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Is Iraq ready for American investors?

It has big needs, business savvy, and plenty of opportunity, say optimists. But critics are wary.

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An Iraqi woman places a call to a broker on the other side of a glass screen at the Baghdad Stock Exchange on October 18, 2009. In the run-up to a major investment conference in Washington, traders at Iraq's stock exchange pitched their ideas for where foreigners should put their money for the best return — banks and hotels. But should American investors be heading for Iraq?

Sabah Arar/AFP

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At the end of her speech to more than a thousand US and Iraqi businesspeople packed in a hotel ballroom, Secretary of State Hillary Rodham Clinton threw an American spin on an Arab proverb: “Dawn does not come twice to wake a man – or a woman.”

Her point? It’s time to invest in Iraq.

It sounds crazy. Though the violence has ebbed, terrorists still make their presence felt with deadly attacks. Challenges – from dividing oil revenues to the future of the northern city of Kirkuk – threaten to split the country. Even if Iraq hangs together, it faces a daunting to-do list of reforms before it becomes a place many foreign businesses would set foot in.

Yet, like Secretary Clinton, some consultants and more than a few US businesspeople are making the case for Iraq: This uncertain period is precisely when foreign companies can reap the biggest gains.

Bob Flavell had heard the same hype, but he wanted hard data about sales prospects for his company, Base 1 Welding Supply. When he asked an Iraqi trade official for it, Mr. Flavell was floored. “The numbers he was talking about, just for our product line, would exceed all of what California exported all of last year to Iraq,” Flavell says. “Those are big numbers.”

Iraq, to put it mildly, needs everything: more than 2 million housing units, half a million hospital beds, seemingly endless technology and know-how for an escalating oil and gas extraction industry, the rebuilding of the nation’s once-robust education system from top to bottom.
Iraq optimists cite four reasons why it’s a great time to invest:

1. A ground-floor opportunity

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