The opportunities and challenges of investing in an emerging market : focus on Iraq

Abstract

Everybody must have heard, at one point or another, the grossly overused term 'emerging market'. Whether you are browsing a financial services website, flipping through a financial based book or indeed if you're just watching the financial news, the term 'emerging market' will probably be mentioned at a point or another. Out of all the countries witnessing large economic growth due to their emerging status, China is definitely the country that has emerged as an economic powerhouse. It is part of the 'big four' emerging economies and has earned rave reviews about its economic potential during the past years. However, why would anybody want to invest in a country which is so well known, that most of its growth has probably already been done? Why won't investors look beyond the Brazil, Russia, India and China quartet and invest in less publicized emerging countries? While scanning through a list of emerging countries, Iraq was the country that mostly drew my attention. For the past decade, the news I have heard about Iraq has not been exactly what I would call positive. When I asked my parents about their opinion on investing in Iraq, I was confronted by two perplexed persons, two sets of raised eyebrows and the inevitable question; 'Why would anybody want to invest in that country?' That very question triggered the main reasons why I have chosen to conduct this study. In this thesis, I will be assessing the historical data I have managed to compile from a host of different sources and give my interpretation of this and of the reports I have read. All countries have their pros and cons and this study seeks to establish the opportunities and challenges incorporated when investing in Iraq. The media portrays the scenario in Iraq as being unendurable with little chance of having businesses flourish. This paper will try to establish the reasons why this emerging country might have a different scenario to all the doom and gloom advertised by the media.