Centralised payment system sought

A centralised regional interbank payment system supported by Arab central banks and monetary agencies should be set up, UAE Central Bank Governor Sultan bin Nasser Al Suwaidi said yesterday. This would have a positive effect on the movement of investments among Arab countries.

"The system would enhance inter-Arab investments as well as tourist movements," said Al Suwaidi. "Regional payment systems have become the most important component of co-operation as these systems are available in Latin America, Asean countries and the European Union.

"The UAE has developed many payment systems, including the interbank offered rate, cheque clearance systems and wage protection systems. These schemes have helped improve banking services in the country, especially the services provided to individuals. In addition, the UAE is now ready to become linked electronically to other Arab countries."

Sheikh Hamad Al Sayari, a former governor of the Saudi Arabian Monetary Agency, was honoured at the Arab central bankers' meeting.

He said: "Central banks should have a vital role, especially in terms of the supervision and control on financial sector. The performance of Arab central banks during the international financial crisis was good due to structural reforms that were applied beforehand."

He said the size of the Arabic economy as a percentage of the global economy had fallen from 3.4 per cent in 1983 to 3.1 per cent in 2008.

"This comes despite the fact that the Arab population as a percentage of the world population rose from 3.9 per cent to five per cent during the same period. Arab gross domestic product increased fivefold from 1983 to 2008, from $485 billion (Dh1.7 trillion) to $1.959trn.

"Global GDP also rose fivefold, from $12.1trn to $60trn. Over the same period the world's population rose by 43 per cent, while the Arab population rose by 86 per cent – but the increase in our population was not exploited."

Jassim Al Manai, Chairman of the Abu Dhabi-based Arab Monetary Fund (AMF), a key Arab League financial institution, said the crisis remains a major concern to all countries despite signs of the start of a recovery.

Addressing a meeting of the Council of the Arab Central Bank Governors in Abu Dhabi, he said regional governments were quick in dealing with the repercussions of the crisis by taking fiscal and monetary counter-measures.

But he warned there should be no "complacency or over-optimism" on the grounds it is too early to talk about a full recovery in the global economy. "Even if the crisis is fully over, we should not expect the situation to return to normal as it was before the crisis," said Manai.

 

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