With its neighbors facing political and economic turmoil in the wake of the Arab Spring, Iraq could emerge as a business leader in the region, according to a panel of experts hosted by the World Bank.
“Iraq is going to attract a lot of interest,” Hamid Biglari, vice chairman and head of emerging markets and content at Citigroup, told business leaders at the “Investment Prospects in the Wake of the Arab Spring” conference on Wednesday. “Iraq has already went through its difficult stage.”
Ian Bremmer, president of the Eurasia Group and another member of the panel, urged investors to take a good look at Iraq, which seems to have put decades of dictatorship, multiple foreign wars and a deadly sectarian conflict behind it.
“I completely agree that Iraq is the most exciting investment opportunity in the Middle East right now,” he said, “and we should get going.”
In the coming year, Mr. Bremmer expects Iraq to produce 500,000 to 700,000 barrels of oil a day, returning to its previous status as a major oil exporter, which will lead to more infrastructure investments, both in the oil industry, as well as for other ventures, such as apartment buildings.
“Everyone that pays attention to the Middle East is thinking about Iraq right now,” he said.
Unfortunately for investors, much of the rest of the Middle East and North Africa region — also known as MENA — is in the middle of difficult and unpredictable times, so attracting new investors there won’t be as easy.
The civil war in Libya, successful revolts in Egypt and Tunisia and ongoing unrest in several other countries have stifled business investment in those nations and cast a pall over the whole region.
In the immediate future, existing investors in MENA likely will look to “stay put” and “reduce their exposure,” Mr. Biglari said, while new investors will wait and see what happens in the region before investing.
“If you look at the MENA region as a whole, it has not received its fair share of investment,” he explained. “New investors are probably sitting out the region for now. But as far as existing investors, they’re staying put.”
Nevertheless, Mr. Biglari said, Egypt also has much to offer from an investment standpoint — a larger market than most countries in the region, and a greater familiarity for foreign investors, who already have established relationships with local accountants, lawyers, guides, for example.
“From a size point of view, Egypt is largely more important,” he said.
Mr. Bremmer said that the recent revolution there, which ousted longtime President Hosni Mubarak, has hurt the nation’s tourism industry, though he said Egypt is still a safe place to visit and the problem is largely perception.
“People say, ‘Egypt, not going to go on vacation there,’ ” he said. “Why not? I mean, I would go and I’d bring my family. I don’t think the country is going to explode.”
A post-revolution Tunisia is even more likely to “get its house in order” and “could become a poster boy for the region,” Mr. Biglari explained, though he added that the country is so much smaller than Egypt that it might not generate as much interest from investors.