Foreign business in Iraq quadruples in 2011
— -- U.S. investment and other business in Iraq has quadrupled this year despite concerns over violence and sectarian rivalry as the last American troops withdrew from Iraq.
U.S. companies reached deals worth $8.1 billion through Dec. 1, up from $2 billion last year, according to Dunia Frontier Consultants, which studies emerging markets.
The surge follows a number of years in which U.S. companies were fearful of entering Iraq and have lagged behind some European and regional countries.
"The U.S. has lagged up to this point because of a perception almost more than anything else that it was a dangerous place, an unstable place," said Lionel Johnson of the U.S. Chamber of Commerce, which has worked to encourage American investment in Iraq.
"It's finally reached a tipping point," said Kyle Stelma, managing director of Dunia.
Iraq's oil industry is attracting U.S. and other foreign companies, and Iraq's government is spending billions of dollars to upgrade infrastructure, such as housing, roads and port facilities.
Iraq's infrastructure has been worn down by years of war. "It's important for foreign companies to invest," said Ayad Salman Yahya, managing director of the Al-Bilad Islamic Bank.
The government plans to build a subway in Baghdad and monorails linking some cities. Cranes dot the skyline of Baghdad, where a large mall is under construction, and city streets are clogged with late-model cars.
Hill International, a New Jersey-based construction management company, recently won a $100 million government contract to build a 30,000-seat sports arena in Anbar province, once one of Iraq's most violent regions.
Total foreign investment and business activity in Iraq has swelled to $70 billion, up from $42.7 billion last year, Dunia's preliminary statistics show.
Iraq looks stable compared to upheavals in nearby countries, including Syria, Yemen and Egypt. "Our neighboring countries have problems," Yahya said.
Still, there are political risks, including rising tensions between Iraq's Shiite-dominated government and the Sunni minority, and terrorist attacks.
"There are many political issues remaining in Iraq," said Kyle McEneaney, Middle East chief at Ergo, a global intelligence and advisory firm. But he said those risks have been there for the past two years, as the number of U.S. troops declined.
"At the end of the day, the fundamental story is still quite compelling," McEneaney said.
Wisam Ahmed, a sales manager for a car dealer in Baghdad that sells Dodge, Chrysler and Jeeps, said he expects to sell about 700 vehicles this year, up from 600 last year. The sales are all in cash, because car loans are almost unheard of in Iraq, and the cost of new cars range up to $50,000.
Iraqis like the Grand Cherokee and Dodge Charger, he said. "They've had enough with the Korean and Japanese vehicles," Ahmed said.
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