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Lebanese businesses in Kurdistan unperturbed by Iraq insurgency

BEIRUT | - June 22, 2014, 11h07
Par Sophie Spencer
A view of Erbil in Iraqi Kurdistan.
The jihadist insurgency in Iraq has global leaders airing concerns about the security of countries well outside of ISIS’ radius but Lebanese businesses in neighbouring Kurdistan do not appear worried.
As news came in last Tuesday that Sunni jihadists ISIS had seized the oil rich city of Mosul in northern Iraq and declared their intention of making it all the way to Baghdad, uneasiness began to spread in the region. The immediate abandonment of this area by the forces of Iraq’s Shia president Nouri al-Maliki, leaving it to the semi-autonomous Kurdistan to protect other cities in the region such as Kirkuk, raised questions and concern about the security of the entire region. What does this mean for the numerous Lebanese businesses present in nearby Kurdistan?

Since Kurdistan was recognised as a federal entity in the Iraqi constitution in 2005 with practical autonomy, the region has been experiencing an economic boom. With an abundance of valuable natural resources including a giant gas field found in 2011 and an atmosphere of security unparalleled in the region, Kurdistan’s economic continues to flourish. Last year it recorded economic growth of 8% and its capital, Erbil, was selected as Arab capital of tourism for 2014.

Kurdistan represents a haven for foreign investors. Article 3 of Kurdistan's 2006 Investment Law ensures parity between foreign and local investors and Arab businessmen, particularly the Lebanese, have been making the most of this. Lebanese businesses have been dominating the construction, media advertising, and hotel industries in particular. The Rotana hotel in Kurdistan’s capital, Erbil, is Lebanese owned and there are an estimated 10,000 Lebanese businessmen residing in the country.

However, with an Islamic insurgency on its doorstep, and Kurdish ministers targeted by bomb attacks, could this mean an end to this investment paradise? Toufic Tasso, general manager of Pigier, Lebanon, the business education specialists that founded the Lebanese French University in Kurdistan, does not think so. ‘Do I think the insurgency will affect negatively the economy of Kurdistan? No. In terms of political stability what happens south of the Kurdistan borders has limited implications in Kurdistan.’

Should Lebanese businesses in Kurdistan be worried that the insurgency will push further east and threaten them directly? Again, no. ‘there is, as far as I know, no claim from Isis on the Kurdish region. Lebanese businesses in Kurdistan do not need to worry. Kurdistan is meant to be a safe haven. Security is the authorities’ top priority as this is what they sell to investors.’

If Tasso sees no reason for despair, other investors are equally apathetic about the events across the Kurdistan border. PC Dealnet recently celebrated the launch of VCE in Erbil with Facebook comments after the insurgency focusing on the positive and ignoring any danger.

Nassib Ghobril, Head of economic research and analysis department at Byblos bank, the first Lebanese bank to establish a branch in Erbil, agrees, ‘Kurdistan is calm. If a business is based in Erbil but operating in the rest of Iraq, it might be worried but I haven’t heard anything. I expect the region to remain stable.’
#Iraq, #ISIS, #Syria
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