By Gordon Platt
Riyadh, future home of the GCC Monetary Council
The UAE government announced plans to set up a federal credit bureau to collect information on individuals and corporations. The ministry of finance says the bureau will prepare reports and credit ratings to help financial institutions make appropriate lending decisions. In addition, Dubai's customs revenue could be doubled once the Gulf Cooperation Council (GCC) implements a value-added tax (VAT), which is scheduled to happen by 2012, according to Ehtisham Ahmad, an adviser to the UAE prime minister's office. GCC finance ministers will meet this month to discuss VAT, Ahmad said at a workshop sponsored by the Dubai International Financial Center.
Muhammad Al-Jasser, governor of the Saudi Arabian Monetary Agency, was named to head the GCC Monetary Council in Riyadh, the precursor to a regional central bank. The UAE and Oman were not represented at the meeting of GCC central bank governors, since they have declined to go along with the monetary union. Al-Jasser says the GCC bank will prepare for the issuance of coins and notes for the planned single currency.
Elsewhere in the region, Bahrain-based Gulf Finance House (GFH) signed memorandums of understanding with the Syrian Investment Authority on behalf of an Islamic bank it is establishing in Syria to be known as Syria Finance House. The MOUs cover plans to develop an economic zone, power projects and phosphate mines. GFH has said it is in the advanced stages of obtaining a license for the new bank, which will operate as both a commercial and investment bank.
Standard & Poor's lowered Jordan's long-term credit rating by one notch to BBB-. It said the global economic slowdown and a decrease in external grants resulted in an increase in the country's budget deficit.