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Monday, January 18, 2010

Iran to establish its first Gulf Trade Center in Oman

The Media Line Staff
January 17, 2010 9:40 a.m. EST

According to the Iranian news agency Press TV, the Trade Promotion Organization of Iran, the body responsible for encouraging Iran's global commerce, plans to set up a trade center in Oman.

The plan follows the establishment of a similar trade center in China last year, and is backed by a one billion dollar budget expressly for the purpose of setting up trade centers around the globe.

The organization is currently working with 60 Iranian companies to encourage business speculation in the Gulf region.

The announcement came four days after Omani Foreign Minister Yousuf bin Alawi bin Abdullah visited the Iranian capital Teheran for talks with his Iranian counterpart Manouchehr Mottaki.

The new government funded project will work alongside Iran's existing private trade organization in the region, The Iranian Business Council in Dubai, which has been operating in the United Arab Emirates since 1992.

"The links between [Iran and Oman] are pretty strong economically as both of them are close geographically," Mohammed Shakeel, editor and economist with the Economist Intelligence Unit, told The Media Line. "Oman wants to establish special gas links with Iran given Oman's own gas shortage."

"There is a trade-off going on, from the Omani perspective, to reach out to Iran over and above the rest of the Gulf Cooperation Council countries," he said. "Oman has a much closer diplomatic relationship with Iran and is much more concerned about Iran's nuclear program in the sense that [this might trigger] conflict with America."

"The diplomatic side is always the one that is pitched first," Shakeel explained. "From the Omani point of view, any diplomatic and economic activity which brings Iran into the wider regional folder is a good thing. From its own personal economic perspective stronger economic relations with Iran will help it improve its own gas shortage."

"There is a lot of pressure on all the individual Gulf Cooperation Council states," Shakeel added. "But Oman has a history of both economic and political independence when it comes to what we term national interest." The United States has been urging its regional allies on the southern side of the Gulf to distance both economically and political from Iran, in an effort to pressure Iran over its alleged nuclear weapons program, which Tehran insists is strictly for power production. Cooperation between Iran and Gulf countries is especially strong in the area of oil refinement.

While Iran has one of the largest oil reserves in the world, a shortage of refining capabilities has meant the country is reliant on foreign refinement plants and must import gas for domestic use.

Many Gulf companies, such as mobile phone operators have expressed interest in entering the vast Iranian market.

Following Oman, Iranian trade centers are planned for Sudan and Azerbaijan.

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