University of Southern California Dissertations and Theses

International Bank for Reconstruction and Development and the Iraqi Development Board

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International Bank for Reconstruction and Development and the Iraqi Development Board

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Content INTERNATIONAL BA N K FOR RECONSTRUCTION AND DEVELOPMENT
AND THE IRAQI DEVELOPMENT BOARD
A T h e s is
P re s e n te d to
th e F a c u lty o f th e D epartm ent o f Economics
The U n iv e r s ity o f S o u th ern C a lif o r n i a
In P a r t i a l F u lf illm e n t
o f th e R eq u irem en ts f o r th e D egree
M a ster o f A rts
hy
Nlma Jaw ad S h a k a rji
J a n u a ry 1955
UMI Number: EP44740
All rights reserved
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This thesis, written by
Nima__Jawad .Shakarji.................
under the guidance of h .is—Faculty Committee,
and approved by all its members, has been
presented to and accepted by the Faculty of the
Graduate School in partial fulfillment of the
requirements for the degree of
Master._of Arts.................
APPROVES
Harry J. Js.
D a te . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D e a n
Faculty Com m ittee
Chairman
TABLE OF CONTENTS
CHAPTER PACE
X. INTRODUCTION ............................................................................ 1
The s ta te m e n t o f th e p r o b l e m .................... 1
Im p o rta n ce o f th e s t u d y ............................. 3
O rg a n iz a tio n o f th e t h e s i s ........................ k
S o u rces o f d a t a ................................................ 7
I I . THE MAJOR OPERATIONAL POLICIES OF THE BANK . . 9
What i s th e i n t e r n a t i o n a l b a n k .................... 9
The p u rp o s e s and s t r u c t u r e o f th e bank . . . 10
The p u rp o s e s o f th e bank . . . . . . . . . 10
S o u rces o f fund ...................................... 1^
The b a n k 's c a p i t a l ........................................... I k
Funds borrow ed in th e c a p i t a l m ark et . . 17
Loans made by p r i v a t e in v e s t o r s . . . . 19
The b a s ic c h a r a c te r o f bank le n d in g . . . . 20
The s p e c i f i c p r o j e c t p r o v is io n . . . . . . 21
D e te rm in a tio n o f p r o j e c t to be fin a n c e d . Zk
L oans f o r l o c a l c u rre n c y e x p e n d itu re s . . 25
I I I . H O W THE BANK HANDLES REQUESTS FOR LOANS . . . 29
The f a c t o r s in f lu e n c in g th e b a n k 's d e c is io n s 29
The r e q u ir e d c o n d itio n s ...................................... 29
The c h a r a c te r o f th e b a n k 's i n v e s t i g a t i o n . 35
The In fo rm a l d is c u s s io n ...................................... 35
i l l 1
I
CHAPTER PAGE
The f i r s t s ta g e ............................................ 36
The se c o n d s t a g e .......................................................... 37
The fo rm a l n e g o t i a t i o n ..................................... . 37
R e la tio n s h ip w ith b o r r o w e r s ........................... 38
O th er f u n c tio n s o f th e b a n k , 41
C u rren cy p r o b l e m .......................................................... 41
Loans to p r i v a t e e n t e r p r i s e s ...................... 42
Loan c h a rg e s ........................................................ 45
The m is s io n s an d th e te c h n ic a l a s s is ta n c e . 48
M is sio n to fo rm u la te a g e n e r a l d e v e lo p -
i
m ent p r o g r a m .............................................. 49:
M issio n to s o lv e s p e c i f i c developm ent
p r o b l e m s ............................................................ 51
The ex p e n ses o f th e m i s s i o n ................................... 52
IV . IRAQ, A M D THE BOARD OF DEVELOPMENT...................... 53
A g e n e ra l id e a o f e x i s t i n g c o n d itio n s . . . . 53
The m in i s tr y and th e b o a rd o f developm ent . . 56
The e s ta b lis h m e n t o f th e d ev elo p m en t b o a rd . 58
The s t a f f o f th e b o a r d .......................................... 59
The p u rp o se and th e d u ty o f th e b o a rd . . . 63
The b o a r d ’s r e v e n u e ................................................. 65
The b o a rd and th e g e n e r a l p r o g r a m ................. 68
iV I
CHAPTER PAGE
The e s tim a te d rev en u e f o r th e g e n e r a l
p r o g r a m ........................• . . ......................................... 69
The p r o j e c t 8 o f th e g e n e ra l program . . . 73
The e s tim a te d e x p e n d itu re s o f th e g e n e ra l
p r o g r a m ........................................................ 76
V. THE GENERAL ECONOMIC DEVELOPMENT PROGRAM IN
DETAIL....................... 82
I r r i g a t i o n an d flo o d c o n tr o l p r o j e c t s . . . 82
H abbaniyah la k e p r o j e c t . ....................... . 89
D iy a la h and Dokan d a m .......................................... $6
Bekhme dam . . . . . . . . . . . . . . . . 99
I n t e r n a t i o n a l ag ree m en ts . l o l 1
D ra in ag e ............................ lofc
Roads an d b u i l d i n g s .................................................... 106
Roads and b r i d g e s ................................. 10?
B u i l d i n g s ....................................................................... 112
H o s p ita ls and d i s p e n s a r i e s ............................. 112
S ch o o ls and e d u c a tio n a l i n s t i t u t i o n s . . 115
H ousing developm ent ........................ 121
I n d u s tr i e s . .................................................................. 123
V I. THE INTERNATIONAL BANK’ S LOANS AN D SERVICES
T O IRAQ AND TURKEY 133 ■
Loans f o r u n d e rd e v e lo p e d c o u n t r i e s ................... 133
V
CHAPTER
B a n k 's lo a n to I r a q ..................................... 134 ■
The am ount and p u rp o s e o f th e lo a n . . . 135
I n t e r e s t j com m ission an d a m o r tiz a tio n o f
th e lo a n ............................................... 137
The c o n tin u o u s r e l a t i o n betw een th e bank
and th e governm ent o f I r a q . . . . . . 139
The Wadi T h a r ta r P r o j e c t 141 1
The d e s c r ip tio n o f th e p r o j e c t . . . . 143
The p u rp o s e o f th e p r o j e c t ........................ 145
The e s tim a te d c o s t ........................................... 14?
The b a n k 's m is s io n to I r a q ....................... . 150
B a n k 's lo a n s to T urkey . . . . . . . . . . 151
The am ount and p u rp o s e s o f th e lo a n s . . 152
O th er bank s e r v ic e s to Turkey . . . . . . 159
C om parative s tu d y o f th e b a n k 's s e r v ic e s t o
I r a q and T urkey ............................ 162
The b a n k 's lo a n s to I r a q an d T urkey . . . 163
S u g g e stio n f o r a n o th e r lo a n to I r a q . . 164
The b a n k 's s e r v ic e s to I r a q and Turkey . 167
C hanging th e e x i s t i n g I r a q i I n d u s t r i a l Bank
to one S im ila r to t h a t o f T urkey . . . . 168
The e x i s t i n g I r a q i I n d u s t r i a l Bank . . . 169
The p ro p o se d I n d u s t r i a l D evelopm ent Bank. 170
CHAPTER PAGE
How to e s t a b l i s h t h i s b a n k .................................. 170
S o u rces o f fu n d s . , .................................* • * 171
7 1 1 . SU M M A R Y AND CONCLUSION......................................................... 173
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
D e v e lo p m e n t .................................................................. 173
The D evelopm ent B oard o f I r a q . .. .. .. 177
The I n t e r n a t i o n a l B ankf s lo a n s an d s e r v ic e s
t o I r a q and T u r k e y ................................. 180
BIBLIOGRAPHY................................................................ 183
LIST OF TABLES
TABLE PAGE
I . The E s tim a te d Revenue f o r th e G e n e ra l Program
f o r th e S ix F in a n c ia l Y ears 1951-1956 . . . 70
I I . The E s tim a te d Revenue an d th e A c tu a l Revenue
f o r th e G en eral Program , ■ ...................................... 72
I I I . E s tim a te s o f E x p e n d itu re s f o r th e G en eral
Program f o r th e S ix F in a n c ia l Y ears E nding
1956 78
IV. P ro v is io n S a n c tio n e d f o r th e Y ear 1952 an d
th e A c tu a l E x p e n d itu re ................................. . 81
V. I r r i g a t i o n and F lood C o n tro l P r o j e c t on
E u p h ra te s— E s tim a te s o f E x p e n d itu re s f o r
th e S ix F in a n c ia l Y ears . ...................................... 92
V I. I r r i g a t i o n and F lo o d C o n tro l P r o j e c t on
T ig r is — E s tim a te s o f E x p e n d itu re s f o r th e
S ix Y ears . . . . . . . . . . . . . . . . . 98
V II. I r r i g a t i o n and F lo o d C o n tro l P r o j e c t s on
E u p h ra te s and T i g r i s — E s tim a te s o f E xpendi
tu r e s f o r th e S ix Y ears ............................. 102
V I I I . C o n s tru c tio n o f Roads and B rid g e s — E s tim a te s
f o r E x p e n d itu re s f o r th e S ix Y ears . . . . 109
IX. E s tim a te s o f E x p e n d itu re s f o r B u ild in g f o r
th e S ix Y e a r s .......................................... 119
v i i i j
TABLE PAGE
X. T ahle o f A m o rtiz a tio n ................................... ll#0
X I. The E s tim a te d C ost f o r th e C o n s tru c tio n o f
th e Wadi T h a rth a r P r o je c t . . . . . . . . 11*9
X II. The I n t e r n a t i o n a l Bank*s L oans to th e
Government o f T urkey . .............................................. 15^ ;
CHAPTER I
INTRODUCTION
The I n t e r n a t i o n a l Bank, f o r R e c o n s tru c tio n and
D evelopm ent i s a r e l a t i v e l y new o r g a n iz a tio n .
Hie w o rld d e p re s s io n and W orld War I I b ro u g h t an end
to p r i v a t e i n t e r n a t i o n a l in v e s tm e n t. C o n se q u e n tly , a t th e
c o n c lu s io n o f W orld War I I , th e w o rld was hun g ry f o r
c a p i t a l . M oreover, r e c o n s tr u c tio n re q u ire m e n ts in E urope
in c r e a s e d th e n eed f o r I n t e r n a t i o n a l In v e s tm e n t. L ik e w is e ,
developm ent o f th e s o - c a lle d u n d e rd e v e lo p e d c o u n tr ie s had
become e s s e n t i a l to th e w o r ld 's econom ic p r o g r e s s . T here
f o r e , th e c r e a tio n o f th e Bank was a n e c e s s i t y to s tim u la te
and g u id e , and to a s s i s t p r i v a t e i n t e r n a t i o n a l In v e s tm e n t.
I t i s in th e I n t e r e s t o f a l l n a t io n s t h a t p o stw a r
r e c o n s tr u c tio n sh o u ld be r a p id . L ik e w is e , th e d e v e lo p
ment o f th e r e s o u r c e s o f p a r t i c u l a r r e g io n s i s In th e
g e n e ra l econom ic i n t e r e s t . . . •1
The S ta te m e n t o f th e Problem
The p u rp o s e o f t h i s s tu d y i s to s u rv e y th e sc o p e o f
th e I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent
in i n t e r n a t i o n a l le n d in g and b o rro w in g . The s tu d y i s
d iv id e d in to two p a r t s . P a r t I w i l l a tte m p t to d e s c r ib e , in
1 From a summary o f th e B re tto n Woods C o n feren ce in
th e New York T im es, J u ly 2 2 , 1 9 ^ .
g e n e r a l, th e Bank*a o p e r a tio n s and th e f a c t o r s in f lu e n c in g
i t s d e c is io n s .
In P a r t I I th e D evelopm ent B oard o f I r a q and i t s
ac h ie v e m e n ts in d e v e lo p in g th e econom ic c o n d itio n in I r a q
and r a i s i n g i t s p e o p le ’ s s ta n d a r d o f l i v i n g w i l l b e s tu d ie d .
M o reo v er, th e B ank’ s lo a n s f o r developm ent to I ra q an d
T urkey w i l l b e exam ined.
In f a c t , t h i s p a p e r w i l l em phasize th e r o l e p la y e d by
th e I r a q i D evelopm ent B oard and th e B a n k 's lo a n to I r a q , and
i t s e f f e c t on th e econom ic c o n d itio n s and th e p e o p l e 's
s ta n d a r d o f l i v i n g i n t h i s c o u n try .
The p u rp o s e , th e n , o f th e stu d y o f th e lo a n s to
T urkey i s to d e m o n stra te p o s s i b i l i t i e s f o r f u tu r e d e v e lo p
m ent lo a n s to I r a q . In o th e r w o rd s, one c h a p te r in th e
seco n d p a r t o f t h i s p a p e r w i l l be d e v o te d to stu d y and
su rv e y th e p o s s i b le f u n c tio n s o f th e I n t e r n a t i o n a l Bank in
dev elo p m en t p ro b lem s In I r a q In com p ariso n w ith th e
ac h ie v e m e n ts o f t h e Bank in T urkey in d e a lin g w ith s i m i l a r
p ro b le m s .
I t i s n e c e s s a r y to n o te h e re th a t th e p u rp o se o f
c h o o s in g th e s e two p a r t i c u l a r c o u n tr ie s f o r th e s tu d y i s
t h a t th e y a r e a t v e ry n e a r ly th e same l e v e l o f d ev elo p m en t
and have co m p arab le econom ic, s o c i a l , and c u l t u r a l b a c k
g ro u n d s .
I t l e a d v is a b le to m e n tio n a t th e b e g in n in g t h a t
Iraq, h a s c o n s o lid a te d a l l i t s d e v e lo p m e n ta l f u n c tio n s u n d er
a g o v ern m e n tal program m ing u n i t c a ll e d th e D evelopm ent
B o ard . I r a q , to d a y , i s lo o k in g to t h i s B oard f o r i t s
econom ic and s o c i a l Im provem ents, and f o r a g e n e ra l r i s e in
th e s t a t u s o f i t s p e o p le .
T h e re fo re , th e s tu d y w i l l c r i t i c a l l y a n a ly z e th e
p r e s e n t p o lic y o f th e Bank and a p p r a is e th e a d v a n ta g e s and
w eak n esses o f th e e x i s ti n g D evelopm ent B oard o f I r a q .
Im p o rtan ce o f th e Study
The u n d e rd e v e lo p e d c o u n tr ie s have g r e a t p o t e n t i a l i
t i e s f o r econom ic d ev e lo p m en t. In th e c o u n tr ie s o f S o u th ern
A s ia , f o r in s t a n c e , th e r e i s a s iz a b le a r e a o f la n d w hich
c o u ld be b ro u g h t u n d er c u l t i v a t i o n , and t h e r e a r e g r e a t
u n d ev elo p ed m in e ra l r e s o u r c e s . M oreover, b o th a g r i c u l t u r a l
p r o d u c ts and m in e ra ls a re now e x p o rte d i n th e cru d e s t a t e .
L im ite d c a p i t a l a c c u m u la tio n and s o c i a l r i g i d i t y in
u n d e rd e v e lo p e d a r e a s a r e th e m ajo r d e t e r r e n t s to econom ic
a c t i v i t y .
The s h o r ta g e o f i n v e s t i b l e fu n d s and la c k o f i n v e s t
m ent o p p o r tu n iti e s r e p r e s e n t two a s p e c ts o f th e same
p ro b lem . A g r e a t number o f In v e stm e n t p r o j e c t s ,
u n p r o f it a b le u n d e r p r e v a i l i n g c o n d itio n s , c o u ld be m ost
p ro m isin g i n a g e n e ra l en v ironm ent o f econom ic expan
s io n . L a r g e - s c a le in v e stm e n t id p r e d ic a te d upon la r g e
s c a le in v e s tm e n t. B oads, e l e c t r i c pow er s t a t i o n s ,
r a i l r o a d s , an d h o u ses have to be b u i l t b e fo re b u s in e s s
men f in d i t p r o f i t a b l e to e r e c t f a c t o r i e s and to in v e s t
t h e i r fu n d s i n new e n t e r p r i s e s . 2
I t i s o b v io u s t h a t p r i v a t e fu n d s and even governm ent
fu n d s a r e in a d e q u a te f o r l a r g e - s c a l e in v e s tm e n t. T hus,
th e s e c o u n tr ie s a r e hun g ry f o r f o r e ig n f i n a n c i a l a i d .
The I n t e r n a t i o n a l Bank f o r B e c o n e tru c tio n and
D evelopm ent i s an Im p o rta n t f a c t o r in th e f i e l d o f i n t e r
n a t i o n a l In v e stm e n t; in f a c t , th e Bank h a s become th e o n ly
im p o rta n t i n s t i t u t i o n in t h i s f i e l d . I t w as s t a t e d a t th e
B r e tto n Woods C o n feren ce t h a t , *'. . . P ro g r e s s o f re c o n
s t r u c t i o n and developm ent w i l l sp eed econom ic p r o g r e s s
ev e ry w h e re , w i l l a i d p o l i t i c a l s t a b i l i t y , and f o s t e r
p e a c e . “3
How, th e n , th e im p o rta n ce o f th e s tu d y i s p r i n c i p a l l y
d e r iv e d from th e im p o rta n ce o f th e Bank to t h i s c r e d i t
h u n g ry w o rld .
O rg a n iz a tio n o f th e T h e sis
As was s t a t e d ab o v e, t h i s p a p e r i s d iv id e d i n to two
p a r t s . P a r t I i s a d e s c r ip t i v e s tu d y o f th e s t r u c t u r e and
m a jo r f u n c tio n s o f th e Bank. In P a r t I I th e JQpaql
2 P au l A. B aran , “N a tio n a l Economic P la n n in g ,1 1 A
S u rv ey o f P ontem porary Econom ics (Homewood, I l l i n o i s :
R ic h a rd D. Irw in , I n c ., V o l. I I , 1 9 5 2 ), p . 379*
3 Summary o f B re tto n Woods C o n fe re n c e , l o c . c i t .
D evelopm ent B oard and th e developm ent lo a n s to I r a q an d
T urkey a r e exam ined.
F o llo w in g th e I n tr o d u c tio n , P a r t I i s composed o f two
c h a p te r s (C h a p te r I I and C h a p te r I I I ) .
C h ap ter I I i s s e t up to a n a ly z e t h e m a jo r o p e r a tio n a l
p o l i c i e s o f th e Bank. I t c o n ta in s th r e e p a r t s , th e f i r s t o f
w hich d e f in e s th e Bank. The seco n d p a r t d is c u s s e s th e
p u rp o s e s o f th e Bank and th e th r e e s o u rc e s o f th e B a n k 's
fu n d s , nam ely, th e Bankl s c a p i t a l , fu n d s borrow ed i n th e
c a p i t a l m a rk e ts , an d lo a n s made by p r i v a t e in v e s t o r s . The
t h i r d p a r t d e a ls w ith th e b a s ic c h a r a c te r o f th e B a n k 's
le n d in g a s r e g a r d s th e s p e c i f i c p r o j e c t p r o v is io n , d e t e r
m in a tio n o f th e p r o j e c t to be fin a n c e d , an d lo a n s f o r l o c a l
c u rre n c y e x p e n d itu r e s .
In C h a p te r I I I th e B a n k 's h a n d lin g o f r e q u e s ts f o r
lo a n s i s d is c u s s e d . The f i r s t p a r t o f t h i s c h a p te r d e a ls
w ith th e f a c t o r s in f lu e n c in g th e B a n k 's d e c is io n s . The
se co n d p a r t d is c u s s e s th e c h a r a c te r o f t h e B a n k 's i n v e s t i g a
t i o n th ro u g h in fo rm a l d is c u s s io n and fo rm a l n e g o t ia tio n and
th e B a n k 's r e l a t i o n s w ith b o rro w e rs .
O th er f u n c tio n s o f th e Bank r e g a r d in g c u rre n c y
p ro b le m s , lo a n s to p r i v a t e e n t e r p r i s e s , lo a n c h a rg e s , and
p r o v is io n f o r te c h n i c a l a s s i s t a n c e a r e d is c u s s e d in th e
t h i r d and l a s t p a r t o f t h i s c h a p te r .
P a r t XI o f th e t h e s i s c o n ta in s t h r e e c h a p te rs
(C h a p te rs IV, V, and. V I).
C h ap ter IV i s devoted, to a d is c u s s io n o f I r a q an d th e
B oard o f D evelopm ent. I t c o n ta in s th r e e p a r t s , th e f i r s t o f
w h ich d e s c r ib e s g e n e ra l e x i s t i n g c o n d itio n s in I r a q . The
se c o n d p a r t d is c u s s e s th e B oard o f D evelopm ent o f I r a q
c o n c e rn in g i t s e s ta b lis h m e n t, i t s p u rp o se and d u ty , an d i t s
re v e n u e . In th e t h i r d p a r t th e B oard and i t s g e n e ra l
econom ic program i s exam ined in te rm s o f th e e s tim a te d
re v e n u e f o r th e p ro g ram , th e p r o j e c t s w h ich a re I n c lu d e d in
th e p ro g ram , and i t s e s tim a te d e x p e n d itu r e s .
C h ap ter V I s s e t up t o exam ine th e B o a rd 's g e n e r a l
econom ic developm ent program i n d e t a i l . I t i s d iv id e d i n t o
t h r e e p a r t s c o n c e rn in g th e u r g e n t n eed s o f th e c o u n try o f
I r a q f o r th e d i f f e r e n t developm ent p r o j e c t s . The f i r s t p a r t
o f t h i s c h a p te r d e a ls w ith th e i r r i g a t i o n and f lo o d c o n tr o l
p r o j e c t s . The se co n d d is c u s s e s th e ro a d s and b u ild in g s
p r o j e c t s , in c lu d in g b r id g e s , h o s p i t a l s and i n s t i t u t i o n a l
h e a l t h , sc h o o ls an d e d u c a tio n a l i n s t i t u t i o n s , and h o u sin g
p r o j e c t s . The t h i r d p a r t i s d e v o te d to a s tu d y o f th e
im p o rta n c e of new i n d u s t r i a l p r o j e c t s a s a means f o r
econom ic d ev e lo p m en t.
In C h ap ter VI th e I n t e r n a t i o n a l B a n k 's lo a n s and
s e r v i c e s to I r a q and Turkey a r e d is c u s s e d . I t c o n ta in s
f i v e p a r t s , th e f i r s t o f w h ich d e a ls in b r i e f w ith lo a n s f o r
u n d erd ev e lo p ed c o u n t r i e s . The seco n d p a r t d is c u s s e s th e
B ank*6 lo a n to I r a q re g a rd in g th e amount and p u rp o se o f th e
lo a n , and th e B a n k 's m is s io n to I r a q . I t i s i n t e r e s t i n g to
n o te t h a t th e Bank h as m ade, to t h i s d a t e , o n ly one lo a n to
I r a q . The t h i r d p a r t d is c u s s e s th e B a n k 's lo a n s to T urkey
c o n c e rn in g t h e i r am ounts and p u rp o s e s , an d o th e r B a n k 's
s e r v i c e s to T u rk ey . In th e f o u r th p a r t o f t h i s c h a p te r a
c o m p a ra tiv e s tu d y i s made o f th e B a n k 's s e r v ic e s to I r a q
and T urkey in r e g a r d to th e d i f f e r e n t lo a n s and s e r v ic e s
g iv e n to b o th c o u n t r ie s . T hen, a s u g g e s tio n f o r a n o th e r
lo a n to I r a q i s p ro p o s e d . The f i f t h p a r t d e a ls w ith th e
n e c e s s i t y f o r ch a n g in g th e e x i s t i n g I r a q i I n d u s t r i a l Bank
to one s im ila r to t h a t o f T u rk ey .
C h a p ter V I I , th e f i n a l c h a p te r , sum m arizes, s t a t e s
o v e r - a l l f i n d i n g s , and draw s c o n c lu s io n s .
S o u rc es o f D ata
B ecause o f th e two p a r t s o f t h i s p a p e r , two s o u rc e s
o f d a t a w ere n e e d e d . As c o n c e rn s P a r t I , much h a s been
w r i t t e n ab o u t th e I n t e r n a t i o n a l Bank by t h e Bank i t s e l f and
by ec o n o m ists in th e f i e l d o f i n t e r n a t i o n a l in v e s tm e n t. In
f a c t , a s p rim a ry and se c o n d a ry s o u r c e s , w h eth e r a s books o r
p e r i o d i c a l s , th e Bank p u b lic a t io n s and th e l i k e a r e r e a d i l y
a v a i l a b l e . As to s o u rc e s o f d a ta c o n c e rn in g th e dev elo p m en t
lo a n s to I r a q and T urkey, th e w r i t e r r e l i e d on th e B a n k 's
p u b lic a t io n s in th e form o f Bank r e p o r t s , th e B a n k 's lo a n
a g ree m en ts and th e l i k e . As th e s tu d y p u ts m ost em p h asis
on th e r o l e p la y e d by The D evelopm ent B oard o f I r a q , th e
w r i t e r h ad to lo o k f o r more m a te r ia l an d In fo rm a tio n con
c e r n in g I r a q . As th e s o u rc e s o f d a ta c o n c e rn in g I r a q , th e
A ra b ic and E n g lis h l i t e r a t u r e , a r e v e ry few , th e w r i t e r
c o n s u lte d a l l th o s e m a t e r i a l s w h ich r e l a t e to th e p ro b lem .
The R e p o rt o f th e M issio n o f th e I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and D evelopm ent was fo u n d v e ry h e l p f u l in
t h i s s tu d y . The A nnual R e p o rts o f th e D evelopm ent B oard o f
I r a q a n d th e c o m p ila tio n o f la w s c o n c e rn in g th e D evelopm ent
B o ard , w hich c o n ta in p r a c t i c a l l y th e o n ly a v a ila b le
m a t e r i a l s c o n c e rn in g t h i s s u b j e c t , w ere in a d e q u a te a s
s o u rc e s o f v a lu a b le in fo rm a tio n o r a n a l y s i s .
I t i s hoped t h a t t h i s s tu d y w i l l b e s a t i s f a c t o r y and
w i l l r e s u l t in s tim u la tin g f u r t h e r d is c u s s io n and a n a ly s is
o f t h e p ro b lem s and a t th e same tim e i n d i c a t e th e f a c t s and
i s s u e s .
CHAPTER I I
THE MAJOR OPERATIONAL POLICIES OF THE BANK
I . "W H A T IS THE INTERNATIONAL BANK?
The I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
D evelopm ent i s a f i r s t v e n tu r e o f p erm an en t i n t e r
n a t io n a l c o o p e ra tio n in lo n g -te rm f o r e i g n le n d in g . I t s
b a s ic c o n c e p t i s t h a t o f an I n s t i t u t i o n th e c a p i t a l o f
w hich i s s u b s c rib e d by a l l i t s members an d on th e b o ard
o f w hich c r e d i t o r a s w e ll a s d e b to r n a tio n s a r e r e p r e
se n te d * ^
The Bank i s owned by th e members who a r e o f to d a y
f i f t y - f o u r n a t i o n s , and i t d o e s i t s b u s in e s s in th e s e
c o u n t r i e s . The r e l a t i o n s h i p betw een th e Bank and i t s
members g iv e s an u n u su a l o p p o r tu n ity f o r c lo s e an d f r i e n d l y
c o u n s e l. The Bank i s c h a r a c te r iz e d by a u n iq u e f e a t u r e in
t h a t , " i t p r o v id e s an o p p o r tu n ity f o r p a r t i c i p a t i o n o f
le n d e r s and b o rro w e rs a l i k e in d r a f t i n g , b o rro w in g an d
le n d in g p o l i c i e s . " 2
A c tu a lly , th e s ig n in g o f th e B r e tto n Woods A greem ents
b y w h ich A greem ents th e I n t e r n a t i o n a l M onetary Fund and th e
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n end D evelopm ent w ere
A nto n in B asch , " I n t e r n a t i o n a l Bank f o r R e c o n stru c
t i o n and D evelopm ent," I n t e r n a t i o n a l C o n c ilia tio n (New York:
C a rn e g ie Endowment f o r I n t e r n a t i o n a l P e a c e , No. ^55>
November, 19^9) > P* 791*
2 L oc. c l t .
10
e s t a b l i s h e d , " a c h ie v e d a v e ry im p o rta n t developm ent in th e
h i s t o r y o f i n t e r n a t i o n a l c o o p e ra tio n in th e f i n a n c i a l
f i e l d . "3 The I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
D evelopm ent h as b een a t work th ro u g h o u t th e f r e e w o rld
m aking lo a n s to I n c r e a s e p ro d u c tio n and r a i s e th e s ta n d a r d s
o f l i v i n g .
I I . THE PURPOSES AN D STRUCTURE OP THE BANE
The P u rp o se s o f t h e Bank
The A r t i c l e s o f A greem ent l i s t f i v e p u rp o se s o f th e
Bank in some d e t a i l . The f o llo w in g q u o ta tio n s w i l l s u f f i c e
to g iv e th e e s se n c e o f th e Bank*s p u rp o s e s :
( l ) To a s s i s t in th e r e c o n s tr u c tio n and developm ent
o f t e r r i t o r i e s o f members by f a c i l i t a t i n g th e in v e stm e n t
o f c a p i t a l f o r p r o d u c tiv e p u rp o s e s , in c lu d in g th e
r e s t o r a t i o n o f econom ies d e s tro y e d o r d is r u p te d b y w ar,
* • •
The I n t e r n a t i o n a l Bank i s a p u b lic I n t e r n a t i o n a l
i n s t i t u t i o n fo u n d ed f o r th e p u rp o se o f f o s t e r i n g lo n g -te rm
econom ic g ro w th in i t s m em bers. T h e re fo re , th e m ain p u rp o se,
o f th e Bank i s to f a c i l i t a t e and prom ote f o r e ig n in v e stm e n t
f o r th e p u rp o se o f r e c o n s tr u c tio n and d e v e lo p m e n t.
3 jr. w. B eyen, Money i n a M aelstrom (New Y ork: The
M acm illan Company, 19^9)", p . 1 8 0 .
^ A r t i c l e s o f A g reem en t. " I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n an d D evelopm ent," A r t i c l e I ( i ) , p . 1 .
11
The Bank p u ts e q u a l em phasis on r e c o n s tr u c tio n and
d ev elo p m en t. In t h i s c o n n e c tio n , th e A r t i c l e s o f A greem ent
s t a t e t h a t , "The re s o u r c e s and th e f a c i l i t i e s o f th e Bank
s h a l l be u s e d . . . w ith e q u i ta b l e c o n s id e r a tio n to p r o j e c t s
f o r developm ent and p r o j e c t s f o r r e c o n s tr u c tio n a l i k e .
Basch I n d i c a t e s t h a t , "many arg u m en ts d e v e lo p e d
aro u n d t h i s p o in t a t B re tto n W oods.“6
The Bank, a s e x p re s s e d by th e r e p r e s e n t a t i v e s o f th e
l e s s d e v e lo p e d c o u n t r i e s , w ould a l l o o a t e to o la r g e a s h a re
o f i t s r e s o u r c e s to r e c o n s tr u c tio n and c o n s e q u e n tly n o t
enough w ould be l e f t f o r d e v e lo p m e n t. I t was L ord Keynes
who d e f e a te d su ch p r o p o s a ls b y a rg u in g t h a t , " sh o u ld th e
am ounts be e q u a lly d iv id e d b etw een r e c o n s tr u c tio n an d d e v e l
opm ent lo a n s , t h e r e would n o t be enough developm ent lo a n s
a f t e r th e r e c o n s tr u c tio n was c o m p le te d ."7
N e v e rth e le s s , "As m a tte r s have w orked o u t th e Bank
h as in c r e a s in g ly em phasized i t s 1 D evelopm ent * r a t h e r th a n
i t s ‘ R e c o n s tru c tio n ’ f u n c tio n s u n t i l t h i s i s now a lm o st i t s
e x c lu s iv e i n t e r e s t ." ®
I h l d . , A r t i c l e I I I , S e c tio n I ( a ) , p . 5*
6 B asch, o p . c l t . , p . 79^*
7 Loc. c l t .
® Noiman S. B uchanan, “ I n t e r n a t i o n a l In v e s tm e n t,"
A Survey o f Contemporary Economics (Homewood, I l l i n o i s :
R ichard D. Irw in , I n c ., 1 9 5 2 ), V ol. I I , p . 335.
12
" ( i i ) To p ro m o te p r i v a t e f o r e ig n in v e stm e n t by means
o f g u a ra n te e s o r p a r t i c i p a t i o n in lo a n s an d o th e r i n v e s t
m ents made by p r i v a t e i n v e s t o r s ; . . . “9
S in ce th e end o f W orld War I I , a s A rth u r S a l t e r h as
re m a rk e d , " P r iv a te f o r e ig n in v e stm e n t ( i n w hich th e g e n e r a l
I n v e s to r r i s k s h i s money) e i t h e r in p o r t f o l i o o r in d i r e c t
in v e stm e n t h as b een p r a c t i c a l l y n o n - e x i s t e n t .*10 In t h i s
c o n n e c tio n , Buchanan h o ld s t h a t :
At l e a s t i n th e U n ite d S ta te s — by f a r th e l a r g e s t
p o t e n t i a l s o u rc e o f p r i v a t e f o r e ig n In v e stm e n t— i n v e s t
o r s have f e l t t h a t th e r i s k s o f w ar, o f c o n f is c a ti o n ,
o f p o l i t i c a l i n s t a b i l i t y a b ro a d , o f exchange c o n t r o l
b lo c k in g o f e a rn in g s an d p r i n c i p a l , e t c . , have made
f o r e ig n com m itm ents q u ite u n a t t r a c t i v e com pared w ith
a v a ila b le d o m e s tic o p p o r t u n i t i e s . ^ i
T h e re fo re , th e d e c lin e in p r i v a t e In v e stm e n t h a s been
a conseq u en ce o f W orld War I I , and even o f th e u n f o r tu n a te
d e p r e s s io n e x p e rie n c e o f many c o u n tr ie s w ith fo re ig n i n v e s t
ment an d i n t e r n a t i o n a l c a p i t a l flo w s . In t h i s r e s p e c t ,
M ik e s e ll p o in ts o u t t h a t :
One o f th e t r a g i c co n seq u en ces o f th e A m erican
d e p r e s s io n an d breakdow n o f th e i n t e r n a t i o n a l c u rre n c y
9 A r t i c l e s o f A greem ent, o p . c l t ♦, A r t i c l e I ( i i ) .
A rth u r S a l t e r , F o re ig n In v e stm e n t ( I n t e r n a t i o n a l
F in a n c e S e c tio n , P rin c e to n U n iv e r s ity , E ssa y s in I n t e r
n a t i o n a l F in a n c e , Ho. 1 2 , F e b ru a ry , 1951)> P* 3 8 .
^ Buchanan,loo, clt., p. 3^3 •
13
i
sy stem i n th e e a r l y 1 9 3 0 f s m s th e p r e c i p i t o u s d e c lin e
i n th e U n ite d S ta te s p r i v a t e in v e s tm e n ts a b ro a d . T h is
d e c lin e was c a u se d by a com plex o f econom ic, p o l i t i c a l ,
and p s y c h o lo g ic a l f a c t o r s , m ost o f w h ich can be tr a c e d
to th e A m erican d e p re s s io n o f 1 9 2 9 .I 2
T h e re fo re , th e c r e a tio n o f th e Bank was a n e c e s s i t y
to t h i s w o rld , to g u a ra n te e and supplem ent b u t n o t r e p la c e -
p r i v a t e f o re ig n in v e s tm e n t. In o th e r w o rd s, th e i n s t i t u t i o n
was d e s ig n e d n o t to r e p la c e p r i v a t e I n t e r n a t i o n a l in v e s tm e n t
b u t to en co u rag e a n d , i f n e c e s s a r y , g u id e i t . M o reo v er, th e
Bank i s n o t su p p o sed to com pete w ith p r i v a t e in v e s tm e n t.
"No w o n d er," a s B asch p o in ts o u t, M t h a t some d e le g a te s
s u g g e s te d a t B re tto n Woods a change in th e names o f th e two
I n s t i t u t i o n s , th e IMF to be c a l l e d th e Bank and th e Bank th e
G u aran t e e Fund. M 13
T hose, in f a c t , a r e th e m ain p u rp o s e s o f th e Bank.
To c o n c lu d e , th e Bank, a c c o rd in g to th e A r t i c l e s , s h o u ld
d e v o te i t s r e s o u r c e s and f a c i l i t i e s m a in ly to p r o d u c tiv e
p u r p o s e s . M oreo v er, th e em phasis in th e B a n k 's c o n s t i t u t i o n
i s n o t on w hat th e Bank i t s e l f can le n d , b u t on ways in
w hich i t can s ti m u la te th e g ro w th o f in v e s tm e n t n a t i o n a l l y
and i n t e r n a t i o n a l l y .
1^ Raymond F. M ik e s e ll, U n ite d S t a t e s Economic P o lic y
and I n t e r n a t i o n a l R e la tio n s (New York: M cG raw -H ill Book
Company, I n c . , 1 9 5 2 ), p .
13 B asch, o £ . c l t . » p . 799*
The Bank began o p e r a tio n o f f i c i a l l y in Ju n e , 19**6>
and i t made i t s f i r s t lo a n in May, 19*17. By th e end o f
1 9 5 2 , i t had made lo a n s f o r a b o u t 250 p r o j e c t s la r g e and
s m a ll in tw en ty — s i x member n a t i o n s .
S o u rces o f Fund
The Bank i s a u th o r iz e d to make lo a n s o u t o f i t s
fu n d s , o r o u t o f borrow ed f u n d s , o r to g u a ra n te e lo a n s . In
o th e r w ords,
The Bank may a s s i s t b o rro w e rs th ro u g h th r e e c h a n n e ls :
th ro u g h lo a n s d i r e c t l y from i t s own r e s o u r c e s , th ro u g h
fu n d s bo rro w ed in th e c a p i t a l m a rk e ts u n d er i t s own
o b lig a tio n and th ro u g h g u a r a n te e in g lo a n s made by
p r i v a t e in v e s t o r s .! * '
The Bank1s c a p i t a l . — The p r o j e c t f o r th e I n t e r
n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent was b a se d
on t h e assu m p tio n t h a t M . . , th e i n s t i t u t i o n was to be a
t r u l y i n t e r n a t i o n a l one in w h ich a l l th e p a r t i c i p a t i n g
n a tio n s w ould ta k e t h e i r p a r t s a s s h a r e h o l d e r s . " ^
The Bank i s made up o f member g o v ern m en ts— in
a l l — and o n ly governm ents may b e lo n g . On jo i n i n g , ea ch
governm ent s u b s c rib e d to s h a re s in th e B a n k 's c a p i t a l ,
t h e amount o f th e s u b s c r i p tio n in e a c h c a se d e p e n d in g
on a member*s n a t io n a l Income and i n t e r n a t i o n a l t r a d e .
The U .S .S .R . and h e r s a t e l l i t e s ( a p a r t from Czecho
s lo v a k ia ) th e A rg e n tin e , S p a in , P o r tu g a l, S w itz e rla n d
I n t e r n a t i o n a l F in a n c ia l S t a t i s t i c s , F e b ru a ry ,
1951, IV, x iv .
15 Beyen, op. cit., p. 177.
an d New Z e a la n d a r e n o t m em bers.3-6
As I t i s c l e a r l y s t a t e d in th e A r t i c l e s of A gree
m ent ,3.7 th e a u th o r iz e d c a p i t a l s to c k o f th e Bank i s $10
b i l l i o n . Members o f th e Bank m ust a ls o be members o f th e
IMF.
T hus, th e B a n k 's own fu n d w hich i s a v a ila b le f o r
le n d in g i s th e c a p i t a l s u b s c rib e d by member n a t io n s . Only
20 p e r c e n t o f th e B a n k 's c a p i t a l i s p a i d i n , th e re m a in in g
80 p e r c e n t s e r v in g a s a g u a ra n te e fu n d , upon w hich th e
Bank may c a l l o n ly i f i t i s u n a b le to m eet i t s o b l i g a ti o n s
in an y o th e r way.
T here w as, a s B asch h a s rem ark ed , a h e a te d d is c u s s io n
r e g a r d in g th e t o t a l amount o f g u a ra n te e s o u ts ta n d in g ,
p a r t i c i p a t i o n s in lo a n s , and d i r e c t lo a n s made by th e Bank
in r e l a t i o n to u n im p a ire d , s u b s c rib e d c a p i t a l , r e s e r v e s and
s u r p l u s . The d is c u s s io n was a s fo llo w s :
On th e one s id e w ere th e c o n s e r v a tiv e s who w ere in
f a v o r o f p u t t i n g th e l i m i t below 100 p e r c e n t, somewhere
aro u n d 70 p e r c e n t; th e y th o u g h t t h a t t h i s w ould have
f a v o r a b le e f f e c t s on th e m ark e t o f th e o b lig a tio n s
g u a ra n te e d o r is s u e d by th e Bank. On th e o th e r s id e
w ere th e o p tim is ts who w ould have l i k e d to h av e a l i m i t
from 150 p e r c e n t up to 300 p e r c e n t o f th e s u b s c rib e d
c a p i t a l , in th e hope t h a t th e p o stw a r c o o p e ra tio n w ould
3-6 Eugene R. B la c k , P o l i c i e s and O p e ra tio n s o f th e
W orld Bank, J u ly 1953* P* 1«
3*7 A r t i c l e s o f A greem ent, op. c l t . , A r t i c l e I I ,
S e c tio n s 1 , 2 , 5» 6 , 7 and 8 , p p . 2~3.
d e v e lo p an e x tre m e ly f a v o r a b le c lim a te f o r f i n a n c i a l
t r a n s a c t i o n s o f t h i s ty p e .
As a r e s u lt o f t h i s d is c u s s io n , a p r o v isio n was
Introduced in th e A r t ic le s o f Agreement w hich lim it s th e
t o t a l amount o f gu aran tees o u tsta n d in g , p a r t ic ip a t io n s in
lo a n s and d ir e c t lo a n s made by th e Bank. TheBe sh ou ld not
exceed 100 p er c e n t o f th e unim paired, su b scrib ed c a p it a l,
r e s e r v e s , and su r p lu s o f th e Bank.
Each member p a id in 2 p e r c e n t o f i t s s u b s c r i p tio n ,
o r , in o th e r w o rd s, one t e n t h o f th e 20 p e r c e n t, in g o ld o r
d o l l a r s . The am ount was im m e d ia tely a v a i l a b l e f o r u s e in
th e Bank*s le n d in g o p e r a tio n s . However, th e 18 p e r c e n t,
o r , in o th e r w o rd s, th e n in e te n th s o f th e 20 p e r c e n t was
p a id in th e c u r r e n c ie s o f th e member c o u n tr ie s and can be
u s e d f o r lo a n p u rp o s e s o n ly w ith th e c o n s e n t o f th e member
whose c u rre n c y i s in v o lv e d .
Up to December 3 1t 1952 th e Bank*s members h ad made
a v a i l a b l e f o r le n d in g an amount e q u iv a le n t to #8^6
m il lio n ( 1*302 m il lio n ) o u t o f t h e i r s u b s c r i p tio n to th e
Bank*s c a p i t a l . #177*2 m il l i o n o f t h i s i s th e 2 p e r
c e n t g o ld o r d o l l a r s paym ent by a l l mem bers; $571*5
m il lio n r e p r e s e n t s th e e n t i r e 18 p e r c e n t s u b s c r ip tio n
o f th e U n ite d S t a t e s , w h ich th e U n ite d S ta te s Government
r e le a s e d f o r le n d in g ; and #97*3 m il li o n r e p r e s e n ts
r e l e a s e s from th e 18 p e r c e n t c a p i t a l o f o th e r members
o f th e Bank. These f i g u r e s do n o t in c lu d e th e £60
m illio n w hich th e U n ite d Kingdom i s r e l e a s i n g f o r Bank
lo a n s to members o f th e Commonwealth, as d e c id e d d u rin g
1® Basch, op. c i t . , p . 799*
i 17
th e r e c e n t Commonwealth C o n fe re n c e . Nor do th e y in c lu d e
r e le a s e s in p r i n c i p l e by o th e r members w hich a r e s u b je c t
to c o n s u lta t io n b e fo re th e y may be l e n t . 19
However, th e 18 p e r c e n t o f th e s u b s c r i p tio n to th e
c a p i t a l s to c k o f th e Bank may be u se d o r exchanged f o r th e
c u r r e n c ie s r e q u ir e d to m eet c o n t r a c tu a l paym ents o f
I n t e r e s t , o th e r c h a rg e s o r a m o r tiz a tio n on th e Bank*s own
b o rro w in g s , o r to m eet th e B ank1 a l i a b i l i t i e s w ith r e s p e c t
to c o n t r a c tu a l paym ents on lo a n s g u a ra n te e d by i t w ith o u t
r e s t r i c t i o n by th e members w hose c u r r e n c ie s a r e in v o lv e d , i f
n e c e s s a r y , a f t e r th e B a n k 's s u b s c rib e d c a p i t a l i s e n t i r e l y
c a l l e d . 20
M oreover, th e Bank may le n d fu n d s d e riv e d from i t s
o p e r a t io n s . Up to th e end o f 1952, th e e q u iv a le n t o f
a p p ro x im a te ly #66.4- m illio n w as a v a i l a b l e from t h i s s o u r c e .
Funds b o rro w ed in th e c a p i t a l m a rk e t. — The Bank * s
c a p i t a l w hich i s s u b s c rib e d by member n a t i o n s , how ev er, was
n o t enough f o r th e B a n k 's le n d in g p o l i c i e s . T h e re fo re , th e
Bank d e c id e d to b o rro w money i n th e m a rk e t f l o a t i n g i t s own
b o n d s. To do t h a t , i t was n e c e s s a r y to p r e p a r e th e m a rk e t
^ W a lte r H i l l , "A d d ress d e liv e r e d to F e d e r a tio n o f
B r i t i s h I n d u s t r i e s ," I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n
and D evelopm ent (London: A p r il 27, 1953)* P» 1*
20 E ighth Annual R ep o rt. " I n te r n a tio n a l Bank f o r
R eco n stru ctio n and D evelopm ent," (W ashington, D.C.: Appendix
Q, N ote 13* 1 9 5 2 -5 3 ), p . 60 .
18
and l e g i s l a t i v e a c t i o n . In t h i s r e s p e c t , B asch in d i c a t e s
t h a t :
The Bank d e v e lo p e d a com p reh en siv e l e g i s l a t i v e p r o
