Domestic Economy

Burgeoning Trade Ties With Iraq

Burgeoning Trade Ties With IraqBurgeoning Trade Ties With Iraq

Iran-Iraq trade value currently stands at $12 billion and the amount could increase to $20 billion if the current banking issues are resolved, ISNA quoted head of Tehran’s chamber of commerce, mines, industries and agriculture, Yahya Al-Es’haq as saying.

“Technical and engineering services account for half of the total trade value between the two countries while commodity exchanges constitute the rest,” said the official, speaking at the 51st board meeting of Tehran’s chamber of commerce on Tuesday.

The official further observed that the recently signed MoUs and contracts between the two counties, in various areas such as construction of power stations and building a dairy factory in Iraq, indicate that “the nature of bilateral relations is becoming more investment-oriented rather than being merely export-oriented.”

 Joint Construction Projects

Minister of Roads and Urban Development Abbas Akhundi said Saturday that Iran has undertaken three major infrastructure projects in Iraq.

He made the remarks in a meeting with the visiting Iraqi Minister for Reconstruction and Housing, Tariq al-Khikani. In the meeting, the two ministers studied the implementation of the three projects in Iraq, namely a drawbridge over Arvand River, as well as the construction of two highways in Hillah and Karbala.

Based on the previous agreements between the two ministers, both countries’ railway networks are to be connected by two routes. The first route passes through Shalamcheh border and requires 40 kilometers of railroad to be constructed in Iran’s territory. The second route will pass through Khosravi border.

The first railway route passes through Arvand River – the southern end of which constitutes the border between Iraq and Iran – which requires a drawbridge to be constructed over the river. The bridge is set to be designed and constructed by Iranian engineers and is expected to be completed within 18 months if sufficient funds are available.

Iran and Iraq agreed on linking their rail networks to facilitate the movement of goods and passengers – majority of them Iranian pilgrims visiting Iraq’s religious sites – via Shalamcheh and Khosravi border points, when Akhundi and his then Iraqi counterpart, Bayan Baqir Jabr al-Zubeidi met in Tehran in December.

Iran has a vast railway network linked to Central Asia, China and Russia. Constructing the 32-kilometer Shalamcheh-Basra railway will enable Iraq to move goods and passengers to Russia and China and vice versa.

Iran and Iraq have enjoyed growing ties ever since the overthrow of former Iraqi dictator, Saddam Hussein in 2003.

Being an immediate neighbor, Iraq is the most significant destination for Iran’s non-oil exports. Improving economic ties with neighboring countries and promoting non-oil exports has been at the core of the Iranian government’s agenda ever since revenues from oil exports shrank significantly due to slump in oil prices.

Successful and effective talks have been held between the two countries over the past months regarding rail, land and air transport, Arvand River waterway and export of engineering services.