KUWAIT CITY — Gulf states on Tuesday brushed off mounting economic threats including Iraq's plans to massively boost oil output as they strode towards launching their own single currency.
Winding up a two-day summit of the six-nation Gulf Cooperation Council, leaders also issued joint statements to back Saudi Arabia in its fight against Yemeni rebels and opposition to military action against Iran.
But economic issues were at the forefront of talks at the summit held in the shadow of an alarming debt crisis in Dubai, the regional financial hub of key GCC member the United Arab Emirates.
Kuwait said it offered to assist Dubai to repay huge liabilities of its conglomerate Dubai World, but the summit stressed it only dealt with the emirate's debt woes in the context of the global recession.
"The summit welcomes efforts taken by the member states to contain the impacts of the global economic crisis and expresses confidence in the strength of the Gulf economies and their capabilities to overcome the impacts of the crisis," a final summit communique said.
At the weekend, Iraq awarded oil contracts to foreign giants at an auction it hopes will hike output to 12 million barrels a day and put it on a par with the world's top exporter Saudi Arabia, also a GCC member.
But Kuwaiti Foreign Minister Sheikh Mohammad al-Sabah said: "We are not threatened by Iraq's plans to expand its oil production."
GCC leaders also decided to take the bullish step of establishing a monetary council and asked its board of directors to take all the necessary measures to issue the single currency.
They did not set a deadline for the introduction of the single currency, with Sheikh Mohammad only saying the project was "on the right track."
Sheikh Mohammad said the GCC has not decided on the peg of the single currency.
"Our ultimate aim is to create a common Gulf market that is capable of absorbing external economic shocks," said the Kuwaiti minister, whose country will be the president of the GCC for the coming year.
Only Saudi Arabia, Kuwait, Bahrain and Qatar have signed and ratified the Gulf monetary union pact while the two remaining members United Arab Emirates and Oman have opted out.
The UAE, the Gulf's second largest economy, pulled out after Riyadh was chosen as the base for the future Gulf central bank, while Oman said it cannot meet the technical prerequisites for the union.
The GCC single currency was initially scheduled to be launched in early 2010 but the summit officially confirmed earlier reports that said the target date was too ambitious and unrealistic.
Turning to political issues, the GCC leaders also affirmed "total backing for Saudi Arabia in facing the aggressions by armed infiltrators, express total solidarity with Saudi Arabia and support its right to defend its territories."
GCC Secretary General Abdulrahman al-Attiyah said the Gulf leaders decided to set up a rapid deployment task force to help member countries.
The leaders "decided to set up a rapid deployment task force to deter any aggression on any GCC member," Attiyah said without providing details. But he said the force was not because of Saudi fight against Yemeni rebels.
Addressing a news conference after the summit, Kuwait's foreign minister said the Gulf states opposed any military action against Iran over its nuclear programme.
"We do not accept any military action against Iran," Sheikh Mohammad said, adding however that alliance members urged Iran to comply with international resolutions.
Attiyah said the leaders decided to remove all obstacles obstructing the full implementation of the Gulf customs union launched in 2003.
The Gulf summit also postponed a decision on a proposed multi-billion-dollar railway network and asked the ministers of finance to complete feasibility studies.
The 2,000-kilometre (1,250-mile) network, estimated to cost up to 25 billion dollars, is planned to link Kuwait in the north with Oman in the south, while passing through the remaining four states.
Attiyah also said the summit decided to appoint a new secretary general from Bahrain when his term expires in April 2011. The next summit will be held in the UAE capital Abu Dhabi.