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Arab Gulf the in stability and safety bringing towards step first be could Iran with tie-up economic An>
Gaslines, industrial exchanges and a GCC-Iran free trade pact could all go a long way in building trust at a time when Iran too is stretching out to win friends and partners.
Thorny issues do remain, but flourishing trade has been known to take the sting out of contentious political subjects.
A case in point is Dubai's relationship with Iran despite the UAE's opposition to Iran's nuclear programme and the long-standing territorial row.
As many as 400,000 Iranian expatriates now live in the UAE, with nearly 9,000 part-Iranian-owned firms registered with the Dubai Chamber of Commerce and Industry. Iran is the main destination for exports from Dubai, with much of the volume hauled by the traditional dhows unofficially.
At the recent meeting of GCC heads of state in Qatar, where Iran was an invitee, Iranian President Mahmud Ahmadinejad offered to supply countries including the UAE and Saudi Arabia with gas and water in a bid to strengthen regional ties and free the area of 'foreign influence.'
'The economic logic of the arrangement is overwhelming and will eventually trump the geopolitical opposition to doing business with Iran,' says Anthony Harris, former UK ambassador to the UAE.
What are the economic compulsions that take the GCC towards Iran?
The main consideration is gas. It has to be borne in mind that the Gulf states, particularly the UAE and Oman, have no choice but to seek Iranian gas if they are to generate the electricity they need in the coming years.
Abu Dhabi National, known as Taqa, plans to expand its power generation capacity by 78 per cent to 16,000 megawatts in the next five years even as the UAE's electricity demand is rising 9 per cent a year.
The UAE, separated from Iran by the narrow Strait of Hormuz, was expecting to receive gas from the country in November 2005, according to an agreement signed by Sharjah-based Crescent Petroleum in April 2001.
The gas has since been delayed as Iran, owner of the world's second-biggest reserves after Russia, demands a higher price.
The deal will however go through as the two parties are in a Catch-22 situation - Iran needs money, and 99 per cent of the UAE's energy demand is natural gas.
Of the other nations receiving Iranian gas, Oman aims to import at least 1 billion cubic feet a day under a $2 billion proposal. Bahrain signed a preliminary agreement of a similar size with Iran in November 2007.
After that Iranian Foreign Minister Manuchehr Mottaki and his Bahraini counterpart Shaikh Khalid bin Ahmed bin Mohamed Al Khalifa signed a memorandum of understanding at the first Iran-Bahrain Joint High Committee meeting.
In the memorandum of understanding, the two countries agreed to cooperate in the areas of economy, business, technology, energy, industry, shipping, tourism, health, environment and agriculture.
Both governments have resolved to enhance the bilateral trade volume to $1 billion a year. Iran, which has an aluminium market estimated to be about 20,000 tonnes, is keen to bolster co-operation in aluminium sector also as part of a strategic move to enhance the existing trade and commercial ties with Bahrain.
Above all, Iran sees a free trade agreement (FTA) with the GCC in the near future that would help boost the regional economy.
A UAE ministerial panel comprising foreign ministers of the GCC has already agreed to start negotiations at Iran's request for an FTA.
Iran's global exports exceeded $100 billion last year and its potential for growth was enormous. Besides oil, the country is rich in agricultural products and technical knowledge and an FTA would help to optimise the use of its resources and talent.
That Iran is a neighbour is a reality that cannot be wished away. This reality mandates all parties concerned to create favourable conditions under which common interests could be secured.
