Why isn't there a concept of a common currency amongst Arabs?

[Aeneas]

I really doubt why there is not unite currency of the League of Arab States?just like Euro.

It has 22 members: Algeria, Bahrain, Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen.

It has area over 14 million square kilometres,and population over 3.3 hundred million.and huge deposits of oil.

if there had been a unite currency of the League of Arab States.it would be a very strong rival to US dollars.even stronger than Euro.because the currency of the League of Arab States would surely based on oil deposits.

 

[godsavetheworld]

^^ Because of immense economic polaristation.

 

[notsuperstitious]

Because launching a common currency requires lots of mechanisms to be in place. The arab league is financially very unequal and may find it diffucult to get a consensus.

A sub group - the gulf cooperation council GCC, mainly made up of the richest arab countries is looking to launch a common currency. The plans are put off beyond 2010 due to current financial turmoil.

 

[Aeneas]

A sub group - the gulf cooperation council GCC, mainly made up of the richest arab countries is looking to launch a common currency. The plans are put off beyond 2010 due to current financial turmoil.

I had heard this plan before,The name "Khaleeji" has been proposed as a name for this currency.if true,the US dollars would be very displeased about it.so I think US will take all their enfort to prevent it happen.Israel is the very tool of US.

 

[wtf]

I really doubt why there is not unite currency of the League of Arab States?just like Euro.

It has 22 members: Algeria, Bahrain, Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen.

It has area over 14 million square kilometres,and population over 3.3 hundred million.and huge deposits of oil.

if there had been a unite currency of the League of Arab States.it would be a very strong rival to US dollars.even stronger than Euro.because the currency of the League of Arab States would surely based on oil deposits.

Arab countries have widely varying economic policies and governments that don't fully trust each other. Anybody who trusts each other is already grouped up into "United Arab Emirates" or in the original amalgamation of Saudi Arabia. Yemen and Oman don't have as much oil as Saudi and are separate. Iraq and Iran don't consider themselves fully Arab (more Persian/Baghdadi etc.).

Why do we need a new currency for that if all we are aiming at is something backed by oil ? Oil futures contracts are exactly that. And I bet that China single-handedly could turn the world trade from Dollars to something backed by oil. This way you have Iranian Oil futures being exactly equivalent of Saudi Oil Futures, independent of local economic policies.

Here is what I am thinking of - China exports a ton of underwear (or iPods or whatever). In return of accepting a million dollars it requires an oil futures contract valued at so-many-yens. That'll solve the 1-trillion-dollars of US debt problem for China (It will have to figure out what to do with all that Oil futures) while giving it energy independence. It can alternately re-sell these Oil futures to other countries from where they import stuff, like Vietnam. China can even standardize and guarantee these futures. That will make these standardized Oil contracts the new defacto currency of the world.

My guess is that China did try something like this before Olypmics (though not to destroy the dollar) by buying a lot of Oil contracts to have a proper Olympics - that involves selling dollars and hence weakens it while increasing demand for Oil .That ended up messing up Oil prices worldwide unintentionally.

The reason that Euro and Dollar are so strong is that they are relatively stable and are backed by large stable economies (better than being backed by oil). So the Arab countries can use all the dollars they get to buy companies in US/around the world.

 

[Aeneas]

for China,I hope RMB become strong currency.but beside RMB,I think the League of Arab should make another strong currency.even it may not be as strong as dollar or eruo.at least it should be strong as Japanese yen.in fact,they have resource to build such kind of currency.

 

[wtf]

for China,I hope RMB become strong currency.but beside RMB,I think the League of Arab should make another strong currency.even it may not be as strong as dollar or eruo.at least it should be strong as Japanese yen.in fact,they have resource to build such kind of currency.

A strong currency is a bad idea for a country that wants to export. For example, Japan is right now trying to deflate their currency. A strong currency is useful for a country that is a net importer.

While US does not export any finished goods (it imports almost everything), it exports capital by buying companies outside their borders - so it suits them. Since when you export capital production shifts from local to outside-borders, the local labour lose their jobs (For eg: Apple computer factory workers, once production shifts to China/Taipei). On the other hand the capitalists (who export the capital outside borders) get richer (For eg: Steve Jobs or Bill Gates).

If Middle east has a strong currency, then Oil prices (measured in terms of other currencies) go up -> hence giving more power to anyone who prices oil in non-middle-east currency, (like Russia) since their oil becomes relatively cheaper. It is easier for them to have local currencies loosely pegged to the dollar. That way they have some policy freedom on pricing of exports (oil) while having all the benefits of a strong dollar (they own a lot of property in the US).

Look at all the problems Russia is having because their currency is so strong. Their currency is strong and hence all Russians want to buy cheap European cars. This causes Russian car industry to fail. This in turn causes Putin to impose import restrictions and taxes. This lead to a riot late last year and Putin had to back down on the currency part.

A strong Renminbi depends on what China wants to do. If it wants to keep jobs in China, they should have a weak currency. If they want to buy foreign companies they should have a strong currency. They have been pragmatic about it so far, no idea what the long term strategy is. You also have to remember that Renminbi is not freely tradeable - Only freely tradeable currencies that can be transferred freely across borders can ever be strong. China knows this and wants it this way because this way they can control both local inflation and exports.

Note that US has been consistently asking China to make their currency stronger (until last year). That would have weakened the US Dollar, but also depleted some of the $2 Trillion reserves that China is holding.

 

[vkurian]

I had heard this plan before,The name "Khaleeji" has been proposed as a name for this currency.if true,the US dollars would be very displeased about it.so I think US will take all their enfort to prevent it happen.Israel is the very tool of US.

It will never happen as most of these countries are ruled by autocratic families.

 

[vkurian]

for China,I hope RMB become strong currency.but beside RMB,I think the League of Arab should make another strong currency.even it may not be as strong as dollar or eruo.at least it should be strong as Japanese yen.in fact,they have resource to build such kind of currency.

Just for your information RMB is the most doctored currency in the world. Chinese government has marked it to the dollar and kept it weak…..Americans are hopping mad about it.

It serves you good as you export maximum to US and the balance of trade is in your favour.

 

[wtf]

Just for your information RMB is the most doctored currency in the world. Chinese government has marked it to the dollar and kept it weak…..Americans are hopping mad about it.

It serves you good as you export maximum to US and the balance of trade is in your favour.

Except for the part where they have $2 Trillion or so which is held as US debt. If US currency deflates (which is a logical result of the TARP plan), Chinese foreign reserves lose value massively. If US inflation hits 10%, a 10 year bond almost halves in value.

It is a bomb with two triggers. And when it goes off, look for all the countries of the world lining up to deflate their currencies.

 

[Lockheed F-16]

Shia,Sunni, Wahhabi......, then there are also CIA agents like Mubarak;first we need a concept of muslim unity or such things will stay far away

 

[Aeneas]

Just for your information RMB is the most doctored currency in the world. Chinese government has marked it to the dollar and kept it weak…..Americans are hopping mad about it.

It serves you good as you export maximum to US and the balance of trade is in your favour.

yes,maybe Japanese were hopping mad about Plaza Accord in 1985 too.which they were forced to rise value of Japanese yen.China witness the Lost decade of Japan,so we had to stick to dollar.

I think,if there were strong eruo or arab currency,we needn't dollar peg.

 

[kaafirslam]

a common currency can never happen as Arab Unity is a myth