Iraq's dealings with Spain: Promises and challenges in economic cooperation
Shafaq News/ The recent Rapprochement between Iraq and Spain was markedby the visit of Prime Minister Mohammed Shia al-Sudani to Madrid and the signingof several key memorandums of understanding. However, experts warn that despitethese promising agreements, Iraq’s political instability, security concerns,and military influence pose serious challenges to their successful implementation,threatening to undermine efforts to attract foreign investment and fosterlong-term economic growth.
MoUs And More
Prime Minister al-Sudani, heading a high-level delegation, concluded avisit to Madrid which his office described as successful.
al-Sudani and his Spanish counterpart Pedro Sánchez led their respectivedelegations in discussions held Thursday in Madrid. The meeting was attended byministers of foreign affairs, interior, transport, and trade from bothsides.
The two countries oversaw the signing of key memorandums ofunderstanding (MoUs):
? A cooperation agreement between the Sovereign Guarantees InitiativeCommittee and the Spanish government.
? An MoU between the Iraqi Federation of Chambers of Commerce and theSpanish Chamber of Commerce.
? An MoU between the Iraqi Federation of Industries and the SpanishConfederation of Business Organizations (CEOE).
? An MoU on security cooperation between the Ministries of Interior ofIraq and Spain.
? An MoU between the Iraqi Commission of Integrity and the Spanish StateProsecutor General.
? A cooperation agreement between Wasit Governorate and the SpanishImathia Construccion.
? A bilateral MoU between Al Iraqia University and King Juan CarlosUniversity of Spain.
Economic Forum Highlights
During the Iraqi-Spanish Business Forum, organized by the SpanishChamber of Commerce in Madrid, al-Sudani highlighted the delegation’scomposition as “a strong message of Iraq’s genuine interest in strengtheningcooperation with Spain.” He also underscored Iraq’s commitment to learning fromSpain’s “successful corporate experiences across various sectors, with a focuson advancing toward a comprehensive strategic partnership.”
“Iraq has attracted $62 billion in foreign investments, supported by asecure and stable environment.” He said in his remarks.
Al-Sudani said that the government secured a $250 million rail projectconnecting Basra to Iran with a Spanish company and ongoing negotiationsinvolving Spanish firms for the Karbala-Najaf railway project.
Moreover, Al-Sudani discussed initiatives such as the Iraq DevelopmentFund and projects aimed at boosting infrastructure and housing, underscoringopportunities for Spanish businesses. He also emphasized Iraq’s focus onadvancing sectors like food, pharmaceuticals, and construction.
In turn, Iraqi Transport Ministry spokesperson Maytham al-Safi told ShafaqNews Agency, al-Safi, “There are numerous shared interests with the Spanishside. In recent days, the 13th session of the Iraqi-Spanish Committee was heldin Baghdad, during which several memorandums of understanding were signed. TheMinistry of Transport plays a crucial role in managing files related to thiscommittee.”
Highlighting key developments, al-Safi pointed to the signing of acontract by the Iraqi Railways Company to construct the Basra-Shalamchehrailway, a 36-kilometer project intended to facilitate the transport of overfive million passengers and visitors between Iraq and Iran. Additionally, amemorandum of understanding was signed to begin studies and designs for theMehran-Kut-Karbala railway, the Karbala-Najaf elevated train, and the broaderdevelopment project.
Al-Safi pointed out, “Many Spanish companies have submitted proposals toimplement or participate in these projects and others. Spain is a leader inmodern railway systems, with numerous successful projects in the region andneighboring countries.”
He added that Iraq’s engagement extends beyond Spain to broader Europeancooperation, “reflecting efforts to serve Iraq’s interests.”
Gateway to Global Markets
Economic expert Diaa al-Mohsen stressed Spain’s industrial strengths,particularly in maritime and railway transport, and its potential as a valuablepartner for Iraq. “Spain is a key member of the European Union with a robustindustrial base in the transport sector. Iraq stands to benefit if theseagreements and relationships are utilized effectively,” al-Mohsen told ShafaqNews Agency.
He noted that Spain’s involvement might steer clear of the commissionsand unofficial fees that have hindered many projects in Iraq. “The Iraqigovernment must pay attention to this, as the country has lost numerousprojects due to external pressures on companies attempting to invest here,” hesaid.
“Spanish companies could help market Iraqiproduction internationally…These firms have established global markets, andIraq should capitalize on this by fostering partnerships with Spanishcompanies,” he said.
Discussing Iraq’s Development Road initiative, al-Mohsen explained thesubstantial financial investment required, which Iraq might struggle to fulfillalone, pointing out that “the agreements signed with Spain represent asignificant boost for this project, paving the way for future progress.”
Internal Challenges
Economic researcher Ahmed Eid expressed cautious optimism about the memorandumsof understanding signed by Iraq’s Prime Minister in Madrid, despite theirpotential for international cooperation and development. He warned of internalobstacles that could hinder progress.
“The signing of these agreements reflects aclear desire to enhance international collaboration, but they face majorchallenges given Iraq’s domestic conditions,” Eid told Shafaq News Agency.
“Security and political instability arecritical concerns…the presence of weapons outside state control and weakgovernment authority in certain regions undermine the feasibility ofimplementing these agreements with Spain.”
Eid added that “regional tensions and the lack of clear strategies tosupport investments further complicate efforts to translate the agreements intotangible projects that could strengthen Iraq’s economy.”
Moreover, according to him, administrative corruption is a persistentissue that “reduces Iraq’s attractiveness to foreign companies aiming to implementprojects effectively.”
“Non-State Groups” Influence
Ahmed Eid stressed that for Iraq to fully benefit from these agreements,substantial progress must be made in bolstering security, stabilizing politicalconditions, disarming non-state groups, andimplementing genuine business reforms.
“The presence of militias not onlyundermines security but also extends their influence into economic sectors,interfering in contracts and investments,” Eid explained to Shafaq News Agency.
“This disrupts projects and limits foreign investment opportunities, asinternational companies may hesitate to undertake long-term ventures due to theheightened risks tied to Iraq’s security situation and the state’s limitedcapacity to enforce the law and combat corruption.”
Eid warned that “the considerable influence of militias creates anuneven competitive environment, complicating the enforcement of laws andinternational obligations linked to the memorandums of understanding.”
“Addressing the root causes of these security and political challengesis essential for transforming these agreements into tangible achievements thatcontribute to Iraq’s economic growth and development,” he concluded.“Otherwise, these agreements risk remaining unfulfilled promises.”
