War-weary Iraq has notched huge strategic victories by routing ISIS from its strongholds across the country, yet also suffered a symbolic setback by a Kurdish independence referendum that revealed a deeply divided society.
For Iraq, sectarian divisions and the battle against extremism work at cross purposes. As the country struggles to reconcile both dynamics, some market investors are encouraged about the country's upside. A June State Department report cited Iraq's "long-term potential" for foreign investment, given its vast oil reserves and massive reconstruction needs.
Bolstered by a $5.4 billion financing agreement approved by the International Monetary Fund last year and a $1 billion tranche of debt guaranteed by the U.S., some investors say the country stands a solid chance of becoming a draw for international investors despite its many challenges.
"The almost unanimous international support for a unified Iraq should lead to financial support for its reconstruction and reinforces the argument made in the past," said Ahmed Tabaqchali, chief investment officer of Asia Frontier Capital's Iraq Fund.
"The realignment of interests of regional players in dealing with the root causes of the conflict — namely the deep economic and political disenfranchisement that bred such fertile ground for the rise of extremism — is one factor Iraq should focus on to dissuade further action on a split within the country."