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Governor of the Central Bank of Kuwait (CBK) Mohammad Al-Hashel speaks during the 59th meeting held by central bank governors of the Gulf Cooperation Council (GCC) in Kuwait City on March 12, to discuss combating terror funding and boosting cooperation. (AFP)
C-banks to tackle laundering, terror KUWAIT GDP GROWTH SEEN UP TO 3.5% IN ’14

KUWAIT CITY, March 12, (Agencies): Central bank governors of the energy-rich Gulf met Wednesday in Kuwait to discuss combating terror funding and boosting cooperation, despite a tense diplomatic row between its member states. “We are a technical committee which does not interfere in politics,” Kuwait’s central bank governor Mohammad al-Hashel told reporters. Saudi Arabia, United Arab Emirates and Bahrain last week recalled their ambassadors from Qatar for allegedly interfering in their internal affairs.

Qatar categorically denied the accusation and did not recall its envoys. The four nations are members of the Gulf Cooperation Council (GCC), established in 1981, along with Kuwait and Oman which did not follow the Saudi-led move.
 
“The row did not impact the meeting where all members were present and contributed effectively to the meeting which was very normal,” Hashel said. Central bank governors from the six states, including that of Qatar, Sheikh Abdullah bin Saud Al-Thani, attended the meeting. GCC central bank governors hold regular meetings and Kuwait’s session was their 59th. It was also the first GCC meeting since the unprecedented diplomatic dispute. Hashel said the one-day meeting discussed the efforts of member states individually and collectively to combat money laundering and terror funding and to comply with international standards.
 
A long-delayed monetary union and single currency were not discussed because UAE and Oman are not part of the union after having withdrawn. Hashel said GCC states were still facing key economic challenges despite huge wealth from oil, particularly the “increasing dependence on oil income to finance budgets and the rise in current spending,” a term normally used for wages, subsidies and defence spending. The Arabian Gulf, which sits on 40 percent of the world’s oil and a quarter of its natural gas, pumps around 17.5 million barrels of oil per day, or a fifth of the world’s consumption. Income from oil and natural gas make up around 90 percent of total public revenues. They are estimated to have assets worth more than $2.0 trillion.
 
High oil prices over the past decade sent the GCC’s combined gross domestic product soaring to $1.6 trillion in 2012.
GCC members are estimated to have posted a record oil income of $740 billion in 2013, up from $680 billion the previous year.
Kuwait’s economy is expected to grow between 3.0 and 3.5 percent this year, the Gulf Arab state’s central bank governor said on Wednesday. Mohammad al-Hashel also told reporters on the sidelines of a meeting of Gulf Arab central bankers that there would be less non-performing loans in Kuwait this year compared to 2013. Analysts in a Reuters poll in January expected GDP growth of 2.8 percent in Kuwait in 2013 and 3.0 percent in 2014. Governor of the Central Bank of Kuwait (CBK) Dr Al-Hashel said the GCC banks face no problem in implementing the Third Basel Accord (Basel III) — a global, voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity risk.
 
Thanks to their strong financial positions and high solvency rates, the GCC banks, particularly the Kuwaiti ones, will be able to implement the reforms envisaged in Basel III before the set deadline, he said. “Today’s meeting reviewed the experiment of each country regarding the implementation of the accord and assessed how far they adapted to the global standards,” he pointed out. “Kuwait made headway in the experimental application of the accord last year and started as of the beginning of 2014 the actual implementation,” Dr Al-Hashel revealed. Kuwait targets the implementation of 12.5 percent of the accord this year while the required percentage by 2016 is 13 percent, he noted. The local banks met the four stages of the reforms envisages in Basel III, he said, noting that the CBK adopted a gradual approach to the implementation process.
 
Dr Al-Hashel added that many of the local banks have sufficient capital for meeting the accord’s requirements while some others need to increase their capital. “The governors of the GCC banks also discussed during Wednesday’s meeting the guidelines for meeting the global standards relating to the auditing and supervision and agreed to do more efforts in this regard,” he went on. “They spoke highly of Kuwait for hosting the training program for the GCC auditor, to be held late this year in collaboration with the International Monetary Fund. “Kuwait will also host a workshop on information security in the GCC and Arab countries with a view to sharing experience with other world-renowned experts, he added.

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