The Economic Development of Iraq

The Economic Development of Iraq

IBRD

The Johns Hopkins Press

"The Mission will be expected to undertake a general review of Iraq’s economic potentialities and to submit recommendations designed to assist the Government of Iraq to formulate a long-term program for the further development of the country’s productive resources"

Operating under this general instruction, the Bank's field mission made a comprehensive survey during the first half of 1951. This hook contains its report and recommendations.
The principal task of the Iraqi government, the Mission found, will be to discover ways and means of spending the rapidly increasing revenues from its oil industry in a manner which will contribute most effectively to the long-range development of the country. Accordingly, the Mission's report emphasizes the importance of effective methods for carrying forward Iraq's development.
The first part of the report contains the major findings and recommendations of the Mission — to which are attached three appendices listing specific recommendations, summarizing the suggestions for technical assistance, and outlining a statistical organization. Part Two consists of a series of monographs dealing with particular subjects. The first is concerned with the basic factors and conditions in the economy of Iraq which the Mission has considered in framing its recommendations. The others set forth in greater detail the Mission’s views on flood control, irrigation and drainage; agriculture and livestock; industry; transport; public health; education; and community planning and community facilities.

Table of Contents

Part I

I. – Introduction / 1
II. – Agriculture / 4
Existing Conditions / 4
Expansion of Area under Cultivation: Irrigation / 7
The Rain-fed Zone / 12
Settlement of New Land / 13
Improvement in Productivity / 17
1. - Drainage / 17
2. - Tools and Draft Animals / 18
3. - Soil-building and Forage Crops: Fertilizers / 21
4. - Livestock Improvement / 22
5. - Research and Education: Incentives / 23
Tobacco and the Tobacco Monopoly / 25
The Introduction of Sugar / 28
Production Credit and Marketing / 29
Forestry / 32
Establishment of a Ministry of Agriculture / 32

III. - Industry / 33
Petroleum and Refining / 34
Expansion of Old Industries / 35
Establishment of New Industries / 36
Financing of Industrial Development / 38
Dangers of Excessive Protection / 40
Government Organization for Industry / 41
Labor and Vocational Education / 41

IV. - Transport and Communications / 43
The Port / 44
The Railways / 44
Air Transport and Inland Navigation / 46
Roads and Road Transport / 47
Communications / 48

V. - Public Health / 49
Prevention of Disease / 50
Curative Services / 52
Organization of Public Health Administration / 54

VI. - Community Planning and Facilities / 55
Need for Community Planning / 56
Housing Developments / 57
Establishment of a Housing Authority / 57
Self-help in Housing / 59
Water and Electricity Supply / 60

VII. - Education / 62
Technical Schooling / 63
Introduction of Compulsory Primary Education / 63
Revisions of the School Curriculum / 65
Intermediate and Secondary Education / 68
Adult Education / 68
Administration / 70
Training Abroad / 71

VIII. - Problems of Execution / 72
Financing the Program / 74
Obstacles to Development / 76
Improvements in Public Administration / 77
Technical Assistance / 80
Skilled Labor / 83
Foreign Supplies / 84
The Problem of Priorities / 85

IX. - Impact of the Program / 87
Effect on Incomes and Prices / 90
Tax Reform / 95
X. - Conclusion / 96
Appendices
List of the Mission’s Recommendations / 103
Suggestions for Technical Assistance / 112
Statistical Organization / 114

Part II

Annex

A. – Basic Factors and Conditions / 123
I. - The Regions / 123
II. - The People / 126
III. - The Standard of Living / 131
IV. - Natural Resources / 136
V. – Production / 145
VI. – Transport / 151
VII. - Money and Banking / 152
VIII. - Domestic and Foreign Trade and the Balance of Payments / 155
IX. - Government and the Economy / 168

B. - Flood Control, Irrigation and Drainage / 183
I. - Water Storage / 183
II. - Irrigation Works / 193
III. - Drainage / 203
IV. - Operation and Maintenance / 206
V. - Costs of the Program / 211

