The current stage of development of the world economy is characterized by the activation of regional economic relations. A new wave of interest in regionalism has not spared the Arabian Peninsula, where since the beginning of the century there has also been an increase in integration cooperation between the GCC countries. In 2001, the "Arab six" concluded a new economic agreement, on the basis of which the customs union was formed in 2003. However, the countries of the Cooperation Council set more ambitious goals - to form a common market in 2007 and introduce a single currency in 2010. The article is devoted to the ways and prospects of deepening integration relations in the region.

The Cooperation Council for the Arab States of the Persian Gulf (GCC) is an integration association that includes six Arabian monarchies: Bahrain, Qatar, Kuwait, the United Arab Emirates, Oman and Saudi Arabia. The Cooperation Council was formed on May 25, 1981 at a meeting of the leaders of these States in Abu Dhabi. The main factor that led to the emergence of this organization was ensuring security in the region. In the late 1970s and early 1980s, the situation in the Persian Gulf sharply worsened. In 1979, the Islamic Revolution took place in Iran, after which Iran began to support anti-government forces in the Arabian countries, openly declaring the need to overthrow monarchical regimes in them. In November-December 1979, the Shiite group of Juhayman al-Otaibi, organizationally and financially supported by Iran, organized armed demonstrations of the population in the Eastern province of Saudi Arabia, inhabited mainly by Shiites, and seized the holy mosque in Mecca. In 1980, the Iran-Iraq war began. Both Islamic Iran and Baathist Iraq were equally hostile to the West, and the winner of this war would have tried to extend its influence to the entire region. Seeing a revolutionary Iran as a major threat, the Arab countries supported Iraq, although they were afraid of its increased military potential.

These developments, which took place in a short period of time, alarmed the Arabian monarchies, forcing them to unite within the framework of a sub-regional organization to strengthen their independence, counter external threats and foreign interference.

FIRST STEPS

The main founding document of the GCC, the Basic Charter, was adopted at the first GCC Summit in Abu Dhabi. He defined the goals of cooperation in the economic, social, scientific, technical and cultural spheres, and established the main working bodies of the Cooperation Council. The main governing body of the GCC

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It is the Supreme Council, consisting of the heads of Member States. It meets twice a year to discuss key issues of cooperation. Recommendations and proposals for integration, including draft general laws of the GCC, are submitted to the Supreme Council by the Ministerial Council, which consists of Foreign Ministers or other delegated ministers. It meets every three months. Various intergovernmental commissions and committees also report to the Ministerial Council. The GCC General Secretariat, which is headed by a Secretary-General appointed by the Supreme Council for a period of three months with the right to extend it for another term, monitors the implementation of decisions taken, as well as ensuring the current functioning of the organization as a whole, including its representation in the international arena. The office of the General Secretariat, consisting of about 400 officials, is located in the capital of Saudi Arabia - Riyadh.

The main purpose of the Cooperation Council in the light of the events described above was considered to be the development of security coordination. Based on the unified defense strategy adopted in 1984, parts of the Peninsula Shield joint contingent were formed, including ground forces, Air Force and Navy units, which were subordinated to the General Secretariat of the Council. They were based at a specially built military base in the vicinity of the Saudi city of Khafr al-Butyn near the Kuwaiti border. Uniform training programs for military personnel were developed and adopted. However, the military aggression of Iraq against Kuwait in August 1990 showed the inability of these units to independently repel an external threat, calling into question the effectiveness of military integration. This forced the GCC countries to rethink the concept of ensuring national security, in which the main role was assigned to external security guarantors, primarily military assistance from Western countries, which reduced interest in strengthening cooperation in the military-technical sphere.

Nevertheless, cooperation in this area continued. In 1997, a plan to create a unified military communications and early warning system was approved. The construction of the united air defense system "Peace Shield", which was based on Saudi air defense, has begun. In 2001, a system of aircraft identification and tracking called "Cooperation Belt" was launched [Ghukasyan and Filonik, 2004]. However, many of the declared projects of cooperation in the defense sector remained unrealized. So, the number of joint rapid reaction forces is currently about 8 thousand people, although it was planned to increase it to 20 thousand. The reason for the stalling of military cooperation is the" lack " of trust between GCC members, the fear of small states becoming dependent on Saudi Arabia, and a different understanding of the sources of external threats. The Gulf states have put their national interests first in the defense sector, which puts collective security issues on the back burner.

