Ideology destroys the economy. This is the fact Iran’s leaders have yet to understand even as its recent escalation with the Gulf countries in particular and Arab and Islamic countries in general creates many economic repercussions.

These developments will further isolate Iran and increase its financial losses due to the still ongoing sanctions imposed by the international community for some years now.

The question arises as to what the consequences might be if commercial ties were severed between some GCC countries and Iran? Who will suffer more? Obviously, relations between the two sides have been negatively affected due to multiples reasons.

First, Iran keeps on interfering in the GCC’s internal affairs. Second, the GCC countries are committed to the resolutions issued by the UN Security Council regarding the sanctions imposed on Iran.

As a result, the volume of trade between the GCC countries and Iran had a dramatic fall to $22 billion (Dh80.74 billion) last year, of which re-exports account for 70 per cent. Of the total trade engaged by the Gulf states, this constitutes only 2 per cent.

Consequently, Iran does not constitute much of a commercial interest to the GCC, but Tehran, which seeks to lift the imposed sanctions by the end of this month, does care about the Gulf market, It is known that Gulf markets are export avenues for Iranian products, especially industrial, livestock and agricultural products, and the its tourism sector, which were stopped after the suspension of flights.

Re-export volumes

GCC countries will not be affected by cutting of ties because their exports to Iran are limited and re-exports do not exceed 11 per cent of the GCC ‘s total re-export volumes. And they are downright marginal compared to what they were for the better part of the last two decades.

Iran, on the other hand, is in dire need of commercial and trade cooperation with its neighbours because its economy is suffering as a result of the sanctions. There is also the collapse of its currency, growing unemployment and inflation that have to be dealt with.

However, Iran can alleviate its economic crisis and deteriorating living standards by enhancing cooperation with neighbours.

For a long time, Iran has been a top destination for Gulf tourists, especially during summer, and spend millions of dollars, as is the case now for Turkey. Moreover, billions of dollars were invested by the GCC nations in various sectors in Iran and helped raise growth rates and provide job opportunities.

However, none of that will continue due to the recent escalation of tension between the two sides. There are many possible cooperation opportunities between Iran and the GCC, which can benefit both. But things have to change for these to come to fruition.

Wrong policies

First, Iranian leaders insist on ideologising their policies and attempt to export revolutions. It keeps on interfering in the internal affairs of the GCC countries, attempting to apply the “Guardianship of the Jurist” (Wilayat al Faqih).

However, these polices will not succeed because the GCC countries have the power to defend themselves and its people are loyal to their countries. Iranian leaders have to reconsider their wrong polices and think about them pragmatically and away from fanatical strands.

Logic says that if you fail to control the Gulf states for 35 years, you will never be able to do now. The same logic also says that if foreign interference are stopped and policies on economic cooperation adopted, mutual confidence would consequently increase and benefit both.

For that to happen, Iran should renounce fundamentalist ideologies and instead pursue a policy of good neighbourliness to enhance stability for all countries in the region — which has been the consistent approach of the GCC countries.

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.