IRBIL, Iraq — The regional capital of Kurdish northern Iraq has the feel of a massive business convention, imploring visitors on every street to invest in a safe gateway to the Iraqi economy where no American soldier has died since the first Gulf War in 1991.
More than 1,000 foreign companies are doing business in the three Kurdish provinces. The regional government counts 16 foreign consulates, including increasingly close ties with Turkey, long hostile to the Kurds but now their largest trading partner.
The small airport in Irbil has regular flights to Vienna, Stockholm, Istanbul, Tehran and Amman. New universities are being built outside Sulaimaniya and Irbil. Smooth, new roads loop around Irbil.
Billboards advertise the comforts of "American Village," where houses look as if they belong in Orange County, Calif. If that doesn't suit an investor's tastes, "Swedish Village" with clusters of wooden cabins is nearby, as is the Asian-themed "Korean Village."
In unguarded moments, residents speculate that their leaders are planning to make Kurdistan the next Dubai, the Persian Gulf shopping mecca (slogan: "Buy, Buy Dubai."). They can point to two dozen new contracts with oil companies to make their case, or they can look to the cranes rising above soon-to-be hotels, fitness centers and shopping malls.
Still, many Kurds remain uneasy, frustrated that the benefits of economic development haven't trickled down to their pocketbooks. They turned out in large numbers in last month's regional election to support a new political party that's promising "change" in the broadest sense.
Some also fear that the Kurdish regional government may be either unable or unwilling to resolve the Kurds' dispute with the central government in Baghdad over a broad swath of territory that the semiautonomous Kurds want to annex. They worry that an armed conflict between the Iraqi military and the Kurdish militia, the peshmerga, would wipe out their recent economic gains.
The epicenter of the conflict between Baghdad and its Kurdish provinces is the oil-rich city of Kirkuk, which Kurds consider part of their homeland and want to annex.
Baghdad moved an Iraqi army division near Kirkuk in late 2008, igniting fears that the central government would try to use force to dislodge the Kurds. Kurdish politicians responded with nationalistic rhetoric that implied that they'd fight for Kirkuk or secede from Iraq.
"If they don't meet our needs, we as Kurds have a right to determine our own rights," said Sherwan Haidary, an influential leader in the Kurdish parliament and a member of Kurdish President Massoud Barzani's Kurdish Democratic Party.
It's a heartfelt debate for Kurds, many of who were driven out of Kirkuk by the late Arab dictator Saddam Hussein's campaign to "Arabize" Kirkuk. Sunni Muslims now complain that the Kurds are conducting a sectarian counterattack, and the population now is divided roughly equally among Kurds, Arabs and Turkmen, with a Christian minority.
Irbil Toyota dealer Khalid Hammad Amin exemplifies the contradiction between economic optimism and political pessimism. Things have been going well for him lately, with money in his pocket and enough income to pay his parents' medical bills. An expansion of credit to customers could help him earn even more.
Yet Amin has a dour outlook on the next few years. He doesn't trust Iraqi Prime Minister Nouri al Maliki, a Shiite Arab, and he can't understand why the Kurdish leaders in the highest levels of Iraqi's national government, starting with President Jalal Talabani, haven't been able to settle the Kurds' differences with their Shiite and Sunni Arab counterparts.
"I wish for a better future, but if you ask anyone, no one is certain. I'm pessimistic," he said.
Maliki last week sought to temper the Baghdad-Irbil conflict with a high profile visit to Kurdish President Massoud Barzani and a trip to Halabcha, the site of a brutal 1988 chemical attack on Kurdish civilians by Saddam's military.
"Remember this crime every year," Maliki said. "It affirms our determination to reject dictatorship and bad policies. We will go forward to build our state on the basis of democracy, respect others' opinions and have a bright future."
The American military saw Maliki's visit as a major sign of progress, said Army Brig. Gen. Stephen Lanza. U.S. leaders have tried to bring Kurds and Arabs together for the past year, and Defense Secretary Robert Gates recently urged Kurdish and Arab leaders to use the remaining two years in which American forces are expected to serve in Iraq to settle their disputes.
"There's a window of opportunity to embrace this," Lanza said.
He said that Army Gen. Ray Odierno, the top American commander in Iraq, is working with Iraqi and Kurdish leaders to unite the Kurdish peshmerga with the Iraqi army through training or joint missions. Those relationships could cool tempers, Lanza said.
Dara Jalil al Khyat, the president of the Irbil Chamber of Commerce, welcomes the offer of American help.
"The history has proved that we can't solve our problems on our own," he said, drawing on more than 30 years of conflicts between Arabs and Kurds over Kirkuk. "We need a third party to help us solve them."
(Ashton reports for The Modesto (Calif.) Bee.)
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Read what McClatchy's Iraqi staff has to say at Inside Iraq
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