Investment Opportunities in Kurdistan and Obstacles Behind and Ahead
Kurdistan is considered as an emerging market hence a growing number of international companies are heading here to take a bite of the cake. Not everyone is willing to enter an emerging market when a high rate of growth is seen, there are other factors to take into account like PESTEL factors (Political, Economic, Social, Technology, Environment and Legal) in this article we are expanding on the PESTEL factors in order to convey our message to the outside world.
Political wise we have autonomy from the central government but we are still considered a part of Iraq and history has taught us and others that the region have seen many political conflicts whether it was with neighboring countries or internal conflict between Kurdish political parties or between Arabs and Kurds. So far and since 1996 we had no political issues in Kurdistan and have a relatively stable political situation where the opposition parties can raise their voice and be heard by the ruling parties without being hurt or stepped on, to me this sounds like democracy on its feet in Kurdistan and so far we are politically stable.
Economically, we are an emerging market and Erbil the capital of Kurdistan is being compared with Dubai for its fast speed of growth rate, all three Kurdistan governorates; Duhok, Erbil and Sulaimaniyah have seen progress in infrastructure, utilities, construction and modernization that you won’t be able to recognize any of them if you visited 10 years ago. And due to new oil fields and various investment opportunities in the past decade we have money.
Socially, we have a westernized lifestyle, women are treated equally with no restriction on their driving, travelling, going out or employment. Kurds do not identify each other by religious background but rather treat each other equally whether one is a Muslim Suuni, Shia, Christian, Yazidi or any other background. The mentality toward expats is very welcoming especially Europe
ans or Americans, but most Kurds are conservative with Arabs due to the conflicts though out recent history.
Technology has definitely differed over the past decade with the electricity supply being more stable; fiber optic and 4G Internet services and more than 95% of the regions have mobile coverage.
The environment hits both limits when it comes to seasons as summer can be extremely hot and reach over 45 degrees Centigrade and extremely cold winters with harsh temperatures reaching as low as -15 degrees. Besides that we have oil fields being discovered every day, natural gas stored underground that hasn’t been tapped yet and in the mid ground we have many natural resources from metals to minerals and on top we have rich soil and water resources that are enough to keep the nation going without any foreign aid.
One of the main factors that scares the foreign investors is the lack of legal rights for foreign investors and the paper works every expat have to go through if they want to settle down in the region forms an obstacle along with having to give 50% of profits to a grantor whether it’s a person or a party, the 50% or 51% is not a formal consent but rather a mutual agreement unlike Dubai where foreign investors have to put the grantors name on their company name.
Today Kurdistan is attractive to smaller companies and lower quality producers that are willing to take more risk compared to established international firms which we need to think about attracting.
By: Ali S. Nuri