RIYADH: A call for deeper integration among GCC states, particularly between the Kingdom and the United Arab Emirates — the two largest economies in the Gulf — was made by the Dubai International Financial Center (DIFC) and the Riyadh Chamber of Commerce and Industry (RCCI) at a business forum held at the Four Seasons Hotel yesterday .
The DIFC delegation was welcomed by Saad Al-Moajil, vice-chairman of RCCI board. Nasser Al-Shaali, chief executive officer of the DIFC authority, also addressed the delegates at a jointly-organized conference entitled “Rising Giants: Opportunities in KSA.”
“GCC has enormous resources and its economies are emerging as an economic and financial hub for the wider region and have achieved average real GDP growth of 6.9 percent over 2004-2008,” Al-Moajil said in his opening remarks.
“Saudi Arabia is the wealthiest economy in the GCC and plays a pivotal role in the wider region. It has the capacity to move things and take the rest of the GCC forward,” he added.
He agreed to move the GCC forward to revisit plans in the light of the changed global scenario. “The financial geography of the region and the world has changed and steps are needed to support regional economic and financial integration,” Al-Moajil stressed
“A consolidated approach between the nations of the Gulf will allow them to maximize emerging opportunities around the world and in the region”, Al-Shaali said.
Those who are here today to represent policy makers, business leaders and some of the biggest names in the regional investment community “have the ability and the authority to strengthen ties at an institutional level between Saudi Arabia and the UAE, promote greater links between our banking and financial services industry, and facilitate greater investment ties and capital flows,” the chief executive officer added.
He recalled that 28 years ago, the leaders in Abu Dhabi and Riyadh, dreamed of formulating common regulations in various fields such as economy, finance, trade, customs, tourism, legislation and administration. They envisioned joint ventures, increasing cooperation among the public and private sector, strengthening of ties between their peoples; and establishing a common currency.
He pointed out that the results have not been as satisfactory as was hoped. “Our brotherly nations have not integrated their administrations, their services, their systems, and their financial and legal frameworks. Money, goods and services and human capital do not flow smoothly across the GCC wherever there is need and opportunity for it. As members of the same family we have not combined our comparative advantages to tap into opportunities that seem impossible to individual states, but easy when approached as a bloc.”
He referred to the estimated more than $1 trillion in Arab funds overseas and the fact that the GCC accounts for marginal inflows of global FDI as prime examples of delay in creating opportunities.
Al-Shaali said the current global crisis is an opportunity that the GCC can utilize to create integrated systems and frameworks and common, unified and standard platforms for a true economic and financial bloc that can navigate with strength in the global economy and financial flows.
Al-Shaali offered to share the expertise that the DIFC has acquired — such as world-class legal frameworks, best-of-breed regulatory models for both Islamic and conventional banking, and Best Practices in Environmental, Social and Corporate Governance norms — to assist and facilitate the realization of the GCC objectives.
Howard Handy, chief economist of Samba Financial Group, said: “Saudi Arabia is exceptionally well positioned to withstand the consequences of the global financial crises. This follows first, from its impressive progress on structural reform, which has propelled the Kingdom to being designated by the World Bank as one of the world’s best countries in which to do business; and second, from its solid financial balances — large stock of foreign assets and strong fiscal position, which are enabling the government to play a powerful anti-cyclical role during the current downturn.”
Other speakers included Iain Morrison, head of corporate and Institutional Banking at SABB (The Saudi British Bank); Roberta Julfar, director, Policy and Legal Services of Dubai Financial Services Authority; Jeff Singer, chief executive of NASDAQ Dubai; and Thomas Leaver, chief executive officer of Dubai Mercantile Exchange.
