Post: by Enorrste – CC
July 12, 2010 at 8:50 PM

[Fact]

The topic of discussion is the GCC and how or if Iraqis involved with this organization.

What is the GCC and what does it do?

Here is the link:

http://www.answers.com/topic/gulf-co-operation-council

And here is the relevant quote:

A body formed 1981 by sixcountries on the western side of the Persian Gulf (the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar, and Kuwait) for their collective security after theoverthrow of the Shah of Iran followed by the emergence of the Islamic Republicof Iran, the Soviet invasion of Afghanistan, and the launching of the Iraq-Iran War.The vulnerability of the oil facilities of the Gulf states to air and sea attack was exposed by thewar. In the face of these external threats, cooperationwas forged amongst the six for purposes of coordinating defence throughregional collective security.

The main goals of the GCC are: economic integrationtogether with coordinated planning; a cohesive foreign policy towards thenon-Arab world, and a framework for the discussion of Arab affairs;coordination of regional collective security; and educational cooperation andsociocultural understanding among member states. There has been success on eachof these four fronts but the most successful area has been in the field ofeconomic cooperation. 1999 a target was set for members toestablish a customs union by 2005.

A Gulf Rapid Deployment Force with units from each member state, was set up in1984. But with the Iraqi invasion of Kuwait in 1990, it was clear that this RapidDeployment Force could not delay any large-scale assault until help could beorganized for an effective defence.

— Barbara Allen Roberson

We can see now that the GCC wasformed initially for mutual defense reasons. As time went on, however, the GCC evolved into another larger focusinvolving economics, trade, and the goal of a single unified currency.

[Fact]

For those interested in theactual initiating charter of the GCC, follow this link:

http://www.gccsg.org/eng/index.php?action=Sec-Show&ID=1

What is the status of the unified currency goal of the GCC?[Fact]

This link will answer thisquestion clearly.

http://english.peopledaily.com.cn/90001/90777/90854/6843994.html

Here is the relevantquote:

GCC may take years to coin unified Gulf currency December 16, 2009

by Du Jian

Kuwaiti Finance Minister Mustafa Al-Shamali said Tuesday the Gulf CooperationCouncil (GCC)monetary union pact has gone into effect during the 30th GCCleaders’ summit in Kuwait City.

In few remarks to the official KUNA news agency,Al-Shamali said the central bank governors of the GCC would hammer out atimetable for the establishment of a central bank that would ultimately issuethe Gulf currency.

However, leaders of the bloc apparently triedto play down that initiative during their two-day gathering and issued adeclaration without touching upon the currency issue.

Although moved closer toward a euro-style single currency, it may take theoil-exporters years to coordinate and negotiate their stance and monetarypolicies for that end. (Part of the article is removed to shorten the post)

The planned Gulf single currency is unlikely to be launched soon as”sufficient time” is needed for preparations, Al-Shamali said daysbefore the summit.

His view was echoed by the emirate’s Deputy Prime Minister and Foreign MinisterSheikh Mohammad Sabah Al-Salem Al-Sabah, who said after the Kuwaiti Parliamentapproved the agreement that it might take adecade for the full adoption of a single Gulf currency.

As of now, four member states, namely Saudi Arabia, Bahrain, Qatar and Kuwait have ratified the GCC monetary union agreement.

In 2006, Oman shocked the bloc in decision to opt out the initiative,saying it was not ready to meet the preconditions. While the UAE followed suitin May this year to protest against locating the joint central bank in Saudi Arabia.

The pullout of the two, especially the UAE, the Arab world’s largest economyafter Saudi Arabia andhomes to a business hub, cast a shadow over the landmark plan.

GCC Secretary General Abdul Rahman al-Attiyah said before the summit that Oman and UAE “are pioneers in joint Gulf action and alwaystook the lead in implementing resolutions of Gulf summits, so they are alwaysat the center of the common Gulf action.”

However, the two countries were still lingering outside the initiative afterthe two-day summit.

Analysts said the Dubai debt crisis is a negative factor for the UAE to turnaround as the emirate would be reluctant to sit behind the negotiating table amid aweak condition.

Source: Xinhua

Now we see that a unified currencywithin the GCC is not on the immediate horizon.

Is Iraqa member of the GCC? And a relatedquestion: Would the USlike Iraqto be a member of the GCC?

[Fact]

Here is the appropriate link:

http://arabcomment.com/2008/the-gcc-and-iraq-whats-happening/

Thefollowing article is long so I have shortened it to the relevant material.

The GCC and Iraq: What’sHappening?December 22, 2008 – 7:37 am

Member states of the GulfCooperation Council (GCC), led by Bahrain,have declined to offer Iraq animmediate path to membership of the body that carries substantialeconomical and political clout in the region, but the question needs to beasked, does Iraqreally need to be a member of the GCC?

