(AFP) – Oct 25, 2008

RIYADH (AFP) — Finance and economy ministers and central bankers from oil-rich Arab states in the Gulf met for emergency talks on Saturday to forge a common front to battle the global economic crisis.

The policymakers of the six-nation Gulf Cooperation Council (GCC) met behind closed doors in Saudi Arabia to examine the impact of the crisis on their economies, Qatari Finance Minister Yussef Hussein Kamal said.

They will discuss "mechanisms of coordination and cooperation between GCC countries aimed at protecting their economies from the fallout of the world financial crisis," GCC Secretary General Abdulrahman al-Attiyah said.

Delegates will also discuss means of "preserving the positive level of growth in these (GCC) countries," he said in a statement, adding that the meeting is also aimed at "bolstering confidence in Gulf markets".

Stock markets in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates have taken a severe battering this month, losing some 200 billion dollars.

Saturday's gathering in Riyadh came as the Saudi bourse, the largest in the Arab world, opened trading with a sharp drop of more than nine percent to its lowest point in four years.

Attiyah insisted that the fall seen across Gulf markets in recent weeks was "unjustified".

"Gulf financial markets initially have no links to the real reasons behind the (global) crisis," he said.

Fears of a liquidity shortfall have also loomed over Gulf banks because of the global credit crunch, with the banks having limited ability to borrow on the international market.

Governments across the Gulf have already stepped in to shore up slipping confidence in their financial sectors by injecting -- or pledging -- huge amounts of liquidity into their banking systems.

Saturday's meeting also comes after OPEC, the Organisation of Petroleum Exporting Countries, announced on Friday that it will slash oil output by 1.5 million barrels a day from November 1.

Saudi Arabia, along with the United Arab Emirates, Kuwait and Qatar, account for more than half of OPEC's official production quota of 28.8 million bpd.

Gulf nations are facing a sharp drop in oil income which contributes more than 80 percent of their public revenues, with oil prices down more than 55 percent since hitting an all-time high of above 147 dollars a barrel in July.

The Riyadh meeting also comes three weeks before the United States hosts an unprecedented summit of the world's richest nations and emerging economies to discuss the global financial crisis.

Saudi King Abdullah will be the only Arab leader to attend the November 15 summit in Washington.

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