Iran confident of attracting UAE investments
Huge opportunities in industry, agriculture, mines, oil & gas and petrochemicals
- By Alexander Cornwell, Staff Reporter
- published: 18:23 January 31, 2014
Abu Dhabi: Iran is confident it can develop stronger economic and political ties with the UAE, its top ranking diplomat in the country told Gulf News.
Mohammad Reza Fayyaz, the Ambassador of the Islamic Republic of Iran to the UAE, said in an interview that Iran is poised for economic growth and would look to its neighbours, including the UAE, to invest.
“There are many investors in the world who have announced their willingness to come to Iran and invest in Iran,” he said.
In the light of P5+1 negotiations between world powers and Iran on its nuclear programme, Fayyaz spoke to Gulf News on the potential for investments in the Islamic Republic.
He said that industry, agriculture, mines, oil & gas and petrochemicals were all high potential areas for foreign investment.
Iran has been systematically locked out of the international community by United States-led sanctions restricting it from foreign investment and trade. The United States, and other global powers, have been at loggerheads with Iran over its nuclear ambitions. But progress in negotiations between the P5+1 (United States, Russia, China, United Kingdom, and France, plus Germany) and Iran suggest there will be sanction relief that may allow foreign investment.
“We have a very big market [of] 75 million people in Iran,” Fayyaz said.
The international community has allowed Iran to export some of its oil production to select countries but has also restricted its access to oil revenue. Iran currently exports to a number of countries including Turkey, India and South Korea.
With some of the world’s largest oil and gas reserves the leading multinational energy companies are reportedly ready to head into Iran.
“Many big oil companies … have met with our Oil Minister and announced their intention to invest in Iran. The fields are ready … if they want to work with us in oil and gas,” Fayyaz said.
However, the US has emerged as a significant oil and gas producer leading to a belief that there will be an oversupply of energy commodities in the coming years.
But Fayyaz disagrees and said Iran’s energy sector is ripe for investment and international exports.
UAE-Iran trade cut by sanctions
The UAE has felt the force of Iranian sanctions. Trade with the Islamic Republic reportedly dropped a third in 2012 to Dh25 billion from Dh36 billion the previous year. But black market trade has risen with electronic goods reportedly being shipped from the Dubai Creek and into Iran.
“We don’t like this [black market] we prefer our economic relationship to be transparent,” Fayyaz said.
Nonetheless, the black market is proving lucrative for those continuing to ship goods into Iran against the sanctions.
Speaking on how Iran will be able to handle a potential flood of foreign investment after almost three decades of US-led sanctions, Fayyaz said Iran will look to its neighbours for guidance.
“Using the experience of other countries is a very good thing. We will try to use their experiences but we don’t want to copy from other countries,” he said.