US Defence SecretaryRobert Gates proposed the idea in Manama, Bahrain,last weekend. Addressing the Manama Dialogue, Gates suggested that Iraqshould be included in regional organizations in order to help bolster itsrehabilitation.

“If you look closely at Iraq’seconomic and political potential, about what it can offer the Middle East, you will see that it is in everyone’s strategic interests tosupport the new government and the people of Iraq inwhatever way you can.

“Iraq canonly play a constructive role in this region if it is on an equal footingdiplomatically, which also requires its government to take proactive steps,such as continuing to appoint its own ambassadors,” Gates said.

“Regional engagement alsomeans that Iraqshould be included in regional forums for economic and security cooperation,and considered for membership in Middle Eastorganizations,” he added.

This is not the first time thatthe U.S. has sought to tie Iraq to the GCC, but this latest call comesat a time when violence is low and the economic opportunities on offer areleading the war torn country to be labeled an ‘emerging market’ like its Gulfneighbours. It also comes on the back of the recently signed agreement thatwill see U.S.force leave the country by the end of 2011, thus removing a significantobstacle to warmer Arab relations with Baghdad. ….

Immediately after Mr. Gates’comments, senior figures from the GCC and member states were quick to dampenany speculation that Iraqwould be asked to join the oil rich group.

GCC Secretary-General AbdulRahman Al Attiyah ruled out expanding the council to include Iraq,saying that such a move needed careful consideration, according to a report onthe UAE based Gulf News website:

“The council as it is has madeseveral achievements, and any option to change it necessitates a cautiousstudy,” Al Attiyah said. “Iraq inits current circumstances and even in normal circumstances is not ready to jointhe council,” he added.

Bahrain daily Gulf Daily Newsreported that the Bahrain Foreign Minister, Shaikh Khalid bin Ahmed Al Khalifa,said whilst there were no immediate plans to include Iraq because theorganization had not yet defined its own internal structure, it might become apossibility in the future.

“There are certain agreementsthat have to be enforced,” Al Khalifa was quoted as saying in the report.

“When the GCC was establishedwe did not restrict its membership to any countries – it is not an exclusiveclub.

“Once the GCC is a completeunit we will allow any of our brothers to come and join.”

Meanwhile an editorial piecein The National, a newspaper sponsored by the government of Abu Dhabi, on Sunday claimed that Mr. Gates’comments were ill-advised, and that the GCC could not accept Iraq asa member state.

So what of Iraq andthe Arab world now? It is unlikely that Gates made his comments without someconsultation with officials in Baghdad,and Iraqi officials understand the political and economic benefits of workingclosely with the Gulf Arab neighbors…..

Although it is hard to seethis plan as a short to medium term reality, especially until thepower-struggle that is inevitable once the U.S.withdraws is played out, Iraq islooking at other ways to integrate economically with the Arab world.

Local press reported recentlythat Iraq is toresume membership of two regional trade bodies, the Federation of GCC Chambersof Commerce and the Arab Sea Port Federation, from which it was expelledfollowing the 1990 invasion of Kuwait…..

As a member of an up andcoming bloc that will hold local political power and international economicinfluence, membership of the GCC would be no bad thing in itself, but a strong,multiethnic and independent Iraqacting as a gateway between the Gulf and the rest of the Arab world would bebetter.

Now this article clearlymakes a distinction between the GCC and the Federations of GCC Chambers ofCommerce.

So our next question is:

What is the FGCCC, and,Is Iraq a member of the FGCCC?

[Fact]

This next link would appear toanswer that question directly.

http/www.iraqdirectory.com/DisplayNews.aspx?id=8695

Iraq restores its membership in GCC

Translatedby IRAQdirectory.com – [3/11/2009]

The Union of Commerce and Industry Chambers for the GulfCooperation Council had agreed on restoring Iraq’smembership in the Union.

According to Oman News Agency reported that theGeneral Secretariat of the Gulf Cooperation Council agreed to restore Iraq’s membership as well as involving of Yemen.

This came at the conclusion of the twenty fourth joint meeting among theofficials of the General Secretariat of Cooperation Council for the heads andmembers of GCC, which was held at Bar al Jasa resort in Muscat.

The Omani minister of Commerce and Industry, Maqbool Bin Ali Bin Sultan haddelivered a speech at the meeting and reviewed the challenges that facing theGulf private sector in the coming period.

[Analysis]

Did you notice the subtle change inwording here? The headline clearlyindicates that Iraqhas “restored its membership in the GCC.”

