Can Iraq’s Development Road project become its gateway to prosperity?

LONDON: Under the Abbasid Caliphate, some 1,200 years ago, Baghdad sat at a crossroads between continents, a global confluence of commerce, culture and learning, becoming one of the most important cities on the Silk Road — the vast trade network that linked Asia to Europe.

It is that same strategic positioning that the modern-day government of Iraq hopes to recreate through a mega-project that could transform the nation’s fortunes after decades of war, sanctions and underdevelopment, and in the process reshape international trade.

The Development Road scheme aims to connect the Arabian Gulf to the Mediterranean with a 1,200 km network of roads, railways and energy links from across Iraq to neighboring Turkiye.

The project is expected to cost up to $20 billion and will be constructed in partnership with Turkiye and with backing from Qatar as well as the UAE.

If successful, it could carve out a new future for Iraq, diversifying its economy and raising substantial revenues. It would help export the country’s plentiful energy resources, while also consolidating relations with Turkiye and the Gulf states.

But the project faces several challenges, both within Iraq and the wider region. Corruption, interstate rivalries, political instability and conflict could derail the scheme, as could competition from other trade corridors in the region.

Failure would raise uncomfortable questions about whether Iraq can ever move beyond its chaotic past to build the kind of country its people desperately seek.

“The Development Road project is one of the most important infrastructure projects initiated in Iraq since the formation of the modern Iraqi state in the 1920s,” Mohammed Hussein, a member of the Iraqi Economists Network, told Arab News.

The idea for a new trade corridor through Iraq has been around for decades. In the 1980s, the concept was branded the “dry canal” — tipped as an alternative to the Suez in Egypt. But wars and sanctions on Saddam Hussein’s regime prevented any progress.

In response to public outrage over Iraq’s continued economic malaise — especially given the size of its oil reserves — the concept has since re-emerged as part of a broader development agenda, helped along by a period of relative stability and improving relations with Turkiye.

The Development Road was launched in 2023 after a meeting between Iraqi Prime Minister Mohammed Shia’ Al-Sudani and Turkish President Recep Tayyip Erdogan.

Central to the plan is the Grand Faw Port now under construction on Iraq’s slither of shallow coastline at the head of the Arabian Gulf. When completed, Iraqi officials say the port will have 100 berths, surpassing Jebel Ali in Dubai as the Middle East’s largest container port.

Grand Faw will connect to a network of highways and railways running through major Iraqi cities including Basra, Karbala, Baghdad and Mosul, all the way to the Turkish border at Faysh Khabur.

From there, they will connect to Turkiye’s networks, linking up with its major Mediterranean ports and its land border with Europe. Oil and gas pipelines are also planned to follow the route, linking Basra’s oil fields to Turkiye’s Ceyhan energy hub.

The scheme, which will be built in three stages up to 2050, would see industrial areas constructed along its route. However, much of the project still remains in the planning phase.

In April last year, Turkiye, Iraq, the UAE and Qatar signed a joint cooperation agreement on the project during a long-awaited visit by Erdogan to Baghdad.

“The project aims to create a sustainable economy bridging east and west,” Al-Sudani’s office said, adding that it would “establish a new competitive transport route, and bolster regional economic prosperity.”

A planned visit by the Iraqi prime minister to Turkiye on May 8 is expected to advance the plan further.

If successful, the project would bring numerous benefits to Iraq, diversifying its economy away from oil and gas and creating hundreds of thousands of jobs. According to Hussein of the Iraqi Economists Network, the project could generate $4 billion per year in customs revenues.

“The Development Road is likely to enhance Iraq’s role in global trade and directly revitalize its non-oil economic sectors such as trade, transportation and tourism,” he said.

There would also be a major boost to Iraq’s strategic positioning, strengthening economic and security relations with Turkiye, the Gulf states and Europe.

“From a global perspective, the Development Road is extremely important for Iraq, as it positions the country as a land bridge between Asia and Europe,” said Hussein.

“It aims to serve as a new route for global trade from the Arab Gulf to Europe, transforming Iraq into a transit hub similar to the Suez Canal.”

Renad Mansour, a senior Iraq research fellow at Chatham House, believes the project represents a clear statement of Iraq’s ambition to put decades of chaos behind it and become a more influential power in the region.

The government sees the project “as an opportunity for Iraq, after years of conflict and dependencies, to start to regain some traction in the region by becoming an important central hub,” he told Arab News.