gram in o r d e r to o b ta in n a t i o n a l and s t a t e l e g i s l a t i o n ,
an d a d m in is t r a tiv e a c tio n in th e U n ite d S ta te s w h ich
make th e B a n k 's o b l i g a t i o n e l i g i b l e f o r in v e stm e n t by
b a n k s , in s u r a n c e co m p an ies, and o th e r i n s t i t u t i o n a l
i n v e s t o r s . 23.
In 1947* th e Bank, f o r th e f i r s t tim e , e n te r e d th e
New York m a rk e t w ith two is s u e s t o t a l l i n g #250 m il lio n s
— 1150 m il l i o n in 3 p e r c e n t tw en ty f i v e y e a rs bo n d s
and #100 m i l l i o n in 2 1 /4 p e r c e n t t e n y e a rs b o n d s. In
1948 an is s u e was made o f 17 m illio n Sw iss f r a n c s o f
s h o r t- te r m 2 1 /2 p e r c e n t s e r i a l b o n d s. S in ce th e n
th e r e have b e e n v a r io u s i s s u e s in New York and S w itz e r
la n d . 22
As i t i s h e ld by th e E ig h th A nnual R ep o rt o f th e
B ank, " re s o u rc e s a v a ila b le f o r le n d in g w ere augm ented by th e
s a l e , in O c to b e r 1 9 5 2 , o f #60 m illio n o f th e B a n k 's bonds in
th e U n ite d S t a t e s . "-23 D uring t h a t y e a r , no f u r t h e r I s s u e s
w ere made in th e U n ite d S t a t e s , w here t h e r e was a s h a rp
I n c r e a s e in th e c o s t o f b o rro w in g .^4
Funds w ere r a i s e d o u ts i d e th e U n ite d S ta te s . In
November 1952, a sum o f f i f t y m illio n S w iss f r a n c s (a p p ro x i
m a te ly #116 m i l l i o n ) was r a i s e d , and a rra n g e m e n ts f o r
B asch, o p . c l t . , p . 800.
22 B la c k , o p . c l t . , p . 2 .
23 E ig h th A nnual R e p o r t, o p . c i t . , p . 7•
oh,
h O O . C i t.
! ' 19|
a n o th e r Is s u e of eq u al s iz e w ere com pleted In June* 1953•
Up to A p r il 27, 1953, th e Bank had r a i s e d M th e
e q u iv a le n t of 1567.5 m illio n (f203 m illio n ) th ro u g h th e s a le
o f i t s bonds in Canada, S w itz e rla n d , th e U n ite d Kingdom and
th e U n ite d S ta te s .* 1 ^ ^ t any r a t e , i t sh o u ld be remembered
t h a t b e fo re th e Bank can make is s u e s o f c a p i t a l in member
c o u n tr ie s i t must g e t, f i r s t , t h e i r a p p ro v a l. The re a s o n i s
to p r o t e c t th e member from h av in g to make an ex p o rt of
c a p i t a l w hich i t s economic p o s i t i o n does n o t w a rra n t.
The Bank h as fo llo w ed and s t i l l fo llo w s p ru d e n t
p o l i c i e s which e n a b le i t to e a rn a h ig h r e p u ta tio n among
I n v e s t o r s . Hence i t i s b e lie v e d th a t th e c a p i t a l m a rk e ts
w i l l be a la r g e and c o n tin u in g sou rce of fu n d s.
Loans made by p r i v a t e I n v e s t o r s . — As i t i s men
tio n e d above, th e Bank se e s i t s main p u rp o se i s th e
encouragem ent o f th e flow o f p r i v a t e c a p i t a l from c o u n tr ie s
where i t i s p l e n t i f u l to c o u n tr ie s where c a p i t a l i s s c a r c e .
At th e B re tto n Woods C onference, Keynes h e ld t h a t : ath e
m ain o p e ra tin g a c t i v i t y o f th e Bank sh o u ld be th e g u a r a n te e
in g o f lo a n s g ra n te d by p r i v a t e i n v e s t o r s . D ire c t le n d in g
by th e Bank ap p e ared to be of seco n d ary im p o rta n c e .
Loc» c i t .
H i l l , l o c . c l t .
2 7
Basch, op. c l t . , p. 797.
The Bank h a s s o ld u n d er i t s g u a ra n te e up to 1953
$49*803*1^6 o f b o rro w e r’ s o b lig a tio n s r e c e iv e d by th e Bank
in co n n e c tio n w i t h . i t s lo a n o p e ra tio n s o f w hich amount a
t o t a l o f $20,174,301 has been r e t i r e d . 2®
I I I . TH E BASIC C H A R A C T E R . OF BANK LENDING
The A r t i c l e s of Agreement govern t h e b a s ic c h a r a c te r
of Bank le n d in g .
The b a s ic c h a r a c te r of Bank le n d in g . . . i s
governed p a r t i c u l a r l y by th e th r e e p r o v is io n s in i t s
A r t i c l e s o f Agreem ent, w hich r e q u ir e t h a t : ex cep t in
s p e c i a l c irc u m s ta n c e s , Bank lo a n s be f o r s p e c i f i c
p r o j e c t s o f r e c o n s tr u c tio n o r developm ent; th a t th e
p r o j e c t i n i t i a l l y s e l e c t e d f o r f in a n c in g be th o s e most
u s e f u l and u rg e n t f o r I n c r e a s in g th e p ro d u c tiv e
re s o u r c e s o f i t s member c o u n tr ie s ; and t h a t a g a in except
In s p e c ia l c irc u m s ta n c e s , Bank f in a n c in g be d e s ig n e d to
m eet f o r e ig n exchange r a t h e r th an l o c a l c u rre n c y
e x p e n d itu r e s .29
f,The Bank h as I n s i s t e d w a s M ik e s e ll p o in ts o u t, w th a t
I t can make lo a n s o n ly on th e b a s is o f w e ll d ev elo p ed
p r o je c ts * . . . *»3© However, a s th e m a tte r h as worked o u t,
th e Bank o u tlin e d in 1949-1950 a number o f p o l i c i e s w hich
a r e more l i b e r a l and b ro a d e r th a n t h a t o f th e e a r ly p e r io d
28
E ig h th Annual R e p o rt, o p . c i t . , Appendix G, Note
F, p . 61.
29 Ma.jor O p e ra tio n a l P o l i c i e s o f I n t e r n a t i o n a l Bank,
U n ite d N ations B u l l e t i n , Volume IX, J u ly 1 - December 15,
1950, p . 318.
30 M ik e s e ll, op. c l t . , p . 203*
! 21
o f o p e r a t i o n s . A c t u a l l y , th e p o l i c i e s and p ro c e d u re s of
th e Bank have n o t been, and can n o t b e, s t a t i c , b u t a r e
c o n s ta n tly g o in g th ro u g h a p ro c e s s of d ev elo p m en t.32
The S p e c if ic P r o j e c t P ro v is io n
The o b je c t o f th e s p e c i f i c p r o j e c t p r o v is io n i s
sim p ly to a s s u re th a t lo a n s w i l l be u sed f o r p ro d u c tiv e
p u rp o s e s . The Bank r e q u ir e s a c l e a r agreem ent b o th a s to
th e ty p e s of goods and s e r v ic e s fo r w hich th e p ro c e e d s of
th e lo a n a re to be expended and o f th e u s e s t o w hich th o s e
goods and s e r v ic e s a r e to be s p e n t, b e f o r e a lo a n i s
g r a n te d . “W ithout such s p e c i f i c a t i o n i t w ould be im p o ssib le
f o r th e Bank t o Judge w hether o r to what e x te n t a lo a n would
be e f f e c t i v e in r a i s i n g th e l e v e l of p r o d u c t i o n ."33
The s p e c i f i c p r o j e c t ap p ro ach , how ever, has b ee n
c r i t i c i z e d by a number o f c r i t i c s . A group of e x p e rts f o r
th e U n ite d N a tio n s has recommended, in t h e study e n t i t l e d
N a tio n a l and I n t e r n a t i o n a l M easures f o r P u l l Employment,
t h a t th e Bank be p ro v id e d w ith a d d i tio n a l re s o u rc e s from
31 i b i a -* P« 205-
32 F i f t h Annual M eeting o f th e Board o f G o v ern o rs.
P a r i s , F ra n c e , Septem ber 6-l^f, 1950. " I n t e r n a t i o n a l Bank
f o r R e c o n s tru c tio n and D evelopm ent," (W ashington, D .C .:
November 30, 1 9 5 0 ), p . 1.
33 F i f t h Annual R e p o rt, " I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and D evelopm ent," (W ashington, D.G., 19^9-
1 9 5 0 ), p . 7.
22
I |
member governm ents f o r m aking lo a n s f o r " g e n e ra l developm ent
p u rp o se s n o t o nly In s p e c ia l c irc u m sta n c e s b u t g e n e r a l l y . "3^
But a s I t I s e x p la in e d by th e Bank in i t s F i f t h Annual
R e p o rt, I t s c r i t i c s have im p lie d th a t th e Bank does n o t
examine th e m e r its o f p a r t i c u l a r p r o j e c t s in r e f e r e n c e to
t h e i r r e l a t i o n to th e o v e r - a l l developm ent needs o f th e
borrow ing c o u n try . The R eport p o in ts o u t t h a t , " . . . th e
Bank does p r e c i s e l y th e o p p o s i t e . "35
The Bank se e k s to d e te rm in e what th e a p p r o p r ia te
in v e stm e n t p r i o r i t i e s in each borrow ing co u n try a r e , and
th e n to adopt i t s program o f f i n a n c i a l a s s i s t a n c e t o m eet
i
p r i o r i t y n ee d s. For t h i s re a s o n i t en co u rag es i t s member
c o u n tr ie s to fo rm u la te a lo n g -te rm developm ent program and
i s a s s i s t i n g s e v e r a l o f them in t h i s r e s p e c t . 36 Thus, th e
Bank i s not p re p a re d to I n v e s t in any program o r p r o j e c t
u n le s s i t i s s a t i s f i e d w ith th e economic m e r its o f t h a t
p r o j e c t . The p r e p a r a tio n of such a program g r e a t l y h e lp s
th e Bank to d e te rm in e which p r o j e c t s a r e o f h ig h e s t p r i o r i t y .
The problem o f p r i o r i t i e s i s v e ry im p o rta n t, because
N a tio n a l and I n t e r n a t i o n a l M easures f o r F u ll
Employment, U n ite d N a tio n s, Lake Success (New York, 1 9 ^ 9 ),
p . 92.
F i f t h Annual R e p o rt, l o c . c l t .
36 Loc. cit.
23
e v e ry th in g cannot be done a t once.
I f th e Bank were t o make lo a n s f o r u n s p e c if ie d
p u rp o se s o r f o r developm ent program s w hich have not been
w orked out in te rm s o f s p e c i f i c p r o j e c t s , th e Bank’ s
r e s o u r c e s m ight be u se d f o r p r o j e c t s w hich a r e ec o n o m ically
o r t e c h n i c a l l y unsound o r a r e of a low p r i o r i t y n a t u r e . 37
i
The Bank h a s fo u n d from i t s e x p e rie n c e t h a t a
s u b s t i t u t e p r o j e c t may be more u s e f u l o r more econom ic,
d u rin g th e c o u rse o f d is c u s s io n s w ith th e borrow ing c o u n try ,
th a n th e one o r i g i n a l l y p ro p o se d . However, th e r e a r e
s p e o la l c a se s w here d e t a i l e d p r o j e c t i n v e s t i g a t i o n s a r e
n e i t h e r n e c e s s a ry n o r f e a s i b l e .
The Bank d o es n o t lo o k to th e im m ediate f i n a n c i a l
r e t u r n t h a t th e p r o j e c t may e a rn . In o t h e r w ords, t h e Bank
does not expect t h a t th e program o r p r o j e c t In w hich I t
i n v e s t s w i l l be s e l f - l i q u i d a t i n g e i t h e r In te rm s o f th e
l o c a l c u rre n c y o r in term s of fo re ig n exchange w hich th e
p r o j e c t I t s e l f may e a rn . The Bank lo o k s r a t h e r ,
. . . to th e e f f e c t t h a t th e p a r t i c u l a r program o r
p r o j e c t may have on th e whole economy o f th e c o u n try ,
and an i n d i r e c t b e n e f i t may be j u s t a s im p o rta n t, in
f a c t even more im p o rta n t, th a n any im m ediate f i n a n c i a l
Fifth Annual Report, op. clt., p. 8.
Loc. cit.
2k\
i
r e t u r n th a t th e p a r t i c u l a r p r o j e c t may e a rn .39
At any r a t e , th e p h ra s e " s p e c if ic p r o je c t" h a s f o r
th e Bank th e w id e s t p o s s i b le s i g n i f i c a n c e . However, th e
s p e c i f i c p r o j e c t approach i s an e x p re s s io n w hich means t h a t
th e Bank w ants t o know, w ith some re a s o n a b le d eg ree o f
p r e c i s i o n , th e p u rp o se s f o r w hich th e Bank funds a re b ein g
u s e d .
D ete rm in atio n o f Pro.1 e c t to be F inanced
The B a n k 's le n d in g p o l i c y , as i t I s d is c u s s e d above,
i s to em phasize i t s p r e f e r e n c e f o r f in a n c in g th e p r o j e c t s
t h a t seem most u r g e n tly r e q u ir e d . T h e re fo re , i t t r i e s to
a d v is e th e b orrow ing c o u n try t o p o stp o n e th o s e p r o j e c t s t h a t
a p p e a r l e s s im m ediately im p o rta n t to th e c o u n tr y 's d ev e lo p
m ent. T his i s b e c a u se , " th e a v a ila b le r e s o u rc e s o f ev ery
c o u n try , in c lu d in g i t s c a p a c ity to borrow ab road a r e
lim ited ."* * 0
To acco m p lish t h i s o b j e c t i v e , th e Bank se e k s to
i n v e s t i g a t e th e o v e r - a l l economic p o s i t i o n o f th e borrow ing
c o u n try . M oreover, th e Bank I n v e s ti g a te s th e in v e stm e n t
e x p e n d itu re s o f th e borrow ing c o u n try and th e r e l a t i o n o f
39 F i f t h Annual M eeting o f th e Board o f G overnors,
l o c . c i t .
F i f t h Annual R e p o rt, l o c . c i t .
— ^
in d iv id u a l p r o j e c t s to th e c o u n tr y 's a c tu a l developm ent
n eed . This kind o f in v e s t ig a t io n may change th e w hole p lan
o f th e borrow ing cou n try.
T his in v e s t ig a t io n may r e v e a l, f i r s t , th a t some
p r o je c ts w hich have not been su bm itted to th e Bank
n e v e r th e le s s m erit a h ig h p r io r it y ; and, secon d, th a t a
number o f th o s e su bm itted to th e Bank, w h ile w orthy o f
c o n s id e r a tio n , are o f r e l a t i v e l y low p r io r it y .
A lthough th e r e i s no s in g le t e s t by which th e r e la
t i v e urgency and p r o d u c tiv ity o f v a r io u s a lt e r n a t iv e
p r o j e c t s can be jud ged , th e Bank's g e n e r a l approach to th e
problem i s th e sam e. This g e n e r a l approach o f th e Bank i s
a p p lie d in any borrow ing co u n try . This approach i s th a t
th e Bank
. . , se e k s f i r s t to determ ine what are or sh ou ld be
th e im portant g o a ls o f a p rop er in vestm en t program and
th en to gauge th e r e l a t i v e p r o d u c tiv ity o f th e v a r io u s
p r o je c ts by th e e x te n t o f t h e ir c o n tr ib u tio n to th o se
g o a ls .^2
A c tu a lly , t h i s su b je c t i s go in g to be ex p la in ed in
d e t a i l in Chapter I I I under th e ch a ra c ter o f Bank in v e s t ig a
t io n .
Loans f o r L ocal Currency E xp en d itu res
There a re two ty p es o f fo r e ig n exchange ex p en d itu re
^ I b id . , p . 9 .
Idem.
26
as d is t in g u is h e d in th e A r t i c l e s of A greem ent.^3
F i r s t , th e d i r e c t c o s t o f im ported equipm ent o r
s e r v ic e s used on th e p r o j e c t .
Second, th e i n d i r e c t f o r e ig n exchange e x p e n d itu re .
A ccording to th e A r t i c l e s of A greem ent, th e Bank
n o rm ally should make lo a n s to meet th e f i r s t ty p e o f f o r e ig n
e x p e n d itu re . The A r t i c l e s , how ever, p e rm it lo a n s f o r th e
l a t t e r ty p e in e x c e p tio n a l c irc u m s ta n c e s .
These i n d i r e c t f o r e ig n e x p e n d itu re s a re a r e s u l t o f
th e l o c a l e x p e n d itu re on la b o r o r d o m e s tic a lly p ro d u ced
equipm ent w hich u s u a lly g iv e r i s e to an in c re a s e d demand f o r
im p o rte d consumer goods o r raw m a t e r i a l s . This second ty p e
o f lo a n i s o f te n r e f e r r e d to a s a lo a n to l o c a l c u rre n c y
e x p e n d itu r e s .
A c tu a lly , many p r o j e c t s w hich do n o t in v o lv e too
many d i r e c t f o r e ig n exchange c o s ts may c r e a t e la r g e a d d i
t i o n a l demands f o r i n d i r e c t f o r e ig n exchange e x p e n d itu re s
f o r th e re a so n J u s t m entioned above. The Bank, u s u a lly ,
se e k s to encourage th e b o rro w in g c o u n tr ie s to f in a n c e , as
much a s p o s s i b l e , th e l o c a l e x p e n d itu re s by do m estic sa v in g .
As a m a tte r o f f a c t , th e Bank i s p re p a re d to a id i t s member
c o u n tr ie s i n th e o r g a n iz a tio n o f t h e i r c a p i t a l m a rk ets
^ Ibid., p. 10.
and t h e i r f i n a n c i a l i n s t i t u t i o n s to t h i s e n d . ^ However,
some a d d i tio n a l f o r e ig n exchange may be u n av o id ab le i f
economic h a rd s h ip and I n f l a t i o n a r e to be av o id ed . In t h i s
c a s e , th e Bank would n o t p r e v e n t an a p p l i c a t i o n f o r a lo c a l
c u rre n c y lo a n to be approved u nder th e s e c irc u m sta n c e s . But
i t sh o u ld be n o te d th a t th e g e n e ra l p o l i c y o f th e Bank i s
n ot to fin a n c e th e whole c o s t o f any u n d e rta k in g . The Bank
on numerous o c c a s io n s has e x p re sse d i t s firm c o n v ic tio n t h a t
M . . . th e m a jo r p o r tio n o f th e c a p i t a l n e c e s s a ry f o r
economic developm ent must come from w ith in th e c o u n try
i t s e l f . . .
i
n e v e r th e le s s , th e r e s t r i c t i o n on l o c a l c u rre n c y lo a n sj
has been th e s u b je c t of much d is c u s s io n . Buchanan p o in ts
out t h a t H th e c r i t i c s would have th e Bank ta k e acco u n t o f
th e i n d i r e c t , no l e s s th a n th e d i r e c t , f o r e ig n exchange
d r a in o f developm ent programs. But, a s i t i s a ls o
m entioned by Buchanan, th e Bank b e lie v e s
. . . t h a t i t s c r i t i c s , on th e one hand, m isco n ceiv e
th e p ro c e s s o f economic developm ent and how th e Bank can
a s s i s t i t an d , on th e o t h e r hand, d is r e g a r d th e o b lig a
t i o n and r e s p o n s i b i l i t i e s p u t upon i t by th e A r t i c l e s of
^ Idem.
^ T hird Annual R e p o rt, I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and Developm ent, W ashington, D. C ., p . 20.
*+6 Buchanan, op. c i t . , p . 336.
28
A greem ent.^7
Indeed, a s i t i s m en tio n ed b e f o r e , th e p o l i c i e s and
p ro c e d u re s of th e Bank a r e c o n s ta n tly g o in g th ro u g h a
p ro c e s s o f developm ent. Thus, a lth o u g h th e Bank has been
r e l u c t a n t to make lo a n s in am ounts beyond what was needed to
co v er th e d i r e c t f o re ig n exchange c o s t s , i t p ro v id e s in i t s
F i f t h Annual R ep o rt a new sta te m e n t o f i t s p o lic y on th e
f in a n c in g o f l o c a l cu rren cy e x p e n d itu re s ; t h i s sta te m e n t
a p p e a rs to be somewhat more l i b e r a l th a n h a s been i n d ic a t e d
in th e p a s t . ^ T his p o lic y i s summarized as fo llo w s:
(a) I f th e p r o je c t t o be fin a n c e d I s of such economic:
u rg en cy t h a t th e co u n try * s a b i l i t y to u n d e rta k e fo r e ig n
borrow ing— w hich i s more o r l e s s l i m i t e d in a l l c a s e s —
i s b e t t e r u t i l i z e d in f in a n c in g t h i s p r o je c t th a n in
f in a n c in g th e d i r e c t f o r e ig n exchange c o s ts o f a l t e r n a
t i v e p r o j e c t s ; (b) i f th e l o c a l c u rre n c y c o s ts o f th e
p r o j e c t can n o t re a s o n a b ly be met out o f a v a ila b le
dom estic re s o u rc e s ; and (c) i f I t i s ap p a re n t t h a t ,
u n le s s f o r e ig n exchange i s made a v a i l a b l e to th e borrow
in g c o u n try to be employed f o r th e im port of e i t h e r
consumer goods o r raw m a t e r i a l s , th e l o c a l c u rre n c y
e x p e n d itu re s in v o lv e d in th e p r o j e c t w i l l le a d to
I n f l a t i o n a r y p r e s s u r e s . ^9
I b i d . , p . 337-
^ M ik e s e ll, o p . c i t . , pp. 205-206.
^ Fifth Annual Report, op. clt., p. 11.
CHAPTER I I I
H O W THE BANK HANDLES REQUESTS FOR LOANS
I . THE FACTORS INFLUENCING THE BANK1S DECISIONS
A lthough I t was m entioned b e fo re t h a t th e p o l i c i e s
and p ro c e d u re s o f th e Bank a r e not s t a t i c , b u t a r e
c o n s ta n tly g o in g th ro u g h a p ro c e s s o f developm ent, th e Bank
i s s t i l l co n fin e d by I t s A r t i c l e s o f Agreem ent. The Bank*s
p e r c e p t has been s tu d ie d in th e p re c e d in g c h a p te r. I t i s
th e p u rp o se o f t h i s p a r t o f th e t h e s i s to d is c u s s th e ,
c o n d itio n s which have to be s a t i s f i e d b e f o r e th e Bank makes
a lo a n . In o t h e r w ords, th e Bank, in p r a c t i c e , b e f o re i t
d e c id e s to make a lo a n , must be su re t h a t a number o f
c o n d itio n s have been s a t i s f i e d . The A r t i c l e s o f Agreement
l i s t many of th e s e c o n d itio n s ; however, a d is c u s s io n o f some
o f them w i l l s u f f i c e to show th e main c r i t e r i a w hich
I n flu e n c e th e Bank*s d e c is io n s .
The R equired C o n d itio n s
A ccording to th e A r t i c l e s o f A greem ent,1 th e r e q u ir e d
c o n d itio n s a r e a s follows*.
X
A r t i c l e s o f A greem ent, " I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and D evelopm ent," A r t ic le I I I , S e c tio n 5 ( i ) »
( i i ) , ( i l l ) , ( i v ) , (v ), (v i) and ( v i i ) , p . 6. The w r i t e r
b e lie v e s t h a t t h e r e i s a p r i n t i n g e r r o r ; i t sh o u ld be
A r t i c l e . I l l , Se c t io n 4.
The Bank may make a lo a n to a governm ent o r to a
p r i v a t e e n t e r p r i s e . In o r d e r th a t th e Bank may make a lo a n
to a p r i v a t e e n t e r p r i s e i t r e q u e s ts t h a t th e governm ent o f
th e c o u n try co n cern ed , th e c e n t r a l hank, o r a com parable
agency o f th e b o rro w in g c o u n try g u a ra n te e th e lo a n . There
f o r e , th e f i r s t c o n d itio n , in t h i s c a s e , i s t h a t th e Bank,
in p r a c t i c e , cannot g iv e s e r io u s ex am in atio n to a lo a n
r e q u e s t u n t i l th e government concerned h a s shown i t s e l f
w i l l i n g to sp o n so r th e p r o j e c t . Loans to p r i v a t e e n t e r
p r i s e s , how ever, a r e going to be s tu d ie d a s a s e p a r a te
s u b je c t in th e fo llo w in g p a r t s of t h i s c h a p te r .
The second c o n d itio n i s th a t w ith o u t th e in te r v e n tio n
o f th e Bank th e b o rro w er i s u n a b le to o b ta in th e money
n eeded under re a s o n a b le c o n d itio n s . N e v e rth e le s s , i t sh o u ld
be remembered a g a in , th a t th e Bank does n o t u n d e rta k e to
compete w ith p r i v a t e i n v e s t o r s . I t s m ain pu rp o se i s to
a s s i s t p r i v a t e i n t e r n a t i o n a l in v e stm e n t. I t I s th e Bank*s
a t t i t u d e t h a t . . f o re ig n f i n a n c i a l a s s i s t a n c e sh o u ld
come c h i e f ly from p r i v a t e s o u r c e s . " 2 L ik e w ise , th e Bank
m ust a ls o ta k e i n to account what i s b e in g done by o t h e r
p u b lic a g e n c ie s; i t i s not supposed t h a t th e Bank com petes
w ith them. The Bank was n o t e s ta b li s h e d on th e b a s i s o f
^ T h ird Annual R e p o rt, I n t e r n a t i o n a l Bank f o r Recon
s t r u c t i o n and Developm ent, W ashington, D. C , , p . 20.
3 i;
j
com m ercial p o lic y .
The e s ta b lis h m e n t o f th e M a rsh a ll P la n i n e a r l y 19**8
was th e main re a s o n which made th e Bank p u t g r e a t em phasis
on th e problem o f th e u n d erd ev elo p ed c o u n t r i e s . W hereas,
when th e Bank s t a r t e d i t s o p e r a tio n s i t gave more a t t e n t i o n
to th e problem s o f European re c o v e ry .
B efore th e M a rsh a ll P la n ap p eared f o r r e c o n s tr u c tio n
and developm ent o f Europe th e Bank had made lo a n s to th e
f o llo w in g European c o u n tr ie s :
The F ren ch lo a n o f $250 m i l l i o n , s ig n e d in May 19W7>
was th e f i r s t lo a n o f th e Bank. . . . The second lo a n
o f #195 m i l l i o n was g r a n te d to th e Kingdon o f th e
N e th e rla n d s. . . . A lo a n o f $40 m i l l i o n was g r a n te d to
Denmark. . . . F i n a l l y , a lo a n o f #12 m il lio n was
g ra n te d to Luxembourg. . . .3
These f o u r lo a n s t o t a l e d $4-97 m i l l i o n . ‘ ‘E xcept f o r
th e lo a n to Luxembourg th e y w ere term ed g e n e ra l p u rp o se
lo a n s because th e y d id n o t r e f e r to s p e c i f i c p r o j e c t s . ^
N e v e rth e le s s , th e p o i n t , as B lack rem ark s, i s t h i s :
Then th e U n ite d S ta te s ste p p e d in to make d o l l a r s
a v a i l a b l e u n d e r th e European R ecovery Programme. The
fu n d s o f th e U. S. Economic C o -o p e ra tio n A d m in is tra tio n
w ere much l a r g e r th a n th o s e th e Bank had a v a ila b le a t
t h a t tim e , an d were m o stly given a s g r a n t s . F u r th e r
Bank le n d in g f o r g e n e ra l r e c o n s tr u c tio n would m e re ly
3 A ntonin Basch, “I n t e r n a t i o n a l Bank f o r R e c o n stru c
t i o n and D evelopm ent, w I n t e r n a t i o n a l O o n c llla tlo n (New
York: C arnegie Endowment f o r I n t e r n a t i o n a l P eace, No. k55»
November, 194-9), p» 805*
^ Loc. cit.
: ' 3 2 !
have red u ced th e amount o f a s s i s t a n c e w hich th e borrow
in g c o u n tr ie s c o u ld g e t from ECA. The Bank t h e r e f o r e
f e l t t h a t f o r th e d u r a tio n o f th e M a rsh a ll P lan i t s work
sh o u ld l i e m a in ly o u ts id e W estern E u ro p e .5
T h e re fo re , th e Bank does n o t make any lo a n to any
c o u n try i f th e b o rro w er i s a b le to o b ta in th e money needed
from p r i v a t e i n v e s to r s o r o t h e r p u b lic a g e n c ie s , su ch a s th e
M a rs h a ll P la n and th e E x p o rt-Im p o rt B a n k ;6 o th e rw is e i t
d o es.
M oreover, th e Bank m ust be s a t i s f i e d th a t th e
b o rro w er has made p ro p e r e f f o r t s to r a i s e c a p i t a l in th e
member c o u n try .
The t h i r d c o n d itio n i s to ta k e i n t o aeco u n t th e
a b i l i t y o f th e b o rro w in g c o u n try to re p a y th e lo a n a f t e r th e
c o m p letio n o f th e program w hich th e lo a n h e lp s f in a n c e . The
Bank must be s a t i s f i e d t h a t payment in f o r e ig n exchange o f
I n t e r e s t and a m o rtiz a tio n on th e lo a n w i l l n o t p ro v e to o
burdensom e. Of m a jo r im p o rtan ce i s th e “w i l l to p a y ."
T h e re fo re th e Bank would p la c e g r e a t em phasis on p r o s p e c ts
of repaym ent, even though th e in v e stm e n t w ould be p r o te c te d
by u n p aid c a p i t a l (80 p e r c e n t ) . The Bank can n o t ex p ect
Eugene R. B lack, P o l i c i e s and O p e ra tio n s o f th e
World Bank, J u ly 1953* P* 5*
^ The E x p o rt-Im p o rt Bank i s an American i n s t i t u t i o n .
The o r i g i n a l one was e s t a b l i s h e d on F e b ru a ry 2, 193^. See
D. B. Marsh, W orld Trade and In v estm en t (New York, 1951)*
C h a p ter 31*
p r iv a t e In v e sto r s to len d i t money o r a c c e p t i t s g u a ra n te e, ,
and th e Bank cannot borrow in th e open market u n le ss th e
repayment o f lo a n s by th e borrow ing c o u n tr ie s i s a ssu r e d .
B lack e x p la in s t h is c o n d itio n in a few words:
Repayment p r o sp e c ts have two a s p e c ts : F i r s t , w i l l the
borrower have enough cash in h is own cu rren cy to cover
th e payment o f in t e r e s t and c a p ita l? S econ d ly, w i l l th e
cou n try be a b le to p ro v id e fo r e ig n exchange, to en a b le
th a t cu rren cy to be tr a n s fe r r e d ? /
The main p o in t , th e n , i s th e w illin g n e s s and a b i l i t y ,
o f th e borrow ing country to f o llo w econom ic p o l i c i e s w hich
w i l l en a b le i t to earn enough fo r e ig n exchange to pay i t s
d e b ts . The most im portant econom ic f a c t o r to be tak en in to
accou n t i s th e co u n tr y ’ s in te r n a tio n a l b a la n ce o f payments
p o s it io n and p r o s p e c ts . Some c o u n tr ie s , m ainly d ev e lo p in g
c o u n tr ie s , o fte n have an u n fa v o ra b le b a la n c e o f paym ents.
The Bank can make lo a n s to such c o u n tr ie s i f th e y , as a
r e s u lt o f t h e ir g e n e r a l econom ic p o l i c i e s and o f th e in v e s t
ment c a p it a l w hich th e Bank i s h e lp in g to c r e a te , are moving
to a p o s it io n in w hich th ey w i l l be a b le to b a la n ce t h e ir
I n te r n a tio n a l a cco u n t.
At any r a t e , i t i s c le a r ly s t a te d in th e A r t ic le s o f
Agreement th a t:
In making o r g u a ra n teein g a lo a n , th e Bank s h a ll pay
due regard to th e p r o s p e c ts th a t th e borrow er, and i f
? Black, op. c l t . , pp. 6-?.
th e borrow er i s not a member, th a t th e g u aran tor, w i l l
be in p o s it io n to m eet i t s o b lig a t io n s under th e loan ;
. . .8
The fo u r th c o n d itio n ,* 1 , th a t th e p r o je c t to be
fin a n ced , i s th e more u s e fu l and u rgen t; i t must be m e r ito
r io u s from an econom ic p o in t o f v iew . M oreover, i t must
en jo y a h ig h p r i o r i t y among a l l in vestm en t schemes in th e
co u n try con cern ed . T h erefo re, b e fo r e th e lo a n i s made, the
in vestm en t p a tte r n o f th e cou n try in w hich th e p r o je c t i s
s it u a t e d should be t e s t e d . However, i t i s not alw ays
p o s s ib le to sa y what p r o je c t i s th e more u s e fu l and u r g e n t.
N e v e r th e le s s , th e p r o j e c t , o f co u r se , must be ' ’p r o d u c tiv e 1 *;
i t m ust d ir e c t ly o r in d ir e c t l y In crea se th e output o f goods !
and s e r v ic e s . In o th e r w ords, i t must im prove d ir e c t ly or
i n d i r e c t l y th e b a la n ce o f paym ents p o s it io n o f th e borrow ing
co u n try by c r e a tin g new e x p o r ts , o r r e p la c in g Im p orts. I f
th e s e req u irem en ts are met th e s e r v ic e o f th e Bankas lo a n
w i l l o b v io u s ly enhance th e p r o g r e ss.
The f i f t h and th e l a s t c o n d itio n i s th a t th e Bank
must be s a t i s f i e d th a t th e borrower i s equipped t e c h n ic a lly ,
f in a n c i a lly and a d m in is tr a tiv e ly , to ca rry out th e p r o j e c t .
T h er efo re , th e Bank i n s i s t s th a t any p a r t ic u la r p r o je c t
sh ou ld be stu d ie d by te c h n ic ia n s — e n g in e e r s , econ om ists o r
^ A r t ic le s o f A greem ent, A r t ic le I I I , S e c tio n 5 ( v ),
l o c . c i t .
35
anyone who h as s p e c i a l knowledge o f th e in d u s tr y co ncerned—
b e f o r e i t i s su b m itte d to i t f o r f in a n c in g .
I I . THE CHARACTER OF THE BANK'S INVESTIGATION
B efore th e Bank can make any lo a n to i t s member
c o u n tr ie s th e r e a r e c e r t a i n p ro c e d u re s o f i n v e s t i g a t i o n t h a t
sh o u ld be fo llo w e d . However, th e r e a r e no e x a c t p ro c e d u re s
w hich can be fo llo w e d in any two c a s e s , b ec au se o f t h e
ab sen ce o f s i m i l a r c o n d itio n s and th e d if f e r e n c e i n th e
l e v e l o f developm ent o f th e p r o s p e c tiv e c o u n t r ie s . N ever-
t h e - l e s s , "a g e n e r a l p a t t e r n o f h a n d lin g lo a n r e q u e s ts has
been d ev e lo p ed , . . .**9 T his g e n e ra l p a t t e r n in v o lv e s two
d i f f e r e n t p h a se s o f i n v e s t i g a t i o n ; th e f i r s t p h ase i s
In fo rm a l d is c u s s io n and th e second p h ase i s form al n e g o tia
t i o n .
The In fo rm a l D isc u ssio n
"W herever p o s s i b l e , t h e Bank p r e f e r s to h o ld in fo rm a l
e x p lo r a to r y d is c u s s io n s w ith p r o s p e c tiv e b o rro w ers b e f o r e
any fo rm a l lo a n re q u e s t i s f i l e d . " * 0 T his i s an im p o rta n t
s t e p , b ec au se i t d e te rm in e s , . f i r s t , w hether th e
9 F i f t h Annual R e p o rt, " I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and D evelopm ent," (W ashington, D. C ., 19^9-
1 9 5 0 ), p . 11.
10 Idem.
; 36
p r o j e c t s to be fin a n c e d a r e , i n p r i n c i p l e , o f a ty p e which
th e Bank can c o n s id e r , an d , se c o n d ly , what k in d o f in fo rm a
t i o n i t w i l l n e e d ." ^ -
This p h ase o f i n v e s t i g a t i o n u s u a lly f a l l s in to two
g e n e ra l s ta g e s .
The f i r s t s ta g e . The economy o f th e borrow ing
c o u n try i s g e n e r a lly examined i n th e f i r s t s ta g e . I t s
p u rp o se i s to d e te rm in e :
(a) th e ap proxim ate amount o f a d d i t i o n a l e x te r n a l
d e b t th e c o u n try can a f f o r d to s e r v ic e and th e r a t e a t
w hich i t can e f f e c t i v e l y ab so rb such d e b t, (b) th e
g e n e ra l o ld e r o f p r i o r i t y o f th e p r o j e c t s u n d e r c o n s id
e r a t i o n from th e s ta n d p o in t o f t h e i r c o n tr ib u tio n to
th e c o u n try 1s developm ent, and (c) th e a p p r o p r ia te n e s s
o f th e g o v e r n m e n ts economic and f i n a n c i a l p o l i c i e s to
f u r t h e r th e developm ent p r o c e s s .12
The Bank u s u a lly s t u d i e s a t i t s home o f f i c e a l l
a v a i l a b l e in fo rm a tio n c o n c e rn in g th e c o u n try i n q u e s tio n .
Then, th e Bank, in alm ost e v e ry c a s e , sen d s a m is s io n to
exam ine th e g e n e r a l c o n d itio n o f th e c o u n try . The m is sio n
s t u d i e s th e b o rro w in g co u n try * s g e n e ra l c o n d itio n and hands
i t s r e p o r t to th e Bank. The Bank u s u a l l y b a se s i t s judgment
on th e m is s io n 1s r e p o r t as to th e amount o f a d d i tio n a l
f o r e ig n d eb t th e c o u n try can s a f e ly assume and e f f e c t i v e l y
1 1
M ajor O p e ra tio n a l P o l i c i e s o f I n t e r n a t i o n a l Bank,
U n ite d N ations B u l l e t i n , Volume IX, J u ly 1-December 1$,
1950, p . 319.
Fifth Annual Report, op. clt., p. 12.
37
u se and, a ls o , a s to th e p r o je c t or p r o j e c t s m ost s u it a b le
f o r fin a n c in g .
The secon d s t a g e . — When th e f i r s t sta g e I s
com pleted and a d e c is io n i s reach ed in p r in c ip le as to th e
a p p ro p ria te s i z e and purpose o f a lo a n , th e Bank then
p ro ceed s in th e secon d sta g e o f I t s in v e s t ig a t io n “w ith a
d e t a ile d exam ination o f th e p a r t ic u la r p r o je c t or p r o j e c t s
s e le c t e d fo r fin a n c in g .
The Bank i s then ready to h elp th e p r o s p e c tiv e
co u n try to s o lv e some o f i t s e x is t in g problem s b e fo r e th e
lo a n i s made.
I f im portant t e c h n ic a l problem s a re in v o lv e d , s t a f f
e n g in e e r s o r o u ts id e e n g in e e r in g c o n s u lta n ts a re c a lle d
upon to make a thorough t e c h n ic a l exam in ation o f th e
p la n s f o r th e e n t e r p r is e . I f a m ark etin g problem i s
in v o lv e d , i t may be n e c e ssa r y to check th e market survey
made by th e borrower o r , i f no such su rv ey has been
made, to a s s i s t th e borrower in making on e. S im ila r ly ,
i t o fte n p ro v e s n ec e ssa r y to examine in d e t a i l th e
f in a n c ia l and a d m in is tr a tiv e arrangem ents p roposed by
th e borrower to carry out a p a r t ic u la r p r o j e c t . ^
The Formal N e g o tia tio n
The Bank s t a r t s the form al n e g o t ia tio n f o r a lo a n
w ith th e cou n try concerned i f th e r e p o r t o f th e seco n d sta g e
o f th e in v e s t ig a t io n on th e p r o je c t o r p r o j e c t s shows a
^ Idem.
38
f a v o r a b le r e s u l t .
The fo rm al n e g o t ia t io n s u s u a lly do not ta k e a lo n g
tim e , b ecau se th e Bank1s members have g a in e d , from t h e i r
e x p e rie n c e w ith th e Bank s in c e th e tim e o f i t s e s ta b lis h m e n t
u n t i l now, g r e a t e r f a m i l i a r i t y w ith th e p r o v is io n s o f th e
Bank*s lo a n and g u a ra n te e ag ree m en ts.
These le n d in g p ro c e d u re s a re s u b je c t to c e r t a i n
q u a l i f i c a t i o n s a s fo llo w s:
The Bank r e q u ir e s t h a t th e b o rro w in g c o u n try r e s t o r e
s t a b i l i t y to I t s economy i n c a se s where e x i s tin g
economic o r f i n a n c i a l p r a c t i c e s would endanger b o th th e
p ro d u c tiv e p u rp o se s an d repaym ent p r o s p e c ts of any Bank
1o a n » « . *.
. . . th e few rem ain in g member c o u n tr ie s whose c r e d i t
i s im p aired by a s t i l l u n s e t t l e d d e f a u l t on t h e i r o u t
s ta n d in g f o r e ig n o b l i g a t i o n , sh o u ld g iv e c l e a r ev id en ce
o f t h e i r w illin g n e s s to r e a c h a f a i r and e q u ita b le
s e ttle m e n t o f t h e i r d e b t s . . . .^5
Now, th e n , th e Bank on th e b a s i s o f i t s i n v e s t i g a
ti o n s s ig n s th e r e q u e s t f o r a lo a n w ith th e borrow ing
c o u n try on a c o n d itio n t h a t t h e r e w i l l be a c o n tin u in g
r e l a t i o n w ith th e b o rro w er.
R e la tio n s h ip w ith B orrow ers
When a lo a n i s made and once c o n s tr u c tio n o f th e
p r o j e c t i s under way, th e Bank w ishes to be k ep t in fo rm ed
1 * 5
J Major O p e ra tio n a l P o l i c i e s o f I n t e r n a t i o n a l Bank,
l o c . c i t .
o f I t s p r o g r e s s . T h e re fo re , th e borrow ing c o u n try sh o u ld
keep th e Bank Inform ed by se n d in g p r o g re s s r e p o r t s . These
p r o g r e s s r e p o r ts a r e p a r t l y a d m in is t r a tiv e , p a r t l y te c h n i
c a l . The b o rro w er subm its su ch r e p o r ts to th e Bank
p e r i o d i c a l l y , in w hich he d e s c r ib e s p h y s ic a l p r o g r e s s , th e
s t a t e o f th e p r o j e c t * s f in a n c e s and any d i f f i c u l t i e s w hich
a r i s e . One o b je c ti v e o f th e s e r e p o r t s , a s H i l l i n d i c a t e s ,
i s t h a t “th e Bank*s aim in r e q u e s tin g p r o g re s s r e p o r t s i s to
be aw are o f any o b s ta c le w hich may a r i s e w hich w ould impede
o r d e la y th e p r o j e e t rs co m p le tio n .
The F i f t h Annual R ep o rt o f th e Bank d is c u s s e s th e
im p o rtan ce o f th e p r o g re s s r e p o r t s in d e t a i l . The p o i n t is
t h a t th e Bank m a in ta in s a c lo s e r e l a t i o n s h i p w ith i t s
b o rro w er b ecau se o f two main a s p e c ts :
F i r s t , th e Banks checks to a s s u re t h a t lo a n fu n d s a re
expended o n ly f o r a u th o r iz e d goods and s e r v ic e s and
a rra n g e s to keep i t s e l f Inform ed o f th e u se s to w hich
B a n k -fin a n c e d goods a re d ev o te d . Second, th e Bank keeps
in to u ch d u r in g th e e n t i r e l i f e o f th e lo a n w ith econ
omic and f i n a n c i a l developm ents in th e borrow ing c o u n try
th ro u g h in fo rm a tio n su b m itte d by th e governm ent,
p e r i o d i c v i s i t s to th e c o u n try by Bank o f f i c i a l s , and
c o n s u lta tio n and exchange o f view s w ith th e governm ent*s
r e p r e s e n t a t i v e .^ ?
A c tu a lly , th e s e p r o g r e s s r e p o r ts a r e more u s e f u l to
^ W alter H i l l , “A ddress d e liv e r e d to F e d e r a tio n o f
B r i t i s h I n d u s t r i e s , “ I n t e r n a t i o n a l Bank f o r R e c o n stru c t ion
and Development (London: A p r il 27, 1953)» p.~£u
^ Fifth Annual Report, op. cit., p. 16.
th e borrow ing cou n try than to th e Bank. “The In form ation
re q u este d by th e Bank" th e R eports ad ds, " is no m ore, and i s
u s u a lly much l e s s , than th a t req u ired by th e borrower I t s e l f
fo r th e e f f i c i e n t c o n tr o l o f i t s own o p e r a t io n s .1 1 There
f o r e , th e im portance o f th e s e r e p o r ts i s to fu r n is h b o th the
borrow er and th e Bank w ith co n tin u in g In form ation to en a b le
them to s o lv e any d i f f i c u l t y , w hether t e c h n ic a l o r fin a n
c i a l , w hich fr e q u e n tly a r i s e s , p a r t ic u la r ly in th e e x e c u tio n
o f la r g e s c a le c o n str u c tio n program s. H ence, " it i s
im portant t h a t , i f such a s it u a t io n sh ou ld a r i s e , th e Bank
sh ou ld know i t in due tim e and thus be a b le to c o n s u lt w ith
th e borrow ers on th e n e c e ssa r y m easures t o be ta k en .
An in t e r e s t in g example o f a d i f f i c u l t y occu rred in
th e su p p ly o f l o c a l currency needed to ca rry th e p r o je c t
forw ard in E l S alvad or.
A power a u th o r ity to w hich th e Bank had made a lo a n
was sh o rt o f lo c a l cu rren cy , so th e Bank sen t i t s
D ir e c to r o f M arketing to E l S alvador to h elp f l o a t a
l o c a l is s u e , th e f i r s t in th e co u n try * s h i s t o r y .20
T h erefo re, i t i s ob viou s th a t th e c o n tin u in g r e la t io n s h ip s
18 Idem.
^ F if t h Annual M eeting o f th e Board o f G overnors,
P a r is , France, September 6 -1 ^ , 195°* " In te r n a tio n a l Bank
fo r R eco n stru ctio n and Developm ent," W ashington, D. C .,
November 30, 195° > p* 9*
20 H i l l , l o c . c i t .
k l
betw een th e Bank and th e b o rro w er have p ro v ed of g r e a t v a lu e
to i t s b o rro w e rs.
In th e c o u rs e o f th e B ank's work i t has become c l e a r
t h a t i n v a r io u s c a se s i t s re q u ire m e n ts f o r th e p ro d u c
t i o n o f p r o g re s s r e p o r ts has c o n tr ib u te d t o th e
e f f i c i e n c y o f th e a d m in is tr a tio n o f i t s b o rro w ers . 2- L
N e v e rth e le s s , th e B a n k 's re q u ire m e n t, som etim es, was
c r i t i c i z e d t h a t i t ‘ ’cau ses e x t r a work f o r i t s b o r r o w e r s .1,22
A ccording to th e F i f t h Annual M eeting,
The Bank, however, does t h i s jo b w ith o n ly two
e n g in e e r s , t h r e e a u d i t o r s , and f o u r a d m in is t r a tiv e
s t a f f members. The sm all s iz e o f t h i s s t a f f i s an
i l l u s t r a t i o n o f th e way th e Bank c a r r i e s out t h i s
