Tourists and investors to Iraq? Why not, say Kurds

ARBIL, Iraq (Reuters) - The Ministry of Tourism has 417 employees and big plans: “We need three or four times as many hotels as we have now,” says Nimrud Youkhana, the minister, “and we need to get more airlines to fly here.”

A Kurdistan flag flutters from the newly constructed Neshteman mall in Arbil, about 350 km (217 miles) north of Baghdad, August 1, 2007. REUTERS/Azad Lashkari

Tourism in Iraq? More hotels in a country whose name evokes images of truck bombs and mayhem, kidnappings and beheaded foreigners?

This is what an advertising campaign in the United States called The Other Iraq, the three northern provinces that blossomed into a quasi-independent state in the 16 years since the U.S. placed a protective umbrella -- the ‘no-fly zone’ -- over the region to stop a genocidal anti-Kurdish campaign waged by Saddam Hussein.

Administered by the Kurdistan Regional Government (KRG), the provinces have largely escaped the violence that has been tearing apart the rest of Iraq since the U.S. invasion in 2003, toppled Saddam and uncorked long-suppressed sectarian hostility.

“We have some way to go still,” said Youkhana, “but we plan to eventually hold annual folklore events like the Jerash festival,” a reference to the Jordanian city which brings together performers from all over the world each summer.

Customers the ministry wants to attract are Arabs from the Gulf who appreciate mountain resorts in an Alpine setting (and a relaxed attitude towards alcohol) and Europeans in search of exotic destinations and archaeological remains dating back thousands of years.

Youkhana’s plans, and the mere existence of a Tourism Ministry, highlight a bullish view of Kurdistan’s future which is also evident in building projects on a grand scale, from a 6,000-shop mall to a string of U.S.-style gated communities with names such as Dream City, Empire Villas and American Village.

Near the airport, Naz City, a new complex of 14 high-rise apartment towers, is cabled for high-speed Internet access. New hotels under construction include one by the German luxury chain Kempinski.

And rising in the shadow of Arbil’s citadel, near where Alexander the Great defeated King Darius of Persia, the huge Nishtiman mall features Kurdistan’s first escalator -- a magnet for children who ride it up and down in wide-eyed wonder.

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There are no detailed figures on how much money has been invested in Kurdistan since 2003, when the rest of Iraq slipped into violence and the north remained stable. The Board of Investment, a government agency set up last summer, has approved more than $3.5 billion in development projects.

The Kurds’ main argument to persuade foreigners to visit and invest is security: there is no other place in Iraq where a foreigner can shop in local markets or walk the streets without fear of being killed or kidnapped.

“I feel safer in Arbil or Suleimaniyah than in Camden, New Jersey,” said Harry Schute, a retired U.S. army colonel who served in Iraq and is now a security adviser to KRG president Massoud Barzani.

“But people hear ‘Iraq’ and they think violence. There’s a lack of understanding that Baghdad and Arbil are different worlds.”


So different that the KRG has all the trappings of an independent state -- its own flag, its own army, its own border patrol, its own national anthem, its own education system, even its own stamp inked into the passports of visitors.

Turkey, Iran and Syria -- all of which have sizeable Kurdish minorities they do not want to become autonomous -- are viewing the KRG’s progress with considerable concern. They fear full independence for Iraqi Kurdistan would set off a chain reaction in the region.

The Iraqi Kurds’ sense of tranquility was shattered by two bombs in May -- a truck bomb outside the regional government’s Interior Ministry killed 15 people and wounded more than 100 and three days later, a car bomb in the office of Barzani’s Kurdistan Democratic Party (KDP) left 30 dead and injured 50.

The government responded by stepping up security, already tight, and virtually sealing the roads into KRG-controlled territory to non-Kurds. Travelers from outside the region are not allowed to pass unless a Kurdish resident meets them in person and “guarantees” their stay.

Despite the May bombs, Austrian Airlines, the only European carrier with a regular service to Arbil, added a flight to its schedule in July to bring Vienna-Arbil connections to four a week. The flights are usually packed.

“The bomb attacks did not dent business interest,” said Bayan Sami Abdul Rahman, the London-based head of the Kurdish Development Corporation (KDC). “In fact, inquiries picked up after a few days.”

They did not dent a booming business in luxury cars, either. “Things are looking good,” said Lezan Shafeea, a sales manager at the sprawling Mercedes dealership in Arbil. “We are selling more top-end models, at $138,500 apiece, than mid-size cars.”

These are cash-only transactions -- Kurdistan’s embryonic financial system has no provision for consumer credit.

Obstacles to opening up Kurdistan to the world, Kurdish officials say, include the travel advisories governments issue to their citizens. The U.S. State Department, for example, makes no distinction between the Kurdish north and the rest of Iraq and “continues to strongly warn” against travel there.

But other countries have taken Kurdistan off their list of life-threatening destinations, according to Falah Mustafa Bakir, the head of the KRG’s Foreign Relations Department -- the region’s de facto foreign minister.

“Denmark, Japan, Austria, Sweden and the Netherlands have all changed their advisories,” he said.

Not even the rosiest optimist predicts a travel boom soon to Kurdistan but a British company, Hinterland Travel, led a group of adventurous tourists in their 50s and 60s on a package tour through the three provinces administered by the KRG in May. Another is scheduled for September.

“This is for people interested in archaeology and history,” said the company’s owner, Geoff Hann, “and who are not faint of heart.”