Kuwait skyline
Kuwait skyline Image Credit: Shutterstock

Border disputes have always been an obstacle in implementing vital development projects and logistics options that contribute to cost reduction. All parties involved miss out on opportunities that would help develop trade and raise growth.

The dispute over the Mubarak Al Kabeer Port in Kuwait - which has come a long way towards finishing its first phase - is emblematic of this. In 2013, the Iraqi parliament approved an agreement over dividing the maritime navigation in Khor Abdullah waterway between Kuwait and Iraq. The Iraqi Supreme Court annulled the agreement last month, raising longstanding issues thought to have been long overcome.

This coincided with Kuwait's signing of a joint agreement with China for the four-phase Mubarak Al Kabeer Port, to be one of the largest in the Arabian Gulf. Given its strategic location and proximity to global trade routes, this port can play a pivotal role and a significant addition to the Gulf's trade possibilities.

Apart from the emotions, legal and historical differences, this project has the potential to yield significant benefits for Kuwait and Iraq alike, if it is assessed in a professional manner within a financial perspective. And in a spirit of common understanding.

Kuwait possesses the technical, administrative, and financial potential and capabilities necessary for the project, which can also benefit the other party, given the lack of these resources. Some of these capabilities are worth mentioning.

On the management side, the GCC has gained rich experience in port management, overseeing dozens of ports across six continents, including in the developed economies of Europe and North America.

On the management side, the GCC has gained rich experience in port management, overseeing dozens of ports across six continents, including in the developed economies of Europe and North America.


DP World’s network

DP World manages 80 ports and terminals, along with the associated logistics, in more than 30 countries. Abu Dhabi Ports has begun to expand through partnership agreements in Egypt, Guinea and Pakistan. This means the GCC’s track record in this domain has earned international confidence.

This places Kuwait in a privileged situation, particularly as it plans to coordinate with a partner for the management of the new port. It is more likely the partner will be from the Gulf region to ensure widespread benefits.

The implementation of a mega project of the size of Mubarak Port necessitates substantial investments. Kuwait is well positioned to provide the required funding. Without it, such a project can never be taken up, resulting in missed economic and logistical opportunities for the two countries.

Due to the proximity of Mubarak Port to Iraqi ports, particularly Al Faw, the project can lead to the integration of operations between ports in the two countries - and not stand as rivals, which is the view that’s being promoted. each port has its own capabilities that complement the other, and which can be boosted through coordination and joint work.

The Mubarak Port can also transform Kuwait and Iraq into strong trade fulcrums, connecting them with large markets like Syria, Iran and Turkey, thereby facilitating trade towards Europe, particularly between East and West.


Kuwait’s got the topography

Iraq alone cannot establish this due to geographical reasons related to its short coastline on the Arabian Gulf, spanning no more than 50 kilometres with shallow water. Kuwait boasts an extensive coastline of approximately 500 kilometres with deep waters that can accommodate larger vessels. This is apart from reasons related to financing and management.

In addition to the mutually beneficial commercial aspects, the ownership structures have completely changed and public shareholding companies have expanded significantly. The Mubarak Port can be converted into a joint stock company, with a portion of its shares made available for public offering and listed on Kuwait Stock Exchange (Boursa Kuwait) as well as on international ones, including possibly the Iraq Stock Exchange (formerly Baghdad Stock Exchange).

Individuals and institutions from both countries, as well as from around the world, can buy shares in the port shares and tap high returns. This implies that the benefit will not be confined to one party alone, but encompass all shareholders in the company, which would align with current global trends.

The GCC countries have been allowing foreign investors to buy shares in their companies, an approach that led to attracting more capital for growth. Taking a similar practical approach with Mubarak Port can be a good omen for Kuwait, Iraq and the wider region.