"IQD Demand is Rising! Here’s Why!"

Iraq's Development Road Project is an ambitious plan to transform the country into a major trade hub by connecting the Gulf to Europe through a network of highways and railways. This $17 billion initiative aims to link the Grand Faw Port in southern Iraq to the Turkish border and further into Europe, positioning Iraq as a key transit point between Asia and Europe. 

The project is expected to create jobs and promote regional stability by enhancing infrastructure and boosting economic activity. For instance, transporting a shipping container from China to Basra costs about $2,000, while moving the same load from Basra to Sulaymaniyah in northeastern Iraq can cost double or even triple that amount. Remembering these numbers will help you understand the massive annual income Iraq is headed for. 

The Development Road aims to alleviate these challenges by creating a more cost-effective and efficient transportation system within Iraq, potentially reducing transportation costs for Iraqi consumers significantly. 

Compared to the traditional route through the Suez Canal, the Development Road offers reduced transport costs and shorter transit times. Specifically, it is expected to shorten the route by 12 to 15 days, providing a more advantageous option for trade between Asia and Europe. 

Furthermore, conducting transactions in Iraqi Dinars for shipping services can increase the currency's value. When more companies need the Dinar for payments, demand rises, leading to a stronger currency. This mechanism can enhance Iraq's economic stability and global financial standing.

In summary, the Development Road Project can boost Iraq's economy by improving infrastructure, reducing shipping costs and times, and strengthening the national currency, thereby contributing to the country's overall stability.

In 2023, China exported approximately 12.5 million TEUs (Twenty-Foot Equivalent Units) of goods to Europe, averaging around 1.04 million TEUs monthly. The largest modern container ships, such as the MSC Irina, can carry up to 24,346 TEUs, equating to about 12,000 forty-foot containers. 

China exports approximately 1.04 million shipping containers (TEUs) to Europe monthly.

This means transporting a month’s worth of China's exports to Europe would take around 43 of the largest cargo ships fully loaded with containers.

This is only an estimated $4,000 × 1 million shipping containers = 4 billion dollars in shipping costs. It does not include the fees and taxes that Iraq might add. 

$4 billion × 12 months = $36 billion in revenue, just from China. 

India's monthly shipping volume to Europe is estimated at approximately 165,000 TEUs, with monthly shipping costs of around $641.7 million, based on current spot rates. Annually, this amounts to about $7.7 billion. China's shipping costs to Europe are significantly higher, reflecting its larger export volume.

Here's the kicker.   The following countries will likely use Iraq's Development Road to transport goods to Europe.

Kuwait – With Iraq’s Grand Faw Port becoming a major shipping hub, Kuwait can connect to this network to improve its export and import logistics.

Saudi Arabia – Saudi Arabia can link its growing industrial sectors to the railway network, facilitating exports to Europe through Iraq.

Jordan – The Aqaba port could see increased trade flows as Jordan taps into the new trade route to move goods more efficiently.

Syria – Once stability improves, Syria could use this route to rebuild its economy by connecting its industries to European markets.

United Arab Emirates (UAE) – As a major Gulf trading center, the UAE could benefit from shorter transit times for goods moving to Turkey and Europe.

Qatar – Similar to the UAE, Qatar’s exports, including LNG and manufactured goods, could move faster via Iraq’s infrastructure.

Oman – Oman’s growing logistics sector could use the Development Road to diversify its export routes.

Lebanon – Lebanon, with its limited land trade options, could use this corridor to access European markets more efficiently.

Bahrain – Bahrain, a smaller but strategic trading hub, could integrate its exports with this new system for cost savings.

India (Indirectly) – India exports large amounts of goods to Europe, and if shipments move through Iraq’s new route instead of the Suez Canal, it could save time and money.

China (Indirectly)—As China continues to expand its Belt and Road Initiative (BRI), it may find Iraq's route a faster alternative to the Suez Canal for reaching Europe. Each of these countries can easily end up paying $5 billion to Iraq annually. When added to China's $36 billion, Iraq is looking at no less than $86 billion in annual revenue. 

And think about it.  Each of these countries must secure IQD to satisfy their shipping costs. 86 billion USD = 112.66 trillion IQD.  

Here's Five Reasons Why the IQD Will Increase in Value:

1. One. (pause) Higher Demand for IQD – When international companies pay for shipping, railway usage, and port services in Iraqi Dinar, the demand for the currency increases.

2. Two. (pause)  Scarcity Formula – As more businesses buy IQD to conduct transactions in Iraq, the supply of available dinars decreases, making each unit more valuable.

3. Three. (pause) Less Dependence on the US Dollar – If Iraq shifts major trade payments to the IQD instead of USD, it strengthens the local currency while reducing inflationary pressures.

4. Four. (pause) Stronger Economy = Stronger Currency – The Development Road will create jobs, increase exports, and boost government revenue, leading to economic growth and a more stable IQD.

5. Five. (pause) An alternative to the Suez Canal, saving billions for companies exporting to Europe. These cost savings will attract more trade, further reinforcing Iraq’s economic power.

The Bottom Line Is:

As Iraq becomes a regional trade hub, more countries and businesses will need IQD, pushing its value upward. For those who are skeptical, the economic fundamentals behind this project make it clear: the IQD is on the path to appreciation.