Why now is a good time to invest in Kurdistan
Ayal Frank is the co-founder and vice president of the United States Kurdistan Business Council (USKBC), established in 2011 to promote Kurdish-American bilateral trade.
The USKBC is a non-profit, member funded organization that aims to help American companies establish themselves in Kurdistan and ensure a good return on investment. It also serves as a platform for Kurdistan-Based companies to pursue opportunities in the US market, either by identifying American partners or companies that can provide them capacity building in certain areas. It includes American companies in a variety of sectors including oil and gas, investment and security, as well as Kurdish companies.
It is currently leading its second trade mission to Kurdistan. The first in October 2012 was attended by over 25 companies. The current delegation consists of 25 companies and organizations.
Rudaw: What does the size of this delegation tell us?
Ayal Frank: The size shows that despite the various challenges that Kurdistan has faced – precisely because of those challenges be it in its war with ISIS, the humanitarian crisis caused by it and Syria – it shows that the US business community remains fully committed in this emerging market and continues to believe in it as a destination to do business and to identify new investment opportunities.
The size of this mission, the reception that we've received already from the KRG, from the Kurdistan private sector, shows that the American-Kurdish bilateral economic relationship is actually healthy.
From a US investor's perspective, Kurdistan might currently seem a scary place to invest, how are they being reassured by coming here?
The fact that they're coming here is the first step. You're not going to invest anywhere unless you go there. So they have a certain level of confidence already in their coming there.
We're providing them with a chance to meet with senior government officials who are speaking to them candidly about the difficulties, the challenges, and also the opportunities. In every business challenge, there is also an opportunity.
When the price of oil is half of what it was a couple of years ago, the cost to invest in the oil sector, to explore for oil, is half of what it was a couple of years ago. That is an opportunity that some would take.
Why is now a good time for the delegation to visit?
The USKBC provides a series of services to its members; events and meetings in Washington, and events and meetings in Erbil. We felt that it was time to provide our members and potential members the opportunity to conduct meetings and events here in Erbil. Since our last major mission three years ago, we felt the companies were ready to come back in a major way – and they have.
The second reason is, just as you see the level of bilateral security cooperation between the United States and the KRG increase, another facet of the American Kurdish bilateral relationship is the economic relationship. This mission has proven that the economic relationship between the US business community and the Kurdish business community is strong.
When you get people like [US Consul General to Erbil Matthias] Mitman and the Deputy Prime Minister [Qubad Talabani] agreeing and finding time in their busy schedules to meet and speak to the American business community that's travelled here and the Kurdistan business community that's based here, it shows the bilateral commitment, and the importance of that economic relationship.
The economic bilateral relationship to both governments is no less important than the security cooperation since ISIS came on the scene a year ago.
What opportunities for American investors are you most excited about?
I think there continues to be opportunities in oil and gas. Some companies have exited the market – for various reasons, not least the price of oil plummeting – that presents opportunities for others to come.
I think there is significant opportunity for companies that provide support and capacity in areas where there are humanitarian crises, including NGOs. We have several NGOs on this mission. It's not only about the bottom line, it's also about American NGOs wanting to help. They're coming on this mission to educate themselves about the level of the humanitarian crisis in Kurdistan caused by refugees and IDPs [internally displaced people] and providing their expertise based on their experience and past performance to lend their support to projects in the humanitarian space.
I think you also have opportunities in security. There are security challenges and I think therefore there is also opportunity for companies to provide a certain level of security. You also see some of companies which provide certain health services understand and appreciate the challenges that the Kurdish forces face, and want to lend a hand and have the experience and past performance to do so.
Just as we know and understand that the US military footprint is going to continue to grow – that cooperation between the US and the KRG continues to grow here in Kurdistan in the war against ISIS – there are opportunities for American defence firms to provide certain products and services to allow the Kurdish forces as the spearhead in this war against ISIS to fight well.
The United States is not a large investor in Kurdistan compared to neighbours like Turkey and Iran, what edge do American companies have over them?
The American brands, the American standards, are far better than some of Kurdistan's regional neighbours. We have a company that has the John Deere dealership. Only one company makes John Deere products. No other country's industry can duplicate the John Deere brand.
One of our companies is the Iraq dealer for Ford Motor Company. Ford is a household American name that brings a product to the table that is second to none. No one can compete with those American brands.
