LIBRARY ANNEX M2 HC 467 7, ic ALBERT R. MANN LIBRARY NEW YORK STATE COLLEGES OF AGRICULTURE AND Home ECONOMICS TORNEOS AT CORNELL UNIVERSITY Date Due AM027539 Apr13'53) May 4:53 May 19:53 Jul3053L. JUL 11 12 NOV 1 1057 Dec19 Jan 8'583 APR 29 958 1413050 Apr 156 37 DEC , de 18 402 Cornell University Library HC 497.17165 C.2 The Economic development of Iraq :report 1 3 1924 002 123 820 mans || 1 The Economic Development of Iraq UWAIT --- 48• 36° 2 34° ALI ALGHARBI 32 AMARA Pontar sayin LIWA JOURN imman limaks SHATT BASRA LAUL KIASI 30° IRANIAN GULF t The Economic Development of IRAQ Report of a Mission organized by the International Bank for Reconstruction and Development at the request of the Government of Iraq. published for INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT by THE JOHNS HOPKINS PRESS 1952 H? 17 I 7 T 65 C 2 181(80 THE JOHNS HOPKINS PRESS • BALTIMORE 18 GEOFFREY CUMBERLEGE, LONDON OXFORD UNIVERSITY PRESS THE MISSION IVAR Rooth Chief of Mission JOHN C. DE WILDE Chief Economist JEAN R. DE FARGUES Adviser on Irrigation, Flood Control and Drainage CARL FLESHER Adviser on Industry and Power E. R. HONDELINK Adviser on Transportation LUTHER G. JONES Agronomist ANTONIO KAYANAN Adviser on Community Planning and Housing BENJAMIN B. KING Economist MIROSLAV A. KRIZ Adviser on Public Finance, Money and Banking ALBERT LORENZEN Adviser on Public Health C. H. J. MALIEPAARD Agricultural Economist K. G. SAIYIDAIN Adviser on Education C. W. SCHULLER Adviser on Public Administration T. THRELKELD Adviser on Animal Husbandry EUGENE TROY Administrative Assistant Rose DILIBERTO EUNICE O. Dorey Secretaries V a. C/ INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT WASHINGTON 25, D. C. OFFICE OF THE PRESIDENT February 11, 1952 His Excellency Nuri Al Said Prime Minister Baghdad, Iraq My dear Mr. Prime Minister: I take pleasure in transmitting herewith the Report of the Mission to Iraq, organized by the International Bank for Recon- struction and Development at the request of the Government of Iraq. The Bank hopes that the Report will contribute to an under- standing and solution of Iraq's development problems and that it will be widely disseminated and discussed. You will understand, of course, that since the Executive Directors and the management of the Bank have not reviewed the Mission recommendations in detail, they are transmitted to you as the views of the Mission rather than positive recommendations of the Bank. We believe, however, that the Mission's Report deserves serious consideration and can be of substantial value in working out a development pro- gram and in framing the general economic policies relating thereto. The Bank will follow with interest the action taken in con- nection with the Report. The Bank will be prepared, at the request of the Government of Iraq, to discuss any questions that might emerge from the study of the Report and to consider how the Bank can best help in the execution of the development program. It is my sincere hope that the Report may be of positive and lasting benefit to Iraq. Sincerely yours, Eupen R Black vi 3200 ROWLAND PLACE, N.W. WASHINGTON, D. C. February 8, 1952 The Honorable Eugene R. Black, President International Bank for Reconstruction and Development Washington, D. C. Dear Mr. Black: It gives me great pleasure to submit herewith the Report of the Mission to Iraq, organized by the International Bank at the request of the Government of Iraq. As you know, the conclusions and recommendations contained in the Report are based on studies made by the Mission in Iraq during the spring of 1951. On behalf of the Mission, I would like to express our apprecia- tion for the friendly cooperation which the Mission received from officials of the Iraq Government at every level and from Iraqi citizens in every walk of life. Without their generous assistance our task could not have been accomplished. I am personally most grateful for the keen interest and whole- hearted devotion which the individual members of the Mission brought to their work. They were at all times energetic and enter- prising in the pursuit of their special studies. I am especially indebted to Mr. John C. de Wilde, my deputy, who was of invalu- able assistance in the field and who, with the able collaboration of Mr. Benjamin B. King, carried so much of the burden of prepar- ing the Report following our return. A word of appreciation is also due Miss Maxine MacKenzie for her untiring work in typing the manuscript of the Report. It is the sincere hope of the Mission that the Report will con- tribute to the further development of the economy of Iraq and to a rise in the standard of living of its people. Sincerely yours, La Rooth vii PREFACE On October 10, 1950, the Government of Iraq officially requested the International Bank for Reconstruction and Develop- ment to send a mission to Iraq to undertake a general review of the country's economic potentialities and make recommendations for a development program. After an exchange of views it was agreed that a mission would be sent with the following terms of reference: "The Mission will be expected to undertake a general review of Iraq's economic potentialities and to submit recommenda- tions designed to assist the Government of Iraq to formulate a long-term program for the further development of the country's productive resources. Specifically, the report of the Mission is to include recommendations concerning : (1) investment priorities as among different sectors of the Iraqi economy and as among types of undertakings within each important sector; (2) the approximate rate of investment which can appro- priately be undertaken without inflationary or other disruptive effects; (3) measures apart from capital investment which appear necessary or desirable for improving and increasing production; (4) economic and fiscal policies which may be important to accelerate the pace of Iraq's development; and (5) governmental organization and practices having an important effect on development.” A number of United Nations agencies cooperated in the selec- tion of the personnel of the Mission. The agricultural economist, the agronomist and the expert on animal husbandry were nomi- nated by the Food and Agriculture Organization of the United Nations, which also undertook to pay a portion of their salaries ix and expenses. The World Health Organization and the United Nations Educational Scientific and Cultural Organization nomi- nated the specialists in health and education, respectively. The Mission arrived in Iraq on February 25, 1951, and the last members left the country on May 27, 1951. During this period members of the Mission travelled widely about the country in order to study conditions and problems at first hand. The Mission worked generally under the auspices of the Development Board, whose members and staff provided valuable assistance. The Principal Liaison Officer to the Mission, Mr. Naim Bashoo, greatly facili- tated the Mission's work. In the course of its work, the Mission also drew on the resources of many other government departments and agencies whose cooperation was generously given. The Mis- sion takes this opportunity to express its gratitude to the many people both in public and in private life who gave freely of their time and effort to help the Mission. In the following report the Mission submits a series of recom- mendations over a broad field. In making these recommendations the Mission has taken into account the Development Board's five- year program without, however, attempting to arrive at a judg- ment on every one of the projects included in this program. The many conclusions and recommendations of the Mission may well be subject to modification in the light of additional information or of future developments. While the Mission enjoyed generous cooperation in obtaining data essential to its work, it was inevitably handicapped to some extent by the same lack of adequate, reliable information which is generally encountered in varying degrees in all underdeveloped countries. For example, the absence of depend- able data on agricultural and livestock yields and on the location, extent and quality of cultivable but idle land made it difficult to assess the impact of various measures in the field of irrigation, drainage and agriculture. Similarly, lack of statistical data has made it difficult to determine, except in general terms, the reper- cussions which increased public expenditures might have on pro- duction, incomes, consumption and imports. The Mission does not believe, however, that these factors significantly affect the validity of its recommendations. x The Mission's report consists of two parts. The first part con- tains the major findings and recommendations of the Mission to which are attached appendices : one, listing the Mission's recom- mendations, one, sumarizing the Mission's suggestions for technical assistance; and a third on statistical organization. The second part consists of a series of monographs dealing with particular subjects. The first monograph is concerned with the basic factors and condi- tions in the economy of Iraq which the Mission has considered in framing its recommendations. The others set forth in greater detail the Mission's views on food control, irrigation and drainage; agriculture and animal husbandry; industry; transport and com- munications ; public health ; education; and community planning and housing xi | 1 | TABLE CONTENTS OF Part I Page I. INTRODUCTION 1 .......... II. AGRICULTURE Existing Conditions Expansion of Area under Cultivation: Irrigation The Rain-fed Zone ......... Settlement of New Land Improvement in Productivity 1. Drainage 2. Tools and Draft Animals 3. Soil-building and Forage Crops : Fertilizers 4. Livestock Improvement ..... 5. Research and Education : Incentives...... Tobacco and the Tobacco Monopoly The Introduction of Sugar ...... Production Credit and Marketing Forestry Establishment of a Ministry of Agriculture III. INDUSTRY Petroleum and Refining Expansion of Old Industries Establishment of New Industries Financing of Industrial Development Dangers of Excessive Protection Government Organization for Industry Labor and Vocational Education 4 4 7 12 13 17 17 18 21 22 23 25 28 29 32 32 33 34 35 36 38 40 41 41 43 44 IV. TRANSPORT AND COMMUNICATIONS The Port The Railways Air Transport and Inland Navigation Roads and Road Transport Communications ......... 44 46 47 48 V. PUBLIC HEALTH Prevention of Disease Curative Services Organization of Public Health Administration.... VI. COMMUNITY PLANNING AND FACILITIES Need for Community Planning 49 50 52 54 55 56 xiii Page 57 57 59 60 Housing Developments Establishment of a Housing Authority Self-help in Housing Water and Electricity Supply VII. EDUCATION ........ Technical Schooling Introduction of Compulsory Primary Education Revisions of the School Curriculum .... Intermediate and Secondary Education .... Adult Education Administration Training Abroad VIII. PROBLEMS OF EXECUTION Financing the Program Obstacles to Development Improvements in Public Administration Technical Assistance Skilled Labor .... Foreign Supplies The Problem of Priorities 62 63 63 65 68 68 70 71 72 74 76 77 80 83 84 85 IX. IMPACT OF THE PROGRAM Effect on Incomes and Prices Tax Reform X. CONCLUSION 87 90 95 96 Appendices List of the Mission's Recommendations.... Suggestions for Technical Assistance....... Statistical Organization 103 112 114 Part II Annex A. Basic FactORS AND CONDITIONS....... I. The Regions II. The People ... III. The Standard of Living IV. Natural Resources V. Production VI. Transport VII. Money and Banking Page 123 123 126 131 136 145 151 152 xiv Annex Page 155 168 183 183 193 203 206 211 VIII. Domestic and Foreign Trade and the Balance of Payments IX. Government and the Economy B. FLOOD CONTROL, IRRIGATION AND DRAINAGE........ I. Water Storage II. Irrigation Works III. Drainage IV. Operation and Maintenance V. Costs of the Program C. AGRICULTURE AND ANIMAL HUSBANDRY I. Introduction II. Diversification of Production III. Observations on Existing Crops IV. Improved Methods of Cultivation V. Control of Pests and Diseases VI. Improvement in Livestock and Livestock Products VII. Education and Research ......... VIII. Use of Incentives ... IX. Agricultural Credit X. Cooperatives XI. Storage Facilities and Credit XII. Forestry XIII. Settlement of New Land XIV. Establishment of a Ministry of Agriculture and Land Use ...... 217 217 219 222 233 239 243 251 258 259 261 263 266 267 272 277 277 279 294 299 D. INDUSTRY 1. Iraq's Potential for Industrial Development II. Possibilities for Industrial Development.... III. State Assistance to Industry.............. IV. Other Suggestions for the Improvement of Industry E. TRANSPORT AND COMMUNICATIONS I. Ports II. Maritime Shipping III. Inland Water Transport IV. Railways V. Roads VI. Airports VII. Air Transport VIII. Post, Telegraph, Telephone, Radio Communications IX. Pipelines 305 307 312 312 314 327 334 335 337 340 XV Annex Page 340 341 342 344 346 351 351 355 362 369 374 X. Surveys XI. General Observations XII. Projected Cost of Proposed Programs Appendices Additional Railway Projects............... Notes on Conversion from Meter to Standard Gauge F. PUBLIC HEALTH I. Introduction II. The Curative Services III. The Preventive Services IV. Endemic Disease Prevention V. Organization of Health Services.. G. EDUCATION I. Introduction II. Introduction of Compulsory Primary Education III. Provision of Fundamental Education for Adults IV. Agricultural and Technical Education...... V. Administration VI. Conclusion H. COMMUNITY PLANNING AND COMMUNITY FaciliTIES I. Introduction II. Rural Communities III. Urban Communities IV. Housing V. Public Utilities 385 385 387 405 417 421 423 427 427 431 440 451 457 LIST OF TABLES Page 73 129 137 Estimated Outlay of Development Program..... Nonagricultural Labor Force....... ....... Cultivable Land, Cropped Land and Land in Agricultural Use .... Land Classified According to Types of Tenure by Cadastral Survey .... Distribution of Private Landholdings According to Cadastral Survey 140 142 xvi Page 146 147 149 151 155 156 157 157 159 166 168 171 172 172 175 177 ........ Estimated Area and Production of Principal Crops.............. Estimate of Livestock Population 1949-50............ Estimated Industrial Employment.......... Production of Petroleum and Refined Products........ Import Licenses : 1951 ............. Imports into Iraq (by value). Imports (excluding oil company imports for their own use) Imports of Textiles, Sugar and Tea (by quantity)............... Official Exchange Transactions—1949 and 1950............ Principal Exports Merchandise Trade Budgets of the Government and Principal Government Enterprises Government Debt Some Government Outlays by Type.... Composition of Government Receipts... Land Classified According to Types of Tenure by Cadastral Survey up to February 8, 1951- Cultivable Land Land Classified According to Types of Tenure by Cadastral Survey up to February 8, 1951- Uncultivable Land Land Classified According to Types of Tenure by Cadastral Survey up to February 8, 1951—Total, Cultivable and Úncultivable Land Monthly Statements of the National Bank of Iraq................ Consolidated Statement of Assets and Liabilities of Five Commercial Banks Expenditures Projected by the Development Board............. Area Within Irrigation Systems .... Mean Monthly Discharges of the Euphrates and the Tigris Number and Horsepower of Irrigation Pumps as of March 1, 1950 .... Salinity of the Euphrates and the Tigris......... Expenditures of the Directorate General of Irrigation.......... Estimated Cost of the Program (Irrigation, etc.)............... Licensing and Purchasing Operations of the Tobacco Monopoly Cash and Accounting Returns of the Tobacco Monopoly...... 178 179 180 181 182 194 212 213 214 215 216 228 230 xvii Page 275 Agricultural Machinery Administration Budget for 1950 (actual results) .... Agricultural Machinery Administration Budget for 1951 (estimates) Operations of the Port of Basra.... Port of Basra Budget........... Fao Bar Dredging Scheme Budget.. Traffic on State Railways........ Railway Finance Registered Motor Vehicles. Budget Summary for 1951-52.......... Airways Traffic Airways Budget Financial Accounts of PTT....... Cost of Transport and Communications Programs... Hospitals, Hospital Beds, Dispensaries and Doctors........... Number of Visits to Health Institutions for Treatment..... Classification of Hospitals in 1949................ The Chief Infectious Diseases Treated at all Health Institutions Cases of Eye Diseases....... Treatments for Malaria as Percentage of Total Treatments at Health Institutions (By Provinces) Treatments for Malaria as Percentage of Total Treatments at Health Institutions (By Years) Incidence of Schistosomiasis.... Cases of Schistosomiasis Treated....... Forms of Tuberculosis Treated at all Institutions... Projected Number and Recurring Costs of Centers of Fundamental Education .... Projected Student Enrollment Under the Compulsory Primary Education Program: 1956-1968.... Projected Student Enrollment in Teachers' Training Colleges : 1953-1957 Note: Totals in tables do not necessarily add up because of rounding. 276 308 309 310 315 316 330 333 336 336 339 342 377 377 378 379 380 380 381 382 382 383 416 425 426 xviii MAPS I. Political Divisions II. Irrigation III. Transport System ..........frontispiece ..after page 8 ....after page 44 FIGURES Page Hydrographs of the Tigris and Euphrates Rivers.... 185 Revised Layout Baghdad Railways & Roads in New Town Plan .......after page 342 Baghdad New Development—Simplified Stage I........after page 342 Dujaila Land Settlement Scheme.......... 138-9 xix 1. Introduction Iraq possesses impressive potentialities for economic develop- ment. With a total population of about 5,000,000 and an area of 168,400 square miles, Iraq is sparsely populated in relation to its resources. Although all but a relatively narrow belt in the north and northeast has insufficient rainfall to sustain agriculture, the country's twin river systems—the Tigris and Euphrates can pro- vide large amounts of water for irrigation. Much of its soil is inherently fertile and with ample water, manpower and implements, the area under cultivation might be almost tripled. In oil, Iraq possesses not only a source of foreign exchange but also a cheap source of power and raw materials essential to the development of industry, agriculture and transportation; and it may have other mineral resources susceptible of commercial exploitation. There is little doubt that the country can ultimately maintain a much larger population on a considerably higher standard of living. As yet, however, this economic potential is in sharp contrast to the poverty prevailing in Iraq. The standard of living of the people is extremely low. Income per capita is probably at most ID 30.1 Almost 90 percent of the population are illiterate and many are subject to debilitating diseases such as malaria, hook- worm and bilharzia. Housing and sanitation are for the most part primitive. The fundamental reasons for these conditions are low output and low productivity. Most of the manpower on the land is underemployed for a large part of the year, and considerable unem- ployment exists in the major cities. Vast tracts of land await reclamation and irrigation before they can be used. Much of the available water is wasted owing to lack of storage and regulation of flow. In the spring disastrous floods often inundate large areas; and in the fall water is acutely short. Agricultural output is hampered not only by the inadequate and irregular supply of water, but also by the progressive salination of the soil in the irrigated areas. Agricultural techniques are primitive, the number and quality of draft animals are inadequate and there is insufficient equipment. Industry is little developed. Although perhaps as many 1 One Iraqi dinar equals £1 or $2.80. 1 2 THE ECONOMIC DEVELOPMENT OF IRAQ as 60,000 people are engaged in industrial production (other than oil), virtually all of these are employed in small undertakings where the work is largely done by hand and productivity is accordingly quite low. Probably only about 2,000 are working in what might be characterized as modern industrial plants. Fortunately prospective increases in government revenues from oil now make it possible for the government to undertake a large-scale program for the development of the country. Past investments in the oil industry will in the future yield large divi- dends in the form of a rapidly increasing production of petroleum. In accordance with an agreement reached in August 1951, sub- ject to ratification by Parliament, the three internationally-owned oil companies operating in Iraq have undertaken to raise oil output, which amounted to only about six million tons in 1950, to 30 mil- lion tons per year by the end of 1955 and to turn over to the Iraqi government half of the profits before the deduction of taxes. On this basis it is anticipated that, over the next five years, the govern- men may receive net revenues amounting to as much as 214 mil- lion dinars from oil alone. Under the terms of a law passed in 1950 these revenues will be available to finance development. They will be assigned to the Development Board, an autonomous agency established in 1950 to ensure greater continuity in the planning and implementation of development programs. In the past, financial stringencies have severely limited public expenditures. The government has often had difficulty in making both ends meet. Severe economy has been the rule. Development outlays had to be kept small; government salaries were not raised in accordance with the increasing cost of living; and local adminis- tration was starved of funds. In the future the situation will be reversed. The principal task will be to find ways and means of spending rapidly increasing revenues in a manner which will con- tribute most effectively to the permanent development of the country. It is with this task in view that the Mission has drawn up its recommendations. Any program for realizing the economic potentialities of the country should be broad in conception and well balanced. Invest- ment outlays in dams and irrigation works, transport facilities and industrial plants must be complemented by increased expenditures INTRODUCTION 3 of a recurrent nature on agriculture, health, education and other significant activities. In some cases expenditures for these purposes will be of even greater importance in improving productivity and conditions of life than large capital projects. The program should not concentrate on investment in new irrigation works while con- tinuing to neglect, as in the past, maintenance of those works already in existence. It must not provide for new schools and hospitals without considering the need for funds and training facilities to staff these and already existing institutions. There must be a proper interrelationship between the development of industry and agriculture and of agriculture and irrigation; and the develop- ment of transport and power facilities will need to be geared to that of production. A balance should also be maintained between pro- jects and measures which will be effective in raising standards of living in the longer run and those which can be expected to yield benefits in the more immediate future. One reason why the longer- run measures are of vital importance is that the population will probably increase rapidly as soon as there is a substantial improve- ment in health conditions. At the same time, there may well be little improvement in the condition of the population if current development is limited, for instance, to making more land and water available without attempting the long and difficult task of teaching the people how to use them more efficiently. In this connection the critical importance of education should not be underestimated. Improvement in the quality of manpower is vital to government, agriculture and industry. There is little point in increasing the means of production unless people can learn how to make better use of the resources available to them. Funda- mental and widespread knowledge of the means to higher produc- tion, better health and hygiene are often more important than capi- tal investments. The dissemination of practical knowledge, and of literacy as a tool for acquiring this knowledge, is essential in the long run to an improvement in production and living standards. Attention should be focussed not only on the content of the development program but also on the means for carrying it out. The achievement of development outlays commensurate with the expected rise in oil revenues represents an immensely difficult task. It can only be accomplished if full advantage is taken of the techni- 4 THE ECONOMIC DEVELOPMENT OF IRAQ cal resources of other countries. It will be noted throughout this report that the Mission has made numerous recommendations for the procurement of foreign technical assistance. These recommen- dations are in no sense a disparagement of the talent and skills now available in Iraq. They represent rather a recognition that a country whose development has been severely handicapped by limited financial resources in the past cannot now suddenly expect to launch a development program involving rapid expansion in virtually every field without availing itself of the many opportuni- ties to obtain technical help from abroad. II. Agriculture Any development program for Iraq must obviously put pri- mary emphasis on agriculture. Over 60 percent of the population is engaged in agriculture, and both industry and commerce depend in turn largely upon farming and animal husbandry. Moreover, large increases in output can be realized both by raising the pro- ductivity of livestock and farm land already in use and by bringing under cultivation large areas presently idle. Existing Conditions Agriculture in Iraq is devoted largely to the cultivation of winter crops. Because of the lack of rain in the summer, during that season crops can be grown only under irrigation. In the rain- fed zone of the North, summer crops can be grown only on a moderate scale in small irrigated areas. In the irrigated zone of central and southern Iraq the limited water supply restricts the area devoted to summer crops to only about one quarter of that grown to winter crops. Barley and wheat are the only significant winter crops, while rice and, more recently, cotton are the principal summer crops. The area sown to sesame, corn, millet and grain sorghum is comparatively insignificant. Tobacco assumes some importance in the mountainous areas of the North. Fruit and vegetables are quite important. Iraq is the world's principal pro- ducer and exporter of dates; excellent citrus fruit is grown, partic- ularly in the Diyala Valley in east-central Iraq, for domestic con- AGRICULTURE 5 sumption; and other fruits and nuts are cultivated, nainly in the North. Livestock raising is an adjunct to agriculture rather than an integral part of it. Sheep and goats predominate because they thrive despite poor grazing and feeding. Sheep and goats, as well as camels, are kept primarily by pastoral nomads who probably num- ber well over 200,000. Cattle and water buffaloes are the livestock of the settled agricultural population. Many peasants, however, have no livestock at all except for a draft animal or two. Livestock are left to forage for themselves, with only some supplementary feeding with straw and perhaps barley in the winter. Only live- stock in and around the cities are systematically fed. Crop yields are generally low. The water supply is frequently inadaquate. Agricultural methods have on the whole remained unchanged for centuries. Little or no animal manure or fertilizer is applied to the soil, animal dung being used largely for fuel. Crop rotation is wholly inadequate and makes little or no provision for soil-building crops. Salinity, attributable to poor drainage, has materially lowered the productivity of land in the irrigation zone. Owing to insufficient and poor draft animals and lack of proper equipment, the soil is often poorly prepared, and weeds detract from the yields. Up to half of the winter crop area is left fallow as a means of restoring fertility, but since the land is generally allowed to go up in weeds to afford grazing for animals, the efficacy of the fallow system is limited. The productivity of live- stock is also low, primarily because of inadequate feeding, but also because of poor breeding, disease and insufficient shelter. Except for some rather limited areas in various parts of Iraq and a promising settlement in the Dujaila district of south-central Iraq, the country is almost wholly devoid of peasant proprietors. The ownership of cultivated lands is largely in the hands of sheikhs and urban proprietors who entrust the actual cultivation in small parcels to sharecroppers. These sharecroppers have neither the equipment nor the knowledge to increase production and for the most part eke out a bare subsistence. The land assigned to the 2 According to the cadastral survey which is half completed, 67.1 percent of the privately-owned land is in units exceeding 1,000 donums. (One donum equals 0.25 hectares or 0.617761 acres.) 6 THE ECONOMIC DEVELOPMENT OF IRAQ fellah or peasant generally changes from year to year so that the cultivator has virtually no incentive to improve it. Moreover, the sharecropping system discourages the cultivation of animal fodder crops since the customary apportionment of shares between land- lord and tenant does not lend itself readily to such crops. Most of the landowners themselves show little interest in improving agri- culture. Enjoying a large share of the crop with the expenditure of little or no effort on their part, they have little incentive to raise output. In recent years, however, an increasing number of land- lords have been displaying a direct interest in improving crops and diversifying production. Some of them have been instrumental in raising production by installing pumps for irrigation, introducing new and more remunerative crops such as cotton, and investing in agricultural machinery. The depressed economic condition of the fellah or share- cropper undoubtedly retards progress. It undermines the health and vigor of the rural population, limits the market for industrial products and may in the long run jeopardize the stability of the social order. The sharecropper's plight is attributable both to his poor economic bargaining position and to the low productivity of agriculture. In the irrigation zone the fellah generally gets only half of the crop even though the state has provided the irrigation works; and his share falls substantially below this percentage when- ever the land is irrigated by privately-owned pumps or the land- lord supplies seed, draft animals or machinery. In a country where capital is scarce in relation to manpower, the ability to provide the means of production-land, seed, animals and machinery-almost invariably also carries with it the ability to exact a high proportion of the return. In Iraq this is reinforced by a law which forbids the sharecropper to leave the land as long as he is indebted to his landlord, which is generally the case. In the long run the share- cropping system could be made quite tolerable if the productivity of the land were raised; and the economic bargaining power of the sharecropper could be increased by giving him access to the means of production—seeds, animals and implements-on more favorable terms through such institutions as cooperatives. In the shorter run, however, the sharecropper's position is likely to improve only as the landowner takes steps to improve his lot in order to keep him AGRICULTURE 7 on the land. There is apt to be increasing pressure on the land- owner to take such steps as a result of the growing opportunities for alternative employment created by a large increase in public expenditures on development, the expansion of industry and the opening of state lands to settlement. In fact, unless the share- cropper's status is improved, there is a great danger that there will be a continued flight of labor from the land, impairing the country's agricultural production. The government itself has made only a modest contribution to the advancement of agriculture. The Directorate-General of Agriculture is only a subordinate department in the Ministry of Economics and has been severely handicapped by lack of funds and a shortage of competent agricultural officers. While it has had some success in combatting pests and diseases and in the extension of such crops as cotton and citrus fruit, too little attention has been devoted to practical research, and almost no field work has been carried out to assist cultivators in improving their crops and methods of cultivation. The expenditures of the Agriculture and Veterinary Departments were actually cut from ID 1,160,000 in 1948-49 to ID 540,000 in 1950-51 and, at the latter figure, repre- sented only 1.8 percent of the total budget outlay. Expenditures on both agriculture and irrigation 1950-51 amounted to only 6.7 per- cent of the total. Plans for the future now envisage large water storage and irrigation projects to provide more water for land already in use and to increase the area under cultivation and provide for the settlement of new land. These plans are in general quite sound. They will be largely ineffective, however, unless at the same time more stress is placed on arresting the deterioration of land already in use by extensive drainage schemes and on raising the produc- tivity of agriculture by other means. The establishment of an efficient extension service and the provision of incentives to im- prove methods of cultivation are particularly important in this connection. Expansion of Area under Cultivation: Irrigation Extension of the area of land under cultivation is vitally important not only to an increase in production, but, above all, as 8 THE ECONOMIC DEVELOPMENT OF IRAQ a means of establishing a class of independent peasant landowners capable of earning a decent livelihood. Official estimates indicate that the amount of "cultivable” land is almost three times that under cultivation. The criteria used in determining the cultivability of land have, however, probably varied widely. Thus part of the cultivable land in the so-called rain-fed zone in the north may well be in areas sub-marginal from the standpoint of rainfall. As soon as possible the government should classify the cultivable land which is not presently cultivated by types of soil and determine what measures are required in each instance to put the land under culti- vation, e.g. whether the land must be reclaimed by drainage and whether, if the land needs to be irrigated, the irrigation should be by pump or by flow. Most of the area which can be put under cultivation will require water, yet, under current conditions, the supply of water does not even permit the effective irrigation of the area already in use. Projects for the storage of the excess water which pours down the Tigris and Euphrates rivers during the spring flood season and frequently unloosens destructive floods are clearly essential. The government has already initiated work on the Habbaniya Lake storage scheme for the Euphrates River and has let a contract for the first stage of the Wadi Tharthar flood control project on the Tigris River. The program of the Development Board also makes provision for storage dams on two tributaries of the Tigris, the Lesser Zab and the Diyala River. While the Derbend-i-Khan dam on the Diyala River will provide primarily for the more effective irrigation of land already under cultivation, completion of the Dokan dam on the Lesser Zab and of the Habbaniya Lake project should provide enough water to extend the cultivable area under irrigation from about 11 million donums at present to approximately 15 million. The Mission fully endorses these projects (see map), with the proviso that borings prove the soundness of the Dokan dam site. At the same time it recommends that they be complemented by the construction at an early date of the Bekhme dam on the Greater Zab River for which no provision has yet been made. This dam would compensate for the diversion of the Lesser Zab water from the Tigris by the Dokan dam. Without the Bekhme dam the EXISTING FLOW PUMP MARSH HIGH DI EXISTII PROPO: PROPOS EXISTIN IRR | | AGRICULTURE 9 already existing water shortage in the Kut and Amara regions in southern Iraq would become more acute. Its construction is all the more urgent because the Wadi Tharthar reservoir will not supply supplementary water for the Tigris for another decade at best. In fact, some geologists believe that loss of water in the reservoir may be such that little or no water for irrigation will ever be furnished by the Wadi Tharthar. Should the Wadi Tharthar ultimately prove able to supply water for irrigation, the water impounded by the Bekhme dam could be utilized for the irrigation of the Erbil plain in northern Iraq. Completion of the final stage of the Habbaniya project calls for the storage in the Abu Dibis and related depressions of water in excess of the expanded capacity of Habbaniya Lake and, in theory, would also permit a substantial extension of irrigation in the Euphrates Valley. Further study is required before beginning this stage of that project, however, because there is great danger that the salt in the depression may make the water unfit for irrigation, or at least dangerous to use, until after the completion of drainage facilities for all the areas irrigated from the Euphrates. At the same time the technical possibility of providing alternative storage capacity through the erection of a dam on the upper Euphrates near Ana should be explored. The irrigation projects outlined above necessitate agreements with Syria, Turkey and Iran regarding the conservation and utili- zation of the water of the Euphrates and the Tigris and their tribu- taries. An agreement with Syria is particularly urgent, since the extensive irrigation development possible in that country might adversely affect Iraq. With Turkey and Iran it is important to conclude understandings for joint afforestation and other water conservation measures in the watershed of the Tigris and its tribu- taries. Afforestation and other anti-erosion measures in the inter- national watersheds of the two rivers will effectively complement the flood-control features of the water storage schemes. In the monograph on irrigation the Mission has given a tenta- tive selection of the irrigation projects which it believes should be initiated to utilize the waters of the new reservoirs. In view of the inadequacy of the information at its disposal, the Mission suggests, however, that its recommendations be reviewed in the light of a 10 THE ECONOMIC DEVELOPMENT OF IRAQ number of factors including (1) the cost and the technical aspects of the irrigation works, (2) the agricultural potentialities of the land affected, (3) the location of the land in relation to the avail- ability of potential settlers, and (4) the ownership of the land. The first three of these need no elaboration. The fourth is important primarily because, provided adequate consideration is given to the first three factors, it would presumably be desirable to give priority to the irrigation of those lands which are clearly part of the state domain and which therefore would be available for distribution to small-holders. Before laying out new irrigation projects the basic premises on which such projects have been designed in the past should, we sug- gest, be re-examined. Hitherto such projects have been laid out on the assumption that half of the area devoted to the cultivation of winter crops would lie fallow annually. The area in summer crops has not been considered since, in the absence of water storage facilities, the amount of water available limited the area that could be devoted to summer cultivation to about 15 to 20 percent of that in winter crops. The fallow system was regarded as necessary to permit the soil to rest and recover its fertility and to enable the land to dry out and the water table to sink, thus minimizing to some extent the danger of salinity. In the future the government will have the opportunity, through organized settlement and development of the new land, to prescribe the use of better systems of crop rotation which will more effectively maintain soil fertility; and the simultaneous installation of drainage facilities, now uni- versally acknowledged to be essential, will prevent salination. At the same time the completion of the large storage projects will presumably permit some control over the distribution of water for winter crops on the one hand and summer crops on the other. Thus it will be desirable to determine, within the limits of flexibility set by the available water supply, the proportion of winter to summer crops which promises the largest overall yield, having regard both to improved crop rotation and to better utilization of manpower on the land. Such a reexamination of the premises on which irri- gation projects have been designed in the past may lead to the con- clusion that the area to be covered by irrigation canals using a given quantity of water can in future planning be reduced. AGRICULTURE 11 Greater attention should also be paid to measures which would insure more economical use of available water, thereby making pos- sible a further expansion of the area under cultivation in the irri- gation zone. Among these are the installation of regulators on the Gharraf canal, for which provision has already been made in the Development Board's program, and more effective regulation of the lower reaches of the Tigris and Euphrates to prevent the dissipa- tion of water into the extensive marshes in the South. Leaks from canals, which are sometimes quite substantial, should be reduced to a minimum, if necessary by lining certain sections of the canals. Above all, the wasteful use of water in irrigation should be arrested. The amount of water used for each crop in Iraq is generally much greater than that in the irrigated areas of other countries. At pres- ent, water is used lavishly over wide areas in an effort to wash accumulating salt from the roots of crops. In the end this only accelerates the progressive salination by raising the water table which brings up and precipitates the salt. The installation of drain- age facilities which will lower the water table will therefore be the most effective means of preventing wastage of water. There is also an urgent need, however, to ascertain through practical experimen- tation, carried out under the joint technical supervision of agri- cultural and irrigation experts, the optimum amount of water re- quired for each crop and to disseminate these findings among the cultivators. The completion of the water storage facilities and irrigation works mentioned above will undoubtedly create some problems of adjustment. In a few places pump-irrigated lands will have to be abandoned as the consequence of new flow-irrigation schemes, and the people affected will require resettlement. In an area of about 750,000 donums the natural flooding of rice lands practised in some districts will presumably no longer be possible, and new methods of rice culture will need to be introduced. Rice patches will have to be terraced to permit the progressive flow of water from one terrace to the next and fertilizers used in the place of silt to replenish the soil; alternatively, new crops may have to be intro- duced. In some cases, partial resettlement of the people affected may need to take place. Even under existing conditions, however, problems of readjustment arise. Natural inundation, for example, 12 THE ECONOMIC DEVELOPMENT OF IRAQ has led to the progressive silting and raising of rice lands, thereby pushing rice culture deeper into the marshes. Finally, the Mission wishes to emphasize the importance of improved operation and maintenance of existing irrigation works. To insure proper functioning of the irrigation system the canals must be equipped with an adequate system of regulator intakes and distributors. Rational distribution of water is often impeded by ancient water rights which insure some landowners a dispropor- tionately large share. In times of scarcity the apportionment of water is often hotly disputed and subject to favoritism. The right of access to water across the lands of other farmers is inadequately insured. A sufficient number of adequately compensated irrigation officials of acknowledged probity is necessary to a fair distribution of water. They should be assisted by local councils of farmers who would gradually learn to approach the problem of equitable distribu- tion in a cooperative spirit. Lack of maintenance has been a serious problem in the past. To facilitate maintenance, irrigation systems should be equipped from the very beginning with such works as roads along canals, canal crossings for people and livestock, water-holes and washing places. To insure adequate operation and maintenance in the future, the Mission recommends that the annual budget of the Irrigation Department, which has averaged only ID 270,000 over the last ten years, should be increased progressively to about ID 1,000,000. The technical supervisory and planning staff also needs to be strengthened. The Rain-fed Zone Except for some areas west-northwest of Kirkuk and the pos- sibility of ultimately irrigating part of the Erbil plain with the water stored behind the Bekhme dam, large-scale irrigation schemes for the North do not appear feasible. Lack of suitable dam sites and topographical difficulties militate against such schemes. Smaller projects, utilizing the water of small streams, springs or wells are possible, however, and these should not be neglected in favor of the more striking, larger schemes. In many parts small streams and springs are already being used, but with direction and stimulus provided by the government these could be improved and many AGRICULTURE 13 more brought into use. The government should take steps to survey the possibilities for small projects and to provide assistance in carrying them out, thus giving aid and security to the farm popu- lation of the North which now feels that its needs have been neglected and overlooked. In general, however, the North will have to remain dependent on rain-fall to sustain its agriculture. There are apparently still considerable rain-fed areas which can be settled and put to the plow. Particular care should be exercised, however, to insure that the areas are not sub-marginal from the standpoint of either rainfall or fertility and that settlers are really available in the North, which is generally more sparsely settled than the central and southern portions of Iraq. For example, the Mission believes that the pros- pect of scanty and uncertain rainfall will probably make it unde- sirable to proceed, except on a very restricted, experimental basis, with the settlement scheme near Balad Sinjar in Mosul province which has been projected by the Agriculture Department. Settlement of New Land In the past much of the vacant land available for an expansion of crop production which ostensibly belonged to the state has fallen into the hands of big landowners. The so-called Land Settlement Law of 1932, which inaugurated a cadastral survey for the purpose of settling the past confusion regarding land titles and systems of tenure, facilitated this process. It permitted the land settlement committees appointed to administer the law to grant titles (so-called lazmah grants) to people who could demonstrate that they had made productive use of land within the previous fifteen years. In practice, it has been possible to obtain title on the presentation of proof that a crop was produced on the land in one year, and the land settlement committees have occasionally accepted even more tenuous proof of cultivation. In this way many sheikhs and other influential persons have managed to obtain title to large tracts of land without any payment whatsoever. Since the cadastral survey is only about half completed, more land may be preempted in this way unless a limit is set on such acquisitions. Land definitely adjudged to be state (miri sirf) property by the land settlement committees has, however, been set aside for 14 THE ECONOMIC DEVELOPMENT OF IRAQ distribution to selected settlers under the terms of a law passed by Parliament in the spring of 1951. This law reflects a growing realization that a class of independent small-holders needs to be created. Settlement areas ranging in size from 2,000 donums in the mountains to 20,000 donums in flow-irrigated land and 80,000 donums in the dry-farming zone are to be established. Units up to 20 donums in mountainous land, 100 donums in flow-irrigated lands, 200 donums in lands irrigated by low-lift pumps and 400 donums in dry-farming lands are to be distributed among farmers, with preference to be accorded to those living in or near the settlement areas. Up to 20 percent of each area may also be allotted to graduates of agricultural schools and former members of the police and army, and up to 25 percent to civil pensioners and unemployed school graduates, provided that the committee responsible for the administration of the whole scheme is convinced of their agri- cultural capabilities. Settlers will be given the opportunity to par- ticipate in the work of preparing each area for settlement. The committee will plan the whole settlement, including the sites of houses and public buildings which are to be constructed in accord- ance with its specifications. The committee will also issue instruc- tions regarding the type and method of cultivation. After ten years farmers who have made good will be granted title to their land without charge, and for a further period of ten years they will not be permitted to alienate their land in any way or to mortgage it except to the state Agricultural Bank. The only exception to this kind of distribution and settlement will be made in the case of state lands which can be irrigated only by high-lift pumps. Such lands may still be leased in tracts up to a maximum of 5,000 donums to a single individual. This law, properly administered, will undoubtedly result in great benefit to Iraq. The Mission urges, however, that the govern- ment insist on the principle that settlers farm their land themselves without resort to sharecroppers. Otherwise there is a danger that a considerable number of minor landlords will be created, thus defeating the fundamental purpose of the scheme. This principle may be jeopardized both by the selection of non-farmers as bene- ficiaries and by the contemplated allotment of excessively large AGRICULTURE 15 plots to single individuals in the pump-irrigated and dry-farming areas. While sympathizing with the desire to provide in some way for unemployed school graduates and retired civil servants, army and police personnel, the Mission believes there is serious danger that these types of beneficiaries will tend to become landlords who will entrust the farming of their plots to others. The success of the settlement schemes may easily be endangered if the land falls into the hands of absentee landlords or of people with little or no farm- ing experience. In any event there are many farmers in relatively overcrowded rural areas with better claims to the new land. The proposed allotments, particularly in the dry-farming and pump-irrigated areas, may well be too large unless there is assur- ance that the farmers will have access to adequate machinery to till their land. The relatively large allotment in pump-irrigated lands as well as the exemption of lands irrigated by high-lift pumps from distribution to small-holders appear to be based on the assumption that only larger landholders can afford the necessary investment in pumps. In the past when capital was scarce, the installation of pumps was left to merchants and landowners who consequently were able to reap high returns in the form of a large proportion of the resulting agricultural output. Now that the government is assured of ample financial means in the future, it might consider financing the construction of pumping stations and providing pumps at cost to groups of settlers organized into cooperatives which would undertake to operate the pumps and gradually repay the government. Under such conditions the justification for larger allotments of pump-irrigated lands would tend to disappear. The Mission therefore suggests that the government review the size of the allocation to each farmer and that it reserve to itself the right to reassign a portion of the allotment if one farmer should prove incapable of cultivating it. The Mission also makes two other recommendations. The first is that the right of sale after the initial period of 20 years be limited in such a way as to give the government an option to purchase for the purpose of preventing the land from falling into the hands of absentee landlords. The second is that the provision enabling settlers to acquire their land without cost be reconsidered. 16 THE ECONOMIC DEVELOPMENT OF IRAQ The Mission believes that the settlers should, as a matter of general principle, be required to make some payment for the extensive bene- fits received. This is all the more necessary in order not to widen unduly the disparity between the economic status of the favored settlers and that of the great majority of cultivators who will con- tinue to work under much less favorable conditions. Such pay- ments need not be excessively burdensome, since they could be spread over a number of years. The new law will apply on a broad scale the basic principles of the Dujaila land settlement scheme in south-central Iraq. In the period 1946 to 1950, 1,058 farmers were settled there on 100- donum plots allotted from state-owned irrigated land. The Mis- sion was impressed by the results achieved through this scheme. The farmers, who used to be sharecroppers, are conscious of their new-won independence and dignity. By comparison with the fellahin in neighboring areas they appear prosperous and content. Many of them are members of a cooperative—the only one of its kind in Iraq-which owns 10 tractors, two lorries, a flour mill and a club-house. Although the accounts of this cooperative leave much to be desired, its operations are generally along sound lines and indicative of what can be accomplished through state-assisted self- help. The Dujaila scheme is, however, not without defects. Its success as an agricultural venture is jeopardized by the progressive salination of the land because of failure to provide drainage facilities -an omission which should be promptly remedied. The administra- tive staff appears to be excessively large. Small-scale "landlordism” has crept in, since some farmers have brought in others to do a large part of their work on a sharecropping basis. The farmers were settled in a scattered fashion without regard to the need for community life. Most important, aside from insisting on small fruit gardens, the committee in charge of the project has effected no improvement in farming methods. The Department of Agriculture is not even represented on the committee, and there are no agri- cultural experts in the project capable of assisting farmers in rais- ing their standards of cultivation. The improved economic posi- tion of the cultivators in the Dujaila scheme is almost wholly due to the fact that the farmer there has a larger plot of land and does not need to surrender a share of his output to a landlord. In the AGRICULTURE 17 new settlements the government will have a unique opportunity to remedy the shortcomings of the Dujaila project. Improvement in Productivity While expansion of land under cultivation, particularly through large irrigation schemes, is essential in the long run to provide for a growing population and to establish a socially desirable class of smallholders, it should not be undertaken without a simultaneous vigorous campaign to increase the productivity of agriculture and livestock. The temptation to neglect such an effort in favor of striking new irrigation schemes should be resisted. Among the measures upon which this campaign should concentrate are drain- age, the provision of better tools, seeds and draft animals, the intro- duction of soil-building and forage crops, the use of fertilizers, the improvement of livestock, the planting of trees and the establish- ment of an effective extension or advisory service to farmers. 1. Drainage The drainage of existing irrigated lands would make the most important single contribution to increasing the productivity of agriculture. Moreover, it will also have the most immediate effect since it can be carried out by the government while the success of virtually all other measures to raise productivity depends on the necessarily slow process of persuading farmers to abandon age-old methods of cultivation. The Haigh Irrigation Commission, which made an extensive study of irrigation and flood control for the government, estimated a few years ago that about 60 percent of the land irrigated by flow had been seriously affected by salt. The Mission's own inquiries and observations indicate that as much as 20 to 30 percent of culti- vated land has been abandoned over the last few decades because of salt accumulation, while on a large part of the remaining land yields have declined by 20 to 50 percent and even more. In a num- ber of new irrigation projects such as Hawija and Dujaila salting forced abandonment of part of the land within two years after the schemes were initiated. Drainage, almost totally neglected in the past, should therefore be prosecuted with utmost vigor in the future. The main drainage canals for the whole irrigation zone have been projected, but it is now necessary to proceed with detailed 18 THE ECONOMIC DEVELOPMENT OF IRAQ planning and execution. First priority should be given to the drain- age of the areas irrigated by the canals dependent on the Hindiya barrage on the Euphrates. A complete drainage network should be laid out as soon as possible for the Aggar Qub region, where drain- age studies have already been carried out, in order to determine through practical experimentation the most appropriate design and spacing of the subsidiary drainage canals. Prompt attention should also be given to the drainage of the Dujaila area in order to halt the rapid deterioration of the land which may otherwise endanger the success of this important social experiment. Altogether the Mis- sion believes that about ID 7,000,000 should be allotted to drainage over the next five years. This compares with a sum of ID 2,000,000 provided in the initial five-year program of the Development Board. So important is drainage that the Mission recommends that it be given priority over new irrigation schemes whenever a limitation of resources makes it impossible to carry out both simultaneously. Since landowners will benefit greatly from drainage, they might reasonably be required to pay at least some part of the cost. Consideration might therefore be given to the imposition of a levy to pay the cost of subsidiary drainage canals. Construction of such subsidiary canals should not be optional with the landowners because failure to build them across one man's property might deny the benefits of drainage to adjoining properties. 2. Tools and Draft Animals In the recent past much stress has been placed in Iraq on agricultural mechanization. In large parts of the country, particu- larly in the dry-farming zone, natural conditions are undoubtedly favorable to the use of tractors. The use of threshing machines or combines has also been shown to have the advantage of producing a far cleaner grain than that obtained through the customary method of threshing by flaying and the tramping of animals. For a long time to come, however, the great majority of Iraqi farmers will be unable to afford the purchase or rental of power machinery even on deferred payment; and many others will find mechanized farming unprofitable particularly as long as the cost of machinery remains so high in relation to the cost of labor. For most farmers the provision of simple tools as well as more and better draft ani- AGRICULTURE 19 mals offers a more practical answer to their needs at this time. Experience in Iraq shows that tractor plowing may increase yields by 20 to 50 percent, largely through more effective destruction of weeds and partly also through better preparation of the soil. Much the same effect could, however, be achieved through better animal- drawn plows replacing those which now, for the most part, barely scratch the surface and fail to uproot the weeds. Means for the acquisition of such tools and improved draft animals should be created through the organization of cooperatives and the provision of better credit facilities. Mechanization will nevertheless play an increasingly important role in the future, especially as labor becomes more scarce and addi- tional land becomes available for cultivation. Mechanization has already facilitated the expansion of cultivation in the dry-farming areas of Mosul and the new pump-irrigated lands in central Iraq. While certain areas in the irrigation zone are undoubtedly over- populated in relation to land currently available, in other areas, particularly in the rain-fed zone, labor is scarce relative to the supply of land. As development schemes are launched and new land is opened up for settlement, the available manpower on lands already under cultivation may well be reduced. The government will need therefore to take steps to insure that mechanization will keep pace with developing requirements. In the period immediately ahead, however, the government should be mindful of the possi- bility that mechanization initiated by landowners may result in a substantial reduction of the portion of the crop going to share- croppers or in the displacement of sharecroppers before alternative means of employment or settlement become available. Through its control over the importation and distribution of machinery and the extension of credit for the purchase of such machinery, the govern- ment will have the power to influence the direction of mechaniza- tion and thus minimize to some extent possibly adverse social consequences. At present only a small portion of Iraqi agriculture is mecha- nized. Combines and tractors in operation are reported to number 320 and 750 respectively, with about half of the number concen- trated in the provinces of Mosul and Baghdad. Of these, 75 com- bines and 81 tractors are owned by the Agricultural Machinery 20 THE ECONOMIC DEVELOPMENT OF IRAQ Administration, an autonomous agency within the Ministry of Eco- nomics. The AMA rents this machinery to farmers and, in addi- tion, is responsible for testing and demonstrating new machinery, licensing of imports and controlling the distribution of the limited supply of spare parts in order to prevent black-marketing. Some provision for rental of machinery, whether by the government or by private enterprise, will be necessary for some time, partly because it enables farmers to become acquainted with the value of such machinery and partly because many farmers do not have sufficient capital for outright purchase. As long as private. enterprise is incapable of providing this service at reasonable rentals or until cooperatives can be established, continuation of the govern- ment rental service appears essential. On the whole, therefore, the AMA's three-year program to replace and expand its machinery park and to equip repair shops appears desirable despite the obvious drawbacks of government operation. At present, however, the AMA is operating at a substantial loss. In the calendar year 1951, for instance, its rental income will probably not exceed ID 50,000 compared with estimated operating costs, including depreciation, of about ID 150,000. Since the beginning of 1950, when it started operations as a fiscally autonomous agency, it has had to cover its deficits out of the ID 500,000 capital which the government under- took to provide. While the government should probably defray that part of the AMA's expenditures not directly attributable to the rental operations, the overall deficit should be reduced by gradually increasing rental charges. Rental charges on tractors, in particular, appear unduly low and may be depriving private persons of the incentive to purchase tractors either for their own use or for rental to others. Since the overhead costs of the AMA's rental operations will probably always remain rather high and its machinery must be transported over considerable distances, it is important that the government encourage as much as possible private purchase and operation of machinery. The extension of credit for this purpose appears essential. At present, however, the Agricultural Bank cannot lend money on farm equipment partly because it is short of funds and partly because such loans would not afford sufficient security in the absence of any legal requirement to register title AGRICULTURE 21 to machinery. In the future cooperative ownership and operation, especially in the new settlement areas, should be encouraged as one of the best means of extending the use of machinery on a practicable and economical basis. The experience of the Dujaila cooperative, which, owing to low overhead and transport costs, rents machinery to its members at rates lower than those of the AMA and yet is apparently able to cover the cost of depreciation, seems promising in this respect. Lack of repair facilities and spare parts have greatly handi- capped mechanization. The government is seeking to overcome this difficulty both by establishing its own repair shops and by requiring importers to provide repair facilities and maintain mini- mum stocks of spare parts. Such centrally located shops will be available, however, only for major repairs. Since local repair facili- ties are now almost wholly lacking, steps should also be taken to establish a considerable number of small shops equipped to under- take minor repairs. In addition, courses designed to train drivers in elementary maintenance are urgently needed. The cost of mecha- nization will remain discouragingly high unless the life of machinery is prolonged by more adequate maintenance and repair. 