SHARJAH, 26 February 2005 — Some Arab countries need to implement reforms in their currency exchange rate regimes in order to spur economic growth, says UAE Central Bank Governor Sultan Nasser Al-Suwaidi.
Addressing a symposium on “Arab economic integration” held in Abu Dhabi, Suwaidi said reforms in the currency regimes were vital to economic growth and integration of Arab economies.
“Foreign exchange rate policy in many Arab countries does not encourage the inflow of Arab and foreign investment or the import of equipment necessary for production,” he told the symposium, which discussed issues relating to liberalization of Arab trade, role of migrating work force in economic integration, foreign and inter-Arab capital inflow and outlook for Arab economic integration.
Suwaidi highlighted the vital need for economic reforms in order to provide the ideal ground for growth of the private businesses — a move that he said would spur growth and achieve economic integration. He called for structural reform in the financial sectors through increasing capital of local banks and enacting affective and sound legislations on inspection and control.
He also highlighted the strategic importance of building a modern transport network linking production sites with consuming and export markets.
“We have a long road to go in this respect and we need to draw plans based on our priorities,” he said. Director General of Arab Monetary Fund (AMF) Dr. Jassim Al-Mannai, in his address to the symposium, linked the current level of Arab economic integration with the discord in economic policies. “Productive base was limited and not diversified and this depresses growth of inter-trade exchange,” he said, underlining that a political program is necessary to clear hurdles before the economic integration.
In separate comments, Suwaidi, the central bank governor, said the UAE has not intention to withdraw its $100 million deposit from Lebanon following the assassination of the former Lebanese prime minister Rafik Hariri.
He said the money had been deposited to support the Lebanese economy, and it was not the right time to take it out.
Suwaidi also denied any change in UAE’s commitment to support Lebanese people with $300 million in aid as promised.