With the overthrow of Saddam Hussein's regime in Iraq, which was the main threat to the Arabian monarchies, the urgency of military integration has further decreased. Some countries began to express doubts about the feasibility of the existence of joint armed forces. In November 2005, Oman's Foreign Minister, Youssef bin Alawi bin Abdullah, stated:: "After the fall of the previous Iraqi regime, there is no need for a joint military force" [Oman dismisses..., 2005]. This position was supported by Qatar, which opposes the dominance of Saudi Arabia in military integration and the deployment of joint forces on the Kuwait-Iraq border, despite the elimination of the threat to Kuwait from Iraq. After these countries expressed their intention to withdraw their military personnel from the Peninsula Shield force, a decision was made in December 2005 to send national troops to the Peninsula Shield.-

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In the opinion of Sami Faraj, Director of the Kuwait Center for Strategic Studies, "this is the first step towards disbanding these forces" [GCC Leaders..., 2006].

In parallel with military cooperation, the Gulf countries expanded their economic ties. The main document on the basis of which economic integration was carried out was the "Joint Economic Agreement", adopted in 1982. It provided for liberalizing the movement of labor and capital within the region, removing customs barriers, deepening technical and monetary and financial cooperation, and coordinating foreign and domestic investment policies. Citizens of the member States were guaranteed broad rights in the economic sphere. At the same time, the agreement did not contain clear language on most issues of cooperation and was declarative in nature. Moreover, article 24, which dealt with the implementation of the agreement, stated that "any of the participating countries may be temporarily released from fulfilling the terms of the agreement if the internal situation or special circumstances so require."

In 1983, a free trade zone was established in the region, which abolished customs tariffs and other payments on products produced in the member countries. Such products were considered to be manufactured by an enterprise with at least 51% of its capital owned by GCC nationals and generating at least 40% of added value. However, this simple rule in theory did not work in practice due to various non-tariff barriers and the bureaucratic procedure for obtaining a certificate of "national origin" for goods, which was issued by a special commission.

Discriminatory practices in the distribution of government orders have become widespread in the GCC countries. Since the 1980s, the governments of almost all Arabian countries have given preferences to domestic products when placing government orders, regardless of their high cost or poor quality. Given the scale of budget spending in the oil-producing countries of Arabia, this issue was of crucial economic importance. The Government of Kuwait, for example, gave its producers a 10 percent price head start when selecting contractors. In Saudi Arabia, national producers have been awarded at least 30% of government contracts since 1983. Other countries of the Cooperation Council followed similar practices. In the 1990s, there was a certain revision of this practice - preferences were given to goods produced in the GCC, but still domestic producers retained some advantages over their Arabian neighbors. For example, in Kuwait, national companies had a 10% price advantage over foreign firms and a 5% advantage over firms from other GCC countries (Legrenzi, 2003).

The 1982 Economic Agreement provided for the establishment by 1987 of limits on customs duties on foreign goods imported into the GCC as a preparatory step towards the establishment of the customs union. Although this task was completed four years ahead of schedule - on September 1, 1983, the minimum tariff rate was set at 4%, the maximum-20%, the further formation of the customs union was slowed down due to deep discrepancies regarding the size of foreign customs tariff rates.

These differences, in turn, were determined by differences in development strategies. Thus, Saudi Arabia, which has the largest industrial potential in the Cooperation Council, has used trade policy as an important tool in implementing an import-substituting development strategy, actively subsidizing domestic producers and protecting them from competition for foreign goods. Survival

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Some industries were only possible with the maximum level of customs protection, so the Saudi government advocated maintaining a high tariff rate. Saudi Arabia was the only G-6 country that had a sufficient domestic market size to implement such a strategy, although only in certain sectors. Bahrain's trade policy was also aimed at ousting imported goods from the domestic market and replacing them with domestic ones, but the emphasis was placed on creating production facilities with the participation of foreign capital. The Bahraini Government has actively encouraged the development of joint ventures that produce a wide variety of products, from toiletry and plastic products to medicines, etc.

