Time for Iranian-Arab economic convergence

With Donald Trump in the driving seat at the helm of the world's largest economy, the Persian Gulf Arab states have signaled their intention to maintain de-escalation and peace with Iran.  

Leading Arab countries such as Saudi Arabia and the UAE welcomed Trump’s adversarial approach to Iran during his first term as US president but in the years since, they have changed tack.

Saudi Crown Prince Mohammed bin Salman Prince hosted senior Iranian officials at a Muslim conference in Jeddah on Monday, while the chief of staff of the Saudi armed forces visited Tehran to discuss defense cooperation.

Historically, West Asia has been as a hotbed of conflicts and tensions, the most prominent of which are the war between Israel and the Palestinians, UAE claims against three Iranian islands, Kurdish annexationist movements in Iraq, Syria and Turkey, the conflicts between Greece and Turkey over Cyprus, the dispute between Iraq and Syria over the sharing of Euphrates River water and the row between Syria and Israel over the Jordan River.

The US invasion of Iraq and the fall of Saddam Hussein in 2003 complicated the situation, leading to intense geopolitical tensions between Iran and its Arab neighbors as each side viewed the other with suspicion over the role of emerging groups and bases of power.

Conflicts stem from different security perceptions of the two sides, which has a significant impact on their tensions.

The foreign policy of the Islamic Republic considers the Persian Gulf as a sensitive area for transit of its oil and energy, and hence an internal security issue which Iran expects regional and extra-regional states not to mess with.

And this is where the shoe pinches. In fact, the main security problem from Iran's point of view is the presence of the United States in the region and the military dependence of the Arab countries on the US.

The Persian Gulf countries, on the other hand, view Iran as a threat. This perception is rooted in the Islamic Republic's geopolitical power factors, including its powerful and penetrating revolutionary discourse, large population, military power, and determination to turn into a superior regional power.

These factors motivated the Arab leaders of the Persian Gulf to seek strong military relations with the US and other Western countries in order to face what they regarded as Iranian threats.

After the American invasion of Iraq, however, there were positive changes in Arab perception of Iran as a country which staunchly opposed the US attack and occupation despite the bitter history of eight years of war with Iraqi dictator Saddam Hussein.

In fact, the turmoil and cataclysm which ensued the US invasion convinced most Arabs to view America as a new colonial power that wants to destroy Arab culture and civilization.  

Despite all these changes in perception, Iran's nuclear program remains as a catalyst for uneasy relations. 

But an overview of the dimensions of the conflicts indicates that ideological, sectarian and geopolitical differences between Iran and Arabs are very unlikely to lead to any confrontation and war.

In fact, there are many grounds for cooperation. For example, Iran and Saudi Arabia signed their first ever anti-terrorism cooperation agreement in the region in 2002 in the aftermath of the 9/11 events.

The question that arises is how Iran and the Persian Gulf Arab countries can use common grounds to build regional convergence, with the answer obviously being economic cooperation.

The theories of convergence and economic cooperation consider trade as a key component of peace among nations that fosters understanding, creates interdependence and improves the living standards of citizens.

In fact, peace created through economic and commercial cooperation is more steady and stronger than democracy and the values ​​derived from it to resolve conflicts among nations.

Experts consider cooperation and economic partnership as a factor of economic freedom and the welfare of citizens, which is almost fifty times more effective than democracy in reducing conflicts between nations.

Economic cooperation and the resulting interdependencies not only promote peace but also strengthen it.

The European Union is a clear example of the consequence of economic cooperation and partnership in providing economic freedom for citizens and bringing peace and stability.

Another example is the case of China and India which despite their history of a complex, volatile, and tense relationship have reduced their conflicts through economic cooperation.

Hence, it is possible to converge the interests of governments through functional economic cooperation and overcome political differences as the root cause of conflicts.

In other words, economic cooperation and convergence is a crucial way to resolve conflicts – something which is missing in the relations between Iran and the Persian Gulf countries.

This is while the Persian Gulf region has experienced one of the fastest economic growth rates in the world in recent years - a testament to the huge opportunities which exist for strengthening regional convergence.

The areas for partnership are vast and varied, including trade and tourism, the development of port facilities, petrochemical-industrial cooperation, air transportation cooperation, and technical and financial investments in the region.

Between 2000 and 2008, trade between Iran and the Persian Gulf Cooperation Council countries surged to $16 billion from around $2 billion, prompting the US to threaten Arab states with removal from the global financial system.

As a consequence, Iran’s trade and economic relations with the Persian Gulf states suffered a big hit, where the UAE, for instance, suspended the operations of 41 Iranian trade and commercial institutions in Abu Dhabi.

That said it can be safely concluded that while the conflicts of interests between Iran and the Persian Gulf states are a given, they are far from being a casus belli for war and confrontation.

The two sides can manage their disputes responsibly and forge viable economic partnerships to ensure development and growth in the region.

Still, trade and investment relations between Iran and the Persian Gulf Cooperation Council countries are prone to the destructive influence of extra-regional countries such as the United States.

As said before, the main reason for the lack of economic, political and security convergence is the intervention of extra-regional countries in the Persian Gulf, which should be minimized by creating trust-building platforms between the parties in order to create peace and stability in the region.

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