Mideast skepticism on Iran sanctions

Analysis: Some in the region question their effectiveness, and are also keeping a cautious eye on the UAE's nuclear aims.

Tom HundleyOctober 5, 2009 05:43Updated May 30, 2010 12:09

Iranian President Mahmoud Ahmadinejad, center, arrives in the United Arab Emirates flanked by UAE President Sheikh Khalifa bin Zayed al-Nahayan, right, and vice president, prime minister and ruler of Dubai, Sheikh Mohammed Bin Rashid Al Maktoum, left, May 13, 2007. (Handout/Reuters)

DUBAI, United Arab Emirates — Iran’s unexpected acquiescence to demands that it open its nuclear program to international inspectors makes a good case for what many skeptics have argued all along: sanctions are much more effective as a threat than a reality.

Iran’s neighbors in the Persian Gulf are pleased with the outcome of Geneva talks in which Tehran agreed to several important confidence-building measures, but they are not fully convinced that the Islamic Republic’s new tone of cooperativeness is not another gambit to buy time and regroup.

“I think we saw an attempt by both sides to make sure the talks continue. Both sides got a little of what they wanted,” said Christian Koch, director of international studies at the Gulf Research Center, a Dubai-based think tank. “Iran got some of the pressure off. For them, that was important.”

For the U.S., the main gain was engaging in direct talks about Tehran’s nuclear program, something the Iranians went into Thursday’s meeting insisting they would not do.

The trick now for the U.S. and its European allies is to keep Russia and China on board in order to keep the threat of sanctions fresh in Iran’s mind.

“Sanctions don’t work, but they are necessary,” said Abdul Khaleq Abdullah, a political scientist at the United Arab Emirates University. “You have to apply them because you don’t have anything else. But we know from past experience that imposing sanctions doesn’t change the behavior of these governments. In fact it stiffens their behavior.” Iran has been under some form of sanction since the founding of the Islamic Republic in 1979. The subject of sanctions is a touchy one in the UAE, especially here in Dubai, a bustling, freewheeling port just 105 miles across the Persian Gulf from Iran.

Nearly a quarter of Dubai’s 1.4 million inhabitants are of Iranian origin, and the city has long been the safety valve — or the leaky valve, depending on one’s perspective — of the various sanction regimes imposed on Iran. More than 10,000 Iranian businesses are registered in the UAE, most of them in Dubai, according to Dubai-based Iranian Business Council.

Iranian speculators looking for a safe haven for their capital helped fuel the real estate boom that has transformed Dubai’s skyline and economy over the last 10 years. An estimated $300 billion in Iranian assets is invested or deposited here.

Dubai has no doubt profited from its role as Iran’s window to the world, but so too has the U.S. Shut out of Iran for three decades, the State Department has turned its consulate here into an important listening post.