Impact of global economic imbalance on migrant workers and economies of the Gulf Cooperation Council
AbstractGCC Countries are characterized by a high incidence of foreigners on both the overall population and the labour force as well as by deep inequalities in social and economic term. These features have influenced the labour market and fuelled mutual tensions and grievances between nationals and foreigners. Consequently, these Countries need to reconcile the demands of economic growth with those of social stability. The latter requires a more equitable allocation of rights and duties along with not only more effective actions in terms of human rights, but also more stable economic dynamics, that prevents the redistributive effects of inflation. The anti-inflationary objective is a priority for Gulf Countries, which entails not only countering the effects, but also removing the causes of inflation. The experience of the new millennium showed that the dollar peg, which characterizes the exchange rate regime of the GCC Countries, was a major vehicle of inflation for Gulf economies and suggests the advisability for its amendment. The alternative proposed in this article is to adopt a basket peg system whereby national currencies could be anchored to a basket of strong currencies that mirror direction and intensity of commercial and financial flows on the international market.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 24210.
Date of creation: 25 May 2010
Date of revision:
GCC countries; exchange rate regimes; basket peg; dollar peg; inflation; migration; labour market;
Find related papers by JEL classification:
- F22 - International Economics - - International Factor Movements and International Business - - - International Migration
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- F31 - International Economics - - International Finance - - - Foreign Exchange
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-14 (All new papers)
- NEP-ARA-2010-08-14 (MENA - Middle East & North Africa)
- NEP-MIG-2010-08-14 (Economics of Human Migration)
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