C. - Agriculture and Animal Husbandry / 217
I. - Introduction / 217
II. - Diversification of Production / 219
III. - Observations on Existing Crops / 222
IV. - Improved Methods of Cultivation / 233
V. - Control of Pests and Diseases / 239
VI. - Improvement in Livestock and Livestock Products / 243
VII. - Education and Research / 251
VIII. - Use of Incentives / 258
IX. - Agricultural Credit / 259
X. - Cooperatives / 261
XI. - Storage Facilities and Credit / 263
XII. - Forestry / 266
XIII. - Settlement of New Land / 267
XIV. - Establishment of a Ministry of Agriculture and Land Use / 272

D. - Industry / 277
I. - Iraq’s Potential for Industrial Development / 277
II. - Possibilities for Industrial Development / 279
III. - State Assistance to Industry / 294
IV. - Other Suggestions for the Improvement of Industry / 299

E. - Transport and Communications / 305
I. - Ports / 307
II. - Maritime Shipping / 312
III. - Inland Water Transport / 312
IV. - Railways / 314
V. - Roads / 327
VI. - Airports / 334
VII. - Air Transport / 335
VIII. - Post, Telegraph, Telephone, Radio Communications / 337
IX. - Pipelines / 340
X. - Surveys / 340
XI. - General Observations / 341
XII. - Projected Cost of Proposed Programs / 342

Appendices
Additional Railway Projects / 344
Notes on Conversion from Meter to Standard Gauge / 346

F. - Public Health / 351
I. - Introduction / 351
II. - The Curative Services / 355
III. - The Preventive Services / 362
IV. - Endemic Disease Prevention / 369
V. - Organization of Health Services / 374

G. - Education / 385
I. - Introduction / 385
II. - Introduction of Compulsory Primary Education / 387
III. - Provision of Fundamental Education for Adults / 405
IV. - Agricultural and Technical Education / 417
V. - Administration / 421
VI. - Conclusion / 423

H. - Community Planning and Community Facilities / 427
I. - Introduction / 427
II. - Rural Communities / 431
III. - Urban Communities / 440
IV. - Housing / 451
V. - Public Utilities / 457

List of Tables

Estimated Outlay of Development Program / 73
Nonagricultural Labor Force / 129
Cultivable Land, Cropped Land and Land in Agricultural Use / 137
Land Classified According, to Types of Tenure by Cadastral Survey / 140
Distribution of Private Landholdings According to
Cadastral Survey / 142
Estimated Area and Production of Principal Crops / 146
Estimate of Livestock Population 1949-50 / 147
Estimated Industrial Employment / 149
Production of Petroleum and Refined Products / 151
Import Licenses: 1951 / 155
Imports into Iraq (by value) / 156
Imports (excluding oil company imports for their own use) / 157
Imports of Textiles, Sugar and Tea (by quantity) / 157
Official Exchange Transactions—1949 and 1950 / 159
Principal Exports / 166
Merchandise Trade / 168
Budgets of the Government and Principal Government Enterprises / 171
Government Debt / 172
Some Government Outlays by Type / 172
Composition of Government Receipts / 175
Land Classified According to Types of Tenure by Cadastral Survey up to February 8, 1951—
Cultivable Land / 177
Land Classified According to Types of Tenure by Cadastral Survey up to February 8, 1951
Uncultivable Land / 178
Land Classified According to Types of Tenure by Cadastral Survey up to February 8, 1951—Total,
Cultivable and Uncultivable Land / 179
Monthly Statements of the National Bank of Iraq / 180
Consolidated Statement of Assets and Liabilities of Five Commercial Banks / 181
Expenditures Projected by the Development Board / 182
Area Within Irrigation Systems / 194
Mean Monthly Discharges of the Euphrates and the Tigris / 212
Number and Horsepower of Irrigation Pumps as of March 1, 1950 / 213
Salinity of the Euphrates and the Tigris / 214
Expenditures of the Directorate General of Irrigation / 215
Estimated Cost of the Program (Irrigation, etc.) / 216
Licensing and Purchasing Operations of the Tobacco Monopoly / 228
Cash and Accounting Returns of the Tobacco Monopoly / 230
Agricultural Machinery Administration Budget for 1950 (actual results) / 275
Agricultural Machinery Administration Budget for 1951 (estimates) / 276
Operations of the Port of Basra / 308
Port of Basra Budget / 309
Fao Bar Dredging Scheme Budget / 310
Traffic on State Railways / 315
Railway Finance / 316
Registered Motor Vehicles / 330
Budget Summary for 1951-52 / 333
Airways Traffic / 336
Airways Budget / 336
Financial Accounts of PTT / 339
Cost of Transport and Communications Programs / 342
Hospitals, Hospital Beds, Dispensaries and Doctors / 377
Number of Visits to Health Institutions for Treatment / 377
Classification of Hospitals in 1949 / 378
The Chief Infectious Diseases Treated at all Health Institutions / 379
Cases of Eye Diseases / 380
Treatments for Malaria as Percentage of Total Treatments at Health Institutions (By Provinces) / 380
Treatments for Malaria as Percentage of Total Treatments at Health Institutions (By Years) / 381
Incidence of Schistosomiasis / 382
Cases of Schistosomiasis Treated / 382
Forms of Tuberculosis Treated at all Institutions / 383
Projected Number and Recurring Costs of Centers of Fundamental Education / 416
Projected Student Enrollment Under the Compulsory
Primary Education Program: 1956-1968 / 425
Projected Student Enrollment in Teachers’ Training Colleges: 1953-1957 / 426
Note: Totals in tables do not necessarily add up because of rounding.

