Rampant violence and an escalating hostage crisis in Iraq are putting a strain on Gulf investors who, having banked on a flourishing post-Saddam Hussein neighbour are now bitterly counting their losses.
The near-daily car bombings, assassination attempts and kidnappings are crippling foreign companies, a number of which have been forced to halt operations in Iraq.
Financiers who have pumped millions into establishing businesses there barely 17 months ago are already disappointed with the impact on their balance sheets but are biding their time, hoping security will somehow improve.
"Since last April, the market and business went into a nosedive," said a Dubai-based businessman, who in the first 11 months after the April 2003 fall of Saddam's regime invested in excess of seven million dollars in opening businesses in Iraq.
"From April to the first week of September, we have incurred losses of potential income of almost three million dollars," he told AFP, requesting anonymity.
He has two four-star hotels in Iraq, a garment factory, laundry services, a trading company as well as food catering and manpower supply services.
The first business requirement for a successful economy in Iraq would obviously be improved security, he said. The next would be changing the country's commercial laws and strengthening its banking system to better serve potential investors.
A spokesman for the Dubai-based Iraqi Business Council, set up earlier this year to promote joint ventures in Iraq, and grouping Iraqi businessmen and companies in the United Arab Emirates (UAE), said the unrest has affected businesses throughout the region that are dealing with Iraq.
"Business from the Gulf region is slowing down, and we're very concerned. Security has deteriorated badly in the last couple of months. It's affecting the business community in and outside Iraq," he said.
Supplying goods from Gulf states requires follow up through businessmen travelling regularly to Iraq, checking the set-up, collecting revenues and continuing the cycle of providing material, the spokesman said.
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