A fractious coalition government. The worst sectarian violence since 2008. Headlines about Iraq aren’t getting any cheerier. Yet there is plenty of good news we don’t get to hear about, says Steve Johnson in the FT. Indeed, corporate earnings “are booming despite the security backdrop”, says Sansar Capital’s Sanjay Motwani. “Can you imagine what will happen if things actually get better?”
The economy grew by 10% in 2012, boosting income per head and confidence. Pepsi distributor Baghdad Soft Drinks saw a 400% leap in profits last year, and bank deposits are rising. JPMorgan and Standard Chartered are now eyeing up Iraq, as are several hotel groups.
The rebound has been driven by the recovering oil industry, which accounts for about 66% of GDP. But last month the government outlined a five-year plan to diversify beyond oil, which “could mark a new stage in Iraq’s recovery”, says Raheem Salman on Reuters. Oil money will be used to bolster infrastructure, education and agriculture.
The rebound is at a very early stage, but the economy and stockmarket have potential.
Brave investors can access the market with the Bermuda-based FMG Iraq Fund (tel: 020-7589 9348). The minimum investment is $10,000.