In an unusual display of cooperation, the GCC is setting-up a company that will make direct transfers of money among its six members possible. However, Qatar is currently being isolated by members of the blog, and is therefore not participating.
Mohammed Al-Hashel, the governor of the Central Bank of Kuwait following a meeting of regional central bankers in Kuwait City told reporters that the Riyadh based company will allow Gulf States to transfer money without relying on international currencies. He said that the chief executive officer has been chosen already and all the member states have agreed to contribute opening capital.
Al-Hashel said after that the company will have to go out and borrow from the Gulf market or use the capital it has produced, and the governors of the member countries’ central banks will sit on the board and a secondary office will be set up in the United Arab Emirates (UAE). He did not say when the company will start to be functional.
The Cooperation Council for the Arab States of the Gulf also known as the GCC (Gulf Cooperation Council) is a regional intergovernmental economic and political union which includes all Persian Gulf Arab States except Iraq. The member states of the council are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE).
Even though members of the Gulf Cooperation Council such as Saudi Arabia, the United Arab Emirates, and Bahrain have been boycotting Qatar since June of last year, the money transfer company is still being initiated in the absence of the alienated member. The boycott is based on suspicions other GCC members have with Qatar as a state sponsor of terror, a charge that the Qataris has vehemently denied.
A London based economist at Capital Economics, Jason Tuvey said that this was a way for the GCC to show that there are still areas for collaboration on the side of economics, even if they cannot agree on issues regarding politics. He said that it seems strange that they can agree to what they claim will be a deep move when at the end of the day, there is still a blockade in place that has broken the economy of Qatar. He said that it does feel a bit like disregarding the elephant in the room.
The GCC blockade that is spearheaded by Saudi Arabia last year gave the gas rich country a list of thirteen demands to resolve the crisis. The to-do list for the Qataris included shutting down Al Jazeera television, abstaining from backing Islamist groups and cutting back ties with Shiite-ruled Iran. Efforts of mediation by the United States and Kuwait have so far failed.