Opinion Editorials, September 2007
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How Possible Might Arab Gulf States Revaluate their Dollar-Pegged Currencies?
By Ali Al-Hail
ccun.org, September 29, 2007
As the Dollar keeps lowering against the Euro, Arab Gulf states, the largest oil producing world-wide have apparently, considered lately, according to reports revaluating their dollar-pegged currencies, despite attempts by some of these states to quash the validity of such reports. One rational presumably, is related to the disability of these states to follow the US interest rate cut recently.
Had such a fiscal precedence occurred, could have been a turning point in the traditional relations between the US and its widely, observed protectorate states. Nonetheless, there have been fears, since the emergence of such reports that any revaluation could have devastating consequences on the estimated trillion Dollar assets buying, the Arab Gulf states have been amassing for sometime in the international markets, amid allegedly, credit crisis suffered by international competitors.
Since Arab Gulf producing states (chiefly, oil and gas) retail their oil and gas in dollar, their imports from the euro zone and Asia have drastically, soared up to nearly, 40% compared to last year. Conceivably, these countries import almost entirely, without a single exception everything from abroad, despite denials, confusion and manipulation.
As a result, Dollar faintness has forced Arab Gulf states particularly, since the mid of this year to dehydrate their fiscal and capital account surpluses for imports and for investing in global markets albeit, their surpluses would arguably, sustain its fair strength, at least in the short run, due basically, to oil rising prices. The latter has, to a point reimbursed Arab Gulf states for the Dollar-record falloff against the euro. However, Arab Gulf states have never witnessed such an unprecedented inflation, because mainly, of the Dollar precarious position at present.
Having stated that, many argue that, while Arab Gulf states have been lately, intensifying the diversification of their investments in the international markets, despite its risks they seem to neglect their ordinary citizens who complain about domestic consuming markets devour for increasing prices while their wages can hardly, match up
Professor, Dr. Ali Al-Hail, Professor of Mass Communication, Twice Fulbright
Award Winner, Fulbright Visiting Scholar and Board Member of AUSACE, ASC, IABD, NEBAA, BEA, IMDA and EAJMC American Associations.
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