w o rk .23
M oreover, th e s e re q u ire m e n ts te n d " to f a c i l i t a t e
su b se q u en t f in a n c in g from th e Bank o r , in th e lo n g r u n , from
any o th e r source.*’2^
I I I . OTHER FUNCTIONS OF THE BANK
C urrency Problem
The B an k 's lo a n s a re o r d i n a r i l y , f o r a c c o u n tin g
p u rp o s e s , e x p re s s e d in term s o f U nited S t a t e s d o l l a r s .
However, th e Bank can make lo a n s to th e b o rro w er in e i t h e r
21
F i f t h Annual M eetin g , oj>. c i t . , p . 10.
22 Idem .
2^ h o c, c i t .
2^ Fifth Annual Report, op. cit., p. 17.
d o l l a r s o r o th e r c u r r e n c ie s a s may be needed to c a r r y out
l
■the p r o j e c t . The borrow er i s o b lig a te d by th e A r t i c l e s o f
Agreement to make repaym ent o f lo a n , paym ent of th e Bank
I n t e r e s t , and o t h e r ch arg es in th e c u rre n c y lo a n e d .25
N e v e rth e le s s , repaym ent must be made in th e c u r r e n c ie s which
th e Bank i t s e l f m ust d is b u r s e in o rd e r to p ro v id e th e
b o rro w er w ith th e c u r r e n c ie s he n e e d s. F or exam ple, i f th e
Bank makes a lo a n to a borrow ing c o u n try in s t e r l i n g w hich
i s p u rc h a se d w ith U nited S t a t e s d o l l a r s , th e borrow er i s
o b l i g a t e d to make repaym ent in U n ite d S t a t e s d o l l a r s . ^6
Repayment in d o l l a r c u rre n c y i s q u i t e a problem to j
many c o u n tr ie s ; th e r e f o r e ,
In o rd e r to meet s i t u a t i o n s of t h i s k in d , th e Bank
h as made e f f o r t s to in c r e a s e i t s a v a i l a b l e le n d in g
r e s o u rc e s in c u r r e n c ie s o th e r th a n U n ite d S ta te s
d o l l a r s by o b ta in in g th e p e rm is sio n of i t s members f o r
t h e u se o f lo a n s o f p a r t o r a l l o f th e 18$ p o r tio n of
t h e i r c a p i t a l s u b s c r i p t i o n s . 27
Loans to P r iv a te E n te r p r is e s
As was m entioned b e f o r e , a lo a n may be made e i t h e r to
a government o r to a p r i v a t e e n t e r p r i s e . A ccording to th e
A r t i c l e s o f Agreem ent, a lo a n to a p r i v a t e e n t e r p r i s e must
A r t i c l e s o f A greem ent, A r t i c l e IV, S e c tio n 5 (i ) •
See F i f t h Annual R e p o rt, o p . c i t . , p . l h .
27 Ibid. , p. 15.
b e a r a g u a ra n te e .
Iflien th e member In whose t e r r i t o r i e s th e p r o j e c t i s
lo c a te d i s n o t i t s e l f th e b o rro w er, th e member o r th e
c e n t r a l o r some com parable agency o f th e member w hich i s
a c c e p ta b le to th e Bank, f u l l y g u a ra n te e s th e repaym ent
o f th e p r i n c i p a l and th e payment of I n t e r e s t and o th e r
c h a rg e s on th e l o a n .28
This p r o v is io n i s an im p o rta n t re a s o n why a m a jo r ity
o f th e borrow ers from th e Bank have been m o stly governm ents
and p u b lic a g e n c ie s . A nother re a so n f o r t h i s c a se ,
. . . i s t h a t th e 'm ore u s e f u l and u r g e n t' p r o j e c t s
w hich th e Bank f in a n c e s , . . . a r e f r e q u e n t l y p u b lic
u t i l i t i e s , w hich in m ost c o u n tr ie s a r e run by th e
governm ent o r by th e p u b lic a u t h o r i t i e s . 29
C oncerning th e fo rm al re a s o n , th e d i f f i c u l t y to make
lo a n s to p r i v a t e e n t e r p r i s e s I s because o f two m ajor
a s p e c ts ; th e f i r s t i s t h a t governm ents a r e r e l u c t a n t to
g u a ra n te e lo a n s to p r i v a t e e n t e r p r i s e s ; se c o n d ly , p r i v a t e
e n t e r p r i s e s a r e som etim es r e l u c t a n t to a sk f o r governm ent
g u a ra n t e e s .
I f a government e x te n d s I t s g u a ra n te e to a p a r t i c u l a r
p r i v a t e company, i t la y s i t s e l f open to ch arg es of
f a v o r in g t h a t e n t e r p r i s e o v er i t s c o m p e tito rs an d , what
i s o fte n more im p o rta n t, o v e r v a r io u s p u b lic p r o j e c t s .
Furtherm ore, th e requirem ent o f a government guaran
t e e ten d s to d isco u ra g e p r iv a t e e n te r p r is e s from se e k in g
28
A r t i c l e s of A greem ent, A r t ic le I I I , S e c tio n 5 (i)>
loc. cit.
Black, op. cit., p. 13•
Bank f in a n c in g b ecau se th e y f e a r t h a t th e y may le a d to
demands f o r government p a r t i c i p a t i o n in o r c o n t r o l o ver
managem ent.30
However, th e Bank b e lie v e s t h a t lo a n s to p r i v a t e
com panies can c o n t r ib u t e to q u ite an e x te n t to th e d ev elo p
ment o f i t s member c o u n t r ie s . T h e re fo re , th e Bank h as t r i e d
v a r io u s te c h n iq u e s t o overcome th e s e d i f f i c u l t i e s . In t h i s
connection: B lack rem arks t h a t :
I am s u r e t h a t in: tim e th e Bank w i l l be a b le to make
d i r e c t lo a n s f o r in d iv i d u a l i n d u s t r i a l u n d e rta k in g s .
W e o b v io u sly w ould w ish to g iv e s e r io u s c o n s id e r a tio n
to any p a r t i c u l a r e n t e r p r i s e w hich p ro m ises im p o rta n t
fo re ig n -e x c h a n g e e a rn in g s o r sa v in g s to a c o u n try ,
e s p e c i a l l y i f i t would a t th e same tim e in c re a s e th e
su p p ly o f any v a lu a b le p ro d u c t f o r w hich a s u s ta in e d
and lo n g -te rm demand re a s o n a b ly can be a n t i c i p a t e d . 31
The Bank, however, c o u ld a c h ie v e a s o lu tio n to t h i s
problem even tho u g h i t was n o t a v e ry s a t i s f a c t o r y o n e . The
Bank1s lo a n to th e N eth e rla n d s H e rste lb a n k (R e c o n s tru c tio n
Bank) and th e Bank*s lo a n to Turkey to a s s i s t in th e e s ta b
lis h m e n t o f th e new T u rk ish I n d u s t r i a l Development Bank a r e
good exam ples. The pu rp o se o f th e form er lo a n was M to
e n a b le th e H e rs te lb a n k to e x te n d c r e d i t s to more th a n 20
p r i v a t e e n t e r p r i s e s in a v a r i e t y of i n d u s t r i e s to be used
f o r th e im port o f equipm ent from h ard c u rre n c y a r e a s . "32
F i f t h Annual R e p o rt, l o c . c i t .
Eugene R. B lack , The World Bank a t Work (New York:
R e p rin te d from F o re ig n A f f a i r s , A p r il, 1952T* p . 6.
32
F i f t h Annual R e p o rt, l o c . c i t .
4 5
The lo a n was made to a “r e s p o n s ib le in te rm e d ia r y 1 1 a f t e r
h a v in g th e governm ent g u a r a n te e . T h e re fo re , i t was p o s s i b l e ,
to m inim ize th e governm ent i n t e r v e n tio n in th e a f f a i r s o f
th e p r i v a t e e n t e r p r i s e s and a ls o to r e l e a s e the governm ent
from p a r t i a l lo a n g u a ra n te e to any p a r t i c u l a r p r i v a t e e n t e r
p r i s e s .
N e v e rth e le s s , th e amount o f th e Bank*s lo a n s made to
p r i v a t e e n t e r p r i s e i s s t i l l a m inor item in th e Ban&^s
le n d in g o p e r a t io n s .
Loans made up to th e end o f 1952 am ounted to th e
e q u iv a le n t o f some $ 1,524 m i l l i o n s , lo a n s made d i r e c t l y
to p r i v a t e e n t e r p r i s e s in th e s t r i c t se n se o f th e word '
a c c o u n te d f o r o nly $178 m il lio n s .3 3 1
I
Loan C harges
The Bank1s lo a n s a r e s u b je c t only to two c h a rg e s ,
I n t e r e s t and com m ission. There i s no p o l i c y , in th e
A r t i c l e s o f A greem ent, to be fo llo w ed by th e Bank in f i x in g
th e i n t e r e s t r a t e s on i t s lo a n s . The Bank, how ever, ch a rg e s
i n t e r e s t on a lo a n a t a r a t e w hich i s a l i t t l e h ig h e r th a n
th e c o s t a t w hich th e bank can borrow in th e m arket f o r a
com parable p e r io d . The d i f f e r e n c e betw een th e a c tu a l
i n t e r e s t r a t e i n th e m arket and a r a t e ch a rg e d by th e Bank
i s th e Bank*s p r o f i t . In c o n n e c tio n w ith th e Bank*s
33 B lack , P o l i c i e s and O p e ra tio n s o f th e World Bank,
o p . c i t . , p . 13•
i 46]
: I
i n t e r e s t r a t e , B lack p o in ts o u t t h a t ,
. . . le n d in g r a t e s h o u ld . . . be based in th e f i r s t '
p la c e on what i t has to pay f o r borrow ed money.
S econdly, th e Bank, l i k e any o th e r le n d in g i n s t i t u t i o n ,
would have to b u i l d up r e s e r v e s f o r bad tim e s .34
The w r i t e r s e e s no j u s t i f i c a t i o n f o r th e Bank to
c h a rg e h ig h e r i n t e r e s t r a t e th a n th e m arket r a t e . The
e s ta b lis h m e n t o f th e Bank, i n th e f i r s t p la c e , was n o t based
on m aking p r o f i t . Secondly, th e Bank i s n o t an i n d i v i d u a l ,:s
i n s t i t u t i o n w hich cannot m eet emergency c a se s u n le s s i t has
r e s e r v e s ; in f a c t , i t i s an i n s t i t u t i o n w hich b e lo n g s to
alm o st a l l th e c o u n tr ie s o v e r th e w o rld . In c a se o f bad
tim e s , i f th e r e sh o u ld be an y , th e Bank would be su p p o rte d
by a l l i t s member c o u n t r ie s . This i s one o f th e c r i t i c i s m s
o f th e Bank. Buchanan p o in ts o u t t h a t M th e Bank has been
c r i t i c i z e d f o r b e in g ftoo coram ercial, . ! *35
The Bank n o rm ally ch a rg e s th e f u l l i n t e r e s t r a t e on
i t s lo a n from th e f i r s t day th e p ro c e e d s a r e a c t u a l l y
d is b u r s e d .
In r e g a rd t o th e com m ission, th e A r t i c l e s of A gree
ment r e q u ir e t h a t ,
• . . d u r in g th e f i r s t te n y e a rs o f th e Bank*s
34
I b id . , p . 15•
35 Horman 3. Buchanan, 1 1 I n t e r n a t i o n a l In v e stm e n t,"
A Survey o f Oontemporary Economics (Homewood, I l l i n o i s :
R ichard D. Irw in , I n c ., Vol I I , 1952)* p . 336.
47
o p e r a t io n s , t h i s r a t e o f com m ission s h a l l be n o t l e s s
th a n one p e r c e n t p e r annum and n o t g r e a t e r th a n one
an d o n e - h a lf p e r c e n t p e r annum, an d s h a l l be c h a rg e d
on th e o u ts ta n d in g p o r t i o n o f any su c h lo a n . . . .3 °
However, th e p o lic y o f th e Bank now adays i s to ch a rg e
w a u n ifo rm com m ission o f 1 p e r c e n t p e r annum on th e o u t
s ta n d in g am ounts o f a l l lo a n s r e g a r d le s s o f th e s o u rc e of
f u n d s ." 3 7
The Bank can u se th e s e com m ission c h a rg e s to m eet i t s
f
a d m in is t r a tiv e e x p e n se s and th e r e i s no n eed to make e x t r a |
c h a rg e s . T h e re fo re , th e w r i t e r d is a g r e e s w ith w hat was
s t a t e d in th e F i f t h A nnual M eetin g o f th e B oard o f G o vernors
i n t h i s c o n n e c tio n . T h is s ta te m e n t was a s fo llo w s :
As r e g a r d s i n t e r e s t r a t e s , th e B an k r s p r a c t i c e i s to ,
c h a rg e b o rro w e rs what i t w ould c o s t th e Bank i t s e l f to
r e p l a c e , b y b o rro w in g , th e fu n d s w h ich i t le n d s , p lu s
o n e p e r c e n t s t a t u t o r y com m ission. . . , p lu s a s m a ll
s p r e a d to m eet th e a d m in is t r a tiv e e x p e n se s o f th e Bank
an d to e n a b le th e Bank to b u ild up a r e s e r v e . 38
At any r a t e , a s th e F i f t h A nnual R e p o rt i n d i c a t e s ,
“The Bank h as made e f f o r t s to e f f e c t a p r o g r e s s iv e r e d u c tio n
o f i t s c h a rg e s.? 1 39
36
A r t i c l e s o f A g reem en t, A r t i c l e IV , S e c tio n 4 ( a ) ,
o n . c i t . , p . 9-
F i f t h A nnual R e p o r t, o p . c i t . . , p . 13.
38 F i f t h A nnual M eetin g o f th e B o ard o f G o v ern o rs,
o p . c i t . , p . 1 .
^ Fifth Annual Report, loo, cit.
The M is s io n s an d The T e c h n ic a l A s s is ta n c e
The p u rp o s e s o f s e n d in g m is s io n s by th e Bank to i t s
member c o u n tr ie s a r e as f o llo w s :
To h e lp th e c o u n try fo rm u la te a program o f In v e stm e n t
w h ich w i l l I n d ic a te p r i o r i t i e s among th e im p o rta n t
s e c t o r s o f th e economy an d among ty p e s o f u n d e rta k in g s
w ith in e a c h s e c t o r ; to s u g g e s t m e th o d s, o th e r th a n
in v e s tm e n t, to im prove p r o d u c tiv e e f f i c i e n c y in e x i s t i n g
e n t e r p r i s e s ; and to recommend im provem ents in th e
g o v ern m en tl s econom ic an d f i n a n c i a l p o l i c i e s and o rg a n
i z a t i o n to f a c i l i t a t e f u r t h e r d e v e lo p m e n t.* * 0
T h e re fo re , one o f th e ways in w h ich th e Bank h e lp s
i t s members i s to sen d a m is s io n to i n v e s t i g a t e th e o v e r - a l l
econom ic p o s i t i o n o f th e c o u n try c o n c e rn e d and s u g g e s t
m ethods to m a n ip u la te and im prove th e e x i s t i n g c o n d itio n .
The Bank se n d s m is s io n s to i t s member c o u n tr ie s in
two c a s e s . F i r s t , th e m is s io n i s u se d as an im p o rta n t
f a c t o r o f th e c h a r a c te r o f th e Bank1s i n v e s t i g a t i o n . B e fo re
th e Bank d e c id e s t o make a lo a n , i t se n d s a m is s io n to t h a t
p a r t i c u l a r c o u n try to s tu d y th e o v e r - a l l econom ic p o s i t i o n .
On th e b a s is o f th e m is s io n f s r e p o r t , th e Bank can u s u a lly
g iv e i t s ju d g m en t.
In a lm o st e v e ry c a s e , th e Bank . . . d is p a tc h e s a
m is s io n o f s t a f f members to th e c o u n try to f a m i l i a r i z e
th e m se lv e s w ith c o n d itio n s on th e s p o t . F re q u e n tly
o u ts id e c o n s u lta n t s in p a r t i c u l a r f i e l d s known to be o f
m a jo r im p o rta n c e to th e c o u n try . . . a r e a ls o a t ta c h e d
M ajor O p e r a tio n a l P o l i c i e s o f I n t e r n a t i o n a l Bank,
o p . c i t . , p . 3 2 1 .
k 9
to th e m is s io n
A c tu a lly , enough h as b een s a i d in t h i s c h a p te r and
th e p re c e d in g one a b o u t t h i s k in d o f m is s io n .
The seco n d c a se in w h ich th e Bank d is p a tc h e s a
m is s io n i s to o f f e r i t s members t e c h n i c a l a s s i s t a n c e —
a s s i s t a n c e u n r e l a t e d to any im m ediate r e q u e s ts f o r f i n a n
c in g . T h is t e c h n i c a l a s s i s t a n c e i s u s u a lly g iv e n on r e q u e s t
o f th e governm ent o f any member c o u n try . The Bank o f f e r s
t h i s h e lp to th e c o u n try c o n c e rn e d e i t h e r in f o rm u la tin g a
g e n e r a l d ev elo p m en t program o r in s o lv in g s p e c i f i c d e v e lo p
m ent p ro b le m s .
M issio n to fo rm u la te a g e n e ra l dev elo p m en t p ro g ra m .
— At th e r e q u e s t o f a member c o u n try th e Bank h as u n d e r
ta k e n to p ro v id e th e governm ent co n c ern ed w ith th e n eed ed
h e l p . The c o u n try co n cern ed may r e q u e s t te c h n ic a l a s s i s t
an ce in th e form o f a g e n e ra l s u rv e y m is s io n . The Bank
p r o v id e s t h i s c o u n try w ith a g ro u p o f e x p e r ts to make a
g e n e r a l su rv e y o f th e c o u n try * s r e s o u r c e s and to fo rm u la te
th e b a s i s f o r a lo n g -ra n g e d ev elo p m en t p la n . A lo n g -ra n g e
p la n d o es n o t mean a d e t a i l e d b l u e p r i n t f o r e v e ry a s p e c t o f
th e developm ent p r o c e s s . The m is s io n , r a t h e r , m akes an
i n t e n s i v e , f i r s t hand s tu d y o f a c o u n try * s r e s o u r c e s . The
h,l
Fifth Annual Report. op. cit., p. 12.
Bank h a s e x p la in e d , In i t s F i f t h A nnual M e e tin g , th e d u ty o f
th e m is s io n i n t h i s r e s p e c t a s fo llo w s :
. . . f i r s t to e s tim a te in a ro u g h o r d e r o f m a g n itu d e
t h e amount o f in v e stm e n t w h ich a c o u n try can a p p r o p r i
a t e l y u n d e rta k e w ith th e r e s o u r c e s a t i t s command,
b e c a u se no c o u n try ad v an ces i t s d ev elo p m en t by u n d e rta k
in g a t th e same tim e m ore th a n i t can c a r r y th ro u g h ;
a n d , se co n d , to make recom m endations to th e governm ent
c o n c e rn in g in v e stm e n t p r i o r i t i e s a s among th e im p o rta n t
s e c t o r s o f t h e economy and among ty p e s o f u n d e r ta k in g s
w ith in each s e c to r .^2
T hese m is s io n s w hich a r e o rg a n iz e d by th e Bank a r e
v e ry v i t a l to th e l e s s d e v e lo p e d member c o u n t r ie s . The
B ank, so f a r , h a s o rg a n iz e d te n su rv e y m is s io n s ; se v en f o r
th e W estern H em isphere C o u n trie s o f C olom bia, G u atem ala,
Cuba, N ic a ra g u a , S urinam , Ja m a ic a and B r i t i s h G uiana; two in
A sia — I r a q and C eylon; and o n e i n E urope— T urkey. A
p r e lim in a r y m is s io n to N ig e r ia i s b e in g o rg a n iz e d .^3
I t i s th e d u ty o f th e Bank to o r g a n iz e th e s e m is
s io n s , b e c au se on th e b a s is o f th e m is s io n s 1 1 r e p o r t s th e
Bank can make a d e q u a te le n d in g d e c is io n s an d t h e r e f o r e
f o llo w a r e l a t i v e l y h ig h I n t e r n a t i o n a l in v e s tm e n t s ta n d a r d .
. . . The Bank can n o t s i t in W ashington an d w a it f o r
b u s in e s s to come to i t i n th e form o f w e ll- f o r m u la te d
d ev elo p m en t p r o j e c t s . R a th e r . . . th e Bank in c o o p e ra
t i o n w ith o t h e r n a t i o n a l and i n t e r n a t i o n a l a g e n c ie s m ust
J i O
F i f t h A nnual M e etin g o f th e B oard o f G o v e rn e rs,
o p . c i t . , p . 1 1 .
^3 B la c k , P o l i c i e s an d O p e ra tio n s o f th e W orld B ank,
o p . c i t . , p . 4.
51 j
1 go o u t and a s s i s t c o u n tr ie s in f o r m u la tin g th e k in d o f ’
developm ent p ro g ram s w hich m eet th e t e s t o f r e a s o n a b ly
h ig h i n t e r n a t i o n a l in v e s tm e n t s t a n d a r d s . ^
The s i z e and c o m p o sitio n o f th e m is s io n s have v a r ie d
a c c o rd in g to th e n eed s o f th e in d iv id u a l c o u n try . The o th e r
i n t e r n a t i o n a l and n a t i o n a l a g e n c ie s w hich u s u a lly a s s i s t th e
Bank t o p erfo rm t h i s o b je c t a r e th e W orld H e a lth O rg a n iz a
t i o n and U n ite d N a tio n s E d u c a tio n a l, S c i e n t i f i c and C u ltu r a l
O rg a n iz a tio n . U s u a lly th e s e m is s io n s have in c lu d e d a d v is o r s
on p u b l i c f in a n c e and g e n e r a l eco n o m ics, I n d u s tr y , p o w er,
t r a n s p o r t a t i o n , a g r i c u l t u r e , e x p e r t s ,i n p u b lic h e a l t h and
o th e r s .^
M issio n to s o lv e s p e c i f i c d ev elo p m en t p ro b le m s . —
r * * * 1 i
The Bank has t r i e d in many c a s e s to o f f e r h e lp to i t s
members in s o lv in g some o f t h e i r dev elo p m en t p ro b le m s .
On v a r io u s o c c a s io n s , member c o u n tr ie s have a sk e d th e
Bank f o r a d v ic e on p a r t i c u l a r p r o j e c t s o r i n d u s t r i e s w ith o u t
r e f e r e n c e to any f i n a n c i a l o p e r a t io n s . Some o f th e members
h av e a sk e d th e Bank to recommend to them econom ic o r f in a n
c i a l e x p e r ts to s e rv e a s a d v i s e r s to th e g overnm ent; o th e r s
M i
Raymond F . M ik e s e ll, U n ite d S t a t e s Econom ic P o lic y
and I n t e r n a t i o n a l R e la tio n s (New York: M cG raw -H ill Book
Company, I n c . , 1 9 5 2 ), p . 205*
^ S ev e n th A nnual R e p o rt, “I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n an d D evelopm ent, v (W ash in g to n , D. 0 . , 1951-
1 9 5 2 ), p . 1 1 .
have re q u e s te d th e Bank to recommend e n g in e e r in g f ir m s to
h e lp to exam ine th e f e a s i b i l i t y o f a c o n s tr u c tio n p r o j e c t
b e f o r e th e d e c is io n to p r o c e e d . The Bank h as p ro v id e d th e
a d v is o r s r e q u e s te d e i t h e r from i t s own s t a f f o r recommended
o u ts i d e c o n s u lta n t s to th e governm ent c o n c e rn e d . A dvice h as
been p ro v id e d in su c h v a r io u s m a tte r s a s e n g in e e r in g , bond
i s s u e s , c o r p o r a te o r g a n iz a tio n , and p ro c u re m e n t m e th o d s.
The e x p e n se s o f th e m is s io n . — I t i s th e p o l i c y o f
th e Bank t h a t th e ex p e n ses o f th e s e m is s io n s sh o u ld be
s h a re d b y th e Bank and th e governm ent c o n c e rn e d . As a
g e n e r a l r u l e , th e Bank h as u n d e rta k e n to p a y th e s a l a r i e s o f.
a l l I t s own s t a f f a tta c h e d to th e m is s io n s , w h ile th e
s a l a r i e s o f o u ts i d e c o n s u lta n ts have b een p a i d h a lf by th e
Bank an d h a l f by th e gov ern m en ts c o n c e rn e d . A ll s u b s is te n c e
t r a v e l and o t h e r c o s ts o u ts id e th e c o u n try have b een p a i d by
th e Bank and s i m i l a r ex p e n ses I n c u r re d w ith in th e c o u n try
a r e p a id by th e g o v e r n m e n t.^
T here a r e two r e a s o n s , a s th e F i f t h A nnual R e p o rt
I n d i c a t e s , f o r s h a r in g th e s e ex p e n ses w ith th e governm ent
c o n c e rn e d . F i r s t , I t i s in f a i r n e s s to t h e o th e r s to c k h o ld
e r s o f th e Bank, and s e c o n d ly , to be s u r e t h a t th e governm ent
co n c e rn e d d e s i r e s to u se th e a s s i s t a n c e e f f e c t i v e l y . ^
^ Fifth Annual Meeting, op. cit., p. 13.
^ Fifth Annual Report, op. cit., p. 18.
CHAPTER IV
IRAQ A M D THE BOARD OP DEVELOPMENT
I . A GENERAL IDEA OF EXISTING CONDITIONS
Iraq, i s a c o u n try o f g r e a t p o t e n t i a l i t i e s f o r
econom ic d ev e lo p m e n t. I t i s a c o u n try w ith an a r e a o f
168,04-0 s q u a re m i l e s . T here i s a s iz e a b le a r e a o f la n d
w hich c o u ld be b ro u g h t u n d er c u l t i v a t i o n . I t h a s g r e a t
u n d ev e lo p ed m in e r a l r e s o u r c e s . M oreover, b o th a g r i c u l t u r a l
and m in e ra l p r o d u c ts a r e now e x p o rte d i n t h e i r c ru d e s t a t e . ^
A cco rd in g to th e f i r s t o f f i c i a l c e n su s o f th e s e t t l e d
p o p u la tio n in I r a q , w hich was ta& en in 194-7, i t s p o p u la tio n
was a p p ro x im a te ly f i v e m i l l i o n . The w r i t e r , how ever,
b e l i e v e s t h a t I r a q h a s a p o p u la tio n o f n o t l e s s th a n sev en
m i l l i o n , due to t h e f a c t t h a t th e p e o p le w ere d is h o n e s t when
th e y s t a t e d th e num bers o f t h e i r fa m ily . They d id n o t g iv e
a c o r r e c t s ta te m e n t b e c a u se th e y w ere a f r a i d o f th e g o v ern
m ent . Many th o u g h t th a t th e governm ent w as t r y i n g to o b ta in
an a c c u r a te f i g u r e in o r d e r t o s e t up d r a f t q u o ta s . The
m a jo r i ty w ere an d s t i l l a r e r e l u c t a n t t o j o i n th e arm y.
T h is i s n o t b e c a u s e th e y do n o t w ant to s e r v e t h e i r c o u n try ,
1 V. W e b ster Jo h n so n , and John E. M e tc a lf, H Land
R e d i s t r i b u t i o n and I n d u s t r i a l D ev e lo p m en t,” Land E conom ics,
V o l. XXIX, Number 2 , May, 1 9 5 3 , p . 155-
b u t b e c a u s e th e y th in k t h a t i n jo in in g t h e army th e y s e rv e
th e B r i t i s h in s t e a d o f t h e i r own c o u n try .
About tw o - th ir d s o f t h e p e o p le l i v e i n r u r a l v i l l a
g e s . “E ig h ty - f iv e to 90 p e r c e n t o f th e r u r a l p o p u la tio n
l i v e s d i r e c t l y o f f th e l a n d . " 2 Many o f t h e i n h a b i t a n t s o f
th e s m a lle r tow ns a r e engaged i n a g r i c u l t u r e . A lso , some o f
th e p e o p le l i v i n g in th e l a r g e r tow ns a r e engaged in
a g r i c u l t u r e . T h e re fo re , i t i s o b v io u s t h a t th e m a jo r
o c c u p a tio n i s a g r i c u l t u r e a n d an im al h u sb a n d ry .
The p r i n c i p a l n a t u r a l r e s o u r c e s o f I r a q a r e w a te r ,
la n d , and o i l . Of th e t h r e e , “w a te r I s th e more c r i t i c a l
f a c t o r in th e c o u n t r y 's developm ent."3 The amount o f a r a b le
la n d a v a i l a b l e i n th e c o u n try i s v e ry l a r g e in r e l a t i o n b o th
to t h e p o p u la tio n and t h e la n d a c t u a l l y u n d e r c u l t i v a t i o n .
A c c u ra te s t a t i s t i c s on th e t o t a l t i l l a b l e a r e a a r e la c k i n g ,
b u t th e fo llo w in g e s tim a te s , b a s e d l a r g e l y on d a ta s u p p lie d
by t h e I r a q i D ep artm en t o f A g r ic u ltu r e , g iv e some c o n c e p tio n
o f t h e i r m a g n itu d e : " C u ltiv a b le a r e a *1-8.1 m il l io n donum s,
. . . a r e a a c t u a l l y in c ro p s 1 1 .1 m i l l i o n donum s, . . . and
2 The Econom ic D evelopm ent o f I r a q . "R eport o f a
M is s io n o rg a n iz e d by th e I n t e r n a t i o n a l Bank f o r R e c o n s tru c
t i o n and D evelopm ent a t th e r e q u e s t o f t h e Government o f
I r a q , " (London: The Jo h n s H opkins P r e s s , 1 9 5 2 ), p . 1 2 8 .
3 I b i d ., p . 136.
55
a r e a u n d e r c u l t i v a t i o n 1 7 .5 m i l l i o n d o n u m s . T h e m ost
im p o rta n t m in e ra l r e s o u r c e i n I r a q i s p e tro le u m . At th e
p r e s e n t tim e , t h e r e a r e two m a jo r o i l f i e l d s — one n e a r
K irk u k in th e W orth, th e o t h e r n e a r B a s ra i n th e S o u th .
E ach o f th e s e two f i e l d s , a lth o u g h th e l a t t e r i s n o t f u l l y
e x p lo r e d , h av e r e s e r v e s ,o f o v e r one m i l l i o n to n e . T here
a r e , how ever, m in o r o i l f i e l d s a t A in Z a le h in M ousel
p r o v in c e and n e a r K hanaquin on th e I r a n ia n b o r d e r .
C o n cern in g t r a n s p o r t a t i o n , th e s ta te -o w n e d r a ilw a y
sy stem i s th e p r i n c i p a l m eans o f t r a n s p o r t , " c a r ry in g ab o u t
2 ,0 0 0 ,0 0 0 to n s o f c a rg o an d o v e r 3 » 0 0 0 ,0 0 0 p a s s e n g e rs
a n n u a lly . "5 The r a ilw a y t r a f f i c i s su p p le m en ted by ro a d
t r a n s p o r t . T here a r e o n ly a b o u t N U ,0 G 0 p a s s e n g e r c a re and
a l i t t l e o v e r 9»000 tr u c k s an d b u se s in t h e c o u n t r y .1 1 ^ The
a v a i l a b l e t r a n s p o r t f a c i l i t i e s a r e n o t a d e q u a te in volum e
f o r I r a q 's n e e d , and a r e g e n e r a lly a n t iq u a te d an d p o o r ly
m a in ta in e d .
D om estic a n d f o r e ig n t r a d e i s th e se co n d m ost im por
t a n t o c c u p a tio n . D om estic t r a d e w hich i s on a s m a ll s c a l e
l o c a l b a s i s i s q u i t e u n s a t i s f a c t o r y . T h is i s b e c a u s e m ost
^ I b i d . , p . 137* donums • .2 5 H e c ta rs o r .6 2 a c r e s
o r 2 ,5 0 0 s q u a re m e te r s .
5 ^ i d . , p . 1 5 1 .
^ L oc. c i t .
o f t h e t r a d e r s l a c k know ledge and s k i l l i n th e te c h n iq u e s of!
m odern m anagem ent.
I t i s n o t a d v is a b le t o m e n tio n h e r e a l l c o n d itio n s in
I r a q , n o r to go i n t o d e t a i l s , a s th e p u rp o e e o f t h i s c h a p te r
i s t o stu d y c r i t i c a l l y th e r o l e o f th e governm ent in th e
econom ic d ev elo p m en t o f t h i s c o u n try and th e s te p s w h ich
have b een ta k e n by s a i d governm ent f o r t h i s p u rp o s e .
I I . THE MINISTRY AND THE BOARD OF DEVELOPMENT
As we s a i d b e f o r e , I r a q h a s g r e a t p o t e n t i a l i t i e s f o r '
econom ic d ev elo p m en t; b u t t h e r e i s a n ee d f o r a sound p o lic y
f o r a b e t t e r d i r e c t i o n and b a la n c e o f in v e s tm e n t. The
p o l i c i e s o f governm ent a r e no l e s s im p o rta n t in u n d e r-
i
d e v e lo p e d c o u n t r ie s th a n th e y a r e e ls e w h e re .
The l e v e l o f governm ent sp e n d in g , th e ta x s t r u c t u r e ,
t a r i f f and m o n e ta ry p o l i c i e s , among o th e r t h i n g s ,
in f lu e n c e th e t o t a l am ount o f in v e s tm e n t, th e s o u rc e s
from w hich i t com es, and th e p u rp o se to w hich i t i s
p u t . 7
F in a n c ia l an d t e c h n i c a l r e s o u r c e s a r e th e m ost im por
t a n t ite m s n e c e s s a r y to c a r r y o u t th e p r o c e s s o f econom ic
d ev elo p m en t in an y u n d e rd e v e lo p e d c o u n try . T hese two
r e s o u r c e s a r e l i m i t e d in I r a q . They a r e , u n f o r tu n a te l y ,
7
E ig h th A nnual R e p o rt, " I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and D ev elo p m en t," (W ash in g to n , D .O .: 1952-
1 9 5 3 ), P . 1 0 .
571,
u se d in th e w rong d i r e c t i o n and th e y a r e n o t f u l l y u t i l i z e d .
“The f a c t t h a t f i n a n c i a l and t e c h n i c a l r e s o u r c e s a r e
l i m i t e d in u n d e rd e v e lo p e d c o u n tr ie s make t h e m ost e f f e c t i v e
u s e o f th e s e r e s o u r c e s a p r e s s i n g n e c e s s ity ." ®
T h e re fo re , i t i s th e g o v e rn m e n ts d u ty to d e v e lo p
so u n d p o l i c i e s so t h a t th e y can h e lp t o s tim u la te th e
economy a s a w h o le to g r e a t e r p r o d u c t i v i t y , in c r e a s e s a y in g s
an d in v e s tm e n t a n d , a s a r e s u l t , a t t a i n h ig h e r l i v i n g
s ta n d a r d s . The w r i t e r do es n o t mean t h a t th e governm ent
s h o u ld c o n t r o l eoonom ie a c t i v i t y , n o r d o e s he w ish f o r th e
g o v e rn m e n t's d iv e r s i o n o f i t s own f i n a n c i a l and te c h n i c a l
r e s o u r c e s in to e n t e r p r i s e s f o r w hich p r i v a t e c a p i t a l and
m anagem ent a r e a v a i l a b l e . The w r i t e r d o es mean t h a t th e
governm ent i s r e s p o n s i b le f o r a d o p tin g p o l i c i e s to ta k e c a re
o f c e r t a i n p r o j e c t s w hich a r e n o t p r o f i t a b l e and a r e n o t
a t t r a c t i v e to p r i v a t e i n v e s t o r s . The f u l f i l l m e n t o f th e s e
p r o j e c t s i s a v e r y n e c e s s a ry s te p w h ich s h o u ld be ta k e n by
th e governm ent b e f o r e any f u r t h e r d e v e lo p m e n t, b e c a u se any
o th e r s t e p s . f o r econom ic d ev elo p m en t a r e h ig h ly d ep e n d en t
upon t h a t f i r s t s t e p . Those n e c e s s a r y p r o j e c t s a r e g o in g to
be d e s c r ib e d in t h e f o llo w in g c h a p te r . U n t i l 1950, th e
I r a q i governm ent was n o t f o llo w in g a s p e c i f i c program f o r
® Loc. cit.
58
econom ic d e v e lo p m e n t. In 1 9 5 0 , th e governm ent r e a l i z e d th e
im p o rta n c e o f a h o a rd to p la n an econom ic d ev elo p m en t
p ro g ra m . T here i s no d o u b t a b o u t th e u rg e n t n e c e s s i t y o f
a b o a rd d ev elo p m en t program i n I r a q .
. . . In an y com munity w here r e s o u r c e s a r e l i m i t e d
and th e c a l l s upon them a r e p a r t i c u l a r l y u r g e n t , a
program m ing i n s t i t u t i o n can h e lp t o l i f t d ev elo p m en t
p r o j e c t s o u t o f t h e a r e n a o f d a y - to - d a y s t r i n g e n c i e s
a n d s h o r t te rm n e e d s .9
However, i t i s o b v io u s t h a t th e e s ta b lis h m e n t o f a
program m ing i n s t i t u t i o n i s n o t i n I t s e l f a p a n a c e a .
The E s ta b lis h m e n t o f th e D evelopm ent B oard
S in ce 1950 th e governm ent o f I r a q h a s b ro u g h t a lm o st
a l l t h e econom ic f u n c tio n s t o g e th e r i n t o a governm ental. !
program m ing u n i t , nam ely, th e D evelopm ent B oard. The w r i t e r
b e l i e v e s t h a t t h i s s te p was one o f th e m o st im p o rta n t
a c h ie v e m e n ts o f t h e I r a q i governm ent in i t s econom ic
h i s t o r y . T h is i s b e c a u se th e D evelopm ent B oard i s ,
. . . a u s e f u l in s tru m e n t . . . w h ich lo o k s a h e a d f o r
a p e r io d o f y e a r s , s e t s o u t m a jo r g o a ls in p r o d u c tio n
an d in v e s tm e n t and p r o v id e s a g u id e t o governm ent d e c i
s io n s on p o l i c y , on a p p ro x im a te m a g n itu d e s o f p u b lic
In v e stm e n t i n d i f f e r e n t s e c t o r s o f t h e economy, an d on
t h e c h o ic e an d tim in g o f in d iv i d u a l p r o j e c t s . 10
T here a r e im p o rta n t o b je c t i v e s w h ich can b e s a t i s f i e d
9 I b i d . . p . 1 3 .
10 L oc. e l t .
59
by t h i e B o ard . The I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n
and D evelopm ent p o i n t s o u t i n i t s E ig h th A nnual R e p o rt th e s e
o b j e c t i v e s .
The f e m u l a t i o n and c a r r y in g o u t o f a d ev elo p m en t
program . • . t r i e s to s a t i s f y f i v e o b j e c t i v e s : (a ) to
re v ie w th e t o t a l o f go v ern m en t in v e s tm e n t, so t h a t i t
w i l l n e i t h e r u n d u ly r e s t r i c t p r i v a t e in v e s tm e n t n o r
e x c e e d t o t a l c a p i t a l r e s o u r c e s and so p ro d u ce i n f l a t i o n
o r o th e r u n h e a lth y r e s u l t s ; (b) to c o o r d in a te d e v e lo p
m ent p la n n in g w ith in th e g o v ern m en t, so t h a t p r o j e c t s In
one s e c t o r w i l l be s u p p o rte d by w h a te v e r com plem entary
in v e s tm e n t i s needed e ls e w h e re ; (c ) to e s t a b l i s h p r i o r i
t i e s among developm ent o b j e c t i v e s and p la n s to i n s u r e
th e b e s t and m ost tim e ly u se o f th e f in a n c e , manpower
an d o th e r r e s o u r c e s a v a i l a b l e ; (d) t o g iv e en co u rag em en t
by p o l i c i e s an d s p e c i f i c m e asu res t o th e m ost u s e f u l
p r i v a t e a c t i v i t i e s ; and (e ) to k eep f i s c a l and econom ic
p o l i c i e s c o n s i s t e n t w ith th e lo n g - ru n o b je c ti v e s o f
econom ic g r o w th .H
The S t a f f o f th e B oard
A B oard c a l l e d The D evelopm ent B o ard was e s t a b l i s h e d
i n 1950 by Law No. 23 o f 1 950. The P rim e M in i s te r , a c c o rd
in g t o s a id Law, i s th e p r e s i d e n t o f th e B oard. The o th e r
members o f th e B oard a r e se v e n ; th e y a r e th e M in is te r o f
F in a n c e and s i x e x e c u tiv e members who a r e n o t o f f i c i a l s .
The V ic e - P r e s id e n t i s one o f th e s i x e x e c u tiv e m em bers.
T h ree o f th e e x e c u tiv e members a r e e x p e r ts in (a) f in a n c e
an d econom ics; (b) i r r i g a t i o n ; and (c) o n e o th e r f i e l d to be
p r e s c r i b e d b y th e C o u n cil o f M in i s te r s . A ll o f them ,
11 Ib id . , pp* 10-11.
a c c o rd in g to th e Law, sh o u ld d e v o te t h e i r tim e to th e B oard.
They a l l have th e r i g h t t o v o t e . The S e c r e ta r y -G e n e ra l
s h o u ld be one o f t h e th r e e e x p e r t s . The C o u n c il o f
M in is te r s a p p o in ts th e s i x e x e c u tiv e members f o r f i v e y e a rs
l i a b l e to e x te n s io n , and th e y a r e l i a b l e to be rem oved by
d e c is io n o f th e s a i d C o u n c i l . ^
The B o a rd 's s t a f f i s c o n s t i t u t e d o f se v e n ty -tw o
p e r s o n s f o r t e c h n i c a l , f i n a n c i a l , and a d m i n is t r a t i v e w o rk .
T h ere a r e s i x t y - n i n e t e c h n i c a l p e rs o n s who s u p e r v is e th e
e x e c u tio n o f th e v a r io u s w orks u n d e rta k e n by th e B o a rd .
F u r t h e r , s e v e n ty - f i v e t e c h n i c a l o f f i c i a l s w ere a p p o in te d by
th e B o ard and p o s te d in th e v a r io u s governm ent d e p a rtm e n ts
t o a s s i s t in th e e x e c u tio n o f th e w orks c a r r i e d o u t b y them
on b e h a lf o f th e B o a rd .13 These s e v e n ty - f iv e t e c h n i c a l
o f f i c i a l s c o n s i s t o f e n g in e e r s , o v e r s e e r s , s u r v e y o r s , an d
e x p e r t s ( in c lu d in g g ra d u a te s o f th e E n g in e e rin g C o lle g e and
S u rv e y in g C o u rs e s ). M o reo v er, th e r e a r e f o r ty - o n e f o r e i g n
o f f i c i a l s who a r e em ployed by th e B oard.
Law Mo. 23 o f 1950 was s u b je c t to many am endm ents.
12
Government o f Ira q , O om pilation o f Laws C oncerning
th e Developm ent Board (Baghdad: Government P r e s s , 1951)»
p . 1 *
13 G overnm ent o f I r a q , D evelopm ent B o a rd , “A nnual
R e p o rt f o r th e F in a n c ia l Y ear 1952-1953> M (Baghdad:
G overnm ent P r e s s , 1953)* P- ! •
In 1953 a new amendment was made i n r e g a r d to th e s t r u c t u r e
i
o f th e B oard. T h ereb y , i n 1953# a b o a rd c a l l e d th e D evelop
ment B oard and a m in is tr y c a l l e d th e M in is tr y o f D evelopm ent
w ere fo rm e d .1* * ' The B o ard , a c c o rd in g t o t h e M in is tr y and
B oard of D evelopm ent Law o f 1953» was fo rm ed u n d e r th e
P re s id e n c y o f th e P rim e M in i s te r . The M in i s te r o f D evelop
m ent h a s become an e ig h th member, w hich w as th e o n ly change
in t h e B oard s t r u c t u r e .
C o n cern in g th e M in is te r o f D evelopm ent, th e w r i t e r
s i n c e r e l y a d v is e s th e I r a q i governm ent to p a y c o n s id e r a b le
r e g a r d to th e q u a l i f i c a t i o n o f th e s a i d m i n i s t e r , d u e to th e
im p o rta n c e o f h i s r e s p o n s i b i l i t i e s i n c o n n e c tio n w ith th e
f u t u r e econom ic d ev elo p m en t o f I r a q .
The M in i s te r o f D evelopm ent m u st, a t l e a s t , have
econom ic b ack g ro u n d b e s id e s h i s a d m i n is t r a t i v e e x p e r ie n c e s .
He sh o u ld have a c o lle g e e d u c a tio n in econom ic an d f i n a n c i a l
f i e l d s . U n fo r tu n a te ly , th e governm ent u s u a l l y d o es n o t
c o n s id e r t h i s p o i n t .
M oreover, i t seem s to th e w r i t e r t h a t t h e r e i s no
j u s t i f i c a t i o n f o r g iv in g th e p r e s id e n c y o f th e B oard to th e
P rim e M in is te r . The w r i t e r f e e l s th e r e i s no J u s t i f i c a t i o n ,
b e c a u s e th e r e i s no r e l a t i o n betw een t h e B oard and th e Prim e
_____________ s
^ Iyab Y ear Book (B aghdad: The Baghdad P r i n t i n g
P r e s s , 1953)» p* 9 7 .
M in is te r w h e th e r from th e econom ic o r f i n a n c i a l p o in t o f
v ie w . M o reo v er, th e C o u n c il o f M in is te r s i s fre q u e n tly
ch a n g e d , due to p o l i t i c a l i n s t a b i l i t y . T h is means t h a t th e
B o a rd 's lo n g -tim e o b je c ti v e s a n d f u n c tio n a r e s u b je c t to th e
v a r y in g id e a s and p o in t s o f v ie w o f e a c h o f i t s s h o r t - l i v e d
p r e s i d e n t s . I t i s a d v is a b le a n d more l o g i c a l , th e n , to g iv e
su c h a p o s i t i o n t o a p e rs o n who i s q u a l i f i e d in th e f i e l d s
o f econom ics an d f in a n c e , o r to make th e q u a l i f i e d M in is te r
o f D evelopm ent th e p r e s id e n t o f th e B o a rd .
In 1952 th e B oard a u th o r iz e d th e M in is tr y o f Educa
t i o n to sen d a b ro a d a m is s io n o f s ix ty - tw o s tu d e n ts f o r
s p e c i a l i z a t i o n i n e n g in e e r in g and t e c h n i c a l b ra n c h e s . In
1953» th e M in is tr y o f E d u c a tio n was a l s o a u th o r iz e d to sen d
a b ro a d a m is s io n o f one h u n d re d s i x t y s t u d e n t s . Of th e s e
222 s t u d e n ts , 154 have a lr e a d y b ee n s e n t a b r o a d . ^ The
w r i t e r a d m ire s th e B o a rd 's a u t h o r i z a ti o n to th e M in is tr y o f
E d u c a tio n b e c a u se i t p ro m ise s to s a t i s f y th e need f o r I r a q i
e n g in e e r s in th e n e a r f u t u r e . The M in is tr y o f E d u c a tio n
s h o u ld have s e n t a b ro a d a l l th e 222 s t u d e n t s . The w r i t e r
h o p es t h a t th e re m a in in g s i x t y - e i g h t s tu d e n ts have b een s e n t
a b ro a d o r w i l l b e s e n t in th e n e a r f u t u r e .
The B oard h a s a p p o in te d a number o f c o n s u ltin g
The A nnual R ep o rt f o r th e F i n a n c i a l Y ear 1 9 5 2 -
1 9 5 3* l o c . c i t .
e n g in e e r s f o r th e s tu d y an d p r e p a r a tio n o f s p e c i f i c a t i o n s ,
d e s ig n s , and d raw in g s f o r v a r io u s i r r i g a t i o n schem es,
b r id g e s and i n d u s t r i e s . 16 The w r i t e r recom mends t h a t th e s e
c o n s u ltin g e n g in e e rs sh o u ld s tu d y some o f th e p ro g ram s o f
o t h e r u n d e rd e v e lo p e d c o u n t r ie s w hich h av e th e same b a c k
g ro u n d , i n o r d e r to in tr o d u c e th e m ethods w h ich w ere fo u n d
th e m ost a d e q u a te end s u c c e s s f u l in p r e p a r in g any p ro g ra m .
