thedrifter
02-22-08, 05:37 AM
GLOBAL CAPITAL
U.S. 'micro-loan' effort yields big results in Iraqi province
Small amounts help Anbar entrepreneurs build up businesses.
By Tony Perry
Los Angeles Times Staff Writer
February 22, 2008
HUSAYBAH, IRAQ — Here in western Iraq on the border with Syria, there are signs of recovery amid wreckage left from the chaos brought by insurgents in Husaybah and such major battleground cities as Fallouja and Ramadi.
Although the central government in Baghdad and much of this war-torn nation is beset by sectarian and geographic rivalries, the U.S. government's foreign-aid program efforts here are quietly showing what a little money can do. And, while still in their infancy, these efforts are catching on.
The war still plagues the nation, and recovery is a long way off. But consider the success that authorities are having in Husaybah and in all of Anbar province.
Al'laur Abd Mottar, 50, had a dream of starting a business to support his wife and eight children. He would buy and sell scrap iron, a material much in demand as residents seek to rebuild homes and businesses damaged by fighting between U.S. Marines and insurgents.
But he had no money. The one bank in town that lends money had been disrupted by the prolonged fight. Even if the bank was up and running, a loan to a penniless dreamer without collateral would not have been a priority.
In November, Mottar got a $3,000 loan from a program underwritten by the U.S. Agency for International Development that is bringing the "micro-loan" concept to war-ravaged Anbar west of Baghdad.
The office in Husaybah was the first in Anbar, reinforcing a view held by Iraqis and Americans that innovations start here and then move east toward the provincial capital of Ramadi. The tribal sheiks here were the first to turn against the insurgency and side with the U.S. "In Anbar, the sun rises in the West," Marine Col. Stacy Clardy said.
With his loan, Mottar began buying and selling scrap metal. His start-up business, run from his house, is showing a profit.
Husaybah is the largest city in the sprawling Al Qaim region along the Syrian border. It has made 210 loans totaling $501,250 for business development, renovation of homes and businesses, and vehicle repairs.
A committee appointed by Mayor Farhan Fetekhan Farhan oversees applications. The rules are loose -- the only prohibited uses are the purchase of land, gold and cars.
So far, 96% of the loans have been repaid in full or are in the process of being repaid, program officials said this month. The money is meant as a revolving fund, with money lent to new borrowers once older borrowers make their payments.
Micro-financing may be new to Iraq, but USAID has similar programs around the globe. It works best, said Gary Robbins, a USAID representative in Anbar, "when there are middle-class entrepreneurs who have business savvy but do not have access to capital."
That could be a description of Sahah Hamed Saleh, owner of a tire repair and balancing shop just off the main street of Husaybah. He borrowed $4,000 to get a computer program that allows him to evaluate where a tire needs balancing. Saleh backed up the investment with some advertising -- a few hand-painted signs. Business picked up almost immediately. "We're very busy," said Salah Shehab Hamad, his cousin.
Historically, Iraq has had a large and industrious merchant class, but the economy was devastated by decades of war, corruption, Baathist Party centralized planning and U.S.-led trade sanctions. Even as Marines rolled into Baghdad in 2003, the Iraqi economy appeared on the verge of collapse.
Fighting between Marines and insurgents for control along the border only deepened the economic trough for average Iraqis. But the alliance between Marines and Sunni tribal sheiks largely thwarted the insurgency here by late 2006.
In Husaybah, businesses reopened along the once-dormant main street. Late last year, a port of entry opened, allowing goods to flow between Iraq and Syria.
To oversee the micro-loan program, USAID turned to the Louis Berger Group, an international consulting firm based in Morristown, N.J. Supervision of the micro-loans is only a small part of a $154-million contract between USAID and the firm to promote economic growth in all 18 provinces.
To overcome strictures in the Koran against charging interest, local imams provided a "religious letter" of permission. Technically, the money is not a loan; it's a kind of partnership, with the borrower repaying his "partners." It was a price Mottar and others were willing to pay. "Now I have a chance to support my family," he said. "Before, I had nothing."
Before an overall economic recovery can be achieved, big-ticket projects beyond the reach of micro-loans will be needed, officials said.
Once-thriving farmland lies fallow because of a lack of electricity and an irrigation system, both destroyed in the fighting. Gasoline and heating oil are available nearly exclusively through the black market.
Still, the micro-loans are seen as grass-roots job creation, Robbins said. "Each loan helps create maybe one, two jobs, but it's a beginning."
tony.perry@latimes.com
Ellie
U.S. 'micro-loan' effort yields big results in Iraqi province
Small amounts help Anbar entrepreneurs build up businesses.
By Tony Perry
Los Angeles Times Staff Writer
February 22, 2008
HUSAYBAH, IRAQ — Here in western Iraq on the border with Syria, there are signs of recovery amid wreckage left from the chaos brought by insurgents in Husaybah and such major battleground cities as Fallouja and Ramadi.
Although the central government in Baghdad and much of this war-torn nation is beset by sectarian and geographic rivalries, the U.S. government's foreign-aid program efforts here are quietly showing what a little money can do. And, while still in their infancy, these efforts are catching on.
The war still plagues the nation, and recovery is a long way off. But consider the success that authorities are having in Husaybah and in all of Anbar province.
Al'laur Abd Mottar, 50, had a dream of starting a business to support his wife and eight children. He would buy and sell scrap iron, a material much in demand as residents seek to rebuild homes and businesses damaged by fighting between U.S. Marines and insurgents.
But he had no money. The one bank in town that lends money had been disrupted by the prolonged fight. Even if the bank was up and running, a loan to a penniless dreamer without collateral would not have been a priority.
In November, Mottar got a $3,000 loan from a program underwritten by the U.S. Agency for International Development that is bringing the "micro-loan" concept to war-ravaged Anbar west of Baghdad.
The office in Husaybah was the first in Anbar, reinforcing a view held by Iraqis and Americans that innovations start here and then move east toward the provincial capital of Ramadi. The tribal sheiks here were the first to turn against the insurgency and side with the U.S. "In Anbar, the sun rises in the West," Marine Col. Stacy Clardy said.
With his loan, Mottar began buying and selling scrap metal. His start-up business, run from his house, is showing a profit.
Husaybah is the largest city in the sprawling Al Qaim region along the Syrian border. It has made 210 loans totaling $501,250 for business development, renovation of homes and businesses, and vehicle repairs.
A committee appointed by Mayor Farhan Fetekhan Farhan oversees applications. The rules are loose -- the only prohibited uses are the purchase of land, gold and cars.
So far, 96% of the loans have been repaid in full or are in the process of being repaid, program officials said this month. The money is meant as a revolving fund, with money lent to new borrowers once older borrowers make their payments.
Micro-financing may be new to Iraq, but USAID has similar programs around the globe. It works best, said Gary Robbins, a USAID representative in Anbar, "when there are middle-class entrepreneurs who have business savvy but do not have access to capital."
That could be a description of Sahah Hamed Saleh, owner of a tire repair and balancing shop just off the main street of Husaybah. He borrowed $4,000 to get a computer program that allows him to evaluate where a tire needs balancing. Saleh backed up the investment with some advertising -- a few hand-painted signs. Business picked up almost immediately. "We're very busy," said Salah Shehab Hamad, his cousin.
Historically, Iraq has had a large and industrious merchant class, but the economy was devastated by decades of war, corruption, Baathist Party centralized planning and U.S.-led trade sanctions. Even as Marines rolled into Baghdad in 2003, the Iraqi economy appeared on the verge of collapse.
Fighting between Marines and insurgents for control along the border only deepened the economic trough for average Iraqis. But the alliance between Marines and Sunni tribal sheiks largely thwarted the insurgency here by late 2006.
In Husaybah, businesses reopened along the once-dormant main street. Late last year, a port of entry opened, allowing goods to flow between Iraq and Syria.
To oversee the micro-loan program, USAID turned to the Louis Berger Group, an international consulting firm based in Morristown, N.J. Supervision of the micro-loans is only a small part of a $154-million contract between USAID and the firm to promote economic growth in all 18 provinces.
To overcome strictures in the Koran against charging interest, local imams provided a "religious letter" of permission. Technically, the money is not a loan; it's a kind of partnership, with the borrower repaying his "partners." It was a price Mottar and others were willing to pay. "Now I have a chance to support my family," he said. "Before, I had nothing."
Before an overall economic recovery can be achieved, big-ticket projects beyond the reach of micro-loans will be needed, officials said.
Once-thriving farmland lies fallow because of a lack of electricity and an irrigation system, both destroyed in the fighting. Gasoline and heating oil are available nearly exclusively through the black market.
Still, the micro-loans are seen as grass-roots job creation, Robbins said. "Each loan helps create maybe one, two jobs, but it's a beginning."
tony.perry@latimes.com
Ellie