The UAE has historically pursued a policy of free trade. The low level of customs duties allowed local firms to import foreign goods for their subsequent re-export to their neighbors. This strategy was followed, in particular, by Dubai, whose economic prosperity was ensured by trade. It levied a minimum duty on imports so that they could then be re-exported to Saudi Arabia and other members of the Council. This caused discontent in Riyadh, which tried by all means to protect its young industries from what it considered "unfair" competition.

The collision of protectionist and liberal policies resulted in a low level of harmonization of the national legislation of the Gulf countries and the general legislation of the GCC, conflicts between the two systems, the prevalence of national laws over the laws of the Council, and a slowdown in the process of standardization of goods, which gave rise to numerous non-tariff restrictions in trade relations. The difficulties of forming the customs union, among other things, were explained by the historical background of the issue. Prior to the discovery of large oil deposits in the region, relations with the trading community were of paramount importance for the Arabian sheikhs. Customs duties were the main source of filling the treasury, and the right to set them was the most important power lever. The loss of control over trade tariffs was regarded not only as a loss of a significant part of sovereignty, but also as a serious weakening of the domestic political positions of the ruling elite.

These problems in economic cooperation hindered the development of intraregional trade. During the twenty years of the Cooperation Council's existence, the share of intraregional trade in the total trade volume of the GCC countries increased slightly - from 5% in 1981 to about 7% in 2001, which is significantly lower than in other integration groupings (for example, in the EU countries, the share of mutual trade of member countries exceeds two-thirds of the total trade volume)..

ECONOMIC AGREEMENT OF 2001

The GCC leaders ' summit in Muscat in December 2001, where they openly admitted that they were not satisfied with the level of integration achieved, can be considered a turning point in the development of Arab economic integration. So, then Crown Prince and now King of Saudi Arabia Abdullah bin Abdulaziz Al-Saud said: "We are not ashamed to admit that we have not achieved the goals set 20 years ago... Objectivity and honesty require us to recognize that we have achieved too little and that most of it remains to be realized... Our attachment to the traditional concept of sovereignty is the main stumbling block for unifying efforts" [Looney, 2003, p.2].

To boost the integration process, the GCC countries decided to update the contractual framework in the field of economic cooperation. The "Economic Agreement between the countries of the Cooperation Council" adopted in 2001 brought the union to a new level.-

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a completely new level of interaction. It establishes the principles of functioning of the customs union, lays down the foundations of the common market, contains provisions on the harmonization of product standards; GCC citizens are granted equal conditions and rights when hiring in the public and private sectors, conducting commercial activities, in the field of education, health, social services, social and pension insurance. The General Secretariat and its committees are responsible for monitoring the implementation of the agreement. Article 27 defines the procedure for resolving disputes that may arise during the implementation of the agreement.

The new agreement allowed the "Arab six" to expand integration cooperation in the economic sphere. In 2003, after 15 years of negotiations, the GCC Customs Union was finally formed, with a three-year transition period during which all customs regulations and procedures should be harmonized. The foreign customs tariff is set at 5% for "non-core "goods and 0% for "core" goods (53 tariff items). The import of certain goods is restricted (an import license is required) or prohibited for reasons of maintaining public order, in particular morals and health. Regarding the import of alcoholic beverages and pork, the GCC countries could not reach a compromise: the import of these products is allowed only through the customs offices of those countries that allow their import. Customs duties are collected by each of the member countries, transferred monthly to the general account and paid on a pro rata basis to the members of the union.

