UAE accounts for lion's share of investments in Iraq

Most of these projects were announced in 2008, the same year that the UAE forgave $7bn of Iraqi foreign debt and reopened its embassy in Baghdad, making it the first Arab country to reopen a permanent presence in the nation, according to research by Dunia Frontier Consultants, a firm based in Washington DC, and Dubai.

"We will see a continued and increased proportion of regional money enter into Iraq for the first time in 2009 as regional firms and funds rebalance their investments towards primarily regional ones," Dunia said.

"As the robust number of regional firms with significant amounts of dry powder start to redeploy their capital, the paucity of viable opportunities within the GCC will force a number of them to take a closer look at opportunities within the 'edge' economies of the Mena region. Dunia expects this will cause disproportionate benefits to the Iraqi economy."

Dunia estimates private foreign investment in real estate will continue to grow robustly, with estimated upper-range investment of $35bn in 2009 and $40bn in 2010.

This is based on the expected construction of 350,000 new housing units in 2009 and 400,000 units in 2010 with an average investment of $100,000 per unit coupled with a severe decrease in viable real estate opportunities in the GCC region over the same period.

Similarly, investment in the oil and gas sector is expected to increase to $24bn this year and $48bn the next.

Growth in other sectors of the Iraqi economy is estimated to be a simple average of the growth rates in real estate and oil and gas, or just more than 50 per cent per annum in 2009 and 2010.

In February, at least $618m in investor capital has been announced for real estate projects across Iraq; these investments have a much wider geographical footprint than before, with investors seizing on previously overlooked opportunities in north-central and south-central Iraq. "The provincial elections that took place on January 31 point to a strong and continued showing by Prime Minister Nuri Al Maliki's Dawa party and his governing State of Law Coalition, auguring positively for a stronger central government and greater political stability in Iraq; barring any wide scale breakdown of relations with the Kurds," Dunia said.