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July 28, 2011
Kuwait and Iraq need joint ventures
New Iraq-Kuwait dispute should be seen in the context of existing political, economic and historical land border crises that have plagued the two countries since 1961
The GCC is not only well aware of the importance of investment in infrastructure and public works projects, but it has gained rich experience of developing these projects over the past few decades — one which is unparalelled when compared to other developing countries.
Not only have the six GCC states developed such projects at home, they have also contributed to the development of similar projects in other Arab states, where work has contributed to both positive development and job creation.
It is against such a backdrop that Kuwait announced a huge investment in the construction of the Mubarak Grand Port on Boubyan Island, a move that made Iraq sceptical about its neighbour's motives given the proximity of the project to the Iraqi border. Iraq, in turn, raised Kuwaiti eyebrows in 2005 when it announced its intent to build a port in the Faw region — just 20 km away from Kuwait's Boubyan Island port project.
This new Iraq-Kuwait dispute should indeed be seen in the context of existing political, economic and historical land border crises that have plagued the two countries since 1961. Both parties should appreciate that the projects are significant to their respective economies and step up cooperation to benefit from economic and commercial benefits they promise.
Feasibility study
Cutting back to the present, the 1978 agreement may actually suggest a way out of the current port dispute; a giant bilateral economic project based on technical and economic feasibility studies that have nothing to do with current political tensions may provide the answer. This will be of immense benefit to Iraq where there are many political parties and militias that do not adhere to the government's decisions.
According to disclosed data, Iraq's Grand Faw Port will cost $6 billion (Dh22.03 billion) — a huge amount that will be hard to raise through investment channels considering the current political conditions in Iraq. The foundation stone for the project was laid last year, but work has not yet started.
With regard to Kuwait's Mubarak Port, the project's initial phases will cost $2 billion but it promises huge competitive advantages in technical and administrative terms, which will in turn affect the economic feasibility of the Iraqi project.
Political irritants
No attention should be given to statements issued by some Iraqi political groups claiming that Kuwait was trying to undermine Iraq's sovereignty. Similarly, there are fears in Iraq that the Kuwaiti project will infringe on its rights over its territorial waters.
There is a solution, however, that would enable both brotherly countries to set up a joint-venture with huge returns assured for both parties, especially Iraq, which is in urgent need of an impetus to take up public projects.
It is, therefore, vital for both sides to bury their differences and look for ways to engage in strategic and joint-venture projects.
Since the Kuwaiti project will be managed by the private sector, unlike in Iraq, it is in the interests of both countries to set up a joint venture company on equal shareholding and then offer part of the shares to the public in both Iraq and Kuwait.
They should also assign a neutral specialised foreign company to determine the port's site according to technical and economic considerations. This should be done in a manner that ensures achievement of the highest possible returns to both countries, and respects the existing Iraqi-Kuwaiti borders and the interests of both parties.
DP World expertise
As for the project's management, there is no better contender than DP World — a major port operator with vast experience in operating tens of terminals across the world, including Europe, Asia and Latin America — especially in view of the fact that DP World has been acknowledged as the world's third-largest marine terminal operator.
It is obvious that this is the right approach for both countries to find a way out of current tensions. Meanwhile, the Arab League can work on coming up with a viable solution. This would mark a unique leap in inter-Arab regional cooperation
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Kuwait and Iraq need joint ventures
New Iraq-Kuwait dispute should be seen in the context of existing political, economic and historical land border crises that have plagued the two countries since 1961
The GCC is not only well aware of the importance of investment in infrastructure and public works projects, but it has gained rich experience of developing these projects over the past few decades — one which is unparalelled when compared to other developing countries.
Not only have the six GCC states developed such projects at home, they have also contributed to the development of similar projects in other Arab states, where work has contributed to both positive development and job creation.
It is against such a backdrop that Kuwait announced a huge investment in the construction of the Mubarak Grand Port on Boubyan Island, a move that made Iraq sceptical about its neighbour's motives given the proximity of the project to the Iraqi border. Iraq, in turn, raised Kuwaiti eyebrows in 2005 when it announced its intent to build a port in the Faw region — just 20 km away from Kuwait's Boubyan Island port project.
This new Iraq-Kuwait dispute should indeed be seen in the context of existing political, economic and historical land border crises that have plagued the two countries since 1961. Both parties should appreciate that the projects are significant to their respective economies and step up cooperation to benefit from economic and commercial benefits they promise.
Feasibility study
Cutting back to the present, the 1978 agreement may actually suggest a way out of the current port dispute; a giant bilateral economic project based on technical and economic feasibility studies that have nothing to do with current political tensions may provide the answer. This will be of immense benefit to Iraq where there are many political parties and militias that do not adhere to the government's decisions.
According to disclosed data, Iraq's Grand Faw Port will cost $6 billion (Dh22.03 billion) — a huge amount that will be hard to raise through investment channels considering the current political conditions in Iraq. The foundation stone for the project was laid last year, but work has not yet started.
With regard to Kuwait's Mubarak Port, the project's initial phases will cost $2 billion but it promises huge competitive advantages in technical and administrative terms, which will in turn affect the economic feasibility of the Iraqi project.
Political irritants
No attention should be given to statements issued by some Iraqi political groups claiming that Kuwait was trying to undermine Iraq's sovereignty. Similarly, there are fears in Iraq that the Kuwaiti project will infringe on its rights over its territorial waters.
There is a solution, however, that would enable both brotherly countries to set up a joint-venture with huge returns assured for both parties, especially Iraq, which is in urgent need of an impetus to take up public projects.
It is, therefore, vital for both sides to bury their differences and look for ways to engage in strategic and joint-venture projects.
Since the Kuwaiti project will be managed by the private sector, unlike in Iraq, it is in the interests of both countries to set up a joint venture company on equal shareholding and then offer part of the shares to the public in both Iraq and Kuwait.
They should also assign a neutral specialised foreign company to determine the port's site according to technical and economic considerations. This should be done in a manner that ensures achievement of the highest possible returns to both countries, and respects the existing Iraqi-Kuwaiti borders and the interests of both parties.
DP World expertise
As for the project's management, there is no better contender than DP World — a major port operator with vast experience in operating tens of terminals across the world, including Europe, Asia and Latin America — especially in view of the fact that DP World has been acknowledged as the world's third-largest marine terminal operator.
It is obvious that this is the right approach for both countries to find a way out of current tensions. Meanwhile, the Arab League can work on coming up with a viable solution. This would mark a unique leap in inter-Arab regional cooperation
[You must be registered and logged in to see this link.]
