27/05/2009
KUWAIT, May 26 (Reuters) - Gulf countries will review their deal on regional monetary union and will seek to resolve disputes prior to its implementation, Saudi Arabia's King Abdullah was on Tuesday reported as saying.
The comments come less than a week after the United Arab Emirates broke ranks with four other Gulf states by withdrawing from the single currency plan in protest at a May 5 decision to base the joint central bank in the Saudi capital, Riyadh.
King Abdullah did not specify what terms of a monetary union deal would be reviewed, in the remarks carried by Kuwait-based newspaper Al-Seyyasah.
"The coming review before the implementation would resolve what had been disputed upon," King Abdullah was quoted as saying.
"The atmosphere for reviewing the monetary union agreement is open and the Emirates has an alert leadership ... We do not doubt their keen (interest to safeguard) the strength of our Gulf council."
The UAE's foreign minister told Reuters last week the Gulf state would consider rejoining the Gulf monetary union if the terms change and its neighbours agree to allow a joint central bank to be based in the country.
On Tuesday, UAE Central Bank Governor Sultan Nasser al-Suweidi said the UAE was not currently in talks to re-enter the single currency plan. "We are not negotiating. For the time being, the position of the UAE is to withdraw," Suweidi told reporters in the UAE capital, Abu Dhabi.
SUBJECT TO REVIEW
Saudi Arabia, Kuwait, Qatar and Bahrain have until a December deadline to ratify a monetary union deal their heads of state agreed on late last year.
But analysts have questioned whether the withdrawal of the UAE, the Arab world's largest economy after Saudi Arabia, could derail the long-troubled project.
In 2001, the six members of the Gulf Cooperation Council -- a loose political and economic alliance -- had agreed to enter a monetary union like that of the European Union.
Oman opted out of the monetary union in 2006 and earlier this year, the GCC abandoned an initial 2010 deadline for issuing the common notes and coins.
"The agreement on the monetary union of the council countries would undoubtedly be subject to review before approval and enactment," King Abdullah said.
Saudi ties with the UAE would not be affected, he added. States in the world's biggest oil-exporting region are also working on a common market, including a customs union.
"The leaderships of GCC countries could disagree over certain opinions and issues, but these differences quickly go, be it in Gulf summits or bilateral meetings ... The kingdom and Saudi Arabia will remain brotherly," King Abdullah said.
The monarch said Saudi Arabia had not liquidated any state investments during the global economic downturn and would not reduce public spending while seeking to keep inflation under control.
"There has been no sale of the kingdom's sovereign investments and I want to point out that Saudi money and assets have not been affected by the global economic crisis, which is seeing a gradual recovery," King Abdullah said.
"We are continuing to implement the pledged projects included in our development plans. The volume of spending will not contract and we not need debt, whether local or foreign." (Additional reporting by Stanley Carvalho in Abu Dhabi; Writing by Daliah Merzaban in Dubai; Editing by Inal Ersan)
