Turkey and Iraq Sign Major Infrastructure Deal to Boost Trade and Connectivity

Turkey and Iraq have signed a landmark agreement to build a 1,200-kilometer road and rail project dubbed the "Development Road" that aims to turn Iraq into a transit hub connecting Asia and Europe. The project, witnessed by Turkish President Recep Tayyip Erdogan and Iraqi Prime Minister Mohammed S Al Sudani, along with Qatari and Emirati ministers, will link a major commodities port in Iraq's oil-rich south to Turkey in the north.

The Development Road project is being promoted as a "lifeline for the logistics sector" amid global crises, according to the head of a logistics association. The alternative trade route is seen as vital given recent disruptions to the Suez Canal due to attacks, which have led to increased delivery times and freight rates. By connecting the Great Faw Port in Basra, Iraq, to Turkey via highways and railroads, the project is expected to enable commodities from Qatar and Asia to be transported to Europe more efficiently.

During the signing ceremony, President Erdogan emphasized the importance of strengthening ties with Iraq, describing the country as a neighbor with many commonalities. The visit resulted in the signing of 26 agreements and the establishment of joint standing committees, indicating an ambitious period of cooperation between the two countries. "This visit marks a new chapter in Türkiye-Iraq relations, with the two countries elevating their bilateral ties to a strategic partnership," Erdogan stated.

The Development Road project is estimated to cost around $17 billion and is expected to generate approximately $4 billion in annual revenue. It will be carried out in three phases, with the first phase set to be completed by 2028, the second by 2033, and the third by 2050. The project encompasses railway and highway lines extending from the Grand Faw port in Basra, Iraq, through several cities to the Turkish border, aiming to provide access to Mersin Port and onward to Europe via Istanbul by road.

Why this matters: The Development Road project has the potential to significantly boost trade and economic integration between Turkey, Iraq, and the wider region. By providing an alternative transportation corridor that connects the East with the West, the project aims to enhance global trade and promote stability in a region that has faced numerous challenges in recent years.

Turkish Minister of Transportation and Infrastructure Abdülkadir Uraloğlu stated that the Development Road Project will be Turkey's new "Silk Road" and will benefit a wide geography by transporting cargoes from India, East Asia, and the Persian Gulf to Europe. He also announced that a four-way ministerial summit between Turkey, Iraq, the UAE, and Qatar will be held soon to further discuss the project's implementation. The agreement is expected to shorten transportation time to 25 days and boost Turkey-Iraq trade to a target of $20 billion in the near future, with the potential to reach $50 billion in the longer term.

Key Takeaways

• Turkey and Iraq sign agreement to build 1,200-km "Development Road" project.
• Project aims to turn Iraq into a transit hub connecting Asia and Europe.
• Estimated $17 billion cost, expected to generate $4 billion in annual revenue.
• Project to be completed in 3 phases by 2050, enhancing trade and stability.
• Project to shorten transport time to 25 days, boost Turkey-Iraq trade to $20 billion.