While the political divide between Iraqi Kurdistan and the rest of Iraq remains a point of tension, the economic divide is showing signs of closing. For a region encompassing the three governorates of Duok, Arbil and Sulaymaniyah, accounting for 9% of Iraq’s landmass and 18% of the country’s population, Iraqi Kurdistan has posted impressive FDI figures for the first quarter of 2013.

According to greenfield investment monitor fDi Markets, there were eight projects in Iraq during the first quarter of 2013, and six projects in Iraqi Kurdistan. This marks a significant improvement for the autonomous region compared to the same quarter in 2012, when it recorded eight fewer projects.

During the first quarter of 2013, more projects have been recorded in Iraqi Kurdistan than in the whole of 2012, with Arbil significantly outperforming other areas, accounting for 83% of all inward FDI. Both business services and financial services continue to be the most attractive sectors. Projects in these sectors typically have low capital expenditure and low job creation. However, with local authorities placing increasing reliance on an autonomous energy programme, larger projects in this sector are being anticipated.