You also have major corporations like Exxon, Chevron and Marathon – leading international oil companies – that are doing business in Kurdistan. How can you compete against that cream of the crop?
The USKBC is a non-profit, member funded organization that aims to help American companies establish themselves in Kurdistan and ensure a good return on investment. It also serves as a platform for Kurdistan-Based companies to pursue opportunities in the US market, either by identifying American partners or companies that can provide them capacity building in certain areas. It includes American companies in a variety of sectors including oil and gas, investment and security, as well as Kurdish companies.
It is currently leading its second trade mission to Kurdistan. The first in October 2012 was attended by over 25 companies. The current delegation consists of 25 companies and organizations.
Rudaw: What does the size of this delegation tell us?
Ayal Frank: The size shows that despite the various challenges that Kurdistan has faced – precisely because of those challenges be it in its war with ISIS, the humanitarian crisis caused by it and Syria – it shows that the US business community remains fully committed in this emerging market and continues to believe in it as a destination to do business and to identify new investment opportunities.
The size of this mission, the reception that we've received already from the KRG, from the Kurdistan private sector, shows that the American-Kurdish bilateral economic relationship is actually healthy.
From a US investor's perspective, Kurdistan might currently seem a scary place to invest, how are they being reassured by coming here?
The fact that they're coming here is the first step. You're not going to invest anywhere unless you go there. So they have a certain level of confidence already in their coming there.
We're providing them with a chance to meet with senior government officials who are speaking to them candidly about the difficulties, the challenges, and also the opportunities. In every business challenge, there is also an opportunity.
When the price of oil is half of what it was a couple of years ago, the cost to invest in the oil sector, to explore for oil, is half of what it was a couple of years ago. That is an opportunity that some would take.
Why is now a good time for the delegation to visit?
The USKBC provides a series of services to its members; events and meetings in Washington, and events and meetings in Erbil. We felt that it was time to provide our members and potential members the opportunity to conduct meetings and events here in Erbil. Since our last major mission three years ago, we felt the companies were ready to come back in a major way – and they have.
The second reason is, just as you see the level of bilateral security cooperation between the United States and the KRG increase, another facet of the American Kurdish bilateral relationship is the economic relationship. This mission has proven that the economic relationship between the US business community and the Kurdish business community is strong.
When you get people like [US Consul General to Erbil Matthias] Mitman and the Deputy Prime Minister [Qubad Talabani] agreeing and finding time in their busy schedules to meet and speak to the American business community that's travelled here and the Kurdistan business community that's based here, it shows the bilateral commitment, and the importance of that economic relationship.
The economic bilateral relationship to both governments is no less important than the security cooperation since ISIS came on the scene a year ago.
What opportunities for American investors are you most excited about?
I think there continues to be opportunities in oil and gas. Some companies have exited the market – for various reasons, not least the price of oil plummeting – that presents opportunities for others to come.
I think there is significant opportunity for companies that provide support and capacity in areas where there are humanitarian crises, including NGOs. We have several NGOs on this mission. It's not only about the bottom line, it's also about American NGOs wanting to help. They're coming on this mission to educate themselves about the level of the humanitarian crisis in Kurdistan caused by refugees and IDPs [internally displaced people] and providing their expertise based on their experience and past performance to lend their support to projects in the humanitarian space.
I think you also have opportunities in security. There are security challenges and I think therefore there is also opportunity for companies to provide a certain level of security. You also see some of companies which provide certain health services understand and appreciate the challenges that the Kurdish forces face, and want to lend a hand and have the experience and past performance to do so.
Just as we know and understand that the US military footprint is going to continue to grow – that cooperation between the US and the KRG continues to grow here in Kurdistan in the war against ISIS – there are opportunities for American defence firms to provide certain products and services to allow the Kurdish forces as the spearhead in this war against ISIS to fight well.
The United States is not a large investor in Kurdistan compared to neighbours like Turkey and Iran, what edge do American companies have over them?
The American brands, the American standards, are far better than some of Kurdistan's regional neighbours. We have a company that has the John Deere dealership. Only one company makes John Deere products. No other country's industry can duplicate the John Deere brand.
One of our companies is the Iraq dealer for Ford Motor Company. Ford is a household American name that brings a product to the table that is second to none. No one can compete with those American brands.
You also have major corporations like Exxon, Chevron and Marathon – leading international oil companies – that are doing business in Kurdistan. How can you compete against that cream of the crop?