As in the booming emirate of Dubai to the southeast in the Gulf, workers from Bangladesh clean the wide roads of the city as luxury sedans speed past.

Hundreds of new buildings are under construction, both in the city centre and in outlying neighbourhoods. Rows of offices, shops and sprawling malls rise seemingly as quickly as mushrooms from the earth.

In central Arbil, high-rise buildings are under construction on the site of what was once a cemetery. Cranes there shift many tonnes of concrete each day.

Bank ATM machines, public gardens, bowling alleys and even a water park -- development in the city is in striking contrast to the capital Baghdad, where the main construction industry involves erecting blast walls against car bombs.

A tall concrete tower rises near Arbil's international airport which has daily flights to several countries in the Middle East and Europe.

The Empire Building, a 22-storey luxury hotel, will be the tallest in the whole of northern Iraq's Kurdish region.

Dozens of other hotels are also under construction, with some promising five-star "dream rooms" to clients.

"We want to provide a safe and secure environment for investors," said Falah Mustafa, a senior official from the foreign affairs department of the regional administration.

"We want to encourage private sector and foreign investor participation. Kurdistan is open for business and can be used as a gateway to the rest of Iraq."

The regional administration last year established a board to promote foreign investment and also passed a law favouring investors.

On the back of this, dozens of foreign companies -- especially oil majors -- signed agreements with the regional government for projects in the region.

The residential property sector is also vibrant.

Large billboards announcing new housing projects such as Dream City, British Village and Royal City have sprung up across the city.

The developments, being constructed on a former military base of Saddam's armed forces, offer huge condominiums and luxury homes priced at around 250,000 dollars each.

Rows and rows of recently finished detached houses stretch along the main roads.

From the ancient citadel in the middle of Arbil, the view is eclectic as old minarets share a skyline with a jumble of unfinished concrete towers, tall cranes and relay towers of cellular phone companies.

The future of the autonomous region is largely dependent on the booming oil sector, which aims to produce at least 100,000 barrels of crude a day.

Iraqi Kurds want to present the region of five million people as a haven of peace and stability, and to demonstrate how calm the situation is on Wednesday they opened a week-long international book fair in Arbil.

The authorities say they have formed a vibrant parliamentary democracy where fundamental rights are guaranteed, including those of minorities such as Christians who have sought refuge there after fleeing the more volatile areas of Iraq.

At the heart of smooth governance of the autonomous region is a cooperation agreement between regional president Massud Barzani's Kurdistan Democratic Party and Iraqi president Jalal Talabani's Patriotic Union of Kurdistan, which came together to form the administration.

All may be calm in the city, but not all is bright.

"Arbil has big problems with trying to provide enough electricity, the cost of living is high and there's also a lot of corruption," said one foreign investor who asked not to be named.

"These are the main concerns of residents," he added.