Last week Links Group were delighted to attend the ‘Knowledge Workshop – Understanding Iran’, hosted by the Australian Business Council Dubai.
Held at the Oberoi Hotel in Business Bay, the event was presented by Gerard Seeber, the Australian Senior Trade Commissioner for MENA, along with Hamid Mojtahedi, a Senior Associate at Al Tamimi & Co. law firm.
The workshop focused primarily on the recent trade sanctions lifted against Iran, a key talking point amongst business leaders throughout the world. For those based in the UAE, there’s a common belief that the deal will create fantastic opportunities for both domestic and MNCs across the entire region.
With a population of 78 million and a GDP of $400 billion, Iran is viewed as a sizeable and ‘untapped’ emerging market. It has a young burgeoning population which is both highly educated and sophisticated, and is famous for their development within the tech industries. Even before the lift of these recent sanctions, Iran’s economy was strengthening off the back of country investment and consumer consumption.
From the UAE’s perspective, it already has strong trade and business links with Iran so it’s perfectly poised to capitalize moving forward. In fact, the main majority of Iran’s imports from the GCC during 2015 were from Dubai ports, totalling a sizeable $37 billion.
However, despite these positive factors, businesses will undoubtedly need to tread carefully when entering the market. Both speakers were keen to promote the strong sense of optimism about the lifting of Iran sanctions, but they were also quick to reiterate the risks involved with doing business with the country. For example, Iran has been locked in diplomatic dispute with Saudi Arabia and its GCC neighbours, leaving an element of uncertainty as to how economic relationships will pan out.
It’s also important to consider the repercussions if Iran has the sanctions reinstated. This could be disastrous for investors financially tied to the country if Iran breaks their terms of the agreement.
Despite these areas of obvious uncertainty, there was an ambitious and optimistic atmosphere amongst the audience at the workshop. The general consensus was that the UAE could actually benefit from the somewhat ‘strained’ relationships between Iran and the GCC. With investors and foreign businesses perhaps somewhat nervous about setting up a physical presence in Iran, it’s predicted many will establish in Dubai and facilitate their trade from within the UAE.