3. Soil-building and Forage Crops: Fertilizers The cultivation of soil-building and forage crops is virtually unknown even though the fertility of the soil needs to be replen- ished and an improvement in feed supply would make the greatest single contribution to an increase in the low productivity of live- stock. In the irrigation zone berseem clover, sown in the grain stubble in late summer, would provide a particularly good pasture, soiling and hay crop. In the rain-fed region winter oats and vetch, when cut and cured, would provide a good reserve feed. In the irrigation zone quick-growing crops such as millet could be grown for summer pasture; and more corn, sorghum and legumes such as cowpeas and mungo beans should be cultivated. Little fertilizer is used and animal manure is generally col- lected and dried for use as fuel. With the expanding cultivation of crops such as cotton, the use of fertilizer is becoming more urgent. There is need for soil analysis and extensive experimentation to ascertain the fertilizer requirement and the effect of fertilizer on 22 THE ECONOMIC DEVELOPMENT OF IRAQ yields. As will be indicated later, inorganic fertilizers could proba- bly be produced cheaply in Iraq and organic fertilizers could be produced as by-products of the slaughtering industry. 4. Livestock Improvement The productivity of livestock is extremely low, primarily be- cause of inadequate feed supply. In addition to the production of fodder crops, measures should be taken to improve natural pasture lands, particularly in the northern mountains, which have generally suffered from over-grazing. Reseeding and rotational grazing are necessary. Productivity could be further raised by the establish- ment of shelters, better breeding methods, especially the introduc- tion of new and improved sires and maintenance of stud stations, and by more effective control of parasitic diseases through an increase in the number of veterinarians and the provision of more extensive diagnostic facilities in the provinces. The quality of livestock products could be raised considerably by a number of measures. One of these is an improvement in the practices and more stringent sanitary supervision of abattoirs. Others would be the establishment of a number of wool shearing and grading units under the guidance of an appropriate expert; appointment of a hides and skins expert to serve as general mana- ger of the newly established Hides and Skins Association; and recruitment of an abattoir specialist to train local abattoir super- visors in improved methods of flaying and preserving hides and skins. At present, even the major cities are without a clean, safe milk supply. The supply of milk could be substantially improved by better feeding of livestock, concentration of milking cattle in well- equipped settlements on the outskirts of cities, and central collec- tion, transportation and processing of milk under strict sanitary controls. The possibility of cooperative collection and processing of milk should be explored. Since the nomads and semi-nomads, who may number from 200,000 to 500,000, account for a large proportion of the livestock in the country, particularly sheep and goats, their needs must receive special attention. Measures should be taken, for instance, to provide them with better watering facilities, sheep-dipping stations, AGRICULTURE 23 and trained medical and veterinary assistants to control disease. In the North, livestock shelters would reduce the high mortality in the winter. In the long run, however, livestock raising is likely to become increasingly the preoccupation of settled farmers, particu- larly as the area under cultivation is gradually extended and natural pastures correspondingly restricted. Mixed farming, in which livestock raising based on the production of fodder crops would have its appropriate place, would greatly enhance incomes, especially because it would give more year-around employment to farmers who now, with the concentration on winter crop produc- tion, are underemployed for the greater part of the year. 5. Research and Education: Incentives While is it relatively easy to point out what should be done to improve agriculture and livestock, devising the means to accomplish the improvement is incomparably more difficult. The means avail- able to the state for a direct attack on low productivity are neces- sarily limited. The government can, of course, lay out drainage schemes, make more water available, provide facilities for combat- ting plant and animal diseases and pests, establish livestock shelters, assist in organizing cooperatives, and furnish more ample credit facilities. However, except perhaps in the new settlement areas, the state cannot prescribe better crop rotation, the use of improved seeds, better methods of cultivation and the like. These depend on private initiative which can at best only be stimulated and encour- aged by the government. In some circumstances farmers can be relied upon to seize the initiative, as in the case of cotton where high prices have stimulated a rapid expansion of production. In the main, however, greater productivity depends on the success of efforts to persuade large numbers of landowners and cultivators to change their time-hallowed methods and techniques. For this reason principal reliance will have to be placed on education, sup- ported by practical research and supplemented where feasible by financial incentives provided by the government. First of all, steps should be initiated immediately to organize an effective extension or advisory service to farmers. At present the Department of Agriculture has less than 25 qualified agricul- turists capable of research and educational work, and much of their 24 THE ECONOMIC DEVELOPMENT OF IRAQ attention is devoted to administrative and regulatory tasks. The relatively small number of agricultural officers in the provinces are engaged primarily in the distribution of seed, in the collection of rather inadequate statistics and in administrative tasks. They lack the time, the transport facilities, and, often, the ability to counsel farmers on methods of improving their output. While shortages of trained personnel will prevent the immediate establishment of a full-time extension service, the Mission recommends the early appointment of a director of extension and education whose first responsibility would be the recruitment and training of personnel for such a service. The need is for people well-grounded in practi- cal, general agriculture rather than specialists. The facilities of the secondary agricultural school and the higher agricultural institute at Abu Ghuraib might well be used to train the required people, provided the quality of the staff is improved and the curriculum revised, especially in the direction of giving more practical training in agriculture. It will be impossible, however, to attract properly qualified people to an extension service unless the status of agri- cultural officers in the provinces is considerably raised and their conditions of service, particularly housing and pay, are greatly improved. The effectiveness of such an extension service would be greatly enhanced by the organization of demonstration units on strategically located government and private farms. There, farmers could be brought to see with their own eyes the practical advantages of improved methods of raising livestock, poultry and farm crops. At the same time the extension service might work closely with the public schools in the rural areas and small towns to insure that a knowledge of the rudimentary principles of agriculture is instilled in children at an early age. Rural primary and secondary schools should give agriculture an appropriate place in their curriculum. An extension service must be backed up by sound, practical research which will develop new crops and more productive varie- ties, improved livestock breeds, better methods of cultivation, and more effective control of pests and diseases. At present there are few people engaged in full-time research. Government farms are devoted primarily to the commercial production of seed, serving neither as demonstration farms nor as centers for extensive AGRICULTURE 25 research. The Mission recommends that in the future such farms should be used primarily as experimental stations. Seed for distri- bution to farmers could be produced on land surplus to the needs of the experimental stations or on a contract basis under appropri- ate government supervision on private farms. The Mission sug- gests that immediate steps be taken to secure a research director to coordinate all existing research and to recruit a gradually expand- ing staff of full-time research experts consisting partly of foreigners and partly of Iraqis. These measures will bring about an improvement in agri- culture only very gradually. In the short run they will need to be supplemented by positive financial incentives. Most farmers will probably prove unwilling or unable to invest money or time in the cultivation of fodder crops or the use of fertilizers unless they are convinced through practical experience that such an investment is really worthwhile. In order to induce farmers to experiment them- selves, the government may wish to consider providing free seed for fodder crops and defraying part of the cost of fertilizer, or, alternatively, making a flat money payment per donum to those undertaking to use fertilizers or grow feed. Such incentives should, of course, be offered only as long as is necessary to demonstrate the value of improved methods. The provision of credit for the acquisi- tion of machinery, fertilizers and other means of production will also be helpful in this respect. It has already been pointed out that the existing sharecropping system, coupled with the shifting nature of cultivation, militates against the introduction of soil-building and forage crops. Under present conditions the landlord will find it difficult to compel the fellah to grow such crops unless the fellah is actually paid for doing so. The Mission therefore suggests that the difficulties inherent in the sharecropping system, as well as the advisability of changes in this system, be studied by an expert on land tenure. Tobacco and the Tobacco Monopoly The Mission has paid special attention to tobacco, not only because cultivation of this crop is of considerable importance to the Kurdish farmers of the North, but also because tobacco leaf is 26 THE ECONOMIC DEVELOPMENT OF IRAQ handled by a government monopoly, the operations of which have been highly controversial. The Tobacco Monopoly was established in 1939 in order (1) to improve the quality of tobacco, (2) to assure farmers stable and remunerative prices, and (3) to raise revenue for the govern- ment, although this objective was not explicit and was certainly subordinate to the other two. The Monopoly licenses the area which may be planted to tobacco, buys the tobacco produced thereon at fixed prices set each year and resells it to manufacturers at prices more than twice as high as those it pays. It is generally recognized that the first objective has not been realized, for the quality of tobacco, which was never high, has probably declined still further. Neither the Monopoly nor the Department of Agriculture has had the personnel to assist farmers in improving the varieties or strains of tobacco grown or the methods of cultivating, picking, curing and sorting, all of which leave much to be desired. The Monopoly's rather haphazard and often arbitrary system of grading and its limitation on the amount of tobacco it will buy per licensed donum have discouraged the production of better quality tobacco and the achievement of higher yields. Storage of tobacco in inadequate warehouses contributes further to its deterioration. The second objective appears to have been at least partly realized, at least insofar as farmers have been given remunerative prices for their tobacco and have received a fairly stable income in the last five years. During the war years farmers enjoyed a bonanza since the Monopoly had no effective limitations on output, classified most of the tobacco in top grades and bought it at very high prices. After the war, changes in grading, stricter limitations on output and lower prices inevitably created discontent, although prices were still remunerative and, until recently, the Monopoly continued to buy more tobacco than the licensed output. The wide disparity between the Monopoly's buying and selling prices has continued, however, to put a premium on the illicit growing and marketing of tobacco. Moreover, the merchant has managed to interpose himself to an increasing extent between the grower and the Monopoly because of his ability to advance money on crops, to transport tobacco to distant collection centers and to obtain a AGRICULTURE 27 higher classification for the tobacco than the grower is often able to get. The third objective has undoubtedly been achieved. During the period September 1, 1943 to March 31, 1950 the Monopoly's cash income exceeded its cash expenditures by almost 6.5 million dinars. In fact, contrary to original intentions, revenue would seem to have become the primary objective of the Monopoly. Improvement in the quality of tobacco should be the primary aim in the future. The Mission therefore suggests that one or two foreign experts, together with a number of Iraqis, be engaged to work in the field in order to help farmers to better their methods of growing, picking, curing and sorting tobacco. At least one expert should be recruited to instruct graders in proper methods of classifying tobacco, and another expert with an Iraqi deputy should be appointed to approve all tobacco for final purchase by the Monopoly. The existing inadequate warehouses should be replaced by four or five new warehouses provided with dust extracting facilities and proper humidifying equipment. The Mission believes that under existing circumstances the Monopoly should be retained. As long as the tobacco is not of such quality that it can be marketed abroad, there will need to be some agency to limit production. Moreover, in the absence of the Monopoly the large number of small growers would have inade- quate bargaining power in the fixing of prices vis-a-vis the mer- chants and manufacturers. The Mission advises strongly, however, against the proposed extension of the Monopoly to the manufac- ture of tobacco products. Such a step seems hardly necessary, since manufacturing is generally in competent hands, and it would only divert the Monopoly's attention from the primary task of improving the quality of the tobacco. The Mission suggests that the Monopoly be reorganized as a fiscally autonomous agency within the Ministry of Agriculture recommended elsewhere in the report. The Monopoly should be headed by an Iraqi director-general assisted by an expert adviser and an advisory board which would include representatives of the growers. In order to discourage illicit marketing of tobacco, the difference between the Monopoly's buying and selling prices should be narrowed to an amount sufficient to cover operating costs and depreciation as well as the accumulation 28 THE ECONOMIC DEVELOPMENT OF IRAQ of a small cash reserve. The resulting loss in revenue can be offset by an increase in the tobacco excises which are relatively easy to collect from the manufacturers. The reduction in illicit production and marketing thus achieved should make it possible to raise the existing limitation on output per donum. This would encourage the better farmers, yet probably would not necessitate a further restriction of the licensed area, which the Mission realizes would be politically impracticable. The Introduction of Sugar In view of the government's desire to introduce the cultivation of sugar beets in northern Iraq, this subject has also been given special attention by the Mission. The possibility merits serious consideration because Iraq has imported over the last three years, on the average, 75,000 tons of sugar annually. There is, in addition, a serious need for new crops to diversify production and make more effective use of the manpower on the land. The Mission believes, however, that no decision on the production of sugar should be made until there is reasonable assurance that sugar can be produced at a cost competitive with the landed price of imported sugar (thus exclusive of import duty) and that the farmer will derive an income from sugar at least equal to that obtained from alternative crops, such as cotton, which can be grown on the same land. Moreover, before a decision is made in favor of sugar beets, the superiority of this crop over sugar cane, which could be grown in the South, must have been clearly established. Sugar beets have been successfully grown in northern Iraq in test plantings carried out by the Department of Agriculture. Larger and more extensive test plantings are necessary, however, particu- larly to study the problems of insect control, yields and costs. The problems of labor supply and transport also need to be more thoroughly explored. The cultivation, transport and processing of sugar beets require close coordination and therefore careful organi- zation. The production of beets is exacting, requiring considerable skill and labor. While preliminary evidence indicates that, on the basis of current price relationships, the yield per donum of sugar beets and cotton would not be significantly different, the balance of advantage may well prove to be on the side of cotton since, owing AGRICULTURE 29 to the greater amount of labor required for sugar beets, a single family can probably cultivate a larger area in cotton. Up to the present, tests have not found a variety of sugar cane adapted to Iraq, but both the methods and the scale of the experiments have not been adequate enough to prove conclusive. If further experimenta- tion does result in the discovery of a well- adapted variety, the pro- duction of cane may be preferable since cane yields are generally higher than beet sugar yields and cane production requires less skill. Moreover, the farmers in Amara in southern Iraq, where cane would be grown, are at least as much in need of a new crop as those in the North. The Mission therefore believes that further investigation and experimentation over the next few years are required before a sound decision can be reached on the production of sugar. For this purpose it suggests that two experts be engaged to direct further research, one in beet and the other in sugar cane. During the period of experimentation it may also be desirable to invite a lead- ing foreign sugar company, acquainted with the production and processing of both beet and cane, to make a study and recommenda- tions on the best way of organizing the cultivation and processing of sugar. Production Credit and Marketing A considerable increase in farm income could ultimately be achieved through the provision of more ample agricultural credit, the establishment of storage facilities for crops and the organiza- tion of cooperatives. The resources of the state-owned Agricultural Bank, the only agricultural credit institution, are insufficient to meet existing needs for credit. In many cases farmers must either borrow money from private lenders at exorbitant rates of interest or sell their crops in advance of the harvest at substantial discounts. Although the Bank has an authorized capital of ID 1,000,000, the government has paid in only ID 550,000 and the Bank has been compelled to bor- row ID 300,000 to supplement its slender resources. In Novem- ber 1949 the Bank was forced to suspend lending execpt for small amounts and not until a year later was it able to resume credit operations on a modest scale. It is vital that farmers be 30 THE ECONOMIC DEVELOPMENT OF IRAQ enabled to obtain sufficient credit to buy seeds, fertilizer, livestock, machinery and other means of production and to make it unneces- sary for them to sell their crops immediately after harvest at extremely low prices. The Mission therefore suggests that the Development Board provide sufficient funds to raise the paid-in capital of the Bank to about ID 2,000,000. This should permit the Bank to expand its credit operations and refund its borrowed resources. Action to enable the Bank to increase its lending will be largely ineffective, however, unless at the same time greater care is exercised to insure that loans are promptly repaid and that farmers, who are often improvident, borrow only for purposes which will increase their output. In the past a considerable portion of the Bank's capital has become frozen as the result of repeated extensions of the maturity dates on its loans. Good storage facilities for grain and perhaps other crops would reduce losses due to infestation, improve the quality of grain, assist in the stabilization of prices and provide some assurance against famine. At present grain is often stored in the open or in inadequate buildings and sheds. A modern 5,000-ton grain elevator has recently been erected in Baghdad, and another of 40,000 tons is projected for Basra to serve the export trade. There is, however, an urgent need for less elaborate and smaller storage facilities throughout the grain-growing areas. These could be of simple con- crete or corrugated steel construction and range in capacity from 1,000 to 3,000 tons. Simple cleaning machinery would be desirable in order to remove impurities from the grain. Such storage facili- ties, which might have a total capacity of about 75,000 tons, would presumably be owned and operated by the Grain Board, an autonomous government agency, and would need to be closely controlled so that the Agricultural Bank could with safety make loans against grain stored in them by farmers and merchants. Under such conditions, more merchants would probably enter the market to bid for grain at harvest time and farmers themselves would not be under the necessity of marketing their grain im- mediately after the harvest irrespective of the level of prices. Although an impressive law on cooperatives has been put on the statute books, almost nothing has been done to organize effec- AGRICULTURE 31 tive cooperatives. As already indicated, the producers' cooperative in the Dujaila project is the only promising venture in this field. The organization of cooperatives is at present entrusted to a depart- ment in the Ministry of Economics whose entire staff consists of a part-time director, one assistant and one clerk. About forty coop- eratives are now registered with the department, but most of these are apparently inoperative and all but one are consumers' coopera- tives for which there seems to be less need. The Mission urges that in the future efforts be concentrated on the organization of agri- cultural cooperatives and that therefore the responsibility for coop- eratives be transferred to the Department of Agriculture. Such cooperatives can become an important means of self-help and sav- ing by farmers. Gradually they may become an important vehicle for the extension of credit to small farmers by the Agricultural Bank. Undoubtedly progress in inculcating farmers with the neces- sary cooperative spirit and a knowledge of the benefits of coopera- tion will be slow. Strong guidance and control will need to be pro- vided initially by the government, and the cooperatives will have to be held to strict accountability in the use of their assets. Yet the experience with the Dujaila cooperative and, to some extent, with cooperatives in other Moslem countries, such as Egypt, indi- cates that beneficial results can be achieved by persistent, well- directed efforts. Cooperatives for the purchase and distribution of seeds, fertilizer and other tools of production and for the joint ownership and operation of machinery should be made an integral part of the new settlement schemes. While primary emphasis should be put on this task, efforts should also be made to organize cooperatives on a small, experimental scale among existing share- croppers. Such cooperatives, assisted by the Agricultural Bank, might confine themselves initially to relatively modest operations such as the provision of seed and simple tools. Success in this field will depend on the existence of a small cadre of enthusiastic govern- ment officials properly trained in the organization and operation of cooperatives. It is therefore suggested that the government take prompt steps to have a number of such officials trained in a country like Cyprus where a well-developed cooperative movement exists. 32 THE ECONOMIC DEVELOPMENT OF IRAQ Forestry In a country where the plains are almost entirely devoid of trees and only the mountain valleys contain a few scattered forests, the importance of forests as a means of controlling erosion and floods and overcoming the acute shortage of timber needs no emphasis. The Mission did not give special attention to this prob: lem because the government has already received an excellent detailed report and recommendations from a British expert. It wishes only to stress that it is important not only to protect and extend the forests in the mountain areas, but also to undertake the planting of trees in the plains to serve as windbreaks and as sources of fuel and building timber. In the Dujaila project an encouraging beginning has been made with the planting of trees along roads and boundaries. In future settlement schemes it might be well to require farmers to plant and maintain small wood lots. To carry out a proper program the Forestry Department, which is now only a division within the Department of Agriculture, should be given an independent status and headed, as at present, by a well-trained foreigner. The training of an adequate number of foresters should also be undertaken. Establishment of a Ministry of Agriculaire Agriculture, livestock-raising and forestry are of such critical importance to Iraq that they merit a separate ministry in the government. The Mission recommends therefore the establishment of a Ministry of Agriculture and Land Use. Within this Ministry and directly under a permanent secretary, it is suggested that direc- torates-general be organized for each of the following subjects: agriculture and horticulture; animal husbandry; forestry and soil conservation ; land settlement; and research. Special sections for administrative and personnel questions, legal affairs, economic re- search and statistics, and extension and education might form part of the immediate staff of a permanent secretary. Within the Minis- try there should also be grouped the more or less autonomous organizations such as the Tobacco Monopoly, the Grain Board, the Agricultural Machinery Administration, the Date Association and the Chambers of Agriculture. The Mission believes that such a ministry would greatly facilitate more effective direction of the government's efforts to improve agriculture and related pursuits. III. Industry Industry is as yet little developed in Iraq. As already indi- cated, apart from the oil industry which employs about 12,000 people, probably not more than 2,000 are working in modern industrial plants. These plants represent a total capital investment of approximately ID 4,000,000 and an annual gross incoine of about ID 3,000,000. Industry is largely confined to the processing of agricultural products, the production of building materials such as cement and bricks, and the manufacture of consumers' goods like textiles, soap, matches, cigarettes, shoes and beverages. Conditions, however, are generally favorable to further industrial development. An expanding agriculture should provide more materials, such as fibres and oil seeds, for processing and when the standard of living among the rural population is raised there should be a growing domestic market for industrial products. In oil and natural gas the country possesses a cheap source of power and fuel as well as an important source of raw materials. There are surface indications of iron, copper, zinc and chrome ores, as well as of the existence of sulphur and salt deposits. The extent of such deposits should, however, be confirmed by core drilling before steps are taken to undertake their commercial exploitation. In the cities there is adequate manpower for industry, and the Iraqi warkman with proper training is generally adept at learning industrial processes. Skilled manpower, however, is very limited, and, naturally enough, there is little of the technical "know-how" which comes through experience and training. Other limiting factors in industrial development are the lack of sufficient private capital and initiative. Much capital, particularly that accumulated from agriculture, is hoarded and the balance is generally invested in urban or rural property, which is regarded as less risky, or in commerce, where investors anticipate a higher rate of return. While there is a trend toward increased private investment in industry, particularly since the war, industrial development in the immediate future will have to depend very largely upon the initia- tive or financial assistance of the government. 33 34 THE ECONOMIC DEVELOPMENT OF IRAQ The Mission has carefully considered what industries might be expanded and what new industries might be established. It has sought to confine its recommendations for industrial development to those industries where there is reasonable prospect of efficient pro- duction, competitive with imports, and where production is within the technical capacity available in Iraq, supplemented, where neces- sary, by outside technical and managerial assistance. Petroleum and Refining No recommendations need be made on the oil industry. The oil resources of Iraq are immense, the reserves of the Kirkuk field amounting reputedly to 1,000 million tons and those of the less well explored fields near Basra offering perhaps equal promise. The development of these resources by the oil companies is proceeding along sound lines. The oil companies have also been well in advance of other enterprises in providing housing, health services, and other amenities for their employees, in instituting labor train- ing schemes and providing better pay for workers. The Mission realizes that there has been some criticism in Iraq of the rate of development, particularly in the Basra field. The expenditure of close to £90,000,000 by the oil companies on oil development in Iraq is now, however, beginning to yield a rapidly rising output. Production in recent years might have been much greater if the outbreak of the war with Israel had not resulted in closing the pipe- line to Haifa and in preventing the completion of another pipeline to that city. The existing line has a capacity of 2,000,000 tons and the projected line would have added another 4,000,000 tons. As al- ready indicated, the government has recently obtained a commitment by the oil companies to increase output, which was a little less than 6,000,000 tons in 1950, to 30,000,000 tons per year by the end of 1955. It would not be advantageous to Iraq, however, to have pro- duction increased to such levels that the ensuing rise in oil revenues cannot in fact be effectively spent. Oil in the ground is a reserve for the future, and too rapid tapping of this reserve may entail a partial waste of resources. The government has decided to build a modern oil refinery near Baghdad which it anticipates will cost about £7,000,000. This refinery will use crude oil supplied from the Kirkuk fields at cost. With an annual capacity of 1,000,000 tons, it will be able to supply INDUSTRY 35 all of Iraq's anticipated requirements for some time. This decision reflects an understandable desire on the part of Iraq to have a modern refinery of its own, replacing the somewhat inadequate and rather old Alwand refinery at Khanaqin which is owned by a sub- sidiary of the Anglo-Iranian Oil Company and is capable of supply- ing not quite 70 percent of Iraq's current requirements. Foreign management of the new refinery will probably be necessary, at least for an initial period. The project will make it necessary to close the Alwand refinery and probably also the small oil field near the Iranian border from which it draws its crude. This field probably cannot be developed on a scale large enough to warrant investment in the pipelines necessary to export the oil. Expansion of Old Industries Some industries are now expanding without government finan- cial assistance. The cement plant and the brewery are both doubling their capacity. Recent improvements and expansion have put the woolen industry abreast of the country's needs. Other industries do not for the present require expansion. Flour milling capacity, for instance, appears ample. The tanneries also appear to have suf- ficient capacity, but to raise the quality of their raw material sup- ply, technical assistance is needed to improve methods of flaying and preserving hides. Still other industries could usefully be expanded but do not have sufficient financial resources to do so without government assistance. The cotton and rayon textile factories in Baghdad and Mosul might well double their designed capacity and extend their facilities to make a wider range of products. At present cotton textile capacity can meet only about a quarter of the country's requirements. Since ample raw material is available and costs of production can become competitive with those abroad, further expansion would appear to be warranted. In its regular budget for 1951-52 the government has provided ID 1,000,000 for a govern- ment textile mill. The Mission believes, however, that govern- ment ownership and operation would not be desirable and that it would be vastly preferable to extend capacity with the participation of private capital and enterprise. 3 By an agreement reached in December, 1951, the government took over ownership of the refinery, retaining the ATOC subsidiary provisionally as its operating agent. 36 THE ECONOMIC DEVELOPMENT OF IRAQ Further expansion of the vegetable oil extraction plant would be justified, the more so since increasing quantities of cotton seed will be available for crushing and the existing plant does not meet domestic requirements. Hydrogenation equipment for making cooking fats might also be added, and the capacity of the appurte: nant soap plant might be enlarged so as to cover about half of Iraq's needs. The capacity of the country's only modern shoe factory, a small enterprise, might well be tripled to reach an output of about 100,000 pairs per year. Similarly, a plant producing alumi- num utensils could well be expanded and complemented by facili- ties for melting and rolling aluminum scrap and pig, thereby sub- stantially reducing costs of production. Establishment of New Industries Among the new industrial enterprises which could be advan- tageously launched are a jute mill, bonemeal fertilizer plants, an automobile tire factory, a small steel mill, a central machine shop, a concrete batching plant and a plant for the manufacture of date boxes. For all of these there is sufficient demand, and production could take place economically on a small scale. The small steel plant would smelt domestically available scrap and produce in a hand-operated mill such items as reinforcing bars, window frames and small angles. The central machine shop would replace the numerous small shops now engaged primarily in maintaining the 3,000 irrigation pumps in Iraq. This shop would significantly reduce the cost of maintaining pumps and, since these pumps are of relatively simple construction, would also be able to manufacture them. Small bonemeal plants could be built at Mosul, Baghdad and Basra to convert bones and other offal of abattoirs into a valu- able fertilizer for domestic use. The growing demand for jute bag- ging would justify the installation of a jute mill capable of making about 10,000 tons of jute products per year. A small tire plant to manufacture tires under foreign license and with foreign technical assistance might also be feasible in a few years, particularly since the demand for tires has been growing rapidly and the development of road transport is expected to receive considerable impetus in the future. A concrete batching plant with ready-mix trucks would be useful in providing poured concrete for many small construc- tion projects. INDUSTRY 37 In addition to the above-mentioned enterprises, it may well be desirable to establish a paper mill as soon as there is an assured supply of pulp from abroad. As the demand for paper bagging for domestically produced fertilizers and cement increases, it will prob- ably be more economical to produce such paper in Iraq than to import it. A plant for the manufacture of glass bottles, other con- tainers and tumblers might also be started, provided the availability of the right type of sand can be confirmed. The largest and perhaps the most promising industrial possi- bility lies in the utilization of the natural gas produced in conjunc- tion with oil and now almost totally wasted. The Mission recom- mends therefore that early consideration be given to the erection, near Kirkuk, of a plant which, using natural gas and gypsum as raw materials, would be capable of producing annually 500,000 tons of ammonium sulphate fertilizer, 100,000 tons of elemental sulphur, 10,000 tons of carbon black and 300,000 tons of cement. Since the natural gas contains about 10.5 percent of hydrogen sulphide by volume, it would be worthwhile to establish a plant to recover sul- phur from all of the gas produced. Part of the cleaned gas would then be cracked thermally, producing hydrogen after removal of the carbon black. In the most important part of the plant the hydrogen and nitrogen won by removing carbon monoxide and carbon diox- ide from the flue gases would be synthesized under high pressure into ammonia. Ammonia and carbon dioxide would then be passed through a slurry of finely ground gypsum, yielding calcium carbon- ate and ammonium sulphate. The latter would be sold as fertilizer and the former used to make cement. Such a plant could produce fertilizer very cheaply, thereby stimulating its use in Iraq; and any fertilizer not consumed domestically would find a ready market abroad. Sulphur and carbon black could be used in the production of rubber tires in Iraq and would also be in great demand abroad; and there will undoubtedly be a growing demand for cement in Iraq. The plant would cost aproximately ID 25,000,000, of which the sulphur recovery plant would account for about ID 8,750,000 and the cement plant for ID 1,500,000. It should be attempted only if a reliable foreign chemical concern can be interested in designing and erecting it and undertaking its operation under a management contract. 38 THE ECONOMIC DEVELOPMENT OF IRAQ The exploitation of salt deposits may ultimately prove to be another industrial possibility. A salt dome known to exist near Basra might provide large quantities of salt for both export and domestic consumption and might make possible the establishment of an alkali plant, for which the gas from the nearby oil field could furnish cheap power. The Mission therefore suggests that core drilling of this dome be undertaken in order to appraise its com- mercial possibilities. In the process of industrial development the host of small enterprises which account in the aggregate for a considerable out- put should not be neglected. Among these are shops engaged in tire retreading, reclamation of lube oil, battery and electrical repair work, automotive and machinery repair, wood-working, etc. Many of them could be assisted to improve their production through installation of power-operated tools and other equipment. In starting new plants and expanding old ones it is important that capital charges be kept at a minimum by arranging for maxi- mum possible utilization of the installed equipment. This involves the employment of as many shifts as possible, the use of machines at maximum working speed and, above all, the use of purchased power. In the past, industrial plants have added unnecessarily to their capital overhead by installing their own power plants. Such plants usually prove costly since they operate only part of the time. Single plants catering to both industrial and lighting needs are more economical because of a high and steady load factor. In order to induce industries to purchase power, however, the price of electricity for industrial use will need to be reduced. Such a reduc- tion could be achieved in Baghdad, the principal industrial center, particularly if steps were taken to relieve the Baghdad Light and Power Company from the heavy burden of sharing its profits with the Iraq government and also having its profits taxed by the United Kingdom. Elsewhere, such as in Mosul, a reduction in power prices depends on more efficient management. Financing of Industrial Development The Mission believes that complete government ownership of industry should be adopted only where absolutely necessary. In general it will prove necessary only where private capital is not available either because the contemplated investment is too large, INDUSTRY 39 or because the investment is in a new and untried field which does not for the moment appeal to private capital. For the chemical plant proposed by the Mission the latter would probably be the case. The government apparently is also furnishing all of the capital for the oil refinery. Wherever complete government ownership is con- sidered necessary, it would be desirable to have the Development Board act as the government's agent in putting up the necessary capital. On the other hand, the existing Industrial Bank should be used as the agency for giving needed assistance to industry in all cases where the need is for expansion of present capacity or where there is a prospect of private participation in establishing new industries. This Bank, which began operations in 1946, has already performed useful work in promoting industry. At the end of February 1951 it had outstanding loans totaling ID 238,650 and participations in industrial enterprises amounting to ID 629,272. It has been handi- caped, however, by a shortage of funds, since the government has paid in only ID 600,000 out of an authorized capital of ID 1,000,000. Its resources have to some extent been supplemented by borrowing ID 100,000 and ID 200,000 respectively from the Awqaf Administration and the National Bank. The Mission suggests therefore that the Development Board provide the means for grad- ually increasing the Bank's capital by about ID 5,000,000 which the Bank would be authorized to use for the making of loans to, and investments in, industry within the framework of an overall pro- gram approved by the Development Board. Aside from making loans for production facilities, the Indus- trial Bank could assist industry by financing the construction of a bonded warehouse at Baghdad, so that credit could be extended on materials stored therein. The absence of such warehousing facilities has caused a chronic shortage of working capital in most industrial enterprises, for under existing conditions much of their capital is tied up in stocks of supplies. The Bank's capital should be used primarily as a revolving fund. The Bank should generally dispose of its industrial shares whenever an enterprise becomes profitable and therefore capable of attracting more private capital. Profit-making assets should be kept only to the extent necessary to maintain a reserve against possible 40 THE ECONOMIC DEVELOPMENT OF IRAQ losses. While the Bank should presumably show a small profit to inspire confidence in its operations, it should not retain its partici- pation in profit-making enterprises for the sake of maximizing its profits, particularly when this limits its ability to assist other industries. To prepare the Bank for its expanding operations, its staff needs to be strengthened by providing for the appointment of an expert with wide industrial experience to head its Industrial Schemes Section and for the establishment of a small-business branch to pay special attention to the needs of small enterprises. The Bank should, of course, have access to the corps of technical specialists which, at a later point in the report, the Mission recom- mends should be attached to the Development Board. Dangers of Excessive Protection Particular care should be taken that government assistance does not foster inefficient industries at the expense of the country's standard of living. This danger is by no means unreal. A Law for the Encouragement of Industry, originally enacted in 1929 and replaced by a new act in 1950, provides limited but generous exemp- tions from income and surtaxes and customs duties, and govern- ment land free of rent for 10 years. Iraqi-owned industrial enter- prises can qualify for these benefits as long as they primarily use raw materials available in Iraq or produce goods imported in con- siderable quantities. Neither of these conditions is necessarily rele- vant to efficient production ; and it is therefore suggested that the law be amended to stipulate that, in general, such benefits should be accorded only to enterprises which have a reasonable prospect of becoming efficient enough to withstand foreign competition. Industry is also protected in many cases by high import duties and in some cases, such as cotton yarn, beer and cement, by import prohibitions. In a small country like Iraq, where the limited market affords opportunities for only one or two plants in each field and where the entrepreneurial class is small, there is an acute danger of monopoly and attendant high prices. In Iraq this danger is aggravated by a tendency in some industries to emphasize limited production with high profits per unit rather than mass production with lower unit-profits. While the Mission recognizes the need for INDUSTRY 41 temporary, moderate protection of certain industries, it wishes to emphasize strongly the need for a rapid and progressive reduction in special assistance. Government Organisation for Industry Government activities relating to industry, except for the Industrial Bank, are now handled by a Department of Industry in the Ministry of Economics. This Department under its present director concentrates primarily on research and laboratory work and is not equipped to analyze and record the commercial and eco- nomic operations of industry. The Mission recommends that a Department of Industries be established to maintain adequate sta- tistical records on industrial production, analyze economic problems relating to industry such as marketing, and administer the laws con- cerning assistance to industry. The research and technical functions now being carried on would then be continued under a separate Department of Industrial Research and Standards. These two departments should gradually be equipped to give increasing assistance to industry in improving its output and reduc- ing its cost of production. This type of assistance should be stressed more and more in the future as compared to special measures of protection and assistance which tend to shield industry against competition. Much can be done in the long run to assist industry in better controlling the quality of its products, reducing waste through material salvage, analyzing production costs, making market surveys and increasing labor efficiency through improved lighting, noise abatement, in-plant training programs and better work flow. Labor and Vocational Education Finally, it should not be overlooked that a contented, well- trained labor force is of the utmost importance to industrial develop- ment. An improvement in working conditions and more attention to the welfare of the worker would tend to increase labor pro- ductivity. Such an improvement can to a large extent be brought about only through a growing realization among employers that it is to their own interest. The government should, of course, lay down minimum standards in this respect, particularly since the absence of real trade unions precludes workers from achieving 42 THE ECONOMIC DEVELOPMENT OF IRAQ greater benefits through collective bargaining. At present, labor laws set up certain requirements with respect to hours of work, periods of rest, vacations, employment of minors and compensa- tion for disability. The Labor Department, however, is inadequately staffed to enforce the law and the many reported violations are generally allowed to go uncorrected. In 1949-50, of 1,228 enter- prises inspected, only 136 were found to comply with the law. Of the remainder, 974 were simply warned and 118 cases were referred to courts. It would be desirable to enforce existing legislation before enacting other labor laws. Efforts are apparently being made to survey the possibility of introducing a social insurance system into Iraq. Under existing conditions, however, any social insur- ance law might tend to remain a dead letter. Training of labor is impeded by the prevailing illiteracy which makes instruction in writing largely impossible. Elementary school- ing and adult education are therefore essential to the improvement of labor efficiency. There is in existence a secondary technical school which attempts to train intermediate school graduates in industry. The curriculum of the school, however, lays too little emphasis on practical training; and the graduates of the school show a disinclination to work with their hands. It would be far better to rely on apprenticeship systems for the basic practical training, and to use the school primarily for supplementary instruc- tion of a somewhat broader character which might be needed by the more highly skilled workers and foremen. Those who are trained in the shop or on the site through such apprenticeship systems can then be recruited from the ranks of the laboring class which is accustomed to manual work. Large private companies and public enterprises like the Iraq Petroleum Company, the railways and the Basra port administration all possess large machine shops where varied training can be imparted to many more than at present. It is suggested, therefore, that the government enlist their coopera- tion in the training of skilled workers for Iraq's requirements generally. Commercial and business education is also important. Govern- ment, banking and commercial firms, and industrial concerns are all handicapped by a shortage of competent typists, stenographers, clerks, bookkeepers and accountants which has been aggravated by TRANSPORT AND COMMUNICATIONS 43 the exodus of the Jews. For industry the training of good cost accountants capable of checking the efficiency of various types of operations is especially vital. A single secondary commercial school, supplemented by a night school, and a higher College of Commerce and Economics have been established to meet the need for business training. The first appears to be functioning along sound lines, although it suffers from inadequate quarters and a shortage of teachers. As soon as competent teachers can be trained or recruited, secondary commercial schools should be opened in the other principal cities, particularly Basra and Mosul. On the other hand, the College leaves much to be desired from the standpoint of both the curriculum and the standard of instruction. It apparently produces neither competent and practical bookkeepers and account- ants, nor people well-grounded in economics and finance, capable of acting as company secretaries or as economic and financial experts in business or government. Greater emphasis should be placed on practical training; the teaching staff must be strength- ened, and more attention paid to banking and accounting, particu- larly cost accounting. Advisory committees consisting of repre- sentatives of leading banks and business houses should be appointed to both the College and the secondary school to review the cur- riculum, make provision for part-time apprenticeship training and check how well graduates of these institutions measure up to the requirements of business. IV. Transport and Communications On the whole, the existing transport system serves the present needs of the country adequately (see map). For the future the principal problems will be to make provision for essential renewals of track and rolling stock and to standardize the gauges on the railways; to develop an adequate network of metalled main roads, supplemented by feeder roads; and to establish effective control over road transport. If these problems are solved, transport capac- ity should have no difficulty in meeting the growing requirements of agriculture and industry. 44 THE ECONOMIC DEVELOPMENT OF IRAQ The Port The Port of Basra, an autonomous public agency which also operates the civil airport, is efficiently run and capable of handling a considerable increase in traffic. In view of the adequacy of this port, the Mission sees no justification for the construction of another port at Umm Qasr as has been suggested from time to time. The Port of Basra has been able to finance necessary capital improvements, as well as to pay off its debts, out of current sur- pluses and should be able to do so in the future except for the task of financing the dredging of a new and urgently needed channel across the Fao bar. The existing channel is subject to heavy silting which necessitates extensive dredging operations at a cost of ID 500,000 to ID 600,000 per year. Until recently it was expected that the Anglo-Iranian Oil Company would advance the funds necessary for this new channel, but recent developments in Iran, coupled with the fact that ample oil revenues will be available to Iraq for investment, appear to make it desirable that the Develop- ment Board finance this project. The Railways The state railways, which are the principal means of transport, are also well managed and have been fully able to meet traffic requirements. They have come in for considerable criticism, how- ever, because of the serious financial difficulties in which they have become involved. The major source of these difficulties lies in the fact that, in 1944, the railways, with the full approval of the govern- ment, began a major capital development program without assur- ance of adequate financing. To defray the cost, the railways have had to use a fund of about ID 2,500,000 set aside for renewals and to borrow ID 1,000,000 from the government as well as £3,000,000 in the United Kingdom with the help of the Export Credits Guaranty Department of the British Government. The program was for the most part soundly conceived and is now largely com- pleted. However, it has left the railways without adequate funds not only for essential renewals but also for other construction pro- jects. One of the major and more controversial projects affected is the erection in Baghdad West of a rather imposing terminal sta- tion and railway headquarters together with relocation of railway O 1 TRAI J TRANS JORDAN TRANSPORT AND COMMUNICATIONS 45 lines and rebuilding and extension of railway goods and marshal- ling yards. Much of the latter project is really part of Baghdad town planning and its cost should therefore not be completely charged to the railways. These problems, as well as that of tractive power on the rail- ways, have recently been studied by a British engineering firm. With some modifications, the Mission endorses the conclusions contained in its report. The railways should be enabled to carry out a program involving essential renewals of track and rolling stock, gradual conversion to diesel traction and the completion of the Baghdad-West scheme on a drastically modified basis which would entail finishing the railway station but postponing most of the balance of this project. The Mission suggests, however, some modifications in the British firm's proposals on the latter scheme, the details of which are set forth in the monograph on transporta- tion. The railway station when completed should serve also as the airport terminal and provide offices for the railway administration and the government. Since the railways can finance only a small portion of this pro- gram out of their own resources, the Mission recommends that the Development Board supply the bulk of the required funds. In addi- tion, the Board might take over amortization of the £3,000,000 loan contracted by the government on behalf of railway development. This must be repaid over a six-year period from June 30, 1952. The Mission also urges that immediate consideration be given to the problem of standardizing the gauges on the railway lines. The Basra-Baghdad-Kirkuk-Erbil line and the branch line to Khanaqin are meter gauge while the line from Baghdad to Mosul, which links Iraq with the railway systems of Syria and Turkey, is standard gauge. The two gauges not only necessitate transship- ment, but, above all, make the task of operation complicated and costly. They require a large amount of duplication in activities, of reserves, standbys and spares in all departments. The need for transshipment is likely to be a growing handicap to the railways as traffic requirements increase and the demand for more rapid transport grows. It is particularly important to consider standardization at this time because the railways face the necessity of carrying out exten- 46 THE ECONOMIC DEVELOPMENT OF IRAQ sive renewals of track and rolling stock and must make decisions as to the type of traction. Final decisions on the Baghdad-West scheme can also be more intelligently taken if the issue of standardi- zation is promptly settled. It is unlikely that such favorable cir- cumstances for an economical conversion operation will ever recur. Conversion of the meter-gauge lines should not be too costly because the construction gauge, formation and bridges of these lines were originally designed with a view to later conversion to standard gauge. Conversion could probably be accomplished within six years. Meanwhile meter-gauge renewals would be kept to an absolutely indispensable minimum. Within a preparatory five-year period detailed plans and cost estimates would be worked out, necessary standard-gauge track and rolling stock ordered and assembled, and diesel locomotives tested with a view to transfer to diesel traction at the end of the period. The actual conversion operation would take only a few days and could probably be car- ried out at the end of five years for the Basra-Baghdad line and at the end of another year for the Baghdad-Erbil line. It is possible that the total cost of conversion would not exceed ID 6,000,000. The Mission therefore recommends that the advisability of stand- ardizing gauges, together with a program for such standardization; be promptly studied by the railway staff with the cooperation of outside experts. Finally, in line with the recommendations of the British engi- neering firm, the Mission suggests that the services of an expert be obtained to make recommendations on the railway rate structure. A general rate increase of about 1212 percent, with some excep- tions, was put into effect in the summer of 1951. This did not affect the rate structure which is characterized by certain anoma- lous differences in the charges made on various sections of the railway system as well as those imposed on various commodities. Air Transport and Inland Navigation With respect to air transport, the Mission recommends that the civil airports at Basra and Baghdad be built up to the speci- fications required by the International Civil Aviation Organization (ICAO) of class B standard airports. This would involve longer runways and improvements in navigational aids, communications TRANSPORT AND COMMUNICATIONS 47 and meteorological services. At the Baghdad airport it would be desirable to build an entirely new runway and to use a wing of the new railway building as the air terminal. The Port of Basra can finance the necessary work there, but that at Baghdad, costing probably between ID 250,000 and ID 300,000, will presumably have to be financed out of Development Board funds. The Mission has no specific recommendations to make on Iraqi Airways, which assures some internal and international services with a small fleet of four planes, except to suggest that its finances be completely divorced from those of the railways. It is neither logical nor sound financially to require the railways to defray the deficits of the air- ways. It would be desirable to carry out any future development of the airways in cooperation with other Middle Eastern countries. Inland water navigation has steadily declined in importance and is now rather insignificant. While irrigation rather than navi- gation will always be the primary consideration in the use of avail- able water resources, it is possible that the better regulation of the Tigris and Euphrates will ultimately result in some improvement in the navigability of these rivers. Limited but uninterrupted navi- gation might be insured if the river bed were trained by dams, locks and groynes into a narrow channel at low water and pro- gressively wider channels at higher water levels. The feasibility and cost of such a scheme might ultimately be submitted for study to experts from the Netherlands where similar conditions have long been encountered. Roads and Road Transport Road transport has not assumed great importance in the past, primarily because most roads are unsurfaced and impassible for a large part of the year. Even large communities like Kut and Amara, although not situated on railway lines, are not served by all-weather roads. An interdepartmental committee worked out and presented in 1950 a 10-year program for the construction or improvement of 37 main surfaced roads involving a total length of 3,463 kilometers at an aggregate cost of ID 14,500,000. Both the program and the proposed specifications of the roads are sound. In addition, the building or improvement of about 8,000 kilometers of secondary or feeder roads, which do not need to be surfaced, will ultimately 48 THE ECONOMIC DEVELOPMENT OF IRAQ be necessary. Such a program will need to be coordinated particu- larly with the development of new agricultural areas. Earth exca- vated in the construction of new irrigation and drainage canals can be used in the building of such roads. The surfaced roads should be constructed by contractors of repute capable of furnishing their own road-making plant. It is generally recognized that the Bagh- dad-Kut-Amara-Basra and the Baghdad-Kirkuk-Erbil-Mosul roads should have first priority. The first of these is at present only a dirt road but the latter has sections which are already surfaced. As road transport develops, it will be vital to institute some controls, particularly since most of the operators now provide only irregular and unreliable service. Limitations on loads and regular inspection of vehicles should be instituted and enforced. Operators of transport services should be licensed to make sure that they are equipped to provide adequate and reliable service at reasonable rates and that they carry insurance. The Mission has also given some attention to the municipal bus service in Baghdad. Operations at present are seriously handi- capped by the diversity and age of its transport equipment and high maintenance costs. A sound decision has been made to standardize equipment. The central workshop should also be modernized and re-equipped and a central garage and four auxiliary garages pro- vided. To carry out this program financial assistance from the Development Board will be necessary. It is also suggested that more efficient management of municipal transport might be achieved through the appointment of a single Director General in place of the present Board, and that a stricter control over the collection of passenger fares be instituted to improve revenues. Communications For communications, capital outlays will be required primarily in connection with the extension of the telephone system. The needs are well-known in Iraq and do not require elaboration here. Although the communications services are operated at a profit which is credited to the government budget, it is suggested that future capital expenditures be financed by the Development Board. This will not only make it easier to balance the government budget, but will enable the Board to insist on better synchronization of the PUBLIC HEALTH 49 procurement of equipment and the erection of structures to house this equipment. In the past these functions have been carried out by two different sections of the Ministry of Communications and Public Works with little or no coordination. V. Public Health Considerable progress in public health has undoubtedly been made over recent decades. The number of hospitals, dispensaries and doctors has greatly increased, and there have been no epidemics of pestilential diseases in recent years. Yet infant mortality is still extremely high-perhaps as much as 250 per 1,000 births; and there is still a very high incidence of such endemic diseases as trachoma, hookworm, bilharzia, malaria and the dysenteries. Many of the prevailing diseases are the by-product of polluted water, and unsanitary, congested living conditions which in turn are trace- able largely to poverty and ignorance. Thus an increase in pro- duction and standards of living brought about through the general development program will be an important complement to a direct attack upon the health problem through expansion and more effec- tive organization of governmental health services. The main attack will have to focus on those diseases which sap the vitality and undermine the productivity of the people. In some rural areas, for example, virtually the entire population is at cer- tain times stricken with malaria. Malaria is said to cause 50,000 deaths every year, as well as much sickness and disability which results in great loss for the country. In the provinces of Amara, Muntafiq and Kut the incidence of bilharzia or schistosomiasis, another debilitating disease, is particularly high. The dysenteries and other intestinal ailments are also a prominent cause of low vitality. In 1948 no less than 5,656,474 visits to medical institutions for treatment were reported, and 1,291,225 cases of infectious diseases were treated. Of these, 603,698 were malaria, and 524,740 trachoma. These statistics are of twofold significance. On the one hand, they illustrate the great expansion which has taken place in facilities for treatment of disease. On the other hand, they indicate clearly the relative inadequacy of efforts to prevent disease. It is 50 THE ECONOMIC DEVELOPMENT OF IRAQ therefore vitally important that more attention be devoted in the future to the preventive aspects of public health work. Prevention of Disease Many measures could be taken to strengthen the preventive aspect of public health work. Doctors and nurses must, above all, be imbued with its importance, for they have countless opportuni- ties to impress on their patients the need for proper hygiene and sanitation. Thus social medicine, involving the study of the environmental factors bearing on health and of appropriate meas- ures for the prevention of disease, should be taught as part of the qualifying course in the medical school at Baghdad. Far more emphasis also needs to be placed on the teaching of hygiene in ele- mentary and secondary schools. Children should be taught not only good personal habits, but also the importance of sanitation in and around the home. Special classes might be given in the prevention of the main endemic diseases, by the school medical officer when- ever possible. Health education must likewise be given an import- ant place in the curriculum of teachers' training colleges