Leveraging its geography and resources to serve as an economic bridge between Asia and Europe is not a new concept for Iraq. In the 1980s, the country promoted the “Dry Canal” idea of offering a commercial transit hub linking several regions of the world. But wars, foreign military occupation, political instability, and the challenge of the so-called Islamic State (IS) hindered such plans. Today, however, Iraq seeks to establish itself as a geo-economic hub between East and West through the Development Road, an ambitious megaproject to establish a major trade corridor linking the United Arab Emirates (UAE), Qatar, Iraq, Turkey, and the European Union. The project’s third and final phase is to be completed by 2050, with phases one and two currently scheduled to finish in 2028 and 2033, respectively.
With a cost estimated in the $17 to 20 billion range, the Development Road was initially presented in May 2023 and finalized during a visit by Turkish President Recep Tayyip Erdoğan to Baghdad in April 2024. This megaproject will consist of railways, roadways, and ports connecting the Gulf to Europe via Iraq and Turkey. The UAE and Qatar are to serve as the project’s strategic financiers, with Turkey as the main driving force and Iraq as the central player.
To be situated along Iraq’s Gulf coast near Basra is the Grand Faw Port (GFP). Upon completion in 2025, GFP is to have a 90-berth capacity, surpassing Dubai’s Jebel Ali to become the Middle East’s largest container port. From the GFP, the Development Road will go northward along a 740-mile highway and railway network traversing major Iraqi cities (Karbala, Baghdad, and Mosul) before reaching the Ovakoy-Faysh Khabur crossing at the Iraqi-Turkish border and linking up to Turkey’s highway and railway networks. Turkey’s economy is integrated into the European Union through the Customs Union. With more than 40 percent of Turkish exports going to EU member states, the Development Road project offers Europe opportunities to expand trade relations with the Middle East and the Far East.
By making Iraq an important hub and corridor for global trade, the Development Road project can help the country diversify its economy beyond oil, create new jobs, stimulate growth in the green energy sector, and, according to the estimates of Iraqi officials, boost the state’s revenues by approximately $4 billion each year. However, the Development Road project brings many challenges, including corruption, inefficiency, and a lack of transparency within Iraqi institutions, as well as risks of renewed armed conflicts, terrorism, and political instability. Considering the many uncertainties surrounding Syria’s post-Assad future and the possibility of groups such as IS exploiting power vacuums there, officials in Baghdad have valid concerns about worsening security crises in Syria spilling into Iraq. Furthermore, just as Iraq has been a battleground for hostilities between the United States and Iran in recent decades, there is potential for a reignition of violent confrontation between American forces and Iran-aligned militias on Iraqi soil, especially if the Trump administration intensifies pressure on the Islamic Republic.
Based on the premise that prosperity and security come hand in hand, Iraqi officials are optimistic about the Development Road helping their country overcome such threats to peace and stability. But those issues themselves—particularly with respect to activities by armed Iraqi groups that operate independently of the state—could lead to growing skepticism about the Development Road’s viability. Without effectively addressing such drivers of instability in Iraq, officials in Baghdad will have a difficult time attracting sufficient international support to make the Development Road a success.
Geopolitical factors are relevant. Countries that are not a part of the project have their own perspectives on the Development Road, and some are likely to see the corridor as undermining their national interests, which could lead some players in the region and elsewhere to play spoiler roles. The Iraqi leadership must carefully navigate such complicated dynamics in order to bring as many countries as possible on board with the megaproject while preventing others from undermining it.
The Emirati and Qatari participation in the Development Road project illustrates the growing levels of cooperation between Gulf Cooperation Council (GCC) members and Baghdad. Indeed, Iraq and Turkey are counting on both the wealthy Gulf states as the most committed investors. GCC states are willing to enlarge their economic footprint in Iraq despite operational risks such as Iraq’s political instability, corruption, and insecurity. Although it remains unknown what concrete commitments the UAE and Qatar will make to the project, both have already been investing in Iraq’s economy (such as through the Emirati role in developing gas fields in southern Iraq, or Qatar’s 25 percent stake in the Gas Growth Integrated Project); such investments stand to serve as a “litmus test” for Abu Dhabi’s and Doha’s future involvement in the Development Road. Considering the large sums of money required for this project, the UAE and Qatar are anticipated to make mostly public investments, yet private companies are also expected to play key roles.
