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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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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
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IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.

Business

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
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Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.

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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
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Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.