Wanderlust…

The International Reporting (and Life) Adventures of Vivian Salama

Dubai Neighbor’s Family Feud Raises Allegations Over Iran Trade

Posted by vmsalama on June 17, 2010

Dubai Neighbor’s Family Feud Raises Allegations Over Iran Trade

June 17, 2010, 6:26 AM EDT

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Bloomberg/Business Week

By Vivian Salama and Camilla Hall

June 17 — An hour’s drive up the Persian Gulf coast from the glitzy hotels and skyscrapers of Dubai, a family feud is threatening to unsettle the United Arab Emirates.

The source of the spat is a power struggle between two sons of the ruler of Ras al-Khaimah, the last of seven states to join what is now the U.A.E. The elder, Sheikh Khalid bin Saqr al- Qassimi, who was stripped of the title of crown prince in 2003, alleges his younger half-brother and current heir, Sheikh Saud, helps foster trade with Iran.

“Any instability would be destabilizing for the whole of the U.A.E.,” said Christopher Davidson, a professor of Middle East studies at Durham University in the U.K. “Such instability would also open the door for further external interference, given its strategic location close to Iran.”

Ras al-Khaimah is 60 miles (97 kilometers) from Iran on the Strait of Hormuz, an artery for a fifth of the world’s oil supply. The U.A.E. is a key American ally in the Gulf and Sheikh Khalid’s allegations, rejected by Sheikh Saud, come as the U.S. and United Nations implement additional sanctions against Iran, broadening an arms embargo and toughening trade limits.

The U.S. and its allies suspect Iran’s nuclear program is aimed at building a bomb. Iran says it nuclear installations are for peaceful purposes.

Emirates’ Image

Ships from Dubai leave for Iran laden with consumer goods every day. Iran accounted for 7.5 percent of U.A.E. exports in 2008, according to the CIA World Factbook. Trade between the two countries exceeded $12 billion in the 12 months to March 20, 2008, the Iranian state-run Fars News Agency reported.

“The U.A.E. will be extremely keen not to create an image that they are trying to get around the trade sanctions,” said Amr Hamzawy, research director and senior associate of the Carnegie Middle East Center in Beirut.

The ruler of Ras al-Khaimah, Sheikh Saqr bin Mohammed al- Qassimi, 92, is ailing in a hospital in Abu Dhabi, the U.A.E. capital, escalating concerns over the future of his territory. He deposed Sheikh Khalid, 66, in June 2003 and replaced him with Sheikh Saud, 54.

The Guardian newspaper reported last week that Sheikh Khalid was preparing a political coup against his brother. Khater Massaad, an adviser to Sheikh Saud and head of the Ras al-Khaimah Investment Authority, said Sheikh Khalid poses no threat to the leadership.

Sheikh Khalid bin Saqr al Qassimi

 

“There was never and will never be any coup in Ras al- Khaimah,” he said in an interview in the emirate on June 9. Sheikh Saud was appointed by his father, with support from U.A.E. founding patriarch Sheikh Zayed, Massaad said.

Trade Zone

Similar to Dubai, Ras al-Khaimah invested to compensate for its lack of oil and gas wealth, including opening the Saqr Port Authority and the RAK Free Trade Zone, which offers companies a 100 percent tax exemption. The sheikhdom is home to one of the world’s largest ceramics companies, RAK Ceramics, which exports to more than 150 countries, according to its website.

Since being removed seven years ago, Sheikh Khalid has sought backing in Washington, telling U.S. lawmakers that Ras al-Khaimah is being used to sidestep U.S. and UN sanctions against Iran, an allegation Massaad says is “nonsense.”

U.S. State Department spokesman Philip Crowley said the U.S. was “very satisfied with our close and ongoing counterterrorism cooperation with the UAE.”

Sheikh Saud bin Saqr al Qassimi

 

U.A.E. exports to the U.S. rose by 53 percent between 2000 and 2009, to $1.49 billion, according to government statistics. Last year, the two countries signed a bilateral agreement for peaceful nuclear cooperation.

Shared Concerns

“Sheikh Khalid does not believe you can put a price on the shared security concerns of the U.S. and U.A.E. when it comes to issues like terrorism and Iran,” Jason Kinney, a spokesman for Sheikh Khalid, said by e-mail on June 15.

The federal U.A.E. government has let the succession dispute in Ras al-Khaimah harm the U.A.E.’s reputation and raise questions about its overall stability, said Abdelkhaleq Abdulla, professor of political science at Emirates University in Al Ain. The government in Abu Dhabi wasn’t available for comment.

“The U.A.E. is now paying the price because the leadership was reluctant to jump in sooner,” to settle differences between the would-be rulers, Abdulla said.

–With reporting by Nicole Gaouette and Lorraine Woellert in Washington. Editors: Rodney Jefferson, Peter Hirschberg

To contact the reporter on this story:

Vivian Salama in Abu Dhabi at vsalama@bloomberg.net;

Camilla Hall in Dubai at chall24@bloomberg.net

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One Response to “Dubai Neighbor’s Family Feud Raises Allegations Over Iran Trade”

  1. Excellent way of explaining, and pleasant article to obtain facts about my presentation focus, which i am going to convey in academy.

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