The establishment of the Customs Union eliminated the rule of" national origin " of goods and related administrative barriers. Customs procedures and fees should now be carried out at a single checkpoint, regardless of the final destination of the goods. Nevertheless, some restrictions on intraregional trade still remain. Thus, internal customs procedures are abolished gradually over a three-year period. Even at the final stage, since the beginning of 2006, customs and border control has been maintained, albeit to a small extent, the purpose of which is to prevent the smuggling of prohibited products and carry out quarantine measures for live goods. The complete elimination of customs checks at the border can significantly improve the efficiency of the customs union, but this will require the harmonization of all health standards and the use of alternative ways to prevent smuggling through the organization of special internal measures. Differences in product standards also create obstacles to the free movement of goods between the countries of the customs union. Recognizing the seriousness of this problem, the leaders of the Cooperation Council countries established the Gulf Organization for Standardization and Metrology (formerly the Saudi Standards Organization) in 2001. However, despite the adoption of more than 1,700 GCC standards, there are still discrepancies in the standardization system that create confusion for business people. In particular, there are significant differences in the established shelf life of goods [Storm and Siegfried, 2005, p. 29].

As the European experience shows, until the process of unification of national standards is completed, the effectiveness of the customs union largely depends on the extent to which the principle of mutual recognition of standards is observed. In the Cooperation Council, this principle applies in accordance with the executive provisions of the economic agreement of 2001.Since national standard-setting bodies have recently emerged in most GCC States (before that, third-country standards were used, mainly in the United Kingdom), the differences between them are relatively small.

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The customs union still does not have anti-dumping, antitrust and some other services that can quickly respond to changes in external factors, for example, take urgent measures to protect domestic producers, represent the interests of the customs union in negotiations with the WTO and other regional groupings, etc. A uniform training program for customs personnel, which is necessary for the correct implementation of the common customs legislation by all members, has not been adopted. Solutions to these complex issues have not yet been found, as evidenced by the fact that at the Abu Dhabi summit in December 2005, the GCC leaders decided to extend the transition period for one year-until 2007 [GCC States..., 2005].

Nevertheless, the establishment of the customs union has already led to a significant increase in intraregional trade. Thus, in the first two years, the trade turnover between the GCC countries increased from $ 12.7 billion in 2001 to $ 23.7 billion in 2004, i.e. increased by 57% [Gulf Industrial Bulletin, Vol. 7, March 2006]. The growth of mutual trade creates favorable conditions for the development of industrial production, structural adjustment of national economies, which reduces their dependence on the world market situation.

The next stage of integration of the GCC countries-the creation of a common market, where the principle of "four freedoms" (free movement of goods, services, capital, labor) will operate-is being completed. The " six " intends to announce its creation in 2007.

An important aspect of the formation of the common economic space is the development of regional infrastructure. In 2005, GCC leaders approved the construction of the Arabian railway network, designed to expand the mutual flow of goods and people between the member countries of the union. It is planned to lay two lines: Kuwait-Saudi Arabia-Bahrain-Qatar-UAE-Oman (1970 km) and Kuwait-Saudi Arabia-UAE-Oman (1984 km), which will pass through the largest ports of the Persian Gulf. The estimated cost of the project is $ 6 billion. It is planned that its implementation will take four years.

Cooperation in the fuel and energy sector is becoming more active. In 2005, work began on the creation of the GCC energy system, which will reduce the cost of electricity generation and increase the reliability of power supply to public utilities and industry. The project will be implemented in three stages. First, there will be a merger of the electricity networks of the northern part of the Persian Gulf: Saudi Arabia, Kuwait, Bahrain and Qatar. The contract is worth $ 1.95 billion. A Swiss company has been granted permission to carry out the work, which should be completed by mid-2008. 40% of the necessary funds will be provided by Saudi Arabia, 36.5% - Kuwait, Qatar and Bahrain allocate 13.5% and 10%, respectively. At the second stage, which is expected to cost $ 300 million, the Southern Electric System will be created, which will include the UAE and Oman. Finally, at the final stage, approximately by the end of 2010, the Southern and Northern electric systems will be combined into a single GCC power system, which will require an additional $ 137 million. The project is characterized by a high level of profitability; according to expert estimates, it should pay off in four years. In the future, the Gulf states plan to connect the GCC energy system to the power grids of Arab and European states and establish electricity exports.

