Dubai: Despite the low business returns and unsecured atmosphere that overwhelming Iraq in 2015, the country remains a potential market for most businesses in the Middle East, legal professionals and businessmen said.

“Iraq witnessed a dramatic economic drop at 0.1 per cent in 2014 compared to the 10 per cent economic growth in 2013 and 12 per cent in 2012,” said Tawfiq Tabba, Managing Partner at Eversheds, UK-based Legal firm, expecting better results in 2015, at the conference of Doing Business in Iraq, held in Dubai on Tuesday. He said this drop is due not only to the unstable security situation following the rise of Daesh, but to unstable government policies under former Iraq Prime Minister, Nouri Al Maliki.

“The lack of the 2014 budget allocation, which in turn resulted in a large deficit due to great gap between government funding and expenditure, was behind drastic economic drop in Iraq,” he said.

However, the $105 billion (Dh386 billion) budget for 2015 and possible international bond issuance will help the Iraq economy rebound and improve business environment overall, Tabbaa added.

As a resource-rich country with a highly educated workforce, Iraq holds a significant promise, according to Issam Hubbi, Regional Director at Camco.

While oil and gas are the main area for investment, he said that power generation, environment and water, construction, financial services, health care, education and defence and security are also sectors with a particularly high potential.

“2014 was a critical business year for us in Iraq. But it is a great potential market as the business share of most Middle East companies based in Iraq was estimated at 10 per cent. We can’t get our business out of Iraq,” Hubbi said.

The impact of political and security issues was quite significant on businesses overall; however, this situation will not last and expected to rebound very soon, he said.

“2009 was similar to last year in terms of doing business, as it was high risk and too much costly,” he said.

“We used to hire security a company to give us a country risk report that guided us to black and red zones, which we [were told we shouldn’t] visit in Iraq. Sometime security costs for a trip from the airport cost almost $3200 per trip.”