The P u rp o se and th e D uty o f th e B oard
I t s h o u ld b e known t h a t th e D evelopm ent B oard i s a
program m ing u n i t ; i t s p u ip o s e i s to s tu d y th e econom ic
c o n d itio n s and p r e p a r e a p ro g ram f o r th e w hole econom y.
P la n n in g i n te rm s o f c o n c re te p r o j e c t s an d s p e c i f i c p o l i c i e s
a r e th e w ork o f o th e r m i n i s t r i e s and a g e n c ie s .
A f e a t u r e to be em p h asized i s t h a t th e b a s ic p r o e e s s
e n t r u s t e d to th e s e u n i t s i s program m ing, and n o t p la n
n in g in a d e t a i l e d s e n s e . . . . The program m ing u n i t
s ti m u la te s p la n n in g and f a c t - g a t h e r i n g w here th e y n ee d
to be done; i t v iew s p la n s and p o l i c i e s o b j e c t i v e l y ,
m e a su rin g them a g a in s t one a n o th e r an d a g a in s t th e
r e s o u r c e s a v a i l a b l e ; and i t recom mends w h a te v e r m o d if i
c a t i o n s o f s u b s ta n c e an d tim in g a r e n e c e s s a r y t o b r in g
them to g e th e r i n t o a c o h e re n t w h o le .17
T h e re fo re , th e m ain p u rp o s e o f th e D evelopm ent B oard
i s to s tu d y th e p o t e n t i a l i t i e s o f I r a q an d to s u rv e y i t s
p r o d u c tiv e r e s o u r c e s and i t s w e a lth and n a t u r a l p o w e rs.
16 I b i d . , p p . 1 - 2 .
^ E ig h th A nnual R e p o r t, o p . c i t . , p p . 12-13•
A cc o rd in g to t h i s s tu d y and s u rv e y , th e B o ard p r e p a r e s a
g e n e r a l program f o r th e dev elo p m en t an d e x p l o i t a t i o n o f th e
s a i d r e s o u r c e s and w e a lth w ith a v iew to I n c r e a s e th e
n a t i o n a l income a n d to r a i s e th e l i v i n g s ta n d a r d o f th e
people.**-®
I t i s th e d u ty o f th e B oard to p r e s e n t to th e C o u n c il
o f M in is te r s f o r p r e s e n t a t i o n to P a rlia m e n t th e g e n e r a l
econom ic an d f i n a n c i a l p la n f o r a p p r o v a l. The B oard can
p ro c e e d to c a r r y o u t th e p r o j e c t s m e n tio n e d in th e program
a f t e r th e p a r lia m e n ta r y a p p ro v a l.-*-9
The Laws c o n c e rn in g th e D evelopm ent B o ard , how ever,
do n o t c l e a r l y s t a t e th e d u t i e s o f th e B o a rd . The w r i t e r
w ould n o te f o r c l a r i f i c a t i o n t h a t th e B o ard was n o t e s ta b
l i s h e d o n ly f o r s tu d y in g th e p o t e n t i a l i t i e s o f I r a q a n d to
s u rv e y i t s p r o d u c tiv e r e s o u r c e s a t a s p e c i f i c tim e , b u t to
c o n tin u o u s ly s tu d y and su rv e y in o r d e r to k eep i t s e l f
in fo rm e d o f p r o g r e s s and to b e a b le to recommend new ch an g es
in t h e program o r to add new p r o j e c t s t h a t may be n e e d e d .
The I n t e r n a t i o n a l B ank1s g e n e r a l s u rv e y m is s io n s have
f r e q u e n t l y s t r e s s e d t h a t , " i t i s an im p o r ta n t ta s k o f th e s e
TO
I r a q Y ear Book, o p . c i t . , p . 1 0 0 .
3-9 C o m p ila tio n o f L aw s, A r t i c l e 3 , S e c tio n 1 ( a ) ,
( d ) , p . 2 . F o r d e t a i l s se e A r t i c l e 3* S e c tio n s 2 , 3» 5
an d 6 .
65
u n i t s to k eep in fo rm ed o f p r o g r e s s , and to recommend ch an g es
t h a t may he r e q u ir e d by c ir c u m s ta n c e s ,K 20
T h e re fo re , any lo n g -te rm d ev elo p m en t program n e e d s to
be k e p t c o n tin u o u s ly u n d e r re v ie w and to b e s u b je c te d to
p e r i o d i c m o d if ic a ti o n .
The B o a r d s R evenue
The D evelopm ent B oard h a s i t s own b u d g e t. The B oard 1
d e r iv e s i t s re v e n u e from th e o i l re v e n u e o f th e governm ent
o f I r a q , a s w e ll a s from th e p ro c e e d s o f any lo a n s c o n tr a c
t e d b y i t o r b y th e governm ent on i t s b e h a l f . The B o ard was
e s t a b l i s h e d w ith th e p r o s p e c t o f a r a p id r i s e in o i l
p r o d u c tio n an d a c o rre s p o n d in g in c r e a s e i n th e I r a q i g o v ern
m ent o i l re v e n u e . Due to t h i s p r o s p e c t o f a r a p i d r i s e in
o i l p ro d u c tio n a la w was e n a c te d in 1 9 5 0 , e s t a b l i s h i n g a
D evelopm ent B oard and a s s ig n in g to i t th e g r e a t e s t p a r t o f
th e o i l re v e n u e , an d p r o v id in g a ls o t h a t o th e r sums may be
a l l o t t e d to th e B o ard , from tim e t o tim e , b y l e g i s l a t i o n .
A cc o rd in g to th e r e p o r t o f t h e m is s io n w h ich was o rg a n iz e d
by th e I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent
a t th e r e q u e s t o f th e Governm ent o f I r a q , th e Law o f 1950
a s s ig n e d a l l th e o i l r e v e n u e .21 A c tu a lly , s a i d law a s s ig n e d
20 E igh th Annual R ep o rt, o p . c i t . , p . 1 3 .
Economic Developm ent o f I r a q . o p . c i t . , p .
169.
66
o n ly 70 p e r c e n t o f th e o i l re v e n u e to th e B o ard .
The B oard s h a l l have i t s own b u d g e t, and i t s re v e n u e s
s h a l l be d e r iv e d from s e v e n ty p e r c e n t o f th e n e t re v e n
u e s r e c e iv e d b y th e G overnm ent from th e O il Com panies
w h e th e r su ch re v e n u e s a r e from th e Incom e Tax o r o t h e r
w is e and su c h o th e r sums a s may, from tim e to tim e , b e
a l l o t t e d to i t by P a r lia m e n t. The p ro c e e d s o f any
lo a n s , d o m e stic o r f o r e i g n , c o n tr a c te d by th e B o ard
u n d e r t h i s la w o r by th e Governm ent on i t s b e h a lf s h a l l
b e In c lu d e d i n i t s b u d g e t. . . .2 2
As was m e n tio n e d ab o v e, th e B oard may d e r iv e fu n d s by,
i
»
m eans o f lo a n s fro m th e I n t e r n a t i o n a l Bank f o r R e c o n s tru c
t i o n and D evelopm ent, an d h as In f a c t done so on one
o c c a s io n . On Ju n e 1 5 , 1 9 5 0 , # 1 2 ,8 0 0 ,0 0 0 w ere lo a n e d b y th e
I n t e r n a t i o n a l Bank f o r th e s p e c i f i c p u rp o s e o f f lo o d co n -
i
t r o l c o n s tr u c tio n . T his lo a n w i l l b e c o n s id e re d in d e t a i l !
in C h a p te r V II.
The re v e n u e o f th e B o ard I s , t h e r e f o r e , com posed
p r i m a r i l y o f th e fo llo w in g r e s o u r c e s : 23
1 . S ev en ty p e r c e n t o f th e t o t a l o f th e g o v e r n m e n ts
s h a r e of th e o i l re v e n u e s r e c e iv e d from th e c o n c e s s lo n n a ir e
co m p an ies.
2 . The sums a l l o c a t e d to i t by l e g i s l a t i o n from tim e
to tim e .
3 . The lo a n s w h ich th e B oard may c o n t r a c t w ith a
22
C o m p ila tio n o f L aw s, A r t i c l e k, S e c tio n 1 , o p .
c l t . , p . 3-
23 Iraq Year Book, op. clt., p. 103*
g o v e rn m e n ta l g u a r a n te e a f t e r th e en actm en t o f a law p e r m it
t i n g su ch a lo a n .
k. Any o t h e r p r o p e r ty , and any o t h e r re v e n u e s o r
i n t e r e s t s a c c r u in g from i t s p r o j e c t s w h ich may be r e a l i z e d
b e f o r e t h e i r d e l i v e r y to th e M i n i s t r i e s c o n c e rn e d .
Any i n t e r e s t , co m m issio n s, an d a m o r tiz a tio n o f th e
p r i n c i p a l o f lo a n s t h a t t h e B o ard may c o n t r a c t s h o u ld be
p a i d by th e B o ard from i t s own b u d g e t. M . . . fh e B o ard
s h a l l m eet any I n t e r e s t , com m issions o r o t h e r c h a rg e s an d
a m o r tiz a tio n o f th e p r i n c i p a l o f su c h lo a n s from i t s
b u d g e t .1 1
Due to th e im p o rta n t r o l e p la y e d b y th e B oard in
f o s t e r i n g th e econom ic d ev elo p m en t o f I r a q , an d th e u r g e n t
n eed f o r such r a p i d d e v e lo p m e n t, th e w r i t e r b e lie v e s t h a t
th e B o a rd sh o u ld r e c e iv e m ore su p p o rt from th e g o v ern m en t.
One o f th e f i r s t re q u ire m e n ts f o r s tr e n g th e n in g th e B o a rd 1s
p o s i t i o n and u s e f u ln e s s i s to p la c e i t i n a v e ry s e c u r e
f i n a n c i a l p o s i t i o n . And a s t h e m ain s o u rc e o f th e B oard*s
re v e n u e i s i t s a llo tm e n t from th e o i l re v e n u e , i t seem s to
th e w r i t e r t h a t i t i s n e c e s s a r y to a s s ig n to th e B oard a l l
th e o i l re v e n u e , o r a t l e a s t more th a n 70 p e r c e n t.
p/i
Pomp Hat ion of Laws, loc. cit.
I
I I I . THE BO A R D AND THE GENERAL P R O G R A M
T here a r e some o b s t a c l e s to g ro w th w h ich e x i s t in
many u n d e rd e v e lo p e d c o u n t r i e s . They in c lu d e :
. . . The l a c k o f t r a d i t i o n s o f p o l i t i c a l r e s p o n s i
b i l i t i e s ; t h e w eakness o f econom ic i n i t i a t i v e ; low
s ta n d a r d s o f e d u c a tio n a n d t r a i n i n g ; an d i n s u f f i c i e n t
u n d e rs ta n d in g t h a t econom ic p r o g r e s s r e q u ir e d p a t i e n c e ,
e f f o r t an d s e l f - d e n i a l . The c o n se q u en c es may be la c k
o f c o n fid e n c e betw een a governm ent an d i t s p e o p le and
f r e q u e n t ch a n g e s in governm ent p o l i c i e s and p e r s o n n e l;
u n so u n d econom ic and f i n a n c i a l p o l i c i e s , d i c t a t e d by
p o l i t i c a l p r e s s u r e s a n d o f t e n le a d in g to p ro lo n g e d
p e r io d s o f i n f l a t i o n ; . . . w a ste o f p u b lic fu n d s on
n o n -p ro d u c tiv e a c t i v i t i e s ; an d weak a d m in is t r a tio n in
go v ern m en t an d b u s in e s s . These f a c t o r s d is c o u ra g e
d o m e s tic s a v in g s , and d e t e r f o r e ig n in v e s tm e n t.2 5
N e v e r th e le s s , many o b s e r v a tio n s by The I n t e r n a t i o n a l
i
Bank f o r R e c o n s tru c tio n and D evelopm ent c o n firm th e w id e ly
i
i
h e ld b e l i e f t h a t th e r e s o u r c e s o f m ost u n d e rd e v e lo p e d a r e a s
a r e a d e q u a te , i f e f f e c t i v e l y u s e d , to s u p p o rt a s u b s t a n t i
a l l y h ig h e r l e v e l o f p r o d u c tio n and in c o m e .2^ T h is was th e
l o g i c w hich l e d to th e e s ta b lis h m e n t o f th e D evelopm ent
B oard in I r a q to w eig h governm ent p o l i c i e s and g u id e g o v e rn
m ent in v e s tm e n t i n econom ic d ev elo p m en t in o r d e r to enhance
t h e e f f e c t i v e n e s s w ith w hich e x i s t i n g r e s o u r c e s a r e u s e d .
The B o ard w as c o n s t i t u t e d and b eg an o p e r a tio n s to w ard
th e en d o f 1 950. I t s tu d ie d th e p o t e n t i a l i t i e s o f I r a q and
25
E ig h th A nnual R e p o r t, o p . c i t . , p . 9-
L oc. c i t .
! su rv e y e d i t s p r o d u c tiv e r e s o u r c e s and i t s w e a lth . The
B o ard , th e n , p r e p a r e d a g e n e r a l program f o r f i v e f i n a n c i a l
y e a r s , 1951* 1 952, 1953* 1954* and 1955* In th e s p r in g o f
1951 th e B oard s u b m itte d i t s p r e lim in a r y o v e r - a l l p ro g ram
w h ich was s a n c tio n e d by Law No. (35) f o r t h e y e a r 1 9 5 1 * ^
T h is Law, h o w ev er, was amended by Law No. (25) f o r th e y e a r
1 9 5 2 , w h ich p ro v id e d t h a t t h e g e n e ra l p ro g ram o f p r o j e c t s o f
th e D evelopm ent B oard sh o u ld ru n f o r s i x f i n a n c i a l y e a rs
i n s t e a d o f f i v e .
The E stim ated Revenue f o r th e G eneral Program
The e s tim a te d revenue fo r th e g e n e r a l program o f th e
p r o j e c t s o f th e Development Board fo r th e s i x f in a n c ia l
y ea r s 1951 through 1956 amounts to ID 1 6 8 ,7 4 0 ,0 0 0 (th e
e q u iv a le n t o f about $ 4 7 2 ,0 0 0 ). See Table I .
L ooking a t th e B o a rd 1a a c c o u n ts f o r th e y e a rs 1951
and 1952 a s shown i n th e B o a rd 's A nnual R e p o rt f o r th e
f i n a n c i a l y e a rs 1 9 5 1 -1 9 5 2 , th e e s tim a te d re v e n u e from o i l
i s n e a r th e a c t u a l re v e n u e . The re v e n u e s from o i l w ere
e s tim a te d f o r th e f i n a n c i a l y e a r s 1951 an d 1952 a t a sum o f
ID 2 8 ,8 4 0 ,0 0 0 . S ee T ab le I . The a c tu a l sum due to th e
C o m p ila tio n o f Laws, Law No. (35) A r t i c l e 1 , o p .
c i t . , p . 1 1 .
28 Government o f Ira q , C om pilation o f Laws Concern
in g th e Development Board (Baghdad: Government P r e s s ,
A r t ic l e 1 , 1 9 5 2 ), p . 6 .
TABLE I
THE ESTIMATED REVENUE FOR THE GENERAL PROGRAM
FOR THE SIX FINANCIAL YEARS 1951-1956
Y ear
O il R evenue
ID
The P ro c e e d s
o f th e T h& rthar
P r o j e c t Loan
ID
M isc.
R e c e ip ts
ID
T o ta l
ID
1951
1 0 ,1 5 0 ,0 0 0 3 2 0 ,0 0 0 2 ,0 0 0
}
1 0 ,4 7 2 ,0 0 0
1952 1 8 ,6 9 0 ,0 0 0 1 ,8 5 0 ,0 0 0 8 ,0 0 0 2 0 ,5 4 8 ,0 0 0
1953
3 2 ,9 0 0 ,0 0 0 9 7 0 ,0 0 0 5 0 ,0 0 0 3 3 ,9 2 0 ,0 0 0
1954 3 4 ,3 0 0 ,0 0 0 6 4 0 ,0 0 0 3 5 ,0 0 0 3 4 ,9 7 0 ,0 0 0
1955
3 4 ,3 0 0 ,0 0 0 1 8 5 ,0 0 0 2 0 ,0 0 0 3 4 ,5 0 5 ,0 0 0
1956 3 4 ,3 0 0 ,0 0 0 2 0 ,0 0 0 3 4 ,3 2 0 ,0 0 0
T o ta l 1 6 4 ,6 4 0 ,0 0 0 3 ,9 6 5 ,0 0 0 1 3 5 ,0 0 0 1 6 8 ,7 4 0 ,0 0 0
S o u rc e : C o m p ila tio n o f Laws 1 9 5 2 , S c h e d u le B, o p . c l t . ,
p . 1 0 .
B oard from th e o i l re v e n u e s d u r in g th e y e a r 1951» b a s e d a t
70 p e r c e n t o f th e t o t a l , am ounted to ID 6 ,7 0 1 ,8 0 0 o r a
s h o r ta g e o f ID 3 ,4 4 8 ,2 0 0 ; an d th e a c tu a l sum due to th e
B oard from o i l re v e n u e s d u rin g th e y e a r 1952 am ounted to
ID 2 2 ,8 7 6 ,2 0 6 o r a s u r p lu s o f ID 4 ,1 8 6 ,3 0 6 . The t o t a l
a c t u a l sum due to th e B oard from th e two y e a r s 1951 an d
1952, th e n , i s sim p ly th e sum o f th e re v e n u e s o f th e two
y e a r s , t h a t i s , ID 2 9 * 5 7 8 ,1 0 5 . T h e re fo re , th e s u r p lu s
r e s u l t i n g from th e d i f f e r e n c e betw een th e e s tim a te d re v e n u e
and th e a c tu a l re v e n u e from o i l re v en u e f o r th e two f in a n
c i a l y e a r s (1951 and 1952) w as o n ly ID 7 3 8 ,1 0 5 . See T ab le
I I . The a c c u ra c y o f th e e s tim a te o f th e o i l re v e n u e s f o r
th e tw o y e a r s l e a d s one to b e l ie v e t h a t th e a c t u a l re v e n u e
w h ich w i l l be due to th e B oard f o r th e g e n e r a l p ro g ram to
ru n f o r s ix y e a rs w i l l n o t b e f a r from th e e s tim a te d
re v e n u e .
However, a sum o f f i v e m illio n d i n a r s was d e d u c te d
from th e a c t u a l t o t a l sum due to th e B oard from th e o i l
re v e n u e s f o r th e m e n tio n e d two y e a r s . T h is f i v e m i l l i o n was
d e d u c te d in a c c o rd a n c e w ith d e c re e No. (7 ) f o r 1 952.
T h e r e f o re , th e a c t u a l t o t a l o f re v e n u e s p a i d to th e B oard
w i l l amount to ID 2 4 ,5 7 8 ,1 0 5 , t h a t i s , a d e f i c i t o f
29
Annual Report, op. clt., p. 22.
TABLE, II
TH E ESTIMATED REVENUE AND TH E ACTUAL
REVENUE FOR TH E GENERAL PR O G R A M
Year E stim ated
Revenue ID®
A ctu a l ID^
Revenue
The D iffe r e n c e
ID
1951 1 0 , 1 5 0 ,0 0 0 6 ,7 0 1 ,8 0 0 - 3 , ****8,200
1952 1 8 ,6 9 0 ,0 0 0
2 2 ,8 7 6 ,3 0 5 -***,186,305
1953
3 2 ,9 0 0 ,0 0 0
195**
**3,300,000
1955
3**,300,000
1956 3**,300,000
T o ta l 16**,6**0,000
+ 7 3 8 ,1 0 5
S o u rc e s : a . C o m p ila tio n o f Laws 1 952, o p . c l t . , p . 1 0 .
b . A nnual R e p o rt, o p . c l t . , p p . 2 1 -2 2 .
N o te: A c tu a l re v e n u e s f o r th e y e a rs 1953 an d 195** a r e n o t
a v a i l a b l e . A c tu a l re v e n u e s f o r th e y e a r s 1955 and 1956 a r e ,
o f c o u r s e , n o t y e t d u e.
73|
ID k , 261,895 from th e t o t a l e s tim a te s f o r th e two y e a r s .
T h ere i s no i n d i c a t i o n in t h e A nnual R e p o rt a s to a re a s o n
f o r t h i s d e d u c tio n . The w r i t e r b e lie v e s t h a t even i f t h i s
d e d u c tio n was made f o r a j u s t i f i a b l e r e a s o n , th e governm ent
s h o u ld do i t s b e s t to s a t i s f y th e B oard f i n a n c i a l l y , due to
t h e v i t a l r o l e o f th e B oard in c o n n e c tio n w ith th e d e v e lo p
m ent o f th e c o u n tr y , in s t e a d o f p u t t i n g i t s a c c o u n t in a
d e f i c i t c o n d itio n .
The P r o je c ts o f th e G eneral Program
The Board s h a ll p r e s e n t to th e C ou n cil o f m in is te r s
f o r p r e s e n ta tio n to P arliam en t a g e n e r a l econom ic and
f in a n c ia l p la n fo r th e developm ent o f th e r e s o u r c e s o f
Iraq and th e r a is in g o f th e stan d ard o f l i v i n g o f her
p e o p le . T his p la n s h a ll d e fin e a g e n e r a l programme o f
th e p r o j e c t s to be undertaken by th e Board and s h a l l
in c lu d e in i t s sco p e, but s h a ll n ot be lim it e d , to
p r o j e c t s in w a ter co n serv a n cy , flo o d c o n tr o l, i r r i g a
t i o n , d r a in a g e , in d u stry and m ining a s w e ll as p r o j e c t s
fo r th e improvement o f com m unications by r iv e r , la n d
and a i r . The Board s h a l l In d ic a te in i t s programme th e
p r io r it y o f such p r o j e c t s , t h e ir approxim ate c o s t and
th e p e r io d re q u ir e d f o r t h e i r e x e c u tio n .30
The Board undertook a g e n e r a l su rv ey o f th e e x p lo it e d
and u n e x p lo ite d r e so u r c e s o f Ira q . The Board was a u th o r iz e d
to employ s p e c i a l i s t s and a d v is o r s f o r t h i s p u rp ose. A sum
n ot l e s s than ID 250,000 was p ro v id ed from th e S ta te
T reasury and p la c e d a t th e d is p o s a l o f th e Board to m eet th e
30 C o m p ila tio n o f Laws 1952, A r t i c l e 3 , S e c tio n 1
( a ) , 9 p* 2 .
7*|
e x p e n se s o f o r g a n iz a tio n , s t u d i e s and s u rv e y n e c e s s a r y f o r '
,th e p r e p a r a t io n o f th e g e n e r a l pro gram. 31
The B oard w as c o n s t i t u t e d and b eg an o p e r a tio n to w ard
th e end o f 1 9 5 0 . In th e s p r in g o f 1951 th e B oard s u b m itte d
i t s p r e lim in a r y o v e r - a l l p ro g ram In v o lv in g a t o t a l o u t l a y o f
ID 65>6?* ,0 0 0 o v e r a f i v e - y e a r p e r io d b e g in n in g w ith th e
f i s c a l y e a r 1 9 5 1 -1 9 5 2 .3 2 The program was s a n c tio n e d in 1951
by Law Mo. (3 5 ) f o r th e y e a r 1951-33
From th e above p a ra g ra p h we come to th e c o n c lu s io n
t h a t t h e B oard made i t s g e n e r a l s tu d i e s a n d s u rv e y o f th e
'e x p lo i te d and u n e x p lo ite d r e s o u r c e s o f I r a q and p r e p a r e d th e
p r o j e c t s w hich s h o u ld b e in c lu d e d in th e g e n e r a l program and!
d e c id e d t h e i r p r i o r i t y , a l l w ith in a p e r i o d o f l e s s th a n one
y e a r . The w r i t e r ( o r any r e a s o n in g p e rs o n ) m ust q u e s tio n
th e a c c u ra c y an d e f f i c i e n c y o f a program so s p e e d ily s tr u c k
o f f when i t i s c o n s id e r in g t h e e n t i r e econom ic d ev elo p m en t
o f a n a tio n .
I t I s p o s s i b l e t h a t su c h a program w ould h av e many
s h o rtc o m in g s . E i t h e r f u t u r e d ev elo p m en ts o r a m ore th o ro u g h
3 1 A r t i c l e 3* S e c tio n 1 ( c ) , l o c . c l t .
32 The Econom ic D evelopm ent o f I r a q , o p . c i t . ,
p . 169-
33 C o m p ila tio n o f Laws 1951, Law Mo. (35)> A r t i c l e 1 ,
o p . c l t . , p . 1 1 .
g o in g s tu d y o f th e e n t i r e econom ic and f i n a n c i a l s i t u a t i o n
■will p ro b a b ly r e v e a l many sh o rtc o m in g s in th e p r e s e n t
pro g ram o f th e B o a rd . And a s th e r e a r e no s t a t i s t i c a l d a t a
a v a i l a b l e an d no o t h e r r e l i a b l e d a t a , th e w r i t e r b e l i e v e s
t h a t a th o ro u g h s tu d y w o u ld , f o r a c c u r a te r e s u l t s , r e q u i r e
s e v e r a l y e a r s .
N e v e r th e le s s , a y e a r l a t e r , t h a t i s , in 1 952, m ajo r
ch an g es in th e g e n e r a l program to o k p la c e .3 ^ New law s w ere
e n a c te d , some a s am endments and o th e r s su p p le m e n ta ry to th e
o r i g i n a l la w s . The e s tim a te d p e r io d f o r th e accom plishm ent
o f th e g e n e r a l p ro g ram was p ro lo n g e d to s i x f i n a n c i a l y e a rs
I
from th e y e a r 1951 i n s t e a d o f f i v e y e a r s . New p r o j e c t s were,
ad d e d to th e g e n e r a l p ro g ram . And th e e s tim a te d e x p e n d i
t u r e s f o r th e w h o le program w as changed from ID 6 5 ,6 7 ^ ,0 0 0
to ID 1 5 5 ,3 7 ^ ,0 0 0 .
S in ce th e en actm en t o f th e new la w s i n 1952, th e
g e n e r a l program in c lu d e s th e f o llo w in g p r o j e c t s : (1)
i r r i g a t i o n p r o j e c t s , (2) ro a d s and b r i d g e s , (3) b u ild i n g ,
(*0 r e c la m a tio n o f la n d s , and (5) i n d u s t r i e s .
J See Compilation of Laws for 1952.
P r o je c ts
1; I r r ig a t io n P r o je c ts
a . Tharthar
b . Habbaniyah
c . D iyalah R e se rv o ir
d . Dokan R ese rv o ir
e . Main d ra in a g e
f . O ther i r r ig a t io n
p r o je c ts
2 . Roads and B rid g es
a . Main roads and b r id g e s
b . P u b lic roads and
b r id g e s
c . New b r id g e s
3* B u ild in g s
a . H o sp ita ls and h e a lth
I n s t it u t e s
b . S ch ools
in D e ta il
c . H ousing f o r la b o r and
o f f i c i a l s
R eclam ation o f la n d s
a . A g r ic u ltu r a l r e se a r c h and
la b o r a to r ie s
b . R eclam ation o f a g r ic u l
t u r a l la n d s
c . Development o f f o r e s t s
d . Animal husbandry
e . A r te sia n w e lls and
d r in k in g w ater
f . Works in th e m ountainous
d i s t r i c t s fo r summer
r e s o r t s and r e s t homes
g . E x p ro p ria tio n o f p rop er
t i e s
h . Other schemes
I n d u s tr ie s
5 .
The E stim a ted E xp en d itu res o f th e G eneral Program
As m entioned b e fo r e , th e sa n c tio n e d g en er a l program
o f Law No. (35) for th e year 1951 was amended by Law No.
77
(25) f o r th e y e a r 1952.3-5 A c c o rd in g ly , th e e s tim a te d t o t a l
e x p e n d itu re was ch an g ed from ID 65*6 ?4 ,0 0 0 to ID 155#374,000.
The sum ID 155*374,000 i s a r e s u l t o f summing up th e s h a re s
w h ich a r e p ro v id e d f o r each p r o j e c t . A sum o f ID 3#180,000
i s a l l o t t e d f o r a d m i n i s t r a t i o n , s t u d i e s , an d o r g a n iz a tio n
e x p e n s e s , ID 53*374,000 f o r i r r i g a t i o n p r o j e c t s , ID
2 6 ,7 6 6 ,0 0 0 f o r r o a d s and b r id g e s , ID 1 8 ,0 1 8 ,0 0 0 f o r b u i l d
i n g s , ID 2 2 ,9 8 6 ,0 0 0 f o r r e c la m a tio n o f l a n d s , and ID
3 1 * 0 5 0 ,0 0 0 f o r i n d u s t r i e s . E ach o f t h e s e sums i s to be
a l l o t t e d o v e r th e w hole s ix y e a r s . F o r d e t a i l s e e T ab le
I I I , p a g e s 78 and 79- T h e r e f o re , th e t o t a l c o s t o f th e
g e n e r a l program f o r th e s i x y e a r s e n d in g w ith th e f i n a n c i a l
y e a r 1956 was e s tim a te d to be ID 1 5 5 * 3 7 4 ,0 0 0 . T h is sum o f
ID 155*374,000 w as s a n c tio n e d b y haw No. (25) f o r th e y e a r
1 952.
The sum a l l o t t e d f o r e a c h o f th e y e a r s 1951* 1 952,
1 9 5 3 , 1954, 1955 and 1956 i s ID 9 * 3 6 4 ,0 0 0 , ID 2 0 ,4 6 0 ,0 0 0 ,
ID 2 8 ,3 9 0 ,0 0 0 , ID 3 1 * 6 0 0 ,0 0 0 , ID 3 2 ,3 3 5 * 0 0 0 , and ID
33*225*000 r e s p e c t i v e l y . L ooking a t th e a n n u a l r e p o r t ,
h o w ev er, one n o t i c e s t h a t t h e B oard does n o t u se th e f u l l
am ount w hich i s p ro v id e d f o r e a c h . F o r exam ple, th e sum
w h ich i s p ro v id e d f o r th e f i n a n c i a l y e a r 1952 was
35
Compilation of Laws 1952# op. clt., p. 11.
TABLE III
ESTIMATES OF EXPENDITURES FOR THE GENERAL PR O G R A M '
FOR THE SIX FINANCIAL YEARS ENDING 1956
P ro je c ts
P ro v is io n
1951
ID
P ro v is io n
1952
ID
P ro v is io n
1953
ID
P ro v is io n
1954
ID
A d m in is tra tio n , s tu d ie s
and o rg a n iz a tio n expenses 170,000 460,000 600,000 650,000
I r r i g a t i o n P r o je c ts 3 ,024,000 7,100,000 10,8 4 0 ,0 0 0 11 , 950,000
Roads and B rid g es 2 , 066,000 3,800,000 4 ,7 0 0 ,0 0 0 5 , 300,000
B u ild in g s 2,36 8 ,0 0 0 2,6 5 0 ,0 0 0 3 ,1 0 0 ,0 0 0 3 , 300,000
R eclam ation of Lands
and O th er Schemes 1,6 8 6 ,0 0 0 3 ,4 5 0 ,0 0 0 4 , 150,000 4 ,4 0 0 ,0 0 0
I n d u s tr ie s and M ining
Schemes 50,000 3,000,000 5 ,0 0 0 ,0 0 0 6 ,0 0 0 ,0 0 0
T o ta l ID 9,36 4 ,0 0 0 20,460,000 28,3 9 0 ,0 0 0 31 , 600,000
■ S 3
00
TABLE III (Continued)
ESTIMATES OP EXPENDITURES FOR THE GENERAL PR O G R A M
FOR THE SIX FINANCIAL YEARS ENDING 1956
P ro je c ts
P ro v is io n
1955
ID
P ro v is io n
1956
ID
T o ta l
A d m in is tra tio n , s tu d ie s
and o r g a n iz a tio n expenses 650,000 650,000 3 ,1 8 0 ,0 0 0
I r r i g a t i o n P r o je c ts 10,335.000 10 , 125,000 53,37**,000
Roads and B rid g es 5 , **50,000 5 , **50,000 26,766,000
B u ild in g s 3,300,000 3 ,3 0 0 ,0 0 0 1 8,018,000
R eclam ation o f Lands
and O th er Schemes **,600,000 **,700,000 22,9 8 6 ,0 0 0
i
I n d u s tr ie s and m ining
Schemes 8,000,000 9,00 0 ,0 0 0 3 1 ,050,000
T o ta l ID 32,335,000 33,225,000 155,37**,000
■Source: C om pilation o f Laws 1952, 0£ . c i t . , p p . 8 -9 .
vo
ID 2 0 ,4 6 0 ,0 0 0 , b u t th e B oard h a s u se d up o n ly ID 8 ,9 8 7 ,5 5 8 ;
o r , i n o th e r w o rd s, th e B oard h a s sa v e d In 1952 a sum o f
ID 1 1 ,4 7 2 ,4 4 2 o u t o f ID 2 0 ,4 6 0 ,0 0 0 .3 6 s e e T able IV.
Does t h i s mean t h a t t h e e s tim a te d ©mount n ee d e d f o r
th e program i s f a r In e x c e ss o f th e a c t u a l n eed ed sum f o r
th e acco m p lish m en t o f th e p ro g ram ? T here i s no comment in
th e A nnual R e p o rt ab o u t t h i s e x c e s s . H ow ever, a l o g i c a l
e x p la n a tio n may b e t h a t t h i s s a v in g i s due t o th e f a c t t h a t
th e B oard c o u ld n o t f i n i s h th e p a r t s o f t h e p r o j e c t s w hich
w ere su p p o sed to b e f i n i s h e d w ith in t h a t p a r t i c u l a r y e a r .
I t seem s a p p a re n t to th e w r i t e r , t h e r e f o r e , t h a t th e B oard
i s n o t c a p a b le o f f i n i s h i n g t h e w hole g e n e r a l program w ith in
th e e s tim a te d s i x y e a r s . T h is i s n o t b e c a u s e c o m p le tio n o f
th e program m ust n e c e s s a r i l y r e q u i r e a lo n g e r tim e , b u t may
be b e c a u s e o f th e B o a rd ’ s i n c a p a b i l i t y o f c a r r y in g o u t s a id
p ro g ram w ith in t h e e s tim a te d p e r io d .
36
Annual Report, op. clt., p. 23.
81
TABLE IV
PROVISION SANCTIONED FOR THE YEAR 1952
AND THE ACTUAL EXPENDITURE
P r o je c ts
P r o v is io n
S a n c tio n e d
f o r 1952
ID
A c tu a l Ex
p e n d itu r e
f o r 1952
ID
S aving
ID
i
A d m in is tr a tio n , s t u d i e s
an d o r g a n iz a tio n
e x p e n se s *4-60,000 260,000 200,000
I r r i g a t i o n p r o j e c t s 7 ,1 0 0 ,0 0 0 1,06*4-, 058 6 ,0 3 5 ,9 ^ 2
M ain Roads and B rid g e s 3 ,8 0 0 ,0 0 0 2 ,9 3 2 ,5 0 0 8 6 7 ,5 0 0 j
B u ild in g s and I n s t i t u
t i o n s 2 , 650,000 2 ,6 5 0 ,0 0 0
R eclam atio n , o f L ands
and o t h e r Schemes 3 ,^ 50,000 2 ,0 7 6 ,0 0 0 1,37*4-,000
I n d u s t r i e s 3 ,0 0 0 ,0 0 0 5 ,0 0 0 2 ,9 9 5 ,0 0 0
T o ta l 20 ,*4-60,000 8 ,9 8 7 ,5 5 8 1 1 , *4-72,4*4-2
S o u rc e : A nnual R e p o r t, o p . c i t . , p . 2 3 .
CHAPTER V
THE GENERAL ECONOMIC DEVELOPMENT
PROGRAM IN DETAIL
G en e ra l c o n d itio n s i n I r a q , th e e s ta b lis h m e n t o f th e
M in is tr y and B o ard o f D evelopm ent, i t s p u rp o s e , d u t i e s , and
re v e n u e , th e g e n e r a l program an d th e e s tim a te d e x p e n d itu r e s
o f t h e B oard, w ere s tu d ie d i n th e p r e c e d in g c h a p te r . In
t h i s c h a p te r , th e p r o j e c t s In th e g e n e r a l program w i l l be
c r i t i c a l l y s t u d i e d .
The p r o j e c t s o f th e g e n e r a l p ro g ra m , a s m e n tio n e d
b e f o r e , a r e : i r r i g a t i o n , ro a d s and b r i d g e s , b u ild i n g s ,
r e c la m a tio n o f la n d s and o t h e r schem es, an d i n d u s t r i e s . I t
I s th e p u rp o s e o f t h i s c h a p te r to s tu d y In d e t a i l e a c h o f
th e s e p r o j e c t s s e p a r a t e l y .
I . IRRIGATION AND FLOOD CONTROL PROJECTS
A sid e from o i l , w a te r and la n d a r e c o n s id e re d to be
th e p r i n c i p a l n a t u r a l r e s o u r c e s o f I r a q . As m e n tio n e d
b e f o r e , w a te r i s t h e more c r i t i c a l f a c t o r in th e c o u n tr y 1s
econom ic d e v e lo p m e n t. E f f e c tiv e an d ec o n o m ic al u t i l i z a t i o n
o f a v a i l a b l e w a te r r e s o u r c e s i s th e c e n t r a l problem o f I r a q .
I r a q i s d o m in ate d by two g r e a t r i v e r sy stem s— th e
T i g r is and th e E u p h ra te s ; b o th o f w h ich h av e t h e i r s o u rc e s
83
In th e m o u n ta in s o f T u rk ey . The T ig r is ru n s i n t h e e a s t
s i d e o f th e c o u n try w h ile t h e E u p h ra te s ru n s in th e w e s t.
They flo w from t h e n o r th o f I r a q to th e s o u th , w here th e y
u n i t e a t Q,urna to flo w a s th e S h a tt a l A rab in to th e P e r s ia n
G o lf.
O nly a s m a ll a r e a i n th e n o r th e r n p a r t o f th e c o u n try
h a s s u f f i c i e n t r a i n f a l l to p e n u l t th e c u l t i v a t i o n o f w in te r
c ro p s w ith o u t i r r i g a t i o n . In th e r e s t o f th e c o u n try ,
a g r i c u l t u r e d ep en d s upon th e w a te r o f th e two r i v e r s f o r
i r r i g a t i o n , w h e th e r by pump, by flo w , o r by n a t u r a l
i n u n d a t i o n .1
M ost o f th e la n d , w ith t h e e x c e p tio n o f n o r th e r n
J e z i r e h , and th e s o u th e rn and n o r th e r n d e s e r t s i s a c u l t i
v a b le a r e a i f w a te r i s made a v a i l a b l e .
W ith th e e x c e p tio n o f th e l a r g e and rem o te s o u th e rn
and n o r th e r n d e s e r t s and th e g r e a t e r p a r t o f th e r o l l i n g
u p la n d s b etw een th e T i g r i s and th e E u p h ra te s known as
th e n o r th e r n J e z i r e h , m o st o f t h i s r e g io n can be
c u l t i v a t e d o n ce w a te r i s made a v a il a b le .2
T h e re fo re , w ith s to r a g e and r e g u l a t i o n o f th e r i v e r
w a te r , a g r e a t e x te n s io n o f th e a r e a u n d e r c u l t i v a t i o n i s
p o s s i b l e . “W ith o u t r e g u l a t i o n , . . . t h e w a te rs o f t h e
The Econom ic D evelopm ent o f I r a q , “R e p o rt o f a
M is s io n o r g a n iz e d by th e I n t e r n a t i o n a l Bank f o r R e c o n s tru c
t i o n an d D evelopm ent a t th e r e q u e s t o f th e G overnm ent o f
I r a q , " (London: The Jo h n s H opkins P r e s s , 1952), p. 123*
2 L oc. c i t .
tw in r iv e r s a re la r g e ly w asted and p e r i o d ic a lly u n lo o sen
d is a s tr o u s f lo o d s upon Baghdad and th e a l l u v i a l p la in to th e
so u th . '*3
I r a q h as b ee n s u f f e r i n g f o r a lo n g p e r io d o f tim e
from f lo o d s . F lo o d s have c a u s e d th o u sa n d s o f human d e a th s
a n d m i l l i o n s o f d i n a r s l o s t i n a g r i c u l t u r a l p r o d u c ts and
o t h e r r e s o u r c e s . In f a c t , i f i t w ere p o s s i b l e to o b ta in
s t a t i s t i c a l d a t a on t h a t s c o r e , an u n im a g in a b ly g r e a t l o s s
w ould p ro b a b ly b e r e v e a le d .
Baghdad, th e c a p i t a l o f I r a q , s u f f e r s from f lo o d s o f
th e T i g r i s r i v e r m ore th a n an y o th e r c i t y o f th e c o u n try .
Baghdad e x p e rie n c e s i t s m ost d i f f i c u l t d a y s d u rin g th e
a n n u a l f lo o d .
Baghdad was o f te n f lo o d e d an d s u rro u n d e d w ith th e
w a te r o f th e T i g r i s , an d th u s a lm o st c o m p le te ly c u t o f f
from th e r e s t o f th e c o u n tr y , l i v i n g f o r w eeks l i k e an
i s l a n d . T h ese w ere alw ay s d i f f i c u l t d a y s , when th e
c o n ta m in a te d w a te rs and s h o r ta g e o f fo o d in town ca u sed
g ra v e e p id e m ic s and e n d le s s s u f f e r i n g a n d m is e ry . The
l a s t m a jo r f l o o d .o f t h i s k in d o c c u rre d in 1925* when
B aghdad c i t y I t s e l f was th r e a te n e d w ith th e f lo o d w a te r,
an d tu rn e d i n t o an I s l a n d . ^
The l i s t b elo w shows th e y e a rs in w h ieh su c h f lo o d s
o c c u r r e d and th e num ber o f d a y s in w h ich Baghdad re m a in e d
3 I b i d . , p p . 123-12**.
^ I ra q Y ear Book (B aghdad: The B aghdad P r i n t i n g
P r e s s , 195377 p . 22.
S5|
I s o l a t e d from th e r e s t o f th e c o u n tr y .-5
Y ears Days Y ears Days
1256 60 1298 60
1261 40 1301 50
1265 50 1303
40
1270 30 1306 40
1274 40
1309
120
1279 30 1311
120
1282 60
1315
60
1291
20
1319
30
1294 20 1324 20
A ll y e a rs m e n tio n e d a r e a c c o rd in g to th e A ra b ic
c a l e n d a r .6
However, t h e l a s t f lo o d w hich o c c u r r e d in t h i s y e a r,
1 9 5 4 , may be s a i d to be one o f th e m a jo r f lo o d s . I t was th e
w o rs t d i s a s t e r in th e f lo o d h i s t o r y o f B aghdad.
As m e n tio n e d b e f o r e , o n ly a s m a ll a r e a in th e n o r th
e r n p a r t o f th e c o u n try h a s s u f f i c i e n t r a i n f a l l to p e rm it
t h e c u l t i v a t i o n o f w in te r c ro p s w ith o u t i r r i g a t i o n . T h is
r a i n - f e d zone s t r e t c h e s from M o rth ern M osul to S uleim & niya.
Wheat and b a r le y a r e th e p r i n c i p a l c ro p s in t h a t z o n e .
Idem .
6 1954 i s th e e q u iv a le n t o f 1 3 7 3 -1 3 7 4 .
86
R a i n f a l l i s g e n e r a l l y , h o w ev er, in a d e q u a te f o r stanmer c ro p s ,
■ although w a te r from s tre a m s an d s p r in g s p e rm it c u l t i v a t i o n
o f r i c e and c o t t o n . In p a r t o f t h i s a r e a , e s p e c i a l l y
N o rth e rn M ousel, th e r e h a s b e e n a r a p id e x te n s io n o f c u l t i
v a t i o n w ith th e h e lp o f m odern a g r i c u l t u r a l m a c h in e ry .7
The r i v e r v a l l e y , w h ic h i s s o u th o f th e r a i n - f e d
z o n e , may be d iv id e d I n to t h r e e r e g io n s : "The u p p e r r i v e r
v a l l e y ; th e lo w e r r i v e r v a l l e y down to Amara and N a s lr ly a ;
and th e t r i a n g u l a r a r e a from N a s ir iy a and Amar-a to th e m outh
o f th e Shatt® a l A r a b ."9
The u p p e r r i v e r v a l l e y in c lu d e s m o st o f th e p a r t
w h ich c o n c e rn s o u r stu d y ; t h i s p a r t i s th e a r e a In w h ich th e
T h a r th a r p r o j e c t I s u n d er c o n s t r u c t i o n . I t in c lu d e s m ost o f
th e n o r th e r n J e z i r e h and th e a r e a n o r th o f Baghdad and e a s t
o f th e T i g r i s . The J e z i r e h i s h a r d ly s u s c e p ti b le to
i r r i g a t i o n b e c a u se o f th e e l e v a t io n and c o n f ig u r a tio n o f
th e la n d . "The J e z i r e h i s an u p la n d p l a te a u r e l i e v e d by low
ra n g e s and d e p re s s e d a r e a s o f w hich th e m a jo r one i s th e
Wadi T har t h a r ."
? The Econom ic D evelopm ent o f I r a q , o p . c l t . , p .
124.
® S h a tt m eans r i v e r .
^ The Econom ic D evelopm ent o f I r a q , l o c . c i t .
^ I b i d . , p p . 124-125*
871
I r a q , t h e r e f o r e , w hich h as g r e a t p o t e n t i a l i t y o f
f e r t i l e s o i l , may b e d iv id e d in to two z o n e s , nam ely, th e
r a i n - f e d zone and th e I r r i g a t i o n zo n e. The ab sen ce o f
p r o p e r and a d e q u a te n etw o rk s o f i r r i g a t i o n le a v e s a s iz e a b le
a r e a o f th e c o u n try a s w a s te la n d . A c tu a lly , th e w a te r i s
a v a i l a b l e from th e T ig r is and th e E u p h ra te s . What i s needed,
i s a p r o p e r n e tw o rk o f I r r i g a t i o n p r o v id in g enough w a te r to
c o n v e rt th e w a s te la n d to a p ro d u c in g a r e a . T h e re fo re , th e
u tm o s t n eed s o f th e c o u n try a r e : H
(1) The s to r a g e o f w a te r f o r th e p u rp o s e o f c o n t r o l
l i n g flo o d s and i n c r e a s in g th e r e g u la r s u p p ly o f w a te r f o r
i r r i g a t i o n ;
(2 ) The exp an sion o f i r r i g a t i o n ;
(3) The p r o v is io n o f d r a in a g e t o p r e v e n t d e t e r i o r a
t i o n o f i r r i g a t e d la n d s from s a l t , and
(k) Q u e s tio n s o f o p e r a tio n and m a in te n a n c e o f
i r r i g a t i o n s y s te m s .
Today th e s to r a g e o f th e f lo o d w a ters o f th e
E uphrates and T ig r is and t h e i r t r ib u t a r i e s i s th e forem ost
problem .
The tw in r i v e r s c a r r y , on th e a v e ra g e , a lm o st 70
b i l l i o n c u b ic m e te rs o f w a te r p e r y e a r — a q u a n t ity
t h e o r e t i c a l l y a d e q u a te to i r r i g a t e v a s t a r e a s . Much o f
^ The Economic Development of Iraq, op. cit., p.
183 -
; 88 (
t h i s com es, how ever, in t h e s p r in g a t a tim e to o l a t e to
b e n e f i t w in te r c ro p s an d to o e a r l y f o r summer c r o p s .12
B e fo re th e e s ta b lis h m e n t o f th e D evelopm ent B o ard th e
go v ern m en t o f I r a q , th ro u g h th e I r r i g a t i o n D ep a rtm en t,
b ro u g h t o v e r e i g h t m illio n a c r e s o f la n d u n d e r i r r i g a t i o n ,
e i t h e r d i r e c t flo w o r l i f t i n s t a l l a t i o n . T h is f i g u r e i s
ab o u t f i v e tim e s th e a r e a o f I r r i g a t e d l a n d u t i l i z e d f o r
a g r i c u l t u r e in 1 9 1 8 .^ The m a jo r d ev e lo p m e n ts w h ich h ad
ta k e n p la c e b e f o r e th e e s ta b lis h m e n t o f th e B oard w e re ,
f i r s t , th e c o n s tr u c tio n o f t h e H In d iy ah b a rra g e on th e
E u p h ra te s , and s e c o n d ly , th e c o n s tr u c tio n o f th e K ut b a r r a g e
on th e T i g r i s . The fo rm e r w as begun in 1911 and f i n i s h e d ini
i
1913, th e l a t t e r was f i n i s h e d i n 1939* The Kut b a r r a g e was ,
th e f i r s t s te p f o r th e d ev elo p m en t o f a t l e a s t 1 , 300,000
a c r e s o f la n d in m id d le and s o u th e rn I r a q , b u t W orld War I I
i n t e r f e r e d w ith th e c o m p le tio n o f th e p r o j e c t , a s W orld War
I h ad b e f o r e i n t e r f e r e d w ith th e H tn d ly a h b a rra g e complemen
t a r y w o r k s .^
T h is was j u s t a b e g in n in g ; th e p r o s p e c t o f a r a p id
r i s e in o i l p r o d u c tio n h as b ro u g h t a b o u t a happy s t a t e o f
a f f a i r s f o r th e d ev elo p m en t o f th e c o u n try b y i r r i g a t i o n .
12 I b i d . , p p . 183-18*1-.
I ra q Y ear B ook, o p . c l t . , p . 2 4 5 .
l2* I b i d . , p . 246.
Then, th e Developm ent Board was e s ta b lis h e d In 1950 and
began o p e r a tio n s w ith a g e n e r a l program In w hich i t In clu d ed
many I r r ig a t io n p r o j e c t s d e sig n e d to p r o t e c t th e cou n try
from flo o d d is a s t e r s and to p ro v id e th e n a tio n , w ith i t s
p o t e n t i a l l y ex trem e ly f e r t i l e s o i l , w ith much needed w ater
fo r a g r ic u lt u r e . One o f th e m ajor p r o j e c t s w hich has been
under stu d y fo r a g e s i s th e Wadi Tharthar p r o j e c t .
The I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
D evelopm ent g r a n te d o n ly one lo a n to I r a q f o r th e c o n s tr u c
t i o n o f f lo o d c o n t r o l p r o j e c t s . More p r e c i s e l y , t h i s lo a n
w as g r a n te d f o r th e c o n s tr u c tio n o f th e Wadi T h a rth a r
p r o j e c t . Due to th e im p o rta n c e of t h i s p r o j e c t , i t i s
a d v is a b le to le a v e i t m o m e n ta rily in o r d e r to be a b le to
s tu d y i t a s a s e p a r a t e s u b je c t in th e f o llo w in g c h a p te r .
A c c o rd in g ly , we s h a l l p ro c e e d now w ith o u r d is c u s s io n o f
o t h e r i r r i g a t i o n an d f lo o d c o n t r o l p r o j e c t s w h ich come n e x t
in im p o rta n c e to th e T h a rth a r p r o j e c t .
Habbanlyah Lake P r o je c t
T his p r o j e c t i s d e s ig n e d f o r two im p o rta n t p u r p o s e s ,
n am ely , f lo o d c o n t r o l o f th e E u p h ra te s and s to r a g e o f w a te r
f o r i r r i g a t i o n . A c tu a lly , H abbaniyah L ake was d is c o v e r e d
d u r in g th e s u rv e y o f th e E u p h ra te s a r e a . T his la k e was
fo u n d to b e an im p o rta n t f a c t o r in th e d ev elo p m en t o f th e
w hole o f th e E u p h ra te s V a lle y . The la k e i t s e l f h a s b ee n
90
