Is Iran serious this time about wanting better economic ties with Gulf states?

Recently, there was a spate of announcements by top Iranian officials about the need to give priority to cooperation with neighbouring countries. The Iranian President and the foreign minister were among those to make such calls for friendlier ties.

Theoretically, this approach should be welcomed by the GCC states and other Central Asian countries bordering Iran. However, an important question has to be raised - Are there solid foundations for such cooperation? Or is Iran doing so to gain time and bargaining power?

In fact, the necessary infrastructure is available for the development of economic and trade relations with the GCC, but there are other, no less important, foundations for strengthening cooperation. For this to happen, there needs to be stability in such ties, there must be genuine efforts at building bridges of confidence, and non-interference in the internal affairs of other countries. Above all, there must be cessation of destructive actions aimed at harming the other party by exploiting economic and trade relations.

Reset economic ties

Are these avenues available for Iran to cooperate with the GCC countries, reinstate and develop economic cooperation? The answer is, unfortunately, an obvious ‘No’. Looking closely into the GCC-Iran relations, we notice the scale of the hostile interventions in the GCC states, by arming affiliated groups such as the Houthis in Yemen, who are receiving smuggled weapons, drones and missiles used to strike the UAE and Saudi Arabia.

This is in addition to smuggling weapons to other GCC countries, where they are constantly discovered in Bahrain and Kuwait, and something which would definitely tell on any confidence boosting measures, and further damaging economic cooperation possibilities.

In addition, the existing trade relations have been exploited through drug smuggling, where the GCC states have repeatedly seized hundreds of millions of Captagon pills that the Lebanese Hezbollah have tried to bring to the six Gulf states without exception. This would absolutely cause serious economic, social and humanitarian consequences, foster ‘dark shadow’ economies, mislead the young and destroy their futures. This is why the GCC countries decided to stop their imports from some countries, incurring heavy losses on suppliers from those countries, such as Lebanon, which already suffers from an economic collapse caused by external domination.

Wasted trade opportunities

This explains why Iran’s foreign trade with the GCC countries is negligible, compared to the volume of its trade with countries outside the Arab Gulf. According to the Islamic Republic of Iran Broadcasting (IRIB), the volume of Iran’s foreign trade from March to December 2021 amounted to $80 billion, most of it with China, Iraq and Turkey, although the GCC countries were on top of the list before the new Iranian approach.

In addition to trade exchanges, Iran was a major centre of attraction for Gulf tourists, who used to flock in thehundreds of thousands to Iranian cities during the 1960s and 1970s. At that time, Iran had been a hub for Gulf medical tourism. There was cooperation in the industrial and service sectors at the time, and Iranians’ remittances from the GCC provided that country’s economy with great capabilities.

Most of this cooperation, from which Iran benefited in particular, has now gone down the drain after the Iranian policy of undermining the foundations on which it was based. It means the latest calls made by high-profile Iranian personalities from time to time are meaningless and contradictory to their practices on the ground.

If they are serious in their calls, they have to prove their goodwill and adopt policies to rebuild confidence in good-neighbourly relations. They have to stop their support for terrorist organizations and their interference in the internal affairs of other countries.

The GCC states and Iran have boundless opportunities for cooperation in all sectors, which would provide job opportunities and improve living standards in the latter. Above all, this will support security and stability in the region and away from expansionist aspirations of a futile endeavour.

-- The writer is a specialist in energy and Gulf economic affairs.