Risk must be acceptable in Iraq

US president Barack Obama made an unannounced visit to Baghdad on 7 April, the day after the Iraqi capital had suffered its worst day of violence for almost two years. Seven car bombings and sporadic street battles followed the arrest of Sunni militia members deemed outlaws by the government.

The incidents serve as another reminder of how febrile Iraqi society remains, and of the political tensions that still simmer within government. Security has improved dramatically since 2007. The country’s economic recovery depends on this improvement continuing.

Major projects are now coming on stream, offering an overdue influx of foreign cash and expertise, and critical job opportunities for Iraqis thanks to the country’s better security. At the same time, new bodies such as the National Investment Commission are making it easier for international groups to enter and navigate the market.

The government is still deeply unpopular with large swathes of the population, but so far it has at least succeeded in preventing Iraq from being plundered for its resources following the invasion, as many had predicted. The balance to be struck between bringing in the investment needed from abroad and appearing to be a foreign stooge is not an easy one.

The elements that seek to divide Iraq will not be eradicated overnight, and tensions will rise further ahead of national elections this year. However, a steady increase in employment, business opportunities and quality of life for Iraqis will ensure that extremist elements have fewer disaffected locals to draw upon for support.

With the international projects market grinding to a halt, businesses are desperate to get into Iraq. Economic development and improving security must go hand-in-hand, however. Companies accept that the country is a high-risk, high-return market. The government’s main task is to ensure that this risk remains acceptable.