BASRA, Iraq (Reuters) – Property prices are creeping higher, shops are staying open later and more schoolchildren are skipping class to help out in their parents’ businesses.
Three months after a security crackdown in Iraq’s oil capital of Basra, there are signs of economic revival. But investment to help secure the peace faces hurdles from bureaucratic inertia, lack of technical skills and foreign businesses’ uncertainty about whether the calm will hold.
“If you get security, you get everything,” Mizher Salam, a 32-year-old furniture store owner, said while taking a break from putting together bed frames.
With violence in Iraq at four-year lows, Basra is an example of the obstacles the country faces as it edges toward recovery from the turmoil that followed the U.S.-led invasion in 2003.
But business owners said decrepit infrastructure, including electricity limited to a few hours a day, was the biggest hindrance, especially during summer heat that hit 43 degrees Celsius (110 Fahrenheit) this week.
“We don’t want something impossible. Electricity, security and a good job. That’s all,” said Falah Hassan, the 24-year-old manager of a food store on the bustling Route 6 highway.
Creating jobs and improving power and water supplies would be the best way to build on a government offensive in late March and April that broke the grip Shi’ite militias had held on Iraq’s second-biggest city, officials say.
“People are now looking forward to the next phase, the next stage of their lives, when Basra will become more prosperous,” provincial governor Mohammed al-Waeli told Reuters.
Basra province, source of most of Iraq’s oil exports and its only outlet to the Gulf, has had a mini-revival of business.
The country’s main port of Umm Qasr is now running at full capacity and about a quarter of Basra’s 12,000 businesses have signed up to be listed in a commercial directory.
That is up from none two years ago when militias and gangs ruled the city, according to a source with the British-led Provincial Reconstruction Team (PRT).
However, big-ticket spending that could cut into the province’s jobless rate — put by government officials at anywhere from 17 to 28 percent — remains elusive.
Foreign investors are still waiting to see if peace holds.
And local government spending and development is hampered by the lack of planning and technical expertise, a hangover from decades of top-down control under the late dictator Saddam Hussein.
Agencies and local governments can face delays in disbursement of funds. With Basra’s provincial budget climbing to $300 million this year, inexperienced officials are struggling to manage and spend it, with many bids for contracts failing to meet specifications, the PRT source said.
“All of that is pretty predictable when you go from having no budget to having significant responsibilities within the space of two years,” the source said.
Political rows have also slowed development, with the naming of a 10-member investment promotion agency delayed for several months because of partisan wrangling.
One of Basra’s major assets, its 1980s-vintage airport with a gleaming marble lobby, is a good example of the reconstruction headaches Iraq faces.
Its 13,000-foot-long (3,930-metre) runway is able to handle the biggest cargo planes in the world. But the facility only gets about a half-dozen cargo and passenger flights a day.
“There’s a good year’s worth of work before you get to the point where it’s a commercial venture,” said Wing Commander Steve Beanlands of the British air force, involved in reconstruction efforts at the facility.
Other problems were the lack of trained management and muddied lines of authority since both the transport and interior ministries share responsibility for the airport, he said.
In a sign security is still fragile, three rockets were fired at the British forces compound at the airport on Wednesday. One hit the area but caused no damage.
Acting on tip from a farmer, Iraqi and British troops found one of the launch sites in a waterway. They recovered an unarmed 107mm Chinese-made rocket stashed in the reeds.
“What’s important for us is that they called the Iraqi army. And this is not a good neighborhood,” Major Peter Smith of the Royal Anglian Regiment said as he examined the weapon.