c o m p le te d d u r in g 1 9 5 2 . ^ The c o m p le tio n o f th e l a k e ,
h o w ev er, does n o t co m p lete t h e .j o b f o r w h ich th e p r o j e c t was
d e s ig n e d . C o m p letio n o f th e p r o j e c t r e q u i r e s c o n s tr u c tio n
o f c a n a ls and b a r r a g e s a s com plem entary p a r t s .
The B oard s p e n t ID 4-50,000 in c o m p le tio n o f th e la k e .
See T a b le V. T h is am ount, h o w ev er, d o es n o t i n d i c a t e th e
t o t a l c o s t o f th e l a k e , b u t o n ly th e c o s t o f th e w o rk s
c o m p le te d s u b s e q u e n t to th e e s ta b lis h m e n t o f th e B o a rd . In
o t h e r w o rd s, th e c o n s tr u c tio n o f H ab b an iy ah Lake was s t a r t e d
b e f o r e th e e s ta b lis h m e n t o f th e B o ard , and l i t t l e re m a in e d
to be done b y t h a t body to co m p lete H ab b an iy ah L ak e.
The sum o f ID 450*000 was u s e d f o r d ig g in g c a n a ls
c a l l e d W arar c a n a l s , and th e c o n s tr u c tio n o f i t s r e g u l a t o r s .
The w r i t e r b e l i e v e s t h a t w ith th e c o m p le tio n o f t h i s work
many human l i v e s and th o u sa n d s, o f a c r e s w ere s e c u re d a g a in s t
th e ra v a g e s o f th e E u p h ra te s f lo o d . The A nnual R e p o rt f o r
th e f i n a n c i a l y e a r 1952-53 p o i n t s o u t t h a t ,
. . . a s a r e s u l t i t was p o s s i b l e , a t t h e p e a k o f
th e E u p h ra te s f lo o d to p a s s p a r t o f th e f lo o d w a te r
th ro u g h th e c h a n n e l i n t o th e l a k e , r e d u c in g th e volum e
o f w a te r in th e r i v e r dow nstream b y ab o u t one h a l f .1 6
The co m p lem en tary p a r t s o f th e p r o j e c t s w ere th e
m ain ite m s in c lu d e d in th e B o ard * s g e n e r a l program f o r th e
^ Idem .
^ A nnual R e p o rt, o p . c l t . , p p . 2 - 3 .
91!
p r o j e c t . They a r e su p p o sed to b e co m p le ted a t th e end of
1 956. A sum o f ID 1,750*000 was e s tim a te d by th e B o ard f o r
t h i s p r o j e c t . See T able V, p a g e s 92 a n d 93*
The se c o n d p a r t o f th e H abbaniyah schem e, a f t e r
c o m p le tio n o f th e L ake, i s a b a r r a g e c a l l e d th e R am adi.
T h is b a r r a g e i s u n d e r c o n s tr u c tio n on th e E u p h ra te s an d i s
su p p o sed to b e u s e d a s a weapon a g a in s t f lo o d s and a s a
r e s e r v o i r f o r i r r i g a t i o n .
At p r e s e n t o n ly a b o u t 8 2 4 ,0 0 0 a c r e s o f th e E u p h ra te s
V a lle y a r e i r r i g a t e d by th e m ain c a n a ls o f th e H in d iy ah
b a r r a g e w hich was c o n s tr u c te d In 1911-1913*^7 The com ple
t i o n o f th e H abbaniyah p r o j e c t , how ever, p ro m ise s to
i r r i g a t e more and m ore o f th e i d l e la n d .
The p r o j e c t , when c o m p le te d , w i l l re d u c e th e f lo o d
d is c h a r g e o f th e E u p h ra te s from a p o s s i b l e maximum "o f 5*200
cum ecs (c u b ic m e te rs p e r se c o n d ) to 2,000 cumecs a n d w i l l
in c r e a s e th e minimum su p p ly o f w a te r a v a i l a b l e f o r i r r i g a
t i o n from 280 cum ecs to p e rh a p s 440 cum ecs.
A cco rd in g to th e M is s io n w hich was o rg a n iz e d b y th e
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent a t th e
r e q u e s t o f th e Government o f I r a q , th e so u n d n e ss o f t h e
■ * ■ 7 I ra q Y ear Book, o p . c i t . , p . 2 4 7 .
The Economic D evelopm ent o f I r a q . o p . c i t . , p .
184.
TABLE V
IRRIGATION AND FLOOD CONTROL PROJECT ON EUPHRATES
ESTIMATES OF EXPENDITURES FOR THE SIX FINANCIAL YEARS
P r o je c ts
P ro v is io n
1951
ID
P ro v is io n
1952
ID
P ro v is io n
1953
ID
P ro v is io n
195^
ID
H abbaniyah
a . Com pletion o f e x is tin g works
b . C o n stru c tio n of b a rra g e o v er
th e E u p h ra tes and h e ig h te n in g
o f th e M ajara r e g u la to r and
th e dykes o f th e Lake
^50,000
300,000 500,000 500,000
R em odelling o f th e t a i l s o f th e
E u p h rates a t Suk E l-S heiyukh and
elsew h ere 10,000 150,000 200,000 200,000
R em odelling o f H i l l a c an al and
i t s m ain b ran ch es 50,000 100,000 250,000 300,000
R em odelling o f Shamiyah and K uffa
r i v e r s 100,000 250,000 150,000 150,000
The g r e a te r Musseyeb p r o je c t 10,000 150,000 200,000 250,000
T o tal 620,000 950,000 1 ,3 0 0 ,0 0 0 l,k0 0,000
v O
N
TABLE V (Continued)
IRRIGATION AND FLOOD CONTROL PROJECT ON EUPHRATES
ESTIMATES OF EXPENDITURES FOR THE SIX FINANCIAL YEARS
P r o je c ts
P ro v isio n
1955
ID
P ro v is io n
1956
ID
T o ta l
ID
H abbaniyah
a . Com pletion o f e x is tin g works
b . C o n stru c tio n o f b a rra g e o ver
th e E u p h rates and h e ig h te n in g
o f th e M ajara r e g u la to r and
th e dykes o f th e Lake 200,000 250,000
A 50,000
1 , 750,000
R em odelling o f th e t a i l s o f th e
E u p h ra tes a t Suk E l-S heiyukh and
elsew h ere
200,000 200,000 960,000
R em odelling o f H i11a c a n a l and
i t s m ain b ran ch es 150,000 150,000 1 ,0 0 0 ,0 0 0
R em odelling o f Shamiyah and K uffa
r i v e r s 150,000 150,000 950,000
The g r e a t e r M usseyeb p r o je c t 300,000 350,000
1 ,2 6 0 ,0 0 0
T o ta l 1,000,000 1,10 0 ,0 0 0 6 ,3 7 0 ,0 0 0
S ource: C om pilation o f Laws, Schedule A, 0£. c i t . , p . 8.
V O
schem e i s beyond q u e s tio n , b u t th e M is s io n v o ic e d s e r io u s
r e s e r v a t i o n s a s to th e wisdom o f e x te n d in g th e s to r a g e
c a p a c ity o f th e p r o j e c t by e v a c u a tin g p a r t o f th e w a te r in
Lake H abbaniyah to th e n e a rb y d e p r e s s io n s o f B ahr e l M ilh
an d Abu D ib is th ro u g h th e d is c h a r g e c h a n n e l o f M u ja rra h .^ 9
I f th e r e s e r v o i r form ed by th e s e d e p r e s s io n s w ere to b e u se d
th e maximum f lo o d d is c h a r g e c o u ld b e f u r t h e r re d u c e d to
1 ,5 0 0 cumecs and th e w a te r a v a i l a b l e f o r i r r i g a t i o n c o u ld be
r a i s e d to 510 c u m e c s.20
To g e t a ro u g h id e a o f th e m ag n itu d e o f th e w hole
schem e c o n n e c te d w ith H ab b an iy ah , i t w ould b e q u i t e s u f f i
c i e n t to s t a t e t h a t th e D hibban r e t u r n c h a n n e l w hich r u n s
from t h e la k e to th e r i v e r i s co m p arab le in s i z e to th e
C an al o f C o rin th e w h ich l i n k s th e A eagean Sea w ith th e
A d r i a t i c S e a .2- * -
A c tu a lly , th e H abbaniyah p r o j e c t i s t h e o n ly m ain
p r o j e c t on th e E u p h ra te s . T h ere a r e , h o w ev er, some m in o r
p r o j e c t s w hich a r e In c lu d e d i n t h e B o a rd 's program t o be
c o n s tr u c te d on t h e E u p h ra te s . Some o f th o s e p r o j e c t s a r e
re m o d e llin g o f th e t a i l s o f t h e E u p h ra te s a t Suk E l-
19 I b i a . . p . 186.
^ k ° c . c i t .
iP&d Y ear Book, o p . c i t . , p . 2 4 6 .
95|
S h eiy u k h , re m o d e llin g o f H i l l a c a n a l and I t s m ain "branches,
re m o d e llin g o f Sham iyah and K u ffa r i v e r s and th e p r e s e r v a
t i o n o f t h e i r "beds from e r o s io n , and th e g r e a t e r M usseyeb
p r o j e c t .
Those few p r o j e c t s t o r e g u l a t e t h e E u p h ra te s f lo o d s
and t o i r r i g a t e th e E u p h ra te s V a lle y w o u ld , th e w r i t e r
b e l i e v e s , be s u f f i c i e n t f o r th e p u r p o s e s . M oreover, a t th e
c o m p le tio n o f th e T h a rth a r p r o j e c t i t w ould b e p o s s i b l e to
i r r i g a t e p a r t o f th e a r e a e a s t o f th e E u p h ra te s by t h e w a te r
r e s e r v e d in th e p r o j e c t . H ow ever, th e I n t e r n a t i o n a l B a n k 's
M is s io n h o ld s t h a t :
. . . i t w ould be a d v is a b le to e x p lo re th e p o s s i b l - i
l i t y o f a l t e r n a t i v e s to r a g e c a p a c ity somewhere a lo n g th e
E u p h ra te s . Of s e v e r a l p o s s i b l e s i t e s , th e b e s t a p p e a rs
to be a t Rawa, a few k ilo m e te r s u p stre a m from Ana.
T h ere a dam 35 to * K ) m e te rs in h e ig h t c o u ld be e r e c te d
t o c r e a t e a r e s e r v o i r w ith a c a p a c ity o f sev en b i l l i o n
c u b ic m e te rs an d an a r e a o f M -80 s q u a re k ilo m e te r s .22
The M issio n u rg e s t h a t a g e o lo g ic s tu d y o f th e s i t e b e
c a r r i e d o u t in o r d e r to o b ta in a g e o lo g ic c r o s s - s e c t i o n in
th e n eig h b o rh o o d o f th e p r o j e c t e d dam em placem ent. No su ch
s tu d y , how ever, h a s b een m ade.
The t o t a l e s tim a te d e x p e n d itu r e s f o r th e d i f f e r e n t
i r r i g a t i o n and f lo o d c o n tr o l p r o j e c t s on th e E u p h ra te s
am ounts to ID 6 ,3 7 0 ,0 0 0 . The e s tim a te d e x p e n d itu r e s f o r th e
22 »rhe Econom ic D evelopm ent o f I r a q , o p . c i t . , p p .
1 8 6 -1 8 7 .
s a i d p r o j e c t s f o r 1 9 5 1 , 1 9 5 2 , 1953, 1 9 5 4 , 1955 and 1956 i s
ID 6 2 0 ,0 0 0 , ID 9 5 0 ,0 0 0 , ID 1 ,3 0 9 ,0 0 0 , ID 1 ,4 0 0 ,0 0 0 ,
ID 1 ,0 0 0 ,0 0 0 an d ID 1 ,1 0 0 ,0 0 0 r e s p e c t i v e l y . The w r i t e r
p r e d i c t s t h a t t h i s am ount i s n o t q u ite enough f o r th e
c o m p le tio n o f t h e p r o j e c t s . The w r i t e r i s n o t an e x p e r t in
t h i s f i e l d o r , m ore p r e c i s e l y , h e does n o t have any know
le d g e o f c o n s tr u c tio n c o s t e s tim a tio n ; n e v e r t h e l e s s , he
a n t i c i p a t e s a s h o r ta g e due t o th e f a c t t h a t th e s e p r o j e c t s
a r e h u g e and th e e s tim a te i s o n ly ID 6 ,3 7 0 ,0 0 0 .
D ly a la h and Dokan Dam
D iy a la h dam i s d e s ig n e d to b r in g a b o u t th e r e v i v a l of
lo w e r Hahrawan l a n d s , o r an e s tim a te d a r e a o f ab o u t 5 0 0 ,0 0 0
m u s h a ra s .23 The r e s e a r c h r e q u i r e d f o r t h i s dam i s
com pleted* I t h a s been d e c id e d to b u i l d a dam a t D e rb ln d l
Khan. The c a p a c ity o f t h i s dam i s 1*37 m i l l i a r d s c u b ic
m e te r s . I t i s b e lie v e d t h a t t h i s c a p a c ity i s n o t e n t i r e l y
a d e q u a te f o r th e f u l l d ev elo p m en t o f t h e la n d a v a i l a b l e f o r
i r r i g a t i o n in th e D ly a la h b a s i n . F u r th e r i n v e s t i g a t i o n ,
t h e r e f o r e , i s t o b e u n d e rta k e n by th e B o ard t o e n la r g e th e
c a p a c ity to a t l e a s t 3*5 m i l l i a r d s c u b ic m e t e r s .2* *
A b a r r a g e I s t o be b u i l t a t Khan B e n i S aad , a s a
23
M ushara e q u a ls donum o r .25 h e c t a r e s o r .6 2 a c r e s .
A nnual R e p o rt, o p . c i t , . , p . 3*
com plem ent to t h e dam, to r a i s e th e w a te r l e v e l and d e v e lo p
th e lo w e r Nahrawan a r e a .
The e s tim a te d t o t a l c o s t f o r t h i s dam and I t s re g u
l a t o r on D ly a la h i s ID 7 * 2 5 0 ,0 0 0 . See T a b le V I.
Dokan dam i s su p p o sed to h e o f m ore im p o rta n c e th a n
D ly a la h dam b e c a u s e a l a r g e r a r e a i s d e p e n d e n t f o r i t s
I r r i g a t i o n upon t h i s dam. Due to th e im p o rta n c e o f t h i s
p r o j e c t , th e B o ard r e f e r r e d th e p la n s to a s p e c ia l co m m ittee
o f t h r e e e x p e r ts in su ch w orks chosen from A m erica, G re at
B r i t a i n , and F ra n c e . T h is co m m ittee v i s i t e d th e s i t e on
w h ich th e p r o j e c t w i l l b e b u i l t , s tu d i e d and ch eck ed th e
d e s ig n s . On t h e i r a d v ic e , w ith c e r t a i n m in o r am endm ents,
th e B oard ap p ro v ed th e d e s ig n s .
The dam w i l l be 230 m eters lo n g and 98 m eters h ig h
and g iv e a s to r a g e c a p a c ity o f 5*8 m illia r d cu b ic m eters o f
w a te r .2-5 T his p r o je c t w i l l c o n tr o l th e w ater o f th e Sm aller
Zab and r e se r v e i t s w ater fo r th e developm ent o f a g r ic u ltu r e
and r e v iv a l o f new la n d s in th e Llwas2 ^ Q f K irkuk, E r b il and
D iy a la , com p risin g an a rea o f two m illio n m usharas.27
25 I b i d . , p . tp.
28 I r a q i s d iv id e d in to f o u r te e n L iw as o r g e o g ra p h i
c a l a r e a s , named f o r th e p ro m in e n t c i t y i n e ach ; f o r
ex am p le, Llwa B aghdad.
27 C o m p ila tio n o f Laws 1951* o p . c i t . , p . 7-
TABLE VI
IRRIGATION AND FLOOD CONTROL PROJECT ON TIGRIS
ESTIMATES OF EXPENDITURES FOR THE SIX YEARS
P r o j e c t s
P ro v is io n
1951
ID
P ro v is io n P ro v is io n
1952 1953
ID ID
P r o v is io n
1954
ID
D ly a la h dam 200,000 450,000 1 ,8 0 0 ,0 0 0 2 ,1 0 0 ,0 0 0
Dokan dam 200,000 600,000 1 ,4 0 0 ,0 0 0 1 ,7 0 0 ,0 0 0
Bekhme dam
2 0 0 ,0 0 0 1 ,0 0 0 ,0 0 0 2 , 500,000
O th e r p r o j e c t s 5 5 4 ,000 9 0 0 ,000 1 ,4 5 0 ,0 0 0 2 , 050,000
M ain d ra in a g e 200,000
4 0 0 ,000 750,000 750,000
T o ta l 1 ,1 5 4 ,0 0 0 2 , 550,000 6 , 400,000 9 ,1 0 0 ,0 0 0
P r o v is io n P r o v is io n T o ta l
P r o j e c t s
1955
1956 ID
ID ID
D iy a la h dam 1 ,7 0 0 ,0 0 0 1 ,0 0 0 ,0 0 0 7 , 250,000
Dokan dam 1*550,000 1 ,2 5 0 ,0 0 0 6 ,7 0 0 ,0 0 0
Bekhme dam 2 ,5 0 0 ,0 0 0 2 ,500,000 8 ,7 0 0 ,0 0 0
O th e r p r o j e c t s 2 ,4 0 0 ,0 0 0 2 , 600,000 9 ,9 5 4 ,0 0 0
M ain d ra in a g e 1 ,0 0 0 ,0 0 0 1 ,0 0 0 ,0 0 0 4 ,1 0 0 ,0 0 0
T o ta l 9 ,1 5 0 ,0 0 0 8 ,3 5 0 ,0 0 0 3 6 ,7 0 4 ,0 0 0
Source: Compilation of Laws, Schedule A, op. cit., p. 8.
: “ 991
The t o t a l e s tim a te d c o s t f o r t h i s dam and i t s com ple
m e n ta ry p a r t s am ounted to ID 6 ,7 0 0 ,0 0 0 . S ee T ab le V I,
p a g e 9 8 .
Bekhme Dam
The D evelopm ent B o ard i n i t s f i r s t f i v e y e a r program
d id n o t make p r o v is io n f o r Bekhme Dan. B ut i t made a
p r o v i s i o n f o r t h e dam in i t s s i x y e a r p ro g ra m , b e c a u s e th e
M is s io n u rg e d t h a t c o n s tr u c tio n o f th e Bekhme Dam b e u n d e r
ta k e n a s soon a s p o s s i b l e . 2 ®
T h is dam i s to b e b u i l t on th e G r e a te r Zab. I t w i l l
have an u lti m a t e h e i g h t o f 165 m e te r s . T h e r e f o re , i t w i l l
b e t h e h ig h e s t dam i n I r a q . A cco rd in g t o th e A nnual R ep o rt
f o r th e f i n a n c i a l y e a rs 1952-1953* and to th e I r a q Y ear
Book, t h i s dam i s one o f th e h ig h e s t in t h e w o r ld .2^ ^he
w r i t e r h o ld s t h a t t h i s s ta te m e n t i s w rong b e c a u se th e h e ig h t
o f H oover dam i s 726*A f e e t , 3 ° w h ereas Bekhme dam i s o n ly
a b o u t 5^1*3^ f e e t in h e i g h t . 31 in th e f i r s t s t a g e , a h e ig h t
2® The Econom ic D evelopm ent o f I r a q , o p . c i t . , p .
1 9 1 .
A nnual R e p o rt, o p . c i t . , p . k. I r a q Y ear Book,
o p . c i t . * p ; 2i f g . -------------------------- — ------
30
U n ite d S t a t e s D ep artm en t o f t h e I n te r io r - B u r e a u
o f R e c la m atio n -H o o v e r Dam (U. S . G overnm ent P r i n t i n g O f f ic e ,
n . d . , n . p . ) .
31 165 m e te rs e q u a ls a b o u t 5^1*3^ f e e t , b e c a u s e each
m e te r e q u a ls 39«37 in c h e s .
o f o n ly 115 m e te rs I s c o n te m p la te d , g iv in g a s to r a g e
c a p a c ity i n t h e r e s e r v o i r o f 2 .7 5 m i l l i a r d c u b ic m e t e r s . 32
T here i s no i n d i c a t i o n , h o w ev er, a s t o th e a r e a o f la n d
w h ich i s su p p o se d t o b e s e rv e d by t h i s dam .
A p u b lic r e l a t i o n s u n i t i s n o t p ro v id e d a s a p a r t o f
th e B o a rd , an d f a c t s a s im p o rta n t a s p r o j e c t e d I r r i g a t i o n
a r e a may be d i f f i c u l t to o b ta in u n le s s th e y happen t o be
I n c lu d e d i n an a n n u a l r e p o r t . The a n n u a l r e p o r t s a r e
su p p o se d to be c l e a r and a c c u r a te in f o r m a tiv e s ta te m e n ts
f o r t h e B oard I t s e l f , a s w e ll a s f o r any o t h e r I n t e r e s t e d
p e r s o n .
I t i s q u i t e d i f f i c u l t , th e n , f o r th e w r i t e r t o s t a t e
th e t o t a l a r e a w h ic h i s g o in g to be s e rv e d b y th e d i f f e r e n t
p r o j e c t s u n d e r c o n s id e r a ti o n .
The t o t a l e s tim a te d c o s t f o r t h i s p r o j e c t am ounts to
ID 8 ,7 0 0 ,0 0 0 . S ee T ab le V I, p a g e 9 8 .
These a r e th e m ajo r f lo o d c o n t r o l and I r r i g a t i o n
p r o j e c t s w h ich a r e u n d e r c o n s tr u c tio n on th e T ig r is r i v e r .
T h ere a r e , h o w ev er, o th e r p r o j e c t s o f l e s s e r im p o rta n c e
w h ich a r e in c lu d e d i n th e g e n e r a l p ro g ra m . T hose, i n b r i e f ,
a r e : i r r i g a t i o n p r o j e c t s f o r A r b il an d M osul L iw as, a
b a r r a g e on th e T i g r i s s o u th o f th e m outh o f Udhaim f o r th e
32
Annual. Report, loc. cit.
101
u t i l i z a t i o n o f t h e w a te r In Bekhme r e s e r v o i r , and c o n s tr u c
t i o n o f c a n a ls , r e m o d e llin g o f c a n a ls l e a d i n g from t h e r i v e r
T i g r i s a t Am arah, r e v i v a l o f B a srah i r r i g a t i o n p r o j e c t s , and
o t h e r s .
The t o t a l e s tim a te d c o s t f o r a l l p r o j e c t s u n d e r
c o n s tr u c tio n on t h e T ig r is am ounted to ID 3 6 ,7 0 4 ,0 0 0 . T h is
f i g u r e d o es n o t in c lu d e th e sum o f ID 1 0 ,3 0 0 ,0 0 0 , w h ic h i s
th e e s tim a te d c o s t f o r th e T h a rth a r p r o j e c t .
The t o t a l c o s ts f o r t h e p r o j e c t s f o r 1951» 1 9 5 2 ,
1953* 1 954, 1 9 5 5 . and 1956 a r e ID 1 ,1 5 4 ,0 0 0 , ID 2 ,5 5 0 ,0 0 0 ,
ID 6 ,4 0 0 ,0 0 0 , ID 9 * 1 0 0 ,0 0 0 , ID 9 * 1 5 0 ,0 0 0 , and ID 8 ,3 5 0 ,0 0 0
r e s p e c t i v e l y . S ee T ab le V I, p . 9 8 .
L ooking a t T able V II, o n e n o t i c e s t h a t th e B o ard
d e v o te d f o r th e i r r i g a t i o n an d f lo o d c o n t r o l p r o j e c t s on th e
T i g r i s a sum w h ic h i s ro u g h ly s i x tim e s l a r g e r th a n t h a t
d e v o te d to p r o j e c t s on th e E u p h ra te s . From th e f lo o d
c o n t r o l p o in t o f v ie w , th e w r i t e r a d m ire s th e B o a rd ’ s
a t t i t u d e a s i t g iv e s m ore a t t e n t i o n to t h e T i g r i s . B ut from
th e v ie w p o in t o f i r r i g a t i o n , t h e l e s s e r a t t e n t i o n o f th e
B oard t o th e E u p h ra te s a r e a i s q u e s tio n a b le . The w r i t e r
b e l i e v e s t h a t th e c u l t i v a b l e a r e a s u rro u n d in g t h e E u p h ra te s
i s n o t s m a lle r n o r o f l e s s e r im p o rta n c e th a n t h a t s u rro u n d
in g th e T i g r i s .
I n t e r n a t 1o n a l a g re e m e n ts . — The c o n s tr u c tio n o f
TABLE VII
IRRIGATION AND FLOOD CONTROL PROJECTS O N
EUPHRATES AND TIGRIS
ESTIMATES OF EXPENDITURES FOR THE SIX YEARS
P r o j e c t s
P ro v is io n
1951
ID
P ro v is io n P ro v is io n
1952 1953
ID ID
P r o v is io n
1954
ID
T h a r th a r 1 ,2 5 0 ,0 0 0 3 ,6 0 0 ,0 0 0 3,1*10,000 1 ,4 5 0 ,0 0 0
P r o j e c t s on
E u p h ra t es 620,000 950,000 1 , 300,000 1 ,4 0 0 ,0 0 0
P r o j e c t s on
T i g r i s 1 ,1 5 4 ,0 0 0 2 ,5 5 0 ,0 0 0 6 ,4 0 0 ,0 0 0 9 , 100,000
T o ta l 3 ,0 2 4 ,0 0 0 7 ,1 0 0 ,0 0 0 1 0 ,8 4 0 ,0 0 0 1 1 , 950,000
P r o j e c t s
P ro v is io n
1955
ID-
P r o v is io n
1956
ID
T o ta l
ID
T h a r th a r 185,000 6 7 5 ,0 0 0 1 0 ,3 0 0 ,0 0 0
P r o j e c t s on
E u p h ra t es 1 ,0 0 0 ,0 0 0 1 ,1 0 0 ,0 0 0 6 ,3 7 0 ,0 0 0
P r o j e c t s on
T ig r is 9 ,1 5 0 ,0 0 0 8 , 350,000 3 6 ,7 0 4 ,0 0 0
T o ta l 1 0 ,3 3 5 ,0 0 0 1 0 , 125,000 5 3 ,3 7 4 ,0 0 0
th e s e r e s e r v o i r s m akes i t n e c e s s a r y t o r e a c h a g re e m e n ts
r e g a r d in g t h e c o n t r o l o f th e w a te r o f th e E u p h ra te s an d
T i g r i s w ith S y r ia , T urkey and I r a n , th ro u g h w h ich c o u n t r ie s
th e tw in r i v e r s flo w .
In th e c a s e o f th e E u p h ra te s , t h i s i s p a r t i c u l a r l y
u r g e n t, b e c a u s e w h a l f o f th e c o u rs e o f t h e r i v e r i s in
T u rk is h and S y ria n t e r r i t o r y an d n e a r l y a l l o f i t s b a s in i s
i n a f o r e ig n c o u n t r y .'* ^
T here a r e i r r i g a t i o n p o s s i b i l i t i e s in S y r ia w h ich
c o u ld s e r i o u s l y re d u c e th e flo w o f w a te r i n t o I r a q . In
I r a n a n d T urkey t h e m o u n tain o u s n a tu r e o f th e w a te rs h e d o f
th e r i v e r s m akes i t much l e s s l i k e l y t h a t s i g n i f i c a n t quan
t i t i e s o f w a te r w i l l b e d i v e r t e d f o r i r r i g a t i o n .
At p r e s e n t , no a g re e m e n ts a s to w a te r r i g h t s e x i s t .
W ith S y r ia , t h e r e i s no a c c o rd w h a te v e r. W ith I r a n , t h e r e
i s o n ly an o ld p r o t o c o l o f 1 9 1 ^ g o v e rn in g th e u se o f w a te rs
o f a s m a ll s tre a m , th e G a n g ir. A p r o t o c o l annexed to th e
T re a ty o f E r ie n d s h ip and Good N e ig h b o r lin e s s c o n c lu d e d w ith
T u rk ey on M arch 2 9 , 1 9 ^6 , s e t up a flo o d w a rn in g s e r v i c e ,
p e im iitte d I r a q to i n v e s t i g a t e p o s s i b l e s i t e s f o r f l o o d -
c o n t r o l dams in T urkey an d g av e ag ree m en t in p r i n c i p l e ,
s u b j e c t to c o n f ir m a tio n in e a c h c a s e , f o r c o n s tr u c tio n o f
^ T*16 Economic Development of Iraq, op. cit., p.
1 9 2.
m
w orks re c o g n iz e d t o b e n e c e s s a r y . T urkey a ls o u n d e rto o k to
i n f 02m I r a q o f an y c o n te m p la te d w orks on e i t h e r o f t h e two
r i v e r s . 3^*
The sco p e o f th e ag reem en t i s th u s f a t h e r l i m i t e d .
Thus i t i s n e c e s s a r y f o r th e I r a q i governm ent to a c h ie v e
m ore d e t a i l e d a g re e m e n ts w ith s a i d c o u n t r ie s in o r d e r to
a v o id f u t u r e c o n f l i c t s in i t s p r o j e c t s w ith th o s e o f th e
o t h e r t h r e e c o u n t r i e s .
D ra in a g e . —* w L ack o f d r a in a g e f a c i l i t i e s h as
r e s u l t e d in p r o g r e s s iv e s a l i n a t i o n and d e t e r i o r a t i o n o f th e
s o i l . ^ S In m ost a r e a s s a l t h a s become a s e r io u s p ro b lem
w i t h i n a few y e a r s o f th e tim e I r r i g a t i o n was b eg u n . A lm ost
a l l la n d i r r i g a t e d by flo w h a s become s a l t y to some d e g re e ,
r e s u l t i n g in d e c l i n i n g c ro p y i e l d s . 36 Pump i r r i g a t e d la n d s
g e n e r a l l y s u f f e r l e s s from s a l t i n g , p a r t l y b e c a u se th e y a r e
h ig h e r and p a r t l y b e c a u s e , ow ing to t h e c o s t o f pum ping,
th e y r e c e iv e l e s s w a te r.
I t i s e s tim a te d t h a t 8a b o u t 60 p e r c e n t o f th e
i r r i g a t e d a r e a s h av e b een a f f e c t e d b y s a l t . “37
I b i d . , p . 193*
I b i d . , p . 203*
36 L oo, c i t .
37 Idem .
The w a te rs o f th e T i g r i s and E u p h ra te s do n o t them
s e lv e s c o n ta in e x c e s s iv e q u a n t i t i e s o f s a l t . The p re s e n c e
o f some o f th e s a l t may h e d u e to th e f a c t t h a t much o f th e
la n d was o r i g i n a l l y u n d e r th e s e a .
As was m e n tio n e d in th e R ep o rt o f th e Economic
D evelopm ent o f I r a q ,
S a lt a c c u m u la tio n can be p r e v e n te d and e x i s t i n g s a l t
e v a c u a te d o n ly b y d ig g in g d ra in a g e c a n a ls w h ich w i l l
lo w e r th e w a te r t a b l e t o a l e v e l o f 1 .5 to 2 m e te r s
b elo w th e s u r f a c e w here c a p i l l a r y a c t i o n can no lo n g e r
b e d a n g e ro u s .38
Up to 195© d r a in a g e h a d been th e s u b je c t o f l i t t l e
p la n n in g o r e x p e rim e n ta tio n in I r a q . The Im p o rta n ce o f
a d e q u a te d r a in a g e an d th e p r e s e n t n e g le c t o f p r o v is io n s f o r
i t w as one o f t h e p o i n t s s t r e s s e d by t h e I n t e r n a t i o n a l
B a n k 's M is s io n . Thus i t becam e a p p a re n t to th e B o ard t h a t
a l l p r e s e n t l y f u n c tio n in g i r r i g a t i o n schem es a r e in n e e d o f
d r a in a g e sy s te m s , f o r s a l t a c c u m u la tio n s e r i o u s l y t h r e a t e n s
to l a y w a ste I r a q 's a g r i c u l t u r a l la n d s .
The B o ard , th e n , I n c lu d e d i n i t s program d r a in a g e
p r o j e c t s . I t i s p o in te d o u t i n th e A n n u a l.R e p o rt f o r th e
f i n a n c i a l y e a r 1952-1953 t h a t th e B o a rd 's T e c h n ic a l S t a f f ,
in c o o p e ra tio n w ith th e I r r i g a t i o n D ep a rtm en t, h a s p r e p a r e d
p la n s f o r d r a in a g e o f 2 2 2 ,0 0 0 m eeh aras i n d i f f e r e n t a r e a s . 39
38 I b i d . , p . 20*K
3 ^ A nnual R e p o r t, o p . c i t . , p . 5*
In. a l l th e d r a in a g e p r o j e c t s , w ork i s e i t h e r u n d er way o r
te n d e r s a r e b e in g c a l l e d . O th e r p r o j e c t s u n d e r i n v e s t i g a
t i o n w ould p r o v id e d ra in a g e f o r 752,800 m e s h a ra s .
The t o t a l e s tim a te d c o s t f o r d r a in a g e p r o j e c t s f o r
th e s i x y e a rs o f th e program am ounted to ID 4 ,1 0 0 ,0 0 0 . The
e s tim a te d sum f o r th e y e a rs 1951* 1952, 1953* 1 9 5 4 , 1955 an d
1956 am ounted t o ID 2 0 0 ,0 0 0 , ID 4 0 0 ,0 0 0 , ID 7 5 0 ,0 0 0 ,
ID 7 5 0 ,0 0 0 ID 1 ,0 0 0 ,0 0 0 , and ID 1 ,0 0 0 ,0 0 0 r e s p e c t i v e l y . See
T a b le V I, p a g e 9 8 .
I I . ROADS AND BUILDINGS
As m e n tio n e d b e f o r e , ro a d s a r e g e n e r a l l y In a d e q u a te .
A ro a d sy stem o f a p p ro x im a te ly 8 ,0 0 0 k ilo m e te r s
(5»000 m ile s ) c o v e rs th e e a s te r n h a l f o f th e c o u n try ,
b u t m ost o f t h e ro a d s a r e u n s u rfa c e d an d im p a s s ib le f o r
lo n g p e r io d s in w et w e a th e r.* ^
I r a q ‘s r o a d sy stem i s c o n t r o l l e d an d m a in ta in e d by
th e P u b lic Works D epartm ent u n d e r th e M in i s te r o f Communica
t i o n s and P u b lic W orks. Up to 1950 th e ro a d system
c o n t r o l l e d a n d m a in ta in e d b y th e P u b lic Works D epartm ent
c o n s is te d o f a p p r o x im a te ly ^ 2 ,5 0 0 k ilo m e te r s m e ta lle d an d
s u r f a c e d , 500 k ilo m e te r s m e ta lle d o n ly , an d 5»000 k ilo m e te r s
o f e a r t h r o a d s .
The Econom ic D evelopm ent o f I r a q , op. c i t . , p p .
3 0 5 -3 0 6 . '
I b i d . , p . 3 2 7 .
Tlie B o ard , in p r e p a r in g t h e g e n e r a l p ro g ram , p a i d
c o n s id e r a b le a t t e n t i o n to t h i s s i t u a t i o n , and c o n s tr u c tio n
o f r o a d s and b r id g e s becam e an im p o rta n t ite m in th e g e n e r a l
p ro g ra m .
Roads a n d B rid g e s
B e fo re th e B oard b eg an i t s work a program w as draw n
up i n 1950 by a co m m ittee a p p o in te d by o r d e r o f th e M in is te r
o f C om m unications and P u b lic Works on F e b ru a ry 7 , 195O.^ 2
T h is co m m ittee c o n s i s t e d o f t h e D ir e c to r s G en e ra l o f P u b lic
W orks, S t a t e R a ilw a y s , I r r i g a t i o n , and S u rv e y s, an d th e
C h ie f E n g in e e r a n d a B r i t i s h r o a d e x p e rt from th e London
M in is tr y o f T ra n s p o r t.
The p ro g ram s c h e d u le s t h i r t y - s e v e n ro a d s o f a t o t a l
l e n g t h o f 3*463 k ilo m e te r s t o b e b u i l t o r Im proved, a s th e
c a s e may b e , i n a p e r io d o f te n y e a r s an d a t a t o t a l c o s t
e s tim a te d a t ID 1 4 *500 , 0 0 0 .^ 3
N e v e r th e le s s , when th e B oard was e s t a b l i s h e d many
r o a d an d b r id g e p r o j e c t s w ere in c lu d e d in i t s p ro g ram .
S in c e th e B oard began o p e r a t io n s , t h e B o a rd 's t e c h n i
c a l s e c t i o n h a s c o n tin u e d th e n e c e s s a ry s t u d i e s f o r l o c a t i o n
o f th e ro a d s a p p ro v e d in t h e B o a rd 's p ro g ra m , em ploying
I b i d - . p . 3 2 8 .
^3 L o e. c i t .
108
a i r p h o to g ra p h ic s u rv e y s w h ere th e s e h av e b ee n n e c e s s a r y .
"A new s e t o f t e c h n i c a l s p e c i f i c a t i o n s f o r c o n s tr u c tio n of
r o a d s and c u l v e r t s an d b r id g e s u s in g m odern u n iv e r s a l
m eth o d s h as been draw n up f o r u se in f u t u r e c o n t r a c t s .
The B oard h as in c lu d e d in i t s p ro g ram th e c o n s tr u c
t i o n o f p u b lic r o a d s and b r i d g e s . A te n d e r has a l r e a d y been
g iv e n to v a r io u s com panies f o r c o n s tr u c tio n o f ab o u t 358
i
k ilo m e te r s o f r o a d s . Upon c o m p le tio n o f th e s e r o a d s ,
com m unication f a c i l i t i e s c o n n e c tin g many Im p o rta n t c i t i e s
w i l l be a v a i l a b l e . F u r th e r ro a d c o n s t r u c t i o n , m o re o v e r, i s
u n d e r c o n tin u o u s s tu d y and s u rv e y . T hese ro a d s w i l l sp an
I r a q from s o u th to north.*K5
In view o f th e im p o rta n c e o f th e i r r i g a t i o n p r o j e c t s ,
f i r s t p r i o r i t y h a s been g iv e n to th e p r e p a r a t i o n o f a p p ro a c h
ro a d s to th e s i t e s o f th e r e g u l a t i o n dam s. T h is h a s
in v o lv e d th e i n v e s t i g a t i o n o f th e b e s t a p p ro a c h e s and much
s u rv e y w ork. At th e same tim e , " th e B o ard d e c id e d to
p u rc h a s e a q u a n t i t y o f ro a d m a ch in e ry f o r u se by th e P u b lic
Works D ep artm en t." ^
^ A nnual R e p o r t, o p . c i t . » p . 6 .
^5 C o m p ila tio n o f Laws 1 9 5 1 » o p . c i t . , p . 9»
^ A nnual R e p o rt, o p . c i t . , p . 8 .
TABLE VIII
CONSTRUCTION OF ROADS AND BRIDGES
ESTIMATES FOR EXPENDITURES FOR THE SIX YEARS
P r o je c ts
P ro v is io n
1951
ID
P ro v is io n
1952
ID
P ro v is io n
1953
ID
P ro v is io n .
195^
ID
Main ro ad s
B asrah-A m ara-K ut-B aghdad ro ad s 300,000 500,000 500,000 500,000
D eltaw a-K irkuk ro ad 200,000 300,000 300,000 300,000
B ag h d ad -S h irg at ro ad 250,000 500,000 600,000 700,000
P u b lic ro ad s and b rid g e s
Roads in th e m ountainous a r e a 200,000 500,000 750,000 1,000,000
H illa-K u fa-N aJ a f 100,000 250,000 300,000 300,000
H illa -D iw an iy ah 50,000 250,000 250,000 250,000
O ther p u b lic ro a d s 500,000 750,000 1,000,000 1,000,000
Com pletion w orks f o r b rid g e s 290,000
New b rid g e s 176,000 750,000 1,000,000 1 , 250,000
T o ta l 2,066,000 3,800,000 700,000 5 ,300,000
- ..1
-o
vo
t
TABLE VIII (Continued)
CONSTRUCTION OF ROADS AND BRIDGES
ESTIMATES FOR EXPENDITURES FOR THE SIX YEARS
P r o je c ts
P ro v isio n
1955
ID
P ro v is io n
1956
ID
- T o ta l
ID
l a i n ro ad s
Basrah-A m ara-K ut-B aghdad ro a d s 500,000 500,000 2,800,000
D eltaw a-K irkuk ro ad 200,000 200,000 1 , 500,000
B ag h d ad -S h irg at ro ad 700,000 700,000 3, *60,000
P u b lic ro ad s and b rid g e s
Roads in th e m ountainous a re a 1,000,000 1,000,000 A, *60,000
H illa -K u fa -N aj a f 300,000 300,000 1,550,000
H illa-D iw an iy ah 250,000 250,000 1,300,000
O th er p u b lic ro ad s 1,000,000 1,000,000 5,250,000
C om pletion w orks f o r b rid g e s 290,000
New b rid g e s 1 , 500,000 1 , 500,000 6,176,000
T o tal 5,*60,ooo
5, *60,000 26,766,000
S ource: C om pilation o f Laws, Schedule A, op. c i t . , p .
9-
i
!
\
The B oard a ls o e n t r u s t e d th e M in i s tr y o f Communica
t i o n s and Works on i t s b e h a lf w ith th e c o n s tr u c tio n o f a
num ber o f r o a d s . T hose r o a d s a r e m e n tio n e d in d e t a i l in th e
A nnual R ep o rt f o r th e f i n a n c i a l y e a r 1 9 5 2 -1 9 5 3 * ^
U n f o r tu n a te ly , th e B o ard d o es n o t i n d i c a t e e i t h e r i n
i t s g e n e r a l p ro g ram o r i n i t s a n n u a l r e p o r t s th e t o t a l
l e n g th o f th e p u b l i c ro a d s u n d e r c o n s tr u c tio n , an d i t i s
d i f f i c u l t to o b ta in su c h in f o rm a tio n from any o th e r r e l i a b l e
s o u r c e .
T hat t h i s p a r t i c u l a r p o i n t and t h i s s o r t o f in fo rm a
t i o n In g e n e r a l I s n o t r e a d i l y a v a i l a b l e i s an Im p o rta n t
i s s u e , and one w h ich th e B o ard sh o u ld c o n s id e r . The B oard
s h o u ld make i t s r e p o r t s a v a l u a b le s o u rc e o f In fo r m a tio n f o r
any I n t e r e s t e d p e r s o n and f o r th e p u b lic g e n e r a lly . N ever
t h e l e s s , th e B o a rd d id m e n tio n th e e s tim a te d c o s t f o r t h i s
p r o j e c t , some ID 2 6 ,7 6 6 ,0 0 0 . See T ab le V I I I , p a g e s 1 0 9 -1 1 0 .
B rid g e c o n s tr u c tio n i s a n o th e r im p o r ta n t ite m i n th e
B o a r d 's p ro g ram . Two b r id g e s w i l l b e b u i l t a c ro s s t h e
T i g r i s i n B aghdad, i n a d d i t i o n to th& e x i s t i n g two m ain
b r id g e s w hich c o n n e c t b o th s i d e s o f B aghdad. One w i l l be
l o c a t e d in th e S o u th G ate an d th e o t h e r i n th e N o rth G a te .
N ine o t h e r b r id g e s w i l l be b u i l t in d i f f e r e n t Im p o rta n t
Ibid., pp. 9-10.
1 1 2 1
t
c i t i e s on th e T i g r i s an d E u p h ra te s .
The t o t a l e s tim a te d c o s t f o r "bridge c o n s tr u c tio n was
ID 6 ,4 6 6 ,0 0 0 . S ee T ab le V I I I , p ag e 1 1 0 .
B u ild in g s
B u ild in g i s a n o th e r im p o rta n t ite m in c lu d e d in th e
B o ard * s p ro g ram . T h is ite m in v o lv e s th e c o n s tr u c tio n o f
h o s p i t a l s , h o u s e s , an d s c h o o ls .
The B oard aim ed, in d raw in g t h e program m e o f B u ild
i n g s , a t s a t i s f y i n g th e n e e d s o f t h e c o u n try f o r th e
s c h o o ls an d i n s t i t u t i o n s o f c u l t u r e an d e d u c a tio n , and
h o s p i t a l s an d d i s p e n s a r i e s , and s a n i t a r y I n s t i t u t i o n s ,
a n d d w e llin g s f o r w o rk e rs and p e t t y o f f i c i a l s . 48
H o s p ita ls an d d i s p e n s a r i e s . < — B e fo re 1950> I r a q had
o n ly e ig h ty - n in e h o s p i t a l s , 49 w h ich w ere u n e v e n ly d i s t r i b
u te d , o n e - t h ir d o f them b e in g in th e Baghdad a r e a an d th e
re m a in in g f i f t y - n i n e d iv id e d among th e o t h e r t h i r t e e n
p r o v in c e s .
Of th e e i g h ty - n in e h o s p i t a l s , f i f t y - e i g h t a r e g e n e r a l
and s i x a r e f o r i n f e c t i o u s d i s e a s e s , t h r e e f o r eye d i s e a s e s ,
two f o r v e n e r e a l d i s e a s e s , and one f o r l e p e r s . T here a r e
a l s o two h o s p i t a l s f o r c h i l d r e n , one f o r women and c h i l d r e n ,
and one f o r m e n ta l d i s e a s e s . A new t u b e r c u l o s i s h o s p i t a l
C o m p ila tio n o f Laws 1951» oj>. c i t . , p . 1 0 .
^9 The Econom ic D evelopm ent o f I r a q , o p . c i t . , p .
355*
1131
• j
and s a n ita r iu m w as opened i n Baghdad in 1 9 5 0 .
These h o s p i t a l s a r e d e f i n i t e l y in a d e q u a te f o r th e
c o u n t r y 's n e e d s , m ost o f them b e in g p o o r ly eq u ip p ed an d
s t a f f e d .
W hile some h o s p i t a l s a r e a d e q u a te ly e q u ip p e d and
s t a f f e d , many o f them a r e s e r i o u s l y i n n ee d o f r e p a i r
an d e q u ip m e n t, e s p e c i a l l y d e n t a l e q u ip m e n t. M ost o f th e
h o s p i t a l s s u f f e r from an a c u te s h o r ta g e o f t r a i n e d
s u b o r d in a te s t a f f (m e d ic a l a id e s o r nurses). . . .
H o s p ita l a d m in is t r a tio n a p p e a rs t o b e w eak th ro u g h o u t
t h e c o u n try , w ith a few n o ta b le e x c e p tio n s su c h a s th e
R o y al H o s p ita l in B aghdad. . . . S e v e r a l I r a q i d o c to r s
a r e now a t t e n d i n g a c o u rs e on h o s p i t a l a d m in is t r a tio n
i n f o r e ig n c o u n t r i e s , . . . I t w o u ld b e a d v is a b le to
g iv e su ch a c o u rs e In I r a q to young d o c to r s a f t e r
q u a l i f y i n g . 50
T here a r e a ls o f o u r h u n d red f o r t y - e i g h t d i s p e n s a r ie s
f o r tr e a tm e n t o f sim p le c o n d i tio n s . In o th e r w o rd s, t h e r e
i s one d is p e n s a r y f o r e v e ry tw e lv e th o u s a n d o f p o p u la tio n .
T h e r e f o re , i t i s o b v io u s t h a t th e number o f th e s e d is p e n s a
r i e s m ust be in c r e a s e d a s a d d i t i o n a l s t a f f can b e t r a i n e d .
S in ce th e B oard began o p e r a tio n s i t h a s e n t r u s t e d
w ith c e r t a i n m i n i s t r i e s and t e c h n i c a l d e p a rtm e n ts th e c a r r y
in g o u t o f a w id e b u ild i n g program o f v a r io u s n a t u r e . -52
M eanw hile th e t e c h n i c a l s e c t i o n s o f t h e B o ard h av e b een
o c c u p ie d In p r e p a r in g d e s ig n s an d s p e c i f i c a t i o n s o f o t h e r
50 I b i d . * p . 356.
^ l o o * c i t .
A nnual R e p o rt, op. c i t . . , p . 1 1 .
b u il d i n g s f o r w h ich a p p ro v a l i s a v a i l a b l e .
Two h o s p i t a l s a r e now u n d e r c o n s t r u c t i o n , one a t Kut
w ith a one h u n d re d tw e n ty b e d c a p a c ity , t h e o th e r a t K arkh
( th e w est s id e o f Baghdad) w ith a s i x h u n d re d bed c a p a c ity .
M o reo v er, te n m ore h o s p i t a l s a r e u n d e r c o n s tr u c tio n i n
d i f f e r e n t c i t i e s an d to w n s. Each o f t h e s e te n h o s p i t a l s i s
c a p a b le o f h o ld in g tw en ty b e d s w ith n e c e s s a r y a n n e x e s .'53
A lth o u g h t h e B oard to o k a s te p o f u tm o st im p o rta n c e
i n b u i l d i n g h o s p i t a l s w h ich w i l l im prove th e h e a l t h o f th e
I r a q i p e o p le , t h e r e i s n ee d f o r f u r t h e r a n d o th e r im p ro v e
m e n t. I r a q , d e s p i t e p u b lic h e a l t h Im provem ent in th e p a s t
t h i r t y y e a r s , i s a n a tio n o f v e r y p o o r h e a l t h . D e f in ite
d a t a a r e la c k in g on d e a th r a t e s r e s u l t i n g from d i s e a s e s .
The m ain p r e v a i l i n g d is e a s e s a r e m a la r ia , t u b e r c u l o s i s and
eye d i s e a s e s . W i t h th e e x is te n c e o f t h e s e d is e a s e s t h e r e
can b e no p ro m ise o f any f u t u r e d ev elo p m en t i n any a s p e c t o f
econom ic d e v e lo p m e n t. A n a t io n o f s ic k p e o p le i s a p o o r ly
p ro d u c in g n a t io n . Mew m eth o d s and m odern m ach in es w ould
h av e a m in o r e f f e c t on im p ro v in g and I n c r e a s in g p ro d u c tio n
u n le s s th e y a r e u s e d by a h e a lth y p e o p le .
T h e re fo re , i t i s n e c e s s a r y t h a t g r e a t e r em p h asis be
Doc* olt.
5 1 * The Econom ic D evelopm ent o f I r a q , o p . c i t . , p p .
352-353*
U 5
p la c e d on im p ro v in g th e h e a l t h c o n d itio n o f I r a q i p e o p le .
The m o st p r a c t i c a l p la n f o r im p ro v in g p u b l i c h e a l t h w ould
c o n s i s t i n b u ild i n g m ore h o s p i t a l s w ith t h e n e c e s s a r y
f a c i l i t i e s an d d o c t o r s , and i n re d u c in g i l l i t e r a c y . The
fo rm e r s te p i s th e B o a rd 's r e s p o n s i b i l i t y .
The B o a rd , in th e f i r s t i n s t a n c e , s h o u ld c o n c e n tr a te
i t s e f f o r t s on t h e re p la c e m e n t, r e p a i r a n d m o d e rn iz a tio n o f
e x i s t i n g h o s p i t a l s .
E s p e c ia lly s h o u ld th e B oard p ay m ore a t t e n t i o n to
in c r e a s i n g f a c i l i t i e s f o r tr e a tm e n t i n t h e r u r a l a r e a s .
As I t becom es p o s s i b l e to d e v o te m ore a t t e n t i o n to
I n c r e a s in g f a c i l i t i e s f o r tr e a tm e n t, p r i o r i t y s h o u ld
b e g iv e n g e n e r a l l y to t h e c o n s tr u c tio n o f a d d i t i o n a l
d i s p e n s a r i e s I n th e r u r a l a r e a s . 55
S ch o o ls and e d u c a tio n a l I n s t i t u t i o n s . —
E d u c a tio n a l re fo rm and r e c o n s t r u c t i o n i s a b a s ic
c o n d itio n f o r th e p h y s i c a l , m e n ta l an d s o c i a l h e a l t h o f
t h e p e o p le an d f o r th e a g r i c u l t u r a l , I n d u s t r i a l and
te c h n o lo g i c a l p r o g r e s s o f th e c o u n try . Even from th e
l i m i t e d p o in t o f v iew o f im p ro v in g m a t e r i a l s ta n d a r d s ,
i t i s n e c e s s a r y n o t o n ly t o expand th e e d u c a tio n a l
f a c i l i t i e s b u t a l s o to e v o lv e a b e t t e r a n d m ore s u i t a b l e
ty p e o f e d u c a tio n w h ich w i l l h e lp to p ro v id e t r a i n e d
