development road project; From bypassing Iran to China’s oil interests

According to the exclusive report of Energy Press, this week, in a ceremony attended by the President of Turkey and the Prime Minister of Iraq, a four-way memorandum of understanding between Iraq, Turkey, Qatar and the UAE was signed for cooperation in the development road project. The development road project, which was announced at the end of last May by the Prime Minister of Iraq, Mohammad Shia al-Sudani, includes a land and rail route from Iraq to Turkey and its ports. This route starts from the port of Faw in Basra and is planned to consist of a road and railway with a length of 1,200 kilometers inside the territory of Iraq and connecting it to the Turkish railway network. The budget of this project is estimated at 17 billion dollars and will be implemented in 3 stages. The first phase will be completed in 2028, the second phase in 2033 and the final phase in 2050.
Turkish Transport and Infrastructure Minister Abdulkadir Oraloglu said that the “Development Road” project will enable the direct movement of goods to all European countries. This project somehow ignores the role and geographical position of Iran in connecting the Persian Gulf countries to Europe and the North-South corridor. Of course, the development of Faw Port is also an image of the great competition between China and the United States.
Iraq’s strategy from the development project
The income from hydrocarbons in Iraq is redistributed in a way that is associated with extreme inequality and corruption and is not reinvested. These policies have led to the exclusion of large sections of the society, of which the youth constitute the overwhelming majority, and about 60% of its population is under the age of twenty-five. The fact that both the limited investment and the few job opportunities available in the private sector have increased the demand for employment in the public sector, which in turn leads to the waste of resources in favor of unproductive activities. The flaws in these policies are obvious, especially during the economic and financial crisis caused by the corona virus epidemic and the significant drop in oil prices, and the Iraqi government was forced to increase the dollar rate and borrow from the government’s strategic financial reserves to pay employees’ salaries.
Despite the rise in oil prices since the start of the conflict in Ukraine, there is a general belief that Iraq’s model for redistributing oil wealth is flawed and, if not corrected, the next political crisis is likely to be much more severe.
Therefore, Sudani wants to prioritize the economy over other government goals, but not by presenting a development model that fundamentally changes redistribution policies, rather, he wants to advance a model of state capitalism in which strategic macro-projects as They are seen as transformative. This model, examples of which exist in Egypt, Saudi Arabia and Turkey, is often based on hasty assessments and economic populism. In other words, instead of actually solving economic problems, it focuses on attracting the opinion of political spheres through the implementation of mega-projects that bring credibility.
The path of development falls into this line of thought, as it is an economic project that revolves around a political goal, that is, maintaining the status quo by seeking partial solutions to economic challenges. Nasser al-Asadi, a Sudanese consultant on transport affairs, stated that the purpose of the development of the road is to achieve more than cross-border trade links, as the road also acts as an artery that allows new blood to flow into the key Iraqi economy.
In addition to the roads and railways that connect the port of Faw in southern Iraq to the Iraq-Turkey border, it leads to the establishment of factories and workshops along its route, which allows commercial activities and creates many job opportunities. The plan, which will be mostly outside the city centers and in the desert areas, will allow the weight of economic activity to move out of the congested urban centers with old infrastructure and help stimulate migration to the peripheral areas.
The dream of exporting gas
Iraq has a plan to implement a gas pipeline within the framework of the “Development Road” project, which aims to connect Asia with Europe, as an alternative to Russian gas for European countries. Iraqi authorities have also confirmed that there is a pipeline to export Iraqi gas to the European market. Iraq has strategic plans to develop many of the country’s gas fields, as well as invest in gas control along with oil operations, so that it reaches self-sufficiency in 2027 and even moves towards export.
In fact, the development road project includes all investment opportunities in Iraq, he noted: this corridor connects the Persian Gulf ports to Europe by land, and Turkey is a gateway for this project to the European Union, as well as Kazakhstan and Turkmenistan. Is. This project will witness the possible participation of 10 countries in the region, including Saudi Arabia, Turkey, Syria, Jordan, Kuwait, Bahrain, Qatar, the United Arab Emirates, Iran and Iraq. Iraqi officials expect this project to be the cornerstone of a sustainable economy that does not rely solely on oil and contribute to regional integration.
Beijing’s oil targets in Faw
It is expected that Faw Port, built on the coast of the Persian Gulf, will be put into operation in 2025. This project is currently two-thirds completed and is being built by the South Korean company Doo. According to the plans, 90 berths of this port have made it on the verge of becoming the largest container port in the Middle East with industrial areas and facilities. With an area of more than 16 square kilometers, Faw port is expected to have an annual handling capacity of 99 million tons.