It is likely that the Development Road will compete with the India-Middle East-Europe Economic Corridor (IMEC), an ambitious US-backed transcontinental trade and investment initiative consisting of two integrated corridors that would link India to the UAE, Saudi Arabia, Jordan, Israel, and EU members through shipping lanes, energy infrastructure, high-speed cables, and railways. But the UAE, which is part of IMEC and the Development Road as well as a BRICS+ member, hopes to serve as a hub for several transcontinental corridors. Moreover, many UAE-based companies have vast experience in the management of large ports and thus are well positioned to help Iraq manage GFP. In fact, when Iraq’s Prime Minister Mohammed Shia` al-Sudani visited Abu Dhabi in February 2023, he requested such Emirati involvement with the GFP. In April 2024, the UAE’s Abu Dhabi Ports Group (a subsidiary of Abu Dhabi Developmental Holding Company, a state-owned sovereign wealth fund) and the General Company for the Ports of Iraq (a state-owned Iraqi entity under the Ministry of Transport) signed a preliminary agreement to develop the GFP and its economic zone through a joint venture. Abu Dhabi and Doha will be able to advance the project, sending the world a unified message about the Development Road while helping Iraq overcome obstacles that could dim the project’s prospects for success.
The Development Road’s impact on Kuwait, however, could prove complicated due to Iraq-Kuwait disagreements over their maritime border. The two countries’ unresolved dispute over the strategic Khor Abdullah waterway, which separates Iraq’s al-Faw Peninsula from Kuwait’s islands of Warbah and Boubiyan, remains an issue with serious repercussions for the Development Road. Although a 2012 bilateral agreement set the terms for navigation rights in this channel, the Federal Supreme Court of Iraq ruled that it was unconstitutional on the grounds that it did not receive two-thirds majority support from Iraq’s Council of Representatives. The 2023 judicial decision has broader implications for bilateral affairs that also calls into question the future of GFP’s development.
The Development Road could become a source of concern for Kuwaiti policymakers with the GFP competing with the Mubarak al-Kabeer Port project, which is being built on Kuwait’s Boubiyan Island. The Kuwaiti port’s construction triggered a dispute between Baghdad and Kuwait City. Iraqi officials see it as undermining the GFP’s chances of success. These dynamics could further fuel a new conflict between the two countries, with negative repercussions for the entire Gulf. Therefore, Iraqi policymakers and their counterparts in GCC states should seriously consider assuaging Kuwaiti concerns about the GFP. This could be done by establishing a “mega-maritime free-trade hub” with Kuwait as a partner and in which the two ports complement, rather than compete with, each other. Under ideal circumstances, Iraq’s and Kuwait’s economic security interests will be a motivator for the two countries to settle their maritime dispute.
It is difficult to imagine Egypt viewing the Development Road favorably. This new Eurasian corridor through Iraq and Turkey represents an alternative to the Suez Canal passage, which has long been a major source of Egypt’s hard currency revenue. In addition to the problem of Red Sea insecurity stemming from Houthi maritime attacks that began in fall 2023, geography helps explain why the Development Road has certain advantages over the Suez Canal. Trade from China to Europe would be up to 15 days shorter via the Development Road than the Suez Canal. Similarly, IMEC, which does not involve Egypt, represents a major source of concern for Cairo as that grand connectivity project also bypasses the Suez Canal.
By the same token, with international trade through the Middle East expected to grow at an annual rate of 10 to 15 percent, it is not clear how much revenue the Development Road would take away from Egypt. It is possible that the project will absorb such anticipated growth in global trade. At least that was the conclusion reached by a representative of Progetti Europa and Global, an Italian company involved in a feasibility study of the Development Road.
Iran’s perspective on the project is complicated, but in general it may put Tehran on edge. Against the backdrop of the Syrian regime’s fall to the Hay’at Tahrir al-Sham (HTS)-led coalition of rebels, the Levant’s balance of power has shifted in ways that severely undermine Tehran’s position. Turkey and Israel are the two regional states that have done the most to fill the void created by Iran and Russia’s significant decrease in influence in Syria following Bashar al-Assad’s ouster. If the Development Road brings Iraq further into Ankara’s orbit, Iran and Turkey’s “cooperative rivalry” could play out in more dynamic ways in Baghdad. Seeing its influence in Iraq as critical to its foreign policy interests, Tehran likely finds a “Turkey and GCC-aligned sphere of influence” that includes Iraq an unsettling prospect indeed.
