U.S. business lags even in Kurdistan

WASHINGTON (Reuters) - Opportunities are rich in oil, agriculture and other sectors in Iraq's Kurdish north, U.S. and Kurdish officials said on Monday, but U.S. investment is still paltry in what promoters bill as "the other Iraq."

U.S. business and government officials, seeking to coax investment and ease fears about doing business in war-torn Iraq, called the autonomous Kurdistan region a "shining example" of what the entire country might one day become.

Boosters point to rich natural resources, a favorable investment climate and, above all, greater security.

The region, with its own government and parliament, has boasted a lower level of violence than the rest of Iraq, which is now cautiously embracing security improvements in Baghdad and elsewhere almost five years after the U.S.-led invasion.

The Iraqi government is hoping to rebuild an economy, and public infrastructure, battered by years of sanctions and war, which plunged many Iraqis into poverty and joblessness.

But the employment outlook is far brighter in Kurdistan, and median incomes are up to 25 percent higher than in the rest of Iraq, the regional government says.

Even so, Qubad Jalal Talabany, the Kurdistan Regional Government's representative to the United States and son of the Iraqi president, said U.S. business accounts only for 1 percent of total investment in Kurdistan. "The United States lags behind most other countries," he said.

Turkey is a major investor in Kurdistan's bridges, banks and oil sector, Talabany said, despite long-standing tension with Ankara over the Kurdish rebels who have launched attacks from their mountain enclaves.

While opportunities may abound, evidence is hard to find so far that investors are willing to put aside concerns about general security in Iraq, along with doubts about the country's political stability, and come even to Kurdistan in droves.

Neither Kurdish nor U.S. officials were immediately able to provide figures for U.S. investment in the region.

Oil is certainly a lure. The Kurdish government has clashed with Baghdad over petroleum deals it has signed with foreign oil firms, which the central government deems illegal.

Talabany, speaking at the U.S. Chamber of Commerce in Washington, insisted the Kurdish government's oil contracts would benefit the entire country.

Kurdish officials are also hoping that agribusiness will become another driver for foreign investment in Kurdistan, a traditional wheat producer.

The region's acreage of field crops, mostly wheat and barley, was about 950,000 hectares (2.3 million acres) in 2007, according to the KRG.

Now, processing and export facilities are needed to invigorate those sectors, along with tobacco, fruits and nuts, maybe even wine, Talabany said.

"The right investments will turn Kurdistan into the breadbasket of the region," he added.