Rentier no more? Baghdad’s $17B gamble on the Development Road

Shafaq News – Baghdad / Abu Dhabi

Iraq’s $17 billion Development Road Project will be the backbone of a new, non-oil economy, linking the Gulf to Europe and reshaping regional trade, Transport Minister Razzaq Muhaibis al-Saadawi said on Tuesday.

During the Global Rail 2025 exhibition in Abu Dhabi, al-Saadawi called the rail-and-highway corridor “a lifeline that carries jobs and investment, not just freight.” He said international experience shows that modern rail networks slash transport costs, strengthen supply chains, and drive competitiveness — outcomes Iraq aims to replicate by making rail the centerpiece of the project.

The Development Road will span 1,200 kilometers from Iraq’s southern ports to Turkiye, combining an electrified railway with a high-speed highway. Construction is planned in three phases through 2050, with the first stage expected to create more than 100,000 jobs.

For decades, Iraq has functioned as a rentier economy, deriving over 90% of state revenues from oil exports. This dependence has left public finances highly vulnerable to price swings, limited private-sector growth, and entrenched unemployment among a young population. Economists warn that without diversification, Iraq’s fiscal system risks recurring crises and an inability to sustain basic services when oil markets weaken.