and special courses in the prevention of diseases associated with irrigation and cultivation should be provided in the School of Agriculture and the School of Engineering. Hospitals should be an object lesson in hygiene and every effort made to impress on patients the import- ance of personal and domestic hygiene. The interest of adults in public health can be stimulated by visual education and by organiz-. ing “health weeks”, the first of which was held in Diwaniya with conspicuous success during the Mission's stay. The army and police have an excellent opportunity to teach habits conducive to good health. Prospective farmers for new settlement projects should be medically examined to restrict, as far as possible, the introduction of endemic diseases into these settlements. To prevent water pollution it would be desirable to locate villages in such settlements away from irrigation canals wherever possible. The Mission strongly recommends that the number of village dispensaries, which is now over 400, be gradually increased and that they be equipped to serve as public health centers. Such cen- ters would be simple in function, aimed primarily at providing ele- mentary medical and health assistance to as many people as possi- - PUBLIC HEALTH 51 ble. As conditions permit, the scope of their services could be expanded. At the present stage it will usually be sufficient to have a specially trained medical assistant rather than a doctor in charge. At present there is no separate cadre of medical assistants. It is therefore suggested that the existing School for Health Officials be converted into a training school for such assistants or aides. The medical assistant in charge of a dispensary will need to consider himself as the village sanitation officer and enlist the help of the village elder in organizing a cooperative effort to keep the village clean. He will also need the assistance of a village midwife and, at a later stage, of a public health nurse. The traditional midwife, if properly trained, could have great influence in improving the standards of personal and domestic hygiene, in combatting infant mortality and giving simple advice on the care of infants. Such midwives, when drawn from the ranks of the people whom they will serve, will have a ready entry into homes and will be able to speak in terms which will be readily understood. It is therefore recommended that a school for training such midwives, recruited from the villages, be established. A similar school should be set up for town midwives. It would be desirable to have three foreign midwives appointed to direct this training program. In the cities a considerable improvement in sanitation could be effected through the creation of a sanitary corps. Such a corps should be charged with house-to-house inspection to detect health nuisances and prevent fly and mosquito breeding, with the inspec- tion of eating-houses, foodstuffs and food handlers, and with the improvement of environmental hygiene in general. A foreign public health or sanitary engineer would be required to organize this ser- vice and establish the facilities and courses for training appropriate numbers of sanitary overseers and sanitary inspectors who, in turn, would impart the necessary instruction to the house-to-house inspectors. The prevention of hookworm, malaria and bilharzia warrants special attention. These diseases are widely prevalent and through their general debilitating effects materially lower productivity. The incidence of hookworm would be reduced by improvements in sew- age disposal, the closing of open drains, provision of suitable latrines and the wearing of shoes. Bilharzia, which is transmitted 52 THE ECONOMIC DEVELOPMENT OF IRAQ by a snail living in irrigation canals, can be combatted by elimination of stagnant, polluted water in which the snail thrives and by treat- ing canals twice yearly with copper sulphate. DDT spraying and the elimination of stagnant water assist in the reduction of malaria. In order to combat both malaria and bilharzia, major irrigation canals should be designed so as to maintain a rate of water flow no less than three miles per hour, and minor distributory canals so as to insure rapid drying-out after use. It is important that one com- plete "dry-out" per week be enforced in every section under irri- gated cultivation. Knowledge of such methods of combatting disease is already available in Iraq. What is needed is wider dissemination of the knowledge and a vigorous campaign to give it effect. The Endemic Diseases Institute in Iraq has done much useful work in this field but it has been handicapped by insufficient transport, supplies and technical personnel. In the future there will be no justification for denying the Institute adequate funds for its work. It would be well to organize special campaigns in those provinces or districts where the incidence of a particular endemic disease has been especially high. Such a campaign would involve a simultaneous effort to treat the people already afflicted in the locality and to teach local officials and the local inhabitants in general the appropriate preventive measures. Mobile dispensaries and mobile vans equipped to show educational films would be especially useful for this purpose. Curative Services On the curative side, principal emphasis must first be placed on the improvement of existing hospitals and an expansion in the nursing service. In its five-year program the Development Board has allotted ID 3,800,000 for medical service buildings. The Mission believes that a large part of this sum should be used to modernize, extend or replace existing hospitals and improve their facilities for diagnosis and treatment rather than to construct additional hospitals. In the monograph on public health the Mission has listed the most urgent projects of this kind which it suggests should be undertaken in adition to those for which provision was made in the first annual budget of the Development Board. While the number PUBLIC HEALTH 53 of hospitals may eventually have to be increased, it is of greater importance today to build more dispensaries. Improvements in hospital administration are also desirable. As long as hospital administration remains in the hands of doctors, they should be given a course in this subject after qualifying. There is at present one doctor to every 7,000 in the population. With increased accommodations and laboratory facilities at the medical schools, the number of doctors qualifying annually can be increased from 35 to 80. While low, the number of doctors is not seriously inadequate provided they are well distributed and supple- mented by sufficient well-trained medical auxiliaries. A large num- ber are concentrated in Baghdad, however, and there is an exces- sive trend toward specialization. Far more general practitioners are needed in the provinces, but it is clear that better housing accom- modations and higher pay will be necessary to attract them. Among the medical auxiliaries the most serious shortage is that of qualified nurses. In one hospital, for instance, it was noted that there were only 12 trained nurses as compared with 21 doctors. The Mission recommends that a school for practical nurses be established in each province, beginning with Basra, Mosul and the Karkh hospital in Baghdad province. It would also be desirable to set up local schools for male "dressers” who are now largely self- taught. With proper training dressers can relieve nurses of many of their duties. The Mission suggests that two foreign nursing sisters be employed in each province to supervise nursing and give instruction, and that the staff at the Royal Hospital in Baghdad be strengthened by the addition of five more foreign nursing sisters. At present Moslem women are not attracted to nursing. The em- ployment of more foreign nurses may help to demonstrate that nursing is a highly respected, skilled profession abroad. More women might also be inclined to adopt a nursing career if nurses were provided with better housing and given status comparable to that of school teachers. Aside from nurses and dressers, hospitals lack enough well- trained laboratory assistants, radiographers, storekeepers, physio- therapists and operating room attendants. Special courses should be instituted to train personnel in each of these categories. Refer- 54 THE ECONOMIC DEVELOPMENT OF IRAQ ence has already been made to the importance of special training for medical assistants who will generally be in charge of village dispensaries. Many people will continue to be far removed from hospitals, dispensaries and pharmacies. For these it is important to make available such simple "household remedies" as anti-malarial drugs, aspirin, tincture of iodine, DDT powder and Epsom salts. It is suggested that the government make arrangements to supply through village shops such drugs in suitable packets carrying simple directions for use. The general availability of these remedies at a reasonable price will also help to reduce the large number of visits to dispensaries for comparatively trivial ailments. Organisation of Public Health Administration The measures outlined above require a number of changes in the administration of the public health program. The present organization, which is the responsibility of the Ministry of Social Affairs, does not lend itself to an effective attack on the problem of disease prevention. Like most of the other central administra- tions, it suffers from excessive centralization. There is too little contact with other ministries whose activities are of importance to public health. The Mission suggests that a public health administra- tor, together with an epidemiologist and a sanitary expert, be recruited abroad to advise the Minister on the organization and further development of the health services. The epidemiologist would concentrate on the principal endemic diseases and the sani- tary expert would advise on measures to improve sanitation and environmental hygiene. While a detailed reorganization should await their advice, it would seem best to group health services according to two main divisions, one concerned with the curative, the other with the preventive services. In the future the reorganized health services will need to work much more closely with the departments concerned with irrigation and agriculture and, on the problem of health education, with the Ministry of Education. In carrying out a much needed decentrali- zation considerable responsibility must, above all, be placed on the chief medical officer in every province. This officer, who now also carries on a private practice, should be given more adequate pay so COMMUNITY PLANNING AND FACILITIES 55 that he can devote his full time to public health work. It will also be important to provide both the provincial and district medical officers with sufficient transportation to enable them to discharge their duties. VI. Community Planning and Facilities In the past, communities have unavoidably grown up rather haphazardly. The older parts of the cities are characterized by great congestion, narrow and winding streets, open drains and generally unsanitary living conditions. Livestock are frequently kept in buildings and backyards of major cities. Overcrowding has been greatly aggravated by the influx of people from the land seeking to escape the hard conditions of life in the rural areas and to find opportunities for employment in the cities. Many of these have simply squatted on vacant lots and on the outskirts of cities; they live in primitive, poorly constructed mud and mat huts under condi- tions of great squalor and without sanitary facilities. Baghdad has about 60,000 of these so-called sarifa dwellers and Basra probably no less than 20,000. In each case most of them have immigrated from the province of Amara where problems of land tenure and the silting and salting of land have made conditions of life unusually difficult. Sewage systems are lacking in all of the cities. Villages are generally clusters of mud houses where, in many cases, men and livestock are not segregated. They have usually grown up around wells or along streams and irrigation canals under conditions where water pollution becomes inevitable. For the most part, safe water supplies are not available. The current flight from the land cannot be arrested as long as the ordinary village lacks the most elementary facilities of sanitation, medical aid, clean drinking water, and schooling, and generally offers little attraction to the person who wants to improve his lot and enjoy a reasonably com- fortable life, Dwellings of mud and mats are not of themselves undesirable. They have the advantage of cheapness and, when properly con- structed, are well adapted to climatic conditions in Iraq. Often, 56 THE ECONOMIC DEVELOPMENT OF IRAQ however, they are poorly built and too small; and they are crowded together on sites and under conditions which breed disease. Need for Community Planning In recent decades there has been a growing awareness of the need for community planning, better housing and community facili- ties. With respect to villages, little has as yet been done except for the planned development of the Dujaila project. Here some effort was made to have houses erected according to standard speci- fications and to depart from the village-type of settlement by requiring that houses be erected in groups of four on the adjoining corners of four land allotments. As an aid to town and city plan- ning there has been created within the Department of Municipali- ties of the Ministry of Interior a small planning section to provide "technical advice as regards municipal schemes for the organization and planning of cities and towns in accordance with modern principles". The municipalities themselves have been charged with “the division of the town into areas having regard to its develop- ment capacity and the specifications of plans to be followed for the improvement of streets, public places and buildings in such areas". The final responsibility for planning has, however, remained unclear. The surveys, plans and partial plans have generally been hastily drawn and with little regard for the actual conditions pre- vailing in the community. In any event, municipalities have for the most part continued to develop without reference to any plans. In many towns new streets have been arbitrarily cut through resi- dential and commercial districts with little concern for real needs or for the people affected. The various ministries concerned with the erection of schools, hospitals, public buildings and bridges gen- erally locate their projects without reference to an overall plan and without consultation with each other. There is today a real need for integrated community planning. The Mission believes that it would be desirable to work towards the establishment of a genuine Community Planning Office in the Ministry of Interior. Such an office should ultimately be staffed with an adequate number of experts versed in architecture, engi- neering and other aspects of town planning. The first step might be to strengthen the existing planning section in the Department of COMMUNITY PLANNING AND FACILITIES 57 Municipalities by appointing a capable, experienced town planner as director and giving him authority to build up a trained staff gradually. It could serve both the Development Board and local authorities in coordinating development projects on the community level and in ascertaining whether the projects for schools, hospitals, and similar facilities in any given community are properly related to the needs and facilties of neighboring communities. Housing Developments Public and quasi-public housing has received increased atten- tion in recent years. The Ministry of Social Affairs, which is authorized to construct houses for workers, has built 204 units and has 185 units under construction. The low rentals on completed units constitute a definite subsidy to the occupants. The city of Basra is now building 750 low-cost houses in accordance with a plan that unfortunately was hastily and inexpertly prepared. Prob- ably the best municipal housing project is near the old city of Bedra in Kut province where a new town site is being developed. The Railway Administration has provided housing for more than 2,400 of its employees, and the Port of Basra is also building accommodations, primarily for its junior officials. Laws which require the construction of houses by industrial firms and large landowners have remained unenforced. Industrial housing is still little developed. The outstanding project of this kind is at Kirkuk where the Iraq Petroleum Company has been building a large housing development, consisting of 1,028 units, for its skilled artisans and officials. The cost of this project is such, however, that it is unlikely to be widely copied. Most of the public and quasi-public housing is open to criti- cism on several counts. Use of poor materials, improper spacing and orientation, poor planning and site engineering have character- ized some of these projects. The few public housing projects under- taken have been launched without adequate attention to the problem of how much rent the potential occupants could pay. Establishment of a Housing Authority In the light of these considerations, the Mission suggests that the responsibility for planning and supervising housing be entrusted ultimately to a Housing Authority located in the Ministry of Social 58 THE ECONOMIC DEVELOPMENT OF IRAQ Affairs and staffed by men trained in house design, architecture, site and sanitary engineering, public health, housing and land eco- nomics, and project management. Initially a nucleus for such an Authority might be created by strengthening the existing housing section of the Department of Labor. At present the section is staffed only by one part-time architect with one part-time assistant, a superintendent, and a few clerks and accountants. The Authority should be provided with a Housing Fund to which the Develop- ment Board would allocate money set aside for housing and into which the proceeds of rentals would be paid. Maintenance and repairs could thus be financed without constant resort to the Treasury. The Authority should be complemented by the establishment of an Applied Building Research Station attached to the proposed Department of Industrial Research and Standards in the Ministry of Economics. Such a station would conduct research designed to develop improved methods and techniques for low-cost housing. In particular, it would experiment with the most economical and effec- tive combination of locally available materials and try them in actual housing units. It would test, for example, such possibilities as the utilization of date-palm fronds for the manufacture of pressed boards, of rice husk and asphalt mixed and pressed into blocks or bricks for interior partitions, and of reed mats and bitumen to form waterproof sheets for roofing materials. How much public housing should be undertaken is difficult to determine in the absence of sample surveys to ascertain the needs of different parts of the population, particularly in the light of what they can afford to pay for housing. Housing will, of course, auto- matically improve as the productivity and the incomes of the people rise, but this does not mean that some portion of the revenue from increased production of oil should not be used to provide housing for those in urgent need. Pending a more thorough study, an amount of about ID 400,000 annually might be taken as a pro- visional target for expenditures. Presumably public housing should cater primarily to the needs of low-paid employees and industrial workers. While a large public housing program is not a matter of high priority at present, it is vitally important that adequate accom- - . COMMUNITY PLANNING AND FACILITIES 59 modations be built for government officials in the provinces in order to make living conditions attractive enough for capable men. Self-help in Housing Any housing program under present conditions should lay pri- mary stress on the encouragement of self-help measures. The great majority of the sarifa dwellers, for example, could probably not afford to live in houses built by the state unless really large sub- sidies were provided, which the Mission does not recommend. These people can best be assisted by setting aside suitable tracts of land for their resettlement and encouraging them to build their own houses of mud and other readily available materials in accord- ance with models provided by the government. To insure proper siting of structures the government might assist in staking out the foundations and in providing some of the needed materials such as cement for stabilizing the mud floor. As an incentive toward com- pletion, it might also furnish one of the final elements of the self- built house such as the roof or roof timbers or window frames. A project of this kind is particularly needed for the sarifa dwellers of Baghdad. The site of such a project should be well-drained, pro- vided with safe water, sanitary facilities, a school, market and health center and located not too far from places of employment. The government actually started a project of this type but it was unfortunately abandoned. Similar self-help measures are contemplated in connection with the new land settlement schemes. Here the government has a unique opportunity for new forms of community planning. The Mission has for this purpose developed a suggested pattern which seeks to combine most effectively the features to be desired in such a community. Details of this are set forth in the monograph on community planning. Self-help measures can, of course, also be stimulated in existing villages and small towns, particularly in the direction of constructing public latrines and baths, erecting needed community centers and planting shade trees. Another means of assisting self-help would be the provision of an adequate system of mortgage credit. Private building has always been handicapped by the lack of credit available on reason- able terms. At the end of 1950 the total mortgages outstanding 60 THE ECONOMIC DEVELOPMENT OF IRAQ probably amounted to only ID 2,300,000 of which about 70 per- cent represented urban mortgages. Of the latter the greater part probably consisted of mortgages on buildings other than houses. At the beginning of 1950 a government Mortgage Bank began operations. Only ID 100,000 of an authorized capital of ID 1,000,000 has, however, been paid in; and the Bank has had to sup- plement its resources by borrowing. Moreover, it can make loans only for a maximum of four years and up to ID 2,000. To facili- tate an expansion of its operations, the Mission suggests that the Development Board provide funds sufficient to increase its actual capital to about ID 1,500,000 and that the Bank be authorized to extend the duration of its mortgages to at least 15 years where warranted. The Mission has given no special attention to the need for public buildings for which the Development Board has budgeted ID 3,350,000 in its five-year program. Undoubtedly the construc- tion of new buildings for the accommodation of government offices is in certain cases desirable, for existing government buildings are for the most part scattered, overcrowded, poorly lighted and equipped and therefore not conducive to working efficiency. As already indicated, the new railway building in Baghdad should provide some space for government offices. Water and Electricity Supply With respect to community facilities, the most urgent tasks appear to be the installation of sewage systems for the major cities, and the provision of safe water supplies and electricity. It is suggested that a start be made with a sewage system in Baghdad, since the rising level of the subsoil waters makes the need of this city most acute. A plan for such a system has already been prepared by consultants to the government. The initial step might be to carry it out for that portion of the city on the east bank of the Tigris. It would be useless, however, to proceed unless there is a determination to make connections with the system compulsory for all property owners who are supplied with municipal water. A safe water supply is, as was pointed out earlier, one of the keys to the health problem. While a number of cities and towns now have a reasonably safe water supply, the situation in the great COMMUNITY PLANNING AND FACILITIES 61 majority needs substantial improvement. The Department of Municipalities has drawn up a five-year program to provide or extend water supply systems for 114 municipalities with a total population of 943,000 people. Since such water systems are techni- cally simple and the need is great, the Mission suggests that the Department be authorized to proceed with this program. Water supply systems for villages must, of course, be simple and inex- pensive. In some cases, wells may prove to be the solution, although frequently brackish water is encountered; in other cases, water piped from a stream or canal with the help of a small pump and run through simple filters may be possible. Outside of Baghdad and Basra municipal power plants are generally inadequate, and a considerable number of municipalities with a total population of 175,000 have no electricity at all. Bagh- dad and Basra, which together account for a generating capacity of 51,000 kilowatts, have a sufficient supply; and Kirkuk is adequately supplied from the large power plant of the Iraq Petroleum Com- pany. Total generating capacity available in the remaining munici- palities, however, is only 14,000 kw. A program for the expansion of this capacity and the provision of electricity for all municipalities would involve the installation of generators with an aggregate capacity of 10,000 kw. It would be desirable to proceed with such a program, provided simultaneous steps were taken to improve the management of municipally-owned power plants outside Baghdad and Basra. In these two cities the power plants are owned and man- aged efficiently by a private company and the Port respectively. At present the machinery in the plants of other municipalities is poorly maintained and little or no attention is paid to depreciation. Power “losses" are as high as 36 percent compared to not more than eight percent in Baghdad and Basra; and the rates charged range from 30 to 55 fils per kw-hr as contrasted with 18 fils and less in Baghdad and Basra. To remedy these evident deficiencies it is recommended that serious consideration be given to entrusting the management of such plants to a competent private firm like the Baghdad Light and Power Company. The Mission does not believe that it would be economic to develop hydroelectric power at present. The capital cost of hydro- 4 One dinar equals one thousand fils. 62 THE ECONOMIC DEVELOPMENT OF IRAQ electric plants is considerably greater than that of equivalent thermal capacity; and Iraq possesses very cheap fuel for the gen- eration of power. At present municipal power is used primarily for lighting, and even if industrial plants should turn increasingly to municipal stations for their power supply they would be able to obtain considerable amounts of “off-peak” power in such cities as Baghdad and Basra without any increase in generating capacity. In the judgment of the Mission hydroelectric power should be con- sidered only if it does not need to be transmitted over long dis- tances and then only if the demand is such as to insure a steady and high load factor. It is not yet clear that the Wadi Tharthar depression will actually store enough water to permit the genera- tion of power, and the power which might be generated at the dams projected elsewhere is likely to be too far removed from major con- suming centers. VII. Education Education is a basic condition for the agricultural, industrial and technological progress of the country as well as for the develop- ment of a fuller cultural life and the sound growth of democratic institutions. Its importance has received growing recognition and considerable progress has been made. In years of financial strin- gency the budget for education has usually continued to expand while other government expenditures were curtailed. In the last two decades, the number of schools rose from 262 to 1,100, the number of pupils from 32,750 to 175,000 and the number of pri- mary school teachers increased from 1,325 to 6,588. During the same period, expenditures on education rose from about ID 300,000 per year to well over ID 4,000,000—a not inconsiderable advance even after taking into account the rise in prices. Nevertheless, there are still only 175,000 children in schools out of about 750,000 of school age. Despite the increased emphasis on primary education, expenditures for this purpose still take only 51 percent of the education budget. The number of children in school declines sharply with each succeeding grade, so that only about half the children starting in primary school actually finish their EDUCATION 63 primary school education and much of the investment in their edu- cation accordingly bears little fruit. The facilities and quality of technical or vocational education are seriously deficient and adult education has been almost wholly neglected. Probably about 80 percent of the men and over 95 percent of the women remain illiterate. Moreover, educational concepts are far too narrow and too little related to the everyday problems of living. As the result of its study of educational needs the Mission has come to the conclusion that the government should launch a three-part program involving (1) the improvement and extension of technical education, (2) the gradual introduction of compulsory primary school education, and (3) fundamental education for adults. Technical Schooling The question of technical or vocational education is not treated in detail here, partly because it has already been discussed in con- nection with agriculture and industry, partly because the govern- ment has requested UNESCO to send a special mission on voca- tional education. Although the number of students in technical schools—about 750—seems very inadequate, Iraq apparently has had difficulty in absorbing the graduates of these institutions largely because they lack sufficient practical training and they show a distaste for manual work. Obviously one of the first steps toward improved technical training will be to give the curriculum of the intermediate and secondary schools a greater vocational bias, with emphasis upon the dignity and value of manual labor. It is also worth emphasizing again that skilled labor and foremen can best be recruited from the ranks of active young workmen through on-the-job training programs, supplemented in some cases by technical schooling. Only the higher supervisory grades of personnel need to be trained in technical schools, and even for these there should be considerable emphasis on practical training in busi- ness, industry and agriculture as an integral part of the curriculum. Introduction of Compulsory Primary Education There is a general consensus both among Iraqi educators and foreign experts who have examined the problem that the time has come for a broad advance in the direction of compulsory education. 64 THE ECONOMIC DEVELOPMENT OF IRAQ In India, where conditions are not dissimilar, a program for the gradual introduction of compulsory primary education has been approved. The only real question relates to the speed with which the objective should be accomplished. The Mission believes that a phased program covering a period of about 15 years may be feasible for Iraq. During the first five years of this period it would be necessary to establish and open the additional training colleges required for teachers, build the needed elementary schools and make all the essential administrative and organizational prepara- tions. At the same time a comprehensive campaign to enlist public support of the objective would have to be launched and a careful survey made to determine the facilities needed in each locality and the order of priority in the introduction of compulsory education. The ensuing 10-year period would then be used for the progressive application of the principle of compulsory education. It is estimated that from 18,000 to 20,000 new teachers will be required for this program. Urgent attention would therefore have to be given in the next three years to the establishment of new training colleges, probably one in each province, to insure that the first group of new teachers would be available by 1956. It is vitally important that competent young men and women imbued with enthusiasm and a sense of mission be attracted to the teaching profession. The local teacher should be equipped to work among adults as well as children and capable of becoming a leader in the community. The status and dignity of the teaching profession should therefore be raised and adequate provision made for teachers' compensation, as well as their housing, health and gen- eral welfare. The number of schools will have to be greatly expanded. Moreover, many of the schools are now ill-housed and ill-equipped and will therefore need to be replaced. Many others are in inade- quate rented structures. It is noted that the Development Board has already set aside almost four million dinars for school construc- tion in its five-year program. The basis for this figure is not known to the Mission, but, since a considerable part of the program is evidently intended for the replacement of old and rented build- ings, it is likely to fall somewhat short of the requirements set by EDUCATION 65 a program for the introduction of compulsory primary education over the next 15 years. The introduction of compulsory primary schooling will have to take into account varying economic conditions. It is often argued that most parents are unable to afford to send their children to school because children must go to work at an early age to help support the family. The high proportion of children who leave primary schools before finishing appears to support this thesis. However, these economic pressures will tend to diminish as the development program gets under way and opens up larger and more remunerative oportunities for employment to adults. Experience indicates that one of the first desires of parents who have improved their economic status is to provide better educa- cation for their children. Such a desire, for example, has already become manifest among the settlers in the Dujaila project. This does not mean, of course, that economic limitations must be ignored. It would be best to apply the principle of compulsion first in cities and more prosperous communities where economic pressures for the employment of children are least evident. In rural areas there may well be resistance to compulsory school attendance unless the period of schooling is adjusted to permit the help of children in the sowing and harvesting seasons. Some dis- cretion should be permitted in adjusting school vacations to the harvesting periods in different parts of the country; and where schools need to remain open during busy agricultural seasons, the period of instruction should be so scheduled as to permit children to work part of the day in the fields. Special problems must be met in connection with the educa- tion of the children of nomadic tribes. Here teachers trained from the ranks of the nomads themselves will have to travel with the tribes. The teaching syllabus will need to be adapted and simpli- fied in order to take into account their special needs. Revisions of the School Curriculum As part of the program there should be a marked reorienta- tion of the curriculum and methods of teaching. Learning is largely by rote. The children passively absorb information and learn comparatively little by actually doing things. Almost no 66 THE ECONOMIC DEVELOPMENT OF IRAQ attempt is made to develop their creative instincts. The curriculum is far too bookish and academic and there is a great gulf between what is taught in school and the exigencies of practical life. Dr. Fadhel Jamali, a distinguished Iraqi educator and political figure, has aptly remarked that “no educational system is justified that does not give relief from the scourge of diseases nor aim at rais- ing the standard of living and inculcating new ideas and techniques". The school curriculum should be revised in the light of four principal objectives which have been well-stated by Mr. Victor Clark in his report on Compulsory Education in Iraq: “The first is the need for sound character training, includ- ing a realization that education is not simply a collection of skills and aids in preparation for a government or clerical job, but the acquisition of sound values which need to be applied in all walks of life whether professional or manual. The second important need is a knowledge of the practice and principles of good husbandry by those who work on the land. An equally important requirement in a minority of the popu- lation is the acquisition of technical skills necessary in local industries and in the growing demand for maintenance work. Finally, as is to be expected in a young country which is still engaged in the process of welding diverse racial and religious groups into conscious nationhood, it is considered that one of the most important needs is the promotion of knowledge and qualities necessary to the furtherance of national unity.' Although there has been some demand that education in the villages should be given a "rural" bias and education in the cities a "vocational" bias, only half-hearted experiments in that direction have actually been carried out. In the future there should be much more emphasis on crafts in all schools. Properly guided children, who are naturally creative, will find joy in working skillfully with their hands and develop a pride in craftsmanship which has seri- ously declined in Iraq. The crafts which are taught should be as varied and as closely linked to local occupations as possible. Rural schools, in particular, should have small gardening plots where children can learn simple agricultural processes, the care of live- 5 Victor Clark, Compulsory Education in Iraq (UNESCO, 1951), p. 18. -- EDUCATION 67 stock and the use of tools. Crafts should emphasize the best use of cheap local materials in weaving and rug making, woodwork, simple building operations and the like. Urban schools might stress such crafts as leather work, woodwork, bookbinding and printing, brick-making, textiles, etc. For girls, lessons might be provided in sewing, cooking and other domestic pursuits. For all pupils, visits to hospitals, industrial plants, demonstration farms and the like would prove a useful supplement to training acquired at school. As already indicated, health and hygiene should be given a more important place in the curriculum. Children could not only be taught useful facts regarding the causes and methods of treat- ment of endemic diseases like bilharzia, hookworm, malaria and eye infections, but could be persuaded to do something about them by helping to eliminate stagnant pools and showing others how to avoid water pollution. Similarly they could learn something about the qualities of different foods, the importance of personal hygiene and the value of cleanliness in the home. In this type of educational program it would be desirable to enlist the cooperation of officials dealing with health, agriculture and local government problems. Through the children, more effec- tive contacts with the parents would be established. Parents would learn to appreciate the practical value of education to their children and themselves, and a better link between school and community would be forged. The inauguration of a revised curriculum and better teaching methods will require a prior reorientation of the training given to teachers. The curricula of Training Colleges should be recast radically in order to reduce the present excessive number of sub- jects and to bring the training nearer to the realistic conditions of the rural or urban areas for which the teachers are being trained. Colleges for training rural teachers should be located in rural areas where students can study rural problems and can actively participate in rural community life. Every Training College should have a demonstration school in which it should have the latitude to work out new teaching methods. At present such Colleges tend to be omnibus educational institutions which give too little time to the professional training of teachers. 68 THE ECONOMIC DEVELOPMENT OF IRAQ Intermediate and Secondary Education The Mission has given great emphasis to primary schooling because it is convinced that the education base should be broadened. In the past education in Iraq has been too much like an inverted pyramid in which more attention has been paid to education at the higher stages than at the primary levels. This does not mean, of course, that intermediate and secondary education should not be allowed to develop at the same rate as in the past. As far as possible, however, the establishment of intermediate and secondary schools in rural areas should be given priority over those in urban areas, for such schools will be needed to produce candidates for the rural Training Colleges. The revision of the curriculum in these schools is of equal if not greater importance than in the case of primary schools. The present need is for a type of education which, in the words of Dr. Jamali, "prepares the citizens for better living and not one which produces men for white collar jobs with superficial learning, men who want to be government officials and clerks and not leaders and artisans in the fields of agriculture, com- merce and social service." Adult Education Adult education has been largely neglected. There are some night schools operated by Teachers' Associations and the Ministry, but the syllabus of such schools is the same as that of correspond- ing schools for children. There are also a few adult literacy centers which concentrate on teaching adults to read and write. The Mission urges that a program for adult education be drawn up and directed by a Special Division of Fundamental Edu- cation in the Ministry of Education. Such a program would be directed primarily to those groups in the population between 12 and 45 years of age. It would stress the acquisition of literacy, not as an end in itself but rather as a means to the acquisition of prac- tical knowledge of the fundamental problems of better living. It is useless to teach people how to read and write unless by this means they can be shown how to work more effectively for their own good. For this reason a new and broader approach to education, different from the traditional schoolroom methods used to teach EDUCATION 69 children, is required. This approach has been characterized by UNESCO as "fundamental education": “The main purpose of fundamental education is to help people to understand their immediate problems and to give them the skills to solve them through their own efforts. It is an emergency solution designed to help masses of illiterate adults and children in countries whose educational facilities have been inadequate. It is an attempt to salvage a generation by giving it the minimum of education needed to improve its way of life, its health, its productivity and its social, economic and political organization." This concept of education lays emphasis not only on the dis- semination of practical training in health, hygiene, civics, agri- culture, etc., but also on the employment of more modern media of communication such as audio-visual aids. In a properly phased program of adult education an initial period of at least two years will need to be devoted to preparatory work and pilot projects. A small group of selected and specially trained teachers will be needed to test various educational tech- niques in a few pilot projects. The localities in which the program will be started will have to be selected and the cooperation of local leaders and officials enlisted. The subject of fundamental education will need to be incorporated in the curriculum of teachers' training colleges. Above all, suitable materials including primers, books, folders and visual aids such as films, slides, charts and maps will have to be assembled. UNESCO could give valuable assist- ance. In fact, it has already conducted a pilot project in the Dujaila area. Materials could also be borrowed and adapted from other countries such as India. In the following three-year period the actual program might be begun by utilizing about 120, or approximately 10 percent, of existing schools also as evening community centers for adult edu- cation. A few schools might initially be chosen in each province so that these could serve as models and observation centers for other teachers. The program would be feasible only if the exist- ing teacher corps were used also for adult education. It is impor- 6 UNESCO Courier, June 1951. 70 THE ECONOMIC DEVELOPMENT OF IRAQ tant therefore to enlist their enthusiastic cooperation, for it would presumably not be possible to pay them more than a nominal amount in supplementary compensation. The efforts of these teachers would need to be complemented by assistance from other local officials in giving talks, demonstrating techniques, and show- ing materials on health, agriculture, irrigation, etc. Finally, in the following 10-year period, all of the remaining schools would grad- ually come into use as adult education centers. In the end the schools should become genuine community centers. In the smaller towns and villages, in particular, they should serve as the focal point for all instruction and as a center for community social life. Administration The program outlined above could not be carried out without some revision in the administration of the educational system. The present administration is too highly centralized. Everything is directed in minute detail from the center. As a consequence courses of instruction and methods of teaching are stereotyped and there is little or no opportunity for experimentation. The Ministry at Baghdad is so burdened with administrative detail that it cannot give adequate attention to policy and planning. More of the administrative routine should be handled by the provincial officials of the Ministry and headmasters should be given greater discretion in adapting curricula to local needs. While the time is not ripe to entrust responsibility for education to the provinces and munici- palities, it is important that every effort be made to enlist the active assistance and cooperation of local officials and leaders in agriculture, commerce, industry and religion. They could assist in stimulating interest in the program and mobilizing voluntary con- tributions to its success. They could help, for instance, in organiz- ing local parent cooperation and interest, in contributing equip- ment to schools and in providing meals and clothing for needy school children. Continuity in educational policy has been seriously impaired in the past not only by frequent ministerial changes but also by frequent replacement of leading officials in the Ministry. Such offi- cials should in the future be assured more permanent tenure. The Mission also suggests that consideration be given to the establish- ment of a Statutory Board or Council of Education. Such a Coun- EDUCATION 71 cil, consisting of officials and non-officials conversant with different types of educational problems, might give valuable assistance to the Ministry in formulating educational policies and programs and guarding against hasty and ill-considered changes in approved programs. Training Abroad A word should finally be said of the Ministry of Education's program for educating Iraqis abroad. During the last 10 years no less than 781 Iraqis were sent abroad for education at government expense. Of these, 234 studied engineering; 53, other technical and industrial subjects; 103, agriculture; 39, commercial subjects; 24, medicine ; 56, law; and 272, education. Many of these will be returning over the next few years and will be capable, if given an opportunity, of playing an important role in carrying out the development program. This type of educational program undoubt- edly merits further expansion. At present the fields of study are decided by the Council of Ministers upon the recommendations of the various ministries. In the future it is suggested that the Devel- opment Board also be consulted on the most important require- ments in the light of its overall program. VIII. Problems of Execution A development program of the type outlined above obviously assumes great magnitude. In making its recommendations on the content of such a program, the Mission has constantly been mind- ful of the cost involved. The cost is not merely to be measured in monetary terms. It has to be translated into the real resources which must be mobilized to carry out the program—the organiza- tional and administrative skills needed to get it on its way; the foreign and domestic services, materials and equipment directly required for its execution; and the additional goods and services for which a great demand will indirectly be created through expen- ditures on the program. The demand on these resources cannot be accurately assessed in advance, and satisfaction of the demand must depend not only on circumstances within Iraq but also on rapidly changing conditions abroad. The Mission has, however, explored some of the problems involved and believes that success in carrying out the program will depend on whether or not there is a full understanding of the actual and potential obstacles in the way and a determination to take timely action to overcome them. The Mission has estimated the cost of the development pro- gram it envisages over the next five years, beginning with the fiscal year 1952-53. These estimates do not, of course, rest on detailed cost calculations. These will need to be worked out and translated into actual budgets by the Development Board working in coop- eration with other government departments and assisted by expert technical advisers. For the most part, the Mission's figures are based upon estimates already included in the program of the Devel- opment Board or otherwise available in Iraq. Wherever appropri- ate, rough adjustments have been made for recent price develop- ments. The outlay involved has accordingly been projected at a total of approximately ID 168 million, apportioned roughly among the various fields of development, as shown in the following table. 72 PROBLEMS OF EXECUTION 73 ESTIMATED OUTLAY OF DEVELOPMENT PROGRAM (millions of dinars) ....55.2 27.6 18.6 2.0 7.0 .... 7.5 2.9 0.25 0.25 0.5 1.45 1.4 0.75 .....37.0 7.0* 25.0 5.0 .....31.0 15.1 Flood control, irrigation and drainage........... Reservoirs New irrigation works Improved irrigation maintenance and operation Drainage Agriculture and forestry.... Grain storage Tobacco warehouses Agricultural Machinery Administration Incentives Agricultural Bank Miscellaneous Forestry Industry Refinery Chemical plant Capital for Industrial Bank Transport and communications. Railways Renewals including diesel traction Gauge conversion Repayment of railway loan Miscellaneous projects Roads Main Feeder Port-new channel Airports Baghdad bus transport Telephone and telegraph Community facilities Water supply Electricity supply Sewage system-Baghdad Housing and mortgage credit Public buildings Education Schools Other Public health ..... Hospitals, dispensaries and equipment Other Miscellaneous Development Board-administration, studies, etc... 6.3 5.0 2.5 1.3 11.0 7.0 4.0 2.0 0.9 0.5 1.5 .23.2 6.0 1.5 9.0 3.4 3.3 6.1 5.0 1.1 5.0 3.8 1.2 ..... 2.0 1.5 Total 168.5 *Government estimate which may well be exceeded. 74 THE ECONOMIC DEVELOPMENT OF IRAQ In this program, the Mission has not included the expendi- tures already provided for in the 1951-52 budget of the Develop- ment Board. For the period 1952-53 to 1956-57, inclusive, the Mission has, however, taken into account not only those pro- jects which it has studied and recommended, but also certain others which it has not examined in detail and which the government has already decided to carry out. The latter include the oil refinery, and a variety of projects such as public buildings and summer resorts, for which the Development Board has provided in its five-year program. The program includes not only investment expenditures, but also increases in recurrent outlays which the Mission considers important to development. Since the ordinary budget out of which these recurring expenditures are generally defrayed will remain tight for a number of years, the Mission strongly recommends that any increases be financed by Development Board funds. Pressures for a reallocation of a designated portion of the oil revenues might well become irresistible if the Development Board insisted on confining its expenditures to purely investment pro- jects and allowed the activities which are normally financed out of the regular budget to become starved of funds, no matter how important they might be. Such a development would seriously impair the prospects of carrying out a coherent program. Although in principle the segregation of revenues for particular purposes is open to serious question and the allocation of oil income to the Development Board will probably give the latter, within a few years, more than twice as much revenue as that accruing to the ordinary budget, the Mission believes that the continuation of this arrangement will be, on the whole, beneficial. It provides more definite assurance that the oil revenues will actually be used in the interest of an integrated program of development rather than dispersed over the whole field of the government's operations with- out making an effective, permanent contribution to a rise in the standard of living. Financing the Program As long as the oil revenues continue to be assigned to the Board, no serious difficulty in financing the contemplated develop- ment program should be encountered. As already indicated, the PROBLEMS OF EXECUTION 75 oil companies have assured the government an increase in the annual rate of production to 30 million tons by the end of 1955 and a division of profits which, it is estimated, may increase the government's revenues from oil to ID 59,000,000 in 1956-57. After allowing for Iraq's obligation to surrender to the Turkish govern- ment 10 percent of its revenues from the output of the Kirkuk and Mosul fields and for the repayment of ID 2,400,000 of past oil royalty advances, the government's net income from oil over the five-year period, 1952-53 to 1956-57, may reach about ID 214,000,- 000. This sum, plus about ID 3,000,000 representing the increase in revenue for 1951-52 not programmed in the Development Board's first annual budget, may thus be available to the Board for financing its program. The total amount would be ID 49,000,000 in excess of the entire developmental outlay contemplated by the Mission. The Mission would strongly advise against any attempt to program this potential "surplus" at this time. First of all, such an attempt would be highly unrealistic in view of the enormous diffi- culties already involved in the appropriate expenditure of the sum suggested by the Mission. Secondly, the income from oil may fall below estimates. Finally, the cost of the program may well increase substantially under the impact of world-wide inflationary pressures. To the first of these, the Mission will later revert in some detail. The second is worth emphasizing because the new arrangement with the oil companies provides a variable rather than a fixed rate of return in the form of half of the profits before taxes. The revenue estimates cited above apparently rest on the assumption that the current price of oil will be maintained and that wages and new equipment costs will not rise significantly. If the anticipated relationship between costs of production and the price of oil is upset in such a way that the former rises more rapidly, profits and therefore income will fall below the expected levels. Although the oil companies have already made the bulk of their investment, future increases in wages and in the cost of additional equipment are not unlikely and may make future costs of produc- tion somewhat higher than current estimates. Whether such an eventual increase in costs would be offset by higher prices for crude oil depends on developments in world production and demand for 76 THE ECONOMIC DEVELOPMENT OF IRAQ oil. It is possible that the rapid rise in output which may be expected to take place in other Middle Eastern countries, with the possible exception of Iran, will tend to restrain prices. In any event, it would be imprudent to rely on the receipt of all the antici- pated revenue. In addition, part of the income should be set aside to meet contingencies and emergencies, particularly further in- creases in costs. The present low level of wages will unquestion- ably rise as the development program gets under way and demand for labor increases. Moreover, the rearmament effort under way in the West may exert a constant upward pressure on the prices of materials and equipment. Since the oil revenues will be received in the form of sterling, Iraq should have ample foreign exchange to defray the cost of imports required for the development program. There should be no need for foreign loans except perhaps to meet part of the hard currency needs. As a member of the sterling area, Iraq is depend- ent on the sterling area dollar pool for allocations of dollars. Until 1951 Iraq received a fixed annual allocation of hard currencies, but under a new arrangement, effective provisionally for one year, the United Kingdom has undertaken simply to furnish sufficient dollars to cover Iraq's essential needs. For part of the extraordinary dollar import requirements arising out of a rapidly expanding develop- ment program, Iraq may still have to borrow abroad. Obstacles to Development While financing the program will present no difficulty, the rate of expenditures envisaged will pose serious problems. To carry out a five-year program involving an outlay of ID 168,000,000, the Development Board would have to spend ID 15,000,000 in 1952-53 and successively larger sums up to a total of ID 50,000,000 in 1956- 57. The experience of other countries in process of development illustrates that it is not easy to spend money rapidly and efficiently on well-conceived projects. Expenditures in most cases tend to fall short of the targets. The International Bank, for example, has noted that disbursements on its loans to underdeveloped countries seldom conform to original schedules. In Iraq the development pro- gram will require the government to gear itself to an annual rate of expenditures which at the end of the next five years will need PROBLEMS OF EXECUTION 77 to be about two and a half times the combined outlays (ID 37,200,- 000) of the government, the railways and the Port of Basra in 1950-51. Moreover, actual development expenditures, which require proportionately far more technical and administrative organization and preparation than ordinary outlays, will need to rise to a rate about 10 times the total public capital expenditures (ID 5,200,000) in 1950-51. Such a rate of expenditure will be achieved only with great effort and by careful planning. It will necessitate substantial im- provement in the efficiency of public administration so that the government will be capable of coordinated planning and execution of the program. It will be necessary to take full advantage of technical assistance available abroad and to enlist experienced foreign firms for the purpose of planning and designing as well as executing major works. Improvement in Public Administration Improvement in public administration is of key importance. The multiplicity of projects in the development program will require an enormous amount of detailed administrative and techni- cal preparation, all of which must be properly coordinated. As indi- cated by the nature of the Mission's recommendations, the work involved will fall on many ministries and departments and not simply on the Development Board. Moreover, in order to avoid overburdening the Development Board, the latter should be in the position to decentralize as far as possible the detailed planning and execution, reserving to itself principally the task of overall plan- ning and coordination. Decentralization would also contribute to morale by giving the entire government service a sense of partici- pation in constructive endeavor which now appears to be lacking. Public administration in Iraq, as in many other underdeveloped countries, requires improvement in many respects. Excessive cen- tralization causes ministers and high officials to be overburdened with detail to the neglect of policy formulation and planning. Inade- quate use is made of such talent and knowledge as is available else- where in the government, including the local administrations. Co- ordination of related activities is frequently lacking, so that, for instance, there is no cooperation in the planning and operation of 78 THE ECONOMIC DEVELOPMENT OF IRAQ irrigation works among agricultural officials in the Ministry of Economics, the Irrigation Department of the Ministry of Public Works and health officials in the Ministry of Social Affairs. The efficiency of civil servants seems to have declined since before the war. Certainly the increase in the number of government employees (excluding police) from about 11,000 before the war to almost 20,000 in 1950 has been considerably out of proportion to the expansion in the government's functions. Many government offices appear to be overstaffed, while others cannot obtain extra personnel for essential increases in services. Officials are frequently shifted from one position to another without regard for their qualifications and experience. Often government officials both in the provinces and in the capital do not enjoy sufficient continuity in office to enable them to become really useful. Promotion appears to be based almost entirely on seniority and other considerations rather than on merit. The morale among government servants is generally low. The two most important factors contributing to inefficiency and morale are probably the low level of government salaries and the lack of any sense of real participation in constructive work. Since before the war salaries and allowances have risen only 20 percent for high government officials and 160 percent for the lowest paid officials, while the official cost-of-living index has increased by about 400 percent. To some extent, however, there has been an increase in salaries through shifts to higher grades, so that, judg- ing from comparative total disbursements of salaries and allow- ances, it may be concluded that average salaries have risen by about 130 percent since before the war.? Nevertheless, salaries, particu- larly of officials in the higher classes of the civil service, are very inadequate. The probity of officials is thus put to a severe test and to the extent that some successfully utilize their positions as opportunities for personal gain, the morale of others suffers. More- over, many civil servants are compelled to supplement their salaries by engaging in business or accepting other employment with result- ing neglect of their official duties. The lack of a real sense of participation in constructive tasks is conspicuous in the civil service. The Mission found a wide- 7 Total disbursements of ID 14,700,000 on salaries and allowances in 1949-50 compared with a sum of about ID 3,500,000 before the war. PROBLEMS OF EXECUTION 79 spread feeling that nothing was being accomplished. Although the establishment of the Development Board and the large prospective increase in oil revenues appears to put Iraq on the threshold of an era of potentially great progress, the Mission discovered very little awareness of these developments among officials both at the center and in the provinces. Where this awareness existed, it was often accompanied by an inclination to disparage the results likely to be achieved. Thus it appears that the government has largely neglected the opportunity to acquaint its officials with its program for the future and to enlist their enthusiastic cooperation in lifting Iraq to a higher plane of economic development. In order to remedy some of these shortcomings, the Mission urges that a small commission, consisting of high Iraqi officials assisted by two foreign experts in public administration and per- sonnel, be appointed to make a complete survey of the system of public administration and recommend improvements therein. This commission should inquire into the training, classification and pro- motion of government officials and the appropriate staffing of government departments. It should devise a new and adequate pay scale which should take into account inequities in the existing salary structure and provide relatively higher pay and improved amenities for officials working in the provinces. It should examine also the measures which might be taken to improve the coordination of government activities and to bring about a gradual decentralization of administrative functions. Pending the commission's study and recommendations, the government might take certain interim steps to improve its opera- tions. One of these might be the appointment of a permanent Sec- retary in each ministry who would be responsible for the coordi- nated administration of the ministry. He would relieve the Minister of as much detail as possible and would brief the Minister on major policy questions requiring his decision. The other might be an interim, perhaps initially modest, general increase in the salaries or allowances of government officials. It might be desirable to cover at least part of the cost of the interim and final increase in salaries out of additional taxes, but some resort to the funds at the disposal of the Development Board may not be inappropriate in view of the importance of more efficient public administration to development. 