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Iraq Committed to Faw Port Project Despite Economic Woes, May Turn to China

Workers load concrete at the al-Faw port project site in Faw, southern province of Basra. (Reuters)
Workers load concrete at the al-Faw port project site in Faw, southern province of Basra. (Reuters)
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Iraq Committed to Faw Port Project Despite Economic Woes, May Turn to China

Workers load concrete at the al-Faw port project site in Faw, southern province of Basra. (Reuters)
Workers load concrete at the al-Faw port project site in Faw, southern province of Basra. (Reuters)

Despite the economic crisis in Iraq and the authorities’ inability to fulfill their financial obligations, especially with regard to paying the salaries of civil servants, the government insists on building al-Faw Grand Port in the southern province of Basra.

The port is considered the country’s most important outlet to the Gulf and Iraqis have been looking forward to establishing it for many years, given its promising economic potential for the country, according to experts in finance, ports and trade.

During his visit to Basra last week, Prime Minister Mustafa al-Kadhimi said that al-Faw port is one of the government's priorities, despite the great challenges that the country is facing.

Kadhimi stressed that the government will work hard to sign with foreign companies to launch operations in the port.

However, the Iraqi cabinet’s desire to proceed with the construction works may face challenges which could delay the expected opening in 2024.

Over the past two days, another issue emerged as the Korean company, Daewoo, announced it wanted to change the terms relating to the duration and the payments of the contract.

The Iraqi Ministry of Transport issued a statement Sunday, addressing the issues with Daewoo, which is implementing the port project.

The Ministry indicated that the company has successfully implemented the port’s western breakwater, adding that the negotiations were held for three months, leading to a preliminary agreement.

The agreement stipulated that the company will implement five projects, with a navigation canal at a depth of 19.8 meters, at a total cost of $2.37 billion, in three years.

The statement noted that after the appointment of the new director of al-Faw port, Daewoo demanded increasing the cost to $2.8 billion if the ministry wanted to reach depths of 19.8 meters.

The former director of Daewoo in Iraq, Park Il-ho, was found dead last month in an apparent suicide at the company’s headquarters in Basra.

Transport Minister Nasser al-Shibli rejected the company's request and granted it three days to abide by the initial agreement.

The Iraqi News Agency (INA) quoted Shibli as saying that the ministry will continue to negotiate with Daewoo regarding al-Faw port, noting that the company has two contracts for the port that end in 2021.

He pointed out that Daewoo has an exception from the General Secretariat of the government to refer to it directly, noting that the work done so far has been excellent.

Shibli hinted at the possibility of turning to Chinese companies in the event that no agreement is reached with the Korean company.

On Sunday, the reconstruction and services parliamentary committee met with the Minister of Transportation to discuss the issues that have recently arisen with the Korean company.

Committee member Burhan al-Mamouri announced that they addressed the controversial points, including the manipulation of the technical specifications set by the Italian consultant.

He added that the new management executing the project requested a gradual reduction of the depths, an extension of the period of the contract, and an increase in the agreed payments.

The Iraqi officials stressed the importance of adhering to the technical specifications, especially with regard to the depths.

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The Future of Revenues in Syria: Challenges and Opportunities for the Interim Government

A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)
A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)
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The Future of Revenues in Syria: Challenges and Opportunities for the Interim Government

A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)
A money changer conducts a transaction in US dollars and Syrian pounds for a client on a street in Damascus (AFP)

Syria faces significant challenges as discussions intensify about the post-Bashar al-Assad era, particularly in securing the necessary revenues for the Syrian interim government to meet the country’s needs and ensure its sustainability. The widespread destruction of the economy and infrastructure poses a dual challenge: rebuilding the nation while stimulating economic activity and ensuring sufficient financial resources for governance.

Currently, the interim government relies heavily on international and regional support during the transitional phase. Donor countries are expected to provide financial and technical assistance to help rebuild institutions and alleviate the suffering of the Syrian people.

However, as the country transitions, external support alone will not suffice. The government must identify sustainable revenue sources, such as managing natural resources, imposing taxes, and encouraging foreign investments.

