Iraqi vendors diversify supplies in response to Syria, Anbar conflicts

Some of the shops in Jamila, a district in eastern Baghdad that is known for food wholesalers, are empty of goods, after nearly two months have passed since the Iraqi army launched military operations against the Islamic State of Iraq and al-Sham (ISIS) in the Anbar province in western Iraq.

The majority of these shops depend on goods coming overland through Syria. The armed conflict raging in Syria, which intensified in late 2012, affected the flow of goods. However, things had been going well, although goods would sometimes take more than a week to arrive whenever the conflict worsened in Syria.

Yet, the ongoing military operations in Anbar have completely disrupted the import process. This is because goods carrying vehicles coming from Syria can no longer pass through the international border linking the two countries, which is seen as another scene of Anbar's military operations.

According to Ahmed Ugaili, the owner of the Akhawein pickle shop, "Pickle shops depend on Syrian products in an essential way. Since the outbreak of the Anbar crisis, products are no longer delivered to our shops."

Speaking to Al-Monitor, Ugaili explained, "Should we continue to suffer from a lack of goods, we will have to close our shops and dismiss our workers. The problem lies in the fact that Anbar is the only passage through which goods are transported [from Syria], especially since the other border crossing with Syria across the province of Ninevah is not safe because it is under al-Qaeda control."

Ugaili has 10 workers, four of whom have been dismissed because stored goods began to run out.

The volume of trade exchange between Iraq and Syria dropped to less than $700 million a year. While the annual trade exchange between the two countries used to amount to more than $4 billion, it dropped to 17.5% of this value in 2012 given the lack of political stability and security in Syria.

Al-Monitor spoke with Hamid al-Moussawi, the owner of a vegetable shop in the Jamila district. He believes that the conflict between the army and ISIS in Anbar is likely to drag on for the coming months, which led him to change his trade exchange from Syria to Iran and Turkey.

"I have always made sure to diversify the sources of import given the lack of security and stability in Iraq. It is true that Syrian goods have a greater profit margin than goods from other countries, but the work must continue," he said.

For his part, member of the parliamentary Economic and Investment Committee and Kurdish member of parliament Mahma Khalil shares the same opinion with Moussawi on the need to diversify the sources of import due to the unstable security situation in Iraq.

Speaking to Al-Monitor, Khalil said, "The ongoing military operations in Anbar have greatly contributed to the impact on Iraqi traders in other provinces given the essential reliance on Syrian goods. However, Iraqi traders have managed to adapt to the situation by diversifying their sources of import."

Khalil confirmed, "The military operations also had negative repercussions on the agricultural sector in Anbar, alongside the negative impact on imports."

Ugaili said he will head to Iran to import goods from there until the Anbar crisis comes to an end. "However, Syrian goods are of better quality with greater profit margins compared to Iranian goods," he said.

While Iraq shares many trade ports with Iran, given its 1,458-kilometer (906-mile) border, the Al-Walid border crossing with Syria is seen as the lifeline to Iraqi trade in light of the total disruption of Iraq's border ports with Saudi Arabia, as is also the case with the Kuwaiti border crossings. Trade with Turkey, on the other hand, is characterized by a more smooth transfer of goods through the Khalil Ibrahim border crossing, located in Iraqi Kurdistan.