But we know from question 1 that Iraqwas not a member of the GCC, so how could it “restore” its membership?

The answer lies in the red quote above. We need to see if the Unionof Commerce and Industry Chambers for the Gulf Cooperation Council isin fact the GCC.

What is the difference betweenthe GCC and the FGCCC?

[Fact]

Is the Union ofCommerce and Industry Chambers for the Gulf Cooperation Council related to theGCC?

Here again is the link to theinitiating charter of the GCC:

http/www.gccsg.org/eng/index.php?action=Sec-Show&ID=1

And here is therelevant quote:

Encourage means of cooperation and coordination between the variousprivate sector activities, develop existing cooperation between the memberstates’ Chamber of Commerce and Industry, and encourage themovement within the GCC of workers who are citizens of the memberstates.

[Analysis]

So we see that theChamber of Commerce and Industry is a part of the greater GCC by its owncharter. But it is NOT the GCC itself.

What is the FGCCC?

[Fact]

The following link isthe founding charter of the FGCCC. Therelevant quote follows:

http/www.english.globalarabnetwork.com/GCC/the-federation-of-gcc-chambers-fgccc.html

Themounting feeling for the need of strengthening fraternity bonds andconsolidating steps enhancing economic cooperation among countries sharingcommon characteristics, objectives, and destiny had led to entertaining theidea of establishing a federation comprising the Chambers of commerce, industry,and agriculture in the Arab Gulf states.

Preliminary meetings in October 1976, attended by the federations and chambersof the seven Gulf Arab States, of Kingdom of Bahrain,State of Kuwait, Sultanate of Oman, State of Qatar, Kingdom of Saudi Arabia,United Arab Emirates, and the Republic of Iraq paved the way forestablishing the Federation of the Chambers of Commerce, Industry andAgriculture of the Arab Gulf States (FAGCC ). In October 1979, the Federationwas officially launched and Dammam – Kingdom of Saudi Arabia, was named as the host city . In 1990,and as a result of the Iraqi regime invasion of Kuwait, the Federation’s Council dropped Iraq’s membership and renamed the Federationas The Federation of GCC Chambers ( FGCCC ).

[Analysis]

We see that in fact Iraq was one of the founding members of the FGCCC. Hence the plans to “restore” it to thatorganization now make sense.

Furthermore, we can seethat restoring Iraq to the FGCCC does NOT mean that it is becoming a member of theGCC. However a further look at the FGCCCcharter makes it clear that the FGCCC is a part of the larger GCC.

[Fact]

From the charter here isa short statement that shows this fact:

In order to carry out its mission and achieve its main objectives,the Federation has been pursuing and participating in the following tasks:

1)establishing economic citizenship rights of GCC subjects ,includingthose for work, ownership and investment.

2)encouraging the freedom of movement of national products among GCCstates, without any administrative or custom barriers.

3)exploring areas and opportunities for establishing joint GCC economicprojects. Introducing, promoting and facilitating their creation and treatmentas national projects in all GCC countries.

[Analysis]

So we now see clearlythat the membership of Iraq in the FGCCC is a subset of the greater GCC. We also see that Iraq was originally one of the founding members of the FGCCC but wasNEVER a member of the GCC, which only has 6 members.

Did Iraq restore its membership in the FGCCC as stated that it would?

[Fact]

Once again we have alink:

http/translate.google.com/translate?hl=en&sl=ar&tl=en&u=http/al-iraqnews.net/new/local/29778.html&rurl=translate.google.com

And we have the relevantquote:

Iraq return as a member of theGulf Cooperation Council

August 22, 2009

Iraq return as a member of the Gulf Cooperation Council

Hamdani said in a statement singled out by the reporter News Agency, IraqiInformation / conscious

“During the coming Days there will be a meeting of the Council and therewill be active participation of Share of Iraq Effective for Iraq. It also willalter the decision of the Council’s decision to switch the name of thecooperation of the Council Chambers of the Gulf Cooperation to the chambers ofthe Arabian Gulf, pointing out Iraq’s return,

He pointed out that Iraq’s return as an active member of the Council ofCooperation Council GCC and to restore Iraq to the prospects for returning Iraqto the prospects of Investment business with all countries. ” Tradewith all countries. ”

So we now know that Iraqhas rejoined a trade organization, the FGCCC as an “active member”.

Recent Changes at the GCC

[Fact]

Now on January 20, 2010 wesee possible changes coming quickly at the GCC. Here is the link:

http/www.business24-7.ae/Articles/2010/1/Pages/03012010/01042010_e3673341d59b4c2a98cde28d2bc69ac2.aspx

Here is the relevant quotewith the important information in red:

GCC monetary authority soon.

