Shaikh Salem Al-'Abdul-'Aziz Al-Sabah.
The Governor of the Central Bank and Chairman of its board since 1986, Shaikh Salem on May 20, 2007, dropped the dinar's peg to the US dollar. This complicated a process towards monetary union by 2010 among the six Arab Gulf Co-operation Council (GCC) states - with all the other five still pegging their currencies to the dollar. The bank adopted a basket of currencies. Shaikh Salem said the decision had been made owing to the "detrimental effects of the pegging system to the national economy". He had dropped the currency basket in 2003, adopting a dollar peg as part of a GCC drive to create a single currency. But doubts over the ability of GCC economies to harmonise had arisen. Oman would not meet the convergence criteria (see background in down22KuwtEnBaseMay28-07 & down26KuwtWhoJun25-07).
In October 2008 and at the government's request, Shaikh Salem set up a task-force to ensure privatisation efforts were not undermined by the long-standing power struggle with the parliament, which the emir dissolved in March 2009. A new parliament was elected on May 16 and a new government was formed on May 29, but again there are many issues on which the two do not agree (see gmt26KwtWhoJun29-09). At Shaikh Salem's recommendation, the previous government in February issued a $5.4 bn package to prop up the banking sector. This is guaranteeing 50% of new loans made by banks in 2009.
Chairing the Kuwait-based Institute of Banking Studies, Shaikh Salem is an alternate governor of the Arab Moneratey Fund (AMF). He has played a major role in containing the negative impact of the global recession on Kuwait's economy. He has been behind efforts to expand the private sector, to introduce a bankruptcy protection law and other measures to facilitate mergers among the emirate's banks. Shaikh Salem is a graduate of the American University of Beirut and most prominent among the central bankers of the Middle East.
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|Publication:||APS Review Downstream Trends|
|Date:||Jun 29, 2009|
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