80 THE ECONOMIC DEVELOPMENT OF IRAQ Finally, the Development Board should, as far as possible, enlist the aid and cooperation of other government ministries and agencies and of the provincial and municipal administrations in the task of planning and carrying out a development program. It should actively encourage them to submit suggestions and plans for development, integrate these plans with each other and the Board's own, and, to the maximum extent feasible, allocate money and responsibility for the execution of these plans and projects to other agencies. The establishment of a Community Planning Office and a Housing Authority, as proposed earlier by the Mission, would be in line with this suggestion. In the last analysis the Development Board would, of course, retain the final responsibility for formulating the overall program, for coordinating those projects such as irrigation which concern many government departments, and for allocating the funds neces- sary to finance the various parts of the program. In order to enable the Board to carry out this overall coordinating and planning function, it is essential that all major development projects be brought within its purview, even though its financial assistance may not in all instances be necessary. At present, projects for a govern- ment petroleum refinery, a government textile mill and a new grain silo are all being kept outside of the Board's jurisdiction. The formulation of an integrated program with a well-conceived system of priorities is difficult as long as this remains the practice. In addition, coordination would be facilitated if the Board, of which only the Prime Minister and Minister of Finance are ex officio members, were to give the Ministers of Economics, Agriculture (a new Ministry proposed by the Mission), Public Works and Social Affairs facilities for attending Board sessions whenever matters of interest to them are being discussed. The possibility of making the Governor of the National Bank also an ex officio member of the Board might be considered. Technical Assistance A substantial increase in the technical staff available to the government will also be of critical importance to the success of the development program. No project should be approved under the program until evidence is submitted that it is technically sound in 1 PROBLEMS OF EXECUTION 81 its conception and that technical skills are available to carry it to successful completion. It will not be possible actually to spend the mounting revenues available for development unless, in the period immediately ahead, the Development Board insures that the govern- ment is equipped with a staff capable of undertaking the detailed technical preparatory work required by numerous projects. At present the government service is admittedly deficient in technical talent. In the long run this deficiency can only be over- come by training Iraqis, but in the short run it must be met by the employment of foreign experts for periods of varying duration. For major projects it will be possible and usually necessary to enlist the assistance of foreign consulting engineering firms and foreign contractors. In general, such projects will be of two types. Most industrial projects will represent one type. Here it will be necessary to formulate basic specifications such as plant capacity, quality of products and production costs, but the plants involved will be based on standardized processes so that bids can be invited directly from manufacturers or contractors on an erected basis with all of the necessary engineering work to be done by the contractor. The contract in a case of this type would specify the details of the equipment to be furnished and would make definite guarantees as to quality of products and production costs. The second type of pro- ject involves those for which standardized designs are not available. and where a large amount of civil works is involved. In such cases the preliminary engineering work should be done, before inviting bids on construction, by qualified consulting engineers who will not bid on the construction work. In general it would be desirable to have the firm chosen to make the preliminary studies also prepare the specifications and conditions upon which bids will be invited, as well as select the qualified bidders, analyze the bids received, and later supervise the contractor. For the large number of smaller projects, however, individual technicians will be needed to assist both in the planning and the implementation. In connection with its recommendations in the various fields of development, the Mission has indicated more specifically the kind and scope of technical assistance required. The government has already made many applications for technical assistance to agencies of the United Nations, and to the United 82 THE ECONOMIC DEVELOPMENT OF IRAQ Kingdom and the United States, but it is important that the govern- ment devise some means for coordinating such requests in the future so that priority will be given to those which will be most helpful to development. Competent foreign technicians are not unlimited in supply and the accommodations and facilities which such experts will require in Iraq are likewise restricted. In some cases foreign experts will be required only for short periods to make surveys of particular problems or to look into the technical aspects of particular projects. In many other cases, how- ever, technical assistance will be needed over longer periods to carry out specific programs. Qualities of patience and persistence as well as technical competence will be required of foreign experts engaged for such tasks. Frequently it will be desirable to give such experts positions of executive and administrative responsibility in order to insure that the job will be done within the allotted time. Appoint- ments of this character need not be regarded as impairing national sovereignty, since the foreign expert will be carrying out programs approved by the government and arrangements can be made to pro- vide each expert with an Iraqi deputy who would be trained to take his place as rapidly as feasible. In addition to its recommendations for technical assistance in particular fields, the Mission suggests that a small corps of compe- tent engineers be attached to the Development Board under con- ditions which would insure more or less autonomous administra- tion. Such a group, which would have to be recruited primarily abroad and necessarily be highly paid, would operate as a pool of technicians who would be available for examining the technical soundness and preparation of projects originating both with the Board and with other government departments. A pool of this character would economize on the number of engineers needed throughout the government. It would also be equipped to find and help recruit foreign experts needed for short-term assignments and to check on the work done by contracting firms. Finally, by operat- ing as a more or less autonomous group under the Development Board, it would relieve the Board of technical details and enable it to devote its attention to overall planning with the confidence that projects coming before it for final approval were technically sound. PROBLEMS OF EXECUTION 83 The technical advice thus available to the Board would usefully be complemented by an economic adviser to whom reference will be made later. Skilled Labor Other difficulties may well emerge in the supply of foremen, skilled and semi-skilled workers. Even now it seems to be difficult to find certain kinds of skilled workers in Iraq, and consequently they are able to command high wages compared with unskilled labor. If acute shortages are not to develop later on, it will be necessary for the Development Board to determine promptly what types of skills are likely to be in greatest demand as a result of the development program and to inquire how appropriate training can be instituted. So far as requirements for major public works are concerned, the Board will, no doubt, be able to obtain useful advice from local and foreign contracting firms with experience in Iraq. Information on requirements for other projects may be obtained from the appropriate organizations such as the railways and the Industrial Bank. Once even a rough idea of the requirements has been ascertained, the extent and quality of the available supply and the methods of training the necessary additional workers should be discussed with the Directorate of Labor, the Ministry of Education and such organizations as could be expected to cooperate in pro- grams of training. The Mission would not wish to suggest that this kind of man- power budgeting is an infallible way of solving all shortages. It is, however, well known that other countries, which are developing much more slowly than Iraq is likely to do within the next few years, have run up against shortages of skilled labor that might have been avoided with foresight and preparation. The Mission feels that there is sufficient evidence to show that the potential quality of Iraqi labor will not prove an obstacle. On a number of occasions the Mission members saw considerable mechanical in- genuity displayed by men with little training and inadequate tools; and these observations were confirmed by those with experi- ence in Iraq. It would do less than justice to the Iraqi worker if the development of his innate skills were not encouraged in the directions where they are likely to be most urgently needed. 84 THE ECONOMIC DEVELOPMENT OF IRAQ Up to the present the Development Board has had no occasion to consider measures to avert particular labor shortages. Training does, however, take time and it is probably not too early to carry out at least a preliminary review of requirements. The Mission recommends that this be done in close cooperation with the Direc- torate of Labor, which, as recommended elsewhere, requires con- siderable strengthening. Finally, where acute shortages do develop, the government could in the last analysis import labor. Thus among the large num- ber of Arab refugees from Palestine there could be found many mechanics, carpenters, electricians, stoneworkers, plumbers, fore- men, as well as a large number of unskilled construction workers. Contractors could also obtain foremen and some specialized workers from other countries in the Middle East. Foreign Supplies Now that defense programs in the United States and Western Europe are going into high gear, Iraq may experience difficulties in obtaining equipment and supplies, and this may retard the rate at which development expenditures can be increased. One limiting factor is likely to be steel, especially steel plates and sheets and certain specialty products. This may affect the deliveries of rail- way equipment, even though, as in Europe, there is open capacity for the manufacture of rolling stock. Other obstacles may be encountered in the construction pro- jects. The market for construction equipment, particularly for certain kinds of heavy equipment, is becoming increasingly tight and anticipated deliveries may be slow. As a considerable part of the production of this equipment is covered by priority orders in the United States, it may be difficult to obtain unless a priority rat- ing can be secured. European sources of heavy construction equip- ment are also tight and, although there may be some capacity for manufacture of fairly large-size equipment, overall availability in Europe, especially for heavy types, is much less than in the United States. Accordingly, it may well be desirable to carry out large- scale construction projects, if possible, through those recognized international contractors who possess substantial pools of the neces- sary machinery. Such an arrangement frequently results in a reduc- tion in the amount of new equipment to be procured. Conceivably, PROBLEMS OF EXECUTION 85 however, it may become difficult to find sufficient foreign con- tractors to undertake major construction projects. The Problem of Priorities In most developing countries the problem of determining rela- tive priorities among various possible projects arises from the scarcity of financial resources. Iraq is fortunate in that this is hardly likely to be a limiting factor. The problem may, however, arise for other reasons. The burden of administrative responsibility on both the Development Board and the government departments may initially delay the preparatory work necessary for the efficient execution of the program. Some indication of relative priorities may from this point of view be desirable. The problem may also arise as a result of a shortage of those types of skilled labor, materials or equipment needed on more than one project. As it is impossible at this time to state just where such bottlenecks may arise, no hard and fast system of priorities can be laid down. The important thing is to watch for indications that they may arise, to avert them if possible and, if not, to decide in good time what steps must be taken as a consequence. Although no definitive statement is possible, certain general observations as to the principles for deciding priorities can be made. In the first place, projects which are intended to conserve the exist- ing resources of the country ought not to be delayed to the point where it becomes excessively costly to recover them or where the smooth working of the economy is endangered. This would apply particularly to the maintenance of existing irrigation systems and the drainage of existing irrigated areas as well as to the mainte- nance of the railways. A second principle is that where competition between projects for scarce equipment or other resources arises, it is usually desir- able to aim at the completion of one single project or group of con- nected projects in preference to the partial completion of several unrelated projects. This is largely a question of timing. The dig- ging of a canal system should proceed in accordance with the con- struction schedule of the dam which is to assure its water supply. Similarly, it is clearly useless to engage in an extensive program of building schools or hospitals before an adequate staff of teachers, 86 THE ECONOMIC DEVELOPMENT OF IRAQ doctors and nurses becomes available. A less obvious example con- cerns the mechanization of agriculture. Earlier in the Report the Mission pointed out that, while mechanization is a fruitful method of increasing yields both per donum and per agricultural worker, comparatively little good will come of it so long as the fellahin who may be displaced can find no alternative occupation or so long as lack of repair facilities impedes the most economic use of existing machinery. As a third principle the Mission would stress the need to avoid neglecting those parts of the program that are of a long run char- acter. For example, the development of an agricultural extension service and the introduction of measures for the gradual improve- ment of livestock are of the highest importance. The temptation to put off such activities because they show no early visible or quick returns can be a strong and continuing one. The Mission is, how- ever, strongly of the opinion that these are among the most vital parts of the program. In the future Iraq will have to depend as much on the more efficient use of water as on increasing the avail- able supply. And it may be added that the inauguration of an accelerated program for training teachers and the modification of curricula in rural schools in order to bring them into closer touch with the everyday needs of the people will serve the same end. Certain other factors may enter into the determination of priorities as a result of the repercussions of the program which are discussed below. If the pressure on the available manpower becomes severe and inflationary symptoms appear, it will be desirable to postpone or slow up those labor-intensive projects which are least urgent in the short run, such as part of the road-building program and the construction of public buildings, grain silos and public housing. It is important that priorities be kept flexible in the light of changing circumstances. The Mission has indicated certain develop- ment targets, but the allocation of resources which is implicit in these targets cannot necessarily stand for the next five years. To keep the allocation of resources and the determination of priorities under constant review, the Mission strongly recommends that a competent economic adviser, preferably with experience in under- developed countries, be appointed to the Development Board. Such IMPACT OF THE PROGRAM 87 an adviser, who should be given a small staff, could assist in determining the impact on the economy of particular projects and the program as a whole and in watching for developing strains and bottlenecks. In view of the importance of economic considerations in the formation of the Board's policy, the economic adviser should have the right to participate in all meetings of the Board. His pres- ence at meetings would also afford the Prime Minister and the Minister of Finance, who are ex officio members of the Board, an opportunity to receive a direct report on how the development pro- gram might affect matters of broad economic policy falling outside the immediate scope of the Board itself. The adviser would also be able to indicate the types of addi- tional information which should be developed in order that the economic repercussions of the program may be more carefully observed. For this reason the Mission suggests that the fact-find- ing agencies of the government be greatly strengthened and reor- ganized by merging into a single statistical organization the Direc- torate-General of the Census and the Principal Bureau of Statistics, establishing a special section on agricultural statistics within the Ministry charged with agriculture, and expanding the Department of Labor in the Ministry of Social Affairs. IX. Impact of the Program The execution of a development program of the magnitude recommended by the Mission is bound to have great repercussions on the economy. The magnitude of the expenditure in comparison with the current rate of government spending has already been noted, but its effect on foreign trade, on national income and on employment can also be assessed in broad terms. If the trade financed by the oil companies is excluded, imports regularly exceed exports by a large margin. For example, in 1949 imports were valued at ID 30,000,000 and exports at ID 12,000,000, leaving a gap of ID 18,000,000. The gap was much larger in 1948 and much smaller in 1950, so that the figure for 1949 represents approximately the average for the last three years. To a 8 See Appendix C, Statistical Organization. 88 THE ECONOMIC DEVELOPMENT OF IRAQ certain extent, this has been financed by a net drawing on Iraq's sterling balances, but the most important source of finance has been the oil companies. During the last three years they have transferred to Iraq an average of nearly £10,000,000 in sterling annually. Part of this consists of royalties and other contractual payments paid to the government and subsequently spent by it, mainly on projects in the capital budget. The larger part, however, has been transferred to pay for current expenses of the oil companies for production, construction projects and exploration. These expenditures have directly or indirectly provided income for the people, which in turn has created a demand for imported goods; the foreign ex- change has provided the means to pay for them. Thus the activities of the oil companies can be said to have both caused and financed a large part of the gap. The same process will continue as expenditure by the Develop- ment Board rises. The Mission envisages that this may reach ID 50,000,000 in about five years' time. Some imports of materials or machinery will result directly from the requirements of the pro- gram. The balance of the Board's expenditures will, however, be for the most part made in Iraq. The large quantity of money, which will thereby be put into circulation, will pass from hand to hand and most of it will eventually be spent on imports. This means that in the next five years imports can be expected to increase by a large proportion of the ID 50,000,000 to be spent by the Development Board. At the least, the value of imports is likely to be double what it has been in the last few years. The magnitude of the program and its effect on the economy may also be illustrated by consideration of the national income. The national income of Iraq in 1949 was estimated by the Statistical Office of the United Nations at a figure in dollars equivalent to either ID 100,000,000 or ID 150,000,000, depending on the ex- change rate. On the basis of some rough and incomplete calcula- tions the Mission estimates that the actual figure probably fell near the middle of this range. It may now be nearer the upper end, since the price and the volume of production of some commodities, especially cotton, has greatly increased and some industrial expan- sion has taken place. Thus an increase in the government's annual income from oil of ID 50,000,000 would alone be equivalent to at IMPACT OF THE PROGRAM 89 least one third of the national income. Subsequently, of course, part of this income is used to pay for labor, transport and materials inside Iraq, and then spent again by those who receive these pay- ments, thus generating a further increase in income among the people. The size of the total addition to the national income cannot be forecast, but it is certain to be substantial. The size of the program can also be gauged in terms of man- power. The Mission has not attempted to make a detailed estimate of the quantity of labor which will be required to fulfill the program, much less the numbers who will find employment as a result of the higher level of economic activity. But an example will serve to illustrate the orders of magnitude involved. If 100,000 additional workers found employment as a result of the program at an average annual wage of ID 100, this would mean an expenditure on labor of ID 10,000,000, which would be only one fifth of the ID 50,000,000 the Development Board may ultimately spend per year on the projects themselves. Since these Development Board expenditures would, in turn, generate expansion in activity and employment in transport, industry and commerce, a figure of 100,000 cannot be regarded as excessive. It is, of course, not intended as a forecast. The actual figure may be considerably higher or lower, depending, to some extent, on how much machin- ery is used on the construction projects. But it will serve as an order of magnitude for the number of new jobs which may be created and which would have to be filled by the unemployed, by new additions to the labor force such as the increase in population, or by people shifted from their existing occupations. As such it may be compared with the current labor force outside of agricul- ture, which, on the basis of the information available to it, the Mis- sion believes is probably not more than half a million. Thus, on these various hypotheses, great changes can be expected which will affect the whole pattern of life. The national income will increase at a rate which, though not unparalleled, can certainly be considered exceptional. Large shifts in employment will occur as a consequence. The import trade will grow rapidly and with it, for example, customs revenues and the revenues of the Railways and the Port of Basra. It remains to examine the possible effects of these changes. 90 THE ECONOMIC DEVELOPMENT OF IRAQ Effect on Incomes and Prices During the war and for a short time afterwards, Iraq experi- enced a severe inflation. Since then, it has enjoyed a fair degree of monetary stability, largely as a result of the conservative finan- cial policies of the government. In fact special local circumstances have lately induced a certain degree of deflation in spite of the strong inflationary influences prevailing in the world outside. The sharp rise in the level of employment and income which will ensue from the development program is bound to alter the whole struc- ture of the economy. Upward movements in wages and prices can certainly be expected. In part, these will be the unavoidable concomi- tant of the process of development. In part, they may be the result of a general inflation in world prices, which would be beyond the control of Iraq. The principal task confronting the government is to prevent an inflation in any way comparable to the wartime one. It is most important to avoid a marked wage and price inflation which would not only make development far more expensive, but might also create serious discontent. The government has, however, ample means at its disposal to avert such a danger, if it allows liberal use of its sterling income from oil to pay for imports. The principal reason for the wartime inflation was the large expenditure of money by the military forces in Iraq and the lack of imported goods—for obviously cogent reasons—to satisfy the en- suing demand. Given a sufficient supply of consumer goods from abroad, there should be no reason in peacetime to repeat this experience. Accordingly the Mission would recommend that in due course a competent committee re-examine the customs tariff and the system of import licensing. Some of the restrictions in the present licensing system were imposed to meet a passing situation and could well be discarded. Certain objectives, for example, restriction of imports of "luxury" goods in favor of necessities, might be better accomplished by appropriate changes in the customs tariff. Efforts should also be made to discard, if only gradually, the present method of customs valuation for goods assessed ad valorem, whereby the domestic wholesale price is taken as the basis of valuation. 1 - IMPACT OF THE PROGRAM 91 If these measures are taken to allow a free flow of imported goods, the possibility of a severe inflation should be remote. There may, of course, be difficulty in obtaining consumer goods from abroad. If this contingency should arise, it will probably be even more difficult to obtain machinery. Thus the government will be confronted, on the one hand, with the need to use a large amount of labor on its construction projects and, on the other, with a lack of goods for them to buy. In this predicament, if inflation is to be avoided and the program is not to be delayed, the government will have to siphon off that part of the increased incomes for which there is no corresponding supply of goods. This can best be done by both direct and indirect taxation at a rate which will insure a budget surplus and by sterilization of this surplus. Initially these funds might be used to retire the public debt, which is for the most part held by the banks. Nevertheless, even if these steps are followed and severe infla- tion avoided, some changes in wages and prices will occur. To a large extent, movements in wages will depend on how easy it is to find the additional manpower required on development projects. Undoubtedly there is a reservoir of unemployed and underem- ployed people which could be tapped. As indicated earlier, con- siderable unemployment exists in Baghdad, Basra and Mosul, and there are many people underemployed who would welcome oppor- tunities for full-time work. The natural growth of population should add at least 15,000 to the labor force yearly. In the country the fellah would probably be unavailable for nonagricultural work even in the off season except perhaps in the immediate neighbor- hood of his home, but members of his family or relatives living with him might take advantage of new employment opportunities without a significant effect on farm output. The nomadic population may also prove to be a source of labor. But the point will, no doubt, be reached when competition for manpower will start to drive up wages and to make agricultural workers increasingly scarce in certain districts. This would not necessarily be an unwholesome symptom. Many people are employed in a very unproductive manner, simply because labor is so cheap. Coolies carry heavy loads which should be carried by truck. Production methods in many industries and handicrafts are 92 THE ECONOMIC DEVELOPMENT OF IRAQ exteremely primitive and new machines—sometimes merely a simple power tool-would greatly reduce the requirements for labor. On the land, especially, there are a number of areas where there is a heavy concentration of fellahin working small plots with the crudest tools. Mechanization, even of a simple kind, could easily make good the loss of a part of this labor. In fact, in some parts of the country, landlords are reluctant to mechanize for fear of displacing their fellahin. Thus a moderate rise in wages would improve the lot of those who take employment on the development projects and should also provide incentive to industrial and agri- cultural employers to give more productive and remunerative employment to those who remain. One point should be stressed at this stage concerning the drain of manpower from the land. To the extent that this drain consists of "surplus” manpower which is already grossly underemployed, the drain can be considered a welcome change for the better. If conditions do not improve on the land, however, the drain might reach proportions which would endanger the future of agricultural production. It is notoriously easy to attract people away from the land with the promise of better opportunities and almost impossible to draw them back once they have left. Improvement in the lot of the fellah is therefore of vital importance. As wages may rise, so may certain prices. Demand will greatly increase, but it is as much its incidence as its volume that matters. If a liberal import policy is followed, there should be no pressure on the price of such imported goods as textiles and sugar, although, of course, changes in world prices cannot be avoided. As incomes increase, greater pressure can be expected on some local products, whose supply cannot be quickly increased and which can only be imported for considerably higher prices. In this category fall a number of foods, especially meat and other animal products such as milk and ghee. Some improvement in supply will occur as a result of diversion from exports, but this possibility is limited. In the short run, at least, somewhat higher prices for these commodi- ties should be accepted as the price of a generally higher standard of living for the mass of the people. The same may be true of fruit (other than dates), the supply of which cannot increase until such time as newly planted trees come into bearing. The production of IMPACT OF THE PROGRAM 93 vegetables, on the other hand, can be increased more readily and a tendency for prices to rise will probably induce an increase in out- put fairly quickly. There will also be considerable changes in incomes. Increased or more remunerative employment would of course benefit a large number of workers. Many agricultural workers are likely to bene- fit. As a result of the greatly increased activity in the import trade, merchants are likely to be very prosperous. In certain localities housing shortages may develop, thus permitting landlords to raise their rents. On the other hand, some classes, particularly civil servants and others employed at fixed salaries, may stand to lose owing to higher prices of some of their essential needs. It will be an important task of the government to insure that these changes do not result in an inequitable shift in the distribution of incomes. This may be achieved in various ways: by export taxes on agricultural commodities whenever prices rise substantially; by changes in the rates of import duties, the burden of which at pres- ent falls heavily on the poorer classes; by raising the exemption limit for income taxes and by enforcing stricter assessment and col- lection in the higher brackets; or by an increase in allowances to civil servants. The Mission does not recommend specific remedies for a situation whose nature can only be forecast in general terms. It would stress, however, the need to keep a careful watch on the nature of the changes that the economy is undergoing. The Mis- sion therefore recommends strongly that a committee be formed consisting of the proposed economic adviser to the Development Board and high-level representatives of the National Bank and the Ministries of Finance and Economics. This group would recom- mend directly to the Council of Ministers the adoption of timely measures aimed at checking any dangerous inflationary trends and at offsetting any tendency toward gross inequities in the distribu- tion of income. No mention has yet been made of the possibility of loss of foreign exchange by the National Bank as a result of the develop- ment program. In itself the program cannot cause an increase in expenditure on imports in excess of the outlay on the development program. In fact, as there will be some need on the part of indi- viduals or organizations to hold larger cash balances, they will save 94 THE ECONOMIC DEVELOPMENT OF IRAQ part of their income in this form and there will be some net gain of foreign exchange by the National Bank. The effect of the development program on the economy as a whole, however, has to be borne in mind. A general rise in the level of prices and wages will tend to increase consumption at the ex- pense of savings. At the same time, there will be considerable incentive to make more investment outside the development pro- gram than in the past. Thus, quite apart from the effect of the pro- gram itself, there will be some pressure to expand imports. Whether this pressure could be sufficiently strong to cause an expansion of imports by more than the amount of foreign exchange used to finance the development program is uncertain, but the possibility exists. It will be important, therefore, to avoid any further pres- sure on the payments position by an excessive expansion of credit to business or by financing a large budget deficit through bank credit. As long as ordinary government expenditures not immediately related to development are kept down and tax income maintained, there should be no serious danger of ordinary budget deficits. In fact, as national income rises as a result of increased development expenditures, ordinary revenues will probably rise more rapidly than ordinary expenditure. The government, however, will have to incur some expenditures which were, in the past, covered by income accruing from oil. Now that this income has been earmarked for the purposes of development, the deficiency has to be made up from ordinary revenue. It may, therefore, be necessary in the first few years for the government to borrow from the Development Board a part of the funds accruing to them, repayment being made when ordinary revenues begin to rise substantially. This should not inter- fere unduly with development, as the pace of actual expenditure on development is likely to be slow initially. Measures to curb credit expansion may prove more difficult as long as the banks are extraordinarily liquid. Statutory reserve requirements would have to be greatly increased to permit effective credit controls. The private banks, most of which are foreign- owned, have, in the past, however, concentrated almost exclusively on the financing of trade, particularly foreign trade. Even if in- creased opportunities arise in the future, they may show little dis- - IMPACT OF THE PROGRAM 95 position to finance investment expenditures. The National Bank should operate essentially as a banker for the commercial banks and therefore should not finance long-term investment. To dis- courage credit expansion on the basis of the larger foreign income which will accrue from oil, the Mission suggests that, instead of selling sterling receipts to the National Bank, the government seg- regate them in a special account in London apart from the country's regular foreign exchange reserves until such time as they are spent abroad or the dinar equivalent is spent in Iraq. Tax Reform Total tax revenues will probably not need to be increased pro- vided any temporary ordinary budget deficit can be met by short- term borrowing of idle funds at the disposal of the Development Board. The only exception might be taxation to pay part of the cost of raising government salaries. On the other hand, some revision in the tax structure to provide a more equitable apportion- ment of the burden would be desirable. In common with many other underdeveloped countries Iraq relies strongly on indirect taxes which bear heavily on consumers without taking into account capacity to pay. Thus in the last three fiscal years indirect taxes contributed about 82 percent of all tax receipts and 71.5 percent of all budget income, while direct taxes accounted for only 18 percent of all tax revenues and 13 percent of total government receipts. While drastic changes in the tax structure may not be feasible, some decrease in the burden of indirect taxes appears desirable. There might well be a reduction in import duties on some essential goods such as sugar and cheap cotton and rayon textiles, offset, perhaps, by an excise tax on luxuries. Likewise it may be desirable to de- crease and gradually abolish, except in its application to exports, the so-called istihlak tax which is levied on produce brought to market and at a rate varying in recent years between 10 and 1242 percent of approximate market prices. Except for the partial inci- dence of this tax, agriculture in Iraq is hardly taxed at all. The income tax which bears very heavily on the salaried classes, whose income is already comparatively low, does not apply to income from either agricultural land or urban property. Agricultural land in pri- vate hands has not been taxed since 1936 when a land and water 96 THE ECONOMIC DEVELOPMENT OF IRAQ rent tax was abolished in return for certain payments to be made by the landholders over a maximum period of ten years. Thus the tax system discriminates in favor of those who have managed to obtain state lands in lazmah grant and against those who have regu- larly leased land from the state. The latter continue to be assessed for rent whereas the former, who have frequently secured large lazmah grants on the basis of rather tenuous proof of occupancy and cultivation, escape any tax or rent assessments on their land. The application of a graduated income tax to agriculture, while equitable, may not be politically feasible at present and would certainly pose difficult problems of assessment. Consideration should be given, however, to the reintroduction of some type of land tax. The fact that the cadastral survey is only half completed would not be an insuperable obstacle. In most cases the land held by each individual will be well known in the locality where he resides. Landholders could be required to register for taxation all the land they claim with the provision that they would not be allowed to establish claims during the cadastral survey to any lands not so registered; and in case of conflicts between actual occupants and other claimants, the tax could provisionally be levied on the actual occupant. It would probably be desirable to levy the tax on culti- vable land rather than land actually under cultivation in order to provide an incentive to production or, alternatively, to release idle land for resettlement. Tax rates would have to vary in accordance with productivity of the land, which could, as in some other coun- tries, be ascertained through tests or control plots located in various parts of the country. The tax rate should presumably also take into account the government contribution to irrigation of the land. The adoption of such a land tax might be linked with the gradual reduction and perhaps ultimate abolition of the istihlak. X. Conclusion Today the people of Iraq for the most part suffer from dire poverty. Although a relatively small number of city merchants and landowners enjoy high incomes, the average standard of life is extremely low. The future would hold little prospect for relief if CONCLUSION 97 the only remedy available were a more equitable division of income. Fortunately, the future does afford the promise of a large increase in national income as a whole. The country has the natural resources—land, water and oil—which can bring a much higher standard of living to all. The revenues from oil will provide the means for a potentially rapid development of other productive re- sources. The central objective must be the attainment of a much higher output in a manner that will benefit the people as a whole. In a country like Iraq principal emphasis will inevitably need to be placed on the development of agriculture. For this reason schemes for the storage of the flood waters of the Euphrates and the Tigris will be of key importance. They will prevent disastrous floods and control the flow of the rivers so as to bring more water to deficient areas and open up large new areas for settlement by land-hungry peasants. An increase in production, however, will not come simply from an expansion of the area under cultivation. The time will come when further expansion will not be possible except at great cost. This makes it all the more necessary to raise the present low productivity of agriculture. The drainage of lands which have deteriorated owing to salting has accordingly been emphasized by the Mission as one of the first objectives. Great importance is also attached to the early development of an ade- quate agricultural extension service, supported by an effective prac- tical experimental organization, which would work directly with farmers in improving their methods of production. Other measures recommended to this end include the provision of incentives to use fertilizers and to cultivate soil-building and fodder crops, and the organization of cooperatives and more ample credit facilities so that farmers can have easier access to improved means of production- better plows and draft animals, other agricultural machinery, seeds and fertilizers. Industrial development can in many ways effectively comple- ment agriculture. The proposed chemical plant at Kirkuk, supple- mented by bonemeal plants, could provide the cheap fertilizers needed to raise the productivity of Iraqi agriculture. Expansion of cotton textile and vegetable oil extraction capacity would capitalize on the growing output of cotton. The proposed modern machine shop would cater to agriculture by reducing the cost of irrigation 98 THE ECONOMIC DEVELOPMENT OF IRAQ pumps. In other respects industrial development would be geared to supply the growing demand for consumers goods, such as shoes, textiles and utensils, and for construction materials, such as cement, arising out of the development program itself. Rising agricultural and industrial output will necessitate a cor- responding increase in transport capacity. Here the development of road transport and the replacement of wornout track, locomotives and rolling stock will be the principal tasks of the future. Since the relationship of health and education to production may appear more indirect, there is danger that these two subjects will be neglected in the emphasis on greater national output. Basically, however, it is the productivity of manpower which must be raised, and this can be achieved, only if measures are taken to make people better educated and to free them from debilitating disease. In the future the public health effort must concentrate on the prevention of disease through such measures as increasing the number of village dispensaries, the training of midwives, the organization of a corps of sanitarians, elimination of stagnant and polluted water, provision of safe water supplies and sewage dis- posal, slum clearance and better housing. Community planning should focus largely on such improvements as will contribute to better public health. A great broadening of the educational effort is needed in the future to teach people how to cope more effectively with the problems of everyday living. To this end, compulsory pri- mary education should be gradually introduced over the next 15 years and a vigorous campaign for the education of adults should be launched. At the same time, however, it is vitally important to adapt education to the practical needs of the people, helping them to improve their health and their methods of work. The program which the Mission has outlined in this report is undoubtedly ambitious. It requires a rate of progress unprece- dented for a country which for many centuries remained virtually static and which over recent decades has developed at a relatively slow pace. There is no assurance that the program can be carried out over the next five years. Yet the Mission has thought it im- portant to set up targets, even ambitious targets, toward which the country can strive. If successful, the program will bring about a CONCLUSION 99 profound economic and social transformation, with far-reaching repercussions. Accomplishment of the greater part or all of the program will require the united energies of the nation. While foreign technical assistance and materials will be needed, success of the program will depend, above all, upon the people of Iraq. Development is not the function or prerogative solely of the Development Board. It will require not only the wholehearted cooperation of the entire govern- ment but, above all, a sustained and energetic effort by the Iraqi people as a whole. Throughout the government, standards of efficiency must be raised if the manifold organizational and techni- cal problems involved in launching and carrying out a development program are to be solved. Furthermore, the government must be vigilant in anticipating and surmounting the many difficulties that will inevitably arise as economic development gets under way. To arouse the interest and mobilize the enthusiastic cooperation of the people at large, education must be greatly improved along the lines on which particular stress has been laid in this report, namely ele- mentary education for the children, vocational education for the farmers, industrial workers and artisans, and fundamental educa- tion for as many adults as possible. Success is impossible with a passive population. Individual Iraqis must be given through the press, the radio, and other media an understanding of what the government is trying to accomplish and how they themselves can contribute to the attainment of the objectives. They must also realize their stake in the program in the form of a rising standard of living and a hope for a better future for their children. Develop- ment is a truly individual as well as a national effort. Only in this way is there a guaranty that it will redound to the national welfare. : APPENDICES APPENDIX A List of the Mission's Recommendations A. Irrigation and Drainage 1. Construction of the Bekhme dam on the Greater Zab River in addition to the water reservoir and flood control schemes already comprised in the Development Board program, including the Hab- baniya and Wadi Tharthar projects and the Derbend-i-Khan and Dokan dams. 2. Postponement of the final stage of the Habbaniya project until drainage facilities for the Lower Euphrates Valley have been installed and the possibility of alternative storage capacity on the upper Euphrates has been explored. 3. Negotiation of agreements with Syria, Turkey and Iran on afforestation and other anti-erosion measures in the watersheds of the Euphrates and Tigris and their tributaries, and where appropri- ate, on the utilization of their waters. 4. Prompt execution of a comprehensive drainage program for existing irrigated areas, with priority for areas commanded by the Hindiya barrage and the Dujaila project; payment of part of the cost by beneficiaries of the scheme. 5. Reduction of wasteful use of existing water supplies not only by installing drainage facilities but also by providing the lower Tigris and Euphrates as well as the Gharraf canal with more con- trol works and by ascertaining through experimentation the opti- mum amounts of water that should be used for every crop. 6. Substantial increases in the current expenditures of the Irri- gation Department to insure improved maintenance and operation of existing irrigation systems. 7. Stricter control over the distribution of water by irrigation officials assisted by local committees of farmers. 8. Re-examination of ancient water rights belonging to partic- ular lands and assurance through appropriate legislation of rights of water passage over lands of other property owners. 9. Encouragement of small irrigation schemes based on small streams, springs or wells, in the North. 103 104 THE ECONOMIC DEVELOPMENT OF IRAQ B. Agriculture and Forestry 1. Reservation of state lands for settlement by small-holders in accordance with announced intentions of the government, subject to (a) further review of proposed size of allotments and inclusion of certain non-farmer beneficiaries, and (b) a requirement that beneficiaries pay part of the cost of settlement. 2. Progressive organization of an extension or advisory ser- vice to farmers; immediate appointment of a director responsible for recruiting and training personnel for such a service. 3. Progressive organization of an adequate research and ex- perimental department to support the extension service; immediate appointment of a director to coordinate existing research and lay the foundations for a full time research staff. 4. Encouragement of more extensive use of fertilizer and culti- vation of soil-building and forage crops; adoption of appropriate temporary financial incentives to this end; study of extent to which existing sharecropping systems makes achievement of this end difficult. 5. Combatting livestock disease and mortality through pro- vision of livestock shelters in the North, establishment of sheep- dipping stations, an increase in the number of veterinarians and diagnostic facilities, assignment of trained veterinarians to nomadic tribes, and provision of more water-holes. 6. Improvement of livestock through encouragement of better feeding, reseeding of natural pastures in the North and stipulation of rotational grazing, introduction of improved sires and establish- ment of government stud stations. 7. Increase in the paid-in capital of the Agricultural Bank to ID 2,000,000. 8. Active encouragement and promotion of agricultural co- operatives, supported by adequate credit facilities, in order to facili- tate acquisition of better seeds, tools and draft animals and common ownership and operation of irrigation pumps and agricultural machinery; establishment of such cooperatives as an integral part of every new settlement scheme; transfer of responsibility for cooperatives to Department of Agriculture and prompt training abroad of a number of officials in cooperative techniques. THE MISSION'S RECOMMENDATIONS 105 9. Continuation of Agricultural Machinery Administration, but with some increase in machinery rentals in order to reduce existing budget deficits; state encouragement of local shops for repairs of agricultural machinery to supplement centrally located repair facilities. 10. Establishment of numerous small concrete or corrugated steel grain storage sheds with an aggregate capacity of about 75,000 tons in addition to projected Basra silo. 11. Improvement in the quality of tobacco by engaging a num- ber of foreign experts (a) to work with farmers in bettering methods of growing, picking and curing, (b) to train tobacco graders, and (c) to approve tobacco for Monopoly purchase; re- placement of existing tobacco warehouses with four or five new ones provided with dust-extracting plant and humidifying equip- ment; organization of the Tobacco Monopoly as a fiscally autono- mous agency; virtual elimination of the spread between the Monop- oly's buying and selling prices, compensated by higher excises pay- able by manufacturers; lifting of the restriction on the amount of Monopoly purchases per licensed unit of area. 12. Postponement of introduction of beet sugar cultivation until further testing of comparative merits of beet sugar and cane sugar and their merits in relation to other competitive crops. 13. Carrying out the recommendations of the British expert's report on forestry already received by the Iraq government; appropriate emphasis on the planting of windbreaks in the plains and on farmers' woodlots in the new land settlement schemes ; establishment of a Department of Forestry independent of the Department of Agriculture. 14. Establishment of a Ministry of Agriculture and Land Use as a more effective means of organizing the government's activities respecting agriculture and forestry. C. Industry 1. Early consideration of a government-financed chemical plant at Kirkuk produce, from waste oil-field gas and gypsum, ammo- nium sulphate fertilizer, cement, sulphur and carbon black. 2. A gradual increase in the paid-in capital of the Industrial 106 THE ECONOMIC DEVELOPMENT OF IRAQ Bank by ID 5,000,000 to enable it to assist private enterprise in (a) expanding existing industries such as cotton textiles, vegetable oil extraction and soap making, shoe manufacturing and the fab- rication of aluminum utensils, and (b) establishing new plants for the production of bonemeal fertilizers, small steel products from scrap, irrigation pumps, automobile tires, date boxes and perhaps ultimately glass containers and paper; appointment of a foreign industrial expert as head of the Bank's Industrial Schemes section. 3. Encouragement of small industry; establishment of a small- business branch in the Industrial Bank to this end. 4. Core-drilling of indicated deposits of copper, iron, zinc, chrome and salt in order to establish their size and quality before undertaking commercial exploitation. 5. Review of existing legislation and practices with respect to the protection of industry to ensure that special protection and benefits are granted on a temporary and declining scale and are generally restricted to industries ultimately able to withstand for- eign competition. 6. Organization of the government's promotional activities relating to industry into a Department of Industrial Research and Standards with responsibility for research and laboratory work, and a Department of Industries with responsibility for the com- mercial and economic aspects of industry. 7. Greater attention to workers' welfare as a means of increas- ing labor productivity; stricter enforcement by the government of existing minimum labor standards. D. Transport and Communications 1. Execution of the ten-year highway construction and sur- facing program recommended by an interdepartmental committee, with first priority to the Baghdad-Kut-Amara-Basra and the Bagh- dad-Kirkuk-Mosul roads. 2. Supplementing the main highway program with ultimately 8,000 kilometers of secondary and feeder roads. 3. Institution of controls over road transport, providing for regular inspection of vehicles, limiting permissible loads, requiring MISSION'S RECOMMENDATIONS 107 insurance and licensing operators, to ensure regularity and reli- ability of service. 4. Gradual conversion to diesel traction on the railways; car- rying out necessary replacement of track and rolling stock; comple- tion of Baghdad-West railway station and new railway layout but on a drastically modified basis. 5. Early study of standardizing the railway gauge with a view to completing a standardization program within six years. . 6. Study of the railway rate structure, particularly with a view to the removal of certain anomalies. 7. Dredging of a new channel across the Fao bar by the Port of Basra with the financial assistance of the Development Board. 8. Improvement of the Basra and Baghdad airports to meet the specifications of Class B airports. 9. Improvement of the municipal bus service in Baghdad through standardization of equipment, establishment of central garages and modernization and re-equipment of the central work- shop with financial help from the Development Board. 10. Transfer of the capital outlays for telephone and telegraph communications to the budget of the Development Board. E. Public Health 1. Greater emphasis on measures to prevent disease such as, (a) Introduction of social medicine as a subject in the med- ical school and appropriate instruction of medical auxiliaries, particularly nurses; (b) More effective teaching of personal hygiene and sani- tation in schools, the army and the police, and by such means as films, lectures, "health weeks", and the like; (c) Organization of a sanitary corps; (d) Establishment of one school for training village mid- wives and another for training town midwives; (e) Expansion in the number of village dispensaries and their use as health centers with specially trained medi- cal assistants in charge. 108 THE ECONOMIC DEVELOPMENT OF IRAQ 2. Energetic prosecution, in close cooperation with the Irriga- tion Department, of the campaign against malaria, bilharzia and hookworm; for this purpose, appropriation of adequate funds to the Institute for Endemic Diseases and equipment of a number of mobile dispensaries. 3. Modernization, extension and replacement of existing hos- pitals before construction of additional hospitals. 4. Expansion and improvement of the medical auxiliary staff in hospitals; establishment of schools for practical nurses in each province; inauguration of special training courses for medical assistants, radiographers, laboratory assistants, storekeepers and physiotherapists. 5. Packaging of "household remedies" for sale at reasonable prices in village shops remote from pharmacies and dispensaries. 6. Appointment of an experienced public health administrator, assisted by an epidemiologist and a sanitary expert, to advise the Minister of Social Affairs on the organization and further develop- ment of health services; greater decentralization of public health administration, with assignment of more responsibility to the chief medical officer in every province who would need to be a full-time, adequately paid official, equipped to carry out his duties. F. Community Planning and Facilities 1. Ultimate establishment of a Community Planning Office in the Ministry of Interior, with the strengthening of the existing planning section in the Department of Municipalities as the initial step; use of this agency in coordinating development projects on the community level under the overall control of the Development Board. 2. Ultimate establishment of a Housing Authority in the Min- istry of Social Affairs, with the strengthening of the housing sec- tion in the Department of Labor as the first step; provision of this Authority with a Housing Fund. 3. Establishment of an Applied Building Research Station under the proposed Department of Industrial Research and Stand- ards to develop the best and most economical techniques and mate- rials for housing THE MISSION'S RECOMMENDATIONS 109 4. Rehousing of sarifa dwellers and other slum dwellers through self-help measures, with the government providing the site, water and other necessary facilities and one or two elements of the house and the people affected building their own houses or huts in accordance with specified models. 5. A modest program for public housing pending a more care- ful survey of housing needs, with special emphasis on the accommo- dation of government employees in the provinces. 6. Improvement of mortgage credit facilities by increasing the paid-in capital of the Mortgage Bank to ID 1,500,000 and permit- ting the Bank to loan money for longer terms. 7. Location of new villages away from streams, wherever pos- sible, to prevent water pollution; encouragement of self-help in building village latrines and community centres; allocation of funds to provide safe village water supplies. 8. Construction of a sewage system in Baghdad. 9. Carrying out the five-year program drafted by the De- parment of Municipalities to provide or extend urban water supply systems. 10. A program, involving the installation of 10,000 kw in thermal generating capacity, to provide or expand electricity to municipalities outside of Baghdad, Basra and Kirkuk, coupled with steps to insure the efficient management of such municipal plants through a competent private firm. G, Education 1. Gradual introduction of compulsory primary education over the next 15 years, with emphasis on the training of the necessary teachers in the first five years; some increase in the present school building program with this in view. 2. Special emphasis, in the normal development of schools beyond the primary stage, on the establishment of intermediate and secondary schools in rural areas to provide candidates for rural teachers training colleges. 3. Establishment of a Division of Fundamental Education in the Ministry of Education to carry out a progressively expanding program for adult education over the next fifteen years. 110 THE ECONOMIC DEVELOPMENT OF IRAQ 4. Fundamental revision of the content of education with more emphasis on practical instruction in health, agriculture, animal hus- bandry, handicrafts, and similar subjects. 5. Improvement in the staff and revision in the curriculum of the government secondary agricultural school and the higher agri- cultural institute at Abu Ghuraib. 6. Establishment of apprenticeship programs to provide on- the-job training to labor and foremen from the ranks, with supple- mentary training to be supplied by technical schools. 7. Review of the curriculum and general adequacy of the secondary commercial school and the College of Commerce and Economics with the help of advisory committees of representatives of leading banks and business houses ; establishment of additional secondary commercial schools as soon as more teachers can be found; greater emphasis on practical training and on cost account- ing in the College of Commerce. 8. Participation by the Development Board in the framing of programs for educating Iraqis abroad. 9. Greater continuity in education policies and programs by ensuring more permanent tenure to high officials in the Ministry of Education and establishing a Statutory Board or Council of Education. H. General 1. Appointment of a commission, assisted by two foreign ex- perts, to make a complete survey of the sytem of public administra- tion and recommend improvements. 2. Appointment of Secretaries to function as the permanent heads of the ministries immediately under the responsible ministers. 3. Interim increase in government salary scales pending final recommendations by the suggested commission on public administration. 4. Fullest possible use of foreign technical assistance in car- rying out the development program; central coordination of re- quests for foreign technical assistance; attachment of a small corps of technicians to the Development Board. THE MISSION'S RECOMMENDATIONS 111 5. Fullest possible gearing of the entire government into the planning and execution of the development program under the over- all coordination and direction of the Development Board. 6. Appointment of an economic adviser to the Development Board to assist the latter in analyzing the economic aspects of de- velopment projects and in determining priorities in the light of particular bottlenecks which may develop. 7. Early analysis of the labor requirements of the development program. 8. Mobilization of more and better information that would help in the allocation of resources, the choice of priorities and the determination of the economic impact of the development program; to this end merger of the Directorate-General of the Census and the Principal Bureau of Statistics into a single statistical agency, establishment of a special section on agricultural statistics in the Ministry of Agriculture and expansion of the Department of Labor in the Ministry of Social Affairs. 9. Consideration of ways and means of liberalizing imports as a means of curbing future price increases resulting from the impact of the development program. 10. Avoidance of ordinary government budget deficits, and curbs on expansion of bank credit except for the financing of grow- ing trade. 11. Appointment of a high-level committee consisting of re- sponsible representatives of the Development Board, the National Bank and the Ministries of Finance and Economics to watch the economic and financial repercussions of the program with a view to recommending timely measures to check dangerous inflationary trends. 12. Revisions in the tax structure in the direction of greater equity, principally by lowering import duties on necessities, offset by excises on luxuries, by gradually reducing and perhaps ulti- mately abolishing the istihlak except on exports and by reintro- ducing a tax on cultivable agricultural land. APPENDIX B Suggestions for Technical Assistance* FIELD OF OPERATION AND TYPE OF EXPERT Minimum Number I. Agriculture and Animal Husbandry Tobacco Specialists in production to work with farmers Grader Manipulators Buyer Adviser to head of Monopoly 2 1 2 1 1 5 Other Agriculture Director for proposed Extension Service, assistant and field supervisors Director for proposed Research Department and director for section on field crops Sugar beet research expert Cane sugar research expert Teachers for Abu Ghuraib agricultural school 2 1 1 2 Livestock Abattoir specialist Expert for Hides and Skins Association Wool-shearing and grading experts Adviser to veterinary services Veterinarians for field service Director of Veterinary Serum Institute Agricultural Machinery Administration Maintenance experts 1 1 2 1 5 1 3 II. Irrigation Additional supervisory engineers for drainage and irrigation 2 * Exclusive of managerial and technical personnel for industrial enterprises. 