Digging Out

A laborer making cement at a hospital being rebuilt by British forces in Basra, in southern Iraq. He earns just a few dollars a day but is lucky to have a job at all.

Orphans serenade British Army Captain Stephen Morte in Basra. Using American money, the facility has launched a business providing sewing classes to women.

Some 3,000 U.S. soldiers have been killed and 22,000 wounded in Iraq since President Bush declared war. Estimates of Iraqi civilian casualties run from 49,000 to more than 54,000, although our government doesn't track those figures. The cost of the campaign is running to about $8 billion a month. No one, with a few notable exceptions, believes the war is going well.

But outside Baghdad, where the term "civil war" seems as good as any to describe the situation, there are signs that some tactics do make a difference. Not cordon and search, and certainly not tanks and artillery, but a ground war fought with capital infusions and small infrastructure projects.

It's a tactic British Army Captain Stephen Morte knows well. Stationed until recently in Basra, the teeming city of 2 million in southern Iraq, where unemployment is an estimated 25%, Morte worked to defuse tension between coalition forces and the Iraqi people by offering grants to help create jobs and ease poverty. He was essentially an angel investor in fatigues. And his daily commute was one of the deadliest in the world.

On October 1, the 39-year-old rolled up on one of his latest efforts, arriving in the belly of a cramped Warrior armored personnel carrier, his rifle clutched tightly between his knees. Beside him sat wary young infantrymen whose slack faces testified to 12-hour shifts patrolling this Shiite city where Islamic militias, corrupt cops, and tribal sheiks vie for control.

The Warrior rattled to a halt, and its ramp groaned open before a sagging orphanage flanked by scaffolding and guarded by a surly Iraqi in a plastic chair, an AK-47 on his lap. The infantry scurried out and took up positions.

As Morte dismounted, though, his face softened. He removed his helmet, donned a dark-green beret, and let his rifle drop inconspicuously to his side. Fadil, a lanky Iraqi contractor, emerged from the orphanage, and the two men shook hands and exchanged greetings in Arabic and English.

"Salaam alaikum," Morte said in an atrocious accent. "How are you?"

"Alaikum salaam," came Fadil's reply. "Very well, thank you."

Compared to last summer, when Fadil first met Morte, the 39-year-old contractor was doing very well indeed. Then he was unemployed and desperate for work. On this day, thanks to a deal Morte brokered, Fadil had a $56,000 contract to rebuild this orphanage for the local government, and he employed around 40 people per day for 10,000 to 15,000 dinars apiece. That's between $7 and $10 a day--not bad by Baswari standards.

Fadil beckoned toward the orphanage, eager to show Morte his progress--and just as eager to get out of sight of informants loyal to the militias and death squads who routinely murder collaborators. As the pair began inspecting reconditioned toilets and a gaggle of laborers repainting furniture, the orphanage's imposing matron invited them to an adjacent classroom. When Morte stepped inside, 50 kids in white shirts stood at their desks and sang a song in English that began, "We are orphans, orphans, orphans," and ended in a lilting, "Thank you!"

The matron then took Morte down the hall to a room filled with desks and sewing supplies and explained through an interpreter that the staff had launched a small business providing lessons to around 100 budding seamstresses. They wanted some cash for new sewing machines. "If it provides work and if it's sustainable, it's something we could look at," Morte said. He made a few notes, then headed back to the Warrior. If he stayed too long, he might have drawn fire.

Adventure Capitalist

In his role as a civil-military cooperation officer for the Light Infantry Regiment--one of the most battle-hardened in the British Army, with roots running back to the late 17th century--Morte liaised among Iraqi reconstruction agencies, the U.S. State Department, the British Foreign Office, and Iraqi construction contractors. Drawing from a reported $80 million in State Department funds channeled to the British forces who occupy southern Iraq, Morte sought out ventures most financiers would consider risky at best. During his time in Basra, he gave small infusions of capital--microfinancing, as it's called--to 200 Iraqi entrepreneurs, who now employ around 10,000 Baswaris. Morte hoped to slowly build self-sustaining enterprises, thereby weaning the country from reliance on foreign aid and improving Iraqis' opinions of foreign forces. The ongoing objective is better security and a reduction in the unemployment that, as Morte's commanding officer, Lieutenant Colonel John Bowron, explains it, "puts people in front of a militia recruiter."