Page last updated at 00:51 GMT, Wednesday, 3 September 2008 01:51 UK

Basra calm offers better future

By Mike Sergeant
BBC News, Basra

Basra demonstration
The people of Basra are impatient for basic improvements
From a military helicopter, the landscape of the Basra region looks barren.

But there are vast reserves of oil here. Plenty of money is gushing out of the ground. So far, though, the residents of the city haven't seen much of it.

For most of the past five years, Basra was more of a battleground than a business centre. After many false starts, British and Iraqi officials say they are finally seeing signs of change.

The British businessman Michael Wareing is co-chairman of the Basra Development Commission - the body overseeing reconstruction efforts here.

It is Mr Wareing's fourth visit to Basra this year. Every time, he says, the situation on the ground has improved.

"There are a lot of challenges, but we are beginning to see some progress on economic development. A whole range of companies are interested in investing here."

Religious rule

Until recently, the security situation made it difficult to attract foreign investors or create the conditions for Iraqi businesses to thrive.

I have a great wish to live in Basra. But this is not the proper time to bring everything here
Entrepreneur Mazen al-Saad
But in March of this year, there was a big shift in Basra. A massive Iraqi army operation called the Charge of the Knights swept the militias from the city. At a stroke security improved.

Before the offensive, coalition troops rarely ventured into the centre of town. Local people faced violence and intimidation.

They were forced to obey strict religious rules. Many women were killed for not wearing a headscarf.

The operation to secure Basra took the British by surprise. But commanders say they are delighted with the results.

Crucially, the job was done by Iraqi soldiers following the orders of the Iraqi prime minister.

Lack of services

Maj Paul Smyth, a spokesman for British forces, says: "I think there is a real sense of optimism here. The security has improved radically."

Basra oil installation
Basra benefits from a strategic location and huge oil reserves
"Reconstruction has started, employment has started to kick-in and the infrastructure is being developed."

The people we spoke to agree the streets are less dangerous now. But some feel the militias could just as easily return. Everyone worries about the state of the economy and the lack of basic services.

"Basra is safer now," says one shopkeeper. "There is nothing happening here."

"There are no jobs. No electricity," complains another man. "What have we done to deserve this?"

British officials take us to see a brand new cardiac unit at the city's teaching hospital. Some of the employees who fled violence are returning now.

Proper time

But the manager Dr Asad Hassan Gati seems uncertain who to thank.

"Have the British helped in Basra?" I ask him. There is an uncomfortable pause, an awkward smile, a shrug of the shoulders then a shake of the head.

Before the US-led invasion, Mazen al-Saad was one of Basra's leading entrepreneurs.

Only now does he feel ready to restart his software business. But he lives in Jordan with his family and has no plans to move back.

"I have a great wish to live in Basra. But this is not the proper time to bring everything here," he tells me. "Where is the education? Where are the services?"

With its riverside location, huge oil reserves and access to the Gulf, Basra has the potential to help reenergise the Iraqi economy. It has not happened yet. But improvements in security have created an opportunity here.

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