Requirements for Economic Convergence of the Gulf Cooperation Council Monetary Union (A Econometric Study for the Period 2005-2022)

Abstract

The paper examined the economic convergence of the Gulf Co-operation Council rates in preparation for monetary union. It discussed the economic feasibility of integration of financial institutions when they operate under the umbrella of conglomerate group of international markets.. The study aimed at developing a model explaining the requirements and the foundations of integration between financial institutions to help lay the foundations for times to achieve integration. Descriptive and standard analysis (using E- views) methods were used in the analysis of data. Findings indicated that the lack of some monetary and fiscal policies currently in place in the GCC countries makes it difficult to conduct analytical studies and provide the necessary economic and monetary indicators for the establishment of a monetary union on a solid foundation, where the only obstacle relates to the national sovereignty. Recommendations included the GCC need to speed up the implementation of the Board of Governors recommendations on criteria of economic performance convergence, to establish a central bank for monetary union, to give priority to economic interests rather than to political differences and to call for the formulation of an integrated Arab vision to protect the rights of Arabs and their money from international financial crisis. The researcher recommends following the standard studies in such researches to predict the values of explanatory variables in the long run in order to reach a mechanism to serve the Arab countries in terms of integration