Iran Dominates Market after Occupation of Mosul

By Omar al-Jaffal for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

After the occupation of the Iraqi town of Mosul by armed groups, including the Islamic State (IS) and the Baath Party — banned by the Iraqi Constitution — prices of food increased significantly, a result of blocked roads and fighting near border crossings, preventing the flow of goods.

Iraq has only two sea routes, the ports of Umm Qasr and Khor al-Zubair, and the following border crossings: Trebil with Jordan; al-Waleed, al-Qaim and Rabia with Syria; Ibrahim Khalil with Turkey; Mundhiriyah with Iran; Arar with Saudi Arabia; and Safwan with Kuwait.

Iraqi markets rely heavily on border crossings for supplies, especially crossings with Turkey, Syria and Iran. The occupation of Mosul reduced access to the crossing of Ibrahim Khalil with Turkey, meaning there are no safe roads from the border to Baghdad and other provinces.

Moreover, the Rabia crossing recently fell out of central government control and into the hands of Kurdish forces. Yet, even before the occupation of Mosul, this border crossing was not favored by merchants.

The three border crossings on the frontiers of Anbar province that link Iraq to Jordan and Syria are basically inoperative, since Iraqi security forces launched a massive military operation in Anbar to eradicate terrorism in December 2014. Crucially, the Mundhiriyah crossing with Iran has remained out of the hands of the mainly Sunni militants since it is located in the majority Shiite Wasit province.

Furthermore, the Iranian government opened two other crossings with Iraq to facilitate the entry of goods. According to a statement issued by the Council of Ministers, the Iraqi government facilitated the procedures for the entry of goods through this crossing to speed up the flow of imports. The government now accepts certificates of origin, provided by inspecting companies, without taking random samples at border points.

Trade between Iraq and Turkey reached $12 billion (14 trillon Iraqi dinars) in 2013, however, on July 2, the Turkish Exporters Assembly said exports to Iraq had declined by 21%, dropping from second to third place, trailing behind the United Kingdom.

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