By Mustafa al-Kadhimi for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraqi-Saudi relations is the most complex issue that Iraq has to deal with. But, at the same time, it is the closest to being resolved if the political entities of both countries prove to be serious about resuming the historical relations that brought their countries together.

While Iraqi-Saudi relations were never at their best — except for short periods of time — the iciness that gripped them never prevented both from appreciating the reciprocal strategic, cultural, human and religious roles that they played in the region and the world.

By completely cutting off Iraqi-Saudi relations in the aftermath of Iraq’s invasion of Kuwait, Saudi Arabia joined the ranks of the front that endeavored throughout the 1990s to curtail the role played by Saddam Hussein’s regime, contain its regional ambitions and eventually lead the political charge that resulted in its downfall in 2003.

Everyone remembers that Saudi Arabian health and political crews rushed to enter Iraq in the early days that followed the toppling of the regime, in a clear indication that the kingdom was ready to open up politically and economically to Iraq.

But this openness never truly materialized as a result of mistakes committed by both sides.

First, Iraqi political leaderships that ruled the country from 2003 onward never really understood the strategic weight that Saudi Arabia possessed. Furthermore, they often behaved and reacted in an emotional and undisciplined manner when confronted with the role played by the kingdom in Iraq and the region. This behavior was construed in the kingdom as an indication of Iraq’s unwillingness to establish deep and strong relations with Riyadh, while rushing headlong to bolster relations with Iran.

Second, in turn, Saudi Arabia did not expend real effort to restore normal relations with Iraq, and did not return in force to the Iraqi arena — nor did it encourage Saudi investors to do so, which the Iraqis interpreted as an attempt by the kingdom to impose a conditional relationship.

In both cases, the subjects of terrorism and sectarian polarization in the region greatly affected the relationship. Iraqis did not differentiate between Saudi terrorist militants fighting in Iraq and the kingdom. Meanwhile, Saudi Arabia construed Iraq’s relationship with Iran as emanating from a Shiite desire to threaten the region’s Sunni Muslims.

All these ambiguities hampered the evolution of the relationship, and increased the coldness with which each country regarded the other.

In this regard, Ali al-Mousawi, spokesman for the Iraqi prime minister, told Al-Monitor on July 18 in Baghdad, “Relations between the two countries were in a holding pattern as each of them considered what their political stance would be.”

The truth is that their relationship has undergone numerous developments during the past years, which portend to the possibility of greatly improving. Following the Arab Summit meeting held in Baghdad in 2012, Saudi Arabia decided to appoint a non-resident ambassador to Iraq — a move that was greatly welcomed by the Iraqis.

And, on June 15, in another sign of increasing trust, Iraq signed a prisoner exchange agreement with Saudi Arabia, which was followed by an actual exchange of prisoners between them as a prelude to this file being closed once and for all. Furthermore, Saudi sources confirmed earlier this month that a senior Saudi delegation would visit Baghdad soon to pave the way for the reopening of the embassy in Iraq.

All these indications are important, but, both sides must work toward bolstering their relationship and put an end to the probing and shaken confidence that has lasted for years.

Saudi Arabia must resume its active role in Iraq and open the door toward strategic long-term relations with Baghdad. This will not only serve the interests of both countries, but will effectively contribute in appeasing the sectarian tensions that have been markedly increasing in the Middle East over the past years.

The pivotal role that Iraq and Saudi Arabia can play in restoring balance to the region previously justified the prolonged periods of mistrust that characterized their relationship. It should now justify ending this period and start a new one predicated upon the preservation of their mutual interests.

Mustafa al-Kadhimi is an Iraqi writer specializing in defense of democracy. He has extensive experience in documenting testimony and archiving documentaries associated with repressive practices.

By Robin Simcox, Research Fellow for Strategic Analysis, part of the Henry Jackson Society.

On Sunday 14 July, over fifty people were killed in a series of terrorist attacks in Iraq. The most deadly attacks took place in Basra, where three roadside bombs killed twenty eight.

A series of attacks – particularly via car bombs – have rocked Basra in recent months. However, the levels of violence are unlikely to deter future investment not only in Basra, but Iraq more broadly.

Oil sales account for over 90% of Iraq’s budget. It exports most of its oil from the south, and Basra – as a major hub for the Iraqi oil industry – is vital to the economy. The Southern Oil Company, the state-owned enterprise responsible for the southern oil fields, is based in Basra; 80 % of the country’s crude oil is exported from there; and 70% of Iraq’s oil is produced in the south.

As a result, and despite security concerns, investment has arrived. Foreign investment in Iraq reached $60 billion in 2012, and construction projects in Basra have seen malls, social clubs and hotels open. Standard Chartered is planning to open a branch there next year. As of last month, Qatar Airways now flies directly into Basra.