112 TECHNICAL ASSISTANCE 113 III. Industrial Bank Chief of Industrial Schemes Section 1 IV. Transport Railway rate expert Experts to study and plan gauge conversion 1 Subject to examination V. Public Health Midwives to set up training courses Additional nurses Expert to organize sanitary corps Advisory group for Ministry (public health administrator, epidemiologist and expert on sanitation) 3 37 1 3 2 VI. General Experts on public administration and personnel Economic adviser to Development Board Corps of specialists for Development Board 1 1 6-8 APPENDIX C Statistical Organization In the body of its report, the Mission has advocated the strengthening and reorganization of the statistical organization of the government. Statistics have, on the whole, been a neglected function of the government, although foreign trade statistics have been collected and published efficiently by the Statistics Division of the Customs Department and a long step forward was taken in 1947 with the eountry's first census of population. When the Mis- sion was in Iraq, the Principal Bureau of Statistics operated as hardly more than a collecting agency with no actual authority over the statistics it collected. Its staff, though willing and hard-working, was clearly inadequate to review critically the statistics it published or to take the initiative in developing new and useful sources of information. In fact, the senior staff of the Bureau have usually been transferred to more lucrative government posts or have them- selves resigned to go into private business. As a result, the annual Statistical Abstract is an unsatisfactory document. It omits useful information which could be collected without too much difficulty; it includes much unnecessary detail and some statistics of highly dubious value; and the same mistakes have tended to be perpetuated year after year. The Mission found a widespread and usually justifiable distrust of published statistics, especially agricultural statistics, which sometimes led those who had some use for statistical data to try to collect their own. The Mission believes that the rapid improvement of the sta- tistical organization is a task which should be undertaken without delay. In many fields individual judgment can be no substitute for carefully compiled statistical data. As the development program proceeds, more and more occasions will arise when such data will be needed by the Development Board, and especially by its prospec- tive economic adviser. Without adequate statistics, it will be far more difficult to follow the progress of the program in fulfilling its ultimate objective, raising the standard of living of the people, and it will often be necessary to take decisions on the basis of guess- 114 STATISTICAL ORGANIZATION 115 work. Lack of funds may have been the reason for neglect in the past, but it need be no obstacle in the future. A detailed report on the statistical organization, with which the Mission is in general agreement, was published in 1948* and an experienced statistician has now been appointed to take charge of the Bureau. In these circumstances, the Mission does not wish to do more than note a few general recommendations and to stress the importance of building up the Bureau into an efficient service organization for the whole government, which can offer an attrac- tive career for its staff. The Need for Improvement Perhaps the best way of illustrating the kind of improvement that is necessary is to consider the principal attributes which good statistics should have and to give examples of how statistics in Iraq meet these tests. Probably the most important quality is reliability. This does not mean 100 percent accuracy, which is normally im- possible. There will be limits of accuracy, varying according to the subject matter, which can be aimed at but cannot reasonably be exceeded. What is important is that the degree of accuracy, which any particular group of statistics is believed to have, should be clearly and honestly stated. Even very rough statistics can be use- ful, provided that the user knows their limitations. Since more than half of the people live off the land, data on the land and its vital complementary resource, water, are of para- mount importance. Today, agricultural statistics are collected hap- hazardly by officials with little training and little transport. Even so, the existing statistics could easily be improved by using a few simple forms and by a little checking of the results from year to year. As it is, they are published without any qualification. The published statistics of the area under cultivation by crops may be cited as an example. These statistics are computed in several ways. Some, mainly those for pump-irrigated land, are supplied by the Irrigation Department. Others are calculated on the basis of seed sown which is often the only measure the fellah knows. However, the published statistics of seed sown and area cultivated are * John Murray, A Report on Statistical Organization of the Kingdom of Iraq. Government Press, Baghdad, 1948. 116 THE ECONOMIC DEVELOPMENT OF IRAQ obviously based on a fixed rate of seed per donum (e.g. 15 kg. for wheat, 20 kg. for rice and barley) which has been applied regularly in almost every year. Yet the rate of seeding undoubtedly varies from one part of the country to another. An explanation of the methods of computation, of the reasons therefor and the degree of reliance that can be placed on them are certainly called for. Again, population statistics have been published for each province, based on a hand-count of the census results. The fact that these published figures contain an estimate for nomads might well be stated. A more important omission is an explanation of the very marked discrepancy between men and women. It is well- known that there is strong tendency in many parts of the country to record male children as female and the returns for the lower age groups confirm this in a striking manner. At least some preliminary note on how this affects the validity of the results would be advis- able. A good example of an appropriate warning is the qualifying note introducing the vital statistics which have been published. Closely allied to reliability is clarity of definition. It is not possible to use statistics properly, if it is not clear what they mean. As an example of this, the figures for cultivable land made avail- able to the Mission and shown in Table 2 of Annex A may be cited. If definitions are not clear, a series of statistics may lack continuity. An example of this is the published figures for electricity consump- tion in the various provinces, which are divided into three groups- lighting, manufacturing and other purposes. It is not clear what “other purposes” means. Moreover, although the definition evi- dently changed in Mosul between 1945 and 1946, no explanation is given and no adjustment has been made. In general, too, a number of units of weight or capacity, such as the mann and the hukka, are used in the Abstract without stating their equivalent in more stand- ard units. The fact that these units vary from one commodity to another and, it is said, from one city to another makes it all the more necessary to state the precise equivalent in the context used. Statistics should also be properly selected. If statistical pub- lications are not to become a mass of unwieldy detail, a proper bal- ance has to be struck between what is to be included and what is to be excluded. The Abstract, at present, contains much detailed medical and legal data of a somewhat specialized nature. On agri- STATISTICAL ORGANIZATION 117 culture, on the other hand, there are only global figures for the country as a whole, although data by provinces and even by smaller units such as qadhas and nahiyas is available. In spite of the poor quality of these statistics, such detail might be extremely useful and would, incidentally, make it easier to assess their reliability. Again, the revealing data on landholdings available in the Direc- torate-General of Land Settlement, which appear in Table 4 of Annex A, have not been included. No attempt has been made to collect statistics of industrial production, although in the more modern industries, at least, this would be simple. An example of another type of poor selection can be found in the long list of wholesale prices published in the Abstract, which are obtained from the Baghdad Chamber of Commerce. Prices are given for such commodities as cardamom and garlic, but none for cotton textiles, which are by far the most important commodity imported into Iraq and prices of which are regularly quoted by the Chamber of Commerce. Statistics should be also as uniform as possible to insure com- parability. For instance, common definitions should, as far as pos- sible, be used by the Customs, the Directorate-General of Imports and the railways in classifying imported goods. In fact, the machine tabulation of the statistics of the Customs and import licensing department could easily be combined, thus saving time and gaining uniformity. As another example, when statistics of industrial pro- duction are available, industrial definitions and coverage should, as far as possible, be uniform with those of the Labor Department. Finally, statistics should be made available as soon as possible, so that the earliest use can be made of them. Apart from printing delays, much of the latest information that is eventually published in the Abstract is held up until other information for the same year becomes available. Specific Recommendations 1. Full implementation should be given to the Law of Sta- tistics—No. 42 of 1939, giving the Principal Bureau the right of supervision over all statistical data in the form it prescribes. 2. As recommended in the body of the Mission's report, the functions of the Directorate-General of the Census should be trans- 118 THE ECONOMIC DEVELOPMENT OF IRAQ ferred to the Principal Bureau of Statistics as soon as possible. The Principal Bureau of Statistics should then be made responsible for the execution, with the assistance of appropriate ministries, of all censuses, including agriculture, industry, distribution, etc. These are essentially statistical functions. Moreover, it is important to bring together the available talent so as to make the statistical organization as flexible as possible. 3. The Principal Bureau of Statistics with its Census division should be housed as soon as conveniently possible in the same build- ing with the Statistics Division of the Customs. Apart from other obvious conveniences, this would bring all the tabulating machines together. At present, some machines are used to capacity, while others stand idle. In choosing the building due regard should be paid to the importance of a location close to the agricultural sta- tistics section of the proposed Ministry of Agriculture. 4. In view of the importance of agricultural statistics, the agricultural statistician requested from FAO should be appointed for a period of not less than two years. 5. In order to make statistics available as quickly as possible, a new quarterly Bulletin of Statistics should be published in Arabic and English, if possible within the next year. The Bulletin would have two principal sections: (i) regular statistics, principally for foreign trade, bal- ance of payments, finance, prices, transport and pro- duction. Data would be included up to the latest date for which they were available at the time of publication, (ii) occasional statistics or statistical studies. These should only be included as suitable opportunity occurred. Examples would be census data on particular provinces as they become available. A cumulative index should be provided for this part of the Bulletin. The Bulletin need not, and, in fact, should not start on an ambitious scale. In the first instance, it should contain only such statistics as the Bureau has been able to analyze and for which it can give accurate definitions and a reasonable estimate of numeri- cal accuracy. As other statistics meet these tests, they may be included. Such a bulletin should not require much additional STATISTICAL ORGANIZATION 119 work, as the statistics included would ordinarily be collected for the Abstract. 6. A schedule should be drawn up for the stage-by-stage growth of the staff and equipment of the Principal Bureau in accordance with the assumption of broader functions. In accord- ance with this schedule, efforts should be made to order equipment and to train or hire from abroad suitable staff. 7. Particular attention should be paid to the selection of a special assistant to the head of the Bureau to direct a small special section which would concentrate on developing and checking new sources of statistics. The Mission found that there was much untapped information in government files. As soon as new sources of data are developed satisfactorily, the collection and calculation, if any, could be turned over to appropriate sections of the Bureau. A particular task of this special section would be to lay the groundwork for future development of national income sta- tistics. In this task as much advantage as possible should be taken of experience in other parts of the Middle and Far East, for example, in India and in Turkey. Much might also be learned from the research now being carried out on the agriculture income of Syria and the Lebanon at the American University at Beirut. This assistant would require high qualifications and should have considerable personal initiative. It is essential that only a candidate of high caliber should be chosen. Preferably he should be of Iraqi nationality, but if one is not found within, say, a year, it would be better to hire a foreign statistician with suitable qualifica- tions on a short contract than to appoint an unsuitable candidate. Α Ν Ν Ε Χ Ε S 1 - ANNEX A BASIC FACTORS AND CONDITIONS 1. The Regions Iraq, a country with a population of approximately 5,000,000 and an area of 168,040 square miles, forms roughly a triangular area with the base running southwest to northeast and the apex terminating at the Persian Gulf. It is dominated by two great river systems—the Tigris and the Euphrates. The Euphrates rises in the mountains of Turkey, flows across the Northern Syrian plateau and then meanders through Iraq, receiving little additional water from tributaries. The Tigris also rises in Turkey, but further to the east and north. It enters Iraq in Mosul province and receives important accessions from the Greater and Lesser Zab Rivers which are fed from the snows and the rains of the moun- tains along the Turkish and Iranian borders and, to a lesser degree, from the Diyala River. Downstream from Ramadi on the Euphrates and Baghdad on the Tigris the two rivers form a single low-lying alluvial valley built up as a delta into the Persian Gulf. As they flow south, the rivers are virtually lost in the marshes and lakes of southern Iraq, their remaining waters uniting at Qurna to flow as the Shatt al Arab into the Persian Gulf. Only a relatively narrow belt, lying north-northeast of a line roughly running south of Mosul and Kirkuk to Khanaqin near the Iranian border, has sufficient rainfall to permit the cultivation of winter crops without irrigation. In the rest of the country, agriculture depends upon the water of the two rivers for irrigation, whether by pump, by flow or by natural inundation. With the exception of the large and remote southern and northern deserts and the greater part of the rolling uplands between the Tigris and the Euphrates known as the northern Jezireh, most of this region can be cultivated once water is made available. With storage and regulation of the river waters, a great extension of the area under cultivation is possible. Without regulation, on the other hand, the 123 124 THE ECONOMIC DEVELOPMENT OF IRAQ waters of the twin rivers are largely wasted and periodically unloosen disastrous floods upon Baghdad and the alluvial plain to the south. The Rain-fed Zone In the upland plains of the rain-fed zone stretching from Northern Mosul to Suleimaniya, wheat and barley are the principal crops. Rainfall is generally inadequate for summer crops, although water from streams and springs permit cultivation of rice and cotton. In part of this area, especially Northern Mosul, there has been a rapid extension of cultivation with the help of modern agri- cultural machinery. To the north and northeast lie the mountain massifs of Iraq. Here the raising of cattle, sheep and goats by Kurdish nomads is one of the principal occupations. The mountains are largely barren of trees but offer natural pasture for animals. In the valleys and on hillsides grain, tobacco, timber and fruit are grown. Tobacco, although small in area, is an important cash crop. Except for some handicrafts, there is little native industry in this region. Mosul, the second largest city in Iraq, is principally a commercial center and an outlet for exports to Syria and Lebanon. Kirkuk, however, is the center of most of Iraq's petroleum production and one of the largest and richest oil fields in the world. Oil fields of subsidiary importance also exist at Ain Zaleh in Mosul province and near Khanaqin in Diyala province. The mountains of the North may ultimately yield other minerals such as copper, chrome and iron. The Irrigation Zone South of the rain-fed zone the river valleys may be divided into three major regions: the upper river valleys; the lower river valley down to Amara and Nasiriya; and the triangular area from Nasiriya and Amara to the mouth of the Shatt al Arab. The first of these regions includes most of the northern Jezireh and the area north of Baghdad and east of the Tigris. The latter area still awaits irrigation for the most part, and the Jezireh is hardly susceptible to irrigation because of the elevation and configuration of the land. The Jezireh is an upland plateau BASIC FACTORS AND CONDITIONS 125 relieved by low ranges and depressed areas of which the major one is the Wadi Tharthar. It is sparsely inhabited by pastoral nomads although in the North some settled farming, made specu- lative by irregular rainfall, is carried on. The second region, extending downstream from Ramadi on the Euphrates and Baghdad on the Tigris and including the Diyala River Valley, is the area where most irrigation projects have been carried out in the past. Pump irrigation predominates on the banks of the three rivers where the land is high and water is easily accessible. For the more remote areas flow irrigation is provided by canals dependent on the Hindiya barrage on the Euphrates, the Kut barrage on the Tigris and the Diyala weir on the Diyala River. Here flow irrigation between the two main rivers is facilitated by the fact that in the Baghdad region the Euphrates is higher than the Tigris, while below Baghdad the Tigris is above the Euphrates. In this region barley is the principal winter crop, followed by wheat. Summer crops are limited by lack of water, but among them cotton has become in recent years by far the most prominent, leav- ing sorghum, sesame, green gram, corn and millet far behind. Fruit culture is important. Dates are widely grown, both for domestic consumption and for export; and the Diyala Valley in particular produces excellent citrus fruit. Rice is an important crop between Nejf and Diwaniya on the Euphrates and around Rumaitha farther down the river. The country's major concentration of population lies in the region comprising the district about Baghdad and the provinces of Hilla, Kerbela and parts of Kut and Diwaniya. It includes the capital, Baghdad, a city with a population of 550,000 and the leading commercial and industrial center of the country. The third region—the Basra, Nasiriya, Amara triangle—is generally one vast marsh during the spring floods. Here the rural dwellings are of reeds and brushwood, in contrast to the rest of the country where mud huts and, in the mountains of the North, stone houses predominate. Rice grown in the naturally inundated marshland is the staple food, varied by fish; and the water buffalo is the prevailing type of livestock. Here also is the world's largest date palm belt stretching along both sides of the Shatt al Arab and contributing one of Iraq's principal exports. Basra, Iraq's only port, is the largest city of this region and handles most of the 126 THE ECONOMIC DEVELOPMENT OF IRAQ country's foreign trade. Near it is the country's second largest oil field. To the south and southwest of the irrigation zone lie the vast arid tracts known as the southern and northern deserts which comprise about 40 percent of the land area of Iraq. These are sparsely inhabited by roaming nomads who raise camels, goats and sheep and annually take their flocks into the river valleys in search of summer pasture. II. The People The first official census of the settled population in Iraq was taken in 1947 and preliminary statistics on the male and female population of each province have already been published. The preliminary estimate of the enumerated population was approxi- mately 4.6 million. This figure has been brought up to 4.8 million in the published statistics by adding a rough estimate of 200,000 for the nomads in Mosul province and in the provinces along the Euphrates. Like all other countries at a similar stage of develop- ment, Iraq has a very young population, about half being under the age of 20. Although no reliable vital statistics are available, all indications point on the one hand to a very high rate of mortality among infants and young children, and on the other, to a corre- spondingly high birth rate. Even under the present poor health conditions the population seems to have been increasing at a rate conjectured to be in the region of one to one and a half percent per annum. Whatever the present rate, however, it is clear that, if full advantage is taken of the ample opportunity to improve health * Considering the attendant difficulties, this census may be judged a suc- cess. The information about the people of Iraq which it has already yielded and, more especially, which it can yield when tabulation is completed, is without doubt far more reliable than any estimates previously made. How- ever, as with most first attempts at census-taking, the results have to be interpreted with great caution. Besides the figures already published, the Mis- sion had access to certain unpublished data on four provinces-Baghdad, Mosul, Kirkuk and Basra. Much of the description of the population which follows is based on this data, but it must be noted that, although allowance was made for the fact that these four provinces are a most imperfect cross- section of the country, this fact is an additional limitation to the validity of any but the broadest conclusions. BASIC FACTORS AND CONDITIONS 127 conditions in the future, the rate could rise to two percent per annum or even higher within a comparatively short period. Obviously this possibility will have to be borne in mind in planning the development of social services such as education and housing. It also has important implications in agriculture. As the limited supply of water is more fully utilized, most of the increase in popu- lation may ultimately have to be absorbed in nonagricultural pur- suits, unless water is used much more efficiently than it is now. As the standard of social services such as health and education is higher in the cities and the opportunities for employment are more varied, the distinction between urban and rural population is an important one in considering the age and sex distribution of the people, their occupations and their standard of living. About 550,000 people live in the municipality of Baghdad, another 300,000 in the next three largest cities of Mosul, Basra and Kirkuk and some 350,000 in other towns having a population of over 15,000. Thus about 1.2 million people or a quarter of the population live in sizeable urban communities. In addition, there are about a hundred smaller municipalities having an aggregate population of under half a million. These towns are usually the administrative and market centers of the minor political subdivisions such as qadhas and nahiyas and many of them are little more than large villages; in many respects they form a semirural category inter- mediate between the larger towns and the villages. There has been a strong migration from the country to the cities in recent years, particularly during the last war. The most striking examples of this can be seen in Baghdad and Basra where many thousands of “squatters" from Amara province are crowded together in makeshift huts under extremely unhygienic conditions. The peculiarly adverse conditions of life in Amara have made that province the principal source of migrants to the large cities and, indeed, to most parts of the country, but there has evidently been a substantial movement from the rural areas in general. As it is prima facie likely that these migrants would consist principally of young adults or adolescents, especially men, it is not surprising to find that the census shows a much higher proportion of the very young (under 10) and the old (over 50) in the rural areas, the disparity being even more marked among men than among 128 THE ECONOMIC DEVELOPMENT OF IRAQ women. The census returns, in fact, record an extraordinarily large excess of women over men in some parts of the country, e.g., 57 percent in the three rural qadhas of Muntafiq province- but there is good reason to believe that such figures, while indica- tive of the true position, are generally exaggerated. Occupation The major occupation is agriculture and animal husbandry. Nearly two thirds of the people live in the rural villages. As handicrafts are rarely found in the villages and only a few people are absorbed by such secondary occupations as trade and transport, it is likely that 85 to 90 percent of the rural population lives directly off the land. Many of the inhabitants of the smaller and even some of the larger towns are also engaged in agriculture. In Tel Afar, a town of 20,000 in the principal grain-growing region of Mosul province, over three quarters of the male population whose occu- pation was recorded gave it as agriculture. This, however, is probably exceptional and the proportion would, no doubt, be con- siderably less than half in many smaller towns. Even in the largest cities, there is a smaller but far from negligible proportion of the population employed in agriculture, principally in the production of vegetables, dates and other fruits or in raising livestock for the city market. In all, the number of people in families whose income is derived directly from work on the land is probably in the neighbor- hood of 60 percent of the total population. This method of express- ing the percentage is used advisedly. A much higher figure could certainly be given for the number of people occupied since most of the rural population is employed to some extent. Unemploy- ment, as opposed to underemployment, is largely an urban problem. In the rural areas the number of men whose occupation was recorded by the census is often nearly as large as the number over 10 years age. This, no doubt, corresponds closely to the facts, since even young children tend flocks and perform other light work on the land while old men help with such tasks as threshing. Women, too, are an important source of agricultural labor, par- ticularly at harvest time, although this is inadequately reflected in the census. of BASIC FACTORS AND CONDITIONS 129 In the towns, on the other hand, the occupations of a much smaller proportion of the males were recorded. And, moreover, many of those that were recorded fell into various ill-defined cate- gories, which very probably include a large number of the unem- ployed or the unproductive (e.g., school children). There is, also, far less opportunity for work by women in the towns. The estimate of 60 percent for the agricultural population would leave rather less than two million people in the families of those employed in other occupations. In this sector the labor force may be estimated at about 400,000 to 450,000 men and some 30,000 women or about 450,000 in all, with a considerable margin of error on either side. Some idea of the distribution of these workers is given in the following table. TABLE 1 NONAGRICULTURAL LABOR FORCE (in thousands) 110 70- Commerce Personal and public service...... Manufacturing and handicraft... Transport Government (including police)..... 75 45 55 355 Other categories; errors and omissions..... 95 450 This table, which is necessarily a compound of industrial and occupational classifications and consequently contains a few dupli- cations, must be interpreted as only a rough estimate giving broad orders of magnitude. After agriculture, commerce is certainly the most important occupational group; the census records nearly 50,000 (including a few women) in the four largest cities alone. There is probably at least an equal number in the rest of the country, since one of the main functions of the smaller towns is to serve as centers of retail 130 THE ECONOMIC DEVELOPMENT OF IRAQ trade for the surrounding countryside and as collection centers for its produce. Even in the smallest towns rows of small shopkeepers' booths can be seen and the larger towns usually have extensive bazaars. Private and public service is another important group of occupations. Besides domestic service it includes such occupations as laundering and catering, the latter a not unimportant category in a country where the coffee-house is a center of social activity. In the four provinces for which data is available, there were 45,000 (of which 6,000 were women) in this group. The estimate given above does not seem excessive for the country as a whole. A more detailed classification of workers employed in manu- facturing will be found in Table 7. This table is based largely on statistics of workers employed in factories which have been com- piled by the Labor Directorate from returns by factory inspectors. These figures are, however, acknowledged to be incomplete, par- ticularly as regards the large numbers of handicraft workers who are self-employed with one or two assistants. From the census data it is evident that there are a large number of additional workers occupied in woodworking and allied occupations (e.g., working with palm leaves or reeds) and in tailoring or dressmak- ing; some addition would also have to be made for jewelry and textile workers. The figure of 75,000 given here includes an esti- mate for these additions. The estimate for transportation, which includes all employees of the railways and the Port of Basra, is a particularly rough one. It is believed, however, to be of the right order of magnitude. The figure for government workers is reasonably accurate, although it may duplicate to some extent workers in other categories already specified. The residual figure, of course, is subject to an extremely wide margin of error. It includes all categories not mentioned else- where such as construction workers and the professions insofar as they are not employed by the government. Literacy The acquisition of skill is severely limited by lack of educa- tion. Education is, as the monograph on that subject shows, broader than the mere ability to read and write, but the degree of BASIC FACTORS AND CONDITIONS 131 literacy in the country is a fair guide to the extent to which the Iraqi can be considered educated. According to the census, which recorded the literacy of all those of five years of age or over, literacy in Baghdad among males over five was over 40 percent; in the smaller towns of the province it was about 30 percent and in the villages only 10 percent. These figures are probably well above the average. Cities like Basra and Kirkuk have a male literacy nearer 30 percent, but in many rural nahiyas it is five per- cent or less and in the remoter nahiyas of the North as low as two percent. Literacy is much lower among women than among men. In the cities of Baghdad and Mosul, the proportion of literate females over five was about 20 percent (about half that of the males). Outside of the larger cities, however, female education hardly exists. The proportion of female literates in the rural areas and the smaller towns of Mosul, Kirkuk, Basra and Baghdad provinces barely exceeds one percent. It is not known how literacy was defined in the census, but even if these figures represent a real ability to read and under- stand rather than a smattering of education, it is clear that illiteracy is a great handicap to even the simplest form of written instruction. In industry this is apt to put a heavy burden of detailed work on the management of a factory. In agriculture it gives little possi- bility of supplementing the limited amount of oral instruction or visual demonstration which the present agricultural service can render. III. The Standard of Living No systematic estimate of the national income has yet been made. A rough estimate by the Statistical Office of the United Nations put the income per head in 1949 at $85. The equivalent in dinars would depend on the exchange rate chosen for conver- sion, which is necessarily an arbitrary choice; at the old rate, it would be about ID 20, at the new ID 30. The Mission attempted to make an estimate of the national product, but the information 132 THE ECONOMIC DEVELOPMENT OF IRAQ available to it was often unreliable, if not actually conflicting, and, in certain fields, data were completely lacking. The attempt was, therefore, abandoned, but it was at least possible to draw the conclusion that the estimate quoted above was approximately, cor- rect and that the total income per head probably fell somewhere between ID 20 and ID 30. In any event, a broad estimate of this kind which embraces both the very high incomes of the landowners and the very low incomes of the fellahin can do little more than convey a general- ized impression of poverty. While it is not possible to give even a rough idea of the distribution of incomes in statistical terms, some description of the standard of living of the people may be of value. Agriculture, which is the most important occupation in Iraq, is also the most difficult to describe, conditions being extremely varied and information virtually nonexistent. However, a hypo- thetical example of the condition of a fellah in the irrigation zone, where barley is the principal crop, may serve as a rough guide. In this zone a fellah, who cultivates 25 donums of winter crops annually, is probably above the average. Estimates of yields vary enormously, even apart from the annual variation due to water supply. Landowners tend to give a high estimate (e.g., 500 kilo- grams per donum), because they believe that the fellahin withhold part of the crop in order to obtain a larger share. This is probably true and accounts for the tendency of the fellah to give a low esti- mate (e.g., 200 kg). Apart from this, the land varies greatly in quality, pump-irrigated land being generally more productive. The fellah, however, gets a smaller share on pump land. A yield of 300 kg on flow-irrigated land would probably not be much below average, if at all. The total crop on 25 donums would then be 7.5 tons. Of this the fellah would probably get as his share two fifths or three tons, out of which he has to retain seed for the next year and to pay for some help with the threshing and harvesting, in all amounting to one half to one ton more. The balance would thus be two to two and a half tons. His family might consist of five or six people, including himself, his wife and children, and one or two other relatives such as his parents or an unmarried sister. The minimum retained for food would be one ton and, in practice, it is probably more. He would thus have BASIC FACTORS AND CONDITIONS 133 little more than one ton left to sell and he might even have to keep part of this for his draft animals, if they are unable to find enough stubble and other natural fodder. The price which a fellah gets for his grain is usually very much less than the wholesale market price in Basra or Baghdad. Although rail transport is very cheap for grains, the other costs ✓ such as local transport, bagging, weighing and storage are high; the merchants' profit and the istihlak tax also have to be deducted. Finally, the fellah's funds are usually exhausted before the harvest season and he frequently accepts a low forward price on his crop before it is gathered. For the 1950-51 crop, prices have been high (over ID 20 per ton), but many fellahin undoubtedly sold forward at prices little over ID 10. This would not be an unusual price in past seasons. Thus, ID 10 for the winter crop and perhaps another ID 10 for a small summer crop of sesame would constitute his total cash income for the year. s This income would usually be spent on food, clothing and possibly some low-grade domestic tobacco. Two of the most important items in food expenditure are sugar and tea. Dates, particularly in the South, and a few vegetables such as onions are also purchased, but, on the whole, most fruit and vegetables are beyond the reach of the fellah and are sold in the towns. Meat is only eaten occasionally, although fish is available in the marsh areas of the South. Nor does the fellah who owns no animals other than his draft animals consume much milk or leban (sour milk). Clothing would consist of some cheap cotton sheeting suffi- cient for a few garments and occasionally a second-hand jacket; few fellahin wear shoes. Hardly anything is spent on housing or furniture, the living quarters being a small mud hut without win- dows and hardly any furnishing but a few mats and cooking utensils. Soap, for example, is undoubtedly a luxury. Life is not far above the subsistence level and must often be below it. In the process of selling his surplus crop and making his small purchases, the fellah is taxed. While with crops consumed in Iraq the istihlak tax is largely borne by the buyer, in the case of an export crop such as barley, which is influenced by world prices, the tax falls most heavily on the producer. At the end of 1950, customs duties on sugar were about one fifth to one quarter of the 134 THE ECONOMIC DEVELOPMENT OF IRAQ Baghdad retail price; on tea, about one sixth. Duties on textiles are also high, but cannot be so easily measured in terms of the retail price, while excise and other revenue collected on tobacco are also very large. In the case of barley, these indirect taxes on sale and purchase might reduce the fellah's real income from his sale- able surplus by as much as one third. Although the villager contributes to the revenue of the country, he receives little in the way of benefits from its expenditure. He is usually without any kind of education, which in itself militates against the improvement of his position. Thus the average fellah would not be able to read even the simplest leaflets, which might be published to improve his methods of cultivation. Government officials, who might impart this knowledge by personal contact, are too few or too hampered by lack of transport to be able to reach him. Much the same applies to his health, which is generally poor in the first instance because he is unable to afford an adequate diet. Apart from a few generalizations, lack of information prevents comparison with other types of agriculture such as rice cultivation in the marsh areas of the South, date-gardening along the Euphrates and in Basra or grain-growing in the North. In general, the rice areas appear to be extremely congested and living standards are probably the lowest of all. Land in the North is more plentiful, the smallholder is more common, and, in any case, the share of the landlord is far lower, but rainfall is uncertain and yields vary disastrously from year to year. There are, of course, fellahin who have additional sources of income. The principal source is livestock. A fellah, who, in addition to working the land, owns a few cows or water buffalo is, by comparison, a rich man, but such people are not common. The capital required to purchase an animal may be several times the annual cash income of the poor fellah. Some may seek casual work during the long off-season, but again these are the minority. The condition of the settlers in the Dujaila project is in strik- ing contrast to that of the average fellah. The principal reason for their improved standard of living is the fact that they do not have to pay any share to a landlord. Their income is for that reason alone more than double. In addition, they have been able to acquire cows, sheep, goats and chickens. Many of them have fruit gardens. BASIC FACTORS AND CONDITIONS 135 j As a consequence they have a far healthier diet and are obviously better dressed. In fact, it is not uncommon to find a farmer who himself employs a fellah. Although this is partly a consequence of the large size of his plot (100 donums including fallow), it is indicative of his much higher standard of living. In the towns, workers with regular employment would be much better off than the poor fellah, but in cities such as Basra and Baghdad where there has been a great influx of people from the country, there is considerable underemployment in addition to unemployment. Although, at the current rate of wages for casual labor (about 200 to 250 fils a day) a man might theoreti- cally earn an annual income of ID 75 or more, there must be many who work irregularly and earn less than ID 50. Bread and rice are comparatively costly and, together with the rent of a room for a man's family, might take nearly half his income. Wages are probably not much higher in many of the smaller and more primitive industries, but artisans such as plumbers and electricians are scarce and can command much higher wages. In the more modern industries, such as the oil industry, the Port of Basra and the new factories in Baghdad, a skilled machinist can earn a dinar a day or more. On the clerical side, in the lowest grade of the regular civil service a married official with more than one child receives ID 13 per month. - The higher income of the city-dweller with regular employ- ment enables him to purchase a reasonable diet, better clothing and better housing. He also has access to educational and health services. Nevertheless, congestion and sanitary conditions are often very bad in certain parts of the cities and disease is common. Above these various classes is the small rich group of land- owners and merchants. No estimate of the proportion of the national income accruing to this group is possible, but some indica- tion can be gleaned from the fact that a landowner in the South normally gets at least half the net value of the output from the land, while, in industry, profits may exceed the total payroll. 136 THE ECONOMIC DEVELOPMENT OF IRAQ IV. Natural Resources Land and Water Aside from oil, water and land may be said to be the principal natural resources of Iraq. Of the two, water is the more critical factor in the country's development. Underground water is gen- erally plentiful, but in parts of the North it is frequently found only at considerable depth and in the central and southern portions, where the water table is high, it tends to be brackish and unfit for consumption. In the two major rivers, however, Iraq possesses a source of abundant water of a quality excellent for irrigation and, with purification, for human consumption. Here the chief problem lies in the marked variation of the flow of the rivers. On the Euphrates the mean monthly discharge of water varies from a low of 293 cubic meters per second in September to a high of 2,235 in May. On the Tigris the variation is even more marked, ranging from a low of 359 in October to a maximum of 2,951 in April. Thus periods of floods alternate with periods of acute scarcity. In the absence of storage facilities and a regulated flow, the limit on the cultivation of crops is set by the current low point in the water supply in the critical growing period for both winter and summer crops. The water problem is further complicated by the fact that continuous use of water for irrigation, coupled with the effect of evaporation in a dry, hot climate, has saturated the subsoil waters with salt and raised the water table, thus precipitating salt which, in the absence of drainage, quickly makes the land infertile. More effective use of the water supply is thus the central problem of Iraq. In relation both to the population and the land actually under cultivation, the amount of cultivable land available in the country is very large. Accurate statistics on the total cultivable area are lacking, but the following estimates based largely on data supplied by the Department of Agriculture give some conception of the magnitude : BASIC FACTORS AND CONDITIONS 137 TABLE 2 CULTIVABLE LAND, CROPPED LAND AND LAND IN AGRICULTURE USE (in millions of donums) 48.1 32.1 16.0 11.1 CULTIVABLE AREA Irrigation zone Rain-fed zone AREA ACTUALLY IN CROPS. By area Irrigation zone Rain-fed zone By type of crop Winter Summer Orchards AREA UNDER CULTIVATION.. 7.6 3.5 8.4 1.9 0.8 17.5 These figures would indicate that the area under cultivation, taking into account the assumption that almost half of the area devoted to winter crops is normally left fallow, is only about 36 percent of the total cultivable area. In the rain-fed zone the area under cultivation could theoretically be more than doubled ; and in the irrigation zone it could be almost tripled. Unquestionably these figures give a somewhat exaggerated impression for it is likely that the criteria employed in classifying land as cultivable have been rather liberal, but there is little doubt that the area under cultivation can be greatly extended. What would be required in detail to put this additional cultivable land in actual use is not known, but, in the irrigation zone, water and drainage are undoubt- edly the prime prerequisites while, in the rain-fed zone, more man- power and machinery may be the principal requirements. Forms of Land Tenare Land is held under a complicated system of tenure which has given rise to much confusion and conflict. In accordance with tra- ditional legal concepts the state has retained the ultimate legal title to nearly all the available land. Absolute private ownership, known as mamloukah or mulk, is confined to urban property and orchards. Rights to the permanent usufructuary possession of a large proportion of state or miri land have been acquired by private 138 THE ECONOMIC DEVELOPMENT OF IRAQ individuals, however, under conditions which are virtually indis- tiguishable from full private ownership, since the holdings may be sold, mortgaged or transferred to successors. In the past, claims to land were established in most cases quite informally without the benefit of full legal sanction, i.e., by simply occupying the land. Tribal lands were generally regarded as being held in common. As, however, the tribes were converted from nomadic pursuits to settled agriculture, the sheikhs and sub-sheikhs of the tribe gradu- ally established a claim to such lands as their own property and thus became landlords, with their tribesmen as sharecropping tenants. In the 19th century the Turkish government sought to estab- lish a single legal system of tenure, known as tapu, but in the end this effort only compounded the confusion. There were no syste- matic grants of tapu tenure. Grants were generally made without any examination of conflicting claims and were used as a means of rewarding the favored few. The grants that were made at that time to the Sadun clan and a few other influential persons in Muntafiq province remain contested to this day by the actual occupiers of the land. With the introduction of tapu tenure many village areas in the North apparently were registered in whole or in part as the personal possession of local notables or aghas who in the past had acted as tax farmers and served generally as intermediaries between the government and the cultivators. In the twentieth century a further complication was added by the rapid introduction of pump irrigation. City merchants financially able to buy pumps entered into arrangements with occupiers of miri land for the supply of water against specified shares in the crop, thus creating new claims to land without resolving the fate of any pre-existing claims. Following a study of this question by Sir Ernest Dowson, a British land expert, the government decided in 1932 to end the confusion by inaugurating a cadastral survey to be carried out by a number of so-called Land Settlement Committees. The law of 1932 as well as the law which replaced it in 1938 recognized the following types of land tenure: Mamloukah or mulk-land held in absolute private ownership. Matroukah-land reserved for public purposes. Mazgufa or wagf—land which is administered in trust (1) for BASIC FACTORS AND CONDITIONS 139 the benefit of religious institutions by the state Awqaf Administration, or (2) for the benefit of private persons by mutawallis appointed by religious courts. This type of waqf must be distinguished from so-called untrue waqf, namely property from which the taxes or revenue were in the past assigned to religious institutions by the Turk- ish government. Miri tapu—land held in permanent tenure from the state under conditions enabling the holder to sell or mortgage it and leave it to his successors. Proof of such tenure may be supplied by documentary evidence or by factual evi- dence that the land has been used productively by the holder or his predecessor for 10 years during which no land rent was paid or that it has been planted with trees meeting specified conditions. Miri lazmah-land held under generally the same conditions as miri tapu, but with the stipulation that the government may veto the transfer of such land if it tends to disturb the peace, a precaution designed to prevent, where neces- sary, the transfer of tribal lands to people outside the tribe. Lasmah grants are made upon proof that a person has made productive use of the land within the preceding 15 years. Miri sirf—land, particularly vacant or idle land, definitely acknowledged as belonging de facto and de jure to the state. Although tapu and lazmah land are still recognized as miri or state land, they are in fact hardly distinguishable from full private ownership. In theory, possession of these lands may lapse if they are not productively used for three successive years in the case of lazmah and for four years in the case of tapu, but this apparently happens rarely, if at all. Prior to 1939 holders of such land were generally required to make to the state a payment for rent and water rights which was lower for tapu than for lazmah land, but in that year these assessments were abolished in return for amortiza- tion of their capitalized value over a period of 10 years. With the abolition of these payments there now remains very little distinc- tion between tapu and lazmah. The cadastral survey has now been completed for about half of the land in the 14 provinces in Iraq. The progress achieved is set forth in the table below. It will be noted that 61 percent of the total land surveyed and 51 percent of the cultivable land sur- 140 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE 3 LAND CLASSIFIED ACCORDING TO TYPES OF TENURE BY CADASTRAL SURVEY* (in donums) Cultivable Uncultivable Total Total area to be classified................. Total area classified by Feb. 8, 1951.. 38,188,575 Mamlukah (mulk) 150,601 Matroukah 9,296 Mawqufa (waqf) 549,198 8,370,595 Miri lazma 7,371,720 Miri sirf 21,737,165 12,268,459 22,366 1,686,912 36,538 698,987 485,291 9,338,365 107,045,725 50,457,034 172,967 1,696,208 585,736 9,069,582 7,857,011 31,075,530 Miri tapu * For fuller details, see Table I in the appendix. veyed has been definitely adjudged to be miri sirf. Only a small part of the land is actually being exploited today. About 1.6 million donums is let by the state on triennial leaseholds which may be renewed once by the same holder. Virtually all of the land in Amara province is also leased out by the state. Here, however, it is held under virtually permanent leaseholds by sheikhs who have been rewarded by rather large tracts of land in return for main- taining order and performing other services in this province which has a somewhat unruly past.? The remainder of cultivable miri sirf land is in theory still available for exploitation. Presumably most of the better and more accessible lands have been alienated to private holders, and that remaining to the state is in large part relatively poor, inaccessible, or not susceptible of irrigation. Never- theless, there is undoubtedly a large reservoir of state land which can still be opened to cultivation, particularly if irrigation is provided. A feature of the 1932 law inaugurating the cadastral survey was the introduction of lazmah tenure. This type of tenure was designed to recognize prescriptive rights to tribal lands. In prac- tice, the sheikhs rather than the tribesmen have benefited from this provision of the law. Lazmah grants could be obtained on proof ' In all there are 290 leaseholds of cultivated state land in Amara of which 13 are between 10,000 and 35,000 donums, 10 between 5,000 and 10,000 donums and 95 between 1,000 and 5,000 donums. BASIC FACTORS AND CONDITIONS 141 that the land was cultivated and a crop produced in any one year, and the land settlement officers, who have sometimes been inex- perienced and subject to influence, have on occasion accepted even more tenuous evidence as proof of a prescriptive claim. In this way a large portion of state land has been alienated to sheikhs and other influential persons, and the number of large landowners has multiplied. Distribution of Land Complete data on the distribution of landholdings are not available. For the area covered by the cadastral survey, it is possible to classify private landholdings into various categories according to size. Such a classification, given in the accompanying table, shows that holdings of 1000 donums or less account for only 15.7 percent of the area. This is indicative of the small number of peasant proprietors. On the other hand, holdings of over 1,000 donums accounted for 67.1 percent of the total of privately owned land, while those of more than 10,000 donums comprised 24.3 per- cent of the area. Moreover, the importance of large holdings is undoubtedly underestimated by these figures. The cadastral survey has proceeded by areas known as muqata'as. In a number of cases landowners have holdings in several muqata'as, but these have been registered as separate holdings. Thus, according to the cadastral survey, there is only one holding in Kut in excess of 100,000 donums (namely 174,251 donums), although it is generally reported that there are actually several holdings well over 300,000 donums. The accompanying table indicates that the highest proportion of small holdings is apparently in Basra, Dulaim, Kirkuk and Suleimaniya. The provinces of Kut, Amara, Mosul, Diyala and Kerbela have the highest percentage of large holdings. The Sharecropping System Although the amount of land cultivated directly by the land- owner has increased since the last war with the use of modern machinery, particularly in Mosul and Baghdad provinces, the great bulk of the land is tilled for the landholder by peasants or fellahin gainst a share in the crop. The sharecropper is not a tenant in the sense that this word is generally used in the western world. He has no discretion in the use of the land and does not lease a 142 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE 4 DISTRIBUTION OF PRIVATE LANDHOLDINGS ACCORDING TO CADASTRAL SURVEY (mulk, tapu and lazmah holdings) Percentage of Total Area by Cadastral Survey Percentage of Area Covered by Cadastral Survey in Holdings of: less than 501. 1001 10,001 100.001. than less 101-500 1000 10,000 100,000 200,000 501 1001 donums donums donums donums donums donums donums over 1000 donums 1-100 donums over 10,000 donums Province Mosul Erbil Kirkuk Suleimaniya Diyala Dulaim Baghdad Kut Hilla Kerbela Diwaniya Basra Amara 64.2 31.7 44.4 14.3 37.9 46.6 68.7 100.0 94.7 42.5 26.2 20.6 37.7 17.1 19.9 32.4 24.7 4.1 24.0 13.8 1.8 18.4 15.7 16.4 25.5 2.9 4.1 12.7 13.9 18.1 9.8 36.3 17.1 5.4 13.7 7.6 19.0 16.5 2.7 2.8 4.7 5.0 8.9 11.3 8.2 10.7 4.4 9.4 1.6 9.9 6.8 5.0 48.8 57.4 29.8 42.4 61.3 19.0 37.5 35.7 41.0 43.8 34.1 43.9 13.6 27.2 5.3 18.9 5.9 13.5 12.5 20.9 45.7 17.5 31.3 20.6 7.3 75.8 21.2 32.6 46.3 42.8 13.9 60.3 30.9 7.2 32.1 23.3 35.4 42.0 5.6 24.0 76.0 37.3 62.7 51.3 48.7 51.7 48.3 25.2 74.8 68.5 31.5 41.6 58.4 11.6 88.4 41.5 58.5 24.9 75.1 45.3 54.7 48.8 51.2 10.6 89.4 27.2 5.3 18.9 5.9 13.5 12.5 20.9 52.7 17.5 31.3 20.6 7.3 75.8 7.0 Total 50.0 15.7 11.0 6.2 42.8 23.2 1.1 26.7 32.9 67.1 24.3 BASIC FACTORS AND CONDITIONS 143 specified piece of land for a definite period from the landholder against a fixed rental. The landholder or his agent (sirkal) assigns to the sharecropper each year the land to be cropped, determines the type and quantity of seed to be sown and prescribes the time and methods of plowing, watering, harvesting, etc. He generally makes an initial advance to the cultivator and often provides the fellah with seeds, draft animals and other means of production. Under the Law Governing the Rights and Duties of Cultivators enacted in 1933, the landholder has the power to keep the fellah on the land as long as the latter is indebted to him. Thus the fellah is in reality a laborer who works with his family not for a fixed wage, but for a share of the crop. The portion of the crop retained by the fellah varies rather widely. In the northern rain-fed zone it is higher than in the southern irrigation zone. In flow-irrigated areas it is half or two fifths but drops to about one third when the landholder provides the seed. Although, under the law, the landholder is not allowed to charge interest on his advances to cultivators, his share of the crop when he provides the seed increases out of proportion to the cost of the seed he furnishes. When the land is pump-irrigated, the fellah's share is generally only two sevenths or three sevenths of the crop. In date and fruit groves where the landowner must make a heavy investment and the value of the output is high, the fellah may only get a fifth to an eighth of the crop. In the rain- fed zone the fellah usually retains 90 percent of the winter crop and even more if the land is relatively remote from the town or city. His share of summer crops which can only be grown with water furnished by the landowner may range from two thirds to one half provided he supplies his own seeds and implements. In general the fellah's share is larger in the North because manpower is less plentiful in relation to available land, yields tend to be lower owing to uncertain rainfall and the fellah frequently has long- established rights to the cultivation of his land. The amount of land cultivated by each fellah and his family varies widely. In the irrigation zone the fellah may on the average plant about 20 donums of winter crops, and, owing to the short- age of water, perhaps 15 percent of this area in summer crops. In rice areas, he generally has only about four to five donums on the 144 THE ECONOMIC DEVELOPMENT OF IRAQ average; and in date and fruit groves his allotment is likely to be equally small. In each of these cases, however, the output per donum is considerably more valuable. In the rain-fed plains of the North where land is more plentiful and yields more uncertain, he may on the average plant as much as 40 donums in winter crops. In most areas the fellah and his family can probably get as large a winter crop area as they can till, but their capacity is limited by lack of draft animals, primitive agricultural techniques and the debilitating effects of disease and a hot climate. In some areas of the irrigation zone, however, particularly in parts of Hilla, Kerbela and Diwaniya, the fellah appears to get less land than he can till owing to the limited availability of good, irrigated land. The same applies to some rice-growing areas, particularly in Amara. Lack of sufficient draft animals and implements, low yields and the necessity of turning over a share of the crop to the land- lord or pump owner all combine to depress the economic status of the sharecropper. His position can only be improved by enabling him to raise his output or by increasing his bargaining power through the creation of alternative opportunities for employment and the opening up of new lands to settlement. Minerals: Oil Iraq possesses considerable mineral resources. Of these by far the most important is petroleum. There are at present two major oil fields—one near Kirkuk in the North, the other near Basra in the South. The Kirkuk field is generally reputed to have reserves of over 1,000 million tons, while that near Basra, which is less well explored, seems to be almost equally promising. There are also minor oil fields at Ain Zaleh in Mosul province and near Khanaqin on the Iranian border. Although surface indications of the existence of copper, iron, chromite and other ores have been found in the mountainous belt adjoining Turkey and Iran, the existence of deposits of sufficient size to warrant commercial exploitation must first be confirmed by core drilling BASIC FACTORS AND CONDITIONS 145 V. Production A considerable part of Iraq's potentially large resources are as yet unutilized or ineffectively utilized. Most of the manpower on the land is underemployed for a large part of the year, and con- siderable unemployment exists in the major cities. Vast tracts of land await reclamation and irrigation before they can be used. Much of the available water is wasted owing to lack of storage and regulation of flow. Oil reserves have as yet been tapped only in relatively modest quantities. The output of the country is therefore still very low and the standard of living correspondingly depressed. Agriculture and Livestock Estimates of the area and output of the principal crops are given in the table below. Although the statistics are not very reliable, they give some indication of the relative importance of the various crops. Barley and wheat are clearly the dominant crops. Barley is one of the leading exports, and cereals altogether accounted for 43 percent by value of the country's exports other than oil in the period 1948-50. Rice is another important cereal. Cotton is now vying with rice as the leading summer crop. Stimu- lated by high prices and government encouragement, the area planted to cotton has risen rapidly in recent years. In 1951, prob- ably about 580,000 donums were put in cotton-almost five times the amount in the preceding year. Other summer crops are com- paratively insignificant. Some sesame is grown for oil, and some corn, millet and grain sorghum. Tobacco assumes importance only in the mountainous area of the North. Virtually no crops are grown for animal fodder, and the production of hay is unknown. The area devoted to soil-building crops such as legumes is rather small. Next to cereals, dates are the most important crop. There are about 20.2 million date trees, of which about 9.7 million are along the Shatt al Arab near Basra and the balance in the central valley districts of the Tigris and the Euphrates and the Diyala River Valley. Dates are a staple food over most of Iraq and date exports, particularly from the Basra area, contributed 31 percent by 146 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE 5 ESTIMATED AREA AND PRODUCTION OF PRINCIPAL CROPS Area (in 1000 donums) Production (in 1000 metric tons) 1949 1950 1949 1935-39 Average 1946-50 Average 1935-39 Average 1950 1946-50 Average 3814 3493 583 541 n.a. 4156 3686 41 28 6 1 43 4000 3800 45 35 8 800 520 6 3 703 375 5 2 0.2 n.a. 750 450 5 3 0.3 n.a. 34 6 n.a. 0.2 970 55 153 148 2.5 273 7 10 212 6 9 242 25 10 n.a. Winter crops Barley 3200 Wheat 2940 Lentils Vetch n.a. Linseed n.a. Summer crops Rice 636 Cotton 84 Sesame n.a. Vegetables n.a. Corn n.a. Millet n.a. Green gram n.a. Tobacco 16 Dates n.a. Other fruits Vegetables n.a. 1 Not available Licensed area & Purchases by the Tobacco Monopoly 617 43 176 100 61 165 111 15° n.a. 106 160 86 199 870 130 75 110 130 140 70 162 n.a. 150 n.a. 16 13 9 48 n.a. n.a. 10 18 11 58 n.a. 21 19 12 38 n.a. 5 300 275 170 250 750 750 750 n.a. n.a. n.a. n.a. n.a. 100 110 n.a. na. n.a. n.a. 1 BASIC FACTORS AND CONDITIONS 147 value of the country's total exports, other than oil, in the years 1948-1950. Citrus fruit, grown for domestic consumption, is of considerable importance in the Diyala River valley and substantial quantities of other fruits and nuts, although of rather poor quality and marketability, are grown in the North, especially in Sulei- maniya and Erbil. Vegetable culture is of particular importance in the neighborhood of large cities. Agricultural yields are generally low, although most of the soil is inherently quite fertile. Barley yields, for instance, are about 30 to 35 percent less than those in Canada and the United States and probably slightly less than those of Turkey and Iran. Little or no animal manure or fertilizer is applied, animal dung being used largely for fuel. Salinity attributable to poor drainage has materially lowered productivity of land in the irrigation zone. The soil is often poorly prepared, and weeds detract from the yields. Chief reliance is placed on the fallow system to restore soil fertility, but, since fallow land is often allowed to go up in weeds on which animals graze, its efficacy is limited. / The raising of livestock is an important industry. Sheep and goats predominate because they thrive despite poor grazing and feeding. TABLE 6 ESTIMATE OF LIVESTOCK POPULATION, 1949-50 ......... Sheep 7,489,700 Goats 1,754,300 Cattle 1,034,600 Buffaloes 200,700 Camels 279,200 Horses 183,800 Mules 66,850 Donkeys 326,400 Sheep and goats, as well as camels, are kept primarily by pastoral nomads who probably number well over 200,000. Cattle and water buffaloes are the livestock of the settled agricultural 148 THE ECONOMIC DEVELOPMENT OF IRAQ population. Livestock, however, are an adjunct to agriculture rather than an integral part of it. Many fellahin have no livestock at all except for a draft animal or two. Livestock are left to forage for themselves, with only some supplementary feeding with straw and perhaps barley in the winter. Only the livestock in and around the cities are systematically fed. Livestock yields are generally very low, primarily because of inadequate feeding, but also because of poor breeding and disease. Yet livestock and livestock products —wool, hides and skins, and casings—accounted for about 13 per- cent of the total value of Iraq's exports, exclusive of oil, in the period 1948-1950. Industrial Output Industrial production is still very small. Reliable figures on industrial output and employment are unavailable. According to the Department of Labor, there are roughly 2,400 enterprises in industry, exclusive of service industries, employing over four per- sons. From Department of Labor data as well as certain supple- mentary sources, it is possible to give a breakdown for approxi- mately 45,000 people engaged in industrial production. As already indicated, the actual number of people so employed is apparently considerably greater if account is taken of small handicraft enter- prises. About 11,500 are employed in petroleum production and refining. The textile, apparel and footwear industries probably employ about 11,000 people. The processing of food, beverages, tobacco, other agricultural products and livestock products accounts for an employment of perhaps 9,000; the production of building materials, including bricks, tile and cement, for about 6,000; and wood processing, for approximately 2,000. Metal-working and machinery repair and maintenance account for most of the balance. These employment figures tend to convey a rather exaggerated impression of possible industrial output. With the exception of those in the petroleum industry, virtually all are employed in small undertakings where the work is predominantly done by hand and productivity is accordingly very low. It is estimated that only about 2,000 people are engaged in what might be characterized as modern plants. Among these are one woolen and one cotton mill, one brewery, several distilleries, a cement plant, a vegetable oil and soap factory, and a number of flour mills. BASIC FACTORS AND CONDITIONS 149 TABLE 7 ESTIMATED INDUSTRIAL EMPLOYMENT 11,500 4,500 3,500 Petroleum production and refining...... Food and beverage Tobacco Wool and cotton processing, textiles, wearing apparel and footwear....... Wood processing and wood products.. Leather (other than footwear)........... Chemicals (vegetable oils, soap, etc.)