Iraq is stepping up efforts to win international investment and develop local business around its southern oil city of Basra, Deputy Prime Minister Barham Salih has said.

Hoping that economic growth might help cement recent fragile security improvements, the government is setting up the Basra Development Commission, led by a leading British businessman.

'I hope through this contribution we will be able to put in place the environment in which we can attract private sector investment and make sure the people of Basra have better jobs and a better quality of life,' Salih said on the sidelines of the World Economic Forum in Switzerland.

Basra province holds most of Iraq's oil reserves and provides its only access to the Gulf. Although it escaped the worst of the violence plaguing Iraq since the 2003 US-led invasion, it has been the scene of a militia turf war and its police chief has survived several assassination attempts.

Violence has subsided since British forces pulled out of Basra city in September, and the province's fate is seen as a test of whether Iraqi authorities can keep peace without troops from the United States or Britain.

But Salih denied that investment in Basra would be a hard sell to multinationals.

'If I were a businessman I would certainly calibrate the risks involved - but the rewards are far, far greater. Iraq is ready for business,' he said.

Michael Wareing, International Chief Executive Officer of KPMG International who was named head of the Basra Development Commission, said the oil industry, port, airport as well as agriculture and banking sectors were possible investment areas.

 He also played down security threats in Basra, saying many oil and gas firms worked in dangerous regions.-Reuters