KTFA
FRANK26: "ALL ROADS LEAD TO THE 'BAGHDAD SUMMIT' "............F26
The Baghdad Summit and support for transportation and logistics projects are a strategic pillar for diversifying the national economy.
The Baghdad Summit, which began on Tuesday, May 13, has been hosting a ministerial-level meeting of the Economic and Social Council, which included important meetings on enhancing regional cooperation on transportation and logistics projects between the region's countries. These topics played a significant role in these meetings, given their importance in stimulating economic growth and connecting regional markets. How can the summit support these projects? What are the expected prospects for this sector?
The government's interest in transportation and logistics projects was a national and regional economic priority at the Baghdad 2025 Summit, through planning major strategic projects aimed at transforming Iraq into a regional transportation and trade hub, by linking southern Iraq to the Turkish border in the north, and Jordan and the Mediterranean Sea in the west, thus enhancing Iraq's role as a major economic hub in the region. Therefore, we find that the government is working to strengthen Iraq's economic position by developing trade relations with Arab countries, re-evaluating previous agreements, and implementing strategic projects aimed at diversifying the economy and reducing dependence on oil. This is due to the advantages and gains it offers in the following areas:
Iraq's strategic location: Iraq serves as a land bridge connecting the Arabian Gulf to Turkey and Europe, and Asia to the Arab world, making it a key logistics hub. The goal is to promote intra-regional trade and facilitate the movement of goods between participating countries (Jordan, Saudi Arabia, Iran, Turkey, and others), reducing costs and increasing the speed and volume of trade.
Diversifying the Iraqi economy: As an alternative to its total dependence on oil, Iraq could become a regional logistics hub, providing job opportunities and supporting other sectors such as industry and warehousing.
The most prominent proposed transport and logistics projects:
A. Land and railway connectivity projects
- The Iraqi Development Corridor: Linking the Grand Faw Port in southern Iraq to Turkey via a railway and highway network, facilitating the transport of goods between the Gulf and Europe.
- The Iraqi-Jordanian railway line: to enhance trade exchange with Jordan and its outlet to the Mediterranean.
- A project to link Gulf ports to Turkey via Iraq: In cooperation with countries such as Kuwait and Saudi Arabia, this project aims to create an alternative trade route to congested sea lanes.
b. Development of ports and airports
- Al Faw Grand Port: One of the largest logistics projects in the region, it could become a competitor to Dubai Ports and Jebel Ali Ports if completed.
- Modernizing Baghdad, Najaf, and Basra airports to increase their capacity to handle air cargo and enhance transit, as well as establishing new airports.
C. Free logistics zones
Establishing warehousing and logistics distribution areas in cities such as Basra and Najaf to facilitate re-exports and reduce shipping costs.
But the important question remains: How can the summit support these projects? Support is provided through:
Concluding land and air transport agreements between Iraq and neighboring countries to facilitate the movement of goods and trucks.
Attracting investments from the Gulf states, Turkey, and China to finance infrastructure.
Establish a regional logistics authority to coordinate transport policies and unify customs standards.
Involving the private sector in the management and operation of logistics projects to ensure efficiency.
Among the most important challenges and obstacles that may face the process of supporting these projects, which are expected to reveal Iraq’s capabilities in developing this category of strategic projects, are:
The weakness of Iraq's current road and railway infrastructure.
Bureaucracy and corruption hinder the implementation of major projects.
Therefore, the multiplicity of economic impact expected from these investments is of great importance on the level of the Iraqi and regional economy, which appears to us as follows:
A. At the level of the Iraqi economy:
Boosting GDP: The International Monetary Fund estimates that investing $10 billion in infrastructure could boost Iraq's economic growth by 2.5% annually.
Job Creation: Transport and logistics projects could create 500,000 direct and indirect job opportunities by 2030.
Diversifying revenues: Currently, 90% of Iraq's revenues come from oil, but the transportation sector could add $5-7 billion annually by 2030.
Reducing the trade deficit: Transportation costs for the trade sector are expected to decline with improved infrastructure, which will provide an incentive to develop export industries that will reduce the $30 billion annual trade deficit between Iraq and its neighbors (Turkey, Iran, and Jordan).
B. At the level of regional trade and international investment:
Reducing shipping costs: The Gulf-Türkiye route via Iraq may reduce shipping time from 20 days (by sea around the Arabs) to 48 hours (by land).
Positive impact on foreign investment flows. With improved infrastructure, the region could attract investments from Turkey, other Arab countries, China (under the Belt and Road Initiative), the Gulf (particularly in energy and logistics), and European companies seeking new markets.
Therefore, the Baghdad Development Summit represents a very opportune opportunity to stimulate the growth and diversification of the national economy, as well as to revitalize Iraq's strategic role in regional cooperation in the field of transportation and logistics. Iraq is on the cusp of a major economic transformation, transforming it into a trade hub between Asia and Europe and supporting its economy with non-oil revenues. This requires effective policies to prepare and rehabilitate relevant sectors and establish strategic partnerships with neighboring countries and international investors.