Maps

I Political Divisions / frontispiece
II. - Irrigation / after page 8
III. - Transport System / after page 44

Figures
Hydrographs of the Tigris and Euphrates Rivers / 185
Revised Layout Baghdad Railways & Roads in New Town Plan / after page 342
Baghdad New Development—Simplified Stage I / after page 342
Dujaila Land Settlement Scheme / 438-9

PREFACE

On October 10, 1950, the Government of Iraq officially requested the International Bank for Reconstruction and Development to send a mission to Iraq to undertake a general review of the country’s economic potentialities and make recommendations for a development program. After an exchange of views it was agreed that a mission would be sent with the following terms of reference:
“The Mission will be expected to undertake a general review of Iraq’s economic potentialities and to submit recommendations designed to assist the Government of Iraq to formulate a long-term program for the further development of the country’s productive resources. Specifically, the report of the Mission is to include recommendations concerning:
(1) - investment priorities as among different sectors of the Iraqi economy and as among types of undertakings within each important sector;
(2) - the approximate rate of investment which can appropriately be undertaken without inflationary or other disruptive effects;
(3) - measures apart from capital investment which appear necessary or desirable for improving and increasing production;
(4) - economic and fiscal policies which may be important to accelerate the pace of Iraq’s development, and
(5) - governmental organization and practices having an important effect on development.”
A number of United Nations agencies cooperated in the selection of the personnel of the Mission. The agricultural economist, the agronomist and the expert on animal husbandry were nominated by the Food and Agriculture Organization of the United Nations, which also undertook to pay a portion of their salaries and expenses. The World Health Organization and the United Nations Educational Scientific and Cultural Organization nominated the specialists in health and education, respectively.
The Mission arrived in Iraq on February 25, 1951, and the last members left the country on May 27, 1951. During this period members of the Mission travelled widely about the country in order to study conditions and problems at first hand. The Mission worked generally under the auspices of the Development Board, whose members and staff provided valuable assistance. The Principal Liaison Officer to the Mission, Mr. Naim Bashoo, greatly facilitated the Mission’s work. In the course of its work, the Mission also drew on the resources of many other government departments and agencies whose cooperation was generously given. The Mission takes this opportunity to express its gratitude to the many people both in public and in private life who gave freely of their time and effort to help the Mission.
In the following report the Mission submits a series of recommendations over a broad field. In making these recommendations the Mission has taken into account the Development Board’s five-year program without, however, attempting to arrive at a judgment on every one of the projects included in this program. The many conclusions and recommendations of the Mission may well be subject to modification in the light of additional information or of future developments. While the Mission enjoyed generous cooperation in obtaining data essential to its work, it was inevitably handicapped to some extent by the same lack of adequate, reliable information which is generally encountered in varying degrees in all underdeveloped countries. For example, the absence of dependable data on agricultural and livestock yields and on the location, extent and quality of cultivable but idle land made it difficult to assess the impact of various measures in the field of irrigation, drainage and agriculture. Similarly, lack of statistical data has made it difficult to determine, except in general terms, the repercussions which increased public expenditures might have on production, incomes, consumption and imports. The Mission does not believe, however, that these factors significantly affect the validity of its recommendations.
The Mission’s report consists of two parts. The first part con tains the major findings and recommendations of the Mission to which are attached appendices: one, listing the Mission s recommendations, one, sumarizing the Mission’s suggestions for technical assistance; and a third on statistical organization. The second part consists of a series of monographs dealing with particular subjects. The first monograph is concerned with the basic factors and conditions in the economy of Iraq which the Mission has considered in framing its recommendations. The others set forth in greater detail the Mission’s views on flood control, irrigation and drainage, agriculture and animal husbandry; industry; transport, and communications; public health; education; and community planning and housing.

