Burak Elmali
July 10, 2024•Update: July 10, 2024
- Türkiye segment of the Middle Corridor presents opportunities for alternative highway and railway connections for the Development Road Project
- By leveraging the potential of a sector-based export model, the burgeoning construction industry, and ground-breaking digital innovations, the project offers Türkiye and participating nations a wealth of economic opportunities
The author is a researcher at TRT World Research Center
ISTANBUL
The Development Road Project marks a pivotal shift in regional connectivity and Türkiye-Iraq relations, symbolizing a new diplomatic era grounded in cooperation and a shared understanding of counterterrorism. This ambitious connectivity initiative, driven by the commitment of both nations, is steadily advancing. During Turkish President Recep Tayyip Erdogan's visit to Iraq in April, the project gained momentum, attracting new regional partners such as the United Arab Emirates (UAE) and Qatar. The first phase is anticipated to be operational by 2028.
Expanding transportation routes holds great potential for boosting economic prosperity, although simply moving goods along these pathways is just the beginning of tapping into their full economic benefits. As the leading stakeholder in the Development Road Project, Türkiye has the potential to go beyond receiving only transit fees and tariffs. Instead, this mega project should be a locomotive driving growth for the Turkish and Iraqi economies as well as the participating nations.
A growth model
The Development Road Project will undoubtedly enhance regional connectivity by integrating existing trade routes in the region. However, this is only the first step. To fully capitalize on this opportunity, an export-driven economic model with a sector-focused approach should be the main priority for Turkish industrialists.
Such an approach would transform the Development Road Project from a mere transit route into a significant provider of goods and services. By establishing free trade zones in strategically located industrial cities, starting with the southeastern Anatolia segment, Türkiye can incentivize investment. Public-private partnerships (PPP) offer a viable solution to budgetary constraints, a domain in which Türkiye has proven expertise, particularly in infrastructure projects.
Business councils like Foreign Economic Relation Board (DEİK) play a crucial role in fostering state-private sector relations and should be leveraged to incorporate the invaluable experience of Turkish companies that have been instrumental in the post-Saddam Iraq's reconstruction.
Extending this project into European markets presents a golden opportunity to enhance key sectors that dominate European Union (EU) trade, such as motor vehicles, iron and steel products, and textiles. Additionally, the southeastern Anatolia region's rich agricultural potential can be modernized with cutting-edge techniques in fertilization and irrigation, converting the Development Road Project into a vital corridor for agro-food exports of Türkiye.
Furthermore, it is noteworthy that the EU's energy and food security issues, which resulted from the Russia-Ukraine war, led Brussels to search for alternatives. This geopolitical shift presents Türkiye with a unique chance to capitalize on its market proximity and address such emerging needs. Plugging the regional flow of energy and resources into the European market is a win-win situation which will bring prosperity to all involved parties.
Enhanced connectivity
One key factor that could elevate the Development Road Project to unprecedented success is its potential for integration with other major trade routes. Consider the China-Pakistan Economic Corridor (CPEC), which China heralds as a flagship project under its Belt and Road Initiative (BRI). A glance at the routes reveals a natural synergy between CPEC and the Development Road Project. Integrating this route, which links to the sea via Gwadar Port, with the Persian Gulf offers a far more cost-effective transportation option compared to the Maritime Silk Road, which traverses the Red Sea, Suez Canal, and the Mediterranean before reaching Europe.
In a similar vein, the Türkiye segment of the Middle Corridor presents opportunities for alternative highway and railway connections for the Development Road Project. The goal is not to haphazardly link various routes but to achieve the ideal of efficient transportation. Türkiye can capitalize on its central position in this interconnected network. It can tap into new markets by forging multilateral agreements and channeling its exports into areas with a production advantage.
Construction
If we reflect on the factors leading to the inception of China's Belt and Road Initiative (BRI), it was primarily launched to address China's surplus of basic materials like steel and cement while also optimizing the use of its foreign exchange reserves by extending loans to recipient countries and being part of the construction boom that follows. While not everyone has Beijing's financial muscles to flex, Türkiye's construction industry is among the most performing worldwide and has an extensive track record. Seeking funds from Qatari and Emirati financial institutions, Iraq could build new infrastructure, notably freight railways and roads, with the help of Turkish companies.
Digitalization
When envisioning the future success of the Development Road Project, it is necessary to seize the opportunity presented by technological advancements, particularly artificial intelligence (AI). Connectivity projects must incorporate a digital dimension supported by sophisticated optimization software. This ensures effective planning for the construction of ports, railways, and highways, as well as the seamless flow of goods. By leveraging these technologies, Turkish service companies can conduct risk analyses, optimize finances, and efficiently plan for the quantity and capacity of export products, along with managing potential transportation challenges. In essence, digitalization stands to revolutionize investment and production, providing transformative benefits both during the ongoing infrastructure processes and in the future.
By leveraging the potential of a sector-based export model, the burgeoning construction industry, and ground-breaking digital innovations, the Development Road Project offers Türkiye and participating nations a wealth of economic opportunities.
*Opinions expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Anadolu
