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10 December 2023

Time to do business with Iran

By Frank Kane


The significance of the visit by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai and a UAE delegation to Iran cannot be over-stated, but I think most commentators have missed the point.

Many observers have concentrated on the geo-strategic aspects of the visit, and of course they are of vital importance.

America and Iran are face-to-face in a stand-off over the issue of nuclear power, and there is always the potential that this might turn into a flash-point of catastrophic proportions for the Gulf and for the world, especially in a US presidential election year with an unpopular president facing an ignominious end to his term of office.

If the UAE can do anything to defuse this issue – perhaps by highlighting its own patently peaceful nuclear ambitions – it will have done the world a power of good.

But I believe the lasting significance of the visit will be to demonstrate that – whatever the American hawks say – that the Iranian people have commercial and trading priorities high on their agenda, and that these should be cultivated to bring Iran back to the centre of the world economic system.

The UAE, of course, has always had strong trade ties with Iran.

But many in the rest of the world, who would be natural trading partners with Iran, have been persuaded and cajoled by the Americans that the country should be virtually frozen out of world trade. (This is not to pass any judgement on the nuclear programme issue, by the way, which has moved from the technical to the political sphere.)

UN sanctions, though so far restricted to goods and services alleged to be associated with the nuclear industry, have given Iran a bad name, while the US has unilaterally attempted to stop international financiers and businessmen from doing business with Iran on areas unrelated to the nuclear issue. Significantly, these further measures have not worked.

The entrepreneurial spirit evident in Iran’s history has meant that traders and merchants from the country have been successful in finding new markets outside the US sphere of influence. China, Russia and other big Asian economies are all willing to engage with Iran, while some west European countries are very hesitant about accepting the American line.

The Americans may disapprove, but Iranian-linked businessmen in London, Paris and Frankfurt are grateful of the opportunity to trade with this market. In many cases, they act as brokers for American businesses that see the commercial opportunities, and cannot bring themselves to agree with their government’s stance.

It is against this background that the UAE’s initiative should be viewed. The Emirates have for a long time been seen, rightly, as a business ally of the Western world, and a willing participant in the modern globalised economy.

At the same time, the UAE is a central trading power in the Gulf region and in the wider Middle East.

By bringing these two power blocks together, the UAE’s initiative has shown that Iran cannot be cut out of the international business and commercial system. It is an integral part of that complex structure, and must be accepted as such. The benefits for the world economy are obvious.

And if, by re-introducing Iran to the global business fold, the cause

of world peace is advanced, so much the better.