With military action on Iraq by the US and its yet undetermined set of allies seemingly a matter of weeks away, traders in Dubai are doing a roaring trade in goods that may become hard to come by close to the expected theatre of war.

Suppliers and traders in Kuwait are placing bulk orders, not only for regular commodities such as milk powder and cashew nuts, but also for items such as gas masks that Kuwaitis fear may be needed if war breaks out.

Dubai's gains

"There is no problem with opening letters of credit (L/Cs) on these orders," according to a senior official with a leading food distribution house based in Dubai's commercial port of Jebel Ali. "Despite the war situation, Kuwaiti ports are still active and have vessels still coming in from all over the world," he added.

Some traders in Dubai, the Gulf's commercial and trading centre, report that regional trade has been picking up over the last six weeks according to local traders. They say that in Kuwait, as well as their usual customers, an increasing amount of business is being done with military forces now stationed in Kuwait.

Military sales

"There have been some orders from the US and British armies there, according to S Chandrasekhar, general manager for one of Dubai's largest suppliers of consumer goods, Spinneys.

Chandrasekhar has not however experienced the pick up in business reported by some of his competitors. "Overall, I have not seen any upsurge in the past few weeks," he said.

Commercial benefits

For the time being Dubai - one of the seven United Arab Emirates - may be benefiting commercially from Kuwaiti buyers' fears of war but business may fall away if conflict erupts and traders cease to do business in Kuwait.

Unlike Kuwait, which borders Iraq, Dubai is at the southern end of the Gulf, well away from where any conflict is expected. As well as increased sales to Kuwait, Dubai is also benefiting from increased hotel bookings and air traffic as people perceive it to be one of the Gulf's safest havens.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.