RIYADH: A landmark accord on monetary union among four members of the six-nation Gulf Cooperation Council (GCC) was signed here yesterday.

This long-awaited common currency agreement signed by Saudi Arabia, Kuwait, Bahrain and Qatar at the Conference Palace here calls for the establishment of the GCC Monetary Council this year that will pave the way for setting up a regional central bank in Riyadh.

"This is a landmark accord," said Saudi economist Ihsan Bu-hulaiga. "But it is highly desirable that other two members should also come on board and I am hopeful that the UAE and Oman will join at some point of time."

The UAE recently announced it was pulling out of the deal after expressing opposition to the central bank being located in Riyadh. Oman backed out in 2006.

"The GCC Monetary Council will manage the transition toward monetary union, which is targeted to be operational in 2013," said a GCC spokesman, Abdelaziz Al-Uwaisheg, here yesterday. The original target date for minting a common currency was 2010, but that was later postponed so that member states could have more time to work out differences.

"The currency union is the ultimate culmination of this integration and if that takes a bit longer it doesn't worry me," said Bu-hulaiga. The agreement will still have to be ratified by each of the four GCC governments of the remaining participants before it can be enacted.

GCC officials have said the Monetary Council will be in session before the end of the year. John Sfakianakis, chief economist at SABB, said the states that stayed out will eventually understand that "the benefits of joining far outweigh the costs of opting out."

He, however, said much remains to be done. "The European Monetary Union didn't happen overnight. Much was compromised by all sides as supranationalism took greater hold."

Speaking on the occasion, GCC Secretary-General Abdulrahman Al-Attiyah said the GCC foreign ministers would meet today to discuss many other regional issues. He said that today's ministerial meeting would take stock of US President Barack Obama's recent visit to Saudi Arabia and his speech in Egypt addressing US relations with the Muslim world.

All six GCC foreign ministers, including Anwar Mohammad Qirqash, UAE minister of state for foreign affairs, have arrived in Riyadh for today's ministerial meeting.

Al-Attiyah, who met Yemeni Foreign Minister Abu Bakr Al-Qirbi here yesterday, said they jointly reviewed aspects of cooperation between the GCC and Yemen and other issues of mutual interest.

As a prelude to today's meeting, the GCC and Yemen discussed the steps to be taken to integrate Yemen's economy into economies of the GCC states through supporting the development process in Yemen.

Al-Attiyah and Al-Qirbi also talked about the agenda of the 4th joint meeting of the foreign ministers of GCC and Yemen. The agenda of that meeting also includes several issues related to promoting the partnership and cooperation between Yemen and GCC states.

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