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UK invests hope in Basra economy (20/12/07)

UK invests hope in Basra economy (20/12/07)

After handing control of Basra province to Iraqi authorities at the weekend, British officials are hoping the region’s economic development will hasten its path towards stability.
A core element of UK strategy is to establish a Basra Development Commission. Days before the hand-over, it was announced that Michael Wareing, chief executive of KPMG International, would be one of the body’s international advisers.

The provincial council has also agreed in principle to provide $25 million. Both agencies will be run by Iraqis.

The UK Department for International Development – which has pledged £744 million to the reconstruction and development of Iraq since 2003 – is providing about £750,000 in start-up costs. All three institutions are set to be operational in March.

But economic progress will be beholden to an improvement in security, which prevents western development workers from entering Basra city. Success will also depend on Iraqi parties working together, particularly the central government and provincial council.

“By itself the commission can do very little unless it really gets the buy-in of all the parties involved, and yes, of course it would be foolish to suggest there weren’t a lot of challenges to that. But I do believe and hope that actually there is quite a lot of common ground,” Mr Wareing, who has yet to visit Iraq, told the FT.

“If nothing else, we can absolutely make sure that as and when the security situation improves such that business is able to function more normally, and I think it’s quite clear that the security position is improving,” he added.

Basra is an important economic centre for Iraq, mainly because of its oil resources, as well as being the country’s only seaport.

At an economic forum in Basra last week, Nouri al-Maliki, Iraq’s prime minister, described Basra as “the lung” of Iraq. The region accounts for 90 per cent of government revenue and is home to 70% of its proven oil reserves.

“It’s economic redevelopment that has taken a while to establish,” says Major General Graham Binns, the commanding officer of multi-national troops in the southeast. “We have been unable to meet the aspirations of the Basrawi public at the speed they were expecting, so meeting the Basrawi expectation is a thing that I would like to have done better.”

Source: Financial Times

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