DUBAI: Next door to Iran under sanctions, world looks different

Published on The Asahi Shimbun, by MANABU KITAGAWA, April 12, 2012.

While the international community is stepping up its sanctions on Iran for suspicions about the country’s nuclear ambitions, their repercussions are being fully felt in this United Arab Emirates city on the other side of the Persian Gulf. More than 500,000 Iranians live in Dubai, including many merchants engaging in trade with their home country. They say business has become more difficult because the financial institutions are making it harder on them.  

“The proceeds of our trade arm have decreased 70 percent over the last two years,” said Morteza Masoumzadeh, a 62-year-old Iranian who runs a marine transportation and trade company in Dubai. “And it’s not missile parts or nuclear-related materials that we are dealing with” … //

… In late December, the United States enacted independent legislation to punish foreign financial institutions that have carried out transactions with the Central Bank of Iran to pay for crude oil purchases. The European Union also decided in January to introduce a total embargo on Iranian crude oil that will take effect in July.

The U.S. administration of President Barack Obama has repeatedly called on the UAE to act in concert with the sanctions. In autumn 2010, UAE financial authorities temporarily regulated remittances to and from Iran.

That plunged Tehran into great turmoil, as the public was no longer able to remit money overseas by way of private money exchangers as they had always done.

But for Dubai, whose prosperity relies on transit trade, Iran is the second largest re-export destination on the heels of India. While Abu Dhabi, the political capital of the UAE, is willing to comply with the sanctions out of consideration for its relations with the United States, Dubai, the commercial capital, remains less enthusiastic, sources said.

“Our trade with Iran is robust, but we don’t know what will come about if the political tensions continue into the future,” said a senior official of Dubai’s Department of Economic Development. The emirate will consider measures to boost its exports to Central Asia, East Africa and other regions to make up for a possible drop in exports to Iran, the official confided.

Iran is sticking to its nuclear programs, ostensibly to promote civil use of nuclear technologies. Sanctions by the international community, suspicious of the country’s nuclear armament ambitions, are likely to intensify in the coming days.

Dubai and Iran are next door to each other across the Persian Gulf. There is every reason to keep an eye on how their relations will develop in the future. (full text).

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