1. Iraq’s Development Road: The Race to Create an Asia-Europe Suez Canal Alternative

While conflict continues to dominate Middle Eastern headlines, Iraq, a country long associated with turmoil, has experienced relative political calm. This stability presents a unique opportunity: leveraging its geographic location to become a critical link in global trade. At the heart of this ambition lies the Development Road Project (DRP): a $17 billion initiative designed to connect the Persian Gulf to Southern Turkey via domestic infrastructure, positioning Iraq as a central transit corridor between Asia and Europe.

In an era marked by escalating geopolitical tensions, vulnerable maritime chokepoints, and growing demands for efficient trade routes, Iraq’s DRP represents a bold strategic move. The project includes the construction of the Al-Faw Grand Port on the Gulf coast, and the development of railways, highways, and energy corridors spanning Iraq’s heartland. Once fully operational by 2050, this infrastructure could offer a compelling alternative to the Suez Canal, whose limitations have become increasingly apparent in recent years.

2. The Vision: Iraq’s Grand Development Strategy

The Development Road Project begins at the Al-Faw Grand Port in Iraq’s southern Basra Governorate. With a planned capacity exceeding 90 berths, this mega-port is expected to become the future largest port of the Middle East, rivaling regional giants such as Jebel Ali in the UAE and King Abdullah Port in Saudi Arabia. Phase one is scheduled for completion by 2028, with full operational capacity anticipated by 2038 and finalized by 2050.

From Al-Faw, a new railway and road network will stretch northwards across Iraq, linking with the Turkish railway system. This connection will allow goods to flow directly into European markets via Turkey’s highways and ports—cutting shipping times significantly. In fact, DRP is projected to shorten transit between Asia and Europe by 10–15 days compared to traditional sea routes through the Suez Canal.

In April 2024, Iraq signed a memorandum of understanding with Turkey, Qatar, and the United Arab Emirates, signaling the project’s growing regional appeal. Each partner brings valuable expertise—Turkey with its logistical and railway experience, and the Gulf states with capital and project management skills. This plan, if successful, would not only make Iraq a key geo-economic player, but also diversify its economy by decreasing rentierism, create jobs, and strengthen relations with Turkey and Gulf countries. The project’s prosperity, however, will depend on managing not just external partnerships, but also Iraq’s complex domestic landscape.

3. Geopolitical Competition: DRP vs. Global Corridors

While Iraq’s DRP is ambitious, it enters a crowded and competitive field of trade infrastructure projects that seek to reshape Asia-Europe connectivity.

 3.1. The Suez Canal: A Stalwart Under Pressure

The Suez Canal, through which over 12–15% of global trade flows annually, remains the most established transit route between Europe and Asia. However, events such as the 2021 Ever Given blockage and ongoing Houthi rebel attacks in the Red Sea have highlighted the fragility of maritime trade through narrow chokepoints.

Despite recent narratives around deglobalization, shipping between the EU and China is expected to rise by 6% in 2025 alone according to the WTO, with such trends continuing for the years to come.  Meanwhile, the Suez Canal has a capacity of only 50-60 vessels per day, making new corridors ever more valuable. The DRP, if successful, will offer an inland route immune to maritime disruptions, increasing redundancy in the global supply chain.

3.2. The IMEC Challenge: An India-Middle East-Europe Contender

The India-Middle East-Europe Economic Corridor (IMEC) represents perhaps the most formidable competition to the DRP. Backed by the United States and the European Union, IMEC connects India to the UAE by sea, then proceeds overland through Saudi Arabia, Jordan, and Israel, terminating at Haifa Port, with onward sea links to Europe.

IMEC boasts substantial funding and Western political support, but faces significant challenges, including the uncertain trajectory of Israel-Saudi normalization and the ongoing Israeli-Palestinian conflict. Its effectiveness is also contingent upon regional cooperation, particularly with Gulf states historically wary of deep collaboration with Israel.

While IMEC may have a larger long-term capacity, Iraq’s DRP has its advantages: it is still faster than IMEC by several days and predicted to be cheaper to construct. Moreover, exclusion from IMEC has driven Iraq and Turkey to double down on DRP, increasing its geopolitical momentum.

3.3. China’s Belt and Road Initiative (BRI)

China’s Belt and Road Initiative—largely land-based and passing through Central Asia—presents a broader strategic vision for Eurasian integration but is not expected to directly compete with the DRP. In fact, the DRP could complement China’s maritime BRI assets, including ports in Gwadar (Pakistan) and Djibouti, providing alternative transshipment options.

Interestingly, China has not formally partnered with the DRP, despite being Iraq’s largest oil buyer and a significant investor in Iraqi infrastructure. This neutrality may preserve the DRP’s multilateral appeal, distancing it from West-East polarization.

3.4. INSTC and Regional Rivals

The International North-South Transport Corridor (INSTC)—linking India to Russia via Iran—is another relevant trade initiative. While INSTC aims to bypass the Suez Canal, it is currently hindered by sanctions against Iran and Russia and lacks credible pathways into Europe amid the ongoing Ukraine conflict.

Closer to home, Kuwait’s Mubarak al-Kabeer Port, located near the Al-Faw Peninsula, presents a more direct challenge. Intra-Gulf competition over port dominance could test Iraq-Kuwait relations. 