There are also broad prospects for cooperation in the gas industry. Only Qatar has large deposits of non-ground natural gas in the GCC, while in other countries the proven reserves are too small for commercial development, which makes cooperation in this area a vital necessity. At the end of 2004, an agreement was signed on the supply of natural gas from Kazakhstan.-

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packaging in the UAE for a 25-year period of 3.2 billion cubic meters. feet per day as part of the Dolphin project. The project provides for the construction of a gas processing complex in the Qatar industrial center Ras Laffan and a 370-kilometer pipeline that will deliver already processed gas to terminals in Tawelah (UAE). The project is being implemented by the Abu Dhabi-registered consortium Dolphin Energy, whose shares are distributed between the Abu Dhabi government-owned Mudabala company (51%), France's Total France (24.5%) and America's Occidental Petroleum (24.5%). The pipeline is scheduled to be launched at the end of 2006, and it is expected to reach its planned capacity within two years [Dolphin Project..., 2005]. Another participant of the Dolphin project is Oman. In 2004, the construction of a 182-kilometer gas pipeline was completed, which supplies Omani gas to Fujairah. Omani gas supplies to the Principality of Ras al-Khaimah also started in May 2005. However, after the construction of the UAE-Qatar gas pipeline is completed, the pumping direction will be expanded and Qatari gas will go to Oman. In 2005, Qatar and Bahrain signed a preliminary agreement on gas supplies. Gas supplies to the latter are expected to start in 2008.

Despite the undisputed importance of the Dolphin project for economic integration in the region, its expansion is hindered by political differences and tensions between individual GCC members. So, due to tensions in relations with Doha, Riyadh blocks the construction of the Qatar-Kuwait gas pipeline, the route of which should run through Saudi territorial waters. In this regard, the settlement of the most acute problems in relations between the GCC countries, primarily caused by territorial disputes, becomes the most important condition for activating economic ties between them. The resolution in 2001 of the territorial dispute between Bahrain and Qatar, which had brought them to the brink of armed conflict for a long time, provided the basis for their signing in 2005 of a memorandum of understanding on the construction of a 40-kilometer two-lane highway overpass. The estimated cost of the project is $ 2 billion. The flyover will be a natural extension of the 24-kilometer King Fahd causeway linking Bahrain and Saudi Arabia. Its opening in 1986 gave a powerful impetus to the development of tourism business in Bahrain. So, if in 1985 The country was visited by about a million tourists, while in 1996 only 2.4 million people arrived via the dam, 63% of whom were Saudis. There is no doubt that the construction of the Bahrain-Qatar flyover will also contribute to the development of trade and economic relations between them.

PROSPECTS FOR CURRENCY INTEGRATION

The strategic goal of the "six" countries is to transform the GCC into a monetary and economic union. Introduction of a single currency - " Gulf dinar "(the name used in the Arabian press, the future GCC monetary unit does not yet have an official name) scheduled for 2010. It should be noted that the Arabian countries already have experience in currency cooperation. So, during the period of colonial British rule in the emirates of the Persian Gulf, the Indian rupee was in circulation. After gaining independence, Qatar and Dubai used a common currency: under the currency agreement of March 21, 1966, the Qatar-Dubai rial was used in both states, which lasted until 1973.

The creation of a monetary union promises to bring significant dividends to the "Arab six". First, according to calculations and practice, the introduction of a single currency will lead to a significant increase in mutual trade, which will help diversify the region's economy and reduce its dependence on oil exports. Secondly, it will have a positive impact on the development of the capital market, which will attract new investors.-

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even regional and international investments in GCC countries ' securities. The EU experience shows that the transition to the single currency increases capital inflows to the regional securities market, and investments in financial instruments, such as corporate bonds, increase significantly.

