Diplomacy

When in Need

Iran-Iraq Relations

When the Iranian ambassador to Iraq, Hassan Danaeifar, called for the removal of obstacles in the way of bilateral trade expansion between the two nations in November 2012, he demonstrated […]

When the Iranian ambassador to Iraq, Hassan Danaeifar, called for the removal of obstacles in the way of bilateral trade expansion between the two nations in November 2012, he demonstrated the continuation of Iran’s positive economic relationship with its neighbor to the west. According to the Iran Republic News Agency (IRNA), the ambassador reported that a trade volume of some $12 billion is expected from March 2012-March 2013, up from $10 billion in the previous year. This increased economic activity comes at a time when Iran’s support is especially valued, as Iraq faces the massive task of reconstruction and nation building. With the awakening of dormant cultural and religious ties also in motion, cooperation between the two nations is expected to increase on a broader scale in the coming years.

Since the fall of Saddam Hussein’s regime in 2003, Iran has worked to foster trade, energy, and cultural ties with Iraq. By January 2010, the two countries had signed over 100 economic and cooperation agreements. President Ahmadinejad, who in 2008 made Iran’s first presidential visit to Iraq since the Islamic Revolution of 1979, has promoted the amicable relationship between the two countries by offering a vow of support in rebuilding Iraq and opening the country’s border to accommodate a flow of pilgrims, scholars, and businessmen alike.

Aiming to reconstruct war-torn Iraq, Iranian companies have stepped in to offer their resources and make investments that will help build a better future. Public entities have focused on regional energy cooperation, where Iran’s blossoming relationship with Iraq is expected to play a central role. In July 2011, oil ministers from Iran, Syria, and Iraq signed an agreement to build a 1,500-kilometer gas pipeline capable of delivering 110 million cubic meters (mcm) per day from the Iranian South Pars oil field through Iraq and onward to Damascus. With an initial investment of $3 billion, construction began in late 2012. The project has been slated for completion by the second half of 2013.

In addition to supplying a portion of demand for natural gas, Iran has launched initiatives to build a number of power plants in Iraq, as well as link Iraqi cities to the Iranian electricity grid. Iran currently supplies power to Basra and Khanaqin, an undertaking that may extend to other areas through projects currently in the planning stages. Apart from leading initiatives that take advantage of the region’s rich energy resources, Iran has sought to build airports and other public infrastructure in Iran, winning a $1.5 billion contract in 2009 to build a complex of houses, hotels, schools, markets, and other commercial buildings in Basra.

With a large part of the population of each country sharing a common faith, Iran has made strides to connect to Iraq on a cultural and religious level. Each month, more than 40,000 Iranians visit shiite holy sites that were previously limited under the policies of Saddam Hussein, such as Najaf, where Iranian companies are involved in the reconstruction of the Shrine of Imam Ali, a 10-year project that will also bring about the modernization of the surrounding area. In addition, Iranians are known for buying religious souvenirs and thus supporting the Iraqi economy through tourism. According to Iraqi estimates, $20 million worth of Iranian investment is allocated toward the tourism sector every year. As its largest trading partner, Iran exports a variety of goods to Iraq such as cars, construction materials, medicine, furniture, carpets, fish, fruit, and clothing. The city of Basra imports approximately $45 million of goods from Iran, and the nearby border of Shalamcheh sees over 150 commercial trucks transporting goods on a daily basis.

You may also be interested in...

Transport

4 Maritime Bottlenecks

Logistics Chokepoints of Global Trade

View More

Tourism

Taste of Cherry

Iran’s Film Industry

View More

Diplomacy

Iran Sanctions Return

US Pressure Affects Trade

View More

Finance

Iran’s Cautious Growth

Capital Markets Trading On

View More
Nuts & Bolts

Economy

Nuts & Bolts

Doing Business

View More
20 by 2025

Tourism

20 by 2025

International Tourism

View More
Reforms Under Fire

Health & Education

Reforms Under Fire

Women in Education

View More
Back to School

Health & Education

Back to School

Education

View More
Won’t You Take Me to… Barkat Town

Health & Education

Won’t You Take Me to… Barkat Town

Pharmaceuticals

View More
View All Articles