Basra is also a key port town, with the cargo unloading statistics at Basra contributing to revenues from Iraqi ports reaching $30 million a month in December 2012. This is the highest amount achieved in the country’s history, and the growing demand for shipping means that the Ministry of Transport plans to open a new port in Basra in the coming months.

All this helps explain why Nouri al-Maliki, Iraq’s prime minister, once described Basra as ‘the lung’ of the country. It is a potential economic powerhouse within Iraq, and clearly of significant strategic importance. Unless there is an enormous spike in violence, the potential gains on offer will ensure that terrorism does not lead to foreign disengagement.

By John Lee.

Greek company TERNA has reportedly been awarded a $26.8m turnkey contract to construct a 100-bed hospital in Basra.

According to Construction Weekly, the design and build project consists of a general hospital covering a built area of 18,000 m2, including 2,000 m2 for a staff residence and 22 rooms for special care. It will come complete with all electromechanical facilities, medical equipment, furnishings, external surfacing and landscaping.

It will include intensive care units, operation theatres, diagnostic services, acute medicine, pediatrics and obstetrics, disaster medicine and medical education system. The project is to be completed in January 2015.

The project, TERNA’ s first in Iraq, is being carried out through the Governorate of Basra on behalf of the Ministry of Health.

(Sources: Construction Weekly)

By John Lee.

Dana Gas has repaired its liquefied petroleum gas (LPG) facility at Kor Mor in Iraqi Kurdistan, which was damaged when a tanker smashed into it last year, halting its production of up to 900 tonnes of oil equivalent a day.

Dana and its parent company, Crescent Petroleum, remain in negotiations with the Kurdistan Regional Government (KRG) about receivables that the companies are owed because of payment delays in the autonomous region.

The repairs at the Kor Mor LPG plant cost $15m, the company said in a statement.

Dana and Crescent have together invested more than $1bn into their gas production in the region. Austria’s OMV and Hungarian MOL are minority partners in the Kurdish operations, which include the gasfields of Kor Mor and Chemchemal as well as the LPG plant.

We are working with the KRG and the ministry to resolve the outstanding issues including the receivables, as soon as possible,” said Rashid Al Jarwan, Dana’s executive director and acting chief executive.

Dana received US$48 million for its gas last year, after the finance ministry in Baghdad agreed to release $1 billion as payment for KRG exports. The Kurdish and the central government are in negotiations over another payment, which is believed to be smaller.

(Sources: The National, Dana Gas)

By John Lee.

Iraqi Railways is to receive two Chinese-build trains within the next two months.

The trains are part of a ten-train, $115-million contract with China to develop railways sector.

The handover of the remaining trains depends on the completion of the Baghdad-Basra-Umm Qasr railway line, which has been delayed due to lack of funds.

(Sources: Aswat Al Iraq)

From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

The conflict in Syria has become increasingly sectarian as it spills over into neighbouring countries.

Iraq has essentially closed its border to Syrian refugees, partly to avoid an influx of Sunni muslims.

But a growing community of Shia pilgrims from Syria have decided simply not to go home.

Al Jazeera’s Jane Arraf reports from holy city of Najaf:

By John Lee.

A spokesman for the Electricity Ministry, Musab al-Mudaris, confirmed on Tuesday that Iraq has signed a deal with Iran to import natural gas for power generation.

Associated Press reports that under the four-year deal, Iraq buy 850 million cubic feet a day of gas at international market prices, but UPI says no financial details were disclosed.

The gas will feed a power plant in Diyala, and two others in the Baghdad, generating 2,500 MW.

Javad Oji [Owji, Ouji] (pictured), managing director of the National Iranian Gas Co, said:

Construction of the 140-mile [long] 48-inch [diameter] gas pipeline is nearing completion and its extension in Iraq territory will also come to an end in the next two months.

(Sources: Associated Press, UPI, Dow Jones)

By John Lee.

A Pakistani company identified as “Alkitan” has said it will build a new cement plant in Basra.

Company director Shakir Ali told the Basra Investment Commission that they wanted to set up there “due to the abundant natural resources and investment opportunities”.

He added that the plant will be built on a 50-acre site.

(Sources: )

From Al Jazeera. Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Will a political deadlock, a lack of government control and spiralling chaos push the war-torn nation over the edge?

Mike Hanna discusses the reasons behind the increasing violence in Iraq recently with guests: Laith Kuba, director of the Middle East and North Africa programme at the National Endowment for Democracy.Laith was the former adviser to the Iraqi prime minister; Brigadier general Mark Kimmitt, a former secretary for political and military affairs and former director for strategy at United States Central Command [CENTOM); and Souad Mekhennet, a columnist at Newsweek. Souad has covered Iraq extensively and authored a book called, “The Children of Jihad “.