an d e f f i c i e n t p e r s o n n e l f o r c a r r y in g o u t th e v a r io u s
d e v elo p m en t p r o J e c t s t h a t may b e u n d e rta k e n b y th e
g o v ern m e n t. 5b
The b e n e f i t s o f n a t i o n a l econom ic d ev elo p m en t a r e
u n l i k e l y to b e d i f f u s e d w id e ly enough to make a r e a l
55 I b i d . , p . 3 5 7 .
56 i b i d . , p . 385-
e o n t r i b u t l o n to s t a b l e s o c i a l and p o l i t i c a l c o n d itio n s a s
lo n g a s a lm o st 90 p e r c e n t o f th e p o p u la tio n rem ain i l l i t e
r a t e an d d e p riv e d o f th e b a r e s t e le m e n ts o f w hat i s a p t l y
known a s fu n d a m e n ta l e d u c a tio n . E d u c a tio n o f b o th c h i ld r e n
and a d u l t s o b v io u s ly h a s to p la y a dynam ic and d e c i s i v e r o l e
in i n c r e a s i n g n a t i o n a l w e a lth w h ic h , i n t u r n , in c r e a s e
s o c i a l w e ll- b e in g and h a p p in e s s .
The R e p o rt o f th e I n t e r n a t i o n a l B a n k 's M is sio n con
t a i n s a num ber o f e x c e ll e n t s u g g e s tio n s an d p r o p o s a ls . The
M is s io n i s p r i m a r i l y i n t e r e s t e d in th e p a r t w h ich e d u c a tio n
can p la y to f a c i l i t a t e and s u p p o rt th e d ev elo p m en t p ro g ram
a s a w h o le . I t h a s come to t h e c o n c lu s io n t h a t th e f o llo w
in g t h r e e a s p e c ts o f e d u c a tio n im pinge d i r e c t l y on th e
Im provem ent o f p r o d u c tiv e c a p a c i t y : ^7
1 . C om pulsory, u n i v e r s a l , p rim a ry e d u c a tio n f o r
c h ild r e n ;
2 . F u n d am en tal e d u c a tio n f o r a d u l t s ; and
3 . V o c a tio n a l and t e c h n i c a l e d u c a tio n r e l a t e d to
d ev elo p m en t n e e d s .
These f o r e g o in g t h r e e a s p e c ts o f e d u c a tio n a r e th e
m o st u rg e n t n e e d f o r th e c o u n t r y 's d e v e lo p m e n t. T h e ir
a b s e n c e i s an o b v io u s I n d i c a t i o n t h a t t h e r e i s no hope f o r
57 1^13-» p. 386.
11?!
d ev elo p m en t and t h a t e x i s t i n g c o n d itio n s w i l l d e t e r i o r a t e .
The Bank*a M is sio n b e a u t i f u l l y e x p re s s e d t h e im p o rta n c e o f
t h e s e t h r e e a s p e c ts o f e d u c a tio n a s i t p o i n t s o u t t h a t :
C om pulsory p rim a ry e d u c a tio n i s t h e o n ly way to
b ro a d e n th e e d u c a tio n a l b a s e . W ith o u t i t i l l i t e r a c y can
n e v e r r e a l l y be stam ped o u t and th e p e o p le g iv e n th e
m eans o f a c q u ir in g t h e p r a c t i c a l know ledge w h ich w i l l
e n a b le them to r a i s e t h e i r s ta n d a r d o f l i v i n g th ro u g h
t h e i r own e f f o r t s . S i m i l a r l y , a d u l t e d u c a tio n i s n e c e s
s a r y i f n e a r l y th e w hole o f th e p r e s e n t g e n e r a tio n
beyond p rim a ry s c h o o l ag e i s n o t to rem ain i l l i t e r a t e
an d be d e n ie d th e o p p o r tu n ity to l e a r n ways an d m eans
o f im p ro v in g t h e i r l i v i n g c o n d itio n s . The n e e d f o r
v o c a tio n a l and t e c h n i c a l e d u c a tio n s h o u ld r e q u ir e no
d e t a i l e d J u s t i f i c a t i o n i n a c o u n try w here th e l a c k o f
t e c h n i c a l s k i l l s seem s to b e one o f th e m ost s e r i o u s
o b s ta c le s to r a p id d e v e lo p m e n t.58
B e fo re 1950 I r a q h ad s c h o o ls f o r d i f f e r e n t a s p e c t s of*
e d u c a tio n , b u t th e y w ere v e r y in a d e q u a te i n number f o r th e
c o u n try * s n e e d . In re s p o n s e to th e M is s io n * s s u g g e s tio n s
a n d t o o th e r s u g g e s tio n s and p r o p o s a ls p r e s e n te d to th e
g o v ern m en t o f I r a q by s e v e r a l co m m ittees and e d u c a tio n a l
e x p e r t s , th e B o ard In c lu d e d i n i t s g e n e r a l progrsaa an item
f o r b u i l d i n g m ore s c h o o ls and e d u c a tio n a l i n s t i t u t i o n s . ^
O nly s i x se c o n d a ry s c h o o ls an d two in te r m e d ia te
s c h o o ls a r e u n d e r c o n s t r u c t i o n . C o n s tru c tio n o f two
t e c h n i c a l s c h o o l was u n d e rta k e n by th e B o a rd an d h a s b ee n
c o m p le te d . A u n i t w h ich c o m p rise s a t e c h n i c a l s c h o o l, an
58 I M d . , p . 3 8 7 .
59 A nnual R e p o rt, o p . c i t . , p . 1 3 .
a g r i c u l t u r a l s c h o o l and te a c h e r t r a i n i n g s c h o o l i s u n d e r
c o n s t r u c ti o n . M o reo v er, s i x t y - s i x e le m e n ta ry s c h o o ls o f
d i f f e r e n t c a t e g o r i e s a r e u n d e r c o n s tr u c tio n th ro u g h o u t th e
c o u n tr y , f o r t y o f w hich w ere co m p leted a t th e end o f th e
f i n a n c i a l y e a r 1952-1953* The re m a in d e r, th e w r i t e r
b e l i e v e s , h a s b ee n co m p leted d u rin g t h i s I n t e r v a l . The
A nnual R ep o rt f o r t h e f i n a n c i a l y e a r 195 2 -1 9 5 3 p o i n t s o u t
t h a t :
E x te n s io n s a r e u n d e r way in some s c h o o ls and ed u c a
t i o n a l i n s t i t u t i o n s su c h a s E n g in e e rin g C o lle g e a n d i t s
l a b o r a t o r i e s , R u ra l T r a in in g S ch o o l a t B sguba, K arkh
S eco n d ary S ch o o l and th e C o lle g e o f Commerce. D esig n s
an d e s tim a te s w i l l be p r e p a r e d s h o r t l y f o r th e c o n s tr u c
t i o n o f 4 A g r i c u l t u r a l and T each er T ra in in g S c h o o ls ,
b o a rd in g s e c t i o n s , an a g r i c u l t u r a l c o l le g e an d many
o t h e r e d u c a tio n a l i n s t i t u t i o n s . ® 0
The t o t a l e s tim a te d c o s t f o r th e c o n s tr u c tio n o f
s c h o o ls and e d u c a tio n a l I n s t i t u t i o n s am ounted to
ID 5 ,4 0 0 ,0 0 0 . The e s tim a te d c o s ts f o r t h e y e a r s 1951# 1952,
1953# 1 9 5 4 , 1955# and 1956 a r e ID 7 0 0 ,0 0 0 , ID 8 0 0 ,0 0 0 ,
ID 9 0 0 ,0 0 0 , ID 1 ,0 0 0 ,0 0 0 , ID 1 ,0 0 0 ,0 0 0 , a n d ID 1 ,0 0 0 ,0 0 0
r e s p e c t i v e l y . See T ab le IX.
T here w ere a t th e c l o s e o f 1953, 868 s c h o o ls f o r boys
and 350 f o r g i r l s w ith 4 ,7 3 4 m ale and 2 ,3 8 2 fem ale t e a c h e r s ,
and w ith 1 5 3 ,4 7 6 b o y s and 4 9 ,6 3 0 g i r l s e n r o l l e d .
T here a r e s i x t y se c o n d a ry s c h o o ls w ith 1 ,1 0 3
60 Idem.
TABLE IX
ESTIMATES OF EXPENDITURES FOR BUILDING.
FOR THE SIX Y EA RS
P r o je c ts
P ro v is io n
1951
ID
P ro v is io n
1952
ID
P ro v is io n
1953
ID
P ro v is io n
1954
ID
H o s p ita ls and H ea lth I n s t i t u t i o n s
S chools
H ousing f o r la b o r and o f f i c i a l s
P u b lic b u ild in g s
Com pletion works f o r b u ild in g s
700,000
700,000
150,000
500,000
318,000
800,000
800,000
300.000
750.000
900,000
900.000
300.000
100.000
1 ,0 0 0 ,0 0 0
1 ,0 0 0 ,0 0 0
300,000
1 ,0 0 0 ,0 0 0
T o ta l 2 ,3 6 8 ,0 0 0 2 ,6 5 0 ,0 0 0 3 ,1 0 0 ,0 0 0 3 , 300,000
P r o je c ts
P ro v is io n
1955
ID
P ro v is io n
1956
ID
T o ta l
Id
H o s p ita ls and H ea lth I n s t i t u t i o n s 1,0 0 0 ,0 0 0 1,000,000 5 , 400,000
S chools 1 ,0 0 0 ,0 0 0 1 ,0 0 0 ,0 0 0 5 ,4 0 0 ,0 0 0
H ousing f o r la b o r and o f f i c i a l s 300,000 300,000 1 ,6 5 0 ,0 0 0
P u b lic b u ild in g s 1,0 0 0 ,0 0 0 1,000,000 5 ,2 5 0 ,0 0 0
C om pletion works f o r b u ild in g s 318,000
T o ta l 3 ,3 0 0 ,0 0 0 3,300,000 18,0 1 8 ,0 0 0
■Source: C om pilation o f Laws 1952, 0£ . c l t . , p . 9*
119
120
'
t e a c h e r s and 7 ,2 6 9 s tu d e n ts (b o th s e x e s ) , e le v e n v o c a tio n a l
s c h o o ls w ith s e v e n ty - n in e te a c h e r s and 1 ,3 1 3 s t u d e n ts ,
t h i r t e e n t e a c h e r s ' t r a i n i n g c o lle g e s w ith s e v e n ty te a c h e r s
and l,i* 8 9 s tu d e n ts (b o th s e x e s ) , and te n c o lle g e s w i t h 135
p r o f e s s o r s and i n s t r u c t o r s an d ^ ,9 2 8 s t u d e n t s . M o reo v er,
t h e r e a r e tw e lv e h ig h e r t r a i n i n g i n s t i t u t e s
As n e a r ly 90 p e r c e n t o f th e p o p u la tio n i s i l l i t e
r a t e , i t i s o b v io u s t h a t t h i s num ber o f d i f f e r e n t k in d s o f
ise h o o ls an d e d u c a tio n a l i n s t i t u t i o n s i s q u i t e in a d e q u a te f o r
t h e c o u n t r y 's n e e d . As e d u c a tio n i s th e f i r s t im p o rta n t
s te p and th e v e ry n e c e s s a r y m eans to g u id e t h e p e o p le o f
t h i s c o u n try to w a rd b e t t e r l i v i n g a n d m ore h a p p in e s s , i t i s :
th e w r i t e r 's hope t h a t th e B o ard w i l l d e v o te more fu n d s a n d
g r e a t e r a t t e n t i o n to t h i s e n d .
The I n t e r n a t i o n a l B a n k 's M issio n c o n c lu d e s t h a t :
I t t r u s t s t h a t th e governm ent w i l l d e f i n i t e l y a d o p t
t h e v iew t h a t in c r e a s e d e x p e n d itu r e s on e d u c a tio n i s a
lo n g - ra n g e p r o d u c tiv e in v e s tm e n t l i k e l y t o g iv e th e
c o u n try a g e n e ro u s r e t u r n in th e form o f a m ore p r o s p e r
o u s , c o o p e r a tiv e , s o c i a l l y c o n s c io u s an d e n lig h te n e d
p o p u la tio n . T h is r e t u r n i s no l e s s r e a l , th o u g h l e s s
t a n g i b l e , th a n th o s e t h a t may be e x p e c te d from i n v e s t
m e n ts in i n d u s t r y o r even a g r i c u l t u r e . Thus i t r e q u ir e s
c o u ra g e and v i s i o n to make a l a r g e in v e s tm e n t in
e d u c a tio n , f o r th e p u rp o se n o t o n ly o f m u lt ip ly in g
s c h o o ls , b u t a ls o o f r a i s i n g th e q u a l i t y o f e d u c a tio n
th e y p r o v id e .
I f n a t i o n a l developm ent i s to be b a la n c e d and
^ I r a q Year Book, op. cit., pp. 2 5 9 - 2 6 0 .
1 2 ll
i
h arm o n io u s, m e a su re s f o r th e Im provem ent o f h e a l t h and
th e p r o v is io n o f b e t t e r e d u c a tio n a l f a c i l i t i e s — w h ich
h a v e a m ore d i r e c t im p a c t on p r o d u c tio n In I r a q th a n in
m ore d e v e lo p e d c o u n t r ie s — m u st be g iv e n t h e i r p r o p e r
p l a c e . In u n d e rd e v e lo p e d c o u n t r i e s , i t w ould be m ost
u n w ise to I n v e s t th e b u lk o f th e n a t i o n a l r e s o u r c e s in
l a r g e i n d u s t r i e s and a g r i c u l t u r a l p r o j e c t s w h ile ig n o r
in g th e n e e d f o r d e v e lo p in g s o c i a l s e r v ic e s e s s e n t i a l to
th e m e n ta l and p h y s ic a l h e a l t h o f th e p e o p le .® 2
H ousing d e v e lo p m e n t. — P u b lic a n d q u a s i- p u b lic
h o u s in g h a s r e c e iv e d in c r e a s e d a t t e n t i o n in r e c e n t y e a r s .
The M in is tr y o f S o c ia l A f f a i r s , w hich i s a u th o r iz e d to con
s t r u c t h o u se s f o r w o rk e rs , h a s b u i l t 20k u n i t s and h a s 185
u n i t s u n d e r c o n s tr u c tio n . The H allw ay A d m in is tra tio n h as
p r o v id e d h o u sin g f o r m ore th a n 2 ,4 0 0 o f i t s em p lo y ees, and
th e P o r t o f B a s ra i s a ls o b u ild i n g acco m m o d atio n s, p r i m a r i l y
f o r i t s j u n i o r o f f i c i a l s . ^3
The B a n k 's M issio n p o i n t s o u t t h a t m ost o f th e p u b lic
and q u a s i- p u b l ic h o u sin g i s open to c r i t i c i s m on s e v e r a l
o o u n ts . Some o f th e s e c r i t i c i s m s a r e a s f o l l o w s : ^
1 . Use o f p o o r m a t e r i a l s ;
2 . Im p ro p er s p a c in g a n d o r i e n t a t i o n ; and
3 . P o o r p la n n in g an d s i t e e n g in e e r in g .
T h e re fo re , th e B a n k 's M issio n s u g g e s ts t h a t th e
Economic Development of Iraq, op. clt., pp.
^23-^24.
63 I M d . , p . 5 7 .
^ h o c, c l t .
12 2
r e s p o n s i b i l i t y f o r p la n n in g and s u p e r v is in g h o u sin g b e
e n t r u s t e d u l t i m a t e l y to a H o u sin g A u th o r ity s t a f f e d by men
t r a i n e d in h o u se d e s ig n , a r c h i t e c t u r e , s i t e and s a n i t a r y
e n g in e e r in g and o t h e r r e l a t e d f i e l d s .
T here i s n o t a v a i l a b l e , how ever, in f o rm a tio n a s to
w h e th e r o r n o t th e governm ent h a s p u t t h i s s u g g e s tio n in to
p r a c t i c e . As t h e r e i s now a developm ent u n i t i n th e
c o u n tr y , th e w r i t e r w ould a d v is e t h i s u n i t , n am ely , t h e
D evelopm ent B o a rd , to s e t up a s e c tio n s t a f f e d w ith e x p e r t
p e o p le in th e f i e l d o f h o u s in g d e v e lo p m e n t.
The B oard in c lu d e d in i t s g e n e ra l program an ite m f o r
h o u s in g d ev e lo p m e n t. As i s m e n tio n e d in th e A nnual R e p o rt
f o r th e f i n a n c i a l y e a r 1952-1953» “c o n s tr u c tio n o f 77 h o u ses
e i t h e r f o r d o c to r s o r h e a l t h o f f i c i a l s i n v a r io u s p l a c e s o f
I r a q h a s s t a r t e d . So f a r h o u se s o f th e s e a r e f i n i s h e d
an d th e r e s t a r e a b o u t to b e co m p le te d , “65 5 * 0 t h i s d a t e ,
th e c o n s tr u c tio n o f 1 ,0 9 5 h o u se s h as b een u n d e rta k e n by th e
B oard; some a r e c o m p leted and th e o th e r s a r e d e f i n i t e l y to
b e b u i l t . T h is f i g u r e d o es n o t in c lu d e t h e h o u se s w h ich
w i l l b e b u i l t b y th e M in is tr y o f D efense f o r t h e i r o f f i c i a l s
an d l a b o r e r s . 66
^ Annual Report, op. clt., p. 12.
66 Ibid., p. 1 * K
The t o t a l e s tim a te d c o s t f o r h o u s in g d ev elo p m en t
am ounts to ID 1 ,6 5 0 ,0 0 0 . The e s tim a te d c o s ts f o r th e y e a rs
1 9 5 1 , 1 9 5 2 , 1 9 5 3 , 1954, 1 955, and 1956 a r e ID 1 5 0 ,0 0 0 ,
ID 3 0 0 ,0 0 0 , ID 3 0 0 ,0 0 0 , ID 3 0 0 ,0 0 0 , ID 3 0 0 ,0 0 0 , and ID
3 0 0 ,0 0 0 r e s p e c t i v e l y . See T ab le IX , p ag e 1 1 9 .
A n o th er ite m in c lu d e d in th e g e n e r a l program i s
r e c la m a tio n o f la n d s and o t h e r schem es. The t o t a l e s tim a te d
c o s t f o r t h i s ite m i s ID 2 2 ,9 8 6 ,0 0 0 .
I I I . INDUSTRIES
I n d u s tr y i s a s y e t l i t t l e d e v e lo p e d in I r a q . C ondi
t i o n s , a r e , h o w ev er, g e n e r a lly f a v o r a b le to f u r t h e r
%
I n d u s t r i a l d e v e lo p m e n t.
T here a r e am ple r e s o u r c e s f o r f u r t h e r i n d u s t r i a l
d e v e lo p m e n t. An abundance o f o i l a n d g as p r o v id e s a
ch eap s o u rc e o f b o th f u e l and raw m a t e r i a l . P a r t i c u
l a r l y a s i r r i g a t i o n i s e x te n d e d , a g r i c u l t u r e w i l l become
I n c r e a s in g ly im p o rta n t a s s. s o u rc e o f raw m a t e r i a l su ch
a s c o t to n , sesam e, l i n s e e d , and p o s s i b l y su g a r b e e t s o r
s u g a r c a n e , so y b ean s and j u t e . © 7
In th e d ev elo p m en t o f I r a q c o n s id e r a b le Im p o rta n c e
m ust be a tta c h e d to i t s i n d u s t r i a l i z a t i o n . The B oard h as
I n c lu d e d in i t s program p r o j e c t s f o r r e f i n e r i e s , u t i l i z a t i o n
o f g a s , and f o r s t e e l , cem en t, t e x t i l e , s u g a r , an d e l e c t r i
c a l pow er I n d u s t r i e s .
67
The Economic Development of Iraq, op. clt., p.
One o f th e im p o rta n t p r o j e c t s w h ich th e B o ard p la n s
to u n d e rta k e i s th e c o n s tr u c tio n o f a b itu m e n r e f i n e r y a t
Q a iy a ra h . f h e r e i s u r g e n t n e e d in I r a q f o r a b itu m en
i n d u s t r y . The p ro p o s e d r e f i n e r y i s to s u p p ly s i x t y th o u sa n d
to n s o f b itu m en p e r y e a r . 68 B id s w ere r e c e iv e d by th e
M in is tr y o f Econom ics f o r th e c o n s tr u c tio n o f s a i d r e f i n e r y .
T here i s no in f o rm a tio n a v a i l a b l e to i n d i c a t e w h e th e r th e
B oard h a s a s y e t a u th o r iz e d c o n s t r u c ti o n . The w r i t e r hopes
t h a t th e B oard h a s n o t h e s i t a t e d to b r in g a b o u t t h e con
s t r u c t i o n o f t h i s p r o j e c t , f o r i t s im p o rta n c e i s g r e a t . The
B oard h a s a l l o c a t e d ID 3 * 0 0 0 ,0 0 0 f o r th e c o n s tr u c tio n o f an
o i l r e f i n e r y .
A n o th er im p o rta n t p r o j e c t i s th e u t i l i z a t i o n o f
K irk u k g a s . A b l u e p r i n t e x i s t s f o r a p l a n t to u t i l i z e th e
n a t u r a l g as p ro d u c e d a t th e K irk u k o i l f i e l d s . The r e p o r t
s u b m itte d b y th e c o n s u ltin g e n g in e e r s , M e s s rs . D. C. and
W illia m P r e s s , L ondon, i n d i c a t e s t h a t i t i s p o s s i b l e to
m a n u fa c tu re m ore th a n one h u n d re d th o u s a n d to n s o f f e r t i l i
z e r s a s w e ll a s s u lp h u r and e a rb o n b la c k , an d to g e n e r a te
pow er f o r cem ent p l a n t s , th ro u g h u t i l i z a t i o n o f t h i s g a s .69
T his p r o j e c t , how ever, h a s n o t b ee n i n i t i a t e d and
68
A nnual R e p o rt, o p . c l t . , p . 19*
^ I r a q Y ear Book, o p . c i t . , p . 1 0 9 .
1 2 51
th e g a s c o n tin u e s to he a w a s te d m a t e r i a l . C o m p letio n o f
t h i s p r o j e c t w i l l r e s u l t i n a s o u rc e o f e l e c t r i c a l pow er f o r
I n d u s tr y and a t th e same tim e c o n s t i t u t e an im p o rta n t s o u rc e
o f incom e.
The s t e e l in d u s tr y i s one o f th e i n f a n t i n d u s t r i e s
i n I r a q . The B ank*s M issio n p o i n t s o u t t h a t ” I r a q i s now
p ro d u c in g a b o u t 5 , 0 0 0 to n s o f s t e e l s c r a p p e r y e a r . * ’7 0
T h e r e f o r e , th e M is s io n recom m ends t h a t a s m a ll h a n d -o p e ra te d
m i l l an d e l e c t r i c m e ltin g f u r n a c e be s e t up t o c o n v e rt t h i s
s c ra p in to r e i n f o r c i n g b a r s a n d s m a ll a n g le s , a l l o f w h ich
a r e i n g r e a t dem and. The M is s io n h o ld s t h a t :
T h is m i l l c o u ld n o t s a t i s f y th e w hole o f I r a q t s ;
s t e e l n eed ; n e v e r t h e l e s s , i t w ould f u r n i s h ab o u t 5 ,0 0 0
to n s p e r y e a r o f c e r t a i n ty p e s a t p ro b a b ly h a l f th e c o s t
o f th e im p o rte d s t e e l i t w ould r e p l a c e . 71
The B o a rd , a c c o rd in g t o t h e M ission*a- reco m m en d atio n ,
p ro v id e d f o r i n v e s t i g a t i o n o f t h i s p r o j e c t . The s u b j e c t was
i n v e s t i g a t e d b r i e f l y b y a c e r t a i n c o n s u ltin g e n g in e e r , who
r e p o r te d t h a t “th e i n d i c a t i o n s a r e t h a t t h i s p r o j e c t on s u c h
a s m a ll s c a le w o u ld be uneconom ic. . . . ”72 N e v e r th e le s s ,
f u r t h e r i n v e s t i g a t i o n s a r e b e in g m ade.
%ke Econom ic D evelopm ent o f I r a q , o p . c l t . , p .
2 9 0 .
71 L oc. c i t .
^ Annual Report, op. clt., pp. 19—20.
Cement p r o d u c tio n i s among th e v e r y s u c c e s s f u l new
i n d u s t r i e s in I r a q . The B ank*s M issio n i n d i c a t e s t h a t :
The m arket f o r cement i s expanding a t a ra p id r a te
and i s beyond th e p r e s e n t p la n t f s c a p a c ity o f 220 to n s
p e r day. A d d itio n a l equipm ent now sch ed u led fo r opera
t io n in 1952 w i l l d ou b le th e p la n t* s o u tp u t.73
The Board e s tim a te s t h a t th e cement needed f o r th e
c o n s tr u c tio n o f dams and r e s e r v o ir s i s a q u a n tity n o t l e s s
than f i v e hundred thousand to n s , o f a s p e c ia l g r a d e .7^
I t was d eterm in ed th a t th e l o c a l p ro d u ctio n o f t h is
q u a n tity o f cement i s more econ om ical than would be im porta
t i o n . The d if f e r e n c e betw een th e c o s t of p ro v id in g t h i s
q u a n tity l o c a l l y through p la n t s c o n str u c te d f o r t h i s purpose
and th e c o s t o f im p ortin g cem ent from abroad amounts to some
s i x m illio n d in a r s . The c o s t o f c o n s tr u c tin g two cement
p la n t s i s e s tim a te d a t th r e e m illio n d in a r s .75 Ir a q , th e r e
f o r e , through th e c o n s tr u c tio n o f th e cement p la n ts f o r th e
p u rp ose o f c o n s tr u c tio n o f dams w i l l sa v e money as w e ll as
g a in two a d d itio n a l cement f a c t o r ie s and work w i l l be
p ro v id ed fo r many p e o p le . In o th e r w ord s, th e s e two p la n ts
w i l l m eet th e cement req u irem en ts f o r th e c o n s tr u c tio n of
dams and in th e fu tu r e m eet th e I n c r e a sin g l o c a l requirements
^ The Econom ic D evelopm ent o f I r a q , o p . c l t . , p .
2&k.
I r a q Y ea r Book, o p . c i t . , p . 1 0 9 .
75 A nnual R e p o rt, o p . c l t . , p . 2 0 .
f o r cem en t. Any s u r p lu s q u a n t i ty i n e x c e s s o f th e n e e d s o f
th e c o u n try can b e e x p o rte d . T h e re fo re , th e c o n s tr u c tio n o f
t h e two cem ent p l a n t s i s o f p rim a ry im p o rta n c e .
A cco rd in g to th e A nnual R e p o rt f o r th e f i n a n c i a l y e a r
1952- 1953 , th e B o ard a p p o in te d c o n s u ltin g e n g in e e rs f o r t h i s
p u r p o s e . The c o n s u ltin g e n g in e e r s have co m p leted i n v e s t i g a
t i o n s a s t o th e p o s s i b i l i t y o f p r o v id in g raw m a t e r i a l s f o r
th e s e f a c t o r i e s a s w e ll a s f i x i n g th e s i t e s on w h ich th e y
a r e to b e c o n s tr u c te d . C o n s tru c tio n b id s w i l l b e s o u g h t a s
soon a s th e s p e c i f i c a t i o n s an d th e d e s ig n s a r e c o m p le te d .? 6
U n f o r tu n a te ly , no r e c e n t in f o rm a tio n a b o u t th e c o n c e rn e d
p l a n t s i s a v a i l a b l e .
The t e x t i l e in d u s t r y i s o f p rim a ry im p o rta n c e to
I r a q . Woolen t e x t i l e s have b ee n p ro d u c e d f o r many y e a r s .
The f i r s t m odern t e x t i l e m i l l came in to b e in g a p p ro x im a te ly
t h i r t y - f o u r y e a rs ag o . The p r e s e n t c a p a c i t y o f th e w oolen
t e x t i l e i n d u s t r y , due to r e c e n t im p ro v em en ts, i s a d e q u a te
f o r t h e n eed s o f th e c o u n try . “R ecen t im provem ents an d
e x p a n s io n have b ro u g h t th e w o o len t e x t i l e in d u s tr y a b r e a s t
o f th e n eed s o f t h e c o u n t r y .1 1 ? ?
76 Idem .
77 Ih e Econom ic D evelopm ent o f I r a q , o p . c l t . , p .
283.
I
C o tto n and ra y o n t e x t i l e s , how ever, a r e p ro d u c e d o n ly
i
In s m a ll s c a l e . T h ere a r e two p l a n t s o f t h i s k in d , one n e a r
B aghdad, and th e o t h e r In M osul. The M is s io n recom m ended
t h a t an ex p a n sio n program f o r e o tto ij an d ra y o n t e x t i l e
s h o u ld "be u n d e rta k e n . The M is s io n h o ld s t h a t :
The i n d u s t r y w ould be i n a f a r b e t t e r p o s i t i o n to
m eet d o m e stic re q u ire m e n ts i f th e c o tto n m i l l a t Baghdad
a s w e ll a s th e c o tto n and ra y o n w eav in g p l a n t i n M osul
c o u ld d o u b le t h e i r d e s ig n e d c a p a c ity an d e x te n d t h e i r
f a c i l i t i e s t o make a w ide ra n g e o f p r o d u c ts su c h a s
s h i r t i n g an d p o p lin . The f i n i s h i n g , p r i n t i n g , an d dye
in g d e p a rtm e n ts sh o u ld a l s o b e e x p a n d e d . 78
The B o a rd , how ever, i s p a r t i c u l a r l y co n c ern ed w ith
th e t e x t i l e s i n d u s t r y , b e c a u s e I r a q im p o rts a t p r e s e n t
c o n s id e r a b le q u e n t l t i e s o f c o tto n and a r t i f i c i a l s i l k
t e x t i l e s . I ra q * s c o tto n and ra y o n im p o rts in c r e a s e d m ore
th a n s i x tim e s d u rin g th e f o r t i e s i n co m p ariso n t o th e
t h i r t i e s .
F o r ex am p le, I r a q ’ s c o t to n and ra y o n im p o rts in 1938
w ere ID 1,300*000# w h ereas i n 1948 and 1950 th e y w ere
ID 7 ,7 0 0 ,0 0 0 an d ID 6,4(50,000 r e s p e c t i v e l y .7 9 C o n s e q u e n tly ,
The B oard h a s d e c id e d to c o n s tr u c t a c o tto n t e x t i l e
p l a n t a t M osul c a p a b le o f p ro d u c in g 25 m il li o n s q u a re
y a rd s a n n u a lly , p ro v id e d t h a t su c h p l a n t s h a l l be
c a p a b le o f b e in g e x te n d e d .80
78 I b i d . , p . 282.
79 I b i d . , T ab le 1 0 , p . 1 5 6 .
A nnual R e p o rt, l o c . c i t .
; 129
F i n a l l y , on Ju n e 2 0 , 195^» th e Bank re a c h e d an a g r e e - '
m ent w ith a c e r t a i n e n g in e e r in g company f o r th e c o n s tr u c tio n
o f t h i s p la n t.® 1
T h is p l a n t w i l l h e c o n s tr u c te d i n Suburban M o su l. I t
w i l l c o n s i s t o f tw e n t y - f ir e th o u sa n d s p in d l e s and s i x
h u n d re d and t h i r t y loom s and a l l th e eq u ip m en t and f a c i l i
t i e s f o r b le a c h in g , d y e in g , an d c o lo rin g .® 2 I t w i l l occupy
an a r e a o f t h i r t y - o n e th o u sa n d s q u a re m e te r s .
The B oard s t a t e s t h a t t h i s p l a n t a t i t s c o m p le tio n
w i l l be one o f t h e b e e t o f m odern f a c t o r i e s w ith i t s new
eq u ip m en t and m ethods o f p r o d u c tio n .
The d e s ig n s and s p e c i f i c a t i o n o f t h i s p l a n t w e re
p r e p a r e d I n su ch a m anner t h a t th e y a llo w f o r a d d i t i o n s an d
e x p a n sio n w ith o u t ham pering p r o d u c tio n i n th e e x i s t i n g
p l a n t . I t i s e x p e c te d t h a t th e p l a n t w i l l be a b le to
p ro d u c e a t a c o s t and in su ch q u a l i t y a s t o com pete w ith
any f o r e ig n p r o d u c tio n . Such a p l a n t w i l l g iv e p erm an en t
em ploym ent to a p p ro x im a te ly tw e lv e h u n d re d w o rk e rs . I t i s
e x p e c te d , a l s o , t h a t th e p r o d u c tio n o f t h i s p l a n t , p l u s th e
p r o d u c tio n o f e x i s t i n g c o tto n t e x t i l e p ro d u c e rs In t h e
^ E l- A k b ar, w D a lly P o l i t i c a l N e w sp a p er,” (B aghdad:
Bar E l-A k b a r P r e s s , No. 8 7 , J u l y 1 , 195*0* P* 4 . (A ra b ic )
82 T
L oc. c l t .
Idem .
130
i
c o u n try w i l l b e s u f f i c i e n t to s a t i s f y th e n eed s o f th e
.c o u n try w ith c e r t a i n ty p e s o f c o tto n p r o d u c ts . I r a q w i l l
th u s sa v e a b o u t o n e - h a lf m i l l i o n d in a r s a n n u a lly , t h a t
f i g u r e b e in g th e c u r r e n t c o s t o f c o tto n im p o r ta tio n s o f th e
s u b j e c t type.®**
In c o n n e c tio n w ith s u g a r r e f i n i n g , th e B ank’ s M issio n
h a s g iv e n c o n s id e r a b le th o u g h t to a recom m endation f o r su c h
a p r o j e c t , The M is sio n comes to th e c o n c lu s io n t h a t i t i s
n o t a d v is a b le f o r th e tim e b e in g to d e v e lo p t h i s I n d u s tr y ,
b e c a u s e o f d ep en d en cy on a g r i c u l t u r e to s u p p ly th e raw
m a t e r i a l . An a d e q u a te s u p p ly o f t h i s raw m a t e r i a l , th e
M is s io n h o ld s , c a n n o t b e a s s u r e d a t t h i s tim e .
Such an e n t e r p r i s e , o f c o u r s e , h a s to d ep en d on
a g r i c u l t u r e t o su p p ly th e raw m a t e r i a l s , e i t h e r i n th e
form o f s u g a r b e e ts o r s u g a r c a n e . S in c e t h i s c a n n o t
be a s s u re d a t t h i s tim e^ i t i s recom m ended t h a t th e
d ev elo p m en t o f t h i s i n d u s t r y b e h e ld In ab ey an ce f o r th e
p re s e n t.® 5
The B o a rd , d e s p ite th e f a c t t h a t th e M issio n d o es n o t
e n e o u ra g e th e s e t t i n g up o f a s u g a r p l a n t , ”l s e n d e a v o rin g
to overcom e p o s s i b l e d i f f i c u l t i e s and to p ro c e e d w ith th e
e x e c u tio n o f su c h a p r o j e c t . ”® ®
I b i d . , p . 5 .
nphe Econom ic D evelopm ent o f I r a q , o p . c i t . , p .
293.
Annual Report, o p. clt., p. 21.
1 3 1 ]
The w r i t e r b e lie v e s t h a t i t i s n o t a d v is a b le to
d e v o te tim e and a l l o c a t e money f o r p r o j e c t s w hich a r e n o t
d em o n strab ly p r a c t i c a l . The m ost Im p o rta n t p o in t i s to
c o n s id e r th e problem o f p r i o r i t y . As lo n g a s th e r e a r e so
many p r o j e c t s w h ich prom ise t o f u l f i l l v e r y u rg e n t n eed s of
th e c o u n try —p r o j e c t s such a s e d u c a tio n and h e a l t h im prove
m ent— th e w r i t e r a d v is e s th e Board to p o stp o n e th e l e s s e r
p r o j e c t s , th e b e t t e r to c o n c e n tr a te on th o s e m a tte r s o f
v i t a l n e c e s s i t y .
C oncerning e l e c t r i c a l pow er, th e Annual R eport f o r
th e f i n a n c i a l y e a r 1952-1953 h o ld s t h a t :
The p o s i t i o n o f I ra q i s e s p e c i a l l y s u ite d f o r th e
p r o d u c tio n o f E l e c t r i c Power a t a cheap c o s t owing to
th e a v a i l a b i l i t y o f o i l f o r f u e l and th e g r e a t p o s s i
b i l i t y o f pow er g e n e r a tio n from th e dams w hich w i l l be
c o n s tr u c te d on th e r i v e r s . 8?
F o r th e p u rp o se o f draw ing up a lo n g -te rm program
th e Board has engaged a w ell-know n firm o f c o n s u ltin g
e n g in e e rs to s tu d y t h i s p r o j e c t . T h e ir p la n w i l l e n v isa g e
n a t i o n a l and l o c a l re q u ire m e n ts o f e l e c t r i c power.®®
A c tu a lly , i t i s im p o rta n t t h a t e l e c t r i c power sh o u ld
be g e n e ra te d w ith minimum c o s t th ro u g h o u t I r a q f o r th e
p u rp o se o f l i g h t i n g and h e a tin g , and f o r power f o r in d u s tr y
87
L oc. c i t .
88 Idem.
132
and th e o p e r a tio n o f pumping i n s t a l l a t i o n s w hich are b ein g
run a t p resen t by ex p en siv e and in ad eq u ate m achinery.
The t o t a l estim a ted c o s t f o r in d u s t r ie s amounts to
ID 3 1 * 0 5 0 ,0 0 0 .8 9
89 Compilation of Laws 1952, Schedule A, op. clt.,
p. 1 0.
CHAPTER VI
THE INTERNATIONAL BANK* S LOANS AND
SERVICES TO IRAQ AND TURKEY
I . LOANS FOR UNDERDEVELOPED COUNTRIES
I ra q and Turkey a r e c o n s id e re d to be among t h e so -
c a l l e d u n d erd ev e lo p ed a r e a s . And, a s was n o te d in C h ap ter
I I , one o f th e m ain p u rp o se s o f th e I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and Development i s to f a c i l i t a t e and prom ote
f o r e ig n in v e stm e n t f o r th e p u rp o se o f developm ent o f th e
backw ard c o u n t r i e s . A c tu a lly , th e p ro m o tio n o f developm ent
i s now alm ost th e B a n k 's e x c lu s iv e i n t e r e s t . N e v e rth e le s s ,
many had arg u ed to th e e f f e c t t h a t th e Bank does n o t p a y any
c o n s id e r a b le a t t e n t i o n to th e developm ent o f th e u n d e r
d e v e lo p e d c o u n t r ie s and d i s l i k e s developm ent p ro g ram s. The
Bank, how ever, h o ld s t h a t :
On th e c o n t r a r y , th e Bank welcomes them , and i t i s a
m a tte r o f r e g r e t t h a t more member s t a t e s so f a r have
n o t been a b le t o ta k e th e tim e to d e v o te th e energy to
th e p r e p a r a t io n o f a c a r e f u l l y c o o r d in a te d i n t e g r a t e d
program , and i t s p r e s e n t a t i o n to th e Bank f o r d is c u s s io n
and f o r c o n s i d e r a t i o n .!
A lthough th e Bank i s supposed t o p la c e e q u a l em phasis
1 F i f t h A nnual M eeting o f th e B oard o f G o v e rn o rs,
P a r i s , F ra n c e , Septem ber 6>~14, 1950. " I n t e r n a t i o n a l Bank
f o r R e c o n s tru c tio n and D evelopm ent," (W ashington, D .C .,
November 30, 1 9 5 0 ), p . 2.
i 1 3 4
on r e c o n s t r u c t i o n and d ev elo p m en t, I t em phasized th e
p r o j e c t s o f r e c o n s tr u c tio n d u rin g th e f i r s t two y e a rs o f i t s
e s ta b lis h m e n t. Then, "as m a tte r s have w orked o u t th e Bank
h as I n c r e a s in g ly em phasized i t s 1 D evelopm ent' r a t h e r th a n
i t s ’ R e c o n s tr u c tio n 1 f u n c tio n s . . . ." 2
Since th e tim e when th e M a rsh a ll P la n began to ap p e ar
a s a d e f i n i t e p o s s i b i l i t y , th e Bank h as d ev o ted i t s
a c t i v i t y i n c r e a s in g l y to lo a n s d e s ig n e d to s ti m u la te th e
improvement o f economic c o n d itio n s and s u b s e q u e n tly , th e
l e v e l o f p r o d u c tio n and n a t i o n a l incom e in th e s o - c a lle d ;
u n d e rd e v e lo p e d a r e a s . 3
I I . BANK'S LOAN TO IRAQ
As m entioned i n C h ap ter IV, one o f th e so u rc e s from
w hich th e Development Board i n I ra q d e r iv e s money i s through;
th e lo a n s w hich i t may c o n t r a c t w ith a g o v ern m en tal g u a ra n
t e e a f t e r th e en actm ent o f a law p e r m it tin g su ch a lo a n .
Also n o te d was th e f a c t t h a t th e Board was c o n s t i t u t e d and
b egan o p e r a tio n s tow ard th e end o f 1950. A lo a n was g ra n te d
by t h e I n t e r n a t i o n a l Bank to I ra q on June 1 5 , 1950, f o r th e
c o n s tr u c tio n o f f lo o d c o n tr o l p r o j e c t s , p r o v id in g t h a t th e
2
Norman S. Buchanan, " I n t e r n a t i o n a l In v e s tm e n t, 1 1
4 Survey o f C ontem porary Economics (Homewood, I l l i n o i s :
R ic h a rd D. Irw in , I n c ., 1 9 5 2 ), V ol. I I , p . 335-
3 A ntonin B asch, " I n t e r n a t i o n a l Bank f o r R e c o n s tru c
t i o n and D evelopm ent," I n t e r n a t i o n a l C o n c ilia tio n (New York:
C a rn e g ie Endowment f o r I n t e r n a t i o n a l P e a c e , No. 455,
November, 1 9 ^ 9 ), P» 808.
Board, s h a l l be r e s p o n s ib le f o r th e c a r r y in g o u t o f th e
p r o j e c t
The B oard, how ever, h a s not engaged d i r e c t l y in any
lo a n c o n tr a c t w ith th e I n t e r n a t i o n a l Bank.
The Amount and P urpose o f th e Loan
The I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
Development to d a y made a lo a n o f $12 ,8 0 0 ,0 0 0 (o r th e
e q u iv a le n t i n o t h e r c u r r e n c ie s ) to t h e Kingdom o f I r a q
f o r th e c o n s tr u c tio n on. th e T ig r is R iv e r o f a f lo o d
c o n t r o l system u r g e n tly needed t o p r e v e n t r e c u r r e n t
f lo o d in g o f l a r g e a re a s o f c u l t i v a t e d la n d and u rb an
p r o p e r t y .5
This i s th e f i r s t and th e o n ly lo a n th e I n t e r n a t i o n a l
Bank h as made to th e governm ent o f I r a q .
The Bank a g re e d to le n d t h i s sum to th e governm ent o f
I r a q on th e term s and c o n d itio n s s e t f o r t h i n th e Loan
Agreement betw een th e two p a r t i e s . 6
I r a q has a g re e d to p ro v id e s e c u r i t y f o r th e payment
of su ch lo a n by m aking c e r t a i n assig n m e n ts o f o i l r o y a l t i e s
P r o je c t Funds Agreement betw een th e Government o f
I r a q and N a tio n a l Bank o f I r a q and I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and Development (W ashington, D.C.: P r e s s of
Byron S. Adams, June 15, 1950, A r t i c l e I ( 6 ) ) , p . 2 .
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and Develop
ment (W ashington, D .C.: F or th e P r e s s , P re s s R e lea se No.
192, J u l y 15, 1 9 5 0 ), p . 1 .
6 Loan Agreement betw een th e Government o f I r a q and
th e I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and Development
(W ashington, D .C .: P re s s o f Byron S. Adams, June 15, 1950).
136
d e r iv in g from th e e x p l o i t a t i o n of o i l i n i t s t e r r i t o r i e s . 7
The p u rp o se o f t h i s lo a n i s to c o n s tr u c t th e Wadi
T h a rth a r F lo o d C o n tro l P r o j e c t . The t o t a l e s tim a te d c a p i t a l
i
c o s t f o r th e c o n s tr u c tio n o f s a i d p r o j e c t amounted to
ID 1 0 ,3 0 0 ,0 0 0 ( th e e q u iv a le n t in d o l l a r s i s about
# 2 8 ,7 0 0 ,0 0 0 ). The Bank, how ever, h as a g re e d to g r a n t a lo a n
o f o n ly # 1 2 ,8 0 0 ,0 0 0 . As m en tio n ed in C h a p te r I I , th e Bank,
a c c o rd in g to th e A r t i c l e s of Agreem ent, n o rm a lly sh o u ld make,
lo a n s to m eet th e d i r e c t c o s t o f im p o rte d equipm ent o r
s e r v i c e s used on th e p r o j e c t . The Bank, th e r e f o r e , does n o t
make lo a n s f o r l o c a l e x p e n d itu re s u n le s s in e x c e p tio n a l
c irc u m s ta n c e s , b e c a u se th e B a n k 's p o lic y i s t h a t th e m ajo r
p o r t i o n o f th e c a p i t a l n e c e s s a ry f o r economic developm ent
m ust come from w ith in th e c o u n try i t s e l f .
T h e re fo re , th e Bank h as a g re e d to f in a n c e th e Wadi
T h a rth a r p r o j e c t w ith # 1 2 ,8 0 0 ,0 0 0 , w hich w i l l co v er o n ly
th e e s tim a te d f o r e ig n exchange c o s t s . The f o r e ig n exchange
c o s ts a r e e x p e c te d to in c lu d e p u rc h a s e s in th e U n ite d
S t a t e s , th e s t e r l i n g a r e a and p o s s i b ly e lse w h e re , o f e q u ip
ment and m a t e r i a l s to be u se d in e x c a v a tio n and i n th e
c o n s tr u c tio n of l e v i e s and headw orks. M oreover, th e lo a n
? In d e n tu re of assig n m en t betw een th e Government of
I r a q and I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelop
ment (W ashington, D.G.: P re s s of Byron S. Adams, June 15,
1 9 5 0 ), p . 1.
137 i
i
sh o u ld be u sed e x c lu s iv e ly i n th e c a r r y in g o u t o f th e
p r o j e c t to w hich th e lo a n was g r a n te d .
The B orrow er co v en an ts t h a t a l l goods p u rc h a s e d in
w hole o r i n p a r t w ith th e p ro c e e d s o f th e Loan w i l l be
im p o rted in to th e t e r r i t o r i e s o f th e Borrower and w i l l
t h e r e be u sed e x c lu s iv e ly i n th e c a r r y in g o u t o f th e
P ro je c t.®
The b a la n c e o f th e t o t a l e s tim a te d c o s ts (which i s
ab o u t $15* 9 0 0 ,0 0 0 ), w hich r e p r e s e n ts th e fund needed to meet
t h e d o m e stic c o s ts o f th e p r o j e c t , i s to be p ro v id e d from
th e g o v e rn m e n ts o i l r o y a l t i e s . The lo a n agreem ent includes^
a p r o v is io n f o r I r a q to s e t a s id e from i t s o i l r o y a l t i e s
s u f f i c i e n t fu n d s to m eet th e d o m e stic c o s t s o f th e p r o j e c t s .
i
i
I n t e r e s t . Commission and A m o rtiz a tio n o f th e Loan
One o f th e p r i n c i p l e o b je c ti v e s o f th e B a n k 's le n d in g
te c h n iq u e s and p r a c t i c e , a s e x p re sse d by B lack , i s “to
in s u r e th a t lo a n s a r e w ith in th e c a p a c ity o f th e b o rro w er to
r e p a y .w 9 I t i s th e aim o f th e Bank to in s u r e t h a t i t s lo a n s
s h a l l c o n ta in th e minimum o f r i s k .
The Bank*s lo a n to th e Kingdom o f I r a q i s s e c u re d by
an assig n m en t o f o i l r o y a l t i e s . This lo a n i s f o r a te rm o f
® Loan Agreement betw een th e Government o f I r a q and
I n t e r n a t i o n a l Bank, A r t i c l e I I I , S e c tio n 2 , o p . c i t . , p . 6.
9 Eugene R. B la ck , L ending T echniques o f th e I n te r
n a tio n a l Bank. " A r tic le P repared fo r Jan u ary-F eb ru ary,
1950, Is s u e of The B i-M onthly B u l l e t i n o f th e S o c le te Beige
d 'E tu d e e t d»E xpansion, L ie g e , B elgium ," p . 1.
138
f i f t e e n y e a rs and c a r r i e s an I n t e r e s t r a t e o f 2 3 /k p e r cen t
p lu s com mission a t th e r a t e o f 1 p e r c e n t , w hich in a c c o rd
ance w ith th e B ank’ s A r t i c l e s o f Agreement i s a l l o c a t e d to
i t s s p e c i a l r e s e r v e fund,**-0 The Loan i s to be w ithdraw n in
f i v e paym ents i n accordance w ith th e e s tim a te d needs f o r
f o r e ig n exchange f o r s a id p r o j e c t in each o f th e f i v e y e a rs ,
1951 th ro u g h 1955- The t o t a l amount t h a t I ra q w i l l r e c e iv e
from th e Bank, a c c o rd in g to t h e Loan Agreement betw een th e
two p a r t i e s , i s 1 1 1 ,1 0 0 ,0 0 0 . I r a q w i l l re p a y to th e Bank
b e f o r e 1965 th e amount o f $ 1 2 ,8 0 0 ,0 0 0 . The d if f e r e n c e ,
w hich i s $ 1 ,7 0 0 ,0 0 0 , i s th e I n t e r e s t .
ESTIMATED COST OF PROJECT11
C o sts p a y a b le In f o r e ig n exchange;
e x p re s se d i n d o l l a r s
1951 $ 870,000
1952 5 ,2 1 6 ,0 0 0
1953 2 ,7 2 0 ,0 0 0
195^ 1 ,7 7 ^ ,0 0 0
3.955 520,000
$11,100,000
I n t e r e s t 1 ,7 0 0 ,0 0 0
T o ta l $12,800,000
A m o rtiz a tio n o f th e lo a n b e g in s i n 1955 and c o n tin u e s
10 I n t e r n a t i o n a l Bank, F o r th e P r e s s , l o c . c l t .
H Loan Agreement betw een th e Government o f I r a q and
I n t e r n a t i o n a l Bank, Schedule k , o p . c l t . , p . k2.
