Importance of Gulf Coordination for Facing "Financial Crisis"

  • 26 October 2008

Despite all efforts to limit the impact of the "financial crisis" and contain its disastrous consequences at various levels, the downslide continues. In this context, the meeting held in Riyadh yesterday by GCC finance ministers and governors of central banks is highly significant. The meeting was held to hammer out a set of joint measures to counter the adverse effects of the "international finance crisis" on the GCC region and its economy. Despite significant steps taken individually by each GCC country to address the crisis, there is pressing need for coordinated efforts given the enormity of the crisis and in light of the close links and mutual interests of all GCC countries with each other. Additionally, GCC economies are open to the international free markets and have embraced globalization. Therefore, these economies are directly linked to the "crisis" that has struck the world. Consequently, it is important for GCC countries to cooperate with each other, coordinate their efforts and benefit from each other's experience in reaching a common understanding on the best strategy to manage the crisis. Moreover, they should seriously review and activate their strategies to offset the effects of the crisis on a continuous basis. The "financial crisis" is escalating in many ways. This underscores the needs for pro-active, joint and strong actions at the GCC level. Coordination among GCC ministers of finance and governors of central banks would help in formulating a common vision that would ensure cooperation and harmony among GCC economies. If the individual and domestic procedures and polices implemented by GCC countries in the recent shored up confidence and trust in their economies and contributed to limiting the adverse impact of the crisis, then the joint GCC efforts would strengthen this feeling of trust and support and help the GCC to overcome this phase with minimal losses. Furthermore, such coordination would protect the sustainability of the GCC economy and shall buttress its ability to endure.

The entire world is responding to the challenge of the crisis, and the calls for comprehensive international cooperation are rising. The UN Secretary General, Ban Ki-moon, recently made a plea in this regard. Moreover, Washington is scheduled to host the G-20 summit in mid November, which would include the G-8 and other emerging economies. The summit would solely discuss the issue of "financial crisis" and try to hammer out the best way to control its consequences. In the same context, it would be quite natural for the GCC countries to coordinate and collaborate to overcome this crisis in the life of international economy.