In Iraq 2008, following a dramatic downturn in violence resulting from its earlier "surge" strategy of extra troops to hold as well as clear communities of extremist gunmen, U.S. military forces have added another arrow to the hearts-and-minds quiver -- microgrants to small entrepreneurs to improve and expand their businesses and thus create more jobs.

"It isn't a free money program," said Capt. Clint Rusch, who oversees the microgrant project of Charlie Company, 1st Battalion, 68th Armor Regiment, which is attached to the 1st Battalion of the 6th Infantry Regiment. "We're not giving away money. We're here helping people to get the technology and equipment they need to do better business.

"Better business means more jobs, more money in the community and working for terrorists to feed families no longer being an alternative."

The microgrant project comes under the umbrella of the U.S. Army's Commander Emergency Response Program. CERP gives commanders authority to spend money to rectify pressing reconstruction and humanitarian needs in their battle space, such as repairing schools and homes damaged in fighting, fixing broken water pipes and reopening health facilities.

There are two types of CERP being used in Iraq: U.S. CERP and Iraqi CERP. Iraqi CERP funds are used for infrastructure projects that U.S. commanders identify, assess and approve in cooperation with central and local government.

U.S. commanders have been allocated about $27 million for CERP, according to figures from the 4th Infantry Division. Iraq has allocated about $81 million.

Microgrants are strictly a U.S. CERP initiative.

"(The Iraqi government) would like their money to be spent on schools, clinics, road repair, sewage repair and items like that," said Col. John Hort, commander of 1/68 and in charge of U.S. efforts in Baghdad's districts of Adhamiya and southern Sadr City.

"We take that and apply that money to those major areas. And then we look at the peripheral areas that don't necessarily fit this plan. For example, local businesses, and we apply microgrants to those areas.

"That's what I would call hard U.S. dollars going into a local business so that he (the business owner) can regenerate that shop and make it a better place and employ more people."

Adhamiya and Sadr City are in northeastern Baghdad. A major portion of Adhamiya is Sunni Muslim and peopled by former officials of Saddam Hussein's Baathist Party government, teachers and other professionals. It's an area where al-Qaida has operated. Other sectors, however, are predominantly Shiite and influenced by anti-American Islamist cleric Moqtada Sadr and his Mehdi Army.

The Mehdi Army, together with Iran-influenced Special Group gunmen, were concentrated in Sadr City, a teeming slum next to Adhamiya, until U.S. and Iraqi forces drove them out of its southern sectors. Iraqi forces later took control of its northern confines under a cease-fire agreement.

Charlie Company dispenses its microgrants in al-Beidha'a, part of Adhamiya and directly next to Sadr City.

Microgrants are for a maximum of $2,500, and since the program started in the area in mid-June, about $375,000 in funding has been recommended. Rusch said about 60 percent of the nominations are for $2,000 or less. Only about 10 percent have been paid so far -- the rest are still in the review/approval/disbursement pipeline at the brigade and division level -- but it's hoped that a 10- to 14-day processing timeline will be operating soon.

"Allison. Allison, my friend. Welcome, welcome," Faris Hassan Jabber said with a broad smile.

Jabber, a carpenter, was a recipient of a microgrant and was working at his band saw as Capt. Todd Allison of Charlie Company entered a shop in a neighborhood called Taribiya on a routine visit to check on the circumstances of grant recipients.

Jabber was the first business owner to get microgrant funding in al-Beidha'a, and Allison was the soldier who made it happen. When Allison first visited, Jabber was working with just one saw, a plane and a few hand tools. Other saws and attachments on his carpentry station had long ceased to function, and the furniture maker was having a difficult time supporting his family of five.

With funds from the microgrant, $500 of his own money and trading in the decrepit machine table, Jabber purchased a fully functioning secondhand one.

"Business is better," he said through an interpreter. "I have two people working for me now."

Next door an upholsterer was busy with a staple gun, fitting and stapling cushioning and fabric onto furniture made by Jabber. The staple gun was fired with the use of a compressor that was powered by a $1,200 generator funded by a microgrant. That generator is used by all the half-dozen businesses on the street to provide power during the long electrical blackouts.

Like Jabber, the upholsterer has hired additional workers and, like all microgrant recipients, later will take on vocational training students.

"Jabber and Taribiya weren't chosen to be the first to get the grants by accident," Allison said. "The people of Taribiya all work in Taribiya and they shop in Taribiya. Helping these businesses has a direct impact on the community."

Rusch and Allison said those wanting microgrants must fill out applications that detail their business background and what the grant money would be used for. The application, if approved by Charlie Company, then goes up the chain of command for review and approval. Followup visits are made to verify the funds were used as stated.

Only time will tell if the microgrant program succeeds in the long term in making communities like al-Beidha'a and southern Sadr City inhospitable places for extremists who may try to return. But for now, the microgrant program could be part of the solution for stability and security in Iraq's capital.

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