139:
u n t i l 1965. Paym ents m ust be made tw ic e a y e a r, on O etober 4
f i r s t and A p ril f i r s t , in each o f th e y e a rs 1956 th ro u g h
1965. See T able X.
The p r i n c i p a l and th e i n t e r e s t on th e lo a n
. . . s h a l l be p a id w ith o u t d e d u c tio n f o r and f r e e
from any "taxes, im p o s ts, l e v i e s o r d u t i e s o f any n a tu re
now o r a t any tim e h e r e a f t e r imposed by th e Borrow er
. . . and s h a l l be -paid f r e e from a l l r e s t r i c t i o n s o f
th e B orrow er. . . .12
The C ontinuous R e la tio n Between The Bank and th e Government
o f I r a q
As m en tio n ed b e f o r e , on e o f th e B ankt s p o l i c i e s i s
t h a t th e b orrow ing c o u n try sh o u ld keep th e Bank in fo rm ed as
to th e p r o g r e s s o f th e co n c ern ed p r o j e c t . T h e re fo re ,
a c c o rd in g to th e Loan Agreement betw een th e governm ent o f
I r a q and th e Bank:
The B orrow er w i l l e n a b le a c c r e d it e d r e p r e s e n t a t i v e s
o f th e Bank t o in s p e c t any and a l l goods p u rc h a s e d in
w hole o r i n p a r t o u t o f th e p ro c e e d s o f th e Loan and any
o f th e s i t e s on which th e P r o je c t i s c a r r i e d o u t and to
i n s p e c t , a u d i t and make c o p ie s o f any books, a c c o u n ts ,
r e c o r d s , c o n t r a c t s , o r d e r s , in v o ic e s , s t u d i e s , r e p o r t s
and o th e r docum ents r e l a t i n g to th e goods p u rc h a s e d in
w hole o r in p a r t o u t o f th e p ro c e e d s o f th e Loan, and
th e u se t h e r e o f in th e P r o j e c t , o r to th e p r o g r e s s of
t h e P r o j e c t . 13
12
Loan Agreement betw een th e Government o f I r a q and
I n t e r n a t i o n a l Bank, A r t i c l e V I I I , S e c tio n 7 , op. c i t . ,
p . 2 3 .
Ihid., Article VII, Section 3* pp. 21-22.
TABLE X
TABLE OF AMORTIZATION
Date Payment Due Payment o f P r i n c i p a l O u tsta n d in g
P r i n c i p a l A f te r Each Payment
O cto b er
1 , 1955
1 2 ,8 0 0 ,0 0 0
A p ril 1 , 1956 534,000 1 2 ,2 6 6 ,0 0 0
O cto b e r 1 , 1956 544,000 1 1 , 722,000
A p ril 1 ,
1957
554,000 1 1 ,168,000
O ctober
1 , 1957
564,000 1 0 ,6 0 4 ,0 0 0
A p ril
1 ,
1958 575f000 1 0 ,029,000
O ctober 1 , 1958 5 8 5,000 9 ,4 4 4 ,0 0 0
A p ril
1 , 1959
596,000 8 ,8 4 8 ,0 0 0
O cto b er 1 ,
1959
607f 000 8 ,2 4 1 ,0 0 0
A p ril
1 ,
I 960 619,000 7 , 622,000
O ctober 1 , I 960 630,000 6 , 992,000
A p ril
1 #
1961 642,000 6 ,3 5 0 ,0 0 0
O ctober 1 , 1961 654,000 5 , 696,000
A p ril
1 ,
1962 667,000 5 , 029,000
O ctober
I t
1962 679,000 4 ,3 5 0 ,0 0 0
A p ril
1 # 1963
692,000 3 , 658,000
O cto b e r
If 1963
705,000 2 ,9 5 3 ,0 0 0
A p ril
I t
1964 718,000 2 , 235,000
O cto b er
If 19 64
731,000 1 ,5 0 4 ,0 0 0
A p ril
If 1965
745,000 759,000
O cto b er 1 , 1965
759,000
Source: Loan Agreement Schedule 1, op. clt., p. 3 2 .
I k l
In F e b ru a ry , 1953* th e Bank s e n t a s t a f f member to
I ra q t o examine th e p r o g re s s o f th e f l o o d - c o n t r o l p r o j e c t
b e in g c a r r i e d o u t w ith th e h e lp o f th e Bank*s lo a n . In
M arch, 1953* Bank r e p r e s e n t a t i v e s d is c u s s e d w ith th e
Government and th e I r a q i Development Board s te p s t h a t a r e
b e in g ta k e n to im plem ent th e recom m endations o f th e B ankfs
g e n e r a l su rv e y m is s io n .1**
M oreover, th e governm ent o f I r a q sh o u ld f u r n i s h th e
Bank w ith a l l in fo rm a tio n c o n c e rn in g th e p r o j e c t and th e
i n t e r n a l and e x t e r n a l f i n a n c i a l and economic c o n d itio n o f
i t s c o u n try .
The B orrow er w i l l f u r n i s h o r cau se t o be f u r n is h e d to
th e Bank a l l su c h in f o rm a tio n , a t su c h tim e s , i n su ch
form and i n su c h d e t a i l , a s th e Bank s h a l l re a s o n a b ly
r e q u e s t , r e l a t i n g to th e e x p e n d itu re s o f th e p ro c e e d s o f
th e Loan, th e u s e o f th e goods p u rc h a s e d i n w hole o r in
p a r t th e r e w ith , th e p r o g r e s s o f th e P r o j e c t , and th e
i n t e r n a l and e x te r n a l f i n a n c i a l and economic c o n d itio n
o f th e B o rro w er. 15
The Wadi T h a r ta r P r o je c t
The Wadi T h a rth a r P r o j e e t i s o f v i t a l im p o rta n ce to
th e economic developm ent of I r a q . As m entioned b e f o r e , o v er
80 p e r c e n t o f th e p o p u la tio n o f I r a q I s engaged in
lA
E ig h th Annual R e p o rt, ‘ i n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and D evelopm ent,’ 1 (W ashington, D .C.: 1952-
1953)» p . 19.
15 Loc. clt.
i**2
I
a g r i c u l t u r e . A g r i c u l t u r a l developm ent, how ever, i s p rim a
r i l y dependent on i r r i g a t i o n , w hich, in t u r n , depends upon
c o n t r o l o f th e c o u n t r y 's r i v e r s , th e T i g r i s and E u p h ra te s
and t h e i r t r i b u t a r i e s . A lth o u g h w a te r i s r e l a t i v e l y
abundant in I r a q , i t s p r o d u c tiv e u se in a modern se n se
rem a in s to be f u l l y d ev e lo p e d .
D e s tru c tiv e flo o d s s t i l l r e c u r e v e ry few y e a r s . The
l a s t f lo o d , t h a t o f 195*** was one o f t h e w o rs t t h a t I r a q h a d 1
en d u red . P eople o f Baghdad w ere p ra y in g in th e mosques and
c h u rc h e s, a s k ih g t h a t God sa v e th e c o u n try . T his f lo o d made
hom eless many p e o p le . One o f th e new spapers p o in ts o u t t h a t
" th e au to m o b ile d r i v e r s w ere v e ry c a r e f u l n o t to ru n over
th e hom eless c h i ld r e n s c a t t e r i n g a lo n g th e ro a d s i n th e
su b u rb s o f Baghdad. "16 M oreover, th e f l o o d s p re a d o u t and
co v e re d th e e n t i r e m id d le a r e a around th e T i g r i s . In o th e r
w o rd s, " th e f lo o d co v ered an a r e a w hich exceeded 2 ,000
sq u a re m i l e s . "17
T his f lo o d w i l l fo rc e I r a q to im p o rt c o n s id e r a b le
am ounts o f a g r i c u l t u r a l p r o d u c ts , e s p e c i a l l y g r a i n s , in s t e a d
o f e x p o rtin g a s u r p lu s o f t h i s p ro d u c t a s i s u s u a lly th e
16 A l-M a ss a l, "In d ep en d en t P o l i t i c a l N ew sp ap er,"
(Baghdad: A l-M oofid P r e s s , No. 213, March 28, 195**/» P* **•
(A rab ic)
17 Al— H ly a d , "D aily P o l i t i c a l N ew spaper," (Baghdad:
A l-M ostaqbal P r e s s , No. 90, A p r il 9 , 195**)* p- 2 . (A rabic)
143
c a s e . M oreover, “i t w i l l c a u se th o u sa n d s o f p e o p le to he
unem ployed. “18 M in is te r o f S o c ia l A f f a i r s h o ld s t h a t ,
" c a r in g f o r th e f lo o d v ic tim s i s th e h ig g e s t r e l i e f p r o j e c t
in th e M iddle E a s t sin c e W orld War I I . "19
I r a q w i l l n o t f o r g e t th e c o n t r ib u t io n s i t r e c e iv e d
from o t h e r c o u n t r ie s to h e lp th e f lo o d v ic tim s . F or
exam ple, P a k is ta n c o n tr ib u te d more th an ID 20,000 and
Lebanon c o n t r ib u t e d about ID 2 ,0 0 0 .20
A c tu a lly , t h i s most r e c e n t f lo o d d i s a s t e r w ould n o t
have happened h ad th e Wadi T h a rth a r P r o j e c t been co m p leted .
“F lo o d c o n tr o l on th e T ig r is i s to be a s s u r e d by th e Wadi
T h a rth a r p ro j e c t . " 2I
The d e s c r i p t i o n o f th e p r o j e c t . 22 — The Wadi
T h a r th a r d e p r e s s io n i s lo c a t e d in a s e m i- d e s e rt v a l l e y ly in g
betw een th e E u p h ra te s and T i g r i s r i v e r s , and i s ab o u t f o r t y
m ile s from th e p r o j e c t s dam s i t e . I t h a s no o u t l e t , and
18 L oc. c i t .
19 Idem.
20 A l-M assai, No. 227, A p ril 15, 1954-, op. c i t . ,
p. 6.
21 ^be Economic Development o f I r a q , "R eport of a
M issio n o rg a n iz e d by th e I n t e r n e t l o n a l Bank f o r R e c o n s tru c
t i o n and Development a t th e R equest o f th e Government of
I r a q , " (London: The Johns Hopkins P r e s s , 1 9 5 2 ), p . 187.
22 po r th e P r e s s , o p . c i t . , p p . 4— 5*
144
i t s s to r a g e c a p a c ity i s e s tim a te d a t a p p ro x im a te ly f i f t y -
f i v e m i l l i o n a c re f e e t .
A dam i n th e T ig r is R iv e r w i l l d i v e r t th e e x c e ss
f lo o d w a te rs th ro u g h a d iv e r s i o n ch an n el to th e D ep ressio n
where th e y can he d is p o s e d o f hy e v a p o ra tio n . The p ro p o sed
o p e r a tio n o f th e p r o j e c t c o n s i s t s m erely o f th e m a n ip u la tio n
o f th e g a te s o f th e dam to r e l e a s e w a te r a t r a t e s n o t in
e x c e s s o f th e c a p a c ity o f th e downstream r i v e r c h a n n e ls a t
c r i t i c a l p o i n t s , th e most im p o rta n t o f w hich I s Baghdad.
The p r i n c i p a l f e a t u r e s o f th e f l o o d c o n tr o l p r o j e c t
a r e a dam a c r o s s th e T ig r is R iv e r above Sammara w ith th e
•n ec essary le v e e s and t r a i n i n g works; u n d e r s lu ic e s in th e
h ead r e a c h o f th e i n l e t c h a n n e l to d is p o s e o f s i l t ; an i n l e t
c h a n n e l w ith a r e g u l a t o r ; and th e r e l o c a t i o n o f e x i s t i n g
r o a d s , ra ilw a y s and s t r u c t u r e s n e a r Sammara.
T h e re fo re , th e e x e c u tio n o f th e p r o j e c t f a l l s in to
two p a r t s . The f i r s t p o r t i o n In v o lv e s " th e e x c a v a tio n of a
c h a n n e l and th e c o n s tr u c tio n o f a p r o t e c t i v e dyke f o r 65
Kms., from a p o i n t on th e T i g r i s o p p o s ite Sammara to th e
T h a rth a r d e p r e s s io n ." The seco n d p a r t in v o lv e s " th e con
s t r u c t i o n o f a b a r r a g e a c ro s s th e T ig r is an d c e r t a i n
a u x i l i a r y works in c lu d in g th e r e l o c a t i o n o f th e Baghdad-
" 1
Mosul Railw ay l i n e . ti23
The i n l e t ch a n n el w i l l ex ten d a b o u t f o r t y m ile s from
th e dam. I t w i l l be e x c a v a te d to a c a p a c ity o f 1?,5G0 cu b ic
f e e t p e r second a n d i t s r e g u l a t o r w i l l be d e s ig n e d f o r
26,500 cu b ic f e e t p e r second to meet f u t u r e re q u ire m e n ts .
I t i s claim ed t h a t 1 1 th e T h a rth a r ch an n el w i l l be th e b ig g e s t
a r t i f i c i a l c a n a l i n th e w o rld . m2^
The dam, how ever, w i l l have a d is c h a r g e c a p a c ity of
tw e n ty - f iv e th o u sa n d c u b ic f e e t p e r se co n d . I t w i l l be a
c o n c re te s t r u c t u r e about f o r t y f e e t h ig h and one th o u sa n d
f e e t long w ith f o r t y o p e r a tin g g a te o p e n in g s, each tw en ty
f e e t in w id th . !
B ecause o f th e new i n s t a l l a t i o n s i t w i l l be n e c e s s a ry
to move th e Sammara r a i l r o a d s t a t i o n and to r e c o n s tr u c t 13*3
m ile s o f ra ilw a y t r a c k . Two new b r id g e s w i l l be c o n s tru c
t e d , one o ver th e i n l e t ch a n n el and one o v e r th e s p illw a y
c h a n n e l o f th e dam. A new ro a d f i f t e e n m ile s lo n g w i l l be
b u i l t . R a ilro a d r e s i d e n t i a l b u ild in g s and o f f i c e s , work
shops and s t o r e s w i l l be r e c o n s tr u c te d .
The p u rp ose o f th e p r o .1 e c t . — There a re two main
Government o f Iraq Development Board, Annual
R eport f o r th e F in a n c ia l Year 1952-1953 {Baghdad: Government
P r e s s , 1 9 5 3 ) * P* 2 .
Ira q Y ear Book (Baghdad: The Baghdad P r i n t i n g
P r e s s , 1 9 5 3 T ,p7""2¥8.
p u rp o se s o f th e Wadi T h a rth a r p r o j e c t , nam ely, to c o n t r o l
th e T i g r i s f lo o d , and a w a te r s to r a g e f o r i r r i g a t i o n .
The Wadi T h a rth a r f lo o d c o n tr o l p r o j e c t i s p a r t o f a ,
more com prehensive p la n , w hich w i l l e v e n tu a lly p r o v id e ,
i n a d d i tio n , f o r w a te r s to r a g e , r e g u l a t i o n o f w a te r
su p p ly and i r r i g a t i o n . 25
Land t h a t co u ld be c u l t i v a t e d u n d er i r r i g a t i o n i s
p l e n t i f u l and th e p o s s i b i l i t i e s f o r f u r t h e r a g r i c u l t u r a l
p r o d u c tio n and e x p o r ts a r e , t h e r e f o r e , c o n s id e r a b le . Even
in th e f e r t i l e a r e a betw een t h e tw in r i v e r s , th e r e i s a v a s t
m arg in f o r new and i n te n s iv e developm ent. I t i s e x p e c te d
t h a t th e p r o j e c t w i l l r e s u l t i n th e p r o t e c t i o n o f c ro p s and
u rb an p r o p e r ty from d e s t r u c t i v e f lo o d s , in improvement -in
h e a l t h and s a n i t a t i o n , and i n in c r e a s e d economic s e c u r i t y
f o r l a r g e s e c t i o n s o f th e p o p u la tio n .
" I r a q i s , p o t e n t i a l l y , one o f th e w e a l t h i e s t coun
t r i e s i n th e M iddle E a s t. I t h as more c u l t i v a b l e la n d th a n
i t s p e o p le can t i l l by th e m ethods p r e s e n t l y u se d . . . .26
In o r d e r to u t i l i z e t h i s s iz e a b le c u l t i v a b l e a r e a , an
a d e q u a te and s a t i s f a c t o r y i r r i g a t i o n system and th e c o n t r o l
o f th e c o u n try ’ s r i v e r s a r e n eeded.
The f u l l developm ent o f I r a q ’ s a g r i c u l t u r a l p o t e n t i a l
depends on i r r i g a t i o n , an d , in tu r n , i r r i g a t i o n depends
upon th e c o n t r o l o f th e c o u n try ’ s r i v e r s , th e T i g r i s and
25 E ig h th Annual R e p o rt, o p . c i t , . , p . 30.
26 F or th e P r e s s , l o o , c i t .
W l
l
i
E uphrates and t h e ir t r ib u t a r i e s . . . . The Bank -was
re q u este d to a s s i s t in fin a n c in g th e T ig r is flo o d !
c o n tr o l p r o j e c t , w h ile a s im ila r p r o j e c t fo r th e c o n tr o l
o f th e E uphrates R iver was r e c e n tly undertaken and w i l l
he fin a n ced o u t o f I r a q 's own r e s o u r c e s . These,
to g e th e r w ith s e v e r a l sm a ll p r o j e c t s a ls o in th e p la n ,
w ould b rin g a t o t a l o f 9 m illio n a c r e s under adequate
ir r ig a t io n w h ile e lim in a tin g f lo o d s on b o th o f I r a q 's
main r i v e r s .2 ?
The Wadi Tharthar P r o je c t i s a ls o ex p ected to en a b le
th e government o f Iraq to sa v e s u b s ta n tia l sums now sp en t on
le v e e m aintenance and c o n tr o l and on f lo o d r e l i e f m easures
f o r th e p o p u la tio n . M oreover, th e In c r e a sin g p r o d u c tiv ity
o f I r a q 's a g r ic u ltu r e , r e s u lt in g from f lo o d c o n tr o l and
e v e n tu a lly from improved i r r ig a t io n f a c i l i t i e s , sh o u ld
I
r e s u lt in an im proved b a la n ce o f payments p o s it io n f o r Iraq,!
a s w e ll as in a h ig h e r n a tio n a l Income.
The Board d ecid e d a ls o to d e r iv e e l e c t r i c i t y from th e
T harthar dam. The* dam w i l l be fu r n ish e d w ith seven e l e c t r i c
g e n e r a to r s , each o f w hich i s to have a power p o t e n t ia l of
1 6 , 6 0 0 ,0 0 0 k i lo w a t t s .2 ®
The e s tim a te d c o s t . — The t o t a l e stim a te d c o s t s fo r
th e c o n s tr u c tio n o f th e Tharthar p r o je c t a re ID 1 0 ,3 0 0 ,0 0 0
(ID 9 # 625,000 p lu s ID 675*000 I n t e r e s t on th e lo a n from th e
I n te r n a tio n a l B ank). As m entioned b e fo r e , o n ly ID 3,965*000
I b id . , p . 6 .
2 ® A l-S h aab , "D aily Newspaper," (Baghdad: A l-Shaab
P r e s s , September 9* 195*0* p . 5* (A rabic)
1*4-81
!
was p ro v id e d by th e Bank in th e form o f a lo a n to be used
f o r f o r e ig n exchange to buy m a te r ia l s and equipm ent f o r s a id
p r o j e c t . The b a la n c e , ID 6 ,3 3 5 ,0 0 0 , i s th e e s tim a te d amount
needed f o r l o c a l e x p e n d itu re s w hich i s to be p ro v id e d by th e
Board from i t s re v e n u e from th e o i l r o y a l t i e s .
The e s tim a te d c o s t f o r th e y e a rs 1951> 1952, 1953,
1954-* 1955, and 1956 f o r b o th l o c a l e x p e n d itu re s and f o r e ig n
exchange amounted to ID 1 ,2 5 0 ,0 0 0 , ID 3*600,000, ID
3 ,1 4 0 ,0 0 0 , ID 1 ,4 5 0 ,0 0 0 , ID 1 8 5 ,0 0 0 , and ID 675,000 re s p e c
t i v e l y . 2? See T able XI.
The c o n t r a c t f o r th e e x c a v a tio n o f th e ch a n n el and
th e c o n s tr u c tio n o f a p r o t e c t i v e dyke was awarded in
December, 1951, by th e Board to M e ssrs, B a lf o u r , B e a tty and
Company f o r a sura o f ID 5 ,9 6 2 ,0 0 0 and work commenced e a r l y
in J a n u a ry , 1952. A pproxim ately 21 p e r c e n t o f th e e a r t h
work was com pleted d u rin g 1952 and p r o g r e s s i s s a t i s f a c
t o r y . 30 Work i s due to be co m pleted in 1955*
The c o n t r a c t f o r th e c o n s tr u c tio n of th e dam a c ro s s
th e T ig r is and th e com plem entary works was awarded in
F e b ru a ry , 1953, by th e Board to Ed Z u b lln A. G. o f D uisbug,
Government o f I r a q , C om pilation o f Laws C oncerning
The Development Board (Baghdad: Government P re s s , 1952)>
p . 8.
Annual Report, op. cit., p. 2.
TABLE XI
THE ESTIMATED COST FOR THE CONSTRUCTION
OF THE WADI THARTHAR PROJECT
Item s
P ro v is io n
1951
ID
P ro v is io n P ro v is io n
1952 1953
ID ID
P ro v is io n
1954
ID
F o r l o c a l
t e x p e n d itu re s 930,000 1 , 750,000 2 , 170,000 810,000
F o r f o r e ig n
exchange 320,000 1 ,8 5 0 ,0 0 0 970,000 640,000
T o ta l 1 , 250,000 3 , 600,000 3 ,i4 o ,o o o 1 ,4 5 0 ,0 0 0
Item s
P ro v is io n
1955
ID
P ro v is io n
1956
ID
T o ta l
ID
F o r l o c a l
e x p e n d itu re s 675,000 6,335,000
F o r f o r e ig n
exchange 185,000 3 ,9 6 5 ,0 0 0
T o ta l 185,000 675,000 10 , 300,000
Germany, f o r a sum o f ID 4-, 9 ^ 8 ,1 0 0 .3 1 T his company con
t r a c t e d t o com plete th e dam by March 1 , 1956.
T h e re fo re , th e a c tu a l sum needed f o r th e c o n s tr u c tio n
o f s a i d p r o j e c t was ID 1 0 ,9 1 0 ,1 0 0 (th e sum o f ID 4 ,9 ^ 8 ,1 0 0
and ID 5 * 9 6 2 ,0 0 0 ). In o th e r w ords, a sum o f ID 610,100 i s
th e d if f e r e n c e betw een th e a e t u a l sum needed (ID 1 0 ,9 1 0 ,1 0 0 )
and th e t o t a l e s tim a te d c o s t (ID 1 0 ,3 0 0 ,0 0 0 ). The Board
e v i d e n tl y met t h i s d if f e r e n c e from i t s re v e n u e from t h e o i l
r o y a l t i e s .
I t i s th e hope o f th e w r i t e r and o f every I r a q i
c i t i z e n t h a t th e Wadi T h a rth a r p r o j e c t w i l l be com pleted
w ith in th e e s tim a te d p e r io d in o r d e r , a t l e a s t , to p ro v id e
th e c o u n try w ith a weapon a g a i n s t th e T i g r i s f lo o d .
A lla w i, th e e x e c u tiv e member o f th e Board, commented
t h a t , H The Wadi T h a rth a r w i l l c e r t a i n l y be com pleted w ith in
th e e s tim a te d p e r i o d , i f n o t b e f o r e . M ^ 2
The B anins M issio n to Ira q
I ra q r e c e iv e d o th e r v a lu a b le a i d from th e Bank, in
a d d i tio n to th e lo a n f o r th e c o n s tr u c tio n of th e f lo o d
c o n t r o l p r o j e c t . A M issio n was o rg a n iz e d by th e I n t e r
n a t io n a l Bank a t th e r e q u e s t o f th e governm ent o f I r a q .
Idem.
^ A l-Shaab new spaper, l o c . c i t .
1511
■ !
On O ctober 10, 1950, th e Government o f I ra q o f f i c i
a l l y r e q u e s te d th e I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n
and Development to send a m is sio n to I r a q to u n d e rta k e a
g e n e r a l re v ie w o f th e c o u n t r y 's economic p o t e n t i a l i t i e s
and make recom m endations f o r a developm ent p ro g ra m .33
The M issio n a r r iv e d in I r a q on F e b ru a ry 25, 1951# and,
l e f t on May 27, 1951* The M issio n , a f t e r a th o ro u g h s tu d y
and i n v e s t i g a t i o n is s u e d i t s r e p o r t , w hich i s now c o n s id e re d
th e m ost r e l i a b l e so u rce of in fo rm a tio n co n c ern in g I r a q .
The governm ent of I r a q , and e s p e c i a l l y th e D evelop
ment B oard, owes th e I n t e r n a t i o n a l Bank much g r a t i t u d e f o r
t h i s v a lu a b le s e r v i c e .
The M issio n l i s t e d in i t s r e p o r t a number o f recom -
i
m en d atio n s w hich a r e now c o n s id e re d by th e governm ent as a
l i g h t to g u id e i t s e v e ry move f o r economic developm ent.
I I I . BANK1S LOANS TO TURKEY
The Bank h a s g ra n te d to Turkey a number o f lo a n s f o r
many d i f f e r e n t p u rp o s e s . In o th e r w ords, th e Bank h a s g iv e n
th e governm ent o f Turkey s i x lo a n s : two lo a n s f o r th e
developm ent o f Turkey*s m ajor p o r t s , one f o r th e c o n s tru c
t i o n o f g r a in s to r a g e , two lo a n s to The I n d u s t r i a l
Development Bank, and one f o r th e c o n s tr u c tio n o f a dam.
33 The Economic Development of Iraq, op. cit., p. ix.
152 j
The Amount and P u rp o ses o f th e Loans
1. On J u ly 7, 1950, th e Bank made a lo a n o f
$12,500,000 f o r th e developm ent o f Turkey*s m ajo r p o r t s .
I t i s h e ld "by th e Bank t h a t th e lo a n i s d e s ig n e d to
f in a n c e th e p r o j e c t s which a r e m ost u r g e n tly needed to
r e l i e v e th e p r e s e n t lo a d on T urkey1© p o r t s and t o r a i s e
t h e i r im m ediate o p e r a t io n a l e f f i c i e n c y .
T his lo a n I s f o r a term o f tw e n ty - f iv e y e a rs and
c a r r i e s an I n t e r e s t r a t e o f 3 1 /k p e r c e n t, p lu s th e u s u a l
For d e t a i l s se e : Loan Number 28 Turkey, Loan
Agreement (P o rt Development and C o n s tru c tio n P r o je c ts )
betw een R ep u b lic o f Turkey and I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and Developm ent. Dated J u l y 7, 1950.
Loan Number 27 T urkey, Loan Agreement (G rain S to ra g e
P r o j e c t ) betw een R ep u b lic o f Turkey and I n t e r n a t i o n a l Bank
f o r R e c o n s tru c tio n and Developm ent. D ated J u ly 7, 1950.
And P r o je c t Agreement (G rain S to ra g e P r o je c t) betw een
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n an d Development and
Toprak M a h s u lle ri O f l s i . D ated J u ly 7, 1950.
Loan Number 3 k Turkey, Loan Agreement betw een
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and Development and
th e I n d u s t r i a l Development Bank o f T urkey. D ated O ctober
19, 1950. And G uarantee Agreement betw een th e R e p u b lic o f
Turkey and I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
Developm ent. D ated O ctober 1 9 , 1950.
Loan Number 63 Turkey, Loan Agreement (Seyhan
P r o j e c t ) between R epublic o f Turkey and I n t e r n a t i o n a l Bank
f o r R e c o n s tru c tio n and D evelopm ent. D ated June 18, 1952.
Loan Number 85 T urkey, Loan Agreement (Second
I n d u s t r i a l Development Bank P r o je c t) betw een I n t e r n a t i o n a l
Bank f o r R e c o n s tru c tio n and Development and th e I n d u s t r i a l
Development Bank o f Turkey. Dated Septem ber 1 0 , 1953. And
G uarantee Agreement betw een th e R ep u b lic o f Turkey an d
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent.
D ated Septem ber 1 0 , 1953*
153
1 p e r cen t com m ission; a m o r tiz a tio n b e g in s in 1956.35
The t o t a l c o s t o f th e p o r t developm ent and c o n s tr u c
ti o n p r o j e c t s i s th e e q u iv a le n t o f # 3 8 ,6 0 0 ,0 0 0 . The Bank’s
lo a n o f #12 , 500, 00 0 , however, w i l l cover o n ly th e f o r e ig n
exchange c o s t r e q u ir e d f o r th e im p o rta tio n of equipm ent and
m a t e r i a l s . The b a la n c e , w hich i s e v id e n tly th e c o s t f o r
l o c a l e x p e n d itu r e s , w i l l be p ro v id e d by th e governm ent o f
T urkey. See T ab le X II, p ag e s 15^ and 155.
2 . On th e same d a te ( J u ly 7 , 1 9 5 0 ), th e Bank made
a n o th e r lo a n o f # 3,900,000 f o r th e c o n s tr u c tio n o f g r a in
s to r a g e f a c i l i t i e s . ^
The g r a in s to r a g e p r o j e c t w i l l p la y and im p o rta n t
r o le in T urkey’ s a g r i c u l t u r a l developm ent a s g r a in i s
T u rk ey ’ s l a r g e s t c ro p , and p r e s e n t s to r a g e f a c i l i t i e s a r e
p o o rly equipped and i n s u f f i c i e n t to h a n d le th e a n n u a l move
ment o f g r a in .
The lo a n i s f o r a te rm o f e ig h te e n y e a rs and c a r r i e s
an i n t e r e s t r a t e o f 2 7 /8 p e r c e n t, p lu s th e 1 p e r c e n t
com m ission; i t s a m o rtiz a tio n w i l l s t a r t in 195^*
The t o t a l c o s t o f th e c o n s tr u c tio n o f g r a in s to r a g e
F i f t h Annual R e p o rt, M I n t e r n a t i o n a l Bank f o r
R e c o n s tru c tio n and Development,*1 (W ashington, D .C .: 19^9-
1 9 5 1 ), P . 33-
36 I b i d . , p . 1 .
TABLE XII
THE INTERNATIONAL BANK'S LOANS TO THE
GOVERNM ENT OF TURKEY
The p r o je c t to be
fin an ced
The t o t a l
c o s t
d o lla r
The Bank loan
f o r fo re ig n
exchange
d o l l a r
The co st f o r
lo c a l
expenditures
d o lla r
The d ate <
loan
of the
The development of
T u rk ey 's m ajor p o r ts 38, 600,000 12 , 500,000 16,100,000 Ju ly
7, 1950
The c o n s tru c tio n o f
g ra in sto rag e 10,000,000 3,900,000 6,100,000 J u ly
7, 1950
To th e I n d u s tr ia l
Development Bank 9,000,000 Oct.
19, 1950
The c o n s tru c tio n
of a dam 35.800,000 25 , 200,000 10, 600,000 June 18, 1952
To th e I n d u s tr ia l
Development Bank 9,000,000 Sept.. 10,
1953
The development of
T urkey's m ajor p o r t 3,800,000 Feb. 26,
195^
T o ta l of Loans 63,^00,000
-----------
U l
TABLE XII (Continued)
THE INTERNATIONAL BANK1S LOANS TO THE
GOVERNM ENT OF TURKEY
The p r o je c t to be
financed
I n t e r e s t
r a t e and
commission
The term of
th e loan
(years)
Amorti
z a tio n
begins
Source
The development of
Turkey*s m ajor p o r ts
3 l A 25
1956 P re ss re le a s e No. 19k
The c o n s tru c tio n of
g ra in sto ra g e 2 7 /8 1 f o 18
195^
P re ss re le a s e No. 19lf
To th e I n d u s tr ia l
Development Bank 2 3 A 1; %
15 1957
P re ss re le a s e No. 219
The c o n s tru c tio n
o f a dam k 3 A
1%
25 1957
P re ss re le a s e No. 295
To th e I n d u s tr ia l
Development Bank 4 7 /8 lj%
15
1958 P re ss r e le a s e No. 339
The development of
Turkey*s m ajor p o r t k 7/8 l;% 21 1/2 .1956 P re ss r e le a s e No. 355
■ ' 156!
I
f a c i l i t i e s i s th e e q u iv a le n t o f $ 1 0 ,0 0 0 ,0 0 0 . The Bank*s
lo a n o f $ 3 ,9 0 0 ,0 0 0 w i l l co v er th e f o r e ig n exchange c o s t
r e q u ir e d f o r th e p u rch ase from ab ro a d o f th e equipm ent and
m a t e r i a l s needed in th e c o n s tr u c tio n o f s to r a g e p r o j e c t s
th ro u g h o u t T u r k e y .37 The governm ent of T urkey, how ever,
w i l l p ro v id e th e b a la n c e f o r th e c o s t of l o c a l e x p e n d itu r e s .
See Table X II, p . 154.
3 . A t h i r d lo a n o f $9*000,000 was g ra n te d by th e Bank
on O cto b e r 19* 1950, to th e I n d u s t r i a l Development Bank of
Turkey to fin a n c e th e c o s t of im p o rts f o r i n d u s t r i a l
developm ent p r o j e c t s u n d e rta k e n by p r i v a t e e n t e r p r i s e s in
T urkey. T his lo a n i s g u a ra n te e d by th e R ep u b lic o f Turkey.
The I n d u s t r i a l Development Bank o f Turkey, to w hich
th e I n t e r n a t i o n a l Bank to d a y C o eto b er 1 9 , 19501 made a
lo a n o f $9*000,000, i s th e r e s u l t o f a j o i n t e f f o r t by
p r i v a t e b u s in e s s i n t e r e s t s i n Turkey and th e T u rk ish
Government t o prom ote th e i n d u s t r i a l developm ent o f
Turkey and to encourage p r i v a t e c a p i t a l in v e s tm e n t.3 °
This lo a n i s f o r a term o f f i f t e e n y e a rs and c a r r i e s
an I n t e r e s t r a t e o f 2 3 /4 p e r c e n t, p lu s com mission a t th e
r a t e o f 1 p e r c e n t; i t s a m o r tiz a tio n paym ent w i l l b e g in in
in 1957. See T able X II, page 155-
3? I b i d . , p . 3»
38 I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and Develop
ment (W ashington, D.C.: For th e P r e s s , P r e s s R e lea se No.
219, O ctober 19, 1 9 5 0 ), Supplem ent s ta te m e n t, p . 1 .
157
i
i
k. The f o u r t h lo a n was made by t h e Bank on Ju n e 18,
1952.
The I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
Development to d a y f ju n e 1 8 , 1952J made a lo a n o f
$>25*200,000 to th e R e p u b lic o f Turkey to a s s i s t in th e
developm ent o f th e Adana P la in , a p r o d u c tiv e a g r i c u l
t u r a l and i n d u s t r i a l a r e a in s o u th - c e n tr a l T urkey. The
lo a n w i l l h e lp to f in a n c e a m u lti-p u rp o s e dam on th e
Seyhan R iv e r— to be used f o r f lo o d c o n t r o l , i r r i g a t i o n ,
and h y d r o e l e c t r i c power— and r e l a t e d pow er f a c i l i t i e s . 39
The p r e s e n t lo a n i s f o r a term o f tw e n ty -f iv e y e a rs
1
and c a r r i e s i n t e r e s t a t th e r a t e o f M - 3 /k p e r c e n t p lu s
com m ission o f 1 p e r c e n t; i t s a m o r tiz a tio n payment w i l l
b e g in on A p ril 1 , 1957»
The t o t a l c o s t of t h i s p r o j e c t i s th e e q u iv a le n t of
1 3 5 ,8 0 0 ,0 0 0 . The Bank’ s lo a n o f #25*200,000 w i l l f in a n c e
th e f o r e ig n exchange c o s t s . T his lo a n w i l l be u se d f o r
p u rc h a s e In th e U n ite d S t a t e s and Europe o f c o n s tr u c tio n
m a t e r i a l s and equipm ent, g e n e r a tin g and tr a n s m is s io n u n i t s ,
an d f o r payment o f e n g in e e rin g and c o n t r a c tin g f e e s . The
b a la n c e , how ever, w hich i s th e c o s t f o r l o c a l c u rre n c y
re q u ire m e n ts , i s to be p ro v id e d p a r t l y by th e T u rk ish
governm ent and p a r t l y by p r i v a t e i n v e s t o r s . ^ See Table
X II, page 15^.
39 I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelop
m ent (W ashington, D.C.: F o r th e P r e s s , P r e s s R e lea se No.
295* Ju n e 18, 1 9 5 2 ), p . 1 .
Iftld . , p p . 1 -2 .
5 . On S eptem ber 1 0 , 1953» th e Bank made I t s second
lo a n to th e I n d u s t r i a l Development Bank o f Turkey. I t i s ,
how ever, th e f i f t h lo a n to Turkey.
The I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
Development to d a y ^Septem ber 10, 1953J made a lo a n of
#9*000,000 to th e I n d u s t r i a l Development Bank o f Turkey.
The T u rk ish Bank i s a p r i v a t e l y owned i n s t i t u t i o n w hich
h e lp s t o f in a n c e th e e s ta b lis h m e n t o r expansion o f
p r i v a t e i n d u s t r i a l e n t e r p r i s e s in T urkey, and i t w i l l
r e - l e n d fu n d s from th e I n t e r n a t i o n a l Bank’s lo a n f o r
p r o j e c t s r e q u i r i n g im p o rts o f equipm ent from a b ro a d .
This lo a n i s a ls o g u a ra n te e d by th e R epublic o f
T urkey.
The lo a n i s f o r a term o f f i f t e e n y e a rs and c a r r i e s
an i n t e r e s t r a t e o f k 7 /8 p e r cen t I n c lu d in g 1 p e r c e n t
com m ission; i t s a m o rtiz a tio n w i l l b e g in August 15* 1958.
6. The s i x t h and th e f i n a l lo a n made by th e Bank to
th e T u rk ish Government was on F eb ru ary 26, 195^* T his lo a n
was made to supplem ent th e v e ry f i r s t lo a n made by th e Bank
to s a i d governm ent, one to f in a n c e th e f o r e ig n exchange
c o s ts o f p o r t improvement and c o n s tr u c tio n p r o j e c t s .
The I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
Development to d a y ^ F eb ru ary 26 , 1 9 5 d made a lo a n o f
#3*8 m il lio n to th e Government o f Turkey f o r p o r t
developm ent. The lo a n w i l l supplem ent a lo a n o f #12.5
m il lio n made i n J u ly , 1950, to fin a n c e th e f o r e ig n
exchange c o s t s o f a s e r i e s o f p o r t Improvement and
c o n s tr u c tio n p r o j e c t s . The new lo a n w i l l cover an
a i
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and Develop
ment (W ashington, D.G.: For th e P re s s , P r e s s R elease No.
339, September 10, 1953), p. 1.
I
in c r e a s e in th e f o r e ig n exchange re q u ire m e n ts o f th e
p r o j e c t s . *^2
T h is lo a n i s f o r a te rm o f 21 1 /2 y e a rs and b e a r s
i n t e r e s t o f if 7 /8 p e r c e n t I n c lu d in g th e 1 p e r c e n t commis
s io n ; i t s a m o r tiz a tio n paym ent w i l l b e g in on A p r il 1 , 1956.
O th e r Bank S e r v ic e s to T urkey
In a d d i tio n to th e s i x lo a n s made by th e Bank to th e
governm ent o f T u rk ey , th e Bank h as re n d e re d two o t h e r im por
t a n t s e r v ic e s to T urkey by s e n d in g a team o f s p e c i a l i s t s to
u n d e rta k e a b ro a d s u rv e y o f th e T u rk is h economy an d th ro u g h '
a s s i s t a n c e in w o rk in g o u t t h e m eans o f s t i m u l a t i n g p r i v a t e
In v e stm e n t in i n d u s t r y in T u rk ey . !
w. * . The T u rk is h G overnm ent r e q u e s te d th e Bank to
sen d an econom ic s u rv e y m is s io n to T urkey to h e lp th e
governm ent fo rm u la te a co m p reh en siv e d ev elo p m en t p ro g ra m .
A f o u r te e n man team o f s p e c i a l i s t s w ent to T urkey in
1950 ®-nd u n d e rto o k a b ro a d s u rv e y o f th e T u rk is h economy and
o u t l i n e d a g e n e r a l p a t t e r n f o r th e c o u n tr y 1s p r o g r e s s , and
p ro p o s e d s p e c i f i c a c tio n t h a t w i l l c o n t r i b u t e to t h a t end.
The su rv e y and a n a l y s i s o f th e T u rk is h economy to be
^ I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelop
m ent (W ash in g to n , D .G .: F o r th e P r e s s , P r e s s R e le a se No.
3 5 5 , F e b ru a ry 2 6 , 195*0, p . 1 .
^ Fifth Annual Report, op. cit., p. 3 3.
u n d e rta k e n by th e m is s io n i n c l u d e : ^ i
(1) an e v a lu a tio n o f i t s p r e s e n t an d p o t e n t i a l econ
om ic c o n d itio n s ;
(2 ) recom m endations a s to th e d i r e c t i o n s and p r i o r i
t i e s in w hich in v e s tm e n t, b o th f o r e ig n and d o m e s tic , m ig h t
b e s t b e c h a n n e le d in th e T u rk is h economy;
(3 ) s u g g e s tio n s o f m ethods and m e a su re s to r a i s e th e
l e v e l o f a g r i c u l t u r a l and i n d u s t r i a l p r o d u c tio n , and im prove
e f f i c i e n c y o f p r o d u c tio n ; and
(^ ) recom m endation f o r im p ro v in g t h e econom ic and
f i n a n c i a l o r g a n iz a tio n an d p o l i c i e s in o r d e r to f a c i l i t a t e
an d en c o u ra g e econom ic d e v e lo p m e n t.
The o th e r s e r v ic e re n d e r e d b y th e Bank to th e T u rk is h
governm ent i s t h a t “th e Bank h a s . . . a c t i v e l y a s s i s t e d in
th e fo rm a tio n o f T u rk e y 's new I n d u s t r i a l D evelopm ent
B a n k ."^5
In m id-19^9» th e T u rk is h G overnm ent an d p r i v a t e
b u s in e s s i n t e r e s t s in T urkey a s k e d th e I n t e r n a t i o n a l
Bank to a s s i s t them i n w o rk in g o u t th e means o f s tim u
l a t i n g p r i v a t e in v e s tm e n t in in d u s tr y in T urkey. B oth
g ro u p s f e l t t h a t p r i v a t e i n d u s t r i a l in v e s tm e n t was
I n h i b i t e d b y th e la c k o f lo n g -te rm money a t m o d e ra te
r a t e s o f I n t e r e s t ; by th e la c k o f e x p e rie n c e in m o b ili
z in g c a p i t a l ; by th e la c k o f t e c h n i c a l and m a n a g e ria l
^ I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelop
m ent (W ashington, D .C .: F o r th e P r e s s , P r e s s R e le a s e No.
1 9 0 , Ju n e 5 , 1 9 5 0 ), p . 1 .
^ F ifth Annual Report, l o c . c i t .
know ledge; a n d by th e la c k o f f o r e ig n ex ch an g e. I t was
g e n e r a lly b e l ie v e d t h a t t h e I n t e r n a t i o n a l Bank m ig h t
h e lp a s a c a t a l y s t f o r th e co m b in a tio n o f th e l o c a l
c a p i t a l , f o r e ig n ex ch an g e, and e x p e rie n c e r e q u i r e d f o r
th e f in a n c in g o f many w o rth -w h ile i n d u s t r i a l p r o j e c t s in
p a r t i c u l a r , and f o r th e s t i m u l a t i o n o f p r i v a t e e n t e r
p r i s e in g e n e r a l , w hich i s c o n s id e re d e s s e n t i a l to th e
d ev elo p m en t o f th e T u rk is h e c o n o m y . ^
The I n t e r n a t i o n a l B ank, t h e r e f o r e , s e n t a c o n s u lta n t
to T urkey in th e F a l l o f 19^9 to d is c u s s th e is s u e w ith a l l
i n t e r e s t e d g ro u p s . As a r e s u l t of t h i s v i s i t , th e In d u s
t r i a l D evelopm ent Bank o f T urkey was form ed in A p r i l, 1950.
•Hie I n t e r n a t i o n a l Bank d e c id e d t h a t su eh an i n s t i t u
t i o n w ould r e c e iv e a d d i t i o n a l c a p i t a l in th e form o f lo a n s
from th e C e n tr a l Bank o f T urkey and th e I n t e r n a t i o n a l B ank, j
I
The B ank, u n t i l now, h a s made two lo a n s to t h i s i n s t i t u t i o n . :
The f i r s t lo a n w as g r a n te d on O cto b er 19» 1 950, f o r
$ 9 ,0 0 0 ,0 0 0 and th e l a s t one was made on F e b ru a ry 2 6 , 195^,
f o r $ 3 * 8 0 0 ,0 0 0 .
The a u th o r iz e d c a p i t a l o f th e I n d u s t r i a l D evelopm ent
Bank i s T .L . 1 2 ,5 0 0 ,0 0 0 . The e q u ity was f u l l y s u b s c r ib e d
b y e ig h te e n i n s t i t u t i o n s , in c lu d in g t h i r t e e n p r i v a t e T u rk is h
and f o r e ig n b a n k s , two t e x t i l e firm s and t h r e e a s s o c ia t i o n s
o f m e rc h a n ts and i n d u s t r i e s .^ 7
^ F o r th e P r e s s , P r e s s R e le a s e No. 219, S u p p lem en t,
o p . c i t . , p . 1 .
^7 Loc. c i t .
162
The new B ank’ s s t a t u t e s s t a t e s i t s p u rp o s e s as:**®
1 . To a s s i s t in th e e s ta b lis h m e n t o f new , and th e
e x p a n sio n and m o d e rn iz a tio n o f e x i s t i n g p r i v a t e e n t e r p r i s e s ;
2 . To s t i m u l a t e p r i v a t e , f o r e i g n , and d o m e stic
in v e s tm e n t in T u rk is h in d u s t r y ; and
3 . To e n c o u ra g e th e d ev elo p m en t o f a m a rk e t f o r
T u rk is h i n d u s t r i a l s e c u r i t i e s .
F or th e s e p u rp o s e s , th e Bank u se s i t s r e s o u r c e s to
g r a n t medium and lo n g -te rm l o a n s , to p a r t i c i p a t e in in d u s
t r i a l e n te r p r is e s , an d , in e x c e p tio n a l c a s e s , e s t a b l i s h and
o p e r a te e n t e r p r i s e s o f i t s own.
IV. COMPARATIVE STUDY OF THE BANK’ S
SERVICES TO IRAQ, AND TURKEY
I t i s a d v is a b le to com pare th e B ank’ s s e r v ic e s t o th e
governm ent o f I r a q and th e governm ent o f T urkey c o n c e rn in g
t h e i r r e s p e c t i v e econom ic d ev e lo p m e n t. The w r i t e r c h o o ses
th e c o u n try o f T u rk ey f o r c o m p a riso n , b e c a u s e th e s e two
p a r t i c u l a r c o u n tr ie s a r e a t v e ry n e a r ly th e same l e v e l o f
d ev elo p m en t and h av e co m p arab le econom ic, s o c i a l , and
c u l t u r a l b a c k g ro u n d s .
Ibid., p. 3
The B ank1a L oans to Ira q an d T urkey
The sum of lo a n s made by th e Bank to th e governm ent
o f T urkey t o t a l $ 6 3 *000,000. In o t h e r w o rd s, th e Bank made
s i x lo a n s to th e T u rk is h governm ent f o r s i x p u rp o s e s . These
s ix lo a n s w ere s tu d ie d in th e p re v io u s p a r t o f th e c h a p te r .
The governm ent o f I r a q , how ev er, h as o b ta in e d o n ly one lo a n
o f $ 1 2 ,8 0 0 ,0 0 0 f o r th e c o n s tr u c tio n o f f lo o d c o n tr o l
p r o j e c t .
I t i s o b v io u s t h a t th e sum o f $63*000,000 i s a huge
f i g u r e in co m p ariso n w ith th e lo a n o f $ 1 2 ,0 0 0 ,0 0 0 to th e
I r a q i g o v ern m en t. As was m e n tio n e d b e f o r e , th e m ain p u rp o se
o f th e Bank i s to c o n tr ib u te to th e d ev elo p m en t o f th e
u n d e rd e v e lo p e d c o u n t r i e s . I t i s w e ll known t h a t I r a q i s a
m ore backw ard c o u n try th a n i s T urkey. Even s o , a s i t h as
b een s e e n , I r a q h a s o b ta in e d o n ly one lo a n and T urkey s i x .
B oth th e Bank and th e governm ent o f I r a q a r e r e s p o n
s i b l e f o r n o t g iv in g th e n a t i o n o f I r a q t h e same chance
w h ich h a s b een g iv e n to T urkey f o r f o s t e r i n g i t s econom ic
d e v e lo p m e n t. The governm ent o f I r a q , o r m ore p r e c i s e l y th e
I r a q i D evelopm ent B o ard , i s r e s p o n s i b le in t h i s m a tte r ; n o t
h a v in g a p p lie d f o r more lo a n s a s h as th e T u rk ish g o v e rn m e n t.
The I n t e r n a t i o n a l Bank a ls o i s r e s p o n s i b l e . I t h a s n o t
b ro u g h t to th e a t t e n t i o n o f t h e I r a q i governm ent th e n e c e s
s i t y f o r d o in g s o . Most o f th e gov ern m en ts o f th e
