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Iran trade ties not easily broken

Iran trade ties not easily broken

Dubai is Tehran’s largest non-oil trading partner, with trade between the two hitting $12 billion last year. But with tougher US sanctions on the cards, could Iran’s “back door to the West” be forced to curtail exports?

February 21, 2010 11:13 by

As the final call to prayer draws near, traders on Dubai Creek are still busy loading rickety dhows with goods of all shapes and sizes. Boxes are piled high, probably too high; some men cool off, ill-advisedly, in the murky, diesel-glazed water. It is an evocative slice of ‘old Dubai’, distinct from new financial hubs and real estate frenzies such as the DIFC, Burj Khalifa and Jumeirah Beach Residence.

Just visible over the water are the old wind towers of the Bastakiah district, which was named after the small town of Bastak in southern Iran, and where hundreds of immigrants settled at the end of the 19th Century. These were the Arab-Persians – so-called ‘ajami’ – who originally hailed from the Arabian Peninsula, but chose to settle in southern Persia. After the Persians started imposing taxes, they flooded back to the Peninsula – with the majority heading to Dubai.

These ‘ajami’ were eagerly absorbed into Dubai’s national population, and today many of their descendants are high-profile Emirati businesspeople.

“Since the very beginning of Dubai’s free port strategy, the sheikhdom benefited from a huge influx of Persian merchants… Dubai was keen to embrace and absorb into its own national population these influential Gulf businessmen,” writes Dr Christopher Davidson in his book Dubai: The Vulnerability of Success.

There were several other waves of Persian and Arab-Persian immigration into Dubai, writes Davidson. One such influx came in the 1930s, when Britain and the Soviet Union – fearful that Iran would ally with Nazi Germany – blockaded all of Iran’s ports.

“Although Dubai suffered from this British embargo, given that Iran had always been one of its greatest trading partners, in the long term it gained, as a third contingent of disgruntled ajami businessmen arrived,” writes Davidson.

“There are now over 40,000 Dubai nationals who are of ajami origin – perhaps half of the emirate’s ‘indigenous’ population – most of whom are successful entrepreneurs or government employees, and they have been complemented by a growing number of permanently resident Iranian nationals prospering in Dubai.”

Ties between Dubai and Iran remain strong. Today, many of the Dubai Creek dhows, piled high with goods, are heading to Iran. For Dubai is Iran’s largest non-oil trading partner: trade between the two tripled to more than $12 billion in the four years to last year, according to figures from the Dubai Chamber of Commerce.

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