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If and when the member states of the “Gulf Cooperation Council” form a single currency, what political benefits and/ or drawbacks could occur and how will international relations with the Middle East be affected?

This essay will seek to argue that if and when the member states of the "Gulf Cooperation Council" (GCC) form a single currency any advantages may seem to exceed any disadvantages but that the actual overall impact of the currency's creation for wider international relations with the Middle East will prove to be somewhat limited.

In order to see why we must first of all say something about the history of the founding states of the GCC: Saudi Arabia, Kuwait, Bahrain the United Arab Emirates (UAE), Oman and Qatar and the factors that lead to the GCC's creation.

The new regionalism theory seeks to explain how states by engaging in political and economic integration as trading blocks and regional organisations seek to manage in an increasingly interconnected world the forces of globalisation on their terms.

In the longer term the GCC still faces the problem of how to deal with the inevitable very longer term decline in oil based wealth: the end of the rentier state. Either a fiscal crisis or a growth in non oil trade amongst themselves and the rest of the world (or some combination) may bring about slow incremental political and economic change. The creation of the Kahleej Dinar will not by itself particularly amount to much.

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