Kuwait reacts angrily to being cut out of Iraq and Turkey’s transport project

Kuwait reacts angrily to being cut out of Iraq and Turkey’s transport project
Iraqi and foreign workers building the new Grand Faw port on Persian Gulf coastline. / bne IntelliNews
By bne Gulf bureau April 25, 2024

Kuwait witnessed a wave of angry reactions on April 25 after Iraq, Qatar, the United Arab Emirates and Turkey signed a quadrilateral memorandum of understanding (MoU) in Baghdad to establish the "Development Road" project, linking Iraq to Turkey and Persian Gulf states.

The agreement, signed during Turkish President Tayyip Erdogan's visit to Iraq, envisions a project launching from Iraq's Faw port, adjacent to Kuwait's Mubarak port, whose delayed completion caused much of the Kuwaiti anger over perceived threats to national, economic and trade interests.

Initially announced in 2023, the 1,200-kilometre double-track railway is a monumental project that would revolutionise transportation in the region. It would move passengers and freight from Al Faw to Ovaköy in Turkey, with approximately 15 stations along the way. The government of Iraq envisions high-speed trains moving passengers at speeds of up to 300km/h, similar to speeds seen in Spain and Uzbekistan. The railway component of the “Development Road” project would have an initial annual freight capacity of 22mn tonnes of bulk cargo and 3.5mn containers, according to a pre-feasibility study by Italian consultancy Progetti Europa & Global (PEG) initially announced.

'State's failure'

More than a third of Kuwait's 50-member National Assembly commented on the signing, deeming it a failure of government policies on development and port projects. They urged serious action, including completing Mubarak port work immediately and forming committees to investigate delays and any impact on Kuwaiti interests.

Political activist Bader Al-Najjar said: "The Mubarak port reflects the state's failure in managing major projects...and its weakness in managing international and regional relations."

"The importance lies in two aspects...if we assume failure in managing major projects, it means we have an insincere government in increasing state resources...and no vision for the economy, sustainability and development," he added.

"The other relates to international and regional relations...reflecting a government problem with its ability to negotiate such economic projects and find bigger allies."

Economic expert Mohammed Ramadan said the agreement is "just a memorandum of understanding...the basis is Iraq and Turkey...on establishing a railroad and road to transport goods, energy, etc from Faw port to Turkey, then Europe."

"If Kuwait had sufficient port and logistics facilities, it could have become an important part of this project...but due to lack of infrastructure that can be used for such projects, they headed to Iraq," Ramadan noted.

Kuwait Economic Society member Abdul Mohsen Al-Fakher commented: "Regardless of the known economic feasibility...countries don't become great without working daily on achieving giant projects...a state that doesn't set goals won't last."

Ramadan warned, "Any loss of a giant project is a loss of Kuwait's future financial resilience...the state must have enough courage and not just oversee sectors, but lead them itself."

MP Abdul Wahab Al-Issa said he contacted government officials who affirmed the "Silk City" law's readiness, awaiting Parliament's reconvening to approve it, having requested its priority listing in the first 2024 assembly term starting in early April.

Turkey pushing for a southern port

Turkey has been pushing to speed up the development of Development Road since last September when India, Middle Eastern powers and the European Union’s biggest economies used a G20 summit to announce the India-Middle East-Europe trade corridor project, also costed at $17bn. The route entirely shuts out Turkey.

“There is no corridor without Turkey,” fumed Erdogan to journalists who had accompanied him to the G20 get-together in New Delhi: “The most convenient line for traffic from east to west has to pass through Turkey,” he added.

Shipping and rail lines of the India-Middle East-Europe trade corridor would pass through the UAE, Saudi Arabia, Jordan and Israel, then reach to Greece and other points in Europe.

Like Development Road, the corridor could compete with the Suez Canal for trade shipments.

The Iranians and Russians, meanwhile, are working on developing the International North-South Corridor (INSTC). It is designed to facilitate multi-modal trade routes linking Russia, the South Caucasus, Central Asia and Europe to the Middle East and India via Iranian ports on the Persian Gulf and Sea of Oman (Indian Ocean).

Russia needs an alternative transport route for trade, following routes west being cut off following Moscow’s invasion of Ukraine. In terms of avoiding impacts of sanctions, the corridor through Iran reaching to the Persian Gulf and Sea of Oman (Indian Ocean) looks like the safest option, says Smagin, in an assessment for Carnegie Endowment.