Paradoxically, the transitional government will also have to tackle the fruits of accelerating economic growth. 'There's a rampant free market but no money returning to the government,' says Toby Dodge, senior fellow at the London-based International Institute for Strategic Studies. More white goods for sale and cars on the roads create demand - on fuel, for example - and can lead to inflation, putting a greater strain on infrastructure.

The task of nursing Iraq back to economic health looks set to fall on a coalition fronted by Daawa Party chief Ibrahim Jaafari. The Daawa Party leads the Shia United Iraqi Alliance (UIA) in partnership with the Supreme Council for the Islamic Revolution in Iraq (Sciri). The UIA won 48 per cent of the vote in the 30 January general election. Jaafari emerged as the UIA candidate for prime minister after the coalition's other contender, Ahmed Chalabi, dropped out of the race, reportedly in return for a promise of either the foreign or defence ministerial portfolio in the new cabinet.

Jaafari's lack of commercial connections supports his reputation for being uncorrupted. He is popular with many Iraqis and widely perceived to be a conciliator and effective mediator, qualities that will serve him well as he leads what Dodge describes as 'an extremely unwieldy coalition'.

Jaafari has said the government's priorities are security, services and the economy. Before addressing these issues, government posts have to be assigned. With 140 out of 275 seats in the new assembly, the UIA will dominate the selection process. Reflecting Jaafari's political inclusiveness, it is expected Sunni representatives will receive a proportion of ministerial seats and sit on the committee charged with drawing up the new constitution. Says Jaafari: 'I can't imagine a government without Sunni, Shia and Kurd because all these are the main components of our society.'

Security will be Jaafari's first priority. 'It is the only real issue of concern to Iraqis,' says Dodge. Jaafari is expected to follow the tough line taken by interim Prime Minister Iyad Allawi. He said recently: 'If need be, we will be strong against perpetrators of acts of violence, and at the same time we will be lenient with anybody who will work with us.' Both American and Iraqi governments will continue to work on reforming the Iraqi army. In the meantime, Jaafari has said multinational forces should stay in Iraq.

Security issues in the central regions will continue to affect the government's ability to encourage economic growth. Many Iraqi business people expect the new administration to focus on the south, which has been starved of investment for 20 years. Money will be spent on roads, schools, hospitals, power generation and water supplies. The $10,000 million project to expand Umm Qasr port will be dramatically enhanced, sources say.

However, the UIA's ability to dominate the government agenda, including its economic programme, will be curtailed by the compromises it will be obliged to make with the Kurdish Alliance. The coalition of Kurdish parties led by Jalal Talabani won 75 seats in the January elections, making them the second largest voting bloc. Jaafari has said: 'Our Kurdish brothers are in a good position. They will have a good presence in the government.' But he has also warned them not to go too far with their demands.

It is likely that Talabani will occupy the largely ceremonial post of president. The 71-year-old Patriotic Unio