A new trade route could pave the way towards a prosperous Iraq

An aerial view of the breakwaters of the Grand Faw Port project, which is under construction, in the southern Iraqi city of Basra. AFP

Iraq, a nation steeped in history and endowed with geopolitical importance, occupies a strategic position in the heart of the Middle East. This location has presented opportunities and challenges alike, drawing the country into various regional conflicts while offering the potential for economic transformation.

Iraq’s $17 billion Development Road megaproject has emerged as a pivotal initiative aimed at using the country’s location to establish it as a major trade hub. By creating a vital link between the Gulf and the Mediterranean, Iraq aspires to enable billions of dollars in trade, promising prosperity and stability for its economy and the wider region.

This is part of Iraq’s broader strategy to assert itself within East-West trade corridors. Competing initiatives include the Chinese-backed Middle Corridor, the Russian-supported North-South Corridor and the India-Middle East-Europe Economic Corridor that connects the UAE, Saudi Arabia and Europe through Greece.

Unlike some of its competitors, Iraq’s corridor seeks to engage regional stakeholders rather than exclude them. This inclusive strategy could position the country as a cornerstone of international trade, addressing the challenges that have historically undermined its ambitions. Further, the project has the potential to stabilise the Middle East by offering a new, competitive trade route.

The Development Road project is poised to become the largest of its kind in the region and includes a 1,200km motorway as well as a parallel railway system that will enable business diversification, strengthen the economy and create new job opportunities. Central to this initiative is the modernisation of the Grand Faw Port and Umm Qasr Port, both in Iraq’s southern Basra governate.

• 

  Suhail Al Mazrouei, UAE Minister of Energy and Infrastructure, second left, with Turkey's President Recep Tayyip Erdogan, third left, Iraq's Prime Minister Mohammed Shia Al Sudani, third right, Qatar's Minister of Transport Jassim Al Sulaiti, second right, Iraq's Transport Minister Razzaq Al Saadawi, right, and Turkey's Transport Minister Abdulkadir Uraloglu, left, during the signing of the Development Road framework agreement on security, economy, and development in Baghdad. Reuters

• 

  Mr Erdogan and Mr Al Sudani share a lighter moment, during the signing of the memorandum of understanding between Iraq, Turkey, Qatar and the UAE. AP

• 

  Iraq launched the $17 billion project last year to link a major commodities port on its southern coast by rail and road to the border with Turkey. EPA

• 

  Mr Al Mazrouei, left, and Mr Uraloglu, right, during the signing of the agreement. EPA

• 

  Mr Al Saadawi, left, and Mr Al Sulaiti. EPA

• 

  Mr Erdogan, second left, and Turkey's Foreign Minister Hakan Fidan, left, follow proceedings. Reuters

With its record-breaking 15km breakwater, the Grand Faw Port symbolises Iraq’s commitment to enhancing its trade capabilities while also reducing environmental effects. As construction progresses, the project aims to connect the Gulf to Turkey, offering a safer and faster alternative route for trade. If successful, this corridor could provide Iraq with economic independence and prosperity, with far-reaching implications for the wider region. The Grand Faw Port is expected to generate about 250,000 jobs and yield up to $4 billion annually in freight transit fees for the Iraqi government.

The economic benefits of such an Iraqi corridor are substantial, with job creation and increased freight transit fees at the forefront. Iraq stands to tap into burgeoning East-West commerce; socially, the project promises to revitalise rural areas and alleviate demographic pressures in major cities, fostering local business growth and regional development.

Traffic forecast assessments indicate that the Iraqi corridor is an attractive alternative compared to other trade routes. For instance, freight transit from Shanghai to Rotterdam could save time and costs by reducing transit for Asian exports to Europe by up to 10 days. The Iraqi project is designed to meet expected demand until 2038 by adopting a multimodal system – railway and motorway – as rail systems alone would be saturated by 2028 due to anticipated traffic demand.

Domestically, the project’s railway, which will run for more than 1,160km, will serve 28 million people – about 66 per cent of Iraq’s population – through 14 strategically located stations. Meanwhile, the motorway will stretch for 1,190km. Both the motorway and railway are designed to be strategically distanced from major urban centres, ensuring accessibility while minimising urban disruption. Specifically, both are 8km from the centre of Basra, making them easily accessible from this major city. They are also 15km from Nasiriyah and 12km from Diwaniyah, providing convenient connections to these urban centres. Their distance from Baghdad is 36km with Rabiah, located 5km away, being 28km from the Turkish border. This network of distances underscores the centrality of the motorway and railway within the broader context of these important Iraqi cities.

The India-Middle East-Europe Economic Corridor project, established by President Sheikh Mohamed, US President Joe Biden, Indian Prime Minister Narendra Modi and other leaders, is one of a few competing trade corridors. UAE Presidential Court

Iraq’s diplomatic efforts have significantly bolstered its regional relationships, particularly with influential neighbours such as Turkey, the UAE and Qatar. Indeed, the Emirates and Qatar have expressed support for the Development Road project, recognising its potential to reshape regional trade dynamics. However, challenges remain, necessitating strategic manoeuvres to mitigate tensions.

This ambitious endeavour faces competition from parallel initiatives and the complexities of regional geopolitics; historical tensions cast doubt on the feasibility of such large-scale projects. The potential emergence of competing ports in the region highlights the necessity of strategic planning and execution.

The success and attractiveness of the Development Road project will also rely heavily on the co-operation and infrastructure capabilities of the countries it traverses, including Turkey, Bulgaria, Romania, Serbia and others. The project involves crossing 1,200km in Iraq, 1,600km on Turkish territory and 2,000km across Europe. This demands a high level of reliability, efficiency and safety to ensure its viability. Each country involved will need to invest in robust infrastructure, seamless logistics and stringent safety protocols to enable smooth operations.

The project has the potential to transform Iraq into a cornerstone of international trade. A stable Iraq is crucial for the Middle East, and this project could play a pivotal role in reshaping global trade routes and fostering regional co-operation. As Iraq navigates its challenges, the success of this initiative could herald a new era of economic growth and geopolitical influence, positioning Iraq as a unifying force in the region.

The strategic significance of this project extends beyond mere economic benefits; it embodies Iraq’s aspirations for a prosperous future, rooted in collaboration, stability and a commitment to become a vital player in the global trade landscape.