By Staff Writer on Monday, January 04, 2010

Four Gulf nations will launch their monetaryauthority to set up a joint central bank at the end of February as part of anhistoric pact to create the Middle East’s first currency union, a senior Gulfofficial was quoted as saying yesterday.

Saudi Arabia, Kuwait, Qatar and Bahrain, members of the six-nation Gulf Co-operation Council(GCC), will officially launch their monetary union on January 23 following itsfinal summit approval last month, said Nassir Al Qaoud, GCC’s Deputy AssistantSecretary General for Economic Affairs.

“The monetary union will be enforced on January 23, a month after the fourth ratification document was depositedby the members with the GCC Secretariat,” Qaoud told the Arabic-languagepaper Al Riyadh.

“As for the Gulf Monetary Authority(GMA), which will pave the way for the creation of the GCC central bank, itwill start operating at the end of February,” he said.

Al Riyadh said Qaoud was reacting to newspaper reports that the central banksof the four countries halted lending operations at the beginning of 2010.

“Those reports carried wrong information that the central banks would stoplending at the start of 2010… this process requires several procedures, whichwill be the responsibility of the GMA,” Qaoud said.

“Any way, most central banks in those countries normally do not lend tothe government, which means these reports do not carry any newinformation,” said Qaoud.”

[Analysis]

What are we to make of thisstatement that the “monetary union will be enforced January 23”? Doesn’t this run in the face of what we justshowed, namely that it could be a decade before the monetary union of the GCCtakes place? Yet we see that the GCC hasdecided to move ahead with only 4 of its country members instead of all 6 ofthem. The affect, if any, on therevaluation of the Iraqi dinar has yet to be determined. If this monetary union does come to fruitionthen it is “possible” that the statement about the ECC determining the ERM mayrequire us to reconsider my statements regarding the meaning of the ERM within Iraqalone. I have no problem with thisbecause that is the normal meaning of Exchange Rate Mechanism. It was just that until NOW we didn’t haveseveral countries that MIGHT bring Iraqinto their fold. If that happened then theERM would definitely be required to ensure no radical fluctuations would takeplace.

A more reasoned approachwould be to state simply that it seems highly unlikely that Iraqwould be invited so quickly into this august organization, in spite of the recommendationof Defense Secretary Robert Gates. Therefore this becomes a “wait and see” issue for me.

Summary on Iraqand the GCC

How can we summarize what weknow against the rumors on various sites regarding Iraq’sjoining of the GCC?

The answer to this questionwill clear up an enormous amount of the confusion and hype about the RV beingimminent based on membership in the GCC.

First, Iraq isNOT a member of the GCC. Therefore anystatements made on rumor sites that by becoming a member it would have to RVare spurious and false. Since Iraq isNOT a member it does NOT have to have a recognized currency. This was the argument and it is false.

Second, Iraq IS now arestored member in a trade organization that is a subset of the largerGCC. It is also an “active member”

Third, there is “talk” thatsome want to make Iraq apart of the larger GCC and this has been pushed for several months now by suchpersons as Defense Secretary Robert Gates.

However, even IF the GCCshould eventually make Iraq a“full-fledged” member, we still do not know if Iraqhas to have an internationally recognized currency to become that member. That question will have to wait until it ismore imminent.

Finally, the recent statementthat 4 of the original GCC countries will form a monetary union on January 23does not mean that Iraqwill participate or even be invited to participate. We need to wait to get more information tomake any statement on this issue.

This means that the imminenceof the RV cannot be surmised based on these rumors or the fact that Iraqhas joined the FGCCC.

We are back to ground leveland can dispense with GCC questions, at least for now.

So what about the Exchange RateMechansim (ERM)?

Now this brings us back to the ERMand the fact that the ECC or Electoral Code of Conduct in some way allowed ormade it necessary for the ERM to come into force.

That is what the article abovestated. Yet it makes no sense because Iraq has no relationship now or in the foreseeable future in a“unified currency”.

This leads us to ask ourselvesthis simple question: what else couldthe term ERM mean with reference to Iraq?

I suggest to you all that the term“exchange rate mechanism” can have only one meaning when it refers to a singlecounty: the revaluation of its owncurrency.

Yes, the ERM in this article isreferring to the RV directly.

Within a country what is the“exchange rate mechanism”? It is the RV.

Between countries it meanssomething else, but within Iraq it can only mean the RV itself.

Now we can understand the trueimport of the article’s statement that the passage of the Electoral Code ofConduct determines the ERM (RV).

What it means is this: The passage of the ECC is necessary in orderto create the conditions for the RV to take place. In other words, it would not be allowed tooccur before the ECC is passed.

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