First Published: 2007-03-21

 
Dubai becomes Iran's business hub
 

Oil boom, development of shipping facilities creates opportunities for trade between two countries.

 

Middle East Online

By John Irish – DUBAI

At least 400,000 of the UAE's 4.1 million residents are Iranian

"Dubai is the most Iranian of cities," said Mohammed Reza, an Iranian expatriate who has lived in the Gulf emirate across the waters from the Islamic republic since 1998.

Not many could argue with him. It was Friday lunchtime and the 29-year-old engineer was about to enter the city's impressive turquoise-domed Imam Hussein mosque. Hundreds of his compatriots followed as the call to prayer echoed.

In a city known for glass and steel skyscrapers and industrial free zones, this little enclave in one of Dubai's older districts could be known as Irantown.

Adjacent to the mosque sits one of Iran's largest consulates. Opposite, people mill around an Iranian hospital ordained with intricate Persian scriptures.

"Iranians were among the first to set up business in the United Arab Emirates," a federation of seven emirates, said Salah Salmeen at the Dubai Chamber of Commerce and Industry (DCCI).

"The oil boom and development of shipping facilities to Iran created further opportunities for maximising trade between the two countries."

According to the Iranian consulate in Dubai, at least 400,000 of the UAE's 4.1 million residents are Iranian.

The numbers have almost doubled since 2003. Iran's status as an international pariah, which has increased since President Mahmoud Ahmadinejad's election in 2005, has forced many nationals overseas.

Heavy taxation and the difficulty of acquiring letters of credit have given businessmen few options but to seek opportunities elsewhere.

"If an Iranian company deals with European companies, the European side is always more comfortable dealing with a Dubai-based company as the rules and regulations are not volatile like in Iran," said Mohammed Safavi, general manager at trading firm The Link.

Located just 170 kilometres (105 miles) across the Strait of Hormuz, Dubai has become a satellite state for Iranian capital.

The DCCI has 8,050 Iranian companies registered. The Iranian Business Council's (IBC) numbers are closer to 10,000 businesses, ranging from banking to real estate and oil.

Iranians are also major investors in property developments.

The DCCI estimates Dubai's non-oil trade with Iran was worth eight billion dollars last year, a 30-percent rise since 2004.

"We estimate accumulated assets of Iranians in the UAE to be about 300 billion dollars, while trade between the UAE and Iran was about 11 billion dollars in 2006," said IBC vice-president Nasser Hashempour.

Dubai has become so important to Iran that senior Iranian government officials are rumoured to have set up front companies in the emirate.

"We've heard a lot about non-private sector companies or people belonging to the government investing in Dubai," said Hashempour.

The UAE is by far Iran's largest global trade partner, with exchanges reaching nearly three times those with Germany.

"Dubai is essential to Iran," said Abdulkhaleq Abdulla, professor of political science at UAE University.

"Iran needs Dubai more than the other way round... It can deal with the outside world from here and it will need it more and more if there are (trade) sanctions imposed (over Tehran's nuclear programme)."

The conflict between Washington and arch-foe Tehran has put Dubai's relationship with its neighbour in the spotlight. At a recent conference in the emirate, Stuart Levey, US undersecretary at the Treasury, suggested the UAE would need to think carefully in the future.

The United States, which is known to use Dubai as a listening post to monitor Iranian activity, is a staunch UAE ally.

"We have been successful in balancing both sides," said Abdulla. "The Americans and Iranians know they have been given leeway here to do things they couldn't do elsewhere. I hope they do not tamper with the stability and security that this country is providing everybody."

The UAE prides itself on its diplomacy, and relations with Iran are thriving despite a 30-year feud over three Gulf islands, which the UAE considers occupied by Iran.

The federation, whose natives are mostly Sunnis, also sees the large presence of Shiite Iranians as another example of its social tolerance.

"In terms of the Shiite-Sunni conflict, the UAE, with its large Iranian population, (shows) that it is possible to maintain a cohesive relationship between the two parties," said Narayanappa Janardhan, political analyst at the strategic think-tank Gulf Research Centre.

"Dubai is a platform where you don't worry about sectarianism."

 

US accuses Iraq forces lacking will to fight IS

Blow to Yemen peace efforts as UN conference postponed

Saudi king vows to punish those behind bombing at Shiite mosque

Fukushima nuclear plant wins Qatar contract

Nobel Prize-winning John Nash killed in car crash

Olmert sentenced to eight months for corruption

Weakened by war, Syria regime appears ready for ‘de facto partition’

Iran army ‘needs bigger budget to counter IS’

Saudi Shiites refuse to be provoked by deadly mosque bombing

Iran denies agreement on inspection of military sites

Emirati aid shipment arrives in Yemen port city of Aden

GCC denies air campaign against IS terrorists has failed

Tripoli leaders use migrant issue as they yearn for recognition

‘Islamic State’ takes full control of Iraq-Syria border crossing

Sudan's Islamists protest against el-Sisi

Saudi mosque attack intended to fan sectarian tension

Islamic State claims Saudi mosque bombing

Israel solicits Platini to sway FIFA

Islamic State reinforces ‘caliphate’ with control of borders

Israeli deputy FM: 'All of it is ours'

Iraqi forces to launch Ramadi offensive

Tunis asks Rome to extradite terror suspect

Suicide bomb attack on Saudi Shiite mosque

Saudi-led coalition warplanes pound Sanaa outskirts

Shebab gunmen raid Kenya village

Kuwait businessman Khorafi dies at 75

IS fighters attack Iraq forces east of Ramadi

Obama offers Tunisia closer security ties

Yemen air strikes continue as Iran calls for talks

Israeli court orders release of Khalida Jarrar

Netanyahu meets with Arab leader Ayman Odeh

U.S. sanctions two companies linked to Iran's plane purchases

Iran supports Yemen talks, denounces foreign interference

IS militants call for attacks on Egypt's judges

11 killed in fresh Libya violence

Assad regime losses in Syria

Obama looks to bolster Tunisia's democratic gains

Turkey opposition unveils plan to build new 'mega-city' in Anatolia

Iraqi prime minister seeks Russian support against Islamic State

Iraq's Sunni tribes feel distrust towards Baghdad after Ramadi fall

Morocco illegal migrant arrest fuels Italy row

Qatar ‘failing to deliver’ on promised labour reforms

US to sell bombs, missiles to Israel, helicopters to Saudis

IS jihadists in full control of Syria's Palmyra

Yemen government wants rebel pullback before joining Geneva talks