Opportunities from the Syrian Diaspora

The Syrian diaspora is seen as a significant economic resource, contributing through remittances or involvement in reconstruction projects. However, realizing these opportunities requires the establishment of strong, transparent institutions, effective resource management, and a clear strategic plan to rebuild trust with both local and international communities.

Securing revenues for the interim government is not merely a financial challenge but also a test of its ability to lead Syria toward stability and prosperity.

Securing Economic Resources

Nasser Zuhair, head of the Economic and Diplomatic Affairs Unit at the European Policy Organization, stated that the interim government, currently led by Mohammed al-Bashir, may replicate its revenue-generating models from Idlib. Resources in Idlib were drawn from temporary measures that are insufficient for sustaining a national economy like Syria’s.

In an interview with Asharq Al-Awsat, Zuhair explained that these resources included taxation, fuel trade with Syrian Democratic Forces (SDF)-controlled areas, international aid for displaced persons in Idlib, remittances from the Syrian diaspora, and cross-border trade facilitated by Turkiye.

“The interim government believes that sanctions relief is a matter of months, after which it can begin to establish a sustainable economy. For now, it will rely on the same resources and strategies used in Idlib and other controlled areas,” Zuhair added.

Challenges and Opportunities

Despite the former regime’s reliance on illicit revenues, such as drug trafficking and Captagon production—estimated to account for 25% of government revenues—the interim government has several potential avenues for generating revenue.

International Aid

Zuhair emphasized that cross-border humanitarian aid indirectly supports local economies. “The current government understands that international and regional aid will be substantial in the coming period, particularly for refugee repatriation and infrastructure development,” he noted.

He added that efforts to secure funding from the Brussels Conference, which allocates about $7 billion annually to support Syria, will be critical. Strengthening ties with regional and European countries, such as Saudi Arabia, Kuwait, Germany, and the UK, is also a priority. However, securing such aid depends on establishing a political framework where Hayat Tahrir al-Sham (HTS) does not dominate governance.

He further noted that international and regional support will likely remain a key revenue source for the interim government, including humanitarian and developmental aid from organizations such as the United Nations and the World Bank.

Taxes and Tariffs

Zuhair highlighted taxes and tariffs as essential components of the government’s revenue strategy. This includes taxing local economic activities, customs duties on cross-border trade, and fair taxes on merchants and industrialists in major cities like Damascus and Aleppo.

“The government can also impose income, corporate, and property taxes while improving border management to maximize revenue from customs and tariffs,” he added.

Agriculture and Natural Resources

Syria’s vast and fertile agricultural lands present an opportunity for revenue generation, Zuhair underlined, explaining that taxes on agricultural products could contribute to state income. However, this sector faces logistical challenges and high production costs. By directing the agricultural sector toward self-sufficiency, the government could reduce dependence on imports and create surplus revenue, he remarked.

Additionally, managing natural resources such as oil and gas could provide a significant revenue stream if the government gains control over resource-rich areas like northeastern Syria, the official noted.

Reconstruction

Reconstruction presents another potential revenue source. International companies could be encouraged to invest in rebuilding efforts in exchange for fees or taxes. Public-private partnerships with local and foreign firms in sectors such as infrastructure and housing could also generate significant funds.

Remittances from the Diaspora

Zuhair stressed the importance of remittances from Syrians abroad, estimating that these transfers could reach $2 billion annually by 2025. Encouraging the diaspora to send funds to support family members and rebuild properties will be a key priority for the government.

Domestic Investments

The interim government has shown its ability to attract domestic investments in real estate, industry, commerce, and agriculture, despite international sanctions. According to Zuhair, leveraging Türkiye as an international gateway, the government could expand this model across Syria, taking advantage of the challenging economic conditions left by the previous regime to draw reasonable investments in its first year.

Tourism and Small Businesses

Revitalizing the tourism sector could directly contribute to revenue, he added, noting that restoring historical and cultural sites, once security and stability are achieved, will attract visitors and generate income.

In addition, encouraging small and medium-sized enterprises will help revive the economy and create jobs, Zuhair emphasized, pointing that supporting manufacturing industries could provide a sustainable revenue stream.