The following article is taken from The Financial Times.

But Isis still controls about a third of Iraq, and two of the three routes between Iraqi Kurdistan and the rest of country. For businessmen eager to tap into the huge market on their doorstep, Iraqi problems are Kurdish problems.

“Kurdistan has about five million people. Iraq has more than 30 million. Businesses don’t come here to sell to Kurds, they come to sell to Iraq,” said a Syrian businessman who opened a factory making potato crisps last year.

“If you have a factory and you can’t sell to the rest of Iraq, you’re not making a profit,” he said.

When Syrian rebels forced the Aleppo businessman to cede control of his large pasta and crisp factories, he moved to Kurdistan despite the fact it was landlocked and had no port for easy shipment across the Middle East. He was keen, he said, to tap into the “virgin market” of Iraq.

“I’m still optimistic about Kurdistan, especially after the US air strikes, which show Kurdistan will not be abandoned,” he said. “But the huge confidence we once had is not the same.”

Confidence may be further shaken by a rare bombing that struck the regional capital Erbil on Saturday – an alarming sign that even if pushed back, Isis could still threaten stability here. Data on the contribution of non-oil foreign investors to the local economy are poor. But developing a competitive private sector is crucial to the future growth prospects of the Kurdistan region, according to Conor Griffin, a senior analyst at the Economist Intelligence Unit. All the businessmen interviewed, who asked that their names be withheld for fear of repercussions, said they were scaling back operations until the situation improved.

“We’re keeping things at a minimum until December, then we will decide if we should keep going, cut back, or pull out,” said a Lebanese manufacturer of kitchenware for hotels and restaurants, who also moved his base from Syria. “What keeps you here is that when you have two good weeks or a good month, it’s 10 times better than what we were doing in Syria.” In June [2014], his operations were slowed by the Isis blitz. When Isis seized territory in Iraqi Kurdistan two weeks ago, everything stopped.

Manufacturers and traders in Kurdistan desperate to maintain business with Baghdad and southern Iraq pay private trucking companies triple the shipment rates to use longer or Isis-controlled routes. Daily shipments that once took several hours now take an entire day along risky roads, or even open desert.

“The companies used to charge us 750,000 Iraqi dinars ($645). Now we pay 1.5 million dinars. One million is for the driver, and 500,000 goes to Isis,” said one factory owner. “Isis even gives the drivers receipts.”

Kurdistan once seemed like the most sturdy and reliable part of Iraq, he said: “I always thought, ‘The Kurds know what they’re doing’ . . . Now I have Isis just 15km from my factory. I don’t know what to expect.”