EghtesadOnline: The latest US sanctions against Iran are forcing many Iranian businesses in the UAE, which has recently become a trade hub of Iranian goods, to move to other countries like Turkey and Qatar.
Dubai, the largest and most populous city in the UAE, has been a major hub of Iranian goods, Al Bawaba reported.
But some Iranians are moving their businesses to other countries, as trade between the UAE and Iran is slowing down thanks to the recent US sanctions.
Iranian traders loading goods to take back home is a common sight on the shores of the Dubai creek. In 2017, exports and reexports from the UAE to Iran totaled $17 billion. Most of that passed through Dubai. But the direct business between the two states is slowing, Financial Tribune reported.
“Trade has dropped down. At peak years, Iran used to be the first reexport destination of the UAE. Nowadays, hardly the total trade between Iran and the UAE–direct ones–goes to something around 5 billion to 6 billion US dollars,” said Hossein Asrar of Iranian Business Council in Dubai.
As new sanctions make it harder for global companies to deal with Iran, Dubai could once again emerge as a key hub for exports to the Islamic Republic. In 2011, Dubai’s trade with Iran grew despite tough international sanctions.
For centuries, boats have been transporting goods between Dubai and Tehran, which is only about 150 kilometers away.
Now this historical trade relations between Dubai and Tehran could be impacted by these latest sanctions, especially as the UAE has been one of the strongest backers of the measures against Tehran.
The UAE’s toughest stance in recent years has forced hundreds of Iranian businesses to move their companies elsewhere in the region, like Qatar and Turkey.
“They need to make a living and if they cannot do it over here, they try some other areas,” Asrar said.
Iran’s economy has already felt the impact of sanctions. Its currency, the rial, has lost almost half of its value since April, shortly before US President Donald Trump announced the measures. As it loses its worth, some Iranians are looking at gold as a safe haven.
Abbas Mozafarian’s family-run jewelry business was founded nearly 200 years ago and has stores in Dubai. He believes the short-term benefits to gold traders will be limited.
“We are talking about the people who has got the money, maybe they can buy gold or diamond or some other, you know, item[s] which has keep the value and get better (sic). But the people who has got no access to a lot of money, which is a majority of the people, they’re really suffering,” said Abbas Mozafarian.
Dubai, which has built itself as a forward thinking trade hub, may suffer as it becomes harder to do business with one of its oldest partners.