The Iranian official noted that the UAE President Sheikh Khalifa bin Zayed al Nayhan is planning to visit Iran and “we are waiting for the exact date of his trip to be announced.”

Since its establishment in early 1970s, the United Arab Emirates has had political and economic relations with Iran which further expanded following the eight-year war with Iraq (1980-88). However, political relations between the two countries have been overshadowed by UAE claims about three Iranian islands in the Persian Gulf which have prevented relations from being as cordial as the two neighboring countries deserve. However, the current level of cooperation between Iran and the UAE in scientific, economic, banking, commercial and trade fields is satisfactory and increasing.

Despite the recent economic and financial crisis, Iranians still account for the lion’s share of circulating capital in United Arab Emirates. They say that 300-500 billion dollars of the Iranian capital is at work in various economic sectors of the United Arab Emirates. Investment in real estate by Iranians greatly decreased in 2009-10 due to severe stagnation in housing market, and many people who had put their capitals in the sector in previous years went broke and suffered heavy losses.

Iran was still the biggest trade partner of the UAE in 2009 with bilateral trade volume reaching 15 billion dollars. Exports from the UAE to Iran accounted for 13 billion dollars of that figure with the rest being related to Iran’s exports to the UAE. Geographic propinquity, low transportation cost, better sales proposals, the possibility of allocating documentary credits, facilitated banking operations, presence of agencies for important companies in the UAE and also establishment of representative offices of the Iranian companies in the United Arab Emirates are major reasons why Iran imports so much goods from the UAE.

The most important articles imported to Iran from the United Arab Emirates include gasoline, iron and still bullions, iron and steel products, spare parts for gas-powered turbines, machinery parts, cell phones, computer parts, sugar from sugarcane, bananas and cigarettes. At the same time, major export items from Iran to the United Arab Emirates include aromatic hydrocarbons, oil and natural gas, fresh and dried pistachios, engine oil, and hand-woven carpets. Other Iranian products like saffron, pistachios and caviar are carried as bulk to the UAE and are re-exported to other countries after repackaging by UAE companies and under Emirates brands.

	Iran was still the biggest trade partner of the UAE in 2009 with bilateral trade volume reaching 15 billion dollars. Exports from the UAE to Iran accounted for 13 billion dollars of that figure with the rest being related to Iran’s exports to the UAE.
Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the UAE		Dr. Mohammad-Reza Fayyaz, Islamic Republic of Iran's New Ambassador to the UAE

As for banking, some Iranian banks like Saderat and Melli have been very active in the United Arab Emirates doing profitable business. Bank Saderat has given more than 6.82 billion dirhams in loans to customers and has been reportedly recognized as the third biggest bank in the United Arab Emirates.

UAE’s Central Bank has also issued a report announcing that total profits earned by Bank Melli of Iran in 2009 amounted to 300.33 million dirhams, up by more than 18.2 percent compared to the preceding year.

Total deposits in Bank Melli’s UAE branch during the past Iranian calendar year has amounted to 3.26 billion dirhams while the figure was only 2.7 billion dirhams a year earlier.

As for labor, hundreds of thousands of Iranian workers are working in the United Arab Emirates and, at present, there are more than 6,000 Iranian companies registered in the UAE of which 4,500 companies are doing retail business.

Given a recent agreement for consular cooperation signed between the Islamic Republic of Iran and the United Arab Emirates, the two sides have decided to consider necessary facilities for issuing work visas to Iranian nationals. In this way, legal grounds will be provided to the Iranian labor force to apply at international employment offices confirmed by the Iranian Ministry of Labor and Social Affairs. They can also travel to the United Arab Emirates on personal funds and start working there.

More importantly, the Iranian government has proposed cancellation of visa formalities with the United Arab Emirates and Mehdi Aqa Ja’fari, acting ambassador of Iran to the UAE, announced that a consular meeting attended by the Iranian deputy foreign minister for consular affairs has been held last April.

Aqa Ja’fari noted that lifting of visa formalities between Iran and the United Arab Emirates was a necessary step to expand bilateral relations given the high number of travels by both countries’ nationals. He added, “We hope the consular meeting between the two countries will bear fruit.” The Iranian official also noted that the UAE President Sheikh Khalifa bin Zayed al Nayhan is planning to visit Iran and “we are waiting for the exact date of his trip to be announced.”

With regard to scientific cooperation between Iran and the United Arab Emirates, a virtual faculty of hadith sciences was opened in September 2007, increasing the number of the Iranian higher education institutes in the UAE to five.

Establishment of a UAE branch of the Islamic Azad University in Dubai was warmly welcomed by Iranian and even foreign students. The university has diversified its courses in the past few years and is now ranking first among Iranian universities in the United Arab Emirates. Following suit with the Islamic Azad University, Shahid Beheshti University, and Payam Nour University have established branches in Dubai as well.

Cooperation between Iran and the Persian Gulf littoral states should work to reduce tension and increase mutual trust in order to defuse transregional instigations which are basically aimed at Iran.