Some researchers believe that after the formation of a monetary union, the Arabian countries will sell their energy resources in "Gulf dinars", refusing to use the US currency [Rutledge, 2004, p.2]. However, such a move by the Arabian monarchies seems unlikely, since it will lead to a breakdown of the settlement system in the global energy market and cause dissatisfaction with the United States, the main military and political ally of the Arabian monarchies. Nevertheless, in the long run, the Gulf dinar can claim to be the main reserve currency of Arab states that are interested in the existence of a strong Arab monetary unit, especially the union currency, which will be perceived in the Arab world as evidence of its unity. Arab and Muslim countries can significantly reduce their reserves in the US currency in protest against Washington's policy in the Middle East, transferring them to the Gulf dinar, if it becomes sufficiently reliable. It is possible that some countries will even want to link the rates of their national currencies to the Gulf dinar.

Since 2002, there have been persistent calls in the Islamic world for the creation of its own currency for conducting trade operations between Muslim countries. For example, former Malaysian Prime Minister Mahathir Mohammad has repeatedly proposed the introduction of an "Islamic gold dinar" [Kobyakov, Chichkin, 01.12.2004.]. Thanks to the rapid development of Islamic financial services in the region and the huge donor assistance provided by the GCC to Muslim countries, the Gulf dinar has a good chance of assuming the functions of an alternative "Islamic currency". A weighty argument in this matter can be the special position occupied in the Muslim world by Saudi Arabia, on the territory of which the most revered shrines in Islam are located. This will enable the countries of the Cooperation Council to receive share premium (seigniorage), which will become an additional source of replenishment of the treasury to oil.

The formation of a monetary union also has a political aspect. Full integration, including the introduction of a single currency, would raise the international prestige of the GCC and significantly strengthen the organization's foreign policy positions. It is assumed that the Gulf dinar will be linked to the basket of currencies of the main trading partners of the Cooperation Council countries, in which the euro and yen will have a significant weight along with the dollar, which will reflect the strengthening trade relations with Europe and Asia. In favor of abandoning the "sole" peg to the dollar, the fact that the recent depreciation of the US currency has a negative impact on the trade balances of the Arabian countries, since it leads to an increase in the cost of imports coming mainly from Europe.

Pegging the dinar to the dollar is also unprofitable for the Gulf countries, since it actually means that the level of interest rates in the GCC depends on the decisions of the US Federal Reserve System taken on the basis of the economic situation in the United States. Usually, when oil prices rise, the Fed lowers the discount rate in order to stimulate economic growth. In the Arabian countries, the increasing inflow of oil revenues dramatically increases the volume of money supply, which, if interest rates are lowered, is fraught with the formation of a financial "bubble". Thus, dependence on US monetary policy worsens cyclical trends in the economies of GCC members, which, of course, contradict the interests of the countries of the region. So they are gradually reducing their dollar reserves. According to data from the Bank for International Settlements in Switzerland, for the last

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For five years, the central banks of the GCC states reduced the share of dollars in their gold and foreign exchange reserves from 70% to 66% (Zhuikov, 2006).

The processes of forming currency associations in the world are based on the theory of "optimal currency zones", which was developed in the 1960s in the works of R. Mundell [A Theory of Optimal..., 1961], R. McKinnon [Optimum Currency..., 1963] and others. According to this theory, for the formation of an optimal currency zone, at least:

1) mobility of factors of production (goods, services, capital, labor). The Arab countries pay special attention to economic liberalization. As part of the formation of a common market, favorable conditions are created for the expansion of the exchange of goods and services, and the free flow of capital. At the same time, due to restrictions on immigrants, labor mobility in the GCC is low. As for the indigenous population, the paternalistic system established in the Arabian monarchies, under which citizens are virtually guaranteed high-paying jobs in the public sector, almost completely discourages them from changing their place of work. Increasing the mobility of GCC citizens is also hindered by restrictions on certain types of activities and differences in the legislative norms governing the labor market;

2) economic diversification. All GCC countries are more or less dependent on hydrocarbon exports. In 2001, the contribution of the oil and gas sector to the GDP of the Cooperation Council was 36%. In 2000, oil exports accounted for 80% of the revenue side of the budgets of the Arabian countries [Storm and Siegfried, 2005, p. 17]. The non-resource sector also depends on oil as a source of capital and a factor that provides the purchasing power of the Arabian markets. As a consequence, the GCC economies are highly vulnerable to fluctuations in oil prices on the global market;

