Channel NewsAsia

Kurdistan a business hotspot in troubled Middle East

Although Iraq remains embroiled in conflict and violence, Kurdistan -- an autonomous region running its own affairs -- is now a business hotspot in a largely troubled Middle East.

KURDISTAN REGION OF IRAQ: More than a decade after the US-led invasion of Iraq, the country remains embroiled in conflict and violence.

But the situation in the country's northeastern corner, Kurdistan, is a far cry from the rest of Iraq.

Kurdistan is an autonomous region running its own affairs. For long an economic backwater, it is now a business hotspot in a largely troubled Middle East.

Over US$30 billion of foreign and domestic investment has transformed the Kurdish region, and the wealth has trickled down to the majority of the population.

Bayiz Sharif, a shop owner, said: "Business is generally good these days. There has been a lot of development and there are lots of tourists coming here especially from other parts of Iraq."

Many attribute Kurdistan's boom to its relatively stable security and political conditions.

Local markets are bustling with activity and people go about their daily lives. But despite all the progress that Kurdistan has made, the situation is still quite fragile.

Kurdistan's growth has been largely funded by the petrodollars coming from the Iraqi government.

But relations between Kurds and Iraqi authorities in Baghdad are often tense, casting doubt over Kurdistan's future prospects.

Many are concerned that tensions between Baghdad and the Kurds can eventually undermine Kurdish gains, especially its thriving economy.

Wladimir Van Wilgenburg, Kurdish affairs analyst, said: "So this is a big problem -- that Baghdad wants to centralise everything although it is a federal government, while the Kurds and the Kurdish government want to be independent from Baghdad as much as possible. And this is creating all these tensions and problems, and that also partly affects the economy especially for those western companies who want to get paid for the work that they are doing here."

Iraqi Kurdistan has come a long way in just a decade. But the key question is whether the progress will be sustained.

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