Mohammad Reza Hatami, Iran’s cultural advisor in the United Arab Emirates, noted in an interview last October that a plan has been proposed to establish a private university called Abu Ali Sina University in Dubai. He added that the plan aims to attract students from the United Arab Emirates to the Iranian universities and increase Iran’s share in training specialized manpower in the UAE. Another goal of the plan is to establish a permanent center for the conclusion of research, education, and industrial contracts and for development of technical and engineering cooperation between the two sides.

The two sides have signed tens of cooperation agreements the latest instance of which was passed by the Iranian Cabinet on April 27, 2010. The new agreement covered cooperation in “extradition of convicts,” “legal and judicial assistance in civil and trade matters,” and “bilateral legal assistance in criminal cases” between Iran and the United Arab Emirates.

Some sources have noted that more than 450 Iranians are now in UAE prisons most of whom have been charged of financial offenses. Another group of those prisoners have been arrested by UAE police on charges of possessing illicit drugs.

In spite of very close economic relations and willingness of the Iranian merchants and businesspeople to invest in the United Arab Emirates, the UAE government has been treating Iranians in an unacceptable manner during the past year. Frequent inspections of Iranians at Dubai airport and humiliating treatment of Iranian tourists which has been further complicated by expelling a large number of Iranians who have been living in the United Arab Emirates since many years ago, has somehow overshadowed political and social relations between the Islamic Republic of Iran and the United Arab Emirates.

Based on some statistics, about 200 Iranian businesspeople and investors have been expelled from the United Arab Emirates on various grounds during the current year.

In late fall 2009, the two countries’ joint commission session was held in Tehran and mistreatment of Iranians by the UAE police was a major topic of discussion in addition to conclusion of some agreements.

A total of 1.5 million Iranian tourists visit UAE every year spending billions of dollars there. The government of the UAE, which is currently grappling with various economic problems and recession, has mentioned tourism as the most important source of revenues.

Sheikh Mohammed bin Rashid Al Maktoum, prime minister of the UAE, has noted that the country has established necessary infrastructures to attract tourists and government’s plans should be directed toward that goal.

Meanwhile, the United Arab Emirates has been dealing with the worst economic crisis in its history during the past year, which pushed Dubai to the brink of total bankruptcy.

Reduced oil prices, stagnation of economic projects and heavy debts of major state companies led to such a dire situation that even Abu Dhabi was not able to help Dubai. Of course, Abu Dhabi officials were not very willing to help Dubai due to political reasons and only did so after taking concessions from Dubai.

Abu Dhabi contributed a total of 32 billion dollars to Dubai most of which was spent on financial liabilities of big companies in Dubai. Some sources have noted that foreign debts of Abu Dhabi and Dubai stand at more than 180 billion dollars most of which are related to state companies.

Economic conditions in the United Arab Emirates has been so serious that Abu Dhabi could not give in to pressures from Western countries, especially the United States, to implement their anti-Iranian policies. The officials of both the United States and UK have sent frequent delegations to the United Arab Emirates in the past year calling for alignment of UAE with Washington’s policies on Iran.

Such political visits reached their peak last month when the US undersecretary of state visited Abu Dhabi to negotiate with UAE officials and get them support international sanctions against Iran.

On the other hand, although economic and financial crises still continue, UAE officials have not given up their ambitious plans like buying 60 Rafael combat planes from France, giving a military base to French forces, supplying fuel to foreign forces in Afghanistan as well as signing a 40-billion-dollar contract with the American, European and Korean companies to build a nuclear power plant in the United Arab Emirates.

Despite having huge oil reserves and small population, the government of the United Arab Emirates has signed hefty contracts with Western countries for construction of nuclear power plants and generation of nuclear power.

Political and cultural relations between Iran and UAE are still overshadowed by high volume of mutual trade, but support of Abu Dhabi for the regional policies of the United States and UK will sure affect political relations between two neighboring countries.

In reality, the United States and Israel are persistently scaring regional countries of an Iranian threat. That fear is powerful enough in the region and among Arab countries of the Persian Gulf which are closest Arab states to Iran. Problems other than the nuclear issue are influencing Iran’s relations with the United Arab Emirates and Saudi Arabia, paving the way for Western countries to make Iran threat look real to them. The final result will be influx of Western weapons into the region.

This is, by no means, to Iran’s benefit and in line with its national security goals. Therefore, we must not dawdle and should do our best to prevent further worsening of relations with Arab countries of the Persian Gulf. Relations between the two sides of the Persian Gulf are important to all countries situated in that region. Positions should be taken with care while political and diplomatic measures should be taken in such a way as not to allow third parties to avail themselves of tense situation in the Persian Gulf.

On the other hand, cooperation between Iran and the Persian Gulf littoral states should work to reduce tension and increase mutual trust in order to defuse transregional instigations which are basically aimed at Iran.

Certainly, it would not be possible to settle old disputes which are usually triggered by the United Arab Emirates, under tense conditions and third parties are sure to benefit from this situation.

This should be adequately explained to UAE officials and confidence building measures should be considered as an option by the Islamic Republic of Iran in order to gradually dispel existing misunderstandings.