As US officials debate whether to unwind the troop surge in Iraq, one important indicator of the sustainability of security improvements will be whether a boost in economic confidence accompanies the drop in violence.

While there is evidence of revived economic activity in Iraq, investment levels are low. Unemployment is alarmingly high – officially estimated at up to 18 per cent – while underemployment stands at more than 35 per cent. And the $48bn (€33bn, £24.6bn) budget for 2008 has yet to be passed, amid Shia and Sunni resistance to allocating 17 per cent of funds to Kurdish regions.