Bahrain’s King To Give 1,000 Dinars ($2,650) to Each Family Ahead of Planned Protests

Latest appeasement (bribe) comes as activists call for protests to demand political, social and economic reforms.


Egypt Effect: Activists have called for protests to demand political, social and economic reforms [Reuters]

Ahead of protests planned to take place in Bahrain next week, the nation’s king has said he will give 1,000 dinars ($2,650) to each Bahraini family.

Friday’s announcement on state media came as the latest step that Sunni rulers have taken to appease the majority Shia public.

Activists have called for protests in Bahrain, starting from Monday, to demand political, social and economic reforms. The demonstrations will coincide with the tenth anniversary of Bahrain’s constitution.

Although most analysts do not see any immediate risk of revolt after popular uprisings toppled the leaders of Tunisia and Egypt, the small island nation is considered the most vulnerable to unrest among Gulf Arab countries.

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Arab states agree on single currency modelled on the euro in latest threat to dollar hegemony

The Arab states of the Gulf region have agreed to launch a single currency modelled on the euro, hoping to blaze a trail towards a pan-Arab monetary union swelling to the ancient borders of the Ummayad Caliphate.

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Traders at the Kuwaiti Stock Exchange

“The Gulf monetary union pact has come into effect,” said Kuwait’s finance minister, Mustafa al-Shamali, speaking at a Gulf Co-operation Council (GCC) summit in Kuwait.

The move will give the hyper-rich club of oil exporters a petro-currency of their own, greatly increasing their influence in the global exchange and capital markets and potentially displacing the US dollar as the pricing currency for oil contracts. Between them they amount to regional superpower with a GDP of $1.2 trillion (£739bn), some 40pc of the world’s proven oil reserves, and financial clout equal to that of China.

Saudi Arabia, Kuwait, Bahrain, and Qatar are to launch the first phase next year, creating a Gulf Monetary Council that will evolve quickly into a full-fledged central bank.

The Emirates are staying out for now – irked that the bank will be located in Riyadh at the insistence of Saudi King Abdullah rather than in Abu Dhabi. They are expected join later, along with Oman.

The Gulf states remain divided over the wisdom of anchoring their economies to the US dollar. The Gulf currency – dubbed “Gulfo” – is likely to track a global exchange basket and may ultimately float as a regional reserve currency in its own right. “The US dollar has failed. We need to delink,” said Nahed Taher, chief executive of Bahrain’s Gulf One Investment Bank.

The project is inspired by Europe’s monetary union, seen as a huge success in the Arab world. But there are concerns that the region is trying to run before it can walk.

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United Arab Emirates exit leaves Gulf currency plan on brink of failure

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Saudi Arabia dwarfs other states in the region and analysts say there is concern that a common currency would serve to concentrate power in Riyadh

A project to establish a common currency for the Gulf has been dealt a near-fatal blow with the decision by the United Arab Emirates to abandon monetary union after disagreement with Saudi Arabia over the location of a future central bank.

The loss of the Emirates to the currency project could accelerate decisions within some Gulf states to diverge from Saudi Arabia’s desire to maintain a currency peg with the dollar. This could lead eventually to the UAE, the Gulf’s most sophisticated economy, floating its dirham, analysts in the region said.

The UAE attributed its decision to quit the Gulf Cooperation Council (GCC) project to the choice of Saudi Arabia as host of the key monetary institution.

Evidence of mounting rivalry and distrust between the Gulf’s two biggest economies emerged two weeks ago, when a meeting of the GCC voted to locate the central bank in Riyadh. UAE officials expressed reservations about the decision. The choice of Riyadh would enhance the physical presence of Saudi Arabia within the GCC, as the organisation’s secretariat is already headquartered in the Saudi capital.

The UAE is the second state in the six-member GCC to pull out of the common currency, which was due to be launched next year. Oman had said already that it would not take part, but the loss of the Emirates, which has the greatest international trading links, makes it unlikely that the project will get off the ground.

Read moreUnited Arab Emirates exit leaves Gulf currency plan on brink of failure