............... Building materials Metal-working, including jewelry Machinery and machinery repair.. Electricity and water supply..... Miscellaneous Total 11,000 2,000 450 550 6,000 1,500 2,700 1,100 1,000 45,800 Indications of output in the more primitive industries are very scanty, but data on output in some of the more modern industries can be found in the monograph on Industry. Production is, in general, on a modest scale, although some industries such as cement fill most of the country's needs. Petroleum Production and Refining Although production of petroleum is now rising rapidly, it has been relatively modest in the past. The exploitation of oil is predominantly in the hands of three companies—the Iraq Petroleum Company, the Mosul Petroleum Company and the Basra Petroleum Company-all owned in equal shares, except for five percent controlled by Mr. Gulbenkian, by the Anglo-Iranian Oil Company, the Royal Dutch-Shell, the Compagnie Française des Petroles and the Near East Development Corporation (owned jointly by Standard Oil of New Jersey and Socony-Vacuum). Of these three, the Iraq Petroleum Company, which is exploiting the large field near Kirkuk, is the only one in production. In addi- tion, the Khanaqin Oil Company, a subsidiary of the Anglo-Iranian Oil Company, has a small concession adjoining the Iranian border. Efforts to develop production have been concentrated mainly on the Kirkuk field where oil is found at the depth of only between 150 THE ECONOMIC DEVELOPMENT OF IRAQ 2,500 and 2,800 feet and production costs are accordingly low. Production capacity has been increasing more rapidly than trans- port capacity. Until 1949 there were only two 12" pipelines with an annual capacity of over 2,000,000 tons each—one to Tripoli in the Lebanon, the other to Haifa in Palestine. With the outbreak of war with Israel the Haifa pipeline was shut down and work on the completion of an additional 16" pipeline to Haifa, which was to have an annual capacity of 4,000,000 tons, was halted. Output therefore had to be reduced from 4,354,000 tons in 1947 to 3,017, 000 tons in 1948. With the completion of another 16" line to Tripoli in 1949, it rose again to about 6,000,000 tons in 1950. Work has proceeded steadily on the construction of a new 30" line, with an annual capacity of 13,000,000 tons, from Banias, Syria, and it is expected that this line will be linked in the spring of 1952 with the disused portions of the two lines to Haifa lying inside Iraq, thus permitting a partial use of the new capacity while the remainder of the line is finished in Iraq. Meanwhile the produc- tive capacity of the Kirkuk field is being increased rapidly to an annual volume of over 20,000,000 tons. In Mosul, where prospects are much less promising, produc- tion is not expected to begin until 1953 and then only at a rate of about 1,000,000 tons per year. Work on the fields near Basra, which are potentially very rich, was begun much later but is now rapidly proceeding. Production costs will be considerably higher than at Kirkuk because oil is found only at a depth of 10,000 feet or more. A pipeline with an annual capacity of about 2,500,000 tons has been completed to the port of Fao on the Persian Gulf, and oil is expected to start flowing early in 1952. The company has undertaken to increase production to 8,000,000 tons by 1955. The output of the Khanaqin Oil Company is confined to two wells in the Naft Khaneh field and is used entirely in the company's Alwand refinery, a simple distillation plant which is the only refin- ery in Iraq. Although drilling is proceeding in the Chia Surkh field north of Khanaqin, it is unlikely that the company's total output will rise substantially. The company's Alwand refinery, which employs approximately 525 people, produces about 70 per- cent of the petroleum products consumed in Iraq, the remainder being supplied, until recently, from the Abadan refinery in Iran. BASIC FACTORS AND CONDITIONS 151 Petroleum products are distributed by the Rafidain Oil Com- pany, a subsidiary of the Anglo-Iranian Oil Company, and at prices, exclusive of taxes, which are among the lowest in the world. TABLE 8 PRODUCTION OF PETROLEUM AND REFINED PRODUCTS (in thousand metric tons) 1947 1948 1949 1950 1951 (est'd.) Crude oil Iraq Petroleum Company...... Khanaqin Oil Company...... Total Refined products 4,354 3,017 339 367 3,671 365 5,986 384 7,500 350 7,850 4,6393,384 n.a. 373 4,036 369 6,370 393 VI. Transport The state-owned railway system is the principal means of transport, carrying about 2,000,000 tons of cargo and over 3,000,- 000 passengers annually. Part of it is standard and part meter gauge. The standard-gauge section is part of the original Berlin- Baghdad railway and runs from Baghdad northward via Mosul into Syria and Turkey. The meter-gauge line extends from the Port of Basra in the South to Baghdad and then beyond to Kirkuk and Erbil in the North, with a branch line to Khanaqin. Over recent years the railways have managed to carry out a considerable capital development program despite serious financial obstacles, but they now face the need of replacing, on a considerable scale, old track, rolling stock and locomotives. Road transport has as yet primarily supplemented rather than replaced railway traffic. There are only about 11,000 passenger cars and a little over 9,000 trucks and buses in the country. Roads are generally inadequate. There are only about 2,500 kilometers of metalled and surfaced roads in all of Iraq. The remaining dirt roads quickly become impassable in bad weather. Some important 152 THE ECONOMIC DEVELOPMENT OF IRAQ centers such as Amara and Kut are linked neither by rail nor by all-weather roads to Basra and Baghdad. In Basra, Iraq possesses an excellent port capable of handling a considerable increase in traffic. Upcountry cargo into and out of the port is handled almost wholly by railway, for inland river traffic has declined greatly in importance owing to shallow water and other impediments to navigation. The port and the railways are each run by an autonomous administration operating under a separate budget. VII. Money and Banking The banking system consists of the National Bank, five com- mercial banks, a number of private banks or sarrafs, the post office savings bank, and three state-owned longer-term financing institu- tions, the Industrial Bank, the Agricultural Bank and the Mort- gage Bank. The National Bank succeeded the Iraq Currency Board as the currency-issuing authority in 1949. Iraq is a member of the sterling area, so that its currency is backed principally by sterling assets in London. Although the law permits the currency to be backed up to 30 percent by Iraqi government securities, as of March 31, 1951, the total amount of currency in circulation was more than covered by sterling assets. Aside from its note-issuing function, the Bank is charged with the administration of foreign exchange control and the supervision of the banking system in accordance with a bank control law which became effective at the beginning of 1950. This law requires banks to keep the equivalent of 15 per- cent of their time and demand deposits as a reserve with the National Bank and to keep 50 percent of these deposits in the form of cash and investments in Iraq. The National Bank is empowered to reduce the reserve requirement to 10 percent and to vary the second between 30 and 70 percent. Since the com- mercial banks have had no need for recourse to the National Bank in order to replenish their cash resources, the Bank's loans and advances have remained very small. As of March 31, 1951, they BASIC FACTORS AND CONDITIONS 153 stood at only ID 650,000, consisting almost wholly of advances to the Baghdad Water Board and the Industrial, Agricultural and Mortgage Banks. Almost all of the remaining assets of the Bank- ing Department consist of Iraqi government securities valued at ID 5,490,000.8 There are five commercial banks in Iraq, of which three are foreign banks. Of the two Iraqi banks, one, the Rafidain Bank, was organized and is controlled by the government and serves as the depository of government funds. These banks confine them- selves principally to the short-term financing of foreign and domestic trade and have always kept themselves very liquid. Thus, as of March 31, 1951, their total liquid assets, including notes and coin, current accounts abroad, discounts and davances, but exclud- ing the statutory 15 percent reserve maintained with the National Bank, amounted to about 87 percent of their current and short- term liabilities, and even 70 percent when advances which are primarily short-term are kept out of account. The operations of the commercial banks are supplemented by the sarrafs which are principally engaged in financing small traders. Their number has been drastically reduced in the last year or two, owing partly to the exodus of the Jews and partly to their failure to meet the requirements of the bank control law that they submit their accounts and divorce their banking and trading operations. The total foreign exchange assets of the banking system are quite considerable. As of March 31, 1951, they amounted to about ID 50,400,000. Total holdings tend to fluctuate primarily because of the influence of harvests upon exports. Thus a harvest failure in 1947, followed by another bad harvest in 1948, as well as the effect of the outbreak of war with Israel in 1948, were instrumental in reducing holdings from ID 64,900,000 at the end of 1946 to ID 43,400,000 in September 1949. As the result of two successive good harvests, reserves then rose in the ensuing year and a half by ID 7,100,000. Part of Iraq's sterling assets have been frozen since the war, releases being governed by a five-year agreement effec- * See statement of the National Bank's assets and liabilities in Table II in Appendix. * For a consolidated statement of the principal assets and liabilities of the commercial banks, see Table III in Appendix. BASIC FACTORS AND CONDITIONS 155 to supplement its capital by borrowing and accepting time deposits from certain institutions, their resources have been wholly inade- quate to the need. VIII. Domestic and Foreign Trade and the Balance of Payments As noted earlier, trade is probably the second most important occupation. To all appearances, the system of distribution is extremely wasteful. Both in the small towns and in the larger cities there are numerous traders with very small stocks of goods, who cannot possibly earn more than an exiguous income, even if their margin of profit is high. The position is, however, not likely to be cured until the general level of incomes rises and there is alternative opportunity for employment. Iraq produces most of its food, but apart from fuel, tobacco, and some building materials, most of its other requirements must be imported. Even the small local industries and handicrafts depend to some extent on imported raw materials. Much of the trade is therefore foreign trade. Baghdad is the principal center for the import trade and also has a considerable share in the export trade, although Mosul is the main center for the export of wool and Basra for dates and barley. Although there are a number of large firms, among them sev- eral foreign companies, engaged in the export-import business, trade is by no means monopolized, as can be seen from the follow- ing table which shows the distribution of import licenses granted : TABLE 9 IMPORT LICENSES : 1951 Import Quota (ID 000) Number of Importers Baghdad Other Cities Total Allocation (ID million) 100-180 50-80 20-40 5-10 36 60 344 1,015 18 24 147 502 6.6 4.9 13.1 10.4 1,453 691 34.9 156 THE ECONOMIC DEVELOPMENT OF IRAQ Competition, in fact, is quite keen in bulk commodities like sugar, tea and textiles. There is no organized market, either in export or import commodities, so that, as speculation is rife, prices can swing rapidly upward on the basis of rumored or actual shortage. TABLE 10 IMPORTS INTO IRAQ (by value) (in millions of dinars) 1938 1947 1948 1949 1950 1.7 2.3 0.2 3.7 2.1 2.3 2.2 2.8 1.1 4.8 2.9 - 1. Sugar 0.5 2. Tea 0.4 3. Cereals and flour... 4. Other food, beverages and tobacco 0.4 5. Cotton and rayon piece-goods.. 1.3 6. Other textiles and clothing?.. 0.9 7. Soap and matches........... 0.1 8. Cement and timber............. 0.5 9. Petroleum products 0.3 10. Iron and steel................... 1.1 11. Automobiles, trucks, and parts? 0.5 12. Machinery; electrical and other transport equipment...... 1.7 13. Miscellaneous 1.7 2.0 7.7 4.0 0.8 1.6 0.9 4.8 2.3 1.4 7.7 3.4 1.0 1.6 1.6 5.0 2.5 1.5 6.2 2.9 1.0 1.0 1.3 0.9 6.4 3.0 0.7 0.4 1.6 3.7 2.2 4.9 2.7 7.0 4.4 7.3 6.8 6.4 5.9 5.2 5.9 40.5 Total Oil company imports. 9.4 1.0 40.0 5.1 45.5 9.5 ........... 37.6 8.4 10.3 Net 8.4 34.9 36.0 30.2 29.2 1 Excluding burlap bags, rope, etc. 2 Including tires and tubes. 3 The majority of these imports were categories 9 to 12. For example, oil company imports in these categories were about ID 8,000,000 in 1948 and ID 9,000,000 in 1949, out of a total of ID 16,000,000 in each year. Except for petroleum products, these goods were virtually all for the companies' own use rather than for resale. Imports Table 10 gives a list of the principal imports for 1938 and for the last four years. Broadly speaking, categories 1 to 7 repre- sent the principal consumer goods, categories 8 to 12 fuel, build- ing materials and capital equipment, and category 13 some con- sumer goods and some industrial raw materials. As the footnote to BASIC FACTORS AND CONDITIONS 157 the table indicates, however, the list as it stands includes imports by the oil companies for their own use, only a very small proportion of which are consumer goods. If these are eliminated, the break- down in 1948 and 1949 would be roughly as follows: TABLE 11 IMPORTS (excluding oil company imports for their own use) 1948 (ID million) (%) 1949 (ID million) (%) 1-7. Principal consumer goods...... 21.5 8-12. Fuel, capital goods, etc. 11.0 13. Miscellaneous .... 5.0 59 30 13 17.6 9.3 4.6 29 15 37.5 100 31.5 100 Thus about 60 percent of the imports other than those by the oil companies were consumer goods, of which textiles, sugar and tea, which are the bulk commodities purchased by the mass of the people, were much the most important. Quantities of these goods imported during the past years are shown in the following table: TABLE 12 IMPORTS OF Textiles, SUGAR AND TEA (by quantity) Sugar Tea (000 tons) Cotton (in Piece-goods Art. silk Woolen illion square meters) 1930-34 av. 1935-39 av. 1947 1948 1949 1950 62.2 60.6 47.2 56.0 61.6 54.3 11.4 17.3 4.1 1.5 4.2 10.1 1.2 2.2 1.2 2.0 1.6 1.4 37.6 40.5 28.7 85.8 52.0 87.2 2.1 3.0 6.4 6.2 8.0 6.9 It will be observed that imports of sugar and tea are now more than double what they were before the war, which, even after discounting an increase in population, must indicate a large rise in consumption per head. Imports of textiles, on the other hand, are 158 THE ECONOMIC DEVELOPMENT OF IRAQ actually less than before the war, so that, although domestic pro- duction has increased, consumption per head must have fallen. Since the war, however, the government has encouraged the import of secondhand clothing, licenses being granted for imports from the United States. Iraq usually produces sufficient cereals for its own use, imports in 1948 and 1949 being the consequence of two successive harvest failures. Apart from ghee, spices and some vegetables, most of the other foods are high-quality products consumed by the com- paratively rich. Of these the import of beer has recently been prohibited, since a modern brewery now supplies the country's requirements. Both soap and matches are made in Iraq, but soap manufac- ture was until recently a "backyard" industry and the quality of the product was poor. The sharp drop in imports of cement and timber in 1950 is a consequence of the new cement plant coming into full production. Imports of timber were also low owing to a depression in the building industry. Timber requirements are, how- ever, likely to increase, as Iraq's own sources of supply are meager. Imports of iron and steel have also been affected by the slump in construction. This category, however, includes a wide range of other articles besides structural steel, the most important in recent years being pipelines for the oil companies. Other articles, such as household ware, should more properly be included with consumer goods. As Iraq's output of refined petroleum products is limited to a small refinery and the requirements of motor transport, irrigation pumps, agricultural machinery and industry have steadily increased, a growing deficit has had to be made up by imports. The govern- ment plans to build a new refinery which should, when completed, remove the need to import virtually all of these products. Among the most important categories of machinery are irri- gation pumps and agricultural machinery, imports of the latter having greatly increased since the war. Other items include equip- ment for electricity production and distribution, and plants for the various new industries started since the war, such as textiles, distilling and the manufacture of ice. BASIC FACTORS AND CONDITIONS 159 The miscellaneous category includes such items as glassware, ceramic products and pharmaceutical products. A number of raw materials or other products used in industry are also included, for example: tanning material ; leather for shoemaking; wooden boxes and other materials for packing dates (to the value of about half a million dinars in 1948); oils and oilseeds for the vegetable oil and soap industry; and non-ferrous metals for the small metal- working industries. Exports The three principal groups of exports are dates, cereals and animal products. Although there have been large fluctuations in the quantities exported, particularly of cereals, over the last 25 years their combined value has usually been at least 85 percent of the total value of exports other than oil, and has often been more. Of the remaining export products, cotton has usually been of some importance in the past and promises to be of much greater import- ance in the future. Prewar and postwar values of the groups of exports are shown in the following table: TABLE 13 PRINCIPAL EXPORTS (in millions of dinars) 1931-35 Av. 1936-39 Av. 1947 1948 1949 1950 3.2 Dates Cereals Animal products Other 0.9 0.7 0.5 0.4 0.9 1.3 1.2 0.5 4.7 6.7 1.2 1.2 4.7 0.2 1.6 1.1 5.8 1.2 1.0 4.3 10.8 2.2 3.1 Total 2.5 3.9 13.8 7.6 11.2 20.4 Dates. Iraq has long been the foremost exporter of dates in the world. The quantity exported has increased steadily from an average of 120,000 tons in the late twenties to 200,000 tons since the war. The crop may vary considerably from year to year. For example, the amount exported in the last quarter of 1949 and the first three quarters of 1950, which represents approximately the exportable surplus from the 1949-50 crop, was about 150,000 tons. The 1950-51 crop, on the other hand, was unprecedentedly large and a record amount of 340,000 tons was exported. 160 THE ECONOMIC DEVELOPMENT OF IRAQ As Iraq has such a large share in the world's trade, variations in the size of the crop can cause large fluctuations in price and, in a prolific year, marketing difficulties. Since 1939 the burden of marketing the prime quality varieties (Khadrawi, Hallawi and Sayer), which are sold in the United Kingdom, Western Europe, North America and Australia, has been largely removed by a series of bulk contracts between the Date Association and a British company, under which the latter has agreed to purchase at a fixed price all dates of these varieties grown in Basra province. No such scheme exists for the Zahdi and other lower quality dates. Their principal markets are in India, Egypt and other coun- tries of the Far and Middle East to which much of the trade is carried in the traditional Persian Gulf sailing ships. Disposal of the extremely large 1950-51 crop through the normal channels proved impossible and the price of Zahdi dates fell during 1951 to a point where it was hardly remunerative to transport them to Basra. Faced with this situation, the government sent a trade mission to India and Pakistan and succeeded in making agreements with those countries which provided, among other things, for increased imports of dates. Cereals. Barley is the only cereal now exported in large quantities, but the quantity is subject to extreme fluctuations owing to the great variability in the crop. On the average, exports have increased considerably over the years. In the latter half of the twenties, they averaged 100,000 tons and before the war 230,000 tons. From 1945 to 1947 they were around 250,000 tons annually, but successive bad harvests in 1947 and 1948 led to a temporary ban on exports in 1948, when less than 3,000 tons were exported. Two bumper crops followed, however, and in 1949 and 1950 exports, which had not before exceeded 300,000 tons, amounted to 326,000 and 462,000 tons respectively. There was normally a surplus of wheat for export before the war; in 1937, the best year, over 100,000 tons were exported. Since the war, however, exports have been negligible except in 1950, while in 1948 and 1949 there were considerable imports as a con- sequence of the bad harvests. On balance, therefore, Iraq cannot at present be considered an exporter of wheat. This is, no doubt, due to the increasing consumption of wheat in the country, as a BASIC FACTORS AND CONDITIONS 161 consequence not only of the increase in population, but also of the shift from the rural areas, where barley is often a staple ele- ment in the diet. Large quantities of rice are produced, but the surplus for export has always been very small. The only other cereal exported in any quantity is millet. Animal Produce. The principal animal products exported by Iraq are wool, live animals, hides and skins and casings (intes- tines), usually in that order of importance. The sheep is the main source of these products, providing all the wool and usually the bulk of the other products. As with dates and cereals, the quan- tities exported vary greatly from year to year, sheep being vulner- able not only to disease, but also to extremes of winter cold and summer drought. In contrast with the other main exports, how- ever, there has been no tendency for exports of animal products to increase. Exports of wool, hides and skins have, on the whole, been below prewar levels, while those of casings have fallen off badly. As animals are often taken across the frontier on the hoof, customs returns of live animals exported are not reliable. The recorded decrease since before the war, is, however, too large to be discounted. Information on the animal population and on the domestic consumption of meat and other products is sketchy and unreliable. A rise in the consumption of meat could well explain the loss of exports of live animals, but this in turn would tend to make avail- able a larger, not smaller, supply of most by-products. Part of the explanation of the fall in export products may lie in a declining sheep population owing to the gradual shift from the pastoral life to settled agriculture and from agriculture to the towns. The monograph on agriculture and animal husbandry discusses the shortcomings of the livestock industry and recommends measures to improve livestock raising and the quality of livestock products. The value of exports of animal products is likely to continue its downward trend unless these measures are undertaken speedily and vigorously. Sheep are especially important as a potential source of dollars. Wool is the most important export to the United States, which also takes all the casings exported and considerable quantities of 162 THE ECONOMIC DEVELOPMENT OF IRAQ skins. Not all the dollar income accrues to Iraq, however, partly because invoices are regularly undervalued and also because some commodities are sold through intermediaries in the Lebanon, Other Products. In the years 1947 to 1949 the remaining exports consisted of the following: bricks and sand exported for use by the Anglo-Iranian Oil Company to the value of about ID 300,000 a year; a variety of agricultural products, whose total value did not exceed ID 500,000 in any one year; and cotton. Iraq has always exported a little cotton, but in the best years, just before the war and again in 1950, its value was only about five percent of all export receipts. The position is now changing radically. Iraq, like several neighboring countries, is experiencing a cotton boom. Under the stimulus of high prices, the area under cultivation has increased rapidly in the last few years and predictions for the 1951 crop have ranged as high as 150,000 tons of seed-cotton, compared with 25,000 tons the year before. If the fellah's traditional aver- sion to a crop he cannot consume himself has been permanently overcome and if he can acquire the necessary knowledge for good cultivation, cotton could very soon become one of Iraq's most important exports, if not the most important. As a summer crop, however, its cultivation will be hazardous until the control of the rivers gives better assurance of a summer water supply. Import Policy All foreign transactions are, with certain exceptions, subject to exchange control. Imports from hard currency areas have been governed by licensing systems and have been limited to goods such as agricultural and industrial machinery, automobiles, trucks and drugs. Before 1948, imports from other areas were not subject to license, except for about 100 items, mainly luxuries. In that year, however, Iraq experienced a very large drain on her foreign exchange reserves and a more complex system was introduced. Under the system now in force, all imported goods have been placed on one of several lists, the two longest consisting of "unlimited" and "limited” goods. Each merchant is given an annual quota in dinars, within which he can import unlimited goods with- out restriction, provided he obtains a license for each purchase. Alternatively, he can spend a small part of his quota on "limited” goods, but only up to a fixed amount. BASIC FACTORS AND CONDITIONS 163 Unlimited goods consist mainly of the goods purchased by the common people such as tea, sugar and cotton textiles, and a variety of other goods considered essential, such as drugs and medi- cal equipment, educational matter, industrial, electrical and agri- cultural machinery, transport equipment and raw materials for local industries such as gunny bags, certain vegetable oils, mastika (for arak), tanning extracts and non-ferrous metals. The principal object of the system, when it was introduced, was to prevent a shortage of these necessities—and hence high prices—at a time when imports as a whole had to be restricted to protect the coun- try's exchange reserves. As an additional safeguard, each applica- tion for an import license was scrutinized to insure that the articles being purchased were not too highly priced. Since Iraq's foreign exchange position greatly improved in 1950, the import of unlimited goods is now permitted without any quota limitation. The goods on the limited list, while not strictly luxuries, con- sist of goods considered less essential than those in the unlimited list. This includes, for example, ready-made clothing of various kinds, automobiles, matches, and certain types of household uten- sils and electric ware. Luxuries, such as bananas, confectionery, cosmetics, Persian rugs and nylon stockings, were placed on a third list of goods "without foreign exchange.” These goods could be purchased only by merchants who held a special license to import "without foreign exchange," which meant that they had to acquire foreign exchange through other than the official channels. Such licenses also permitted them to purchase goods on the other two lists. Foreign exchange can be acquired without official license in a number of ways, of which the following are probably the most important: by undervaluation of exports, especially wool, hides and skins; by the export of dates to neighboring countries in small craft (in this case retention of foreign exchange is legally per- mitted); by smuggling, although there is probably a net inflow of smuggled goods; by sale of dinar notes to foreign pilgrims to the Holy Cities; and by overvaluation of imports. The present system was introduced in order compel merchants to use these resources instead of drawing on the national exchange reserves. Although the system has been successful in that there has been a very 164 THE ECONOMIC DEVELOPMENT OF IRAQ extensive use of private exchange holdings, particularly in 1949 when licenses to the value of over ID 10,000,000 were issued, it may well be that it has also encouraged the illegal acquisition of foreign exchange. A fourth list consists of prohibited goods. This is purely a protective device, almost all of the goods in this list being produced in Iraq. These include a variety of agricultural products such as sesame seeds and cottonseed or their oils. Several of the newer industries have also been protected by the prohibition of their products, for example, beer, cement, cotton yarn, aluminum ware, alcohol and hides. Although the improvement in the foreign exchange situation has led a relaxation of the quota limitation, the other restrictions remain. In particular, import licenses still have to be obtained for each purchase. Although it is maintained that licenses can now be obtained quickly, this appears to act as at least a psychological deterrent to merchants. One of the objects of the licensing system is to restrict importing to bona fide merchants, but if this is con- sidered necessary, it could, of course, be achieved by the issue of a general importer's license, good for a period such as a year. As the economy develops and the standard of living rises, which it may do rapidly in the near future, the demand for goods now on the limited and prohibited lists is likely to increase and restrictions on imports of these goods might easily have an infla- tionary effect on prices. This would hit the artisan, the clerk and the civil servant, and might increase the cost of the development program. Any extension of prohibition to textiles and other goods produced in Iraq would, of course, hurt the poorest classes. Under these circumstances, it will be very difficult to manage so rigid a system. A much more flexible instrument would be the customs tariff, but little coordination of the import licensing system with the tariff seems to have been achieved. At present the tariff is primarily a means for raising revenue and, as such, imposes the greatest burden on those who buy bulk commodities. It hardly conforms to the objectives of a licensing system that aims at a plentiful supply of these goods at low prices. The principal objection put forward to higher duties on luxuries is the increased premium BASIC FACTORS AND CONDITIONS 165 thereby put on smuggling which is difficult to control in a country with long land frontiers, even with a large police force. On the other hand, smuggled goods can now be purchased quite openly, and it is hard to believe that enforcement could not be made more effective. In any event, outright restriction of imports could cause prices to rise and so put almost as great a premium on smuggling as a high tariff. The government has tried to prevent excessive mark- ups on certain goods such as radios by price control measures, but the control is by no means fully effective. The government has also supplemented the system by entering the market itself. For example, arrangements have been made under the recent Trade Agreement with India for the import of cotton textiles and gunny bags, in part on government account. The government has also made direct purchases from abroad of its own requirements (e.g. tires). The effect has, however, not always been as intended, merchants being hesitant to buy with the prospect of large government stocks hanging over the market. On the whole, a less complex system of import control would seem better suited to an economy like that of Iraq, whose require- ments are likely to change in composition and to increase quite rapidly. Fewer regulations, more strictly enforced, are likely to serve better the two ends of social justice and public revenue. Balance of Payments The bulk of foreign transactions are carried out through the commercial banks, which are subject to exchange controls, or through government channels such as the National Bank. How- ever, numerous transactions pass through other channels and many of them are virtually impossible to estimate. For this reason the Mission has not attempted to construct a true balance of payments. Table 14 shows the foreign exchange transactions passing through the principal official channels, so far as they are known to the Mission. The other items which would enter into a complete balance of payments are discussed subsequently. As will be seen, even this account, which it should ordinarily be possible to balance, is subject to a wide margin of error for which no explanation is available. The general significance of the 166 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE 14 OFFICIAL EXCHANGE TRANSACTIONS—1949 AND 1950 (in millions of dinars) 1949 1950 I. ITEMS NOT INVOLVING THE OIL COMPANIES A. Trade Exports Imports +14.9 -20.0 +20.6 -24.8 -5.1 -4.2 B. Other Current Items Transfers by RAF and foreign companies ..... + 1.1 Interest and profits (net) + 0.4 Payments to Crown Agents and foreign contractors 0.4 Other items (net).. ..... 2.2 + 1.3 + 0.8 2.2 2.8 -1.1 -2.9 C. Capital Items Private transfers (net).... Public transfers - 0.1 + 0.5 + 2.5 -0.1 +3.0 + 4.4 II. ITEMS INVOLVING THE OIL COMPANIES Transfer for local expenditure (IPC Group) + 6.7 Transfer for local expenditure (AIOC) + 1.1 Royalties, etc. (IPC group) + 2.1 Net advances (IPC group) 1.0 + 0.3 + 3.2 + 1.0 +8.9 +8.9 +2.7 +4.8 III. ERRORS AND OMISSIONS........... -3.9 +1.8 IV. INCREASE (+) OR DECREASE (-) IN FOREIGN BALANCES OF THE NATIONAL AND COM- MERCIAL BANKS -1.2 +6.6 table is, however, clear. The transfers made by the oil companies have financed a considerable deficit in trade and a smaller one on other items. The accounts presented above, however, do not by any means BASIC FACTORS AND CONDITIONS 167 include all foreign transactions. There are, in addition, three major self-balancing accounts. In the first place, there are the additional operations of the IPC group. Goods valued at ID 9,200,000 in 1949 and at ID 7,400,000 in 1950 were imported on their own account by the IPC group for use in their operations, while 3,700,000 and 6,000,000 tons respectively of oil were exported and a small quantity of equipment re-exported. Theoretically it would be possible to enter these items in a balance of payments as mer- chandise trade and, after subtracting local expenditure and royal- ties, offset them by appropriate entries for investment and profits. As they do not, in fact, affect the exchange position, it is simpler to omit them than to make what are necessarily arbitrary calculations. Secondly, there is an important group of transactions by the AIOC and its associated distributing and producing companies, the ROC and the KOC. The ROC imported about ID 1,000,000 worth of goods, mainly petroleum products, in each year. The net proceeds of the sale in Iraq of imported and locally produced petroleum products, after deduction of local expenses and taxes, were for the most part placed in special local accounts on which the AIOC drew to pay for certain expenses in Iraq. The principal items were various shipping dues in the Shatt al Arab amounting to somewhat more than ID 1,000,000 and building materials exported from Basra. The final balancing item was an increase or decrease in the accumulated balances in the AIOC's or the ROC's local accounts, i.e., an increase or decrease in Iraq's liabilities in foreign dinar accounts. It is known that in 1950 there was a con- siderable accumulation of unused funds by the ROC. Finally, there is a considerable body of transactions, mainly illegal, which do not pass through official channels. The approxi- mate value of trade not accounted for in the items already discussed is shown in Table 15. Part of the discrepancy may be explained on grounds of the difference in timing between receipt or dispatch of the goods them- selves and payment therefor. Furthermore, the customs returns overestimate imports by recording the valuation of the major part of these goods c.i.f. Baghdad or Mosul, thus including transporta- tion inside Iraq. Some items, which were really trade, may have been included under other headings (e.g. payments to the Crown 168 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE 15 MERCHANDISE TRADE (in millions of dinars) 1949 Imports 1950 Exports Imports Exports 12.4 40.5 22.0 37.6 Customs returns Less Oil Companies trade.. "Officially" financed 0.7 - 14.9 -10.3 --20.0 0.8 - 20.6 · 8.4 -24.8 Discrepancy 3.2 10.2 0.6 4.4 Agents). But the principal explanation of the large amount of residual imports is the import of goods "without foreign exchange.” Licenses issued (but not necessarily used) amounted to ID 10,800, 000 and 7,400,000 in 1949 and 1950. These were paid for with foreign exchange acquired by the methods already described. Part of this foreign exchange was, no doubt, also used for travel abroad, particularly in the Lebanon. Insofar as receipts and expenditures in "unofficial" foreign exchange did not balance in any one year, there must have been a balancing item in these transactions, repre- senting capital export or import. No data is available on this, but it is generally believed that there has been a considerable export of capital in recent years. IX. Government and the Economy Until recently the goverment, handicapped primarily by a shortage of funds, played a comparatively modest role in promoting economic life. In agriculture the main effort was confined to the production and distribution of seeds, the promotion of cotton and citrus culture and the combating of diseases and pests, particularly the locusts. Some help was given through the establishment of the Agricultural Bank and of a government organization for the rental of agricultural machinery. One project for the settlement of small- holders on newly irrigated government land in the Dujaila district near Kut was initiated. Outlays on irrigation and flood control, BASIC FACTORS AND CONDITIONS 169 however, had to be kept small. In the field of industry the govern- ment sought to stimulate private enterprise by according special tax benefits and protection and by establishing the Industrial Bank. The Development Board With the prospect of a rapid rise in oil production and there- fore in government oil revenues, the promise of a much wider field of activity developed. Accordingly a law was enacted in 1950 estab- lishing a Development Board and assigning to it all the oil revenues as well as the proceeds of any loans contracted by it or by the gov- ernment on its behalf. The Board consists of two ex officio mem- bers——the Prime Minister, who functions as its president, and the Minister of Finance—and six executive members appointed for five years. The Board was directed to draw up a general program for the development of Iraq and, upon its approval by Parliament, to proceed with the detailed plans and specifications of the projects included in the program and with their execution in accordance with an approved order of priorities. Each year any revisions in the program, an annual budget and an annual report are to be presented to the Parliament. The Board is also to consider and coordinate development schemes which may originate in the various ministries of the government. The establishment of this Board is evidence of the govern- ment's determination to see the extraordinary oil revenues used for developing the country's resources and raising the standard of living and to insure some continuity in development which frequent changes in governments have made virtually impossible in the past. The Board was constituted and began operations toward the end of 1950. The British and American governments each nomi- nated one of the executive members in accordance with a request by Iraq. In the spring of 1951 the Board submitted its preliminary over-all program involving a total outlay of ID 65,674,000 over a five-year period beginning with the fiscal year 1951-52. About ID 29,401,000 of the Board's projected revenues, consisting of the income from oil anticipated at that time and nearly all of the pro- ceeds of the $12.8 million loan obtained from the International Bank for the Wadi Tharthar flood control project, were reserved 170 THE ECONOMIC DEVELOPMENT OF IRAQ for subsequent programming. Expenditures for the five-year period were allocated by broad fields as follows (in dinars) :5 Water storage and irrigation schemes. 30,044,000 Roads 15,826,000 Buildings, including hospitals and schools................. 12,618,000 Miscellaneous projects 6,216,000 Administrative expenditures 970,000 Unprogrammed reserve 29,401,000 Because of the brief time devoted to its preparation, this pro- gram will necessarily undergo modification as more detailed study is given to requirements and the cost of individual projects and as some of the over-all allocations are programmed in detail. The magnitude of this projected outlay is in startling contrast to the financial stringency which has characterized public expendi- tures in the past. The government has had great difficulty in mak- ing both ends meet. Severe economy has been the rule. Develop- ment outlays were pared; government salaries were not increased despite the increasing cost of living; and local administration was starved of funds. Government Budgets The trend of government finances is indicated in Table 16. It will be noted that, despite economies and tax increases, the government's total budget showed substantial deficit in 1948-49 and 1949-50, primarily because of the bad harvests in 1947 and 1948 and the effects of the war with Israel. Of the government's principal autonomous enterprises, the railways also ran consider- able deficits on capital account which were defrayed only by using reserve funds, by borrowing ID 1,000,000 from the government and contracting a loan of ID 3,000,000 through the Export Credits Guaranty Department of the British Government. The Iraqi gov- ernment borrowed at home to meet its own needs, its domestic debt rising from ID 4,500,000 on March 31, 1948, to ID 10,800,000 on March 31, 1951. Borrowing had to be limited, however, because the market for government securities was virtually restricted to the banking system. As of March 31, 1951, the National Bank and the commercial banks held ID 9,200,000 of the domestic debt. *For a more detailed breakdown, see Table V in Appendix. BASIC FACTORS AND CONDITIONS 171 TABLE 16 BUDGETS OF THE GOVERNMENT AND PRINCIPAL GOVERNMENT ENTERPRISES (in millions of dinars) 1947-48 1948-49 1949-50 1950-51 1951-521 (provisional) (estimate) GOVERNMENT BUDGET Ordinary Revenues Expenditures 21.2 23.0 21.2 28.1 23.8 26.6 26.1 25.9 28.2 29.1 Balance -1.8 -6.9 -2.8 +0.2 -0.9 Capital Revenues Expenditures 4.8 3.6 2.5 3.9 3.8 3.4 5.1 3.8 Balance +1.2 -1.4 +0.4 +1.3 - Total Revenues Expenditures 26.0 26.6 23.7 32.0 27.6 30.0 31.2 29.7 28.2 29.1 Balance -0.6 -8.3 -2.4 +1.5 -0.9 3.8 3.6 4.0 4.0 4.2 RAILWAYS BUDGET Revenues Expenditures, (including capital) ... 5.3 6.4 4.8 4.3 5.2 Balance -1.5 -2.8 -0.8 -0.3 -1.0 2.3 2.6 2.6 PORT AND Fao BAR BUDGETS Revenues Expenditures, (including capital).... 2.4 2.5 2.1 2.4 2.4 3.2 4.1 Balance +0.2 +0.2 +0.2 -0.8 -1.6 1 With the establishment of the Development Board the latter's budget has replaced the government's regular capital budget. In its 1951-52 budget, however, the govern- ment has still incorporated income from oil produced in the first quarter of the calendar year 1951 and is planning to devote this revenue to a number of projects including a gove ment spinning and weaving mill (ID 1,000,000), a small-loans bank (ID 250,000), establishment of a National Insurance Company (ID 50,000), army buildings and equipment (ID 464,000), and the initial cost of an oil refinery (ID 250,000). 2 Since the original approval of the budget the government has apparently issued three ordinances raising total authorized expenditures by about ID 2.7 million. 172 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE 17 GOVERNMENT DEBT (in millions of dinars as of March 31) 1948 1949 1950 1951 Domestic debt Treasury bills Bonds 1.5 4.3 4.6 6.0 4.8 6.0 3.0 6.0 4.5 10.6 Total Foreign debt ali lae 10.3 10.8 3.0* Grand Total 4.5 10.6 10.3 13.8 Contracted on behalf of the railways. Features of Government Expenditures Certain characteristic features of government expenditures in recent years are set forth in Table 18. Outlays on defense and police have absorbed well over one third of the total budget. On the other hand, expenditures on agriculture and irrigation which are of critical importance to the economy have been very small and in 1949-50 were even further reduced so that they represented only TABLE 18 SOME GOVERNMENT OUTLAYS BY TYPE (in millions of dinars) 1948-49 1949-50 Percentage of total budget Percentage of total budget 1950-51 (est.) Percentage of total Amount budget Amount Amount Defense and police 11.4 35.6 11.1 37.0 10.9 36.7 Agriculture and irrigation 2.5 7.8 1.6 5.3 1.6 5.4 Education 2.6 8.1 2.6 8.7 3.8 12.8 Health and other social services 2.0 6.2 1.7 5.7 2.4 8.1 Public Works and housing* 1.8 5.7 1.2 4.0 2.0 6.8 Includes expenditures of Public Works Department in the ordinary budget and expenditures on public works, including communications, but excluding irrigation, in the capital budget. BASIC FACTORS AND CONDITIONS 173 a little over five percent of the total. Expenditures on education, health and other social services, although still very inadequate, rose slightly so that they absorbed almost 21 percent of the total budget in 1951. Capital outlays have been extremely modest. Total new government investment outlays for civilian purposes have averaged only ID 2,700,000 annually in the period 1948-49 to 1950-51. Expenditures on public works and housing, excluding irrigation, absorbed on the average less than six percent of total government outlays in this period. Economies have also been effected in recent years at the expense of the municipal and provincial administrations. By law, these were supposed to have assigned to them, in equal shares, the proceeds of the property and petrol taxes less the expenses of collection incurred by the central government. Actually very little of these taxes has been turned over to the local and provincial governments. For example, in the three years 1947-48 to 1949-50 the provincial administrations received only ID 175,000 out of a total of ID 2,626,000 due to them. Municipalities were similarly handicapped. The ability of local governments to carry out improvements and even to maintain existing facilities was corre- spondingly curtailed. Characteristic Features of Government Revenues The fiscal system in the past has been characterized by (1) the high proportion of revenues derived from indirect taxation, (2) light taxation of agriculture, and (3) considerable tax evasion and poor tax collection. Indirect taxation is generally predominant in all under- developed countries, and Iraq is no exception. In the three-year period 1948-49 to 1950-51 indirect taxes contributed about 82 per- cent of all tax income and 59 percent of total budget receipts. Customs duties and excises accounted during these years for 71.5 percent of total revenues from indirect taxes, while taxes on agri- cultural produce, fish, and livestock brought to market (the so- called istihlak and koda taxes) contributed most of the remainder. Direct taxes—the so-called land tax, the property tax and the income tax-accounted for only 18 percent of total tax revenues and 13 percent of all government receipts. Income and surtaxes 174 THE ECONOMIC DEVELOPMENT OF IRAQ have yielded only about ID 2,400,000 annually in recent years because income from agriculture and urban property is exempt and rather sweeping exemptions or reductions have also been accorded to Iraqi-owned industrial enterprises. The three principal oil com- panies have also not been required to pay income taxes in return for annual payments in commutation of all taxes. Income and surtaxes thus bear primarily on salaried employees and individuals and companies engaged in commerce. In 1948-49 all Iraqi com- panies paid only ID 259,000 in income and surtaxes as compared with ID 488,000 paid by foreign companies. Both land devoted to agriculture and income from agriculture largely escape taxation. A land tax, assessed in accordance with a very complicated set of criteria, was levied until 1931 when it was replaced by a 10 percent tax called istihlak on agricultural produce brought to designated centers, presumably for sale. At the same time, the government enacted a Law for the Collection of Land Rent which, after its revision in 1936, came to be called erroneously a land tax. Actually it was a compound of a rent charge on all lands except those alienated in tapu to which the state had retained the ultimate title, and a tax on water whether supplied by flow or by pump. The "rent" element was supposed to equal about five percent of the value of the crop and the "water" charge between two and 10 percent, depending on whether the land was irrigated by pump or by flow, and, if by flow, whether or not the flow was regular and assured. The total charges were assessed by various criteria. For government lands, which were regularly leased, they were set either by auction or by triennial assessment of the type and amount of crops grown on the land. This levy, which itself was circumscribed by a number of exemptions, was abolished in 1939, except for miri lands leased regularly by the government, in return for certain payments over a maximum period of 10 years. In view of the subsequent inflation these proved to be rather light. Thus virtually the only remaining agri- cultural tax is the istihlak. During recent years this tax has varied from 10 to 124/2 percent of the value of produce brought to market as fixed on the basis of market prices. The istihlak, however, is paid by the buyer rather than the seller, although the producer may actually bear it insofar as prices are set in the export market BASIC FACTORS AND CONDITIONS 175 TABLE 19 COMPOSITION OF GOVERNMENT RECEIPTS (in millions of dinars) Actual results Estimates 1948-49 1949-50 1950-511 1951-52 A. Taxes Direct taxes : Land tax Property tax Income tax 2 0.6 0.6 2.2 0.4 0.8 2.4 0.4 0.8 2.4 0.4 0.6 1.7 Total direct taxes 3.4 3.6 3.6 2.7 3.2 3.6 4.6 Indirect taxes : Turnover tax on agricul- tural produce and animals Customs...... Excises.. Stamp duties Tobacco Monopoly (net)'.. 9.8 11.3 13.0 { 4.7 9.4 3.1 0.6 1.2 0.5 0.5 0.3 0.5 0.4 n.a. Total indirect taxes. 13.8 15.8 18.1 19.0 Total tax receipts....... 17.2 19.4 21.7 21.7 B. OTHER RECEIPTS Share in National Bank's profits Oil royalties Posts and telegraphs (gross) All other receipts.......... 0.6 5.0 2.0 1.0 3.0 3.2 1.1 3.3 0.7 1.84 1.2 1.2 2.6 2.8 Total other receipts.. 6.0 7.6 9.4 6.5 Grand Total 23.2 27.0 21.1 28.2 1 Preliminary. 2 Actually a tax in respect of land rent and water rights. 3 The amount credited to the budget does not represent the actual surplus of the Monopoly's cash receipts over expenditures which amounted to ID 2,200,000 in 1948-49 and ID 1,200,000 in 1949-50. The Monopoly's "accounting" contribution to the budget is computed by (1) taking the difference between cash income and cash expenditures realized by the Monopoly in its transactions in tobacco, tombak and cigarette paper, (2) adding or subtracting the net charge in the value of the Monopoly's stocks during the year, and (3) adding sundry revenues from confiscated tobacco license fees, storage, etc. * Represents only royalties to be received on oil production in the first quarter of the 1950 calendar year, the remainder being credited to the Development Board. 176 THE ECONOMIC DEVELOPMENT OF IRAQ or prices cannot be correspondingly increased because domestic demand is too elastic. At the same time, the tax system discriminates in favor of those who have managed to obtain state lands in lazmah grant and against those who have regularly leased land from the state. The latter continue to be assessed for rent whereas the former, who have frequently secured large lazmah grants on the basis of rather tenuous proof of occupancy and cultivation, escape any tax or rent assessments on their land. Agriculture probably also profits to a greater extent than other sectors of the economy from tax evasion. It is generally acknowledged that only between 60 and 70 percent of the istihlak is actually collected and that part of the tax is collected at reduced rates by downgrading the produce subject to taxation. More- over, many leaseholders of government land simply fail to pay the rent tax. Thus of the ID 874,552 assessed in 1949-50, only ID 185,715 was actually collected. The leaseholders in Amara province accounted for ID 669,000 of the arrears. Their failure to pay may reflect in part a feeling that they are the victims of the discrimination cited above. BASIC FACTORS AND CONDITIONS 177 TABLE I-A LAND CLASSIFIED ACCORDING TO TYPES OF TENURE BY CADASTRAL SURVEY UP TO FEBRUARY 8, 1951 CULTIVABLE LAND (in donums) Total Area of Province Area Classified Mawqufa (Waqf) Miri Tapu Mamlukah (Mulk) Province Matrukah Miri Lazmah Miri Sirf Total 6,588 69,620 66 11 63,067 81,360 203 2,319 15,181 22 92 Baghdad Kut Kerbela Basra Amara Diwaniya Dulaim Erbil Suleimaniya Mosul Kirkuk Hilla Diyala Muntafiq 7,906,800 6,208,325 2,447,600 4,908,400 7,496,800 5,981,600 18,428,400 7,217,200 3,805,600 20,129,200 8,132,400 2,100,000 6,438,000 5,832,400 28 6,669 10 16 56 200 3,489 7,369 319,171 618,974 84,652 84,576 7,991 187,791 123,181 786,739 355,373 2,979,610 1,372,423 573,148 876,964 13,840 645 190 170,914 109,878 27,976 126,670 1,037,157 1,595,466 19,488 3,041 47,043 840,588 432,201 817,853 2,705 1,099,525 310,935 758,091 407,637 3,324,500 2,535,439 23,958 61,608 1,914,865 307,405 3,579,990 302,540 51,793 7,775,652 991,127 262,092 605,193 4,838,398 4,750,149 130,429 227,473 1,969,921 1,335,905 4,155,882 1,907,787 411,076 12,026,669 2,786,179 1,624,834 2,023,874 913 1,615 37 50 Total 107,032,725 150,601 9,296 549,198 8,370,595 7,371,720 21,737,165 38,178,575 178 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE I-B LAND CLASSIFIED ACCORDING TO TYPES OF TENURE BY CadastRAL SURVEY UP TO FEBRUARY 8, 1951 UNCULTIVABLE LAND (in donums) Total Area of Province Area Classified Mawqufa (Waqf) Miri Tapu Mamlukah (Mulk) Province Matrukah Miri Lazmah Miri Sirf Total Baghdad Kut Kerbela Basra Amara Diwaniya Dulaim Erbil Suleimaniya Mosul Kirkuk Hilla Diyala Muntafiq 7,906,800 6,208,325 2,447,600 4,908,400 7,496,800 5,981,600 18,428,400 7,217,200 3,805,600 20,129,200 8,132,400 2,100,000 6,438,000 5,832,400 14,951 20 96 4,447 258 8 435 517 15 116 135 182 1,186 108,756 54,148 3,872 21,372 9,271 23,924 81,074 202,888 117,982 354,692 621,893 37,821 49,218 9,010 192 160 441 57 2 550 813 2 4,442 2,503 3,158 15,206 41,592 127,504 26,391 6,613 202 31,578 7,490 9,326 1,250 213,207 42,381 65,532 125,927 71,131 152,311 1,637 113 7,595 98,093 26,693 5,970 349,126 1,124,000 868,073 748,587 836,648 75,474 4,320,580 162,132 12,873 324,210 160,035 192,575 164,050 594,567 1,458,176 900,229 781,575 854,032 229,081 4,436,823 381,646 132,113 900,942 827,570 364,711 406,996 4,274 632 65,442 51,408 Total 107,032,725 22,366 1,686,912 36,538 698,897 485,291 9,338,365 12,268,459 BASIC FACTORS AND CONDITIONS 179 TABLE I-C LAND CLASSIFIED ACCORDING TO TYPES OF TENURE BY CADASTRAL SURVEY UP TO FEBRUARY 8, 1951 TOTAL, CULTIVABLE AND UNCULTIVABLE LAND (in donums) Total Area of Province Area Classified Mawqufa (Waqf) Miri Tapu Mamlukah (Mulk) Province Matrukah Miri Sirf Miri Lazmah Grand Total Baghdad Kut Kerbela Basra Amara Diwaniya Dulaim Erbil Suleimaniya Mosul Kirkuk Hilla Diyala Muntafiq 7,906,800 6,208,325 2,447,600 4,908,400 7,496,800 5,981,600 18,428,400 7,217,200 3,805,600 20,129,200 8,132,400 2,100,000 6,438,000 5,832,400 84,571 86 107 67,514 258 36 7,104 527 31 172 335 3,671 8,555 115,344 54,148 3,872 21,372 9,271 24,016 81,074 202,888 117,982 355,605 623,508 37,858 49,268 90,370 395 2,479 15,622 79 2 14,390 1,458 192 175,356 112,381 31,134 141,876 360,763 746,478 111,043 91,289 8,193 219,369 130,671 796,065 356,623 3,192,817 1,414,804 638,680 2,136,892 1,108,288 1,747,771 21,125 3,154 54,638 938,681 458,894 823,823 2,705 1,103,799 311,567 823,532 459,045 3,673,626 3,659,439 891,931 810,195 2,751,513 382,879 7,900,570 464,672 64,666 8,099,862 1,115,162 454,667 769,243 5,432,965 6,208,325 1,030,658 1,009,048 2,823,953 1,564,986 8,592,705 2,289,433 543,189 12,927,611 3,613,749 1,989,545 2,430,870 Total 107,032,725 172,967 1,696,208 585,736 9,069,582 7,857,011 31,075,530 50,447,034 180 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE II MONTHLY STATEMENTS OF THE NATIONAL BANK OF IRAQ (in thousands of dinars) Assets Consolidated Accounts of Issue and Banking Departments Liabilities Currency in Current Other Circulation Accounts Accounts Total Sterling Silver End of Month Capital & Reserves · Iraq Securities Advances Other 91 53 63 Oct. 1949 Dec. 1949 Mar. 1950 June 1950 Sept. 1950 Dec. 1950 Mar. 1951 2,500 2,500 2,500 2,500 2,500 2,500 2,942 35,913 36,356 38,634 39,282 37,813 39,096 40,566 354 338 3,160 3,930 4,617 4,877 3,345 1,863 1,891 2,109 1,871 2,520 2,685 1,863 40,630 41,085 46,403 47,583 47,450 49,159 48,717 34,707 35,137 39,843 40,859 40,278 41,885 41,700 157 151 152 155 161 155 154 5,620 5,620 6,120 6,160 6,160 6,160 6,160 55 125 225 353 798 910 650 56 53 50 53 1 This table omits the currency held by the Banking Department, which appears in its accounts as an asset and in the Issue Department's accounts as a liability. 2 Includes advances made to the Industrial Bank, Mortgage Bank, Baghdad Water Board. As of July 1950 advance of 1949 government share of National Bank profits also included. BASIC FACTORS AND CONDITIONS 181 TABLE III CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES OF FIVE COMMERCIAL BANKS (in dinars) ASSETS Feb. 28, 1950 Feb. 28, 1951 LIABILITIES Feb. 28, 1950 Feb. 28, 1951 5,140,227 Notes and coin in Iraqi currency.. 3,217,543 Credit balances with branches and licensed banks in Iraq.............. 1,806,774 Deposits with National Bank...... 3,271,104 Investments, advances and dis- counts in Iraq: Government loans 2,578,083 Bills discounted 813,129 Advances 4,338,362 Investments 357,276 Sundry 31,650 Deposits and investments payable abroad: Foreign government securities 3,502,870 Other 7,418,652 All other 534,327 3,366,131 5,549,794 Paid-up capital 1,650,000 1,800,000 Reserves and provisions.. 386,723 605,576 Balance profit and loss account.... 142,682 164,205 Debit balances with branches and licensed banks in Iraq................ 1,936,609 3,637,427 Liabilities against credits opened 2,659,820 5,344,375 Demand deposits 13,770,021 13,759,800 Time deposits 767,889 613,814 Sundry creditors 155,775 573,498 All other, including government and quasi-government deposits 6,400,251 9,209,011 2,176,315 958,506 6,384,214 435,683 57,188 2,252,870 9,169,608 217,170 Total 27,869,770 35,707,706 Total 27,869,770 35,707,706 182 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE IV EXPENDITURES PROJECTED BY THE DEVELOPMENT BOARD (in millions of dinars) 1951-52 1952-53 1953-54 1954-55 1955-56 Total 0.2 1.3 0.5 0.2 0.2 0.2 Irrigation projects: Wadi Tharthar Habbaniya Diyala Reservoir Dokan Reservoir General drainage Other irrigation projects: New projects Completion of projects begun previously 3.6 0.5 0.7 0.7 0.3 3.1 0.5 1.1 1.0 0.5 1.5 0.7 2.2 1.8 9.6 2.1 6.1 5.7 2.0 1.9 2.0 0.5 0.5 0.4 0.9 1.2 0.9 0.9 4.2 sܟ 0.3 - 0.3 ão 7.5 3.0 6.6 7.4 7.5 5.5 30.0 Total Roads and bridges : Main roads across Iraq from south to north (Basra - Baghdad, Kir- kuk, etc.) Other roads 0.8 1.3 1.3 2.1 1.5 2.1 1.5 2.0 1.5 1.9 6.6 9.4 2.1 3.4 3.6 3.5 3.5 15.9 Total Buildings: Hospitals Schools Other buildings 0.7 0.7 0.7 1.0 0.7 0.7 0.9 0.7 1.1 0.8 0.8 1.1 0.9 0.9 1.1 3.8 3.8 5.0 2.3 2.5 2.7 2.9 12.6 0.3 0.3 0.3 0.3 1.2 មន ជន \ ខ ន ន ន ដ ដង ន ដង | ខ ន ង ដ ដង ។ 0.3 0.3 0.3 0.3 Total 2.4 Other projects : Small settlement projects.... 0.2 Artesian wells and water for drinking purposes..... 0.2 Special projects in north- ern Iraq 0.3 Reforestation and filling of swamps and marshes........ 0.1 Telegraphs & telephones.... 0.5 Other projects 0.2 Expropriations 0.3 1.2 0.3 0.3 0.3 0.3 1.3 0.1 0.1 0.1 0.1 0.5 0.5 0.4 1.1 0.1 0.3 0.1 0.3 0.3 Total Administrative expenses Grand Total 1.7 0.2 1.2 0.2 1.2 0.2 1.1 0.2 0.9 0.2 6.2 1.0 9.4 13.7 14.8 15.0 12.8 65.7 Note: Totals do not necessarily add up because of rounding. ANNEX B FLOOD CONTROL, IRRIGATION AND DRAINAGE Effective and economical utilization of available water resources is the central problem of Iraq. In its study of this problem the Mission has addressed itself to (1) the storage of water for the purpose of controlling floods and increasing the regular supply of water for irrigation, (2) the expansion of irri- gation, (3) the provision of drainage to prevent deterioration of irrigated lands by salt, and (4) questions of operation and mainte- nance of irrigation systems. The Mission has relied heavily on published materials ranging from the Report on the Irrigation of Mesopotamia by Sir William Willcocks, published in 1911, to more recent studies, particularly the monumental Report on the Control of the Rivers of Iraq and the Utilization of their Waters made in 1949 by the Irrigation Development Commission under the presidency of Mr. F. F. Haigh. In addition, however, the Mission conducted a field survey, in the course of which one or more of its members visited the sites of proposed dams and reser- voirs, and examined the problems of irrigation at first hand. Its conclusions are therefore based on observation as well as the study of relevant documents. I. Water Storage Today the storage of the flood waters of the Euphrates and Tigris and their tributaries is the foremost problem. The twin rivers carry, on the average, almost 70 billion cubic meters of water per year—a quantity theoretically adequate to irrigate vast areas. Much of this comes, however, in the spring at a time too 1 See the Mission's main report, p. 7 et seq.; also Annex A, Basic Factors and Conditions. 183 184 THE ECONOMIC DEVELOPMENT OF IRAQ late to benefit winter crops and too early for summer crops. Destructive spring floods are apt to occur just before the harvest- ing of the winter crops begins and as the planting of summer crops is in process. In the dry season— July to December—which is critical for both summer and winter crops, the mean discharge of the Euphrates at Hit and the Tigris at Baghdad is only 421 cumecs (cubic meters per second) and 559 cumecs, respectively, as com- pared with 1,765 cumecs and 2,572 cumecs during the three peak months of the spring. The Haigh Commission has calculated that the mean discharge which can be relied upon for irrigation is only 280 cumecs for the Euphrates and 350 cumecs for the Tigris and its tributaries. This supply would appear to be barely equal to the water needed for existing irrigation systems when figured on the basis of the standards usually applied in Iraq. In fact, at present there is an acute shortage of water in the irrigated areas of the Diyala Valley and the Hilla canal system while in other areas water is wasted. Short of radical economies in the use of water, which can only be realized over the long term, no significant extension of the irrigated area can be undertaken without control- ling and regulating the flow of the rivers. Nor can disastrous floods be controlled without schemes for the storage of the excess waters. The Euphrates A project for the regulated diversion of the flood waters of the Euphrates into Lake Habbaniya is already under way. This project involves the construction of an inlet channel from the Euphrates near Ramadi to the lake as well as an outlet channel for the later release of the stored waters. A barrage will be built across the Euphrates at Warrar to raise the water level and thus permit an increase in the capacity of the lake reservoir. The outlet channel and regulator are already finished and work is well advanced on the inlet channel and its regulator. The project when completed will reduce the flood discharge from a possible maximum of 5,200 сumecs to 2,000 cumecs and will increase the minimum supply of water available for irrigation from 280 cumecs to per- haps 440 сumecs. The total cost is estimated at ID 4,300,000. 