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A political risk outlook for 2010

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1 A political risk outlook for 2010 on Wed Jan 06, 2010 10:53 am


Elections in March will spark violence as al-Qaida makes a bid to undermine the transition to Iraqi national sovereignty. A U.S. troop withdrawal beginning right after the elections will invite more violence. But compared to what we've seen before, and what might have happened, the overall story is remarkably positive. For the markets, Iraq is suddenly an opportunity. The institutions are becoming legitimate (even with the unresolved Kurdish issue), the army is starting to work, and most importantly, political leaders from all communities are beginning to recognize the value of Iraq's tremendous natural resource base from which all can benefit if they make the compromises to maintain stability in the country. For all their basic governance problems, there's very little chance of Iraq actually becoming a failed state at this point -- a meaningful risk even a year ago. It's not a place we're ready to vacation in, but we're bullish on Iraq.

Iraq is also moving in a positive geopolitical direction. Ties with Turkey have grown particularly quickly -- not just in the Kurdish region in the north, but in Baghdad. That's one of the few positive stories for Ankara this year. Arab states in the region are still hesitant to build ties with Iraq as they wait for clarity on its next government. Prime Minister Nouri al-Maliki hasn't been a popular figure with neighboring Gulf Arabs, but they recognize that Iraq's economic consolidation won't wait for another four years, and they'll start making political overtures to Baghdad if Maliki's mandate is extended. And if the Iraqi prime minister isn't returned (which is certainly plausible), we'll see a stream of head-of-state visits to place relations with a new leader on a more solid footing. So whatever the electoral outcome in March, we're likely to see Iraq on a faster path to integration with regional political and economic infrastructure next year. Meanwhile, Iran's role in Iraq has quietly receded. Iran's controversial presidential election and subsequent state violence did nothing to improve Tehran's influence among Iraq's Shiite population, where Iraqi nationalism has been steadily growing.

The headlines for Iraq next year will undoubtedly be the timing/delays/pace of the U.S. troop withdrawal. But the real story is going to be a moderate government, growing geopolitical influence, and the most exciting new investment opportunities the region has seen in a decade. (Here is the link for the full article....http://www.realclearpolitics.com/articles/2010/01/06/a_political-risk_outlook_for_2010_99790.html)

2 Re: A political risk outlook for 2010 on Wed Jan 06, 2010 11:43 am


My understanding is that our troops will stay for 3 months after the elections which will put it in June when they begin to go home per the SOFA agreement.

3 Re: A political risk outlook for 2010 on Wed Jan 06, 2010 5:43 pm


let the French earn their keep protecting them since they wanna reap the rewards of a new Iraq now.....

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