Iranian officials want their country’s own Gulf ports—Bandar Abbas, Bandar Imam Khomeini, and Chabahar—to become important hubs for greater economic interconnectivity among the Far East, Middle East, and West. Despite the extent to which western sanctions have severely constrained Iran’s ability to serve as a platform for transregional trade, a host of countries in the neighborhood have been using Iran’s ports for trade. Within this context, Tehran worries about the GFP decreasing the value of these Iranian ports. With Iranian ports currently providing Turkey direct access to the Gulf, the GFP has the potential to change the equation and undermine Iran’s position as a transit country in this body of water.
However, when analyzing Tehran’s stakes in the future of this Iraqi-Turkish project, nuance is necessary because there is the possibility that Iran could benefit from the project and the wealth that it would generate. With the second Trump administration keeping Iran under pressure through economic sanctions, a more prosperous Iraq could offer the Iranians many benefits. It is also necessary to keep in mind how trade involving Asia that relies on Iraq’s GFP and road and railway networks will depend on the Strait of Hormuz, giving Tehran leverage that could secure it a slice of the Development Road pie. Additionally, with IMEC being driven in no small part by Washington’s desire to counter China’s rise and to promote Saudi-Israeli normalization, Iran would probably welcome any successful corridor that represents competition to IMEC.
Like other Arab states, Iraq seeks to maintain a balanced geopolitical position between the United States and China. In this era of great power-competition, Iraqi policymakers must continue to strike delicate balances to secure fruitful relationships with both Washington and Beijing.
So far, Washington has not taken any official stance on the Development Road project. Yet China’s role will likely shape the US perspective on the corridor. Although China so far has done little vis-à-vis the Development Road, the rhetoric from Beijing emphasizes how the Iraqi-Turkish corridor stands to complement the Belt and Road Initiative (BRI). This suggests that Beijing could have ample incentive to invest in the Iraqi-Turkish corridor in the future. Indeed, Chinese officials’ talk about Development Road and BRI complementing each other is fact-based. With southwestern China being connected to Gwadar Port via BRI’s China-Pakistan Economic Corridor, China stands to benefit from its goods going from Pakistan’s main port to Basra and from there on through Iraq, Turkey, and the EU. At the same time, with the BRI’s Middle East Corridor linking Central Asian countries and Turkey, the Development Road and BRI intersect in Turkey.
The Biden administration enthusiastically supported IMEC as an alternative to BRI and a way to enhance a rising India’s capacity to challenge China. With the Trump administration likely to remain determined to put pressure on US allies and partners to distance themselves from China, Iraqi officials must consider how the White House will see the Development Road within the geopolitical context of Washington and Beijing’s intensifying competition.
Nonetheless, the possibility of the United States viewing the Development Road as beneficial to its national interests must not be discounted. At a time when Washington’s top concerns about Iraq are to counter IS and Iranian influence and protect Kurdish interests, American officials might see the project’s success as advancing US long-term economic and security interests in Iraq. At the same time, the Red Sea region is likely to remain volatile, at least in the near future, because the fate of the Gaza ceasefire is an unknown variable in the equation. If Israel resumes its genocidal war on Gaza, which is a possible (if not an expected) scenario, the Houthis have vowed that they will restart their maritime attacks. Thus, the emergence of new and alternative trade routes can serve the interests of many countries, including the United States.
As illustrated by the Trump administration’s trade policies with Canada, China, and Mexico, the White House seems to believe that more autarky will serve America’s economic interests. But the leadership in Baghdad is taking the opposite approach, viewing greater infrastructure and logistical connectivity between countries as opening doors to more prosperity, political stability, and security.
By leveraging its geography and international borders, Iraq sees the Development Road as a valuable opportunity to become a more influential player in the global geopolitical and geo-economic order. Of the many international challenges facing Baghdad as this project moves forward, one of the most salient will be to ensure that countries such as Kuwait and Iran are given enough buy-in to prevent them from hindering what could become a major conduit for global trade.
The views expressed in this publication are the author’s own and do not necessarily reflect the position of Arab Center Washington DC, its staff, or its Board of Directors.