4. Iran’s Ambivalence: Strategic Opportunity or Geopolitical Rival?

Iran’s stance toward Iraq’s Development Road Project is complex, reflecting a careful balancing act between economic opportunity and strategic caution. As Iraq attempts to reposition itself as a key transit hub, Iran finds itself both potentially empowered and strategically challenged as an influential neighbor.

On one side, Iran could benefit economically and geopolitically from a successful DRP. A surge in commercial traffic between Asia and Europe would pass through the Strait of Hormuz, where Iran holds a dominant position. This would broaden the strait’s significance from being an energy choke point to a vital conduit for global trade, potentially increasing Iran’s leverage in regional and international negotiations. Moreover, Tehran may see an opportunity in the DRP’s potential to stabilize Iraq’s economy, which could reduce volatility along their shared border and provide indirect economic spillovers.

However, Iran remains cautious. The DRP enhances Turkish and Gulf influence in Iraq—particularly in Sunni-majority regions—at the expense of Tehran’s traditional clout. It could also undercut Iran’s own trade routes and port infrastructure, especially if sanctions are lifted and competition for Asian-European traffic intensifies. Whether Iran ultimately supports or undermines the DRP may depend on how it calculates its long-term strategic position in a shifting regional order.

5. Domestic Opportunities and Challenges

Iraq’s Development Road Project offers enormous potential, but its success will depend on the country’s ability to overcome serious domestic obstacles. Decades of war, international sanctions, sectarian conflict, and infrastructure neglect have left Iraq with a fragile economy and limited institutional capacity. Despite being one of the world’s largest oil producers, Iraq remains economically troubled, with outdated roads, rail networks, and ports—many of which were damaged or never modernized due to prolonged instability. This infrastructure deficit poses a significant challenge to implementing a logistics corridor of global scale.

As a result, attracting investment for the Development Road Project is no simple task. While Turkey, Qatar, and the United Arab Emirates have signed on as key financial and strategic partners, broader international investment remains cautious. Concerns over governance, corruption, and the lack of cohesive state control in some parts of Iraq contribute to investor hesitation. The project will require a delicate balance between public funding, foreign direct investment, and multilateral cooperation.

Security concerns further complicate the investment landscape. Much of the DRP traverses territories where the central government has limited authority and where armed factions have more power. The risk of insurgent activity, sabotage, or local disputes means that insurance premiums for cargo transport could be significantly higher along this corridor than in more stable environments. However, this challenge is not unique to Iraq—insurance costs have also surged for shipping through the Red Sea, where attacks by Houthi rebels have severely disrupted transit through the Suez Canal.

Despite these issues, the Iraqi government has emphasized the DRP as a “state project,” seeking to elevate it above partisan politics and ensure its continuity across election cycles. A newly established independent commission will oversee planning and implementation, intended to improve transparency and insulate the project from political turnover.

If successful, the DRP could deliver a much-needed economic transformation. It promises to create hundreds of thousands of jobs, stimulate private sector growth, improve national infrastructure, and—most critically—diversify the Iraqi economy away from oil dependence. Currently, 93% of government revenues are derived from the hydrocarbons sector, making Iraq one of the most oil-reliant economies in the world. The DRP, with an anticipated $4 billion in annual revenue, offers an alternative foundation for long-term economic resilience.

6. Internal Divides: The Kurdish Dimension and Governance Challenges

Internal divides within Iraq’s governance system and persistent sectarianism are among the most pressing challenges to the DRP’s success. Of particular concern is the relationship between the central government in Baghdad and the Kurdistan Regional Government (KRG) in the north.

The DRP’s planned route more or less bypasses the KRG province. Kurdish officials have expressed concerns that the project is designed to bypass the autonomous region, amounting to political and economic exclusion. They demand it to pass at least two cities in KRG including Erbil, the capital of the autonomous region. Baghdad insists that the current route was chosen for cost-efficiency, while the KRG maintains it should be more involved in decision-making. Reaching a negotiated agreement will be essential—not only to avoid delays but also because the KRG plays a vital role in managing security in the north, including curbing PKK activities.

Beyond Kurdish relations, governance challenges include weak law enforcement, the influence of non-state actors and especially corruption. The country ranks 140 out of 180 in the World Corruption Perceptions Index. As seen during the early stages of the Al-Faw Grand Port’s construction, competition over contracts among political factions and militias can derail or delay progress. The central government must ensure equitable distribution of benefits and build robust mechanisms to mediate internal competition.

Conclusion: A Fragile Opportunity with Global Impact

The Development Road Project and Al-Faw Grand Port are not just infrastructure initiatives—they are instruments of national transformation and regional realignment. If successfully implemented, the DRP could elevate Iraq to a central position in global trade, rebalancing power dynamics in the Middle East and providing an enduring alternative to the Suez Canal.

However, the journey to realization will not be smooth. Iraq must contend with external competition, internal political fragmentation, security threats and corruption. Its ability to navigate these challenges will determine whether the DRP becomes a symbol of a renaissance for Iraq, or yet another lost opportunity.

In a world increasingly looking for resilience in trade, diversification of routes, and regional integration, the success of Iraq’s Development Road would not just benefit Baghdad—it could reshape the logistics map of the 21st century.