Dr. Mohammed Bin Suleiman Al-Jasir at the First Meeting of Gulf Monetary Council – Riyadh.
In the Name of Allah, Most Gracious, Most Merciful.
Peace be to the best Prophet and Messenger, our Master Mohammed, and to his family and all his companions, and to those who graciously follow his path up to the Day of Judgment. Praise be to the Almighty Allah who said in His Noble Book: "Say: Work! Allah will observe your deeds, as well as His Messenger and the Believers! You shall return to the World of the unseen and testimony, and He (Allah) shall show your deeds". Peace be to our Master Mohammed who said:" The hand of Allah shall be with the Congregation (community)."
Peace and blessings of Allah be to you,
It gives me great pleasure to welcome all of you in the city of Riyadh on a day where we celebrate an important achievement which would not have come true without Allah's Grace then the guidance and blessings of the leaders whom Allah has bestowed on them penetrating visions and rectitude to pursue all that is in the present and future interest of our homelands. From this forum, I would like to present to them, on my behalf, and on behalf of the members of the Board of Directors of GMCO, great thanks. I pray to the Almighty Allah to bestow on them good health, and to preserve to all of us the bliss of prosperity and stability, and to keep this achievement in the records of their good deeds. I avail of this opportunity to present our great thanks to all those who have contributed to this achievement through their studies, commitment, thought and work. I extend our special thanks to the Secretariat General of GCC, its Secretary General and related committees of the Council. I record special thanks to my colleagues, the Governors of Central banks and monetary agencies in the GCC member states and their staff whom we started to reap the first fruits of their efforts, Praise be to Allah.
While we celebrate today the first meeting of the Gulf Monetary Council, it will be appropriate to review in brief the thirty-year journey of the GCC of the Arab States. Day after day, the GCC is realizing unprecedented achievements in our region. The establishment of the Gulf Monetary Council is a crown on various stages leading to economic integration between the GCC States. The beginning marked the formation of the Free Trade Zone in 1981, next was the establishment of the Customs Union in 2003, followed by the establishment of the Common Gulf Market in 2008. Today, we witness another fruit of our common cooperation, namely, the launch of the Gulf Monetary Council which is a quantum and historic leap in the march of economic integration and correlation between the GCC member states. In my opinion, the economic return of this step is no less than its historic symbol.
It is great pleasure for me, while we celebrate today the first meeting of the Gulf Monetary Union, to briefly review the most important stages of building GMCO. The beginning was marked by the agreement of the Supreme Council in December 2001 on the timeframe to establish GMCO, and adopt the US Dollar as a common anchor for the currencies of GCC states as from 2003. Over the last few years, various committees started work on setting economic convergence criteria, and identifying their components and the way of their calculation in order to achieve convergence of the economies of the member states of GMCO and facilitate the issuance of the single currency, God willing. At its 26th session (Abou Dhabi, December 2005), the Supreme Council of GCC approved the criteria of economic convergence. In May 2007, the Committee on Financial and Economic Cooperation approved the ways for calculating and measuring the criteria of Convergence of economic, financial and monetary performance.
In conjunction with the work of the committees related to GMCO, on the economic side, legal teams, from the member states, worked to prepare the draft of the legislative and regulatory framework of a common monetary authority. This effort was crowned with the issuance of a decision by the Supreme Council (in December 2008) approving the Agreement of the Monetary Union and the Statute of the Gulf Monetary Council. The member states were urged to sanction the Agreement the soonest possible in preparation for the establishment of GMCO to enable it to perform its mandate before the end of 2009 at the latest. In fact, four states sanctioned the Agreement and the sanctioned documents were deposited with the Secretariat of the Council before the end of 2009.
Brothers, Members of the Board,
The launch of the Monetary Council occurs at a time where the world is witnessing the most adverse financial crisis since eighty years, causing adverse effects to economic growth in many countries of the world, apart from triggering many economic problems. During such economic crises, the importance of economic cooperation and integration arises. Work should be continued to enhance the march of economic cooperation between the member states. I am fully confident of the success of this march, with the Grace of Allah.
The achievement of our ambitions will require increased efforts from all of us through concentration, perseverance and hard work due to the complexity of the requirements of the monetary union and diversity of its routes. For example, monetary policies of the member states should be coordinated. Symmetry and coherence of data and statistics need to be increased. Work on strengthening of banking supervision should be continued and payments systems must be linked. Another area of no less importance is the completion of the legal aspects, including the preparation of the GMCO's by-laws, and continued efforts must be made to complete the statute of the central bank. Existing regulations related to monetary union in the member states should be considered to increase their coherence and remove any discrepancies therein. It is important to develop the administrative aspects such as deep rooting the institutional work in GMCO and good selection of the executive organ in view that it is the nucleus of the environment and culture of the future central bank. All these activities entail preparation of a work program within a timetable that will meet the ambitions of our leaders and peoples.
I would like to emphasize here that the Kingdom of Saudi Arabia, as is the case with the remaining member states, is committed to proceed with the march towards the monetary union. The Kingdom is ready at all times to overcome all challenges which might encounter the march of the monetary union, and to work hand in hand up to the completion of all requirements of the monetary union and incarnate the common efforts with the establishment of the central bank and the launch of the single currency.
I must caution myself and all the parties concerned, including our citizens, against falling in the trap of exaggerated expectations. It is certain that the monetary union and the single currency will achieve coherence in monetary policies and the ability to compare prices with simplicity and transparency of financial dealings between citizens of the member states and residents therein, but, however, it will not solve economic problems and other problematic issues that should be encountered through other economic channels which do not fall within the responsibilities and the competences of the GMCO or the central bank in future.
In conclusion I wish the Gulf Monetary Council all success in achieving its objectives, and I hope that your meeting will be a success, with Allah's Grace.