PATHWAYS TO DEVELOPMENT

The link between global economic growth and international trade continues to remain on the agenda. During the last 50 years, excluding crisis periods, 2023 is one of the years when global trade slowed its growth the most. Accelerating global trade has now become one of the most important pursuits. Although cost and profit are fundamental motivation behind the search for a greater share of the global output, environmental problems have also become critical in recent years. To illustrate, implementation of the “Carbon Border Adjustment Mechanism” for which the European Union will start reporting in 2023, draws attention as an important agenda item. Beside this, global warming also plays an important role in countries’ search for new trade routes.

There are restrictions on the number of daily ship passages in the Panama Canal due to global warming. As a result of these restrictions, daily ship transits have been halved and therefore global trade is suppressed. Drought due to global warming, decreasing water levels in the Panama Canal and melting polar ice caps are the most obvious indicators that not only financial indicators play a role in the emergence of new trade routes. Numerous steps are being taken to expand and deepen global trade routes and networks and to continue infrastructure investments for this purpose.

One of the steps taken in this direction is the Belt and Road Initiative project carried out by China. China aims to repair East-West trade with this initiative, the foundations of which were laid in 2013. China has created a sphere of influence covering more than half of its gross product with various projects carried out in more than 70 countries. However, the departure of Italy, the only G-7 country participating in this initiative, is a sign that there are problems in this initiative.

There are also some attempts being made to respond to this initiative with new trade networks created by the EU and the USA. With this aim, the European Union has created the “European Union Global Gateway” project with a budget of approximately 300 billion dollars, covering the years 2021-2027. Via this project, the EU can support private and public infrastructure investments on a global scale in the fields of digital technology, energy, transportation, health, education and research.

With the inception of the “Belt and Road Initiative” project in 2013, China aims to repair East-West trade through this ambitious project

The United States, along with Japan and Australia, announced the Blue Dot Network in the last quarter of 2019 to boast the operational applicability of G20 principles, which are vital for global governance. This project aims to implement a multi-stakeholder approach that envisages an evaluation and certification system in various development projects. The search for many roads and corridors that will affect the global economy and change the flow of trade is now on the table.

The increase in global tension with the Russia-Ukraine war in the North and the attacks of the Houthis in Yemen in the South makes the need for new trade routes clearer. The long duration of the war between Russia and Ukraine and the lack of signals that it may end in the near future puts a strain on the countries that trade through this region, especially the EU. Attacks in Yemen cause the Suez Canal route to not be used effectively, causing the trade flow to shift towards the Cape of Good Hope.

The recent Evergreen ship accident in the region caused a daily loss of 10 billion dollars to global trade. In this context, the inability to use both the northern and southern corridors effectively creates a window of opportunity for the “middle corridor”, which includes Türkiye. The Central Corridor is very important for trade between China and Europe and is of vital importance for maintaining the annual trade volume of more than 600 billion dollars. Our country is a critical connection point for the global trade network due to its strategic location in this corridor…

The Al Faw Grand Port is expected to not only positively impact Iraq’s trade volume but also shorten the trade route between the Far East and Europe by approximately 25 days

In this regard, initiatives that can increase our country’s role in global trade networks and developments in neighboring countries are of great importance. To example, the infrastructure steps of Iraq, which is a significant foreign trade partner and has a 5 percent share in our exports, are of critical importance today, when geopolitical risks surround the world. The most important of these steps is the El Faw port, which is planned to become operational in 2025. It is thought that this port will make an important logistical contribution to world trade by creating an alternative route to the Suez Canal. By the help of Al- Faw Grand Port, not only Iraq’s trade volume will be positively affected, but the trade between the Far East and Europe will be shortened by around 25 days, also. In order to make this alternative route to be effective, Türkiye and Iraq aim to realize the “Development Path Project” by the end of 2029. This project, in addition to being a salve for Iraq’s economic problems, is seen to have the capacity to increase our country’s effectiveness in global trade.

The project, which is expected to cost around 17 billion dollars, is expected to be based on a serious investment in the field of transportation. This road will also contribute to the economic development of the Gulf countries. According to the statement made by the Ministry of Transport and Infrastructure, within the scope of the Development Road Project, it is aimed to invest 615 kilometers of new line for the 2 thousand 88-kilometer railway connection and 320 kilometers of new highway investment for the 1912 kilometer road corridor. The approximate cost of new road projects is estimated to be 8 billion dollars.

The Development Road between Türkiye and Iraq will be an important road within the Zangezur Corridor between Türkiye and Azerbaijan. Türkiye will be able to strengthen its logistics infrastructure through this route to increase its effectiveness in the Central Corridor. It is obvious that the search for roads and corridors in global trade will always be on the agenda for economic, environmental and managerial reasons. The development of these roads, which will have many advantages, is of critical importance in order to get a higher share from the global economy.

And most importantly, these roads are not far for Türkiye…