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BAGHDAD, Iraq (June 6, 2008) - When Army Capt. Shawn Carbone
first took a good look at the economy in Iraq's southern Baghdad
province, he found it similar to his studies of America during the
Great Depression of the 1930s.
"Most of the historically strong businesses were gone," said
Carbone, economics team leader for the Baghdad 7 Embedded
Provincial Reconstruction Team. "The owners had left and packed up.
The businesses were shut down, and there was mass unemployment
across the board."
There were many reasons for the economic troubles of Iraqis in
the area the 3rd Infantry Division's 2nd Brigade Combat Team took
control of in June 2007. A lack of security forces had left a gap
that al-Qaida in Iraq terrorists filled by using the area as a
base.
Farms and businesses were damaged, and violence caused many to
flee -- some of whom have yet to return. Sectarian strife heated up
following the 2005 elections, which left many in the area without a
voice in government.
Basic needs, such as electricity and water, went largely
unmet.
Carbone saw an opportunity to help turn things around. His
training in economics at Niagara University, in his hometown of
Niagara, N.Y., prepared him for the task of helping the citizens of
southern Baghdad province.
"It's rewarding, because it's an experiment in economics,"
Carbone said. "This is from the ground up. It's much like our
depression-era economics. I've actually sent e-mails to my
professors, asking them their opinions on some of these things and
researched books on depression-era economics."
After security was established, the biggest obstacle to economic
recovery, Carbone said, was the centralized nature of the economy
in the past. Local industries such as a chicken hatchery, a poultry
processing plant and a meat processing facility, for example,
received inputs from and sold their goods to the Iraqi government
at set prices.
"Cooperation is the biggest thing," Carbone said. "From where I
sit, these businesses are complementary. But they never had a
capitalist society, which is all about bringing down costs."
Now the government is in a state of transition and moving toward
free trade.
"Everyone is going through the change," Carbone said. "Some of
the government systems are not yet in place, but that's where we're
heading."
In an effort to revive the local economy, the Baghdad 7 Embedded
PRT worked in conjunction with 2nd Brigade Combat Team Civil
Affairs, using money as their main tool. Armed with State
Department and U.S. Agency for International Development funds,
soldiers and civilians on the team looked for projects that would
benefit the community as a whole.
Civil affairs soldiers used their battalion's bulk funds to
stimulate individual small businesses through a series of $2,500
micro-grants. Though most of the projects focused on agriculture,
which dominates the local economy and employs the largest
percentage of people, other avenues were explored, as well.
Army Maj. Douglas Betts, commander of Company A, 415th Civil
Affairs Battalion, said soldiers on the ground identified who could
best use the grants.
"The troop commanders and company commanders are all very smart
guys," Betts said. "They know what they're doing, and they know
what's best for their areas."
Micro-grants were given to businesses ranging from chicken farms
to Internet cafes. Most recently, a women's beauty parlor opened up
in Arab Jabour, something that would have been impossible in that
area until recently.
Betts said soldiers have found other creative ways to involve
women in business. One example he gave was women's sewing
cooperatives, which grew out of women's committees looking for ways
to employ themselves and raise revenue for their causes.
"Captain [Trista] Mustaine in the EPRT did a great job with
sewing co-ops. That's a new one to me," Betts said.
"One [co-op] that I know is basically made up of war widows,"
Betts said. "These ladies want to do something for orphans and
school children. They are actually making clothes and selling them.
I thought that was pretty original."
The only condition that comes attached to the micro-grants is
that business owners attend business training and meetings of their
local business associations, Betts said. The formation of local
business associations has been vital in helping citizens to help
themselves. The focus now is in getting business owners weaned off
of coalition forces funding and to get them working with their own
government.
Basil Razzak, a bilingual, bicultural advisor with the Baghdad 7
Embedded PRT, said it took some adjusting for local farmers and
businessmen to get used to the new economic model.
"Up until now, it was all supervised by the government.
Everybody belonged to the government," Razzak said. "I remember at
one business association meeting, the chairman said, [to Carbone],
'You are our boss.' He said, 'I'm not your boss. I'm here to help
you and support you, but it's your organization and you can conduct
your meeting as you like.'"
Razzak, a Canadian citizen who grew up in Baghdad and holds a
degree in administration and economics from the University of
Baghdad, said the capitalist spirit is slowly, but surely, taking
hold here.
"They are open to new ideas, Razzak said. "They realize the era
of state-owned business is gone. They are willing to work and
cooperate."
Carbone said the stimulus coalition forces provided to the local
economy already has produced unexpected results. As more businesses
reopen and new ones appear, local entrepreneurs have taken it as a
sign that it's OK to reopen their shops.
"When they start to see these places opening with the help of
coalition forces, some of the people have come back and opened up
on their own," Carbone said. "That's something we didn't
expect."
One business owner who received significant coalition help has
been encouraged to invest even further in his business. The owner
of a meat processing plant in Arab Jabour received a grant to get
his facility running again after shutting down operation in 2006.
Prior to that, the factory employed more than 90 people.
He noted that one factory owner who received a grant then
pitched in $200,000 of his own money. "The money is out there,"
Carbone said.
"The biggest thing was that when the owner came back to the area
and saw that the security situation had changed progressively, he
was more willing to reinvest and start over," he said.
Betts said he sees signs that businesses have returned to stay
in the area.
"I've noticed it in the short time that I've been here," Betts
said. "When we first went out, there were some shops, but there
weren't that many. But I've noticed in the past several months, in
Sayafiyah especially, a lot more of those businesses. They look
better, and they're repainted. People are repairing their shops and
restocking supplies."
Betts said the greatest benefit of the renewed prosperity was a
population that was employed and able to meet their needs.
"That's the key to security. People that are able to take care
of themselves and their families are not out there planting bombs
and killing people for money," Betts said. "I want to see a strong
economy, because that's the cornerstone of stability."
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