International companies aim to set up shop in Iraq despite violence

International companies are overlooking security worries and a recent spike in violence to set up shop in oil-rich Iraq. Lured by the country’s vast oil wealth and sizzling growth rates. Despite the uptick in violence mainly caused by the spillover of the Syrian civil war, international companies have in recent months launched or expanded operations in Iraq’s finance, agriculture and construction sector as well as in the energy industry that is the mainstay of the country’s economy.

“If you look at the region, Iraq is one of the few promising emerging markets out there,” said Ismail Maraqa, a senior partner overseeing Iraq operations at the PwC, the professional services firm, whose business had grown by 30 percent over the past year. “The business opportunities are huge. They are trying to grow the oil sector by six or seven times,” he added.

Iraq’s gross domestic product has doubled since 2003 to above prewar levels. Over each of the past two years, the economy grew more than 8 per cent, according to the World Bank, and Iraq’s central bank predicts even higher growth.

“I think there’s a big potential here. The future is bright,” said Mozhar Mohamed Saleh, an adviser to the central bank and professor of finance at two major Baghdad universities. “But because the security situation is not very good, it’s a hazy picture.”

Besides the foreign investments in Iraq’s relatively safe Kurdish region, the interest in the rest of Iraq has increased, especially since the 2008 departure of US troops, said Lady Emma Nicholson, executive chairman of the Iraq Britain Business Council. The trade organization’s 54 members, up from 43 last year and 39 in 2011, include Deloitte, ExxonMobil and an affiliate of Caterpillar. Citigroup said in June that it would open an office and three major Lebanese banks – Byblos, BankMed and Bank Audi – have opened or are about to open branches in Iraq.

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