Dubai: Waiting for a windfall from Iran
Can Dubai take advantage of Tehran’s rapprochement with the US to once again become Iran’s de facto financial link to the world?
Along the wharfs of Dubai Creek the dhows are being loaded with cargo just as they have been for generations. Everything from second-hand car tyres to new refrigerators, and from men’s sandals to cases of Vimto fruit juice is stacked high on the dockside.
The stamps on some of the crates and boxes show that they have already travelled long distances, from such places as China and Taiwan, but other goods are sourced from within the region, from Saudi Arabia, Bahrain or Iraq. What they all have in common is their destination: most of the goods are waiting to make the short trip across the Persian Gulf to Iran.
Dubai has long been a bridge between Iran and the wider world. Over the decades the authorities in the UAE’s second city have welcomed their near-neighbours with open arms, and Iran has responded in kind. Iran’s citizens have bought property in Dubai, many of its banks have set up branches there and trading firms have prospered sending goods back and forth.
The emirate’s banks have also done well out of the relationship, helping to oil the wheels of trade between the two countries. But in recent years much of the trade has fallen away as Dubai has belatedly begun to enforce international sanctions on the Islamic republic. As the scene along the creek illustrates, some elements of cross-Gulf commerce are still thriving, but much of the trade and finance has dried up.
“Dubai is now enforcing the compliance requirements much more strictly than before,” says Sarosh Zaiwalla, a senior partner at London-based Zaiwalla & Co, a law firm representing a number of Iranian banks.