The Platform

Photo illustration by John Lyman

The Middle East, for one reason or another, is embracing plastic banknotes.

The affluent Gulf States have recently embarked on a quest to showcase their modernization prowess to the world. This showcase is manifested through breathtaking architectural feats, cultural events, and initiatives designed to leverage soft power in the West. A curious byproduct of this quest is the region’s sudden infatuation with a niche innovation: polymer banknote printing. Despite the looming shadow of environmental concerns, polymer has become the material of choice, a testament to its perceived modernity.

Regarded by a select few central banks as the zenith of currency technology, polymer banknotes are gaining a foothold in the Middle East, a trend underpinned by a widely held yet critical misunderstanding of their environmental impact. These banknotes, although touted for their durability, are ultimately a plastic product, and their extended lifespan masks a stark reality: they are associated with nearly triple the greenhouse gas emissions of the paper notes they aim to replace. Nonetheless, several Middle Eastern states are advancing a strategy of banking modernization by embracing the polymer trend, a move that has raised eyebrows among environmentalists globally.

The proliferation of polymer notes in the Middle East should be viewed within the broader context of a regional drive towards modernization and an inclination towards greenwashing. The most economically powerful Gulf States are endeavoring to cement their economic dominance and global influence through an array of infrastructural, socio-economic, and financial projects. These projects are strategically crafted to broadcast their industrial strength and resilience to the international community. At a cursory glance, polymer banknotes seem to offer an eco-friendly alternative for secure currency, owing to their robustness. However, this perception is misguided. The adoption of polymer notes in the Middle East must be seen against a backdrop of ambivalence amid an intensifying global climate crisis, particularly in countries where fossil fuels are still the cornerstone of the economy. Following an unremarkable COP28 hosted in Dubai, the shift towards polymer notes sends a disconcerting message about the Middle East’s stance on addressing the worldwide plastic dilemma.

Saudi Arabia was the first to introduce a polymer note in the region, unveiling a five-riyal note in October 2020. The Saudi Arabian Monetary Authority (SAMA) praised the note for its state-of-the-art security features, durability, and innovative GUARDIAN polymer substrate. Dr. Tim Berridge, Director of R&D, Marketing, and Design at CCL Secure—the manufacturer of GUARDIAN—highlights that “Polymer enables features that are extraordinarily difficult to counterfeit. In many countries where polymer has been introduced, the proportion of counterfeit notes in circulation has dropped from as high as 30% to virtually zero.” However, the security features that are championed for polymer notes are not exclusively available to them; such features can also be integrated into paper notes. Polymer is primarily designed to accommodate straightforward security overlays rather than intricate built-in features.

The battle against currency forgery has seemingly eclipsed environmental concerns. The notes were proclaimed as “Made from Saudi petrochemical materials” in their promotional video, featuring a portrait of King Salman of Saudi Arabia, and an image of the Shaybah Oil Field in the Empty Quarter. This is a stark departure from the traditional cotton-based paper notes, which are not produced in conjunction with the petrochemical sector.

July saw Egypt release its inaugural 20-pound polymer note, with claims that “In general, polymer banknotes are characterized by being more flexible, stronger, thinner than paper banknotes, having a longer life span that can extend to three times than the paper banknote, in addition to being water and dust-resistant. Moreover, it is eco-friendly, recyclable, and difficult to counterfeit.” Despite these proclamations of environmental stewardship and recyclability, the reality of polymer notes presents a conundrum for environmentalists. On average, the production of a single polymer note emits 8.77kg of CO2, nearly threefold the emissions of prior paper notes, according to a report by Evergreen Finance London. For instance, the Bank of England’s polymer £5 note alone is responsible for 2.76kg of CO2 emissions. While durability is a plus, does it justify a surge in greenhouse gas emissions during an era of acute climate concern?

In a move reflecting a broader regional trend, the United Arab Emirates has enthusiastically adopted polymer banknotes. In April 2022, the UAE introduced new 5- and 10-dirham notes. These banknotes are distinguished by high-security features, including a transparent window showcasing a portrait of the nation’s founding father, Zayed bin Sultan Al Nahyan, and the emblematic UAE nation brand illuminated with fluorescent designs and texts rendered through state-of-the-art intaglio printing techniques. Additionally, the notes incorporate a see-through register, a latent image on the obverse side, and tactile symbols specifically designed to assist visually impaired individuals in identifying the note’s denomination.

This significant issuance was preceded by the launch of a commemorative 50 dirham note in January 2022, marking the country’s first venture into polymer currency. “The issuance of this new banknote, which is printed using eco-friendly polymer material, is aligned with the leadership’s declaration of 2023 as the Year of Sustainability, and embodies the features of the new phase that the UAE has begun in its developmental journey and ambitious future. The new banknote features unique technical characteristics to keep pace with global standards and technologies with the aim of making the dirham an international currency used worldwide,” articulated H.E. Khaled Mohamed Balama, Governor of the CBUAE. He further highlighted the strategic initiative as a step towards advancing the nation’s financial sector and supporting the UAE’s competitive edge in the global arena.

Similarly, Qatar commemorated the 2022 World Cup with a polymer banknote, a singular edition to date. “The issuance of commemorative banknotes for the FIFA World Cup Qatar 2022 represents a fundamental contribution from the banking sector to the success of the historic event, the first of its kind in the Middle East and the Arab region. It constitutes a source of pride for all of us, and an affirmation of the unity and integration of the various entities in the public and private sectors in the state,” proclaimed Central Bank Governor, Sheikh Bandar bin Mohammed, during the note’s ceremonial release.

In stark contrast, the European Central Bank has opted to maintain traditional paper banknotes, albeit with an added protective coating to the €5 and €10 notes to enhance their longevity. This conservative approach is underpinned by the fact that euro counterfeiting fell to an all-time low in 2021, with a reduction of nearly 25% from the previous year. The United States, for its part, has not entertained the shift to polymer notes. American officials maintain that their paper currency blend endows the one-dollar bill with a robust 21-month lifespan, which surpasses that of lower-denomination polymer notes. Moreover, a transition to plastic money would entail substantial costs for new manufacturing and processing infrastructure, an investment deemed unnecessary given the current minimal rates of U.S. currency counterfeiting.

While the Middle East forges ahead on a different path, the question remains whether the region’s move towards plastic banknotes will yield the intended benefits in monetary and financial stability, or whether it will be viewed as a costly divergence from tried-and-true practices.

After working in the auditing sector for 15 years, Dan Smith now works as a consultant for an insurance company. Dan's particular area of interest are ecological risks, especially those related to climate change.