Whether one supports the war in Iraq or not, American troops are by and large decent and heroic men and women. But there is another untold story about Americans in Iraq: the entrepreneurs.

A few years back, an investigation by American troops into a roadside bombing of their fellow service men turned up an Iraqi father of six. He was not an ideological member of the Sunni insurgency. Rather he was just an unemployment man who agreed to plant a bomb in exchange for a few hundreds of dollars to feed to his children. An “economic insurgent,” if you will.

Those same Americans troops realized that one way to starve off the insurgency is to provide jobs for Iraqis. They set out to do just that and founded the Marshall Fund, a private-equity firm named after, of course, the Marshall Plan for post-World War II Europe.

The funds seeks to invest in Iraqi businesses, giving them the capital they need to get started or expand operations.

In 2008, they made their first investment: a tomato-processing plant in Harir. Iraqi has very fertile land, perfect for growing many fruits and vegetables. But it imports $100 million in tomato paste a year. The reason is not lack of tomatoes, on the contrary tomato farmers are resigned to allow whole fields rotten simply because there are not enough processing plants in the country. That is where Marshall Fund stepped in. With a $6 million investment, Iraqis can now eat more of their own tomatoes.

The Marshall Fund is not the only player in Iraq. Investors from around the world are decending into Iraq as the violence winds down [hopefully]. General Electric, the world’s largest company, is one of them.

Last year foreign companies invested $910m in private Iraqi joint-ventures. Individuals and investors such as the Marshall Fund put in another $500m for start-ups.

Case New Holland, a firm owned by Italy’s Fiat, opened up a farm tractor plant in 2007. The U.S. government is also doing an yeoman’s job:

In 2006, with unemployment and underemployment in Iraq well over 50%, according to government estimates, the American administration changed course. It created the Task Force for Business and Stability Operations in Iraq to jump-start the private sector, this time from the bottom up. The hope was that helping to create self-sustaining businesses and, with them, jobs, would give Iraqis—including economic insurgents—a stake in the country’s stability. It started by ensuring that American contracts went directly to Iraqi businesses. Since 2006, $2 billion of American contracts have been signed with over 5,000 private Iraqi firms. Next on the agenda was to undo some of the damage from earlier American policies. The Task Force received $50m in both 2007 and 2008 to restore production in Iraq’s 60 SOEs, some of which were running at 10% of capacity or less.

Take Iskandiriyah, a manufacturing town. The Task Force arrived in late 2006 to restart the many factories once run by two SOEs there. Today they are producing machine parts, trailers and machinery for the oil industry. In total around 5,000 Iraqis are back at work in Iskandiriyah’s two SOEs. The town is considered stable.

This is an incredibly story. One that has not been well covered by the media. Iraq has the potential to be a great economic powerhouse in the region. I pray that violence will not start up again and that the country will only move forward from here.

Source: It’s the economy, stupid.