Micro-Grants Put Iraq Small Business Back on Track

By Fred W. Baker III
American Forces Press Service

Dec. 14, 2007 - In the Arab Jabour area of Iraq, a local butcher is back to work in a new shop with plenty of business and plans to expand, thanks in part to some small grants given to local businesses to help jump-start their operations. Six months ago, the area was an insurgent stronghold, and the butcher sold only one or two sheep a month. Now he is butchering four or five a day and has added cows two days a week, Army Lt. Col. David Kennedy, a deputy economic provincial reconstruction team leader in Iraq, said in a conference call with Internet reporters and "bloggers."

"What we found is that just a small injection of capital into many of the small businesses in our (area) has yielded immediate results to many of the shops and merchants," he said.

The mostly Sunni population of the southern-Baghdad region of Arab Jabour is about 120,000. The area was once one of the main routes for weapons, bombs and money infused into the Baghdad insurgency, but order has since been restored, and U.S. officials are busy helping the population rebuild their cities.

Kennedy's small team has passed out about 57 "micro-grants" to local businesses averaging about $400 to $500 each paid for by Commander's Emergency Response Program funds. So far his group has pumped about $90,000 worth of the grants into the local businesses, he said.

Kennedy said he visits the areas once a week to distribute the grants and check on the progress of the businesses. The grants are not handouts, and business owners are expected to have a plan for the money. Also, Kennedy tries to link training to receiving the grants and reinforces any successes with more grants.

"We don't want this to be just a cash grab. They have to actually show us how they are improving their business," Kennedy said.

"If we see that a business is using their money prudently and they're making a lot of improvements, then we'll give them another one," he said.

With the funds, the butcher renovated a new shop next to his old one and then was given a new butcher table. He has plans to eventually open a restaurant employing 15 people, a place for families to come together, relax and be normal people, Kennedy said.

"This guy has a vision," Kennedy said. "Me and the team leader have made it a goal to eat dinner there before they leave this summer.

"Hopefully we can make that a reality," he said.

This is Kennedy's second tour to the area, and he has seen incredible improvements, he said. Along with the economic revitalization, Kennedy works with local governments to rebuild their infrastructure. He meets weekly to discuss improving essential services, such as electricity, water and education. Arab Jabour now has streetlights for the first time in five years or more.

"This is not the U.S. coalition people doing the work. These are Iraqis," Kennedy said. "These are college-educated, professional people who are very anxious to do their jobs. All they need to do their jobs is security.

"They want to do their jobs. They just want to be safe while they're doing it. They're all chomping at the bit to get back to work and do what they're trained to do. They just need our help," Kennedy said.

Local concerned citizens groups are being transitioned from security functions to public works efforts, he said. The activities are modeled after successful efforts in areas such as Anbar province.

One potential hurdle to sustaining the growth is that the U.S. government -- not the Iraqi government -- is still providing money for the improvements, Kennedy said. But, that, too, is changing.

Local councils are strong, forming subcommittees and attending training, and, most importantly, establishing representation within the Iraqi government structure.

"We still have to provide the money. In most cases, ... if they can get those spigots turned on from the government up in Baghdad flowing down, ... they're going to be well on their way to success over here," he said.

A new government center is set to open this week, and the local council has plans for five days of training in Baghdad on how to be an effective governing body.

"They are serious people realizing that there is serious work to be done, and they want to be part of the future of their people. They're good, honest Iraqis," Kennedy said.