John McTernan: Where should we look to see how to make a success of a small country? All eyes are on Kurdistan

A country of five million people with oil reserves and a huge potential for renewable energy. Part of a larger country and sitting to the north of its more populous neighbour. Proud of its culture, history and progressive politics.

With a parliament that's more than a decade old with a far better record on women's rights than the national parliament. Governed by a nationalist party committed to self-determination. Scotland? No. This week, with the all-party parliamentary group, I'm a guest of the parliament of Kurdistan. It's an eye-opening experience.

In the abstract, the establishment of democracy is often quoted in defence of the Iraq War. The Kurdish people look back further to the Gulf War and give John Major the credit for the "no fly zone" – US and UK planes protecting Kurdistan with daily patrols – which made the region a "safe haven". One of the first institutions, in 1992, was the parliament. But economic development has only come with liberation and democratic government across Iraq. Revenue sharing has led to a boom in public spending. Health care and education have rapidly expanded. Nearly half of university students are women.

Not everything is perfect. Kurdistan is still in many ways a traditional culture and women's rights have a long way to go. Abortion is illegal. Divorce rare. Domestic violence unreported. Honour killing still too culturally acceptable. The Kurdish government have acted. Polygamy is illegal. The President and Prime Minister have said there is no honour in honour killings and they are treated as murder. Female genital mutilation is an appalling 25 per cent, halved under cultural changes driven by the government, including fatwas, but remains a priority for elimination. Yet this is a story of real progress and the correct comparison is with regional neighbours, including other parts of Iraq. This is not just a progressive government but an example of what can be done. It is telling that the Christian minorities of Baghdad and Mosul fled to Kurdistan.

There are real business opportunities too. Most of the Kurdish government's budget is capital spending on infrastructure – around $6billion a year. Tenders are being issued for industrial parks, airports and highways. The irony is that French companies are doing far better than British ones despite France opposing the Iraq War. There is a real desire for British companies to work here. Indeed, the areas of growth would suit many Scottish companies. Water collection, irrigation and hydro-power are priorities. Suitable for Scottish Water with its new remit, perhaps? Oil and gas exploration is expanding. Modern industrial parks and manufacturing are government priorities. And foreign companies get land free and no taxes for ten years. As for security, the Top Gear team declare Kurdistan as safe as Cheltenham in their Christmas special.

Surely it's time for one of SCDI's excellent trade delegations?