be the most conservative country within the GCC. The Saudi gross domestic product (GDP) amounts to more than $300 billion, which is second to none in the region.

Bahrain and Dubai have long granted GCC subjects unrestricted access for trading in stocks and property. In doing so, both Bahrain and Dubai desired to develop an edge over regional economies, a move that translates into enticing investments. Clearly then, Bahrain and Dubai are sure to embrace the common market project.

Likewise, Attiyah expects the next summer overcoming unfinished business with regards to customs union. The GCC commenced customs union status at the start of 2003 hoping to complete the requirements by 2005. However, the implementation was delayed until 2007 due to numerous obstacles. These include finding solutions to matters related to fair distribution of customs revenues amongst member-countries. Technical officials were charged with coming up with a formula for distribution of customs revenues taking into account issues such as final destination of goods.

Another matter concerns the lack of transparency. It is alleged that some member-states are not confining themselves to unified customs rates on imports, with some charging less in order to entice business.

GCC states are required to adhere to a standard external trade policy with non-members, a document adopted during the Abu Dhabi summit in 2005. In retrospect, Oman cited absence of transparency as one reason behind its decision not to join the planned monetary union in 2010.

Undoubtedly, regional states must be commended for their intention of commencing the common market status. In fact, implementation of common market fits with the goal of reaching GCC economic integration.

Eventually, economic integration results in member states focusing on their competitive advantages. Also, clearly, GCC countries are about to make history.

The writer is a Member of Parliament, Bahrain.