On the Monetary Union of the Gulf States

This paper attempts to highlight the main characteristics of the economies of the Gulf
Cooperation Council (GCC) and their plan to form a monetary union by 2010. Several aspects
are considered such as the pattern of trade, the monetary side, and the fiscal side. The main
conclusion is that the large similarities among the GCC members reduce the costs of
introducing a single currency while the small intra-trade volume reduces the benefits.
Furthermore, in general the GCC states have achieved a noteworthy degree of convergence
taking the European convergence criteria as a reference.