A Closed Kurdistan Region Of Iraq Border Could Cost Iran $6 Billion
The Islamic Republic of Iran’s exports into the Kurdistan Region of Iraq (KRI) – through four official border gates and three unofficial ones – is estimated at $6 billion annually.
Following the KRI’s independence referendum, the federal government of Iraq has escalated efforts to exert control over those borders. On October 2nd, at the behest of Baghdad, Iran closed the official crossings of Parviz Khan and Bashmakh, citing nearby military drills as the cause. However, both Iranian and Kurdish officials were quick to insist that the measure was temporary.
According to experts, economic interests between Iran and the KRI reduce the threat of borders remaining closed in the longer term. The four gates constitute half of Iraq’s official gates into Iran: Monzerya in Khanaqin, Haji Omaran in Erbil, Bashmakh in Penjwen, and Parviz Khan in Garmian.
“There has been a significant recent increase in trade rate between the KRI, Iran, and Turkey. There was a 20% increase in the last three months alone,” Nawzad Adham, General Director of Trade at the Ministry of Trade and Industry, told Yalla.
The KRI’s trade is concentrated with 15 countries. Turkey is the region’s leading trading partner with over 37% of imports, followed by China (15%), Iran (12%), and South Korea (6%).
The trade between the KRI and Iran generated $6 billion in 2016, and in the first half of this year over $3 billion – projected at over $7 billion by year end.
According to numbers from the Ministry of Trade and Industry, the KRI imported merchandise worth $136.5 billion dollars from the 15 countries in the last 13 years, increasing annually from $4 billion in 2004 to a peak of $17.2 billion in 2013.
Even with global imports down to a little over $13 billion in 2016, analyst Karwan Rahim doesn’t believe Iran will keep the border closed for a prolonged period of time, as trade through borders into the KRI constitute 8% of Iran’s total exports.