Kurdish authorities have focused on promoting investments and construction, optimistic that they might eventually become the Middle East’s transportation and business hub.

Below are extracts of an article written by Kirk Semple and published by the International Herald Tribune:

It is a measure of soaring Kurdish optimism that government officials here talk seriously about one day challenging Dubai as the Middle East's main transportation and business hub.

The Kurdistan Regional Government is betting that it can, investing $325 million in a modernist terminal at the Erbil International Airport to handle - officials hope - millions of passengers a year and a runway that will be big enough to handle the new double-decker Airbus A380.

"We're not saying Kurdistan is heaven," said Herish Muharam, chairman of the Kurdish government's Board of Investment. "But we're telling investors that Kurdistan can be that heaven."

As the rest of Iraq has plunged into a downward spiral, Kurdistan has enjoyed relative political stability and limited violence, in part owing to a sectarian and political homogeneity lacking elsewhere in the country.

Kurdistan's rising fortunes have been no more apparent than in the wave of building and investment that has swept the region in the past four years. Iraqis and foreigners alike have poured in billions of dollars, defiantly wagering that the region - with a population of about 4.2 million, its own army and a semiautonomous government - will remain relatively peaceful even if the rest of Iraq slips deeper into civil war.

Where explosions and bomb-scarred buildings have been a defining symbol elsewhere in Iraq, construction cranes are now a common feature on the Kurdish landscape, tugging hotels, shopping centers, and office and housing complexes from the ground.

While public infrastructure is still suffering from chronic underinvestment, the regional government has approved more than $4 billion worth of mostly private development projects since August, when the Board of Investment was created. Billions of dollars' worth of other projects were already under way.

Much of the money is coming from overseas, including the United States, Europe, the Gulf countries, Iran and Turkey, officials say.

The Kurdistan Regional Government has placed special emphasis on attracting investors from the United States and Britain, unleashing a slick advertising campaign in English dubbed "The Other Iraq," which includes television commercials featuring romantic shots of Kurdistan's mountains, and waving, cherubic children.

"It's spectacular, it's joyful," intones a narrator in one 30-second spot. "It's not a dream. It's the other Iraq."

[…]

For all the shiny new construction in Kurdistan, there are glaring deficiencies in the public sector. Kurdistan's residents receive at most about three hours of electricity a day. Not all areas of the region receive drinking water, and the health care and education sectors are anemic There are no waste water treatment plants, and sewer systems are inadequate: Even a moderate rainfall turns the streets into foul rivers.

In the immediate aftermath of the U.S.-led invasion in 2003, Kurdistan's officials were so desperate for any kind of investment that they signed off on numerous projects with only limited concern for the essential needs of the population.

"The government built like mad," said Douglas Layton, director of the Erbil office of Kurdistan Development Corp., a public-private partnership promoting investment in the region. "There was no master plan."

To make matters worse, governmental graft went unchecked.

"The corruption was happening because of the rushing we were doing in nearly everything in a limited amount of time," Muharam said in an interview here last month. "It caused misuse, lack of transparency."

Many projects foundered because of a lack of capital. Erbil, for instance, is dotted with half-finished buildings, roadways and overpasses.

The government is now implementing a more transparent system of contracting and is trying to rectify the imbalance between public sector and private sector development. Muharam said the government was also trying to strengthen the banking system and insurance laws to provide a more attractive environment for investors.

[…]

Officials and investors argue that Kurdistan offers the opportunity for national and foreign businesses to establish a foothold in Iraq with an eye toward a more peaceful future when development in the rest of Iraq will be possible.

"You can do business here today and as the situation stabilizes down south - and I hope it will; it's not looking too good right now - you can move down south," Layton said.

[…]

"It's relatively secure," said Layton, an American who has worked for many years in Kurdistan. "It's not perfect, but I'd much rather walk down the streets of Erbil than walk down the streets of Detroit, New York, Washington and Chicago."

Still, he is not taking any chances. As he spoke, bodyguards were posted outside his office. And behind his desk chair, next to an umbrella, a Kalashnikov leaned against the wall.