3) price and wage elasticity. In the GCC countries, prices and wages are virtually unaffected by oil crises. The main stabilizing role in reducing oil prices is played by government spending. Since the exchange rate is not used by the GCC countries to counter external shocks, low price and wage elasticity cannot be an obstacle to the formation of a monetary union;

4) stability of exchange rates of national currencies in relation to each other. The GCC economies are characterized by low inflation rates and high stability of national currency rates, which is ensured by pegging to the US dollar. Kuwait was the last country to officially link its currency to the dollar in 2003. Since the Kuwaiti dinar was previously calculated on the basis of a basket of currencies of the country's main trading partners, in which the dollar had the greatest weight, fluctuations between the six Arabian currencies have been minimal over the past decade. Pegging to the dollar, which guarantees the stability of the Arabian currencies, is likely to continue until 2010, as it is necessary during the formation of the monetary union, as well as after, during the trial period. However, in the future, as the union "matures", the Arab countries may reconsider their attitude to the US dollar.;

5) the presence of appropriate political will. Over the 25 years of the GCC's existence, Arab leaders have repeatedly demonstrated their commitment to integration. Despite the fact that integration has been uneven and there have been occasional disagreements between individual countries, the leaders of the" six " remain determined to expand cooperation and interaction in all areas. The GCC is the only sub-regional association in the Arab world that has achieved practical results in the field of integration. Other Arab sub-regional groupings (Arab Maghreb Union, Arab Cooperation Council, etc.)-

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standing time has virtually ceased to exist. The viability of this Arab union is based on a complex of cultural and historical ties of the participating countries, political, ideological and religious homogeneity, orientation towards the principles of a market economy, common socio-economic and other problems, the need for joint actions to counter internal and external threats, and a pro-Western course in foreign policy.

Although the GCC countries do not fully meet these criteria, this does not mean that they cannot form a monetary union. Of course, this will require serious and deep preparation, as this step will have important political and economic consequences. Thus, the members of the monetary union have a common monetary policy, so their economies should be sufficiently "synchronized". The establishment of the GCC customs Union is an important step in this direction.

The introduction of the single currency should also be preceded by the completion of the process of forming a common market and the creation of the central bank of the GCC. At first, the Arab countries did not intend to create such an institution. Instead, it was proposed to develop monetary policy directions at meetings of representatives of central banks. Subsequently, however, this idea was abandoned, considering it impossible to conduct a coordinated monetary policy without a common Central Bank. Its specific structure is under discussion. Two options are being considered: the merger of the existing national central banks into one and the formation of a Central Bank following the example of the European Central Bank. The powers of the future Central Bank of the GCC and the share of each country's participation in its capital have not yet been determined. These issues need to be resolved in advance so that the Central Bank of the GCC can start working even before the formation of the monetary union.

You will also need to mutually fix the exchange rates. The currencies of the GCC countries are quite stable due to their pegging to the US dollar, which simplifies the solution of this problem.

The GCC countries cannot avoid establishing "convergence criteria" - the main economic indicators required for a country's entry into a monetary union (the size of public debt, budget deficits, long-term interest rates, and the level of inflation). In the EU, their values, known as the Maastricht criteria, coincided with those of the eurozone's largest economy, Germany. The Cooperation Council is dominated by the economy of Saudi Arabia, which accounts for more than half of the total gross domestic product. Most of the monetary union criteria have already been agreed. Thus, the level of public debt should be maintained at a maximum of 60% of GDP (in EU countries, this figure also does not exceed 60%). In 2004, only Saudi Arabia, where the national debt was about 65%, did not fit into this framework, but in recent years there has been a steady trend towards its reduction. The gold and foreign exchange reserves of members of the monetary union must cover imports for at least six months. The maximum allowable inflation rate cannot exceed the GCC average plus 2%, and the interest rate is the average for the three countries with the lowest inflation plus 2 percentage points.