2 See chart and also Tables I and II in the appendix. FLOOD CONTROL, IRRIGATION AND DRAINAGE 185 HYDROGRAPHS OF THE TIGRIS AND EUPHRATES RIVERS Average Mean Monthly Discharge Minimum Mean Monthly Discharge Maximum Mean Monthly Discharge M3 PER SEC 6000 TIGRIS AT BAGHDAD M3 PER SEC 6000 6000 EUPHRATES AT HIT 5000 5000 5000 4000 4000 4000 3000 3000 3000 2000 2000 2000 MURINN MAN VARLY 1 DISChasse times! I AVERAGE MEAS HALY DISCHARGE (1806-186) PRIN MAN VALY DISCHARGE (IMO) 1000 1000 1000 AVTBAG MAN VARLY DISCHARGE (1924-1946) DISCMRGE (1930) DISCHARGE (1991) M A M ND J F M A M J 186 THE ECONOMIC DEVELOPMENT OF IRAQ While the soundness of the scheme is beyond question, the Mission has serious reservations about extending the storage capa- city of the project by evacuating part of the water in Lake Habba- niya to the nearby depressions of Bahr el Milh and Abu Dibis through the discharge channel of Mujarrah. The Haigh Com- mission contemplated that with the reservoir formed by these depressions the maximum flood discharge could be further reduced to 1,500 cumecs and the water available for irrigation could be raised to 510 cumecs. In the opinion of the Mission, however, the salt in these depressions would be a serious obstacle to their use as a reservoir for irrigation water. The use of the stored water of Lake Habbaniya would in itself tend to raise the salt content of the Euphrates to the maximum concentration considered usable for irrigation. Since the lake is said to contain about two million tons of salt, and the waters of the Euphrates entering the lake themselves contain some salt, the waters of the lake at the capacity set by the 49.5 meters contour may reach a salt content of 100 parts per 100,000. These waters when mixed half and half with those of the Euphrates, which have a maximum salinity of 40 parts per 100,000, will tend to have a salt concentration of 70 per 100,000 or approximately the maximum tolerance. The Bahr el Milh and Abu Dibis depressions, however, now contain about 44 million tons of salt. The 20.5 billion cubic meters of water which might be stored in these depressions would therefore have a salinity of 215 parts per 100,000. It would be necessary to remove 27 million tons of salt in order to reduce salinity to 80 parts per 100,000. The Haigh Commission thought it possible to achieve this lower salt content in approximately four years by progressively evacuating the stored water into the Euphrates, but at a rate which would not raise the salt in the Euphrates itself over 80 parts in 100,000. Even granting this possibility, the Mission believes, however, that the resulting salt content would still be too high for irrigation water. As a minimum, the Mission strongly suggests that any project for storing water in these two depressions be deferred until the problem of salting, already acute, has been brought under control by the installation of drainage facilities in the irrigated areas of the Euphrates Valley. At the same time it would be advisable to explore the possibility of alternative storage capacity somewhere FLOOD CONTROL, IRRIGATION AND DRAINAGE 187 along the Euphrates. Of several possible sites, the best appears to be at Rawa, a few kilometers upstream from Ana. There a dam 35 to 40 meters in height could be erected to create a reservoir with a capacity of seven billion cubic meters and an area of 480 square kilometers. The water would be backed up over a distance of 200 kilometers of which 60 kilometers would be in Syria. No geologic study of this possible dam emplacement has been made. An examination of outcroppings shows a series of horizontal layers in which soft but fairly compact limestone alternates with layers of highly decomposed rock and layers of soluble gypsum. While these surface indications raise serious doubt concerning the water- tightness of the possible reservoir, the Mission urges that a geologic study of the site, supported by soundings, be carried out in order to obtain a geologic cross-section in the neighborhood of the pro- jected dam emplacement. The Tigris Flood control on the Tigris is to be assured by the Wadi Tharthar project. A contract for the work on part of this scheme was awarded in the fall of 1951. The project involves the erection of a barrage across the Tigris, north of Samarra, to limit the flood discharge of the river to about 3,500 cumecs and divert the excess waters via an inlet channel into the Wadi Tharthar depression. At a contour of 60 meters the depression is expected to hold about 68 billion cubic meters of water in a reservoir extending over 2,050 square kilometers. The total cost of this project, for which the International Bank for Reconstruction and Development provided a loan of $12,800,000 in June 1950, has been budgeted by the Development Board at a figure of ID 9,625,000. The efficacy of the Wadi Tharthar as a flood control scheme is clear. That the depression is sufficiently watertight to store enough water for irrigation is less certain. The Haigh Commission and its geologist had no doubt on this score, but other experts, including the one who served as government geologist until recently, have raised serious questions regarding the tightness of the reservoir. Two firms of consulting engineers-Messrs. Coode, Vaughan-Lee, Frank and Gwyther, and Sir William Halcrows and Partners- have advised that the Wadi Tharthar project be considered exclu- sively for flood control. In any event, it would take about ten years 188 THE ECONOMIC DEVELOPMENT OF IRAQ for the reservoir to fill to the level at which water might be supplied for irrigation, and this water would then be available only for use in the Tigris Valley from Baghdad south. Thus other schemes for the storage of water for irrigation have to be considered. From time to time storage dams for the Upper Tigris have been suggested, some with the obvious hope that they would cater to the needs of the North where rainfall is unreliable and does not permit the cultivation of summer crops. Among the sites proposed are two north of Mosul. One is near the village of Zumar about 115 kilometers from Mosul. The topographic features there would permit the creation of a storage basin, but geologic conditions appear to be very unfavorable. The soil consists of badly decom- posed and fissured Lower Fars limestone and of marl which is also more or less decomposed. While no geologic investigation of the site has been made, borings made by the Mosul Petroleum Company about 10 kilometers away indicate the presence of num- erous permeable layers in this area through which large amounts of water would probably be lost. Despite these prima facie doubts about the water tightness of the reservoir, the Mission believes that a complete geologic study, including borings, should be made of the site because of the understandable interest in this project in the North. Conditions at the second site-Badosh, 25 kilometers above Mosul—are even less favorable. It has been suggested that with a dam 45 to 50 meters high a reservoir with a capacity of five billion cubic meters could be constituted. Outcroppings, however, disclose decomposed limestone with many caverns on this site. The dam would have to be built across a slight fold, cutting through various formations. Even with resort to costly and laborious injec- tions of concrete, it is extremely doubtful that the proposed reser- voir could be waterproofed. Farther down the Tigris there is another possible dam site at Fatha where the river crosses a mountainous fold running north- west-southeast and known as Jebel Hamrin on the left bank and Jebel Mahul on the right bank. This site was studied in some detail by consulting engineers in 1940, and the investigation was resumed by the Haigh Commission in 1948. The Commission's geologist held that it would be impossible to build a gravity dam FLOOD CONTROL, IRRIGATION AND DRAINAGE 189 in the gorge itself but that an earthen dam farther upstream might be feasible. The dam would have to be about 3,500 meters long and, with a height of 75 meters and a fall board of six meters, could be used to store 24 billion cubic meters of water up to a contour of 182 meters. It could therefore be considered as an alternative to Wadi Tharthar and even as preferable since it would be likely to make more water available for irrigation. However, the anticipated cost of construction about ID 20,000,000-and the vulnerability of an earthen dam to enemy attacks in time of war caused it to be rejected. Now that there no longer is any question of its consideration as an alternative to Wadi Tharthar, the possi- bility of a more modest project at Fatha might well be examined. A dam only 40 meters high could create a reservoir of five billion cubic meters which might some time in the future become of criti- cal importance to irrigation. At the same time it would be so much smaller than the original project that the same objections concern- ing its safety could hardly be entertained. The Mission would therefore recommend further geologic studies and, particularly, a series of borings to determine definitely a geologic cross-section along the axis of the site. The Tigris Tributaries The Development Board has already provided in its five-year program for the construction of the Derbend-i-Khan dam on the Diyala river and the Dokan dam on the Lesser Zab river. The Mission agrees that these dam sites are the best available but suggests, as will be indicated in greater detail later, that these two projects be supplemented by the construction of the Bekhme dam on the Greater Zab river. The Derbend-i-Khan Dam on the Diyala Originally the Haigh Commission recommended that a dam be built at a point called Gibraltar where the Jebel Hamrin crosses the river. In 1950, however, Messrs. Coode, Vaughan-Lee, Frank and Gwyther and Sir William Halcrows and Partners expressed their preference for a dam at the Derbend-i-Khan defile farther upstream; and in 1951 the Development Board included this pro- ject at a total cost of ID 4,800,000 in its five-year program. The Mission considers this decision sound. The foundation soil at the 190 THE ECONOMIC DEVELOPMENT OF IRAQ Gibraltar site is soft sandstone sandwiched with layers of imper- meable marl. The dam would have to be built of locally available sand and gravel, with an impervious facing in reinforced concrete or an impervious core; and it would be difficult to establish a watertight joint between the impervious facing and the impervious soil through the sandstone. The hills edging the reservoir show many low points where lines of seepage are so short as to create the risk of breaches. The presence of a lot of gypsum adds to the doubt about the watertightness of the reservoir. Moreover, its size and location are such that 128,000 masharasof arable land would be submerged and 35 kilometers of railway detoured. Borings have been made at the Derbend-i-Khan site and expert geologic opinion holds that the site provides a good founda- tion for a dam and has possibilities for a watertight reservoir. The rock-fill dam to be built will only close the breach, opened by centuries of erosion, in a solid rock sheath which, over long geologic periods, must have constituted the resistant part of a natural dam. The capacity of the dam will be only 0.87 billion cubic meters as compared with 1.56 billion for the Gibraltar dam. However, after allowing for losses, engineers believe that Derbend-i-Khan will provide a discharge of 80 cumecs at the Diyala weir, which governs the Diyala irrigation canals, as agaist 85 сumecs for Gibraltar. At present the usable mean discharge at the weir is only 38 cumecs. The Dokan Dam on the Lesser Zab A short distance from the Iranian border the Lesser Zab River passes through four gorges. According to competent geologic opinion, only the fourth of these, namely the Dokan Gorge, appears to offer a suitable dam site. The Dokan Gorge cuts through about 60 meters of Judean limestone covered by 40 meters of Shiranish limestone. Surface examination indicates that the former appar- ently consists of horizontal, generally sound beds, interspersed here and there, however, by caverns, while the Shiranish appears to be much more fissured. Up to the present only a brief geologic reconnaissance of the site has been carried out. Borings should be undertaken to confirm the surface indications and determine what special precautions should be taken in building the dam. The 3 A mashara is equal to a donum (0.25 hectares or 0.617761 acres). FLOOD CONTROL, IRRIGATION AND DRAINAGE 191 geologic investigation should extend to the Shiranish limestone, for if this is found to be of adequate quality a higher dam and larger reservoir would be possible. The construction of an arch dam at this site would be more economical than a gravity dam, but the proper planning and execu- tion of such a dam requires much more skill. The Mission suggests that, after a thorough program of borings have shown the geologic conditions that will be encountered, the design and engineering of the dam should be entrusted to several consulting engineering firms so that the Development Board will be enabled to judge the best of different conceptions. So far as possible, all risks should be eliminated before construction commences. Soundness of concep- tion and safety should not be sacrified in a desire to get things done rapidly. An arch dam 60 meters in height would provide storage capa- city for 1.99 million cubic meters at a level of 501 meters and for 2.21 million at a level of 508 meters. The usable mean discharge of the Lesser Zab would then be raised from about 63 cumecs to 108.5 and 149 cumecs at these respective levels. The Bekhme Dam on the Greater Zab The Haigh Commission made a complete geologic reconnais- sance, including borings, of the possibilities of building a dam at two different sites in the Bekhme Gorge. It concluded that the Shiranish limestone at the upstream entrance to the gorge would provide a sound foundation for the construction of a high dam. The Commission was primarily interested in this dam as a flood control project, and, after deciding in favor of the Wadi Tharthar scheme, did not therefore include the dam in its program. The Development Board's five-year program also makes no provision for Bekhme. The Mission urges, however, that construction of the Bekhme dam be undertaken as soon as possible. With the completion of the Dokan dam and related works it is planned to divert the waters of the Lesser Zab into the Adhaim River and use them for irrigat- ing areas on the left bank of the Tigris and in the Diyala River Valley. Thus the Lesser Zab which has a usable flow of about 60 cumecs at present will no longer be supplying water to the Tigris. 192 THE ECONOMIC DEVELOPMENT OF IRAQ As a result irrigation in the Lower Tigris basin, particularly in the area served by the Shatt al Gharraf where water is already acutely short, would inevitably suffer in consequence unless water were made available from some alternative source. Although the deficit may be made good from the Wadi Tharthar in the end, it is by no means certain, as has already been pointed out, that the Wadi Tharthar depression will be able to supply water for irriga- tion. If the Wadi Tharthar reservoir can ultimately supply the Lower Tigris, it will still be possible to use the water stored behind the Bekhme dam for the irrigation of the Erbil plain in the North. Nor should the cost be regarded as out of proportion to the results that will be achieved. In 1948 Messrs. Coode, Vaughan-Lee, Frank and Gwyther estimated the cost of a gravity dam in concrete at ID 9,000,000, but in 1950 they came to the conclusion that a buttress dam could be built at considerably lower cost, namely about ID 6,500,000. The dam would provide a net storage capacity of 1.66 billion cubic meters and would increase the usable dis- charge of the river from 128 cumecs to about 240 сumecs. This would furnish additional water sufficient to irrigate an area of two million masharas gross. On this area it would be possible to grow winter cereals on 828,000 masharas which might have a total value of ID 3,700,000, assuming conservatively a yield of one quar- ter of a ton per donum and a price of ID 18 per ton. If, in addition, summer crops were grown on one third of the area devoted to winter crops and yielded about the same value per mashara, the total value of the crops grown on the area of two million masharas gross could be put at about ID 5,000,000 per year. The resulting increase in national income would far outweigh the cost of the scheme. Even the tax yield would exceed the cost of amortization. International Agreements The construction of these reservoirs makes it necessary to reach agreements with Syria, Turkey and Iran regarding the con- trol of the waters of the Euphrates and Tigris. For the Euphrates this is particularly urgent because half of the course of the river is in Turkish and Syrian territory and nearly all of its basin is in a foreign country. There are irrigation possibilities in Syria which could seriously reduce the flow of water into Iraq. Works which would raise the water level 10 to 20 meters upstream would com- FLOOD CONTROL, IRRIGATION AND DRAINAGE 193 mand an area for irrigation of 1,000,000 to 1,360,000 masharas in Syria. Irrigation of 1,000,000 masharas would require a flow of almost 60 сumecs. In Turkey and Iran the mountainous nature of the watershed of the rivers makes it much less likely that signifi- cant quantities of water will be diverted for irrigation. With these countries, however, it will be important to reach agreements regarding joint anti-erosion measures. Such measures will effec- tively complement water-storage schemes as means of flood control, the more so since silting will otherwise substantially reduce the effective life of reservoirs. Cooperation in afforestation of the watershed areas of these rivers is therefore highly desirable. At present no such agreements exist. With Syria, there is no accord whatever. With Iran, there is only an old protocol of 1914 governing the use of the waters of a small stream, the Gangir. A protocol annexed to the Treaty of Friendship and Good Neighbor- liness, concluded with Turkey on March 29, 1946, set up a flood- warning service, permitted Iraq to investigate possible sites for flood-control dams in Turkey and gave agreement in principle, subject to confirmation in each case, for construction of works recognized to be necessary. Turkey also undertook to inform Iraq of any contemplated works on any of the two rivers. The scope of the agreement is thus rather limited. II. Irrigation Works It is now necessary to consider what irrigation works will be needed to utilize the additional water that will ultimately be made available by the water reservoirs discussed above and what further works should be undertaken to ensure better utilization of water. Aside from flood control, the most important consequence of the new reservoirs will be the expansion of the area under irriga- tion. As Table 1 indicates, the area now under irrigation has been estimated by the Haigh Commission at 12,696,000 masharas gross, of which 4,671,000 are irrigated by the waters of the Euphrates and 8,025,000 by those of the Tigris and its tributaries. 194 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE 1 AREA WITHIN IRRIGATION SYSTEMS (in 1000 masharas) Mean dis- charge used Winter crop for irrigation area irrigated (in cumecs) Gross Cultivated 3,109 2,666 1,160 161 EUPHRATES Flow irrigation Pump irrigation from canals river 32 607 955 515 812 263 474 43 Total 4,671 3,993 1,897 236 2,380 2,033 760 105 TIGRIS* Flow irrigation Pump irrigation from canals river 1,060 3,020 901 2,567 400 1,280 49 115 Total 6,460 5,491 2,440 269 DIYALA Flow irrigation Pump irrigation 74 1,350 215 1,148 183 572 92 8 Total 1,565 1,331 665 82 Grand Total 12,696 10,815 5,002 587 * Including tributaries other than the Diyala. In considering the areas which might be provided with new irrigation systems, the Mission has adopted certain standards and practices which have been generally accepted in the past. Among these are: 1. The amount of cultivated land (in winter crops) which can be irrigated effectively by a constant flow of one cumec measured at the intake of an irrigation system (i.e. the so-called irrigation duty) is 7,200 masharas or donums; 2. Half of the cultivable area within an irrigation system is left fallow during the winter crop season; and, since a given amount of water can generally irrigate an area in winter crops about four times as large as in summer crops, the area of an irrigation system is conceived in terms of the winter crop; FLOOD CONTROL, IRRIGATION AND DRAINAGE 195 3. The cultivable area within an irrigation system is about 85 percent of the gross area which includes the surface occu- pied by roads, villages, canals, etc. The Mission does not regard the first two criteria as immut- able. The indicated irrigation duty is certainly very low; and the Mission will make some suggestions regarding it in the subsequent discussion of problems of operation. The present fallow system practiced in agriculture should also not be regarded as sacrosanct. Through the use of fertilizers and the introduction of soil-building crops the proportion of fallow might well be considerably reduced. Since almost all of the land which will be newly irrigated will be opened to settlement by small-holders under prescribed conditions, the state will be in a good position to insist on better agricultural practices in such areas. With water stored in reservoirs, it will also be possible to regulate the distribution of water as between winter and summer crops. In the past the amount of water which has flown down the rivers at critical parts of the growing seasons has set an automatic limit on the area both in winter and summer crops. In the future, however, this flow will be subject to control through the release of stored water. The Mission therefore sug- gests that the government make a special study to determine what combination of winter and summer crops using a given quantity of water would yield the highest output for the manpower employed on the land. The outcome of this study as well as a re-examination of the fallow system may in the end affect the calculations of the gross area which needs to be covered by irrigation works in order to use a given supply of water. The sequence in which new areas are to be supplied with irrigation is governed partly by purely technical factors. Within the limits set by these technical factors, however, the selection of the areas to be irrigated should take into account the agricultural value of the land, its proximity to potential settlers and its owner- ship. In making its recommendations regarding new irrigation sys- tems, the Mission has sought to give appropriate weight to all these factors. It was not always possible to arrive at a considered judgment of the agricultural potentialities of various areas, so that on this ground alone its suggestions may be subject to revision. Regarding the ownership of lands which could be irrigated, the Mission had no information. Presumably most of this land is in 196 THE ECONOMIC DEVELOPMENT OF IRAQ state ownership. In any event, as long as it is technically feasible and not more costly, it will be desirable to give preference to the irrigation of good agricultural land remaining in state ownership because such land can be used for distribution among small-holders. Expansion of Irrigation—the Euphrates Except for a narrow band on both banks of the Euphrates between Hit and Hindiya and some smaller areas along the lower Euphrates, which are irrigated directly from the river by pumps, the irrigation systems of the Euphrates are served by a series of canals whose off-takes are above the Hindiya barrage. Nine of these canals serve the left bank of the Euphrates ; and only two", the right bank. The Hindiya barrage was built primarily to increase the intake into the most important of these canals—the Hilla. This canal, together with its three terminal branches—the Diwaniya, Dagharrah and Hurriyah canals, is supposed to irrigate a gross area of 2,333,000 masharas. The supply of water, however, is suffi- cient to irrigate only about 35 percent of the cultivable area com- manded by the Hilla canal system. It has already been recognized, therefore, that the additional water made available from the Habba- niya should, in the first instance, be used to increase the irrigation intensity in the Hilla canal system to the standard 50 percent. The Development Board has already reserved ID 900,000 to remodel the Hilla canal in order to bring about the necessary increase in its capacity from 114 to 175 cumecs at its head and from 57 to 87 cumecs at its tail. As will be noted below, an additional enlargement of the canal's capacity will be necessitated by further expansion of irrigation. While the Haigh Commission contem- plated carrying out the required increase in capacity in two phases and proposed to rely partly on erosion as a means of attaining the needed capacity, the Mission believes it desirable to give the Hilla canal its final outline from the very beginning and to avoid reliance upon the rather erratic effects of erosion. At the same time, the course of the canal should be straightened and precau- tions taken to reduce losses by infiltration at the resulting low points. 4 Saglawiyah, Abu Ghuraib, Yusuſiyah, Latifiyah, Iskandiriyah, Musayib, Nasiri. yah, Kifl and Hilla. 5 Husseiniyah and Beni Hassan. FLOOD CONTROL, IRRIGATION AND DRAINAGE 197 It has already been mentioned that upon the completion of the Habbaniya project the usable flow of the Euphrates will be raised from 280 to 440 сumecs. Since the Hilla canal area will absorb 30 cumecs, the balance of the increase, or 130 cumecs, will be available for the extension of irrigation to a gross area of 2,200,000 masharas. To use this quantity of water the following irrigation projects are recommended : 1. Extension and enlargement of the Musayib and Iskandiri- yah canals to irrigate an additional gross area of 228,000 masharas. The Development Board has already earmarked ID 400,000 for these works. 2. Prolongation of the Babil canal, which is at present only a secondary canal branching off from the Hilla, and increasing its capacity from eight to 65 cumecs so as to provide water for 670,000 masharas gross. For this pur- pose the capacity of the Hilla canal at its head will have to be raised to 229 cumecs. 3. Construction of a barrage below Kifl on a deviation of the Kufa branch of the Euphrates which would govern, on the right bank, a new canal intended to serve the Bahr el Najaf and, on the left bank, the Shamiya, a branch of the Euphrates which would thereby become a controlled canal with an enlarged capacity of 272 сumecs at its head. This would extend irrigation to a gross area of 590,000 masharas. 4. Construction of a feeder canal connecting the Shamiya with the Diwaniya, one of the branches of the Hilla canal, in order to irrigate a gross area of 385,000 masharas between Shamiya and Diwaniya and deliver a flow of water which would release about 38 cumecs at the tail of the Hilla canal for use elsewhere. This feeder, which would have a capacity of 237 cumecs at its head and of 184 cumecs at its junction with the Diwaniya, would be extended to serve the new Khar canal. 5. Irrigation of a gross area of 108,000 masharas in and immediately south of the Dagharrah canal area by remodelling the Dagharrah Canal and constructing the head of the Khar canal. The additional water for the Gagharrah would come from that released at the tail of the Hilla Canal as a result of the building of the Shamiya- Diwaniya feeder; and that for the Khar canal would come from the expanded supply of the Diwaniya. 6. Additional construction of the Khar canal to irrigate about 220,000 masharas gross. 198 THE ECONOMIC DEVELOPMENT OF IRAQ The Mission suggests that detailed plans of these irrigation works be made as soon as possible in order to make sure that this program is completed by the time the Habbaniya project is fin- ished. Execution of this program will require some agricultural adjustments in the Shamiya area where rice is now grown under conditions of natural inundation. By controlling the Shamiya and installing a flow-irrigation system the area available for winter cultivation will be greatly increased, but at the same time rice culti- vation may have to be curtailed. In any event, the fellahin will have to grow rice not on naturally flooded land, but on terraced plots watered successively from canals. At the same time fertilizer rather than silt brought by the floods will have to be used to main- tain the productivity of the rice lands. As the Haigh Commission has already noted, these adjustments would in the end have to be made anyway, owing to the progressive silting of the rice lands which is gradually raising them to levels where they can no longer be flooded. The Department of Agriculture should take timely steps to assist the fellahin to adapt themselves to the new conditions. Other Irrigation Works on the Euphrates Aside from the works required to expand the area under irri- gation, certain other irrigation works on the Euphrates appear to be necessary. The Development Board has already set aside ID 250,000 for improving the Shamiya, one of the branches into which the Euphrates divides below Kif, and controlling the erosion phenomenon known as the nagarah which threatens to dry up the whole rice-growing district of Shamiya. In the Shamiya-Kufa dis- trict the flooding and silting caused by the diversion of the Euphrates waters into several branches and numerous canals has raised the river and canal beds above those of the downstream region of Shinafiyah where the waters are once more united in a single channel. During the dry season the remaining water, con- fined to a narrow channel, rapidly erodes the accumulated alluvium causing a series of falls which move up the canals and tend to lower them to a level where they can no longer be used for irri- gation. Regulators to stop this erosive action have been installed on two of the principal canals, but more are needed. A somewhat similar problem is encountered farther down the river in the rice-growing region above Lake Hammar. Here ero- FLOOD CONTROL, IRRIGATION AND DRAINAGE 199 sion keeps the river bed so low in relation to the silted rice lands that the distribution of water in the dry season has become very difficult. The Development Board has provided ID 1,000,000 in its program for necessary control structures on this part of the Euphrates. There has been no agreement as yet, however, on a plan for these works. Expansion of Irrigation—the Tigris and its Tributaries Along the Tigris and the Diyala, pump irrigation is much more prominent than along the Euphrates. A large part of the coun- try's irrigation pumps are concentrated on the stretch of the Tigris between Baghdad and Kut. The principal flow-irrigation areas are in the Diyala River and, farther south, along the Shatt al Gharraf. Both these areas suffer from an acute shortage of water. In the North there is a small flow-irrigated area known as Hawija and near Kut an area of similar size fed by the Dujaila canal. The Derbend-i-Khan dam will not make possible any expan- sion of the area under irrigation. However, by assuring a usable flow of 80 cumecs, as compared with a present mean flow of only 38 cumecs, it will provide a really adequate water supply over the entire area covered by existing irrigation systems in the Diyala Valley. The Dokan dam will supply enough water to irrigate about 2.5 million masharas gross. In general accordance with the Haigh Commission's recommendations and the contemplated program of the Development Board, the Mission believes that this water should be used to irrigate new areas on the left bank of the Tigris, both above and below Baghdad, as well as additional areas in the Diyala River Valley. For this purpose, that part of the water supply not used for the irrigation of areas along the Lesser Zab River should be diverted through a new feeder into the Adhaim River; this in turn would be linked by a new feeder to the Diyala River. The latter would then supply the new Nahrwan canal which would be con- structed to serve a large area on the left bank of the Tigris below the confluence of the Diyala. The Adhaim feeder should allow for a flow of about 76 cumecs and the Diyala feeder for about 41 cumecs. * For a tabulation of the irrigation pumps in Iraq, see Table II in the appendix. 200 THE ECONOMIC DEVELOPMENT OF IRAQ Irrigation projects for the following areas would then be necessary : 1. Along the Lesser Zab the Makhmur area on the right bank (400,000 masharas gross) and the Hawija area on the left bank (300,000 masharas gross). About 180,000 masharas in the Hawija project are already being irri- gated, and work is proceeding on the extension of irriga- tion to the balance. Both areas would be served by canals governed by a new barrage (Hawija barrage) on the Lesser Zab River which would also control the intake into the Adhaim feeder. 2. On the left bank of the Adhaim River a gross area of 600,000 masharas. To raise the water level for the neces- sary new canals, as well as for the Diyala feeder, construc- tion of a barrage across the Adhaim will be necessary. 3. Extension of the irrigation system of the Diyala by 540,000 masharas gross. 4. Irrigation of a gross area of 660,000 masharas on the left bank of the Tigris below the Diyala River through con- struction of the Nahrwan canal and of a regulating barrage just above Beni Saad to govern the take-off of the canal from the Diyala. This program differs from that recommended by the Haigh Commission in that it does not provide for the irrigation (1) of a gross area of 560,000 masharas on the left bank of the Tigris below Fatha, and (2) of a gross area of 300,000 on the right bank of the Adhaim. The agricultural potentialities of these areas have not been surveyed. A decision to provide irrigation for them should accordingly not be made until it is established that their agricultural value is at least equal to that of the other areas. In its five-year program the Development Board has already included part of the works for the above projects. This program budgets ID 500,000 for the Hawija barrage on the Lesser Zab, ID 300,000 for the barrage on the Adhaim, ID 500,000 for the Beni Saad dam, ID 750,000 for the construction of part of the new Nahrwan canal and ID 2,600,000 for canal systems in the areas commanded by the Hawija and Adhaim barrages. On the other hand, no provision has yet been made for the Adhaim and Diyala feeders. The Mission has not attempted to determine which new areas might be irrigated with the additional flow made available upon FLOOD CONTROL, IRRIGATION AND DRAINAGE 201 completion of the Bekhme dam. As already indicated, the ultimate choice will depend on whether or not the Wadi Tharthar reservoir will store sufficient water for use in irrigation. Other Irrigation Works on the Tigris Other works are required, particularly to insure more effec- tive utilization of the available water supply. One of the more important problems along the lower Tigris is how to prevent the wastage of water which is sent through Shatt al Gharraf from the Tigris. The Shatt al Gharraf, a former branch of the Tigris, has been converted into a canal through construction of an intake works which in turn is governed by the barrage across the Tigris at Kut. For a distance of 150 kilometers, however, it has no regulators of any kind. This makes it necessary to send through the intake a flow about double what would otherwise be needed and causes a great loss of water at the tail end of the canal. The gross area irrigated from the Shatt al Gharraf is theoretically 2,350,000 masharas of which 1,950,000 are irrigated by flow and 400,000 by pumping. Actually, however, the area in winter crops is apparently only about 700,000 masharas which indicates an intensity of irri- gation of only 35 percent as compared with the customary 50 per- cent. Chronic difficulties are therefore experienced in supplying the requisite volume of water. In order to insure the required sup- ply even for the 700,000 masharas in winter crops it is often neces- sary in the dry season to close the gates of the Kut barrage for some time, thereby depriving the lower reaches of the Tigris of water and interrupting navigation. The installation of regulators at suitable intervals will make it possible to irrigate the same area with a much smaller volume of water. The Haigh Commission contemplated the construction of one regulator on the Gharraf, but only for the purpose of governing a new canal which would extend the area under irrigation. The Development Board has set aside ID 450,000 for "construction of regulators on the Gharraf and reclamation of new regions”. The Mission urges that the regulators be constructed as rapidly as possible, but suggests caution in undertaking any new reclamation until there is ample assurance that the existing area can be ade- quately irrigated. Ultimately, of course, expansion of the area 202 THE ECONOMIC DEVELOPMENT OF IRAQ under irrigation may become possible when additional water becomes available either from the Bekhme dam or the Wadi Tharthar reservoir. Another important project which should be undertaken is the better control of the lower Tigris in the vicinity of Amara. For a considerable distance above Amara and in the immediate neigh- borhood of that city, the Tigris is progressively impoverished by a series of outlets which can hardly be called canals but which, owing to inadequate control, divert a large portion of the river waters into the marshes. One of the largest of these outlets is the Musandaq on the right bank of the river. This outlet takes off the flood waters of the Tigris up to a maximum capacity of 2,000 cumecs and is normally sealed off in the dry season by a dike. After breaching by a flood, however, the dike cannot be rebuilt except at a time of low water long after the flood peak has sub- sided. In the intervening period much valuable water is lost. Near Amara the Buteira, Mushara and Kahala canals, with capacities of 1,000, 100 and 450 сumecs, respectively, further deplete the water supply in the Tigris. Farther downstream still more canals, of which the principal ones are the Tabar, the Majar el Kebir and the Michiriyah, deprive the Tigris of water. While all these outlets or canals benefit rice cultivation, they also submerge much land suitable for cultivation of other crops and result in immense losses of water. It is therefore necessary to devise a control program which will prevent the flooding of cultivable land, drain and make available for cultivation the extensive marshes on both banks of the Tigris below Amara, and keep enough water in the Tigris to maintain navigation. The Haigh Commission gave a brief study to such a program, the cost of which is estimated at about ID 3,000,000; and the Development Board has set aside ID 1,2000, 000 for the "construction of regulators on the Tigris at Amara". The Mission urges that, as a first step, all the canals branch- ing off the Tigris be equipped with effective intake regulators which would make it possible to control water diversion. First of all, the Musandaq should be provided with such a regulator and the temporary wooden regulator of the Buteira should be replaced. An intake regulator should also be constructed for the Mushara. In addition, dredging of the Tigris might be undertaken in an effort FLOOD CONTROL, IRRIGATION AND DRAINAGE 203 to keep the river bed deep enough to prevent the formation of additional outlets at flood times. These measures should then be complemented by a series of small works to provide proper control of the canals themselves. The Mission suggests that no regulator barrages be built across the Tigris itself until the results of these control measures are known. Meanwhile, the program should improve the navigability of the river and assist in draining the marshes. As in the case of the Shamiya district on the Euphrates, the program for controlling the lower reaches of the Tigris will make adjustments necessary in the rice-growing areas of Amara. Here, too, it is therefore important that the Department of Agriculture provide timely assistance and advice to cultivators in adapting to the new water regime. III. Drainage While new irrigation schemes always appeal to the popular imagination, it would be exceedingly unfortunate if they should continue to be carried out, as in the past, to the neglect of essential drainage. Lack of drainage facilities has resulted in progressive salination and deterioration of the soil. In such areas as Hawija and Dujaila salt has become a serious problem within only a few years from the time irrigation was begun. Almost all land irrigated by flow has become salty to some degree, resulting in declining crop yields. The only conspicuous exception is the land in the Diyala River Valley for which the river, which has cut a deep bed from the Jebel Hamrin range to its confluence with the Tigris, acts as a natural drain during the dry season. Pump-irrigated lands gen- erally suffer less from salting, partly because they are higher and thus tend to have better natural drainage and partly because, owing to the cost of pumping, there is an incentive to avoid the lavish use of water which tends to waterlog the soil. The Haigh Commission estimated that about 60 percent of the irrigated areas have been affected by salt. The Mission's own observations indicated that perhaps 20 to 30 percent of the culti- vated land in the irrigated areas has been abandoned during recent decades owing to the accumulation of salt and that yields on the 204 THE ECONOMIC DEVELOPMENT OF IRAQ land still being tilled may have declined by 20 to 50 percent. The situation appears to be worst in the regions fed by canals con- trolled by the Hindiya barrage on the Euphrates. Thus about half of the lands irrigated by the Beni Hassan canal and 40 per- cent of those served by the Kifl canal have become too salty for winter cultivation. The waters of the Tigris and Euphrates do not themselves contain excessive quantities of salt. Water is generally regarded as perfectly suitable for irrigation as long as the proportion of dis- solved salts by weight does not exceed 70 parts in 100,000. Avail- able analyses of the Tigris at Baghdad indicate that the proportion does not exceed 30 to 33 per 100,000 at most. For the upper reaches of the Euphrates the proportion is the same or even less, but in the lower Euphrates, which receives the drainage waters from the irrigated areas, the proportion may go as high as 90 parts per 100,000 in the fall of the year. (See Table III in the appendix.) Salt has, however, become concentrated in the subsoil waters. The presence of some of the salt may be due to the fact that much of the land was originally under the sea. In the long run, however, it has been the continuous irrigation or flooding of the soil, com- bined with the effect of evaporation under the hot summer sun, which has led to a progressively greater concentration. Irrigation and flooding keep the water table high with the result that capillary action brings the water up into a zone where it evaporates under the heat of the sun and precipitates salt. Frequently cultivators resort to lavish use of irrigation water in order to wash the salt away from the roots of the crops. In the end, however, this practice has only worsened the situation by tending to raise the water table still further. Salt accumulation can be prevented and existing salt evacuated only by digging drainage canals which will lower the water table to a level of 1.5 to 2 meters below the surface where capillary action can no longer be dangerous. Under such conditions water used in irrigation will wash away the salt deposited in the root zone and return it to the subsoil water which will be tapped by the drainage canals. Fortunately the salt found in the soil is not the sodium carbonate or "black alkali" type which cannot readily be washed away by water. Owing to the low level of the land the FLOOD CONTROL, IRRIGATION AND DRAINAGE 205 salty water accumulating in the drainage canals will in most cases have to be evacuated by pumps. Up to the present, drainage has been the subject of little planning or experimentation in Iraq. Mr. J. S. Turcan, the drain- age expert of the Haigh Commission, carried out a drainage study for the Aggar Qub region, which is irrigated by the Saglawiyah and Abu Ghuraib canals. It was found that of the total area of 320,000 masharas, 197,000 needed drainage. Experiments indicated that a flow of 1.0 сumec per 1,200 marsharas over a period of two and a half months rid the soil of salt to a depth of two meters provided drains were installed with a maximum spacing of two kilometers and sufficient depth to keep the water table from rising to a level higher than 1.75 meters from the surface of the soil. The cost of a drainage project for this region, inclusive of the cost of a pump- ing station to evacuate the drainage waters to the Tigris, was estimated at ID 279,000 per 150,000 masharas or ID 1.86 per mashara. Preliminary plans have also been made for the drainage of other areas. One of these was for the area served by the Beni Hassan canal where the drainage of 330,000 masharas was esti- mated to cost ID 750,000 or ID 2.26 per mashara. The Haigh Commission came to the conclusion that the cost of drainage would average ID 2.0 per mashara or a total of ID 8,160,000 for 60 per- cent of the area now under flow irrigation. Drainage might be usefully complemented by steps to line canals at points where there appear to be excessive losses of water through seepage. Such losses may lead to waterlogging of the soil and a resulting rise in the water table. Since Iraq is rich in asphalt, a lining of bituminous concrete might be best. Deterioriation of land through salting has become such a serious problem that immediate steps should be taken to initiate drainage on a large scale. The Mission urges that work on the main drains be begun as soon as plans can be completed. At the same time complete drainage systems should be laid out and con- structed for areas where the salt problem is most acute, notably those irrigated by the canals dependent on the Hindiya barrage. A start might be made with a drainage system for the Aggar Qub region since it has already been carefully studied. Early steps should also be taken to drain the Hawija and Dujaila areas. The 206 THE ECONOMIC DEVELOPMENT OF IRAQ experience gained with the drainage systems first completed, par- ticularly with respect to the depth and spacing of secondary drains, will be useful in planning subsequent schemes. It is important also that drainage facilities be incorporated in any new irrigation schemes. It is always more costly to provide a drainage network for an already existing irrigation system, since it generally involves cutting across irrigation works and splitting up parcels of land. The installation of drainage facilities will be of vital importance for the rice-growing region of Kufa-Shamiya which the Mission recommends converting to a controlled flow- irrigated area. The same is true of the marshy region along the lower Tigris for which the Mission has suggested a number of control works. The Development Board has allocated ID 2,000,000 to drain- age in its five-year program. The Mission recommends, however, that at least ID 7,000,000 be devoted to this purpose over the next five years. Drainage works for the new irrigation projects alone would cost ID 5,600,000 on the assumption that about 60 percent of the area involved would require drainage. The Mission sug- gests that part of the cost of installing drainage facilities in exist- ing irrigated areas be paid by the landholders who are benefited. This would be an equitable arrangement and need not be unduly burdensome if payments are spread over a number of years. Land- owners, however, should not be given the option of participating in a drainage scheme, for the construction of an integrated drainage network requires the inclusion of all the land within a given area. IV. Operation and Maintenance With attention focussed on the construction of reservoirs and new irrigation systems, there is a great danger that maintenance of existing irrigation works will continue to be neglected as in the past. There are many signs of such neglect today. Regulators have fallen into disrepair; canals have become silted and have developed bad leaks. False economies in the original construction and the use of poor materials have often made the task of maintenance more difficult. Thus frequently there has been no provision for roads FLOOD CONTROL, IRRIGATION AND DRAINAGE 207 along the banks of main and secondary canals although roads greatly facilitate inspection and maintenance. The facing of the canals adjoining the control structures is often too short for effec- tive protection of both the canals and the control works. The turbulent water coming up against the earthen embankments may then undermine the embankments or even the control structures themselves. Brick, which lacks adequate resistance to shock and erosion, has sometimes been used as a construction material where concrete or precast concrete blocks would have been definitely pre- ferable. In the future, it might also be desirable to try gabions of iron-wire net, weighted with stones and coarse gravel, in facing canals. These have given excellent and cheap protection against erosion in some countries. Maintenance is also made more costly by failure to provide originally enough canal crossings for livestock and people, as well as places for washing and drinking. Under such conditions canal banks inevitably deteriorate with resulting leaks and the creation of pools of stagnant water. Crossings, which for the most part can be very simple in construction, should be installed near the villages and at points frequented by cattle. Paved fords will generally be best for cattle since they will provide facilities for drinking at the same time. There is also a need to regulate road crossings of small canals and ditches. Such crossings, which are built by the land- owners, are often too short and constructed so poorly that consid- erable water escapes and the approaches to the crossings are reduced to quagmires. The operation of the irrigation systems, involving the delivery of water to the actual users, could be considerably improved. Fair distribution is undoubtedly made difficult by chronic shortages of water. Whenever water is short, its distribution tends to be hotly disputed. Under such circumstances the influential landowner is often successful in bringing pressure to bear on the poorly-paid irrigation official who is in charge of distribution. Sometimes land- owners resort to more direct action by building temporary dams across canals in order to divert more water to their land. Equitable distribution is also impeded by old water rights which are attached to individual land parcels, particularly in the Diyala River Valley, and are transferred with such property. They often confer a right 208 THE ECONOMIC DEVELOPMENT OF IRAQ to use a quantity of water out of proportion to the amount of land to be irrigated; and in times of water scarcity they must be taken into account in rationing the available supply even though an objective appraisal of relative requirements might produce quite a different distribution. A larger supply of water would, of course, minimize the diffi- culties of distribution set forth above, but in the long run it is also vitally important that economies be effected in the amount of water used. The provision of drainage facilities and the installation of an adequate amount of regulators on canals will certainly bring about substantial economies of this character. The cultivators in Iraq, however, have for many years been accustomed to use water rather lavishly; only demonstration will convince them that they can safely manage with a smaller supply. It has already been pointed out that the irrigation duty is very low compared to that in many other countries. For flow-irrigated lands it is about 16,950 masharas gross (equivalent to 7,200 masharas in crops); for land irrigated by pumps from canals, 19,500; and for that irrigated by pumps from rivers, 26,200. Pump-irrigated lands have a somewhat higher duty because they are generally better drained and therefore less salted and because the cost of pumping encourages economy in the use of water. As far as the Mission is aware, the problem of raising the irrigation duty has not been systematically studied. The Mission recommends strongly that fields be set aside in each irriga- tion system for the purpose of determining through practical experimentation over a number of years the optimum quantity of water to be supplied to each crop. Such experiments should be carried out under the joint direction of the Agriculture and Irri- gation Departments. In the future it would be desirable to associate the landholders in each irrigation area as far as possible with the operation and maintenance of the irrigation system. Irrigation should be a truly cooperative venture. The Mission understands that councils of landowners already exist in some districts, notably along the Diyala, to assist irrigation officials in the distribution of water at times of shortage. Such councils might well be organized in all districts and with the broader function of advising on all problems of maintenance and distribution. They could sponsor the experi- FLOOD CONTROL, IRRIGATION AND DRAINAGE 209 ments in the best use of water mentioned earlier and could assist in disseminating the findings. They would be an important means of developing the concept of common responsibility for the efficient operation and upkeep of irrigation systems and might ultimately serve also to disseminate information on agriculture. The legal situation with respect to water rights and the con- struction, maintenance and operation of irrigation and flood-control works is defined by Articles 1234 to 1238 of the Mejelle, or Ottoman Civil Code, and Law No. 23 of 1923 and its successive amendments. Repeated changes in this legislation have made it difficult to determine the validity of certain provisions. It would be desirable to codify and clarify the legislation and, in the course of such a review, to eliminate some of its defects. It would be advisable, for instance, to ensure a right of passage for canals across the property of third parties with compensation fixed by the Irrigation Department in accordance with defined criteria. At present such a right of passage is recognized but with the proviso that the interested party must buy or lease the necessary land, which, in practice, may lead to extortionate terms. There is also a need for a review of old water rights. While presumably such rights cannot be abolished, the right to use water might well be brought into closer accord with the amount of land to be irrigated. The law makes the Directorate General for Irrigation in the Ministry of Communications and Public Works responsible for the construction, operation and maintenance of the irrigation and flood- control schemes. In 1949 the irrigation services had a staff of 1,330 persons, classified approximately as follows: Engineers 26 Assistant engineers 20 Overseers 94 Office personnel 250 Bund personnel 820 Specialists 120 On the whole, there is an insufficient number of competent, experienced engineers; and pay scales are inadequate to retain able men in a service which often entails considerable hardship. The staff in the provinces is generally not large enough to cope with technical problems along with the many administrative questions 210 THE ECONOMIC DEVELOPMENT OF IRAQ centering particularly about the distribution of water. Young engi- neers are often sent as beginners to outlying posts where they work without adequate technical supervision. The service has lacked an experienced Chief Engineer who could, through frequent visits in the field, provide advice and guidance and support the staff with the weight of his authority. The Mission understands that such a Chief Engineer has now been appointed. It would be desirable to provide him with several experienced assistants specialized in drainage and irrigation questions. In the past the planning of new works has been characterized by two defects: inadequate coordination with other government departments, particularly those dealing with agriculture and health, and failure to make full use of the knowledge and experience of the divisional irrigation engineers. Although irrigation obviously serves agriculture, the Depart- ment of Agriculture in the Ministry of Economics has been virtu- ally ignored in the planning of new irrigation schemes. The same has been true of the health service which is vitally interested in the layout of irrigation projects in connection with its fight against malaria and bilharzia. In its capacity as an over-all planning and coordinating agency the Development Board will be able to insist that all interested government departments be consulted in the planning of projects. A committee consisting of representatives of the Irrigation, Agriculture and Health Departments might be established to pass on irrigation and drainage projects and advise on their priority. This committee might be complemented by a technical commit- tee which would direct the experiments to ascertain the optimum use of water, to which reference has already been made, and per- haps to study other technical operating problems. In the future planning of irrigation works it would be desirable to make greater use of the divisional irrigation engineers in the provinces. These officials have often acquired an experience and knowledge of local conditions which could greatly aid realistic planning The cost of new flood-control and irrigation works will in the future be defrayed out of the budget of the Development Board. FLOOD CONTROL, IRRIGATION AND DRAINAGE 211 The cost of operation, however, will have to be met out of the ordinary budget. In the past the ordinary budget of the Irrigation Department has been wholly inadequate to insure efficient operation and maintenance of the existing irrigation systems. In the last ten years an average of only ID 270,000 has been spent annually under the ordinary budget.? Expenses for operation and main- tenance should actually be about 150 fils per gross mashara under flow irrigation. With a gross area of approximately 6,800,000 masharas under flow irrigation, the appropriate total would there- fore be about ID 1,000,000 per year, inclusive of the salaries of the requisite personnel. The Mission therefore suggests that the budget of the Irrigation Department be progressively increased to reach that sum within the next five years, with the additional cost to be borne by the Development Board. V. Costs of the Program The Mission estimates that the total cost of the over-all pro- gram it has recommended would amount over the next five years (1952-53 to 1956-57) to about ID 55,000,000. Of this ID 27,600,000 would be for water reservoirs, ID 7,000,000 for drainage, ID 2,000,000 for improved maintenance and the balance for new irrigation works. A more detailed breakdown is given in Table V of the appendix. These estimates are exclusive of the pro- vision made in the first year's budget of the Development Board. They are based upon cost estimates made in Iraq by the Haigh Commission and others, but make allowances of 10 to 20 percent for intervening price increases. A further rise in prices in the future would, of course, raise the aggregate cost. * See Table IV in the appendix. 212 THE ECONOMIC DEVELOPMENT OF IRAQ APPENDIX TABLE I ! MEAN MONTHLY DISCHARGES OF THE EUPHRATES AND THE TIGRIS (in cubic meters per second) Mean monthly discharge The Euphrates at Hit1 Maximum monthly discharge Minimum monthly discharge Mean monthly discharge The Tigris at Baghdad? Maximum monthly discharge Minimum monthly discharge Month 258 278 January February March April May June July August September October November December 592 665 968 1,853 2,235 1,208 577 358 293 311 432 558 1,130 1,217 2,651 2,917 3,358 1,792 809 533 383 557 881 1,248 344 462 533 249 268 202 183 225 247 264 947 1,388 1,992 2,951 2,775 1,684 897 504 373 359 516 709 1,926 3,020 3,496 4,541 5,241 3,562 2,069 1,278 827 872 1,105 1,413 432 323 797 935 997 548 292 192 163 175 212 300 1 Based on observations over the years 1924-1946. 2 Based on observations over the years 1906-1946. | FLOOD CONTROL, IRRIGATION AND DRAINAGE 213 TABLE II NUMBER AND HORSEPOWER OF IRRIGATION PUMPS AS OF MARCH 1, 1950 Average capacity of pumps: 1948-49 = 36.22 H.P. 1949-50 = 36.40 H.P. Euphrates and canals Number H.P. Tigris and tributaries Number H.P. Diyala and tributaries Number H.P. Shatt al Gharraf Number H.P. Shatt al Arab Number H.P. Total 1949-50 Number H.P. Total 1948-49 Number H.P. Liwas 74 71 2,394 68 74 2 2,394 68 2,209 68 2 2 2 3 44 54 2,518 1,084 33,475 Mosul Erbil Suleimaniya Kirkuk Diyala Baghdad Dulaim Hilla Kerbela Diwaniya Muntafiq Kut 68 3,277 92 3,852 3 122 1,315 265 115 1,313 268 86 139 4,453 265 7,904 86 2,032 30 651 570 22,610 82 3,364 44 5,795 41,780 7,904 2,032 651 22,610 4,674 26,076 13,656 3,455 75 29 477 28 5,386 41,849 7,974 1,738 624 18,705 3,362 26,115 13,002 2,982 30 570 106 548 354 118 .... 24 1,310 97 4,508 82 552 333 106 451 21,568 354 13,656 12 448 Amara Basra 1 5 167 101 2,840 Total 1,177 41,181 2,034 74,171 160 7,129 121 5,818 101 2,840 3,593 131,139 3,425 124,042 214 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE III SALINITY OF THE EUPHRATES AND THE TIGRIS1 (proportion of dissolved salts in parts per 100,000) Tigris At Baghdad Hindiya Euphrates At Samawah Month Hilia Ur Junction 26 26 22 9.5 7.2 10.7 7.4 5.8 8.3 January February March April May June July August September October November December 19 19 19 23 28 30 32 33 27 16.7 16.9 20.5 18.0 18.5 10.8 10.2 22.5 26.6 27.0 19.1 21.4 19.7 22.6 21.1 13.9 10.3 10.9 16.5 69.0 90.7 69.8 53.3 57.2 20.0 23.5 20.7 20.0 10.0 8.0 14.0 70.9 97.6 82.2 57.2 74.4 9.1 22.1 20.7 26.8 17.5 17.1 1 Data for the Tigris are based on observations over the period 1924 to 1932, but those for the Euphrates on observations over only one year which was particularly dry. FLOOD CONTROL, IRRIGATION AND DRAINAGE 215 TABLE IV EXPENDITURES OF THE DIRECTORATE GENERAL OF IRRIGATION (in dinars) TOTAL BUDGET CAPITAL WORKS BUDGET Capital Works Other than Bunds Bunds Total ORDINARY BUDGET Salaries Irrigation Flood Allowances and Drainage Control Services Fiscal Year Total 1941-42 1942-43 1943-44 1944-45 1945-46 1946-47 1947-48 1948-49 1949-50 1950-51 247,396 200,328 355,461 448,309 326,975 667,057 783,139 1,088,591 726,224 607,481 53,295 119,047 152,830 157,986 124,756 337,897 363,020 230,671 159,084 173,080 300,691 319,375 508,291 606,295 451,731 1,004,954 1,146,159 1,319,262 885,308 780,561 63,986 67,971 82,606 74,963 68,077 89,965 86,628 70,765 69,924 56,926 32,566 36,512 22,842 23,266 28,093 125,208 13,318 54,213 32,608 19,877 75,332 95,128 118,598 154,693 157,981 201,527 187,781 206,146 189,418 193,868 171,884 199,611 224,046 252,922 254,151 416,700 287,727 331,124 291,950 270,671 472,575 518,986 732,337 859,217 705,882 1,421,654 1,433,886 1,650,386 1,177,258 1,051,232 Total 5,450,961 1,871,666 7,322,627 731,811 388,503 1,580,472 2,700,786 10,023,413 216 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE V ESTIMATED COST OF THE PROGRAM (in million dinars) Project Development Board Program 1951-52 to 1955-56 Mission Program 1952-53 to 1956-57 9.62 2.32 10.30 2.80 7.80 5.10 1.56 4.80 2.12 .50 .30 .60 .36 1.50 .60 - .50 I. Dams and reservoirs Wadi Tharthar Dokan Bekhme Derbend-i-Khan Habbaniya II. Irrigation works On the Tigris and its tributaries Hawija barrage Adhaim barrage Adhaim and Diyala feeders.......... Beni Saad barrage........ Irrigation systems using Dokan reservoir supply Regulators on the Gharraf......... Control of the lower Tigris........ On the Euphrates Remodelling of Hilla canal........ Kif barrage, regulation of the Shamiya, and Shamiya-Diwa- niya feeder Irrigation systems using Habba- niya water supply................... Regulation of tails of the Euphrates Other irrigation works.... III. Drainage IV. Improved maintenance and operation.. 2.60 .45 1.20 5.41 .45 1.20 .90 .90 .25 1.40 .40 5.18 1.00 1.00 .32 2.00 7.00 2.00 Total 29.28 55.16 ANNEX C AGRICULTURE AND ANIMAL HUSBANDRY I. Introduction The main features of agriculture and animal husbandry in Iraq have already been set forth elsewhere and are only briefly recapitu- lated here. Barley, wheat, rice, dates, other fruits and vegetables, and, more recently, cotton are the principal crops. Animal hus- bandry is of great importance but at present is really not integrated with agriculture. There is virtually no mixed farming. Crop and livestock yields are very low. Poor feeding is the principal cause of the low productivity of livestock. Low crop yields are attribut- able to poor drainage in the irrigation zone, to the failure to main- tain soil fertility through the use of manure and fertilizer and the cultivation of soil-building crops, and to inadequate tools of production. Advances in agricultural techniques are seriously hampered by the poverty and ignorance of the fellahin who culti- vate the soil and by the lack of interest displayed by most of the large landowners in improving agriculture. While there are exten- sive lands that can be put to the plow, particularly if more water is made available, a substantial portion of the land now in exploita- tion may be said to be overpopulated considering the present level of agricultural technique. An increase in production is urgent. The standard of living which now prevails on the land is deplorably low. At the same time the population is increasing at a rate that can be expected to grow more rapid as public health improves. Output can be greatly increased both by extending the area under cultivation and by raising the productivity of land already being exploited. Primary emphasis has hitherto been placed on the first of these, and large new water storage and irrigation schemes are being planned.2 1 See Annex A, Basic Factors and Conditions. * See Annex B, Flood Control, Irrigation and Drainage. 217 218 THE ECONOMIC DEVELOPMENT OF IRAQ Undoubtedly this is important not simply as a means of raising production, but especially as a means of increasing the number of independent peasant proprietors, today so conspicuously few. In the future, however, more attention should be given to increasing productivity. It will take a long time to settle substantial numbers on new land. The living standard of the fellahin who will continue to work the land already in use can be improved only by a rise in productivity, unless there is a drastic redistribution of the output as between the landlord and the cultivator. Moreover, if output per man employed on the land cannot be raised, it may prove diffi- cult to find the needed manpower to carry out the large develop- ment program for Iraq as a whole or even to settle newly opened lands without a significant curtailment of production in the exist- ing agricultural areas. This monograph is therefore chiefly concerned with measures to improve productivity. The first section discusses diversification of production, with emphasis on those crops which will bring animal husbandry into a more intimate relationship with agricul- ture. The second section deals with the possibilities of expanding the output of some of the crops already grown. The third section treats of some of the means by which productivity in general might be raised—better methods of cultivation and better tools, more effective control of pests and diseases and similar measures. In the next section the improvement of livestock and livestock prod- ucts comes in for special attention. The succeeding section takes up the essential steps in a government program to improve agri- culture and animal husbandry—the organization of an extension service, supported by adequate research and experimentation; the provision of more ample credit facilities; and the establishment of cooperatives. Following a brief discussion of forestry, the problems involved in the settlement of new land are examined, with special stress on the opportunities it offers to develop agriculture from the very beginning along more advanced lines. Finally, in the conclud- ing section the organization of the government's agricultural serv- ices is considered. AGRICULTURE AND ANIMAL HUSBANDRY 219 II. Diversification of Production Fodder and Pasture Existing crop rotation is far too limited and does not make effective use of the land. Wheat and barley are virtually the only winter crops. There are a considerable number of summer crops, but cotton and rice clearly predominate. Rice is really outside any crop rotation, since, for the most part, it is grown year after year on naturally inundated land. Fallow generally takes the place of good crop rotation. No doubt the large amount of water required for summer crops in relation to the available supply has hindered the introduction of new crops, but the water storage schemes that will be carried out over the next decade should bring a change in this respect. Moreover, economies in the use of water which may be effected may in the long run make more water available for summer cultivation.3 Basically the aim in the future must be to make fuller use of the land and the people who work it. The cultivator who grows wheat or barley in the winter does not have enough to occupy him except at sowing and harvest time and has still less to do in the summer. Conversely, the rice farmer has virtually nothing to do in the winter. On the average, cultivators keep little or no live- stock outside of a draft animal or two and they grow no fodder and plant no pasture for their livestock. Hay-making is unknown. While in and around the towns grain, oil cake and cut legumes are used for feeding, in general the most important source of feed for sheep, goats, buffaloes and cattle alike are grain stubble and the uncultivated grasses and herbage. Thus the animals are left to forage for themselves. Under these conditions their food is ade- quate for only five to six months, barely sufficient for maintenance during three to four months and at starvation level for the remainder of the year. Introduction of a mixed type of farming which will include leguminous fodder crops in the rotation with cash crops would mark a most important advance in Iraqi agriculture. Such crops will enrich the soil as well as provide feed for livestock. Better * See Annex B, Flood Control, Irrigation and Drainage, pp. 208-09. 