Iraq’s geographic position would become a “potential point of leverage” that could rebuild its regional position, he added.

The Development Road also offers substantial benefits to Turkiye.

Ankara “views this project as a strategic opportunity to boost its regional role, enhance its trade ties with regional actors and solidify the economic connectivity in the region,” Sinem Cengiz, a Turkish political analyst, told Arab News.

It also marks a sea change in Turkiye-Iraq relations, which have long been dominated by border security, Turkiye’s conflict with Kurdish militants and control of water resources.

“From the Turkish side, it is an opportunity to transform its relations with Iraq from a security-oriented perspective to an economically integrated relationship,” said Cengiz.

“This project provides a framework for long-term mutual dependency and a rare chance for Turkiye and Iraq to compartmentalize, and institutionalize their relations.”

There are, however, an array of challenges and potential obstacles that could delay or scuttle the project altogether.

The biggest risks come from within Iraq itself. Since the 2003 US-led invasion, Iraq has experienced a devastating civil war, a savage conflict with Daesh extremists and the emergence of powerful Iran-backed militias.

“The Iraqi state remains fragmented and corruption is still a big challenge,” said Mansour. “There’s all sorts of challenges, political and security-wise, that would need to be addressed to ensure the sustainability of such a grand vision.”

The country still ranks poorly on Transparency International’s corruption perceptions index, although there has been gradual improvement since 2015. This, along with other bureaucratic obstacles, means ensuring efficient project management is a significant concern.

“Iraq’s reputation for corruption, weak law enforcement, bureaucratic inefficiency, and an underdeveloped business environment will certainly increase the project’s cost and duration,” said Hussein.

The nature of the project means it will have to be built through many regions of the country, each with its own ethnic, religious and political mix.

“The road will go through several different territories where the central government doesn’t have as much authority and you have different armed groups and different sides who would need to be part of this process or could turn into spoilers,” said Mansour.

The route avoids most of Iraq’s semi-autonomous Kurdistan region in the north, apart from the last 20 km where it reaches the border with Turkiye, potentially creating new rifts with the country’s large Kurdish minority.

The Kurdistan Regional Government has accused the federal government of deliberately bypassing the territory and excluding Kurdish areas that would otherwise have benefited from the scheme, said Hussein.

“The project has raised concerns among KRG leaders, who are demanding it be designed to pass through at least two of the KRG provinces, Irbil and Duhok,” he said.

The federal government, however, denies the KRG’s claim, insisting the current route is based on cost-efficiency.

There are also major external challenges to the project.

Grand Faw Port is located just a few kilometers from Kuwait’s long-proposed Mubarak Al-Kabeer Port, which is also under construction. The projects have exacerbated a long-running dispute over the maritime border between the two states and raised tensions over competition between the two ports.

“To prevent tensions and avoid creating a sense of insecurity, Kuwait must be somehow integrated into the process,” said Cengiz. “This would make the project more regionalized and help build a more stable environment for cooperation.”

Iran, which has huge influence in Iraq, particularly through the militias it funds, is also watching the scheme warily. Some argue the corridor could benefit Iran, but could also pose significant competition to its Gulf ports and plans for its own trade route linking Asia to Europe.

Then there is the rivalry with existing trade routes, most notably the Suez Canal, which is vital to Egypt’s economy. Attacks on shipping in the Red Sea by Yemen’s Houthis have dramatically reduced shipping through the waterway, increasing the cost of transporting goods from Asia to Europe.

Iraqi officials claim the Development Road will offer a much faster route from Asia to Europe than the Suez, even without the current shipping disruption.

Another major corridor through the Middle East is also being developed between India, the Gulf states, and Europe, and was set to include Israel and Jordan. Known as the “India-Middle East-Europe Economic Corridor,” or IMEC, the project has won the backing of the US. However, the war in Gaza has presented challenges.

IMEC was viewed by some as a response to China’s Belt and Road Initiative — the vast set of infrastructure projects launched in 2013 to create land and maritime networks between Asia and Europe.

China has not yet committed to providing financial backing to the Development Road but has hinted that the project could be integrated into its BRI, raising a possible point of contention with the US.

Despite these many challenges, there is widespread support within Iraq for the project. If successful, the Development Road could become a beacon of hope for a nation emerging from a long night.