By Doug Palmer WASHINGTON, Feb 20 (Reuters) - Despite war and sectarian violence, Iraq still offers good business opportunities, particularly in the more secure northern region controlled by the Kurds, a top U.S. government official said on Tuesday. "We've seen a boom in the IT (information technology) sector in last three years. In cell phones, in Internet hookups, there's been very rapid rise. So in some sectors, there's really been an explosive activity," Franklin Lavin, Commerce undersecretary for international trade, said. The security situation in Baghdad makes it very difficult to encourage U.S. companies to establish operations there, Lavin said, but added that the Kurdish north had attracted billions of dollars in foreign investment since the fall of Saddam Hussein in 2003. Kurdish northern Iraq won autonomy from Saddam with U.S. help in 1991, and has benefited from more than a decade of economic development. While there has been some violence, it has not approached the levels seen in Baghdad. Lavin spoke by phone from Arbil, the capital of the Kurdish region, where he and Iraqi Trade Minister Abdul Falah al-Sudany co-chaired the first meeting of the U.S.-Iraq Business Dialogue, a forum aimed at increasing two-way trade and investment ties. While many may question investing in Iraq before the situation is more stable, "my view is it's really just the opposite," Lavin said. "We need improvement in security, but also need an economic approach that allows for job creation, that allows for business start-ups, that allows for new product and expansion and gives people new opportunity and new hope." "We really owe it to ourselves not to wait," he added. There had been a relative lull in sectarian attacks in Baghdad since Iraqi and U.S. forces began a crackdown against sectarian violence, but dozens of people have been killed by car and truck bombs in recent days. A second initiative called the Iraqi Business Gateway encourages U.S. companies to look at the Kurdistan region "as a gateway to the rest of Iraq," Lavin said. "This part of Iraq tends to enjoy a very positive business environment, a very good security situation and also a very welcoming investment philosophy," Lavin said. "There's something humming here and you get a sense of vitality." The United States exported nearly $1.5 billion of agricultural commodities, telecommunications equipment and other products to Iraq in 2006 and imported about $11.6 billion worth, mostly in oil, from the war-ravaged country. Lavin said he expected the Iraqi government would soon finalize new regulations providing a legal framework for foreign oil companies to operate in Iraq.