The greatest difficulty in discussing the "convergence criteria" was caused by the question of the acceptable level of the budget deficit. In the oil-exporting countries of Arabia, the budget deficit is closely linked to the oil market situation and sometimes reaches 20% of GDP when oil prices fall, which can be disastrous for the monetary union. For example, in the EU, the budget deficit should not exceed 3% of GDP. In December 2005, at the summit of the Supreme Council, it was decided to set this indicator also at 3%, however, according to GCC officials, with sharp fluctuations

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for budget revenues, certain deviations from this rule are allowed [Co-operating Council, 2006].
It is necessary to further standardize the procedure for providing statistical data. Currently, the analysis of the economic situation in the GCC countries is complicated by the lack of operational standardized information. Meanwhile, the need for it will increase many times to assess the compliance of members of the monetary union with the "convergence criteria". In addition, it is necessary to strengthen the coordination of economic policy. Such coordination in the GCC countries is still very weak. As a result, there are situations when several countries simultaneously create parallel industries, and with the formation of a monetary union, this is fraught with increased competition between them. In this regard, it is extremely important for the GCC to coordinate its economic development plans, taking into account the comparative advantages of its member countries, in order to avoid duplication of production capacity as much as possible.

Finally, it is necessary to prepare firms (especially small and medium-sized ones), as well as citizens of the GCC countries, in advance for the transition to the single currency. In the EU, for example, a large-scale information campaign covering all aspects of the transition to the single currency began three years before the introduction of the euro.

Thus, the current stage of development of the Cooperation Council is characterized by a weakening of cooperation in the military-technical sphere, while at the same time accelerating economic integration. Time will tell whether the Arab states will be able to implement their stated plans. The group's history shows that its goals were not always achieved. Thus, as early as in the 1981 economic agreement, the GCC members expressed their intention to coordinate monetary and banking policies "in order to establish a single currency." Nevertheless, no consistent actions were taken in this direction at that time. The extension of the transition period of the customs union creates certain difficulties in the integration process, but officials of the Cooperation Council have not yet announced an adjustment in the schedule of integration activities. The GCC countries are well aware that their ability to play a major role in the global economy, achieve sustainable growth and increase competitiveness in the global market directly depends on the development of integration ties between them.

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Gukasyan G. Filonik A. Araviyskaya integratsiya [Arabian Integration] / / Mirovaya ekonomika i mezhdunarodnye otnosheniya, 2004. N 2.

Zhuikov D. "Euro" of the Persian Gulf / / RBC daily, 20.09.2006.

Kobyakov A. Chichkin A. Currency of strategic purpose // Russian entrepreneur, 01.12.2004.

Co-operating Council // Oxford Business Group. Vol. 107. 02.01.2006.

Dolphin Project to Handle 3.2 bcf / d Gas in Initial Phase // The Peninsula. 30.05.2005.

GCC Leaders to Disband Peninsula Shield // Defense News. 02.01.2006

GCC States to Benefit from Economic Union // Daily News. 22.12.2005.

Gulf Industrial Bulletin // Gulf Organization for Industrial Consulting. Vol. 7, Issue 68, March 2006/http://www.go-ic.org.qa/

Legrenzi M. The Long Road Ahead: Economic Integration in the Gulf States // Cooperation South Journal. Vol. 2, 2003.

Looney R. Economic Integration in the Gulf: Does the Future Hold More Promise than the Past? // Strategic Insights, March 2003.

McKinnon R, Optimum Currency Areas //American Economic Review. Vol. 53. 1963.

Mundell R, A Theory of Optimal Currency Areas // American Economic Review. Vol. 516 1961.

Oman Dismisses GCC Defense Force // Middle East Newsline. 11.30.2005.

Rutledge E. Establishing a Successful GCC Currency Union: Preparations and Future Policy Choices. Dubai, 2004.

Storm M., Siegfried N. Regional Monetary Integration in the Member States of the Gulf Cooperation Council. ECB. June 2005. http://www.ecb.int/pub/pdf/scpops/ecbocp31.pdf

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