Mohammed Saleh, the deputy governor of the Central Bank of Iraq, estimates that trade between Syria and Iraq has fallen to a mere 17.5% of its former levels, from $4 billion to $700 million per year, due to the instability and security crisis in Syria. In past years, Iraqi markets have been heavily dependent on Syrian products, which accounted for nearly 60% of the country’s consumption goods, to satisfy the country’s basic needs.
Hassan Dahlaky, an official from the Association of Iraqi Traders, told Al-Hayat that Syrian products held a special place in Iraq “because they meet our country’s needs at reasonable prices. This is for products such as handkerchiefs, stationery, spices, fruits, vegetables and other basic goods.”
“Syrian products are necessary for Iraqi markets and can satisfy Iraqi needs,” added Dahlaky.
“Most Iraqi traders who do business with European firms are now forced to import and ship construction materials — mainly concrete — through Turkish and Jordanian ports rather than Syrian ports,” noted Dahlaky. He added that Iraqi traders are now mainly doing business for Turkish products, which are pricier than Syrian or Chinese-made merchandise. Many Iraqi investors in Syria, mainly in Aleppo, returned to Iraq after their businesses ground to a halt.
Economist Abbas al-Ghaliby mentioned that last year, Iraqi-Syrian trade totaled $5 billion. He added that Iraqi traders addressed the shortage of Syrian merchandise by supplying the Iraqi markets with products from other countries.
“The unrest in Syria badly damaged the country’s industrial sector. Syrian manufacturers were compelled to sell their stocks to Iraq in order to avoid catastrophic losses as much as possible,” added al-Ghaliby.
For his part, Saleh stressed that Syrian markets now face substantial shortages when it comes to many primary commodities and foreign currencies, a result of the economic sanctions leveled against the country. Syrian trade is now limited to the use of three mechanisms: swaps, cash payments or the settlement of debt with other partners.
“Iraqi-Syrian trade exceeded $3 billion last year. However, trade between both could fall to less than $700 million and might be limited to fruits and vegetables,” said Saleh.
Concerning the returns of Iraqi investors in Syria, Saleh noted, “the volume of Iraqi investments in Jordan was far more important than the volume of Iraqi investments in Syria. However, Iraqi investments have been on the rise there since 2003.”
Saleh added that Iraqi investors would focus on the Iraqi markets and that they might turn to the Kurdish, Turkish and Gulf markets. “Returns from Iraqi investments are gradually increasing because Iraqi markets are more profitable and represent a good outlet in which to sell products.”