“I think they got slightly aggravated, they were like, ‘how is it that we had troops down there, we ran the PRT (provincial reconstruction team) from beginning to end and then the French and the Turks go in there and neither of them have helped with the invasion or liberation or whatever you want to call it. And at the end of my 8 years there I was like ‘why did I do all this?’ Now its a total vacuum. An article was published a few months ago was asking, ‘where’s everything gone, all the money we spent, where are we?’ So the chamber of commerce contacted me and said ‘we want Italian companies to go down to Nasiriya.”

Like Johnson, Prouse is part of a vanguard of intrepid business minds who both know Iraq intimately and tread the same ground that coalition boots once patrolled. Knowing what they know and what the Iraqis in the south want, it’s hard not to think there should be more like them, with greater U.S.-EU involvement. Across the south, the environment has not changed much post “surge,” although a greater number of AQ attacks get through, as Joel Wing highlighted to me last month. I asked Prouse if she thought the U.S .and EU were being too timid in their approach:

“Companies who struggle in Europe and the U.S. should look at Southern Iraq. The Chinese and Turks have been operating all-over the place for years now. And the Chinese cannot hide the fact that they are Chinese, but they do not get killed or attacked or kidnapped. We are definitely too timid about Southern Iraq. Hotels are full of foreigners, just not us. Foreigners who grasp the fact that to do business in Iraq you need time.”

The violence, Prouse says, is a stigma to the south. Bureaucracy and the idiosyncrasies of Iraqi business are the big enemy:

“Sounding out business in Iraq is not a one or two day trip. You need to find the interlocutors. Iraq definitely suffers from the stigma of violence. But, although sad, that violence is no longer directed toward the foreigner.”

Between Syria and the marshes

Continued foreign investment in the face of a spike in violence is encouraging, but progress in Iraq’s vital south could yet be threatened. A stirring of Shia militancy has arisen from continued political failure in the former Green Zone, staggering unemployment and ongoing Al Qaeda attacks. Much of this deterioration nationally can be traced to Maliki, as Toby Dodge has exhaustively chronicled. Tactical poking, rather than a broader regional strategic approach in Syria will complicate the picture, and could stir up groups such as Kata’ib Hezbollah who are marginal now, but believe the United States and Israel are backing Al Qaeda. Stephen Wicken at the Institute for the Study of War recently predicted such a backlash, noting how threats of U.S. action against Syria could provoke counterthreats against the West from fringe Shia militias. This has now happened.

Could this herald a final rush to the exits for foreign companies? Buoyed by the prospect of greater independence from Baghdad and higher oil revenues, the southern governorates are unlikely to let the militants reign once more. But if Iraq’s southern heartland is to remain stable, the United States will have to tread carefully in Syria, and engage more proactively with Baghdad. We might be seeing a new phase in U.S.-Iraq relations, but Obama may have to use the leverage of high-tech arms sales to get Iraqis to make amends. That is no mean feat when it comes to worsening sectarian relations, and it will take much more than the noble efforts of Grand Ayatollah Ali al Sistani to foster peace. The encouraging signs in the south are clear evidence of that fragile progress remains, and could yet be damaged.

Robert Tollast is a frequent contributor to the Small Wars Journal, Iraq Business News and Global Politics Magazine. Based in London, he is currently conducting interviews with Iraq experts and veterans of the conflict.