UAE businessman Khalaf Al Habtoor calls for Gulf economic, currency union

UAE businessman Khalaf Al Habtoor has called for the formation of a Gulf economic bloc with its own currency unpegged from the US dollar.

In an op-ed for Saudi publication Arab News, Al Habtoor argued that recent events, including the United Kingdom’s vote to leave the European Union and the election of Donald Trump as US President meant the future was uncertain.

“Hopefully, a Trump White House will surpass all expectations. He is a proven winner in business and his battle for the top job paid off,” he said.

“Nevertheless, a single GCC currency unhinged from the dollar and diversification away from oil revenues are sensible insurance policies.”

Read: GCC States Remain Split Over EU-Styled Union

Al Habtoor described Saudi Arabia and its Gulf allies Bahrain, Kuwait, Oman, Qatar, the UAE and Oman as the region’s “lone stable, secure and prosperous foundation” that must be strengthened at all costs.

He also expressed encouragement from the recent support of a stronger Gulf union by Saudi Deputy Crown Prince Mohammed bin Salman.

Citing some of the benefits of a close GCC integration, the businessman said the region would be the world’s sixth largest economy and hold increased diplomatic clout and expanded leverage during negotiations with other countries.

This would include in negotiations to re-establish peace in Syria and Yemen and to deter western states from “prostrating themselves” before Iran to win arms and trade deals, he said.

“Please do not let the idea of an economic bloc vaporise like so many others discussed in the past. Securing the future for coming generations must be our priority and once we choose to navigate together in the same direction, we will be a force to be reckoned with,” he said.

The Gulf states have discussed a closer union several times in recent years but some countries have proven unwilling to give up their economic independence.

The dip in oil prices over the last two years, which has hit some Gulf economies harder than others, has also prompted concerns that a closer union would limit nations’ individual powers to manage their deficits.

In an interview with Gulf Business earlier this year, consultancy EY’s MENA chairman and CEO Abdulaziz Al Sowailim said the GCC could attract new revenue sources and optimise costs through integration.

Read: Why the GCC’s future could lie in greater union