With Focus on Economic Relations, Iran-Iraq Ties Move Into the ‘Daylight’

Expectations were high when Iranian president Hassan Rouhani visited neighboring Iraq last month. During the trip, his first as president, Rouhani signed multiple trade deals with Iraq, where the return of peace and stability has renewed the government’s focus on economic development. The deals covered a variety of sectors including railway construction, electricity infrastructure, and engineering services.

Today, the volume of annual bilateral trade between Iran and Iraq stands at around USD 12 billion. But Rouhani has targeted ambitious growth, saying the two sides should aim to reach USD 20 billion in trade.

The deputy governor-general of Iran’s southeastern Khuzestan province—close to the Iraqi border—said Rouhani’s trip prepared the ground for the growth of trade in the Arvand Free Economic Zone. Agreements to complete a railway link connecting the southwestern Iranian town of Shalamcheh to the Iraqi Port of Basra and the decision to eliminate visa fees for travelers were among the most notable achievements of the trip. The tourism sector is booming as Iraqis find it increasingly appealing to visit cities in Iran’s west as well as the northeastern holy city of Mashhad, a popular destination for Iraq’s Shiite pilgrims. Iranian pilgrims also travel to Iraq in huge numbers, visiting shrines in Najaf and Karbala.