A lot to win, a lot to lose: can the Gulf and Iran do business together once a nuclear deal is signed?
The world — and the Arabian Gulf in particular — is awaiting a significant event less than three months from now that will have geopolitical and economic ramifications. It is expected, if things go well, that the six powers and Iran will sign a final agreement on Tehran’s controversial nuclear programme.
There are still obstacles that could yet get in the way of a final agreement despite the current sense of optimism. In the recent past, the US and the West were cheated by North Korea, which gave former US President Bill Clinton the same commitments that are being promised by Iran now, to get an agreement signed with the superpowers.
A few years later, the global community found out it was cheated by Pyongyang, which secretly carried on with its nuclear programme and announced its first atom bomb 10 years after signing the agreement with the West, thus dishonouring all its commitments. This attitude can be attributed to the nature of the Pyongyang regime, as ideological and totalitarian regimes do not pay much attention to reputation and international treaties.
Although we wish that both parties would reach a final formula for the nuclear agreement to spare our region a new war, all probabilities should be taken into consideration, since the element of surprise, as in North Korea, would be extremely costly, in the Iranian case.
But, let us suppose a final agreement is reached and the signatories celebrate in one of the beautiful Swiss cities far away from any threats, crises and wars. The agreement is expected to unlock important economic opportunities as and when they become available. As evidence, many countries and major companies have already started preparing to ensure future commercial and economic gains.
The first expected impact from any agreement will be felt on oil prices, and which concerns all countries in the region since the lifting of sanctions would mean the flow of huge investments into the oil and gas sector in Iran. This could raise production by 50 per cent to 4.5 million barrels a day, creating an additional surplus. But it should be noted this will not happen immediately, and take between a year-and-a-half to two years due to the upgrades needed by infrastructure affected by the sanctions.
In this case, the producing countries may engage in a war that would lead to increasing production, yet set off a decline in revenues. This will consequently affect the Iranian economy and also the economies of other oil-producing countries.
Secondly, trade and economy will be affected. But the degree of positive outcomes will depend a lot on Iran’s political approach and interventions in regional countries’ internal affairs in its desire to establish a Persian Empire, judging by official statements.
This is with knowledge that the age of empires is long gone. If Iran continues such a course of action, tensions will still simmer in the Gulf, and no one will benefit from any agreement.
It should be noted that, historically, there have been broad areas of cooperation between Arab and Iranian parties. Iranian goods will have access to the rich Gulf consumer markets, and ports on the Arabian Gulf can help Iran meet its needs of commodities and services. Trade between the two parties had fallen by 50 per cent over the past five years.
This economic cooperation on both sides of the Gulf will be available only if Iran embraces a friendly and forward-thinking approach after the signing of an accord. This can also be achieved if Tehran stops looking back and give up its imperial ambitions. It must look to the future so as to take advantage of this historical opportunity, which will create big economic returns for the peoples of this region, including Iranians, who have been exhausted by the sanctions.
On the Arab side, there are no imperial aspirations. The GCC countries are peace-loving states focused on developing their economies and on building mutual cooperation with all countries.
Since charity begins at home, GCC states will undoubtedly welcome, as always, the development of all forms of cooperation with Iran on the grounds of mutual respect between neighbours. But for that to happen, emphasis should be on shared interests over imperial dreams and ideas from the past which lead to nothing but destruction.
Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.
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