Presented with the prospect of doing business in an area near territory controlled by the Islamic State, or ISIS, nestled between Syria and Iran, many U.S. businesses are understandably hesitant.
Despite the turmoil in the region, American oil and gas giants like Chevron, ExxonMobil and Marathon have invested hundreds of millions of dollars in Kurdistan, a semi-autonomous region of northeast Iraq that has figured prominently in the fight against ISIS. The region has some of the largest reserves in the world, containing an estimated 45-50 billion barrels of oil and 100-200 trillion cubic feet of gas.
What’s lesser-known, however, is that other industries have set up shop to provide goods and services to consumers and businesses within the region itself, which is home to more than 5 million people. Avis and Hertz rental cars, Carvel Ice Cream, Ford, Deloitte, Kentucky Fried Chicken, Pizza Hut and Quiznos are but a few familiar names.
Five days after my wife and I married in the North Georgia mountains, we moved to the Kurdistan region for one year to teach at an elite private school. Though many suggested we were perhaps less than mentally balanced, we felt comfortable in our surroundings. This was partly because we saw many U.S. companies represented, including many brands whose corporate bases are in Atlanta, such as Church’s Chicken, Cinnabon, Coca-Cola Co. and United Parcel Service Inc., providing pleasant reminders of home.
Metro Atlanta is home to a small Kurdish population of roughly 300 families; our friends were supportive of our “honeymoon” to their homeland and assured us we would feel welcome.
They were right. Foreigners are not simply tourists but also guests treated with utmost respect. On many occasions we encountered strangers who invited us to their homes. Renowned for their hospitality, Kurds are open to the West, embrace diversity, and support democratic ideals. One man we encountered in a park on the verge of tears had his son translate how appreciative he was that we came to teach Kurdish children, imploring us to tell our government to do more.
Initially surprising, it became common to see luxury cars zooming along newly paved highways, and many designer stores beckoned shoppers in glistening shopping malls that could compete with Lenox or Perimeter. Upscale restaurants were in no short supply.
While news reports on Kurdistan often center on conflict, enhanced stability there has brought more tourism, leading the capital city, Erbil, to be named “2014 Arab Tourism Capital.” This year Marriott will open two properties; Hyatt will open its first hotel by 2017.
All this amounts to a different narrative about Kurdistan than is commonly told in the U.S., one that the region’s leaders hope to change through the United States Kurdistan Business Council (USKBC), which held a February meeting in Washington to welcome the region’s new representative to the U.S. capital.
Attending the meeting, I learned that the stock of U.S. investment in the KRG currently numbers hundreds of millions of dollars and is expected to soon eclipse $1 billion.
The USKBC facilitates commerce and trade for U.S.-based companies in a variety of industries, including agriculture, energy, financial services, manufacturing, security and transportation, working with top officials to achieve greater engagement and investment.
The KRG has one of the most progressive investment laws in the Middle East. Most alluring to investors is a10-year tax break for services or manufacturing. Foreign and local investors and capital are treated equally. Foreigners are entitled to fully own any venture and are free to repatriate profits in full, as well as buy and own land for investment purposes.
A federal region within Iraq, Kurdistan is able to exercise large degrees of economic and political independence from Baghdad. As such, the Iraqi Army is by law unable to enter unless approved by the Kurdistan Regional Parliament. Our identity cards allowed us to travel freely across Kurdistan, but we were unable to set foot in Iraq “proper.”
The KRG also maintains its own foreign policy in many respects, occupying several diplomatic offices in many countries. Other countries have similar offices in Kurdistan, including a U.S. Consulate General.
Kurdistan has a per capita GDP of $8,000 and is posting more than 8 percent growth annually, but the challenges of operating there shouldn’t be taken lightly. Still, ISIS has consistently been unable to break into Kurdistan, routed by Peshmerga forces aided by U.S./Coalition airstrikes. In recent months, there has been an unprecedented chorus of U.S. politicians and policymakers suggesting the U.S. begin directly arming Kurds on a sustained basis.
Regardless, U.S. companies shouldn’t write off this important emerging market. Atlanta may be the “Hollywood of the South,” but companies here should continue to train their lenses on Kurdistan. The risks are substantial — but so are the potential rewards.
Benjamin Kweskin is a writer, researcher and public speaker. He holds master’s degrees in both International Studies and Political Science. He and his wife lived this past year in Erbil, Kurdistan Region.