Investors on the hunt for international opportunities need look no further than Kurdistan, the semi-autonomous region in the north east corner of Iraq. So delegates will be told at the country's two-day trade and investment conference in London this week.
Some 400 people are expected to attend the event, which will be hosted by key figures from the region including the Prime Minister of the Kurdistan Regional Government (KRG), Barham Salih, eight of his ministers and an 80-strong business delegation.
The key message is that Kurdistan is not like the rest of insurgency-torn Iraq. "People are able to do business in Kurdistan," Bayan Sami Abdul Rahman, the KRG High Representative to the UK, said. "It is peaceful, stable, and has never had an insurgency of any kind; and not a single coalition soldier or foreign citizen has been kidnapped or killed in the region."
There are some impressive figures. The Iraqi economy is set to grow by 7.3 per cent this year and 7.9 per cent next, and Kurdistan's even faster. The region has attracted more than $12bn (£8.3bn) in non-oil investment in the past four years, some $3.1bn from abroad. There are already 1,200 foreign companies working in the region. And although so far the majority of inward investment is from the Middle East – particularly Turkey, Lebanon and Kuwait – the KRG wants to reach out to global businesses from Europe and the US as well.
Kurdistan is principally known for oil and gas. With oil reserves estimated at 45 billion barrels, and between 6 and 8 trillion cubic metres of gas, hydrocarbons are both a major economic asset for the region, and a route to the world stage. Some 40 exploration contracts have already been let, and there are high hopes for the proposed Nabucco pipeline set to run from Azerbaijan through Turkey and on to Europe. "We are looking to join Nabucco," Ms Rahman said. "That will allow us to play a role as part of the world's strategic oil and gas reserves."
But Kurdistan is not just about oil. The domestic economy is also booming, particularly the construction and retail sectors. It is difficult to overstate the deprivation from which it started, after years labouring under two sets of sanctions – from Saddam Hussein himself, and from those imposed on him by the rest of the world. "From the consumer point of view there was real poverty in the early 1990s," Ms Rahman said. "Kurdistan was closed, so for us liberation really was liberation."
Today, Kurdistan imports from Iran and China at the lower end and from the United Arab Emirates and Jordan for more expensive goods, with a particular penchant for big-screen TVs and mobile phones. And the region's towns and cities are alive with construction sites for new shopping malls and supermarkets, as global heavyweights such as Mango and Benetton eye up the opportunity to push their brands into an entirely new market.
Alongside the retail revolution is a flurry of infrastructure programmes, as the KRG races to make up for lost time. Linking the rash of hotel and housing schemes are new roads, underpasses and tunnels. "There is huge demand for construction supplies, which means massive opportunities for everything from cement to design and engineering consultancies," Ms Rahman said.
Telecoms and IT are also major growth areas, as Kurdistan vaults itself into the 21st century. Mobile phones were banned under Saddam, although two companies – Korek and AsiaCell – were started as underground outfits, at huge personal risk to the founders. The two companies now have Iraq-wide licences and werea boosted by investment from the Gulf. With the nationwide infrastructure in place, the market for mobile and internet services is also taking off.
And then there is agriculture. In the decades before the 1970s, two-thirds of Kurdistan's working population were employed in agriculture. Now that figure is less than 10 per cent – after Saddam's vendetta against the region wiped out 4,500 villages, and then his insistence that the UK Oil for Food programme allow imports of wheat and rice destroyed demand. The sector is already drawing interest, both from Middle Eastern states renting farmland in less arid parts of the world, and from private equity.
And there is huge potential, not least for exports of native fruit crops such as figs and pomegranates. "Kurdistan could go back to being self-sufficient, could provide for the rest of Iraq, and within 10 years could be exporting," Ms Rahman said.
KRG Prime Minister Barham Salih will open the conference tomorrow with a call for British companies to see behind the problems elsewhere in Iraq to the huge benefits of getting an early toehold in the region. "For companies that are looking at investing in the Middle East, Kurdistan has a really bright future," Ms Rahman said. "Our growth potential is enormous."Reuse content