Dubai and Iran

Thomas Lifson:

As the gasoline riots continue in Tehran (and who knows where else in Iran?), popular discontent with the mullahs' regime increases as economic hardships multiply. Kenneth Timmerman, writing in Front Page Magazine, discusses both the economic roots of unrest and the prospects for heightening it.

Among several interesting bits of information is the role of HSBC Bank (one of the world's biggest, a British institution that grew out of the Hong Kong and Shanghai Banking Corporation) as a key link in Iran's ability to do financial business with the rest of the world.
Working quietly behind the scenes, the Bush administration has won agreement from bankers in Dubai to stop clearing Iranian government financial transactions. Because Dubai has become the economic lifeline connecting Iran to the outside world, this has been a major blow to the regime.

Just last week, sources in London told me, the British government agreed to a U.S. request to put pressure on the HSBC bank to stop clearing Iranian government financial transactions as well. Since HSBC handles approximately 50% of Tehran's remaining international business, this is an additional heavy blow.
One fascinating aspect to this report is that a Saudi investor, Maan Abdulwahed Al-Sanea, reportedly the second richest man in the Kingdom, has purchased a $6.5 billion stake in HSBC. The Wahhabi rulers of Saudi perceive a mortal threat from the Shiite rulers of Iran, and may well be "encouraging" HSBC and the UK to make life difficult for the Iranians as a means of removing the mullahs from power.

He points out some interesting contrast between Dubai and Iran too. It points out the advantage commerce has over being an oil tick.


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