The GCC needs to accelerate its move towards a single currency which would make the whole region much stronger, said Standard Chartered Bank economist Marios Maratheftis.

Once the states put in place a central bank and the necessary institutions a common currency could be up and running in a matter of weeks, he said.

"People talk about the problem of convergence before setting up a single currency but that is not an issue here," he said.

"With the exception of Kuwait all the GCC currencies are pegged to the dollar so you have in effect a single currency in place."

"There was an apparent convergence problem about the inflation rates in Qatar and the UAE compared with Saudi Arabia, but when the credit crunch hit inflation in Saudi went up. Convergence will take care of itself."

He said that what was necessary for a single currency, that was de-pegged from the dollar, was the development of a government bond market.

"Bahrain leads the way in this but even here there is no real secondary market which is necessary so that you can then develop a commercial corporate bond market," he said.

He added that with these institutions in place there was no reason why the GCC currency could not be free floating.

"Government bonds, unlike in the US where they are backed by nothing, would be supported by oil wealth and strong reserves and that would make them attractive for global central banks to hold," he said.

"They would be a hedge against fluctuating oil prices. I have been arguing against the peg for some time. It is time that the GCC set its own monetary policy and stopped importing policy from the US."

He said that while the region was not immune it was better set to face the crisis.

"I have been listening too long about de-coupling between the Western economies and the rest and, quite frankly, I have never believed one word of it. The credit crisis has shown that no one is immune to what happens in the West."

"The current crisis is the result of a liquidity boom and I am surprised that anyone is surprised about what has happened," he said.

"Every liquidity boom in the last 100 years, perhaps longer, has ended in a downturn.

"This one has been caused by people in the US lending to Ninjas - people with no income, no jobs and no assets."

He said that the real developing economies at present were the US and the UK.

"Look at their economies. They have massive government debt, financial services that are in a mess and collapsing equity markets. That is what we expect from emerging economies.

"I believe this downturn will last longer than most people think because you can't turn round nine years of spending money you have not got in three months.

"You can't get away from the fact that with the US housing boom people were using their homes like ATM machines and drawing money out that saw a consumer boom. And then the bubble burst," he said.