SHAFAQNA- In order to expand its strategic relations in the region, Saudi Arabia is increasing the level of economic cooperation with Iraq and is considering the railway line project from the coast of the Red Sea to Iraq.
Saudi Arabia is considering the plan to build a railway line from the Red Sea coast to Iraq, as announced by Majid Al-Qasabi, the Minister of Commerce of Saudi Arabia.
According to Al-Arabi Al-Jadeed, as stated by Al-Qasabi during his speech at an economic conference between Saudi Arabia and Iraq last month, the proposed project is currently being reviewed by the Ministry of Transportation of Saudi Arabia, within the framework of Saudi Arabia’s Vision 2030 plans.
The latest statistics indicate that the volume of trade between Saudi Arabia and Iraq increased to $1.34 billion in 2020. Out of this trade volume, Saudi Arabia’s exports accounted for $898 million, while Iraq’s exports amounted to $41.8 million.
Railway from Red Sea to Iraq would boost the trade volume between two countries
Economic expert Amer Al-Shawbaki highlighted that the railway line from the Red Sea coast in western Saudi Arabia to Iraq would boost the trade volume between the two countries. He also noted that this project would bring more benefits to the Iraqi side.
Al-Shawbaki explained that the proposed project opens up another gateway for Iraqi exports to the countries of the Cooperation Council, in order to prevent exports through the port of Faw or the southern waters of Iraq.
Furthermore, this project would also shorten the transportation distance for exports and imports.
Among the most important proposed projects related to the railway line is the development of a road project, which includes a railway between Faw, southern Iraq, and Turkey.
Al-Shawbaki mentioned that the goal of all these railway planning endeavors is to support the non-oil economy and enhance the revenues of the Cooperation Council countries.
Hussam Ayesh, another economic expert, believes that this approach by Saudi Arabia is highly significant from a commercial perspective as it reduces the risks and costs associated with maritime transportation, particularly through the Strait of Hormuz, the Bab-el-Mandeb Strait, or the Suez Canal.
Furthermore, this economic expert pointed out that such an investment approach, supports Saudi Arabia’s investments in Iraq. There are approximately $3 billion allocated from the Saudi government’s funds for Saudi Arabia’s investments in Iraq, and the country is considering the transfer of oil through the pipeline between Saudi Arabia and Iraq, away from maritime routes.
Ayesh emphasized that similar projects would allow oil exports to other countries through a pipeline that has been suspended for political reasons.
He also believes that strengthening relations with Saudi Arabia provides Iraq with an opportunity to play a more effective economic role, particularly in the energy sector, in a way that serves the region.
Source: Mdeast
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