Gulf oil producers need to enact legislation to adapt to a financial new world order taking shape as a result of the global economic crisis, the head of the region's private sector said yesterday.
Authorities in the six-nation GCC should also hasten plans to create a Gulf Central Bank and take extra measures to deal with unexpected developments, said Abdul Rahim Hassan Naqi, Secretary-General of the Federation of the GCC Chambers of Commerce and Industry.
In a statement just after the GCC heads of state endorsed plans to create the world's second monetary union, Naqi also urged regional stock markets to stop speculations for quick profits to avert further losses.
He said the Dammam-based federation is planning to hold a pan-GCC symposium to discuss the global crisis and its impact on member states, adding that several regional bodies would co-sponsor the seminar in Doha.
"This symposium is considered very important because the current global crisis is bringing about radical changes in the world's economic and fiscal systems, its investment tools, instruments and legislation and all market forces," he said in the statement, obtained by Emirates Business.
"Such developments should prompt the GCC countries to derive lessons from that crisis by enacting new laws and legislations that suit our economic circumstances and at the same time allow us to adapt to the winds of change."
Naqi said the global crisis is threatening development programmes and other investment and economic activities in the 28-year-old GCC and this should push "all competent parties in member states to play a part in protecting our economy".
"I also call on all stock markets in the GCC to behave responsibly – away from speculation and attempts to make quick profits. GCC governments should also take further measures to ensure discipline in those markets by strengthening the principles of transparency and accountability for all financial and non-financial companies in the market. They also need to hasten plans to set up the Gulf Central Bank so the member states will be ready to deal with any emergency or unexpected financial developments as a result of the current crisis," he said.
GCC bourses plummeted by nearly $500 billion (Dh1.83 trillion) during 2008 as a result of the global crisis and other factors but most Gulf governments have refrained from direct intervention, opting instead for supporting their banking sector after it suffered from a severe liquidity shortage due to the global credit crunch.
Before the GCC summit in Muscat at the year end, Naqi said there was a need for a collective Gulf plan to stimulate the economy, which he said would be negatively affected by the credit crunch and the plunge in oil prices.
"We do hope that member states will adopt the necessary economic, financial, monetary and investment policies that will allow them to absorb the results of this crisis." The federation is making contacts within the GCC and other countries to organise the first major Gulf conference to discuss the global crisis, he said.