I. - Introduction

Iraq possesses impressive potentialities for economic development. With a total population of about 5,000,000 and an area of 168,400 square miles, Iraq is sparsely populated in relation to its resources. Although all but a relatively narrow belt in the north and northeast has insufficient rainfall to sustain agriculture, the country’s twin river systems—the Tigris and Euphrates—can provide large amounts of water for irrigation. Much of its soil is inherently fertile and with ample water, manpower and implements, the area under cultivation might be almost tripled. In oil, Iraq possesses not only a source of foreign exchange but also a cheap source of power and raw materials essential to the development of industry, agriculture and transportation; and it may have other mineral resources susceptible of commercial exploitation. There is little doubt that the country can ultimately maintain a much larger population on a considerably higher standard of living.
As yet, however, this economic potential is in sharp contrast to the poverty prevailing in Iraq. The standard of living of the people is extremely low. Income per capita is probably at most ID 30.1 Almost 90 percent of the population are illiterate and many are subject to debilitating diseases such as malaria, hookworm and bilharzia. Housing and sanitation are for the most part primitive. The fundamental reasons for these conditions are low output and low productivity. Most of the manpower on the land is underemployed for a large part of the year, and considerable unemployment exists in the major cities. Vast tracts of land await reclamation and irrigation before they can be used. Much of the available water is wasted owing to lack of storage and regulation of flow. In the spring disastrous floods often inundate large areas; and in the fall water is acutely short. Agricultural output is hampered not only by the inadequate and irregular supply of water, but also by the progressive salination of the soil in the irrigated areas. Agricultural techniques are primitive, the number and " quality of draft animals are inadequate and there is insufficient equipment. Industry is little developed. Although perhaps as many
1 - One Iraqi dinar equals £1 or $2.80.

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IBRD

The Economic Development of Iraq

The Johns Hopkins Press

The Johns Hopkins Press
The Economic Development of Iraq
International Bank for Reconstruction and Development

Report of a Mission organized by the
International Bank for Reconstruction and Development
At the request of The Government of Iraq

The Johns Hopkins Press - Baltimore 18
Geoffrey Cumberlege, London
Oxford University Press

published for
International Bank for Reconstruction and Development
By the Johns Hopkins Press 1952

The Mission

Ivar Rooth
Chief of Mission
John C. de Wilde
Chief Economist

Jean R. de Fargues - Adviser on Irrigation, Flood Control and Drainage

Carl Flesher - Adviser on Industry and Power
E. R. Hondelink - Adviser on Transportation
Luther G. Jones – Agronomist
Antonio Kayanan - Adviser on Community Planning and Housing
Benjamin B. King - Economist
Miroslav A. Kriz - Adviser on Public Finance, Money and Banking

Albert Lorenzen - Adviser on Public Health
C. H. J. Maliepaard - Agricultural Economist
K. G. Saiyidain - Adviser on Education
C. W. Schuller - Adviser on Public Administration
T. Threlkeld - Adviser on Animal Husbandry

Eugene Troy
Administrative Assistant
Rose Diliberto
Eunice O. Dorey
Secretaries

International Bank for Reconstruction and
Development Washington 25, D. C.