Will reopening of border crossing drive Saudi investment in Iraq?

Nov 28, 2020

The recent reopening of the Iraqi border crossing of Arar with Saudi Arabia  in a bid to enhance trade exchange between the two countries coincided with talks about the Saudi agricultural investment project in Iraq.

However, the border’s reopening for the first time in 30 years Nov. 18 also coincided with political pressures from influential forces pushing against any openness in relations with Saudi Arabia. “Some are promoting the lie of Saudi colonialism,” Iraqi Prime Minister Mustafa al-Kadhimi said that day, describing this as “shameful.”

Positive economic returns from the Arar crossing could break the Iraqi reluctance to resuscitate relations with Saudi Arabia. Arar is currently the only crossing along the common border of more than 830 kilometers (515 miles).

“Trade movement through the Arar crossing is likely to face attacks that would impede trade and end any Saudi-Iraqi economic cooperation in the future,” an Iraqi security source told Al-Monitor, on condition of anonymity. “Shiite forces fear Saudi influence in central and southern Iraq. They will not allow it.”

The Shiite Asaib Ahl al-Haq (League of the Righteous) led by Qais Khazali, in an Oct. 31 statement, accused  Riyadh of “planning to seize swaths of land within four Iraqi provinces.”

That same day the State of Law Coalition called for ending “the project to grant Saudi Arabia land for investment in the Badia of Iraq.”

However, State of Law Coalition parliament member Abdul Hadi Saadawi told Al-Monitor, “The Arar crossing will be economically and commercially beneficial to Iraq, just like crossings with other countries such as Kuwait, Turkey, Syria and Jordan.” He warned, “The use of the crossing for political purposes will render its useless and will expose it to failure.” 

Mazhar Mohammad Saleh, an adviser to Kadhimi for economic affairs, told Al-Monitor, “The Arar crossing is a gateway to an Iraqi economic project with neighboring Arab countries.” Saleh added, “Saudi Arabia’s inclination to invest and enhance trade with Iraq is a natural tendency aimed to meet the needs of the kingdom and its markets.”

Saleh said a commercial project such as the Arar crossing must be based on studies that ensure the sustainability of investment and trade projects. He called on the Saudi-Iraqi Coordination Council to adopt a road map for receiving investments and exchanging goods, in a way that equitably serves the two countries.

The enthusiasm of the Iraqi and Saudi sides in proceeding with the opening of the crossing was unhindered by the attempts of those opposing the rapprochement between the two countries. The Saudi Transport Ministry carried out a series of maintenance works on the road leading to the new Arar crossing and secured the roads leading to and from it.

The director of the Iraqi side of the Arar border crossing, Brig. Habib Kazim, told Al-Monitor, “The Iraqi authorities have put in place a complete security, administrative and logistical plan to secure the roads to Arar through Karbala [central region] and Anbar [western region]. Maintenance works have been completed for about 250 kilometers [155 miles] from the highway, starting from Anbar to the far south, where the Iraqi ports are, in Basra.”

Kazem added, “Iraq has started managing logistical, administrative and security operations and departments in Arar. It also provided the crossing with health services, including veterinary, as well as services required for people and vehicles, with the fruitful cooperation of Saudi Arabia.”

The general manager of the General Land Transport Company, Mortada al-Shahmani, is highly optimistic about the crossing. He told Al-Monitor, “The start of land transport operations between the two countries will achieve a breakthrough in the goods exchange volume. Saudi Arabia is equipping the crossing in terms of buildings and logistical equipment. The crossing has a modern architectural design that meets the expectations of the bilateral trade movement.”

However, parliament member Alia Nassif of the State of Law coalition warned of “political goals behind any commercial and economic cooperation with Saudi Arabia.”

She said that the Arar crossing should only be used for trade purposes and that Iraq should ensure its security and non-interference in its internal affairs. “Trade exchange with a fair trade balance is not the problem, but there are Saudi investments and projects that may open the door to regional strategic projects that the Iraqi people are afraid of, given that by the end of the 50-year investment projects, their ownership may devolve to Saudi Arabia.”

An economic expert and adviser to the Iraqi Banking Association, Salam Sumaisem, told Al-Monitor, “The Arar crossing opens the horizons for the diversification of Iraq’s economic relations with Arab countries, which keeps it away from the economic tensions resulting from the sanctions imposed on neighboring countries. Yet political pressure could impair the full performance of the Arar crossing.”

Legal expert and political analyst Ali al-Tamimi also saw Iraqi benefits from the crossing. He told Al-Monitor, “The new approach was taken by Kadhimi [as part of] the openness of Iraq to its Arab and Western surroundings, and his decisive decision to open the Arar crossing will greatly enhance the role of Iraq in the region.”

Tamimi added, “Competition between Saudi Arabia, Iran and other countries means more options for Iraq. But Iraq should rely on Saudi Arabia more than an Iran crippled by international sanctions.”

The mutual desire of the Iraqi and Saudi governments to make the Arar crossing a gateway to wider relations is obvious. Iraqi officials say the crossing constitutes a big step forward in the course of the bilateral relations while Saudi Arabia has already dispatched through the crossing 15 containers of medical supplies and medicines to help the Iraqi people.

There seems little doubt that the Iraqi political forces allied with Iran are reluctantly accepting the opening of the Arar crossing. Just as they previously criticized Iraq’s opening with Egypt, they now lash out at Saudi investments.

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