u n d e rd e v e lo p e d c o u n tr ie s a r e unaw are o f t h e i r n eed s o r o f
th e s te p s w hich a r e n e c e s s a r y f o r t h e i r econom ic d e v e lo p
m ent .
As was m e n tio n e d in C h a p te r I I I , in o r d e r t h a t t h e
Bank may do a b e t t e r jo b i t s h o u ld n o t s i t in W ashington and
w a it f o r b u s in e s s to come to I t in th e form o f w e ll -
fo rm u la te d d ev elo p m en t p r o j e c t s . The B ank, i n c o o p e ra tio n
w ith o th e r n a t i o n a l and I n t e r n a t i o n a l a g e n c ie s m ust go o u t
and a s s i s t i t s member c o u n t r ie s in f o m u l a t i n g th e k in d o f
d ev elo p m en t p ro g ram s w hich m eet th e t e s t o f r e a s o n a b ly h ig h
i n t e r n a t i o n a l In v e stm e n t s ta n d a r d s .
S u g g e stio n f o r a n o th e r lo a n to I r a q . — As m e n tio n e d
b e f o r e , m ore th a n 80 p e r c e n t o f th e I r a q i p o p u la tio n i s
en g ag ed i n a g r i c u l t u r e . M o reo v er, b o th in d u s t r y and
commerce d ep en d , in t u r n , l a r g e l y upon a g r i c u l t u r a l
p r o d u c ts . T h e r e f o re , any d ev elo p m en t p ro g ram f o r I r a q m ust
o b v io u s ly p u t p rim a ry em p h asis on a g r i c u l t u r e .
The D evelopm ent B oard o f I r a q , i n i t s g e n e ra l
v
p ro g ra m , em p h asized i r r i g a t i o n to in s u r e th e s a t i s f a c t i o n o f
th e c u l t i v a b l e la n d w ith n e e d ed w a te r. M o reo v er, th e B oard
d e v o te d a l a r g e am ount o f money to th e c o n s tr u c tio n o f f lo o d
c o n t r o l p r o j e c t s t o p r o t e c t t h e c o u n try from th e s e v e re
f lo o d s o f th e tw in r i v e r s . The B o ard , th e r e b y , e n d e av o red
to p r o t e c t th e a g r i c u l t u r a l p ro d u c t a s one o f th e m ain
165
p u rp o s e s o f th e f lo o d c o n t r o l p r o j e c t s .
N e v e r th e le s s , th e r e I s a f u r t h e r s t e p ■which s h o u ld
r e c e iv e a t t e n t i o n from th e B o a rd , nam ely, a d e q u a te f a c i l i
t i e s to s t o r e th e a g r i c u l t u r a l p r o d u c t.
I r a q i fa rm e rs a r e in n ee d o f a d e q u a te f a c i l i t i e s in
w hich to s t o r e t h e i r p r o d u c t. Such s t o r e s w ould a f f o r d
n e c e s s a r y p r o t e c t i o n a g a in s t g r a in p e s t s and a ls o h e lp to
m i t i g a t e th e f e a r o f fam in e w h ich i s e v e r p r e s e n t in a
c o u n try w ith s h a r p ly f l u c t u a t i n g h a r v e s t s .
The w r i t e r , t h e r e f o r e , a d v is e s th e D evelopm ent B oard
pay a t t e n t i o n to t h i s v i t a l p o i n t w hich h a s c o n s id e r a b le
t
in f lu e n c e on th e c o u n t r y 's econom ic d e v e lo p m e n t. The B oard
s h o u ld o b s e rv e t h e g r e a t em p h asis on g r a in s to r a g e b y th e
T u rk is h g o v ern m en t, to o b ta in a v a lu a b le le s s o n f o r f u r t h e r
d ev elo p m en t p r o j e c t s .
G ra in e l e v a t o r s a r e e s p e c i a l l y n e e d e d . T here a r e
o n ly two e l e v a t o r s in I r a q , o n e o f f i v e th o u sa n d to n s a t
B aghdad, and a n o th e r o f f o r t y th o u sa n d to n s a t B a s r a . The
c o u n tr y p o s s e s s e s no m odern g r a i n s to r a g e f a c i l i t i e s . The
w r i t e r b e l ie v e s t h a t i t i s th e d u ty o f th e B oard to
c o n s t r u c t m ore g r a in e l e v a t o r s in l o c a t i o n s and s i z e s
a c c o rd in g to th e n ee d s o f t h e v a r io u s g r a in p r o d u c tio n
a r e a s .
The construction of such elevators requires, of
i 1 6 6]
c o u r s e , a c o n s id e r a b le sum o f m oney. The B oard can f in a n c e
l o c a l e x p e n d itu r e s from i t s 70 p e r c e n t re v e n u e from o i l
r o y a l t i e s and a p p ly f o r a lo a n from th e I n t e r n a t i o n a l Bank
to f in a n c e th e f o r e ig n ex ch an g e.
The w r i t e r , t h e r e f o r e , s u g g e s ts t o th e B oard to
u n d e rta k e a g e n e r a l s u rv e y in c o n n e c tio n w ith g r a in p ro d u c
t i o n and th e f l u c t u a t i o n o f h a r v e s ts in o r d e r t o l e a r n th e
n e e d ed num ber, s i z e , and l o c a t i o n o f g r a i n e l e v a t o r s . The
e s tim a te d c o s t f o r th e c o n s tr u c tio n o f th e g r a in s to r a g e
p r o j e c t w ould be b a se d on t h i s s tu d y . A cc o rd in g to th e
e s tim a te d c o s t , th e B oard s h o u ld a p p ly to th e I n t e r n a t i o n a l
Bank f o r a lo a n to m eet th e f o r e ig n exchange i f t h e r e i s a
n ee d f o r i t . O th e rw ise , th e B oard s h o u ld p ro v id e th e w hole
sum n eed ed f o r l o c a l c u rre n c y and f o r e ig n exchange from i t s
re v e n u e from o i l r o y a l t i e s . I f th e B oard sh o u ld f in d t h a t
i t i s n e c e s s a ry t o b o rro w from th e B ank, i t m ig h t th e n stu d y
th e lo a n ag reem en t b etw een th e Bank and t h e governm ent o f
T urkey c o n c e rn in g th e lo a n made by th e fo rm e r to th e l a t t e r
f o r th e g r a in s to r a g e p r o j e c t . M oreover, th e B oard sh o u ld
s tu d y th e d e s ig n s and m ethods w hich w ere fo llo w e d by th e
T u rk is h governm ent in u n d e rta k in g a add p r o j e c t .
I f th e B o ard w ere to s tu d y th e T u rk is h g r a in s to r a g e
p r o j e c t b e fo re p ro c e e d in g w ith th e c o n s tr u c tio n o f a s i m i l a r
p r o j e c t in I r a q , i t w ould b e a b le to e lim in a te many
167
d i f f i c u l t i e s w h ich fa c e d th e T u rk ish governm ent in t h a t
c o n c e rn .
The B ank, in i t s F i f t h A nnual R e p o rt, i n d i c a t e s t h a t
" th e Government £ l r a q i g overnm ent] h a s in fo rm e d t h e Bank
t h a t i t in te n d s to subm it f u r t h e r p r o j e c t s f o r c o n s id e r a
t i o n , in c lu d in g . . . g r a in s to r a g e . . . ." ^ 9 B u t,
a c c o r d in g to th e a v a i l a b l e in fo rm a ,tio n , th e I r a q i governm ent
h a s n o t s u b m itte d su c h a p r o j e c t to th e B ank. The w r i t e r
h o p es t h a t th e B oard w i l l a c t on h is s u g g e s tio n in th e n e a r
f u t u r e .
The Bank* s S e r v ic e s to I ra q and Turkey
As m e n tio n e d p r e v io u s ly in t h i s c h a p te r , th e Bank h as
re n d e re d th e two c o u n tr ie s v e r y s i m i l a r s e r v ic e s c o n c e rn in g
th e s u rv e y and a n a l y s i s o f t h e econom ies o f b o th c o u n t r i e s .
A m is s io n w ent to I r a q in 1951 and made a th o ro u g h s tu d y and
i n v e s t i g a t i o n o f th e econom ic c o n d itio n s o f I r a q . A s im ila r
m is s io n w ent to T urkey i n 1950 and made a g e n e ra l s u rv e y o f
th e T u rk is h econom ic c o n d itio n s on th e same b a s i s . T h ere
f o r e , i t m ig h t be a c c u r a te t o s t a t e t h a t b o th c o u n t r ie s have
o b ta in e d a lm o st t h e same b e n e f i t from th e Bank in t h a t
c o n c e rn .
N e v e r th e le s s , th e T u rk is h governm ent h as r e c e iv e d
ii-9
Fifth Annual Report, op. clt., p. 30.
168 !
i
a n o th e r s e r v ic e from th e Bank; a s s i s t a n c e in th e fo rm a tio n
o f T u rk e y 's new I n d u s t r i a l D evelopm ent B ank, w h ereas th e
governm ent o f I r a q h a s n o t. T h is s e r v ic e i s o f u tm o st
im p o rta n c e to many o f th e s o - c a l l e d u n d e rd e v e lo p e d coun
t r i e s . The w r i t e r , t h e r e f o r e , b e lie v e s t h a t th e e s t a b l i s h
ment o f a s i m i l a r Bank in I r a q i s a n o th e r n e c e s s i t y f o r th e
c o u n t r y 's econom ic d ev elo p m en t.
V. C H A N G -IM G - THE EXISTING IRAQI INDUSTRIAL
BANK TO ONE SIMILAR TO THAT OF TURKEY
I n d u s tr y i n I r a q i s l i t t l e d e v e lo p e d . One o f th e
m a jo r o b s ta c le s to I n d u s t r i a l developm ent i s th e la c k o f
s u f f i c i e n t p r i v a t e c a p i t a l f o r in v e s tm e n t. P r iv a te c a p i t a l
e x i s t s In s u b s t a n t i a l q u a n t i t i e s , b u t h a s n o t p a r t i c i p a t e d
on any s u b s t a n t i a l s c a le i n lo n g -te rm I n d u s t r i a l in v e s tm e n t.
Much c a p i t a l , p a r t i c u l a r l y t h a t a c c u m u la te d from
a g r i c u l t u r e , i s h o ard ed an d th e b a la n c e i s g e n e r a lly
I n v e s te d in u rb a n o r r u r a l p r o p e r ty , w hich i s re g a rd e d
a s l e s s r i s k y , o r in com m erce, w here i n v e s to r s a n t i c i
p a t e a h ig h e r r a t e o f r e t u r n . 5©
T h e re fo re , e n tr e p r e n e u r s h av e b een u n a b le to f i n d
medium o r lo n g -te rm money a t re a s o n a b le r a t e s . F u rth e rm o re ,
p r i v a t e b u sin e ssm e n have fo u n d i t d i f f i c u l t to o b ta in
e x p e rie n c e d m anagem ent te c h n i c i a n s and f o r e ig n ex ch an g e.
The Economic Development of Iraq, op. clt., p. 33-
I t i s t r u e th a t t h e r e e x i s t s th e I n d u s t r i a l Bank In
I r a q , b u t t h i s bank was fo u n d to be u n a b le to c a r r y o u t th e
• r e s p o n s i b i l i t i e s o f d e v e lo p in g I r a q 's i n d u s t r y .
A c c o rd in g ly , th e w r i t e r recommends a change in th e
e x i s t i n g I n d u s t r i a l Bank in f a v o r o f one s i m i l a r to t h a t
w h ich was e s t a b l i s h e d w ith th e I n t e r n a t i o n a l B a n k 's a s s i s t
an ce in T urkey.
The E x is tin g I r a q i I n d u s t r i a l Bank
In 19*+0 th e I n d u s t r i a l Bank o f I r a q was e s t a b l i s h e d
by Law Mo. 12 o f 1 9 ^ 0 . B ecause o f th e d i f f i c u l t i e s c r e a te d
by W orld War I I , th e Bank d id n o t b e g in o p e r a tio n s u n t i l
1 9^6 .
A cco rd in g to A r t i c l e I I o f th e E s ta b lis h m e n t C o n tra c t
o f th e Bank, th e B a n k 's s o u rc e s o f fu n d s c o n s is t o f c a p i t a l
in th e form o f a lo a n p ro v id e d by th e g o v ern m en t, p r o f i t and
i n t e r e s t , and money borrow ed from th e p u b l i c o r b an k s o r
sem i-g o v ern m en t a g e n c ie s .
The o r i g i n a l c a p i t a l o f th e Bank w as ID 5 0 0 ,0 0 0
p r o v id e d by th e governm ent a s a lo a n w ith o u t I n t e r e s t and
f o r a term o f s i x t y y e a r s . In Ju n e 1950, th e c a p i t a l was
i n c r e a s e d to one m il lio n I r a q i d i n a r s . The p a i d - i n c a p i t a l ,
up to F e b ru a ry 1951 > am ounted to o n ly ID 6 0 0 ,0 0 0 .
I t i s o b v io u s t h a t a sum o f ID 6 0 0 ,0 0 0 I s a t r i f l i n g
am ount when one c o n s id e r s th e w ide r e s p o n s i b i l i t i e s o f th e
Bank, and th e g ro w in g n eed f o r d o m e stic i n d u s t r i e s .
M oreover, t h i s Bank, l i k e o th e r g o v e rn m e n tal i n s t i t u
t i o n s , s u f f e r s from a la c k o f e x p e rie n c e d management and
r e f l e c t s th e c o r r u p tio n p r e v a i l i n g i n th e econom ic, p o l i t i
c a l , and s o c i a l a s p e c ts o f th e g o v e rn m e n ta l s t r u c t u r e .
The P ro p o sed I n d u s t r i a l D evelopm ent Bank
To rem edy th e d e f e c ts i n th e e x i s t i n g I n d u s t r i a l Bank
o f I r a q w hich h av e a p p e a re d in p r a c t i c e , e s p e c i a l l y th e
m anagem ent*s la c k o f s c i e n t i f i c and p r a c t i c a l i n d u s t r i a l
know ledge a n d th e in a d e q u a c y o f fu n d s , th e w r i t e r s u g g e s ts
th e e s ta b lis h m e n t o f a p r i v a t e l y owned b an k s i m i la r to th e
T u rk is h I n d u s t r i a l D evelopm ent Bank.
How to e s t a b l i s h t h i s B ank. — As m e n tio n e d b e f o r e ,
th e T u rk is h I n d u s t r i a l D evelopm ent Bank was e s t a b l i s h e d w ith
th e a i d o f th e I n t e r n a t i o n a l Bank. The w r i t e r ho p es t h a t
b o th th e I r a q i governm ent and p r i v a t e b u s in e s s i n t e r e s t s in
I r a q w i l l a sk th e I n t e r n a t i o n a l Bank to a s s i s t them in
w o rk in g o u t th e m eans o f s t i m u l a t i n g p r i v a t e in v e stm e n t in
th e in d u s t r y o f I r a q . T h is s t e p w i l l b e ta k e n i f b o th
g ro u p s f e e l t h a t p r i v a t e I n d u s t r i a l in v e s tm e n t i s i n h i b i t e d
by la c k o f s u f f i c i e n t lo n g -te rm money; b y la c k o f e x p e rie n c e
in m o b iliz in g c a p i t a l ; by la c k o f t e c h n i c a l and m a n a g e ria l
k no w led g e; and th e d i f f i c u l t i e s o f f o r e i g n ex ch an g e.
And as one o f th e m ain p u rp o s e s o f th e I n t e r n a t i o n a l
Bank I s to h e lp th e u n d e rd e v e lo p e d c o u n tr ie s in th e m a tte r
o f im p ro v in g and d e v e lo p in g t h e i r econom ic c o n d itio n s , i t
seem s u n lik e ly t h a t th e Bank w ould h e s i t a t e to r e n d e r su c h a
s e r v i c e . The I n t e r n a t i o n a l Bank, a t th e r e q u e s t o f th e
I r a q i g o v ern m en t, w ould sen d c o n s u lta n ts to d is c u s s th e
is s u e w ith a l l I n t e r e s t e d g ro u p s . As a r e s u l t o f t h i s
v i s i t , a p la n m ig h t b e e v o lv e d f o r th e e s ta b lis h m e n t o f an
i n s t i t u t i o n w h ich w ould be p r i v a t e l y owned and d i r e c t e d by
co m p eten t m anagem ent a d v is e d by a t e c h n i c a l s t a f f q u a l i f i e d
to a n a ly z e in v e s tm e n t a p p l i c a t i o n s and a s s i s t th e i n s t i t u
t i o n ^ c l i e n t s in c a r r y in g o u t p r o j e c t s . The w r i t e r
s u g g e s ts th e I n d u s t r i a l D evelopm ent Bank o f I r a q a s a name
f o r th e p ro p o se d i n s t i t u t i o n .
S o u rces o f f u n d s . — The p ro p o se d I n d u s t r i a l D evelop
m ent Bank o f I r a q s h o u ld d e r iv e i t s fu n d s from th e fo llo w in g
s o u r c e s :
1 . The a u th o r iz e d c a p i t a l s h o u ld be s u b s c r ib e d by a
g ro u p o f p r i v a t e i n s t i t u t i o n s . The a u th o r iz e d c a p i t a l
sh o u ld be n o t l e s s th a n se v en m illio n I r a q i d i n a r s . The
p r i v a t e i n s t i t u t i o n a l s u b s c r i b e r s sh o u ld in c lu d e m o st o f th e
p r i v a t e I r a q i Banks and some f o r e ig n b a n k s , and th e
im p o rta n t e x i s t i n g I r a q i I n d u s t r i e s su c h a s th e t e x t i l e and
cem ent i n d u s t r i e s .
2 . The I n d u s t r i a l D evelopm ent Bank sh o u ld h av e th e
r i g h t to bo rro w money from th e N a tio n a l Bank o f I r a q to m eet
th e l o c a l c u rre n c y n eed s o f th e Bank.
3 . The I n t e r n a t i o n a l Bank sh o u ld a g r e e to make lo a n s
w ith th e I r a q i governm ent g u a ra n te e to th e I n d u s t r i a l
D evelopm ent Bank to su p p ly th e f o r e ig n exchange re q u ire m e n ts
o f th e p r o j e c t s w h ich th e new Bank w i l l f in a n c e in i t s
I n i t i a l s ta g e s .
I f su ch a bank w ere to b e e s t a b l i s h e d I r a q w ould
h av e :
1* An i n s t i t u t i o n to c a r r y o u t th e r e s p o n s i b i l i t i e s
o f s ti m u la tin g in d u s t r y in d e v e lo p in g t h e econom ic r e s o u r c e s
o f th e c o u n try and r a i s i n g th e p e o p l e 's s ta n d a r d o f l i v i n g .
Through t h i s i n s t i t u t i o n p r i v a t e b u s in e s s I n t e r e s t s w i l l
a v o id th e in e x p e r ie n c e a n d c o r r u p tio n o f th e g o v e rn m e n ta l
i n s t i t u t i o n .
2 . A co m p eten t m anagem ent a d v is e d by a t e c h n i c a l
s t a f f w hich w ould p ro v id e s c i e n t i f i c a n d p r a c t i c a l in d u s
t r i a l know ledge.
3 . A s u f f i c i e n t fu n d f o r in v e s tm e n t n e e d s .
I t i s th e w r i t e r 's hope t h a t b o th th e I r a q i g o v e rn
m ent an d th e p r i v a t e b u s in e s s i n t e r e s t s w i l l r e a l i z e th e
im p o rta n c e o f th e r o l e w h ich w i l l be p la y e d b y th e p ro p o se d
i n s t i t u t i o n . The w r i t e r lo o k s fo rw a rd w ith p le a s u r e to th e
tim e when t h i s p ro m is in g ach iev em en t h a s become a r e a l i t y .
CHAPTER V I I
SUMMARY AND CONCLUSION
As m e n tio n e d b e f o r e , t h i s p a p e r -was o rg a n iz e d in two
p a r t s . P a r t I h a s been a d e s c r i p t i v e s tu d y o f th e s t r u c t u r e
an d m a jo r f u n c tio n s o f th e I n t e r n a t i o n a l Bank f o r R econ
s t r u c t i o n and D evelopm ent. In P a r t I I th e I r a q i D evelopm ent
B o ard and th e Bank d ev elo p m en t lo a n s to I r a q and T urkey w ere1
ex am in ed . T h is c h a p te r i s d e v o te d t o a summary and to a
s ta te m e n t o f o v e r f a l l f in d in g s and c o n c lu s io n s .
I . INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT
I t was se e n t h a t th e Bank was n e c e s s a r y to s ti m u la te
a n d t o a s s i s t p r i v a t e i n t e r n a t i o n a l in v e s tm e n t a t t h e end o f
W orld War I I . The c r e a tio n o f t h e Bank w as a v e ry im p o rta n t
d ev elo p m en t in th e h i s t o r y o f i n t e r n a t i o n a l c o o p e ra tio n in
th e f i e l d . I t h a s a s s i s t e d in th e r e c o n s t r u c t i o n an d
d ev elo p m e n t o f t e r r i t o r i e s o f members by f a c i l i t a t i n g th e
in v e s tm e n t o f c a p i t a l f o r p r o d u c tiv e p u r p o s e s , in c lu d in g th e
r e s t o r a t i o n o f econom ies d e s tro y e d by w a r.
I t h as a l s o been fo u n d t h a t th e B ank, d u rin g t h e
f i r s t y e a rs o f i t s e x is te n c e , a l l o c a t e d to o l a r g e a s h a re o f
i t s r e s o u r c e s to r e c o n s t r u c t i o n ; b u t a s m a tte r s h av e w orked
174-1
o u t th e Bank h a s in c r e a s in g l y em phasized i t s d ev elo p m en t
f u n c t i o n , r a t h e r th a n r e c o n s t r u c t i o n , to th e p o in t t h a t
d ev elo p m en t i s now alm o st i t s e x c lu s iv e i n t e r e s t .
The B ank, how ever, was d e s ig n e d n o t to r e p la c e
p r i v a t e i n t e r n a t i o n a l in v e s tm e n t h u t to en c o u ra g e a n d , i f
n e c e s s a r y , to g u id e i t . M o reo v er, th e Bank i s n o t su p p o sed
to com pete w ith p r i v a t e In v e s tm e n t.
The Bank can d e r iv e fu n d s to make lo a n s from t h r e e
s o u r c e s :
1 . The B a n k 's c a p i t a l : th e i n s t i t u t i o n i s a t r u l y
I n t e r n a t i o n a l one in w hich a l l th e p a r t i c i p a t i n g n a t io n s
have ta k e n t h e i r p a r t s a s s h a r e h o ld e r s .
2 . Funds borrow ed in th e c a p i t a l m a rk e t.
3- Loans made by p r i v a t e i n v e s t o r s .
The b a s ic c h a r a c t e r i s t i c o f le n d in g by th e Bank i s
t h a t th e B a n k 's lo a n s , e x c e p t in s p e c ia l c irc u m s ta n c e s , a r e
f o r s p e c i f i c p r o j e c t s o f r e c o n s tr u c tio n o r d ev e lo p m e n t.
M o reo v er, e x c e p t i n s p e c ia l c irc u m s ta n c e s , th e B a n k 's
f in a n c in g i s d e s ig n e d to m eet f o r e ig n exchange r a t h e r th a n
l o c a l c u rre n c y e x p e n d itu r e s . However, th e s p e c i f i c p r o j e c t
a p p ro a c h h as o f te n been c r i t i c i z e d . The c r i t i c i s m w as t h a t
th e Bank h as n o t b een p ro v id e d w ith a d d i t i o n a l r e s o u r c e s
from member g o v ern m en ts f o r m aking g e n e r a l dev elo p m en t
lo a n s , n o t o n ly i n s p e c i a l c irc u m s ta n c e s b u t g e n e r a lly .
n e v e r t h e l e s s , I t I s th e B ank*s le n d in g p o l i c y to em p h asize
i t s p r e f e r e n c e f o r f in a n c in g th e p r o j e c t s t h a t seem m ost
u r g e n tly r e q u ir e d . To a c c o m p lish t h i s o b j e c t i v e , th e Bank
s e e k s to i n v e s t i g a t e th e o v e r - a l l econom ic p o s i t i o n o f th e
b o rro w in g c o u n try . Thus i n v e s t i g a t i o n may change th e w hole
p la n o f th e b o rro w in g c o u n try .
I t h a s a l s o been fo u n d t h a t b e f o r e th e Bank can make
any lo a n to a member c o u n try th e r e a r e c e r t a i n o th e r p ro c e d
u r e s to be f o llo w e d . The g e n e r a l p a t t e r n in v o lv e s two
d i f f e r e n t p h a s e s o f i n v e s t i g a t i o n ; th e f i r s t i s in fo rm a l
d is c u s s io n and th e second p h a s e i s fo rm a l n e g o t i a t io n .
One o f t h e Bank* e p o l i c i e s i s t h a t th e Bank' s lo a n s
a r e s u b je c t to two c h a rg e s , i n t e r e s t an d com m ission. The
B ank, how ever, c h a rg e s I n t e r e s t on a lo a n a t a r a t e a l i t t l e
h ig h e r th a n th e c o s t a t w h ich th e Bank can b orrow in th e
m a rk e t f o r a co m p arab le p e r io d . The d if f e r e n c e b etw een th e
a c t u a l I n t e r e s t r a t e in th e m a rk e t and a r a t e c h a rg e d by th e
Bank i s th e Bank*s p r o f i t .
The w r i t e r f e e l s t h a t th e r e i s no j u s t i f i c a t i o n f o r
th e Bank*s c h a rg in g a h ig h e r i n t e r e s t r a t e th a n th e m a rk e t
r a t e . The p u rp o s e o f th e B ank, in th e f i r s t p la c e , was n o t
to show a p r o f i t . The Bank i s n o t an i n s t i t u t i o n w h ich
c a n n o t m eet em ergency c a s e s u n le s s i t h a s r e s e r v e s . I t i s
an I n s t i t u t i o n w h ich b e lo n g s to a lm o st a l l th e c o u n tr ie s
o v e r th e w o rld . In c a se o f b a d tim e s , i f t h e r e sh o u ld be
an y , th e Bank w o u ld b e s u p p o rte d by a l l i t s member coun
t r i e s . F o r t h i s re a s o n th e Bank has b een c r i t i c i z e d f o r
b e in g to o co m m ercial. A c tu a lly , th e Bank ean u se th e
com m ission c h a rg e s to m eet i t s a d m in is t r a tiv e e x p e n se s and
th e r e i s no n eed to make e x t r a c h a rg e s . At any r a t e , i t
h a s b ee n found t h a t th e Bank h a s made e f f o r t s to e f f e c t a
p r o g r e s s iv e r e d u c tio n of i t s c h a rg e s .
One o f th e g r e a t s e r v i c e s re n d e re d by th e Bank to i t s
member c o u n tr ie s i s th e s e n d in g o f m is s io n s and r e n d e r in g
t e c h n i c a l a s s i s t a n c e . The p u rp o s e o f s e n d in g m is s io n s to
member c o u n tr ie s i s to i n v e s t i g a t e th e o v e r - a l l econom ic
p o s i t i o n o f th e c o u n try c o n c e rn e d an d s u g g e s t m ethods to
m a n ip u la te and Im prove th e e x i s t i n g c o n d i tio n s . The Bank
se n d s m is s io n s to I t s member c o u n tr ie s in two c a s e s . F i r s t ,
th e m is s io n i s u se d a s an im p o rta n t f a c t o r in th e Bank*s
i n v e s t i g a t i o n . The seco n d c a s e in w hich th e Bank d is p a tc h e s
a m is s io n i s to o f f e r i t s members t e c h n i c a l a s s i s t a n c e —
a s s i s t a n c e u n r e l a t e d to any im m ed iate r e q u e s ts f o r f i n a n
c in g . T h is t e c h n i c a l a s s i s t a n c e i s u s u a l ly g iv e n on r e q u e s t
o f th e governm ent o f any member c o u n try . The Bank o f f e r s
t h i s h e lp t o th e c o u n try c o n c e rn e d e i t h e r i n f o rm u la tin g a
g e n e r a l dev elo p m en t program o r in s o lv in g s p e c i f i c d e v e lo p
m ent p ro b le m s . I t i s th e p o l i c y o f th e Bank t h a t th e
177
i
e x p e n se s o f th e s e m is s io n s s h o u ld he s h a re d by th e Bank and
th e governm ent c o n c e rn e d .
F in a l l y , i t h as b een fou n d t h a t f o r th e Bank t o make
i t s o p e r a tio n s s u c c e s s f u l , i t sh o u ld n o t s i t in W ashington
and w a it f o r b u s in e s s t o come to i t in t h e form o f w e ll
fo rm u la te d d ev elo p m en t p r o j e c t s . The Bank s h o u ld go o u t
an d , i n c o o p e ra tio n w ith t h e i r n a t i o n a l an d i n t e r n a t i o n a l
a g e n c ie s , a s s i s t i t s member c o u n tr ie s in f o r m u la tin g th e
k in d o f developm ent pro g ram s w h ich m eet th e t e s t o f re a s o n
a b ly h ig h i n t e r n a t i o n a l In v e s tm e n t s ta n d a r d s .
I I . THE DEVELOPMENT BOARD OF IRAQ
I r a q h as g r e a t p o t e n t i a l i t i e s f o r econom ic d e v e lo p
m e n t. I t h as b een fo u n d t h a t , u n t i l 1950* th e I r a q i
g o v ern m en t was n o t f o llo w in g a s p e c i f i c program f o r econom ic
d e v e lo p m e n t. In 1950, th e governm ent r e a l i z e d th e im p o r
ta n c e o f a b o a rd to p la n an econom ic dev elo p m en t p ro g ra m .
T here i s no d o u b t o f th e u r g e n t n e c e s s i ty o f a b o a rd
d ev elo p m en t program in I r a q . A program m ing i n s t i t u t i o n can
h e lp to l i f t d ev elo p m en t p r o j e c t s o u t o f th e a re n a o f d ay -
to d a y s t r i n g e n c i e s and s h o r t term n e e d s . T h e re fo re , s in c e
1950 th e governm ent o f I r a q h a s b ro u g h t a lm o st a l l i t s
econom ic f u n c tio n s to g e th e r i n t o a g o v e rn m e n ta l program m ing
u n i t , nam ely, th e D evelopm ent B o ard . The w r i t e r h a s
i n d i c a t e d t h a t t h i s s te p was one o f th e m ost im p o rta n t
1?8
a c h ie v e m e n ts o f th e I r a q i governm ent In I t s econom ic
h i s t o r y .
The B oard was e s t a b l i s h e d in 1950 by Law No. 23 o f
1 950. The s t a f f members o f th e B oard a r e e i g h t i n num ber.
They c o n s is t o f th e Prim e M in i s te r , as th e P r e s id e n t o f th e
B o ard , an d th e M in i s te r o f F in a n c e an d s i x e x e c u tiv e members
who a r e n o t o f f i c i a l s . The V ice P r e s id e n t i s one o f th e s i x
e x e c u tiv e m em bers. However, Law No. 23 o f 1950 h a s b een
s u b je c t to many am endm ents. In 1953 a new amendment was
made in re g a rd to th e s t r u c t u r e o f th e B o a rd . T h ereb y , in
1953* a B oard, c a l l e d th e D evelopm ent B o ard , an d a M in is tr y ,
c a l l e d th e M in is tr y o f D evelopm ent, w ere fo rm ed .
The w r i t e r h a s in d i c a t e d t h a t th e I r a q i governm ent
s h o u ld p ay c o n s id e r a b le r e g a r d to th e q u a l i f i c a t i o n s o f
members o f th e M in is tr y o f D evelopm ent, due to th e im por
ta n c e o f t h e i r r e s p o n s i b i l i t i e s in c o n n e c tio n w ith t h e
f u t u r e econom ic d ev elo p m en t o f I r a q . M o reo v er, th e w r i t e r
h as p o in te d o u t t h a t I t i s n o t a d v is a b le to g iv e th e p r e s i
dency o f th e B o ard to th e P rim e M in is te r a s th e r e i s no
r e l a t i o n b etw een him and th e B oard from t h e econom ic o r
f i n a n c i a l p o in t o f v ie w , an d b e c a u se th e C o u n c il o f
M in i s te r s i s f r e q u e n t ly ch an g ed due to p o l i t i c a l i n s t a b i l
i t y . The w r i t e r , t h e r e f o r e , h a s h e ld t h a t i t I s a d v is a b le
and m ore l o g i c a l to g iv e su c h a p o s i t i o n to a p e rs o n who i s
q u a l i f i e d in th e f i e l d s o f econom ics an d f in a n c e .
179
C o n cern in g th e B o a r d s re v e n u e , i t h as b een fo u n d
t h a t i t d e r iv e s i t s rev en u e from f o u r s o u r c e s . The m ost
im p o rta n t s o u rc e i s th e 70 p e r c e n t o f th e t o t a l o f th e
g o v e r n m e n ts s h a re o f th e o i l rev en u e r e c e iv e d from th e
c o n c e s s io n a ir e co m p an ies. Due to th e im p o rta n t r o l e p la y e d
by t h e B oard i n f o s t e r i n g th e econom ic developm ent o f I r a q ,
and th e u rg e n t n e e d f o r su c h r a p id d ev e lo p m e n t, th e w r i t e r
h a s s u g g e s te d t h a t th e I r a q i governm ent s h o u ld a s s ig n to th e
B o ard a l l th e o i l re v e n u e , o r a t l e a s t m ore th a n 70 p e r
c e n t.
I t h a s b ee n fo u n d t h a t th e B oard s tu d ie d th e p o te n
t i a l i t i e s o f I r a q an d s u rv e y e d i t s p r o d u c tiv e r e s o u r c e s and
i t s w e a lth , and th e n p r e p a r e d a g e n e ra l developm ent program
f o r s i x f i n a n c i a l y e a rs from 1951 th ro u g h 1956. The e s t i
m ated rev e n u e f o r th e g e n e r a l program o f th e p r o j e c t s o f th e
D evelopm ent B oard am ounts to ID 1 6 8 ,7 ^ 0 ,0 0 0 . The e s tim a te d
e x p e n d itu r e s o f th e g e n e ra l program am ount to ID 155,37^*000.
D u rin g th e s tu d y , th e w r i t e r h a s fo u n d t h a t th e B o ard i s n o t
c a p a b le o f f i n i s h i n g th e w hole g e n e r a l program w ith in th e
e s tim a te d s i x y e a r s . T h is i s n o t b e c a u se c o m p le tio n o f th e
p ro g ram m ust n e c e s s a r i l y r e q u i r e a lo n g e r tim e , b u t may b e
b e c a u s e o f th e B o ard * s i n c a p a b i l i t y o f c a r r y in g o u t th e s a id
pro g ram w ith in th e e s tim a te d p e r io d . N e v e r th e le s s , th e
g e n e r a l program i s now in e f f e c t and w ith i t s c o m p le tio n
I r a q w i l l have a s tr o n g in s tru m e n t a g a in s t flo o d s a n d a v e ry
u s e f u l one f o r i r r i g a t i o n , b e t t e r and new ro a d s an d b r id g e s ,
m ore and m odern h o s p i t a l s , h e a l t h I n s t i t u t i o n s and s c h o o ls ,
and m ore i n d u s t r i e s . In o t h e r w o rd s, I r a q , th ro u g h th e
D evelopm ent B o ard , w ould be b e t t e r o f f from th e ec o n o m ic al
and s o c i a l p o in ts o f view .
I I I . THE INTERNATIONAL BANK1S LOANS AND
SERVICES TO IRAQ AND TURKEY
The w r i t e r h as com pared th e B a n k 's lo a n s and s e r v ic e s
to t h e governm ent o f I r a q and th e governm ent o f T urkey con
c e r n in g t h e i r r e s p e c t i v e econom ic d ev e lo p m e n t. The w r i t e r
ch o se T urkey f o r co m p ariso n , b e c a u se th e s e two p a r t i c u l a r
c o u n t r ie s a r e a t v e r y n e a r ly th e same l e v e l o f d ev elo p m en t
and h a v e co m p arab le s o c i a l an d c u l t u r a l b a c k g ro u n d s.
The sum o f lo a n s made by th e Bank to th e governm ent
o f T urkey t o t a l s # 6 3 * 0 0 0 ,0 0 0 . The Bank made s ix lo a n s to
th e governm ent o f T urkey f o r s i x p u r p o s e s . These lo a n s
w ere: # 1 2 ,5 0 0 ,0 0 0 f o r th e dev elo p m en t o f T u rk e y 's m a jo r
p o r t s , #3*900,000 f o r th e c o n s tr u c tio n o f g r a in s to r a g e ,
# 9 ,0 0 0 ,0 0 0 to th e I n d u s t r i a l D evelopm ent B ank, # 2 5 ,2 0 0 ,0 0 0
f o r th e c o n s tr u c tio n o f a dam, #9*000,000 to th e I n d u s t r i a l
D evelopm ent B ank, an d #3*800,000 f o r th e developm ent o f
T u rk e y 's m ajo r p o r t . The governm ent o f I r a q , h o w ev er, h as
o b ta in e d o n ly one lo a n o f # 1 2 ,8 0 0 ,0 0 0 f o r th e c o n s tr u c tio n
o f a f lo o d c o n t r o l p r o j e c t .
The w r i t e r c h a rg e s b o th th e governm ent o f I r a q an d
th e I n t e r n a t i o n a l Bank w ith r e s p o n s i b i l i t y f o r th e f a c t t h a t ;
o n ly one lo a n to I r a q h as b een o b ta in e d , in co m p ariso n w ith
th e s i x lo a n s to T urkey. C r itic is m was l e v e l l e d a g a in s t th e
governm ent o f I r a q b ec au se i t d id n o t a p p ly f o r o t h e r lo a n s
and a g a in s t th e Bank b ec a u se th e Bank i s n o t su p p o sed to s i t
in W ashington an d w a it f o r c u s to m e rs . I t s h o u ld go o u t and
recom mend to th e u n d e rd e v e lo p e d c o u n tr ie s t h a t th e y a p p ly
f o r lo a n s in o r d e r to c a r r y o u t th e m ost Im p o rta n t. p r o j e c t s
n eed ed f o r t h e i r econom ic d ev e lo p m e n t.
I t h as b een found t h a t I r a q i fa rm e rs a r e in n eed o f
a d e q u a te f a c i l i t i e s in w hich to s t o r e t h e i r p r o d u c ts . G ra la
s to r a g e I s e s p e c i a l l y n ee d ed . The c o n s tr u c tio n o f e l e v a t o r s
r e q u i r e s a c o n s id e r a b le sum o f money to f in a n c e b o th l o c a l
e x p e n d itu r e s an d f o r e ig n ex ch an g e . The w r i t e r h a s , t h e r e
f o r e , s u g g e s te d t h a t th e B o ard u n d e rta k e a g e n e ra l s u rv e y in
c o n n e c tio n w ith g r a i n p r o d u c tio n in o r d e r to le a r n th e
n ee d ed num ber, s i z e and l o c a t i o n o f g r a in e l e v a t o r s . The
w r i t e r h as p o in te d o u t t h a t i f th e B oard sh o u ld f in d t h a t I t
i s n e c e s s a r y to b o rro w from th e Bank, i t m ig h t th e n s tu d y
th e lo a n ag reem en t betw een th e Bank and th e governm ent o f
T urkey c o n c e rn in g th e lo a n made by th e fo rm e r to th e l a t t e r
f o r g r a i n s to r a g e p r o j e c t s . M oreover, th e B oard s h o u ld
s tu d y th e d e s ig n s and m ethods w hich w ere fo llo w e d b y th e
T u rk is h governm ent in u n d e r ta k in g th e s a i d p r o j e c t , I n o rd e r
to b e a b le to e lim in a te many d i f f i c u l t i e s w hich f a c e d th e
.T u rk ish governm ent i n t h a t c o n c e rn .
The Bank h a s re n d e re d v e ry s i m i l a r s e r v ic e s c o n c e rn
in g t h e s u rv e y an d a n a ly s is o f th e econom ics o f b o th
c o u n t r i e s . A m is s io n w ent to I r a q In 1951 an d made a
th o ro u g h s tu d y an d i n v e s t i g a t i o n o f th e econom ic c o n d itio n s
o f I r a q ; a s i m i l a r m is s io n w ent to T urkey in 1950. The
T u rk is h governm ent h as r e c e iv e d a n o th e r s e r v i c e from th e
Bank; a s s is t a n c e i n th e fo rm a tio n o f T u rk e y f s new I n d u s t r i a l
D evelopm ent B ank. The go v ern m en t o f I r a q d id n o t a p p ly f o r
su c h s e r v i c e s .
The e x i s t i n g I r a q i I n d u s t r i a l Bank i s n o t a d e q u a te
to m eet i t s w ide r e s p o n s i b i l i t i e s o r th e grow ing n e e d f o r
d o m e stic I n d u s t r i e s . T h e r e f o re , th e a u th o r h as p ro p o s e d
th e ch a n g in g o f th e e x i s t i n g I r a q i I n d u s t r i a l Bank to one
s i m i l a r to t h a t o f Turkey w ith th e a i d o f th e I n t e r n a t i o n a l
Bank. W ith th e e s ta b lis h m e n t o f su c h a B ank, w h ich w ould be
a p r i v a t e l y owned i n s t i t u t i o n , I r a q w ould have an i n s t i t u
t i o n th ro u g h w h ich p r i v a t e b u s in e s s i n t e r e s t s c o u ld a v o id
th e in e x p e r ie n c e and c o r r u p tio n o f th e governm ent i n s t i t u
t i o n ; a com petent m anagem ent, and a s u f f i c i e n t fu n d f o r
in v e s tm e n t n e e d s .
BIBLIOGRAPHY
BIBLIOGRAPHY
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B la c k , Eugene R ., "The W orld Bank At W ork," r e p r i n t e d from
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t i o n and I n d u s t r i a l D ev elo p m en t," L and E conom ics, V o l.
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C. ESSAYS
B a sch , A n to n in , I n t e r n a t i o n a l C o n c i l i a t i o n . New Y ork:
C a rn e g ie Endowment f o r I n t e r n a t i o n a l P e a c e , No. ii-55*
November, 19^9 > PP. 791-87^*
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S e c tio n , P r in c e to n U n iv e r s it y . E ssa y s In I n t e r n a t i o n a l
F in a n c e , No. 1 2 , F e b ru a ry , 1951*
I
t
P . PUBLICATIONS OF LEARNED ORGANIZATIONS
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F in a n c ia l Y ear 1952-1953* Baghdad: Governm ent P r e s s ,
1953* 29 p p .
B la c k , Eugene R . , P o l i c i e s an d O p e ra tio n s o f th e W orld B ank.
W ashington, D .C ., J u ly , 1 9 5 3 . 16 p p .
G u a ra n te e A greem ent betw een th e R e p u b lic o f T urkey an d
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O c to b e r 1 9 , 1 9 5 0 . 9 PP*
G u a ra n te e A greem ent b etw een th e R e p u b lic o f T urkey an d
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent,
S eptem ber 1 0 , 1953* 8 p p .
H i l l , W a lte r, "A d d ress d e l i v e r e d to F e d e r a tio n o f B r i t i s h
I n d u s t r i e s ," I n t e r n a t i o n a l Bank f o r R e c o n s tru c t io n and
D evelopm ent. London: A p r il 27* 1953* 7 p p .
I n d e n tu r e o f A ssignm ent b etw een th e G overnm ent o f I r a q and
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent.
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A r t i c l e s o f A greem ent. W ashington, B .C . 36 p p .
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A nnual R e p o rt. W ashington, D.G. 1 *8 p p .
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a t Work. W ash in g to n , D .G .: J u ly 2 0 , 195^* 35 p p .
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D evelopm ent B o a rd . B aghdad: G overnm ent P r e s s , 1951*
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I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent.
W ashington, D .C .; P re s s o f Byron S. Adams, June 1 5 ,
1 9 5 0 . kZ p p .
Loan A greem ent (G ra in S to ra g e P r o je c t) b etw e en th e R e p u b lic
o f Turkey an d I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
D evelopm ent, J u l y 7 , 1 9 5 0 . 56 p p .
Loan A greem ent ( P o r t D evelopm ent and C o n s tr u c tio n P r o j e c t s )
b etw een th e R e p u b lic o f T urkey and I n t e r n a t i o n a l Bank
f o r R e c o n s tru c tio n and D evelopm ent, J u l y 7 , 1 9 5 0 .
59 PP.
Loan A greem ent b etw een I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n
an d D evelopm ent and th e I n d u s t r i a l D evelopm ent Bank o f
T urkey, O c to b e r 1 9 , 1 9 5 0 . 12 p p .
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T urkey and I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n an d
D evelopm ent, Ju n e 1 8 , 1 9 5 2 . 9 p p .
L oan A greem ent (S econd I n d u s t r i a l D evelopm ent Bank P r o j e c t)
b etw een I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and
D evelopm ent an d th e I n d u s t r i a l D evelopm ent Bank o f
T u rk ey , S ep tem b er 1 0 , 1 9 5 3 . 16 p p .
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N a tio n s B u l l e t i n , Volume IX, J u ly 1 - December 1 5 , 1950*
757 p p .
P r o j e c t Agreem ent (G rain S to ra g e P r o je c t) betw een I n t e r
n a t io n a l Bank f o r R e c o n s tru c tio n and D evelopm ent and
T oprak M a h s u lle ri O f ls e , J u ly 7 , 1 9 5 0 . 6 p p .
P r o j e c t Funds A greem ent b etw een th e G overnm ent o f I r a q and
N a tio n a l Bank o f I r a q an d I n t e r n a t i o n a l Bank f o r
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t i o n — H oover Dam. U. 3 . Governm ent P r i n t i n g O f f ic e ,
n . d . , n .p .
E. PRESS RELEASES
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n an d D evelopm ent.
W ash in g to n , D. C .: F o r th e P r e s s , P r e s s R e le a s e Ho. 190,
Ju n e 5» 1 9 5 0 . 2 p p .
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent.
W ashington, D .O .: F o r th e P r e s s , P r e s s R e le a s e Ho. 192,
J u l y 15» 1950. 6 p p .
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n an d D evelopm ent.
W ash in g to n , D .C .; F o r th e P r e s s , P r e s s R e le a s e Ho. 19**,
J u l y 1 7 , 1 9 5 0 . 7 p p .
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent.
W ash in g to n , D .O .: F o r th e P r e s s , P r e s s R e le a se Ho. 219,
O cto b er 19# 1 9 5 0 . 6 p p .
I n t e r n a t i o n a l Bank f o r R e c o n s tru c tio n and D evelopm ent.
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Asset Metadata

Creator Shakarji, Nima Jawad (author)

Core Title International Bank for Reconstruction and Development and the Iraqi Development Board

Degree Master of Arts

Degree Program Economics

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag economics, general,Middle Eastern Studies,OAI-PMH Harvest,political science, international relations

Language English

Contributor Digitized by ProQuest (provenance)

Advisor Garis, Roy L. (committee chair), Anderson, William H. (committee member), Neuner, Edward, Jr. (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c20-443649

Unique identifier UC11264123

Identifier EP44740.pdf (filename),usctheses-c20-443649 (legacy record id)

Legacy Identifier EP44740.pdf

Dmrecord 443649

Document Type Thesis

Rights Shakarji, Nima Jawad

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA