By Ian Simpson
BASRA, Iraq (Reuters) - Property prices are creepinghigher, shops are staying open later and more schoolchildrenare skipping class to help out in their parents' businesses.
Three months after a security crackdown in Iraq's oilcapital of Basra, there are signs of economic revival. Butinvestment to help secure the peace faces hurdles frombureaucratic inertia, lack of technical skills and foreignbusinesses' uncertainty about whether the calm will hold.
"If you get security, you get everything," Mizher Salam, a32-year-old furniture store owner, said while taking a breakfrom putting together bed frames.
With violence in Iraq at four-year lows, Basra is anexample of the obstacles the country faces as it edges towardrecovery from the turmoil that followed the U.S.-led invasionin 2003.
But business owners said decrepit infrastructure, includingelectricity limited to a few hours a day, was the biggesthindrance, especially during summer heat that hit 43 degreesCelsius (110 Fahrenheit) this week.
"We don't want something impossible. Electricity, securityand a good job. That's all," said Falah Hassan, the 24-year-oldmanager of a food store on the bustling Route 6 highway.
Creating jobs and improving power and water supplies wouldbe the best way to build on a government offensive in lateMarch and April that broke the grip Shi'ite militias had heldon Iraq's second-biggest city, officials say.
"People are now looking forward to the next phase, the nextstage of their lives, when Basra will become more prosperous,"provincial governor Mohammed al-Waeli told Reuters.
PORT REVIVAL
Basra province, source of most of Iraq's oil exports andits only outlet to the Gulf, has had a mini-revival ofbusiness.
The country's main port of Umm Qasr is now running at fullcapacity and about a quarter of Basra's 12,000 businesses havesigned up to be listed in a commercial directory.
That is up from none two years ago when militias and gangsruled the city, according to a source with the British-ledProvincial Reconstruction Team (PRT).
However, big-ticket spending that could cut into theprovince's jobless rate -- put by government officials atanywhere from 17 to 28 percent -- remains elusive.
Foreign investors are still waiting to see if peace holds.
And local government spending and development is hamperedby the lack of planning and technical expertise, a hangoverfrom decades of top-down control under the late dictator SaddamHussein.
Agencies and local governments can face delays indisbursement of funds. With Basra's provincial budget climbingto $300 million (152 million pounds) this year, inexperiencedofficials are struggling to manage and spend it, with many bidsfor contracts failing to meet specifications, the PRT sourcesaid.
"All of that is pretty predictable when you go from havingno budget to having significant responsibilities within thespace of two years," the source said.
AIRPORT WITH FEW PLANES
Political rows have also slowed development, with thenaming of a 10-member investment promotion agency delayed forseveral months because of partisan wrangling.
One of Basra's major assets, its 1980s-vintage airport witha gleaming marble lobby, is a good example of thereconstruction headaches Iraq faces.
Its 13,000-foot-long (3,930-metre) runway is able to handlethe biggest cargo planes in the world. But the facility onlygets about a half-dozen cargo and passenger flights a day.
"There's a good year's worth of work before you get to thepoint where it's a commercial venture," said Wing CommanderSteve Beanlands of the British air force, involved inreconstruction efforts at the facility.
Other problems were the lack of trained management andmuddied lines of authority since both the transport andinterior ministries share responsibility for the airport, hesaid.
In a sign security is still fragile, three rockets werefired at the British forces compound at the airport onWednesday. One hit the area but caused no damage.
Acting on tip from a farmer, Iraqi and British troops foundone of the launch sites in a waterway. They recovered anunarmed 107mm Chinese-made rocket stashed in the reeds.
"What's important for us is that they called the Iraqiarmy. And this is not a good neighbourhood," Major Peter Smithof the Royal Anglian Regiment said as he examined the weapon.
(Editing by Dean Yates and Mark Trevelyan)