In the midst of economic uncertainty due to the global financial crisis, Gulf nations are taking action by agreeing to a Gulf monetary union pact on Tuesday, which will see Qatar, Kuwait, Bahrain and Saudi Arabia creating a joint central bank and a single local currency, according to Al Jazeera.

The United Arab Emirates declined to join the pact because of the chosen base for the future central bank: the Saudi capital of Riyadh. Oman will also not be part of the union because it cannot meet the prerequisites at the present time. However, Mustafa al-Shamali, Kuwait’s foreign minister, expects to the two nations to enter the monetary initiative.

“The Gulf monetary union pact has come into effect. Accordingly, GCC central bank governors will work out a timetable for the establishment of the Gulf central bank to ultimately launch the single currency,” said al-Shamali.

The Associated Press reports that the council wants the goal to be met by 2010, which would see a Gulf monetary council be setup followed by a central bank, which will then establish a single currency. However, analysts doubt the deadline will be met.

The London Telegraph notes that between them all, they have economic clout worth $1.2 trillion, 40 per cent of the world’s oil reserves and financial power equal to China. (via digitaljournal.com)