By Aseel Kami
BAGHDAD (Reuters) - Iraq's leaders hope the country's still largely untapped oil wealth can one day rival Saudi Arabia and provide a decent living to its citizens after years of conflict and chaos.
But for 12-year-old Abbas Mohammed and his family, it is used plastic bottles and empty aluminum cans that keep them alive. Mohammed spends his school summer holidays picking through a Baghdad garbage dump so he can sell the discarded items and help support his family.
In the refuse dump near Abbas's home in the Iraqi capital's impoverished district of Sadr City, men, women and children swarm over the stinking piles of garbage.
Mohammed, a slim boy dressed in grubby clothes, runs with other children to greet the arrival of trucks carrying fresh rubbish, waiting anxiously for them to unload so they can start raking through the refuse despite the smell and the dirt.
"We earn our living through this garbage," shrugged Mohammed, holding a big sack and a metal hook.
"We start work in the morning, we collect Pepsi cans, plastic bottles and then we sell them. I have been working in this place since I was three years old," he told Reuters.
Sadr City, a warren of narrow streets and low-built slums housing more than 3 million people, is a sprawling area of poverty east of the Tigris river in the Iraqi capital.
Once known as Saddam City, the Shi'ite stronghold suffered years of neglect under the Sunni-led government of Saddam Hussein, who was toppled in a 2003 U.S.-led invasion.
Oil producer Iraq, which is still struggling to emerge from years of war, chaos and sectarian bloodshed triggered by the invasion, has an official unemployment rate of 15 percent and another 28 percent of the workforce are in part-time jobs.
Despite its huge untapped oil and gas reserves and steadily rising oil output and revenue, 23 percent of the population live below the poverty line, according to the Ministry of Planning.
For Mohammed, life in Sadr City means long days during his school holidays scrabbling through the refuse in the scorching summer heat before selling his daily haul to a middleman.
He sells each kilogram (2.2 lb) of plastic bottles or soda cans for 250 Iraqi dinars (around 20 U.S. cents), earning between 2,000 to 4,000 dinars ($1.50-$3) a day.
His mother and one of his brothers work with him in and around Sadr City. The three of them bring in around $250 to $400 a month, meager earnings to support a large family. The brothers only work during school holidays, but other children at the dump have left school behind to work full-time gathering garbage.
Mohammed's mother, Zubaida Khazaal, a mother of 12, said they were obliged to be garbage pickers because they are poor and her husband is unemployed because he cannot work.
"We do not have anything, we live in a mud house and my husband is sick," said Khazaal who wore an improvised cloth mask against the stench as she emptied a sack of bottles.
"We wish the government could help us."
CHILDREN MOST VULNERABLE
Popular anger over power outages, food ration shortages, corruption and government ineffectiveness is heating up the political climate in Iraq as Prime Minister Nuri al-Maliki's shaky cross-sectarian coalition considers whether to ask U.S. troops to stay on past an end-year withdrawal deadline.
Sadr City is a powerbase for Moqtada al-Sadr, a fiercely anti-American Shi'ite cleric whose Mehdi Army insurgents once battled U.S. and Iraqi troops during the peak of the sectarian conflict in 2006-2007. He opposes U.S. troops staying on and has threatened "military resistance" if they do.
Security officials expect insurgents and militias to try to test Iraq's forces when the U.S. troops prepare to leave.
As Iraq battles to emerge from the ruins of war, the U.N. children's agency UNICEF estimates nearly a quarter of Iraq's children -- over three million youngsters, the most vulnerable group in society -- scrape by on an income of less than $2.20 a day. One child in nine is working.
A recent International Labor Organization report listing dangerous jobs in which children are engaged across the world mentioned collecting garbage as one of the activities in which minors risked suffering violence and injury.
Mohammed wears a glove over his left hand to protect himself from sharp objects in the dump and his mother says she fears he could catch a disease. But she says she needs him to work.
At a location near the dump, a middleman supervises the operation of a machine which compresses the plastic bottles into a wire-wrapped pack weighing around 300 kg (660 lbs).
The package will be sold to an Iraqi trader who exports the packs of plastic to Turkey and Syria. No industry has existed in Iraq to recycle bottles and cans, business experts say.
In Baghdad, the trade for export is a lifeline: "There are no jobs, so what else can I do but this. A lot of families depend on this business," said Haider Muhsin, 36, as he stood by the machine compacting plastic bottles.
Iraq has around 40,000 private small and medium-sized factories, but 90 percent of them are idle, said Hashim al-Atrakchi, chairman of the Iraqi Federation of Industries.
The 10 percent, or 4,000, which are functioning are not at full capacity after years of war and economic sanctions put in place two decades ago after Saddam invaded Kuwait.
Plastic manufacturing is patchy partly because many industries are just restarting and also require a stable supply of electricity. Iraq's national power sector is still in ruins and coping with frequent outages is a hefty business expense.
From the garbage heap of Sadr City, however, Mohammed dreams of a better future, when he can quit his garbage-picking job and spend more time on school work: "I want to complete my studies," he said, "And become a teacher."
(Editing by Pascal Fletcher and Alastair Macdonald)