In five years, Kurdistan will achieve what the Emirates did in 20. You will not be able to recognise it. " Looking down from the top floor of the 23-storey hotel where he works, overlooking a landscape dotted with construction cranes and new housing complexes, Cem Saffari does not conceal his pride when asked why he moved from a comfortable life in London to take up a job in Kurdistan, the autonomous northeastern region of Iraq. "Pioneers always win, " he says.

A middle-aged Turk in a dark suit, Saffari is the business development manager of the luxury five-star Divan Hotel in Erbil, the capital of Iraqi Kurdistan. The Divan cost $80 million to build and has 228 rooms, whose prices range from $500 to $15, 000 per night. Its clientele is the ever-growing number of businessmen willing to invest in a region with 45 billion barrels of oil reserves and one of the fastest economic growth rates on earth.

Erbil's petrodollars and rapid growth have gained it the nickname of "the new Dubai, " but local authorities prefer to define Kurdistan as "the other Iraq. " The security that the Kurdish Regional Government has been able to provide is one of the main reasons behind the economic boom. Thanks to its ethnic homogeneity and own armed forces, Kurdistan has become a safe haven for many Iraqis and minority groups - especially Christians - who have fled the continuing violence in Mosul and Baghdad.
Although the region's autonomy dates back to the end of the first Gulf War, when the UN enforced a no-fly zone to protect Kurds from the vengeance of Saddam Hussein, it is only since 2003 that Kurdistan has been able to blossom, thanks to the lifting of economic sanctions against Iraq. Turkey and Iran have been the quickest to invest. Of the 1, 170 foreign companies registered in Kurdistan, more than half are Turkish, according to Fatih Ali Almudaris, an economic relations adviser at the local Ministry of Trade and Industry. Turkish capital is financing everything from construction to oil installations, from jewellery boutiques to food products. "When we opened up we needed everything, and Turkey was there with its expertise and quality, " Almudaris explains.

Turkey's investment might appear at odds with the country's opposition to an independent Kurdish state. The government in Ankara remains highly sensitive to anything that might animate Turkey's own large Kurdish population. But Turkish companies have been investing in Kurdistan since 1996, well ahead of any other competitor. And those on the ground in Erbil perceive a smart longterm strategy by Turkey, especially if claims for self-determination among the 28 million Kurds in Turkey, Iran and Syria begin to rise. "The Turkish plan was clever: Make this region economically reliant on them to thwart its political wings, " explains a foreign businesswoman in Erbil, who asked not to be named because of the sensitivity of the issue. So far, though, building a Kurdish state has not been a priority for local authorities, who are busy trying to sustain the region's recent rapid growth. The lack of local expertise is a problem and has forced the KRG to lure foreign firms with business-friendly regulations :10-year tax exemptions;total ownership of companies and repatriation of profits;cut-price land for investment projects;and an economic philosophy that changed beyond recognition from the state-driven policies of the previous regime. Despite the undoubted opportunities, there are still factors that discourage foreign investment in Kurdistan. Of these, the oil disputes between Kurdistan and the central government of Iraq loom over the region's future. While the national constitution entitles Kurdistan to 17 per cent of Iraq's total oil revenues (some $83 billion in 2011), Erbil and Baghdad are constantly bickering over the authority to grant exploration contracts in the region. The Ministry of Oil in Baghdad claims that two recent deals signed between the KRG and US oil giants Exxon Mobil and Chevron are illegal, and has forbidden both companies from taking part in upcoming national auctions for oil exploration rights - a sanction that has, until now, kept other major oil companies away.

Despite these uncertainties, Kurds are optimistic about what foreign investment might bring. "It's a virgin territory, " says 30-year-old Jamal Penjweny. Ten years ago, he was a shepherd;now he roves from consulting for oil companies to working as a photographer to managing a small cafe in the center of Sulaymaniyah, the region's cultural hub. Penjweny's pictures of Kurdistan have been exhibited in the US and Europe. "Before, we weren't used to thinking beyond these mountains, " he explains, sitting in the garden of his cafe and looking at the peaks that encircle the city. "Not only has the economy grown fast, but also the mentality of the people. "

Kurdish authorities hope that this confidence, coupled with the region's relative stability and the extent of opportunities that exist there, will overcome any doubts for investors in the end.