U.S. investors and other foreign companies continue to shy away from investing in Afghanistan and Iraq because of security and infrastructure problems as well as government corruption, a critical shortcoming in the two countries’ efforts to grow their economies and increase stability.
“Security is essential to economic and business development,” said Ethan B. Kapstein, a professor of international affairs at the University of Texas’ Lyndon B. Johnson School of Public Affairs, according to report from UPI.
Investors are reluctant to make capital investments in conflict areas, Kapstein said, fearing that they will be destroyed. The reluctance affects not only foreign investment but local entrepreneurs, research indicates.
And that lack of investment exacerbates the difficulty of creating security in a country, experts said.
Gayle Tzemach Lemmon, a journalist and fellow at the Council on Foreign Relations who researched women-owned businesses in post-war areas, said economic growth is key in creating secure communities.
“Entrepreneurs are a passionate and vocal force for stability,” she said.
Roadblocks to investment in Iraq are similar to those in Afghanistan.
“Everything imaginable needs to be rebuilt,” said Leslie M. Schweitzer, senior trade adviser for the U.S. Chamber of Commerce, referring to airports, seaports, waterways, railroads, water purification systems and around 2 million to 3 million houses. “The numbers are astronomic.”