Nixing GCC monetary union, Oman charts own way

Oman’s decision in early 2007 to opt out of the GCCmonetary union project has come as a blow to efforts by GCCstates to establish closer economic relations. However, thedecision was not necessarily based on a complete rejectionof the scheme. Rather, it is a reassertion of Oman’s need tofollow a different path until a more solid set of monetaryunion objectives is implemented by the other GCC states. Ithas also put under the microscope the GCC’s level ofpreparedness in dealing with its 2010 deadline for theproject. Prime candidate to join… on paper With the most conservative GDP growth of the GCC memberstates, Oman seemed likely to benefit from the much-vaunted ‘catch-up effect’ of monetary union, as seenfollowing the introduction of the euro. Oman was certainlynot struggling to meet the negotiated requirements in termsof fiscal policy: budget deficits are required to be cappedat 3%, while Oman had a fiscal surplus in 2005 of