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Spoils of war

Spoils of war

Seizing investment opportunities on the ground floor of emerging economies or in countries and regions scarred by violence is risky, but can provide big returns.

May 23, 2010 10:31 by

The common denominator with Adobe in the early days and Iraq today is just that: early days. And bravery. Conflict-afflicted area investing is not a new idea. It’s at the heart of the decision to take a chance on a startup and realize a level of profits that is not available to those without a strong appetite for risk. At the end of the day, you have to be willing to lose your shirt to avail yourself of the potential for extraordinary returns on investment. And plenty out there have the requisite amount of courage to see in Iraq’s economy a rare window of opportunity.

The UK’s Guardian last year ran a story with the title, “Invest in Iraq – if you dare.” It detailed the international appetite for high risk, big return investment in conflicted areas. Interested parties from around the world showed up in London for the Invest Iraq conference, which sought to pair international firms with Iraq-based companies. A representative for the Iraqi National Investment Commission told the Guardian that he often meets with as many as ten foreign delegations a day hoping to get in the Iraqi economy’s ground floor. “The cautious will wait and see, while the brave will enter, adapt and possibly reap the benefits – at what cost no one knows,” the Guardian said.

Iraq is not the only choice for the risk-ready investor; the West Bank is another option. The Palestine Stock Exchange (PSE) has 93 listed companies keen for investors. So keen, in fact, that they took their show on the road to Hotel Intercontinental in Abu Dhabi earlier this week in a two-day event to highlight investment opportunities in the region. The IMF said the region could post an economic growth rate of around 7 percent this year, climbing to as much as 10 percent “in a positive scenario including looser Israeli restrictions and continued donor support,” Lebanon’s Daily Star reported. The flip side is slowed growth and stagnating peace talks if there is no meaningful letup on West Bank restrictions and the Gaza blockade.

In 2008 Newsweek wrote that, “The value of Western investment in Iraq is hard to overstate. Commercial ties break down cultural barriers and knit societies together, benefiting both the Middle East and the West.” Not to mention the fact that the early bird most often gets the worm.

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