220 THE ECONOMIC DEVELOPMENT OF IRAQ feeding will make livestock far more productive and resistant to disease and produce better and stronger draft animals. By making the keeping and systematic feeding of livestock an integral part of settled agriculture, the people on the land will be assured fuller employment and higher incomes. Livestock should play a more prominent part in the farm economy for still another reason. The great bulk of the sheep and goats, which constitute over 80 percent of the livestock, are the property of nomads and semi-nomads. Nomads from the northern and southern deserts regularly move into the riverine areas in search of summer pasture; and semi- nomadic shepherds move within the irrigated areas feeding their flocks on green barley, grain stubble and the grass and weeds of fallow land. Both are meeting with increased resistance from the settled farmers; and in any event the expansion of the area under irrigation will increasingly curtail the pasture available to the nomads. Thus the remaining nomadic tribes will need to be gradu- ally settled, but they will adapt themselves readily to settled agricul- ture only if it will enable them also to maintain considerable livestock. Among the forage crops berseem or Egyptian clover, a winter annual, is well-adapted to most of the irrigated area of Iraq and could be grown on a much larger scale. Sown in the grain stubble in late summer, it will provide a good pasture, soiling and hay crop. Alfalfa, a perennial, also makes a good forage crop capable of yield- ing 1.5 to 5 tons per donum for two to five years. However, in view of its deep roots, it cannot be recommended unless good cultivating equipment is available to kill it when necessary. For summer pasture, quick-growing crops such as millet or binder crops such as maize and sorghum should be grown. Summer legumes-cow- peas and mungo beans, and particularly the black mungo of India can be recommended. The lack of water during the summer makes the problem of forage crops in the rain-fed zone more difficult. Large areas can, however, be planted to winter oats and vetch which, when cut, cured and cocked, will provide a good reserve feed. The increased production of cotton which has taken place recently should be an excellent source of livestock feed once farmers learn to appreciate the value of oil cake feeding. For this AGRICULTURE AND ANIMAL HUSBANDRY 221 reason the cultivation of more cotton as well as such crops as lin- seed and sunflower seed will be important to the livestock economy. Sugar Beets and Cane The value of beet tops and pulp for livestock feeding might also be regarded as one of the principal reasons for introducing the cultivation of sugar beets. Similarly, one of the advantages of cane sugar might be the production of molasses which could also be used for livestock feed. These have been, of course, subordinate considerations in the minds of those who have advocated these crops for Iraq. The principal consideration has been to produce at home the sugar now imported in a volume which averaged 75,000 tons per year in the three-year period 1948 to 1950. Undoubtedly sugar beets could be cultivated in the northern provinces of Suleimaniya and Mosul and sugar cane in the South, particularly in Amara. The real question is, however, whether either or both of these crops could be grown economically and on a scale large enough to warrant the necessary investment in process- ing plant. It must be decided whether cane or beet is preferable and whether either of them can compete with cotton for the avail- able land, water and labor. The data available at present do not make it possible to arrive at sound decisions on these questions. Test plots grown over 10 years indicate that there are several varieties of beet well adapted to Iraq and capable of reasonably high yields in terms of sugar. Experiments on cane sugar produc- tion at Abu Ghuraib, Basra and Amara have yielded much less favorable results, although one variety under test held some promise of furnishing sugar at an economic cost. The experiments, however, have not been conducted in a way and on a scale that would permit a satisfactory conclusion. If further experiments prove the feasibility of growing cane, it is likely to be a more eco- nomic crop than sugar beet. Experience elsewhere demonstrates that cane yields are generally higher and that the production of cane is less difficult and less demanding of skilled and semi-skilled labor than that of sugar beets. It is suggested therefore that further experiments on a larger scale be undertaken under appro- priate expert guidance. In each of the possible beet sugar areas five or more 10-donum plantings might be tried. Special attention 222 THE ECONOMIC DEVELOPMENT OF IRAQ should be paid to the effect of fertilizers on yields and to the possi- bility of insect and disease damage. A careful record should be kept of production costs. Similar large scale experiments with sugar cane would have to be initiated at Amara on a comparable basis. A sugar beet expert should be engaged to direct research at Abu Ghuraib, with assistants at the Bakrajo and Nineveh substa- tions. Another expert would be needed to take charge of the experi- mental work on cane. Both men would have to be given a suffi- cient field force to carry out the manual labor involved. These field experiments should be supplemented by an eco- nomic inquiry into requirements for labor, farm equipment and transport and into comparative costs of production. In this con- nection the cost of producing cotton on the same land would have to be investigated. The value of the yield per donum, taking into account the by-products, would need to be compared on the basis of existing price relationships as well as the factors which may affect that relationship in the future. For example, it might be concluded that in the longer run the demand for cotton, and there- fore its price, would be better maintained, especially in the sterling area. In any comparison of yields it would be necessary not only to consider the output per unit of area but also the area which an average family could be expected to cultivate in the particular crop. Thus it is probable that one family could grow a larger area in cotton than in sugar beets because the latter demand more labor, particularly heavy labor that could be performed only by adults. Finally, there must be a reasonable assurance that sugar can be produced and sold at a price which will prove competitive with that of imported sugar less the import duty. III. Observations on Existing Crops No attempt is made in this monograph to comment on every crop grown in Iraq. Many crops could be improved through the introduction of varieties which are more productive and resistant to insects and disease. Only an adequate research and extension service, to which reference will be made later, will be able to capitalize on the many potentialities for improvement. Here, only a few of the more important crops are singled out for special mention. AGRICULTURE AND ANIMAL HUSBANDRY 223 Dates Dates, one of the principal foods of Iraq, are also a main export crop. While Iraq's pre-eminence in the world date market will not easily be threatened, the quality of dates has apparently declined and replacement of old trees has been far from adequate. Not more than 15 percent of the old gardens have under way a tree-planting program sufficient to replace old and deteriorating stands. More than 60 percent of the gardens are in poor condition owing to inadequate cultivation. Halfa, Johnson and Bermuda grasses have been allowed to become serious pests, causing considerable damage. Yields could be improved by better cultivation, manuring, fertiliza- tion, reduction of other fruit trees planted in date gardens and improvement in irrigation through the cleaning of canals and the installation of more pumps. Processing of the crop could also be improved, for old packing sheds where primitive methods of hand- ling are employed are still in use. Responsibility for promotion and improvement of the date industry is entrusted to the Date Association under a law approved in 1935. Ever since 1939 the Association has had a contract with the Andrew Weir Company whereby the latter undertakes to buy at fixed prices and export all the dates of the best varieties offered for sale from the Basra district. There is general agreement among the growers that this arrangement has helped to stabilize prices. On the expiration of the current contract with Andrew Weir after the 1952 season, the Association hopes to conclude a similar agree- ment with a newly-formed Iraqi company. The Association, the growers and the foreign companies engaged in the date trade are each expected to subscribe one third of this company's capital of ID 500,000. Consideration is also being given to extending its price-support operations to the dates grown in the Tigris- Euphrates valley. In addition, the Date Association is contemplat- ing a distillery to convert into alcohol dates which are surplus to market needs. There is considerable danger that in carrying out these ambi- tious plans the Association will neglect the need for better cul- tural practices stressed above. The Association has already been criticized for doing little to improve the production of dates. It would be unfortunate if it followed the precedent set by the Tobacco 224 THE ECONOMIC DEVELOPMENT OF IRAQ Monopoly which seems to have lost sight of one of its primary objectives, namely, to raise the quality of tobacco. Moreover, before the Association and its Iraqi "marketing" company undertake the contemplated stabilization program, there must be reasonable assur- ance that prices are not fixed at excessively high levels owing to political pressures and that the company has ample financial resources. An operation of this character is likely to be highly speculative. While large profits may be earned in some years, severe losses will be incurred in others. With respect to the pro- jected alcohol plant, caution should also be exercised. There is already one distillery making alcohol as well as arak. For the time being the demands for alcohol may make another plant appear attractive, but it is doubtful that in the long run dates can compete with other raw materials such as molasses as an economical source of alcohol. Other Fruits Iraq can grow a wide variety of fruits and nuts. Citrus fruit has been conspicuously successful in the Diyala River Valley and the number of plantings has increased greatly with the help of the Department of Agriculture which distributes the trees. A higher output could be achieved through the use of fertilizers, particu- larly nitrogen, and by better cultivation to discourage weeds and pests. Better storage facilities are also needed. In some parts of the country, particularly in the North, condi- tions are quite favorable to the growing of deciduous fruits. The fruit, however, is poor in quality and seldom gets beyond local markets. The better grades of fruit are all imported from other Middle Eastern countries. Yet better care in pruning, cultivation, thinning and in the control of insects and diseases might well double the output of apricots, peaches and apples and greatly improve their quality. A rising standard of living should provide an incentive to higher production provided facilities are made avail- able to can, dry and store the fruit. The proposed small-business section of the Industrial Bank might investigate the possibility of financing such facilities. The organization of transport to the mar- ket also requires attention. Nut culture could also be expanded in the northern provinces. The possibility of top-working, budding or grafting improved AGRICULTURE AND ANIMAL HUSBANDRY 225 varieties of pistachio scions on established native pistachio trees should be given particular attention. Almond orchards could be increased to advantage. Vegetables and Potatoes Vegetable culture is concentrated in the neighborhood of the large cities where such products as radishes, lettuce, cabbage, cucum- bers, squash, tomatoes and others are in good supply during the season. Unfortunately vegetables do not figure prominently in the diet of most people. Outside of the big towns little or no vege- tables are eaten. In part, this appears to be due to the fact that tribal tradition holds the cultivation of vegetables in low esteem. However, where the sharecropper is inclined to grow vegetables, he may be discouraged by the lack of available land or the shift- ing of the area assigned to him for cultivation. If a determined effort were made by the government to enlist the cooperation of the landowners, it might not be too difficult to overcome these obstacles. It might be desirable to increase the production of potatoes which are now imported to the value of about ID 100,000 per year. The lighter soils along the large streams in the provinces of Mosul, Erbil and Suleimaniya are particularly well adapted to the produc- tion of both Irish and sweet potatoes. With proper guidance in cultural practices and the use of fertilizers, planters in these areas could easily supply the country's needs. If it is demonstrated that potato yields compare favorably with other crops, the govern- ment might well encourage the planting of potatoes both by launch- ing an educational campaign and by furnishing the necessary seed to planters. Special attention will need to be given to transport, however, and the growers will have to be shown how to build inexpensive potato bins or pits with sufficient ventilation, insula- tion and accessibility. Tobacco Tobacco has been grown to some extent in the North for cen- turies, although it was not until the last few decades that its pro- duction assumed importance. Even now, the value of the tobacco crop is probably no more than a tenth of that of wheat or barley. In the mountainous areas of Erbil and Suleimaniya, however, it is 226 THE ECONOMIC DEVELOPMENT OF IRAQ the principal crop of the Kurdish farmers. Moreover, the way in which tobacco has been bought, sold and handled by the govern- ment Monopoly has created much controversy. At the same time the Monopoly's operations have yielded considerable profits to the Treasury. Finally, the government is hopeful of expanding the production of tobacco, which is at present grown only for home consumption, so that it will make a significant contribution to exports. For all these reasons tobacco has become an important and controversial subject. The purchase and sale of raw tobacco and tombak was vested in the government by law No. 35 of 1939. This legislation also instituted government licensing of the manufacturing, importation, wholesaling and retailing of cigarettes and controls over the impor- tation of cigarette paper, boxes and other requisites for the manu- facture of cigarettes. Operation of the Monopoly was at first entrusted to the Customs Department but in 1943 it was transferred to a separate Directorate-General within the Ministry of Eco- nomics. The original law did not detail the objectives of the Monopoly beyond specifying that “one of its main objectives shall be the improvement of tobacco.” Apparently, however, other objectives were (1) to assure the cultivators fixed and remunera- tive prices for their tobacco, and (2) to raise revenue for the government. Quality of Tobacco The principal objective of the Monopoly has certainly not been achieved. In fact, it is generally recognized that the quality of tobacco has deteriorated rather than improved during its existence. The reasons for this are many. First of all, neither the Monopoly nor the Department of Agriculture has given farmers any assist- ance in improving their crop even though the cultivation, picking and curing of tobacco require considerable knowledge and skill which has been largely lacking in Iraq. The tobacco now grown is a mixture of several varieties not at all uniform in type, time of maturity or quality. Instead of picking the leaves individually starting at the bottom of the stem, the whole plant is frequently harvested at once. Curing is haphazard, with immediate exposure of the leaves to the sun instead of retaining them in a wilting shed AGRICULTURE AND ANIMAL HUSBANDRY 227 for three or four days. In packing and grading, growers do not separate the bottom, middle and top leaves or take care that pack- ing takes place only when the moisture content and the pliability of the leaves are just right. The second reason for the poor quality is inadequate grading and manipulation by the Monopoly. Tobacco is graded for the Monopoly by committees whose members are generally untrained. Classification is by color only and a bale given a single grade often has tobacco ranging through all shades of green, yellow and brown. Influential cultivators, or merchants acting on their behalf, can often obtain grades for their tobacco unwarranted by its merits. Thus the grading system offers little or no incentive to the grower to produce the best possible tobacco. Finally, the Monopoly stores tobacco under conditions which contribute to its rapid deteriora- tion. Warehouses are often exposed to the elements and are with- out temperature and humidity control so that tobacco may alter- nately ferment and dry out. Little re-grading or manipulation is done in warehouses. Farmer Income from Tobacco Whether the Kurdish farmers have on the whole obtained an adequate income from tobacco is less easy to determine. Their income from tobacco has depended on (1) the amount of tobacco purchased from each year's crop by the Monopoly and the prices (less istihlak and land tax) paid, and (2) the amount of tobacco sold illicitly and the prices realized thereon. Unfortunately, not enough data are available to permit an estimate of the income of tobacco farmers. Data on prices paid by the Monopoly for the first three years of its operation are lacking; figures on total tobacco production, from which the amount marketed illicitly might be deduced, do not exist; and little or nothing is known about the prices realized on tobacco marketed illegally. During the war the Monopoly, which was supposed to equate the supply of tobacco with demand by licensing the area under cultivation, apparently made no real effort to use licensing as an instrument for the restriction of production. The area licensed rose steadily from 28,014 donums in 1940 to a peak of 71,730 in 1944. In the period 1943-45 the income of farmers was also considerably 228 THE ECONOMIC DEVELOPMENT OF IRAQ increased by classifying a much larger proportion of their output as "extra" or "first” grades which, of course, fetched higher prices. At the same time the Monopoly boosted the prices paid for the 1944 crop to a level more than twice as high as those which had prevailed for the 1943 crop. For the 1945 crop it lowered its prices somewhat but still maintained them at a level approximately twice as high as in 1943. As a result the Kurdish farmers reaped a bonanza. Whereas the Monopoly paid only ID 634,005 for the 1943 crop, it disbursed ID 3,208,032 for the 1944 crop and ID 3,608,997 for the 1945 crop (see table). TABLE 1 LICENSING AND PURCHASING OPERATIONS OF THE TOBACCO MONOPOLY Prices Paid for Each Grade (1943 = 100) Extra First Second Third Donums Licensed Total Purchases Quantity Value (kg) (dinars) Year 100 229 194 1943 1944 1945 1946 1947 1948 1949 1950 57,747 71,730 34,797 26,818 19,225 15,500 15,500 16,000 100 247 210 140 154 140 140 140 100 233 198 151 167 151 151 151 183 202 183 183 100 250 211 214 236 214 214 214 4,080,787 8,863,022 12,582,734 4,395,166 4,231,320 4,347,639 6,621,905 634,005 3,208,032 3,608,997 746,499 757,152 772,729 1,326,291 183 n.a. n.a. Beginning in 1946 the Monopoly began to retrench sharply. The area licensed was reduced successively to 19,225 donums in 1947 and 15,500 in 1948, and it has since been held to approxi- mately this level. Prices were also lowered to some extent. Most important of all, a stricter grading policy was adopted, resulting since 1946 in the virtual elimination of purchases of the "extra" grade and substantial reduction in the proportion of "first” grade tobacco purchased. As a result the Monopoly's disbursements for purchases from the 1946 crop fell to only ID 746,499. They have since been maintained at approximately this annual level except for the amount paid for the 1949 crop which amounted to ID 1,326,291. The quantity purchased of each year's crop fell from a peak of 12,600,000 kilograms in 1945 to about 4,400,000 in 1946, AGRICULTURE AND ANIMAL HUSBANDRY 229 4,200,000 in 1947, 4,300,000 in 1948, and rose again to 6,600,000 in 1949. Actually, the Monopoly by no means fully enforced its announced policy of buying no more than the maximum amount that the licensed area could ostensibly produce. Its purchases exceeded the ostensible maximum by about 400,000 kilos for the 1947 crop, 1,200,000 for the 1948 crop and as much as 3,500,000 for the 1949 crop. Much of the 1946, 1947 and 1948 crops evi- dently found their way into the black market. Because of the danger of growing stocks, the Director-General, supported by the Prime Minister, issued a warning in advance of the 1950 crop that in the future no more tobacco would be bought than could be produced on the licensed area. Evidently the Monopoly carried out this policy for, up to April 12, 1951, it had bought only 2,250,000 kilos from the 1950 crop out of a theoretical total of 3,200,000 kilos. Since the cultivators apparently did not take the government's declared intention seriously, the actual crop substantially exceeded the permissible total. However, farmers were apparently compelled to sell their surplus illicitly at very low prices, thus giving rise to an expectation that in the next years the limitation on production will be more generally observed. If so, it seems likely that farmers' receipts from tobacco will amount to between ID 600,000 and ID 700,000 per year at prevailing Monopoly prices. In general, it can probably be said that farmers received more for their tobacco than they would have obtained in the absence of the Monopoly. Since the tobacco produced is generally poor and therefore is unable to find foreign outlets, it is likely that, in the absence of the Monopoly's price support and production control program, prices would have been substantially lower. At the same time, the farmers suffered from the rather erratic policies of the Monopoly which permitted them to realize very high incomes dur- ing some of the war years and let them down suddenly immediately after the war. Tobacco Monopoly Revenues The government has undoubtedly enjoyed considerable income from the Monopoly. In any discussion of this subject a distinction * The Monopoly has operated on the assumption that each licensed donum would produce up to a maximum of 200 kg. of tobacco. 230 THE ECONOMIC DEVELOPMENT OF IRAQ must be made between (1) the actual cash income and cash expenditures of the Monopoly, which is of particular importance to the Treasury and (2) the Monopoly's accounting contribution to the budget. These two differ markedly, as is indicated be TABLE 2 CASH AND ACCOUNTING RETURNS OF THE TOBACCO MONOPOLY (in dinars) Cash on Treasury Account Cash Cash Income Expenditure Balance Contribution to the Budget Sept. 1, 1943- Mar. 31, 1946.. 6,760,878 1946-47 3,518,655 1947-48 3,580,232 1948-49 3,061,214 1949-50 2,240,234 5,692,965 3,807,628 1,340,388 844,814 1,036,028 +1,067,913 -288,973 +2,239,894 +2,216,399 +1,204,207 2,147,275 3,479,436 1,860,358 342,902 424,272 Total 19,161,213 12,721,773 +6,439,440 8,254,243 The accounting contribution to the budget is figured by (1) calculating the difference between cash income and cash expendi- ture realized by the Monopoly in its transactions in tobacco, tom- bak and cigarette paper, (2) adding or subtracting the net change in the value of the Monopoly's stocks during the year, and (3) adding sundry revenues from confiscated tobacco, license fees, storage, etc. Thus in 1946-47, the accounting contribution to the budget was large despite the cash deficit incurred by the Monopoly because stocks rose markedly. In 1948-49, on the other hand, the contribution to the budget was small in relation to the cash sur- plus of the Monopoly because stocks of tobacco and tombak during the year fell from 9,100,000 to 6,700,000 kilos. Finally, the con- tribution to the budget in 1949-50 was small because at the end of that year stocks were valued for the first time at purchase price instead of sales price as hitherto. As a result the valuation of stocks was substantially reduced despite the fact that the quantity of tobacco and tombak on hand had increased from 6,700,000 to 7,800,000 kilos. By and large it certainly can be said that the Monopoly has yielded substantial revenues to the government. This revenue has AGRICULTURE AND ANIMAL HUSBANDRY 231 accrued despite rather inefficient operation because the Monopoly has consistently charged tobacco manufacturers prices two to two and a half times higher than those it paid for tobacco and it has been able to compel them to accept tobacco at the grade which it has specified, despite the marked deterioration of such tobacco in the Monopoly's warehouses. Recommendations In the future the first concern should be improvement in the quality of tobacco. To accomplish this it would be desirable first of all to recruit abroad at least two or three experts on the growing of tobacco. These, assisted by a selected number of Iraqis, would work directly with the growers in a campaign to raise the standards of cultivation, picking and curing. In addition, a minimum of two leaf experts should be engaged to give instruction in the proper methods of grading or classifying tobacco. In order to provide a check on the work of the grading committees, the appointment of an expert buyer to approve all tobacco for final purchase by the Monopoly is recommended. He would presumably need to be a foreigner initially, but would have an Iraqi deputy who would be trained to take his place. In the warehouses, several experienced foremen-manipulators are needed to supervise and teach the staff correct methods of handling and storing the tobacco. The inade- quate existing warehouses should be replaced with four to five new ones constructed of brick and concrete, equipped with dust extract- ing and humidifying plant and portable storage racks. Each of these new warehouses would have four floors, the first three devoted to storage and the fourth to manipulation. The Monopoly itself might be retained, principally because there will need to be some agency to limit production as long as the tobacco is not of such quality that it can readily be sold abroad. Moreover, the large number of small tobacco growers might other- wise be at the mercy of the merchants and manufacturers who would have incomparably more bargaining power in the fixing of prices. It is suggested, however, that the Monopoly be reorganized into a financially autonomous agency with its own budget, its own accounts and its own funds. As an autonomous government enter- prise it would be required to turn over annually to the Treasury 232 THE ECONOMIC DEVELOPMENT OF IRAQ its profits, less a suitable reserve, determined in accordance with approved accounting practice. An expert accountant should be engaged to draw up a proper system of accounting for the agency. In this connection it would be desirable to revalue the stocks of the Monopoly realistically after destroying inferior and excessively deteriorated tobaccos. The Monopoly would be headed, as at pres- ent, by a Director-General who might usefully be assisted by an adviser of recognized competence in the production and handling of tobacco. It would be desirable also to have an advisory board on which both manufacturers and growers could be represented. The existing wide disparity between the buying and selling prices of the Monopoly provides a powerful incentive to illicit production and marketing of tobacco. The Mission strongly urges that this differential be greatly narrowed to a point where it is sufficient only to cover the expenditures of the Monopoly, plus a reasonable reserve. The revenue lost in this way could be collected in the form of additional excises on the manufacturers whose out- put and sales can be controlled relatively easily. The present limitation on the amount of tobacco which the Monopoly will purchase from each licensed donum discourages productivity and should accordingly be lifted. This would not necessarily mean a further contraction of the licensed area, for the curtailment of black marketing resulting from the reduction of the difference between the Monopoly's buying and selling prices should enable the Monopoly to buy and sell more tobacco. The Mission believes it would be very unwise to adopt current proposals to extend the Monopoly's operations to the manufacture of tobacco products. The remedy for the poor quality of tobacco does not lie in government assumption of manufacturing operations. The present manufacturers turn out a reasonably good product considering the quality of their materials. Their production costs are also likely to compare favorably with those that could be achieved with government operation. 1 AGRICULTURE AND ANIMAL HUSBANDRY 233 IV. Improved Methods of Cultivation Dry-farming Techniques Following this discussion of specific crops, it will be appro- priate to give some attention to the various improvements in culti- vation which might raise the yields of agriculture in general. Many of these improvements will be of special benefit to wheat and barley which will continue to be the principal crops. One important method of increasing the productivity of the land-namely drainage—has already been discussed elsewhere. It is worth emphasizing again, however, that the excessive use of water which aggravates salting should be discouraged as far as possible. Farmers in both the irrigation and the rain-fed zone must be taught how to make the most of the available water. For this reason the methods of dry-land farming which have proven suc- cessful elsewhere could usefully be applied in Iraq. These stress the need to prepare a proper seedbed that will insure seedlings a good start, to plant when moisture conditions are right and to sow during overcast weather if possible. Second, they include a num- ber of practices to reduce evaporation-furrow irrigation instead of flood irrigation whenever practicable; subsoiling to break the soil pan and permit better percolation of water to a greater depth; and mulching as soon as possible after irrigation. Finally, they seek to increase the water-holding capacity of the soil through the addition of organic manure in the form of green crops; by thorough cultivation to improve tilth and by less frequent irriga- tion, but with greater amounts of water. Fallow Practices The existing fallow practices could also be considerably improved. Fallow as practiced in Iraq does tend to restore soil fertility to some extent and lowers the water table in the irriga- tion zone, thereby reducing the danger of salinity. Improved crop rotation (including especially the cultivation of soil-building crops), the use of fertilizer, drainage and more economical use of water will all in the long run reduce the need to keep land fallow. * See Annex B, Flood Control, Irrigation and Drainage, pp. 203-06. 234 THE ECONOMIC DEVELOPMENT OF IRAQ For a considerable time to come, however, it will be an important factor in agriculture. Proper fallow will promote nitrification and store in the soil up to 30 percent of the precipitation during the fallow period. This is true, however, only where the fallow land is kept free of vegetation which depletes the soil moisture and uses up the accumulated plant food. In Iraq this is seldom done, either because fallow is used as pasture or because the available tools are not adapted to destroy the deep-rooted perennial weeds. The typical wooden "nail" plow, drawn by ill-fed and ill-kept animals, reduces the annual weeds but only encourages the more persistent, deeper-rooted species which subsequently offer stiff competition for crops following the fallow period. In the rain-fed zone considerable land is tilled where the rain- fall is marginal. The yield on such land is usually very poor. During a 10-year period, for instance, there will generally be five fallow years, two crop failures, two fair crops and one good crop. Better results might on the average be obtained if grain were planted every year on rows two and a half to three feet apart. This would reduce the plant population per unit of area and per- mit intertillage to control weeds and conserve moisture. Tests of this sort might well be made. Use of Fertilizers Although soils are generally fertile and have sufficient potash, phosphorus and nitrogen for crop production under the existing fallow system, experiments have indicated that applications of nitrogen increase yields under certain conditions. This is true of vegetables, of green gram following wheat and barley in the rota- tion, of cotton following small grain, of dates and citrus fruits and of rice produced in areas where silt does not replenish the soil. On the other hand, in Iraq the application of fertilizer to wheat and barley in the fall has failed to increase yields materially, and its application to small grain frequently promotes excessive vege- tative growth. Presumably this lack of response is due to the fact that grain is grown on fallow land which has had a chance to replenish its supply of nitrogen. It is possible, however, that even on such land nitrogen may be deficient in the spring, making a top dressing at that time beneficial. Experience elsewhere has demonstrated that proper crop rotation and use of fertilizers make AGRICULTURE AND ANIMAL HUSBANDRY 235 possible more intensive utilization of the land. Experiments con- ducted over a long period in the United States have shown the reaction of wheat yields to fallow, fertilizer and crop rotation. The results indicate that yields respond most favorably to fertilizers used in combination with a crop rotation scheme. There is great need to do more experimental work in Iraq in order to determine the optimum rates of fertilizer applications for various crops, the best time of application and the effect of green manure on production. The high cost of fertilizers may have deterred their use. This handicap may be overcome if steps are taken to carry out the Mission's proposals to establish a large nitrogen plant at Kirkuk as well as a number of small bonemeal plants. Tools and Draft Power In discussing the need for weed control, reference has already been made to the lack of adequate equipment and good draft ani- mals. In some parts of Iraq hand cultivation without the use of draft power may still be seen. In other parts, however, one can see the most modern tractors and combines at work in the fields. Better tools and draft power will no doubt help to improve the productivity of the land both by destroying weeds and by better preparation of the soil. Similarly, better threshing equipment will raise the quality of the grain. This does not mean, however, that mechanization of agriculture will necessarily be the appropriate solution. Most farmers do not have sufficient land or money to warrant the purchase of a tractor or combine, and cooperative ownership will inevitably develop rather slowly. Moreover, under existing conditions the cost of amortization, operation and main- tenance may be too high in relation to the cost of labor. Better plows drawn by sturdy animals may have largely the same effect as tractor-drawn plows in destroying weeds and improving prep- • Yields under various conditions were as follows in terms of bushels per acre: 1. Continuous wheat, without fertilizer....... 12.33 2. Continuous wheat, with fertilizer.......... 23.58 3. Wheat after one year of fallow... 22.00 4. Wheat in a 4-year rotation, without fertilizer. 24.00 5. Wheat in a 4-year rotation, with fertilizer..... 32.00 236 THE ECONOMIC DEVELOPMENT OF IRAQ aration of the soil. Similarly, small stationary threshers may offer a better alternative than large harvesting combines to the present methods of threshing by flaying and the tramping of animals. The government should pay at least as much attention to the task of getting simple, inexpensive tools into the hands of the cultivators as to the much more ambitious program of agricultural mechaniza- tion. Good hand tools, for example, are almost nonexistent. Improvement in draft animals is also necessary. While the sup- ply of draft animals cannot be increased rapidly, it is possible to get animals of greater strength and endurance by better feeding and selection. In the longer run, however, there is no doubt that mechaniza- tion of agriculture will assume growing importance. Physically, the country with its flat broad plains is ideally suited to mechani- zation although the canals and ditches in the irrigation zone offer some impediments to the use of machinery. Moreover, even now there are labor shortages at sowing and harvest times in some parts of the country, particularly in the North. In the future such short- ages may become really acute as manpower is drawn from the land to take advantage of the new employment opportunities created by the over-all development program and as some of the fellahin work- ing on land now under cultivation leave to settle new land. Under such circumstances mechanization may become the principal means of maintaining and expanding agricultural output. In its policy respecting mechanization the government will need to steer a care- ful course. On the one hand, it will want to keep some check on mechanization as long and wherever there is danger of displacing fellahin before alternative means of employment become available; on the other hand, it will find it desirable to accelerate mechaniza- tion whenever labor shortages become serious. Through its control over imports and credit, the government possesses effective methods of influencing the rate of mechanization. The United States Lend-Lease Program gave mechanization its first impetus. At present there are probably about 170 com- bines and 550 tractors in operation in the country, with about half of the number concentrated in the provinces of Mosul and Bagh- dad. In addition, 75 combines and 81 tractors are owned and made AGRICULTURE AND ANIMAL HUSBANDRY 237 available for rental by the Agricultural Machinery Administration, an autonomous agency within the Ministry of Economics.? Further progress will be seriously impeded, however, unless means are found to prolong the life of machinery which is now less than half what it is in the United States. The shortage of spare parts and repair facilities has been very discouraging to machinery owners. The failure of private dealers to provide these largely inspired the government's original decision to establish the Agri- cultural Machinery Administration as a monopoly for the importa- tion and distribution of agricultural machinery. In accordance with suggestions made by an earlier International Bank Mission, the government has tried to meet the problem by different measures, namely by licensing dealers only on condition they agree to set up repair facilities and maintain an adequate stock of spare parts. The enforcement of these requirements, however, will not provide a complete solution, even if it is supplemented by completion of the AMA program for setting up its own repair facilities at Bagh- dad, Kirkuk, Mosul, Diwaniya and Kut. The AMA and private dealers should also cooperate in conducting courses in operation and elementary maintenance of machines for drivers. Moreover, simple local facilities to carry out all but major repairs are needed. An adequate number of mechanics both for the central and local repair shops must be trained, and for this purpose foreign shop supervisors and instructors will be necessary. The Industrial Bank may have to cooperate by providing small loans for equipping local shops. The AMA now performs a number of useful functions. It regulates imports and the distribution of spare parts and tests different types of machinery for their adaptability to conditions in Iraq. Most important, it maintains a pool of machinery for rental. In some respects its operations could undoubtedly be improved. An official estimate given to the Mission gives a total of 320 combines and 750 tractors. Customs statistics for the years 1945 to 1950 inclusive, however, show that only 632 tractors and 262 combines were imported. Part of these are already out of commission. An on-the-spot survey in each province by a member of the Mission indicated that only 170 combines and 549 tractors, exclusive of government-owned machines, were in operation. Of the combines, Mosul had 75; Baghdad, 75; seven provinces, one to five each; and five provinces, none. Of the tractors, Baghdad had 250; Mosul, 150; Kut, 40; Kirkuk, 23; Erbil, 15; six provinces, less than 10 each; and three provinces, none. 238 THE ECONOMIC DEVELOPMENT OF IRAQ With a larger and more qualified staff it could do a better job in advising farmers on the type of machinery best suited to their needs and could undertake the tasks outlined in the preceding paragraph. It might also pay more attention to finding and testing the type of machinery that would be particularly useful on smaller holdings. Above all, in its rental service it should charge rates which will not cause it to run a large deficit or discourage private ownership of machinery. The rental service itself performs a useful function and should be continued until private enterprise can provide the same service on the basis of a reasonable return or until sufficient coop- eratives can be organized to provide machinery for their members. Many landowners cannot now afford to buy a machine, and others will not risk buying until they have had a chance to test its value by renting one. The AMA, however, now sustains heavy losses on its rental operation. For the calendar year 1951 its operating expendi- tures are expected to be ID 150,463 as compared with a projected rental income of only ID 50,000. For the two years 1950 and 1951, the total cash deficit of the Administration will probably amount to about ID 222,000.8 It has been able to finance such deficits only by using up the balance of the capital contribution of ID 500,000 which the government originally made to the agency. Since ID 235,750 of this contribution consisted of machinery and build- ings, very little of the remaining cash will have been left by the end of 1951. The AMA's financial situation is all the more acute because it now urgently needs funds to purchase new machin- ery and equipment at a rate of perhaps ID 250,000 per year. In the past there has been no depreciation reserve for the replace- ment of machinery. To meet this financial emergency it will be necessary to make the rental operation self-sustaining. In part this can be accomplished by reducing expenditures. Probably more important, however, will be an increase in rentals, especially those on tractors which are now relatively low. A continuing govern- ment contribution to the total budget of the AMA will probably be merited, but only to the approximate extent to which AMA expenditures are attributable to functions other than the rental of * For the 1950 and 1951 budgets of the AMA, see Tables I and II in the appendix. AGRICULTURE AND ANIMAL HUSBANDRY 239 machinery. At the same time the cost of new machinery and equip- ment will need to be financed-possibly out of Development Board funds if earlier plans to borrow for this purpose from the Inter- national Bank do not materialize. Government rental of machinery should at best be considered a temporary expedient. It is wasteful, primarily because overhead expenses are high. The transportation of machinery from central shops to the renters tends to be expensive and to expose the machinery to excessive wear and tear. Private and cooperative ownership of machinery should therefore be encouraged. One step in this direction would be to enable the Agricultural Bank to lend money for this purpose on the security of the machinery. In the past the absence of any provision for registering title to such machinery has prevented such loans. Another important measure would be to encourage the establishment of cooperatives for the collective ownership of machinery, especially in the new agricul- tural areas which are to be opened. At present the producers' cooperative in the Dujaila project owns a number of tractors. Because overhead costs are relatively low it is able to rent them out at lower rate than the AMA while still apparently covering the cost of operation and depreciation. V. Control of Pests and Diseases Livestock Pests and Mortality More effective control of pests and diseases would also materially help to improve yields. This is particularly true of live- stock. Because of lack of funds, equipment and trained personnel, no systematic campaigns for eradicating specific groups of diseases have been undertaken. Many livestock diseases, particularly of the parasitic type, are rife. Among the principal livestock diseases are foot and mouth disease ; haemorrhagic septicaemia; anthrax; sheep pox; blackleg; parasitic gastritis ; tick-borne diseases (anaplasmo- sis and piroplasmosis); fowl cholera ; Newcastle disease; various manges; and dourine. The available staff is wholly insufficient to control, let alone eradicate, any epidemic which might break out. A serious outbreak of disease would endanger the livestock industry of neighboring countries as well as that of Iraq. 240 THE ECONOMIC DEVELOPMENT OF IRAQ The first requisite for an effective campaign against livestock diseases is a larger trained staff. The number of field veteri- narians should be increased from 17 to 28 as rapidly as possible. A number of Iraqis should be sent to foreign veterinary schools, preferably in countries where comparable livestock conditions exist, such as India, Pakistan, Egypt or Turkey. Pending the training of Iraqis, it would be advisable to engage a number of veterinarians abroad. The field service should be augmented by trained assistants and dispensers. Graduates of the Abu Ghuraib agricultural school might be recruited for these positions and given a short concen- trated course in the practical aspects of veterinary science at the veterinary school at Baghdad, with further instruction at the neighboring clinic, the Veterinary Service Institute and the abattoir. It would be highly advisable to take some of the candi- dates for such training from the nomadic tribes so that they can later help their own tribes in combatting the hundred and one ailments which beset their livestock. Organization of a competent veterinary field service is likely to prove impossible, however, unless the prevailing pay and other conditions of service are greatly improved. Secondly, facilities for diagnosis and treatment should be improved. It is suggested that simple regional diagnostic labora- tories be set up in all provinces. At present all laboratory work in connection with diagnosis is centered in the Veterinary Service Institute at Baghdad, thus causing much waste of time and effort. Decentralization might begin with the establishment of laboratories in Mosul and Kirkuk to serve the North and in Basra to serve the South. Such regional laboratories should not be established, how- ever, at the expense of the quality of the staff and service of the Institute in Baghdad. Complicated diagnosis would continue to be handled by the Institute which also manufactures sera and vaccines. It would be advisable to reorganize and strengthen the Institute so that it can give adequate support to the veterinarians in the field and make an appropriate contribution to veterinary education. The quality of equipment must be improved and production methods modernized. A qualified foreign expert might be appointed to assist in making the necessary changes. AGRICULTURE AND ANIMAL HUSBANDRY 241 There is a great need for systematic remedial and prophylactic treatment to reduce widely prevalent parasitic infections by such means as flock treatment against internal worms, and cattle and sheep dipping against external parasites. A small campaign to con- trol sheep pox and other external ailments was begun at one time, but abandoned because of lack of funds. In the future adequate funds should be set aside to carry out a well-planned campaign of dipping, particularly in the North. This will involve the estab- lishment of dip-tanks at strategic points in relation to the grazing grounds of the herds and flocks, the location to be worked out by a ground survey undertaken by field officers. Another important prophylactic measure would be the establishment of quarantine stations at points used for international trade in livestock. At present many livestock belonging to the nomadic tribes die from lack of water or exposure to severe weather, either directly or indirectly as the result of lowered resistance to disease. In the severe winter of 1949 about 1,500,000 sheep are said to have died in the mountains of Kurdistan. In the South the waterholes used by the tribes tend to dry up in dry years, thus necessitating great treks to reach water during which many animals are lost. Such losses would be greatly reduced by livestock shelters in the North and more wells in the South. The shelters, which should be built at strategic points on the migration routes, would be primarily for the protection of lambing ewes and would provide emergency feed supplies for migratory flocks. A three-walled mud structure, with a roof and accommodations for shepherds and some feed- stuffs, will be sufficient. Although the government has dug some wells for the use of the southern tribes, much more could be done. Plant Diseases and Pests The pests and diseases affecting crops have not been as great a problem as those attacking livestock. The locust plague is a periodic menace, but has been kept rather successfully under con- trol in recent years. The systematic distribution of poison bait in hatching areas during the spring has been the most effective method of combating the locust. Since the bait will be scorned when succulent green food is available, it is important also that farmers • The best bait consists of mill-run bran, sawdust, sodium Auorsilicate and water and should be applied at the rate of 14 pounds of wet bait per donum. 242 THE ECONOMIC DEVELOPMENT OF IRAQ be made to realize that the eggs can be destroyed before hatching by cultivating infested areas to a depth of about two inches either in late fall or early spring. Once the locusts or grasshoppers begin to spread, their ravages can be arrested by applying chlordane or toxaphene as spray or dust. Sprays have the advantage of causing higher initial kills and they continue to kill over longer periods than dust. To control future outbreaks the Department of Agri- culture should at all times have access to sufficient funds and have on hand an adequate amount of supplies, vehicles, spraying and dusting equipment. This has not always been true in the past. The most destructive of several sucking insects is the Sunn pest (Burygaster integriceps) which does great damage to wheat and barley crops in several Middle East countries. Iraq has reported losses of 30 to 50 percent and in some sections almost total crop losses. The most common procedure used in control of this insect has been to plant early-maturing varieties of grain, since the insect does not attack after the seed has begun to harden. Grain losses from rust and smut are sometimes quite substan- tial and could undoubtedly be reduced. Although the Mission made only a superficial survey, loose smut of wheat and barley and close smut of barley were noted over a considerable area. In certain sec- tions as much as 10 to 20 percent of the seeds appeared to be smutted. Leaf rust of wheat and leaf and stem rust of barley, as well as powdery mildew, were also observed. Cotton pests and diseases are not at present a factor in pro- duction. The pink boll worm, however, has been recorded from Basra and the boll worm (Earia insulana) is found throughout the cotton-growing region. Laphygma exigua is most common and does some damage. There are also a number of other pests. While, in the aggregate, these have not inflicted serious losses, agricul- tural officers should be prepared to recognize any new infestations and should be briefed on the most effective methods of control. It might be noted in this connection that the State University of Ari- zona at Tucson, Arizona, U.S.A., has published in pamphlet form a schedule for cotton insect control that is outstandingly good.10 10 Cotton Insect Control, Circular 179, Agricultural Extension Service, University of Arizona, Tucson. - - AGRICULTURE AND ANIMAL HUSBANDRY 243 In any discussion of pests the damage caused by weeds is worth emphasizing again. Poor tillage and the tendency to use idle land as pasture has caused a rapid spread of Bermuda and Johnson grass in the irrigation zone. These pests have actually forced a considerable amount of crop land out of production and have lowered the yield of such summer crops as cotton, maize and sesame. VI. Improvement in Livestock and Livestock Products Improvement in both the quality and quantity of livestock pro- duction is likely to be of growing importance in the future, par- ticularly since the anticipated rapid increase in public expenditures on development as a whole will create an expanding and more discriminating market for animal products. In general the types of livestock found in Iraq represent rather hardy animals which, through a process of natural selection, have become fairly resistant to the rigors imposed by a severe climate and inadequate feed supplies. This does not mean that improvements in breeding cannot be effected. At present breeding is largely haphazard and uncontrolled, particularly as to timing and the selection of sires. It is a well-known scientific fact, however, that the evaluation of genetic factors influencing production in any direction—meat, milk, wool, work, and the like cannot be prop- erly assessed unless the nutritional level is first improved, thus permitting the full genetic development of the livestock to take place. Iraq is a particularly striking illustration of the truth of the old saying that “half the breed goes into the mouth.” One of the best methods of exploring the possibility of improved breeding and the results of better feeding and other live- stock practices would be to establish a number of herds and flocks of indigenous breeds of livestock as well as poultry on government farms throughout Iraq. There careful records would be kept to discover for the first time what these animals can really produce with improved feeding, breeding and management. These livestock stations could also provide progeny-tested sires to farmers for 244 THE ECONOMIC DEVELOPMENT OF IRAQ breeding. Above all, farmers could be brought there to see with their own eyes the benefits of better livestock practices and the value of mixed farming. A start toward establishing such herds and flocks has already been made. The following expanded program might be carried out over the next few years in different parts of Iraq: Southern Area: 1. A flock of purebred Arabi sheep should be kept at the government farm at Basra, together with a herd of selected buffalo. 2. A herd of selected buffalo should be established at Amara either on government property or on private property where the owner will cooperate with the government in obtaining the necessary information on breeding, perform- ance, feeding, etc. Central Area: 1. At Abu Ghuraib Farm the selected flock of Awasi sheep should be more usefully adapted than at present to give information on breed performance, milk production, wool yield, etc. The herd of Jenubi dairy cows should follow a carefully planned program with respect to breeding, feed- ing and types of management to determine performance, influence of improved feeding, likely foundation dairy strains for country stations, and the like. At present the farm has no clearly defined livestock policy and lacks continuity of policy. This station might also usefully con- tinue its work on Friesians as a town (Baghdad) cow, purely for urban milk supplies. It would be undesirable to continue with more than one imported breed of cows for this purpose, and the use of this breed should be strictly limited to urban requirements. 2. Work should also be done on buffalo in this central area but this can be readily carried out by controlling breed- ing and management on one or more of the buffalo settle- ments (e.g. Dora) in the neighborhood of Baghdad. 3. In the central area also, the work on Arab horse breeding should be maintained and expanded on a more realistic basis. The local racing organizations and the Turf Club would probably cooperate readily in a comprehensive breeding scheme to improve the quality of the local horses. 4. Finally, a small farm (300-500 donums) should be pur- chased in the Diyala province and organized on a mixed AGRICULTURE AND ANIMAL HUSBANDRY 245 farming basis, including crops, horticulture and livestock in its program. From the livestock point of view it should be a demonstration of the production of milk, eggs and poultry under irrigation conditions to meet urban require- ments in the Baquba and Baghdad areas; a lesson in improved feeding, breeding and management, and, above all, in mixed farming. Northern Area: 1. Flocks of Karadi sheep should be established at Nineveh and Bakrajo, a herd of northern black cattle at Bakrajo, and a herd of Sharabi cattle at Nineveh. Improved foun- dation stock or even purebred sires of the black mountain breed of cattle might be brought in from Turkey. 2. Formule breeding, selected foundation stock (jacks) might be introduced from Cyprus to meet the mountain and hill requirements of this northern area. Special measures will need to be taken to assist the nomads in improving their livestock. Aside from the veterinary assistants which might be attached to the tribes, it would be desirable to train a few members of each tribe in such a way that they can give advice and assistance on other livestock matters, including the development of better breeds with the help of selected sires procured from the government. Better pasturage is, however, the critical question. In view of the difficulty of increasing the feed supply for the livestock of the nomads in the South, their problem may be best met in the end by converting an increasing number to mixed farming as new areas are irrigated. Some help may be given by investigating the possibility of conserving existing desert forage plants and introducing new drought-resistant grasses and herbs. For the northern nomads better watered natural grazing lands are available. Unfortunately these lands have been badly abused, and, in the Northeast in particular, a considerable portion has been overgrazed so severely that scarcely any palatable forage remains. Regulations to enforce rotational grazing are urgently needed. Reseeding of the worst areas would not be impossible and would certainly reap large dividends. Controlled grazing is par- ticularly necessary to safeguard the scanty forest areas. For this purpose it is suggested that the migration routes for livestock in the North be fixed in consultation with the Forestry Department. 248 THE ECONOMIC DEVELOPMENT OF IRAQ the tail, and in many cases not even all the “clippable" wool is taken from the body and legs. It is suggested, therefore, that one or more Australian wool clippers be recruited to teach several Iraqis, preferably shepherds, the proper way to secure a maximum clip. These trained clippers, who would be in government service, would then be assigned to clipping sheds which, with proper shear- ing equipment, should be established in one or two of the main sheep areas, starting, perhaps, with Samawa and Aqra. The tribes would be encouraged to bring their sheep to these sheds where they would be clipped for a small fee in cash or in kind. The sheds could at the same time be used as wool grading stations so that livestock owners could easily see which type of animals pays them best. They might also serve as centers for the collection of goat hair for export. In addition to the stationary clipping sheds, one mobile unit might be tried. The cost of these shearing units, which might be either hand or power driven, would be very small. Poultry and Eggs Poultry, which take a very secondary place in the livestock picture of the average village, are generally of nondescript breeds and feed themselves primarily through uncontrolled scavenging sup- plemented by an occasional handful of grain. No thought is given to breeding a better type bird or a bird which will produce larger eggs over a longer laying season. Yet the possibility of developing better and more productive poultry through proper feeding and management has already been demonstrated by work carried on by the government. In the future, poultry units should be established for demonstration and breeding purposes on all government agri- cultural stations. Experimental work on the control of parasites and on the construction of cheap poultry houses out of locally avail- able materials should be carried on at Abu Ghuraib, Bakrajo and possibly Basra. Farmers should be asked to come and observe the results of good management and to draw better breeding stock from these agricultural stations. One or two of the larger farmers might be encouraged to undertake the raising of poultry on a large scale as an experiment. There will certainly be a growing domestic market for poultry and eggs, and it may ultimately be possible to cater to the markets of Gulf ports and the oil company settlements in the Middle East. AGRICULTURE AND ANIMAL HUSBANDRY 249 Dairy Products The larger towns receive their milk and milk products from cows, buffalo, sheep and goats which are kept in backyards in town or on nearby farms and settlements. The dairy cattle among them are usually of mixed or nondescript breed. While they are surprisingly well fed, their housing and the methods of milking and processing the milk are extremely primitive. The majority of municipalities appear to have sufficient legislation to ensure clean milk production, but enforcement is poor and the livestock owner is not educated to the necessity for taking more care with the pro- duction of his commodity. Baghdad, for example, has regulations to remove livestock out of the city and locate them outside of the city boundaries. It has provided livestock settlements for the milk- ing buffalo complete with walled paddocks, running water and feed- ing stalls, but unfortunately with no accommodation or living quar- ters for the workers. Despite these facilities many livestock owners continue to keep their animals in the poorer quarter of the city, and no attempt is made by the government to demonstrate clean milk production in these settlements. The government has taken a step in the right direction in installing a small milk pasteurizing plant in Baghdad (100-gallon flash pasteurizer), but the only milk passing through the plant is some 200-300 liters a day from the Abu Ghuraib agricultural sta- tion. Unfortunately many Baghdad residents do not even know of its existence. Some government officials have urged a larger pasteurizing plant even though the present plant is daily running considerably below capacity. The cleanliness of existing milk supplies must first be improved and producers persuaded to use the existing plant. Another unfortunate feature of the present "backyard" herds is the fact that many dry cows and calves are sent to slaughter and only the milk producing animal is retained. Each year the dairy industry loses a great number of potentially good milk-producing animals in this way. The following recommendations for the amelioration of the situation in Baghdad are put forward with the expectation that, if they are successfully applied there, they can be extended also to the other major cities : 250 THE ECONOMIC DEVELOPMENT OF IRAQ (a) A survey of all the milk-producing animals in Baghdad and environs should be undertaken through the Veterin- ary and Animal Husbandry Department. This should include the number of animals, names of owners and approximate production of milk; disposal of milk, either as fluid milk or processed; estimates of seasonal variations in production; some general information on sources of feeding stuffs; list of retail dairies and details of the dis- posal of their products. (b) On the basis of the information thus obtained the govern- ment should take the lead in forming a cowkeepers asso- ciation or milk producers association, which will repre- sent the trade and deal with the government in all matters affecting milk supplies. The association should have a voice in advising the government on any regulation of the retail prices of dairy products. (c) Through the Veterinary and Animal Husbandry Depart- ment the milk producer should be shown and persuaded to adopt better feeding, breeding and management methods. (d) Existing legislation to move the livestock out of the heart of the city to settlements and nearby farms outside the city boundaries should be enforced. Regulations forbid- ding adulteration of milk must also be made effective, which will presumably necessitate more adequate remun- eration of medical department inspectors to prevent bribery. Adequate laboratory facilities, together with the necessary trained staff, ought to be made available for testing inspection samples. (e) On existing or newly established livestock settlements, adequate provision must be made for housing the workers, storing feeding stuffs, and purchasing day-to-day require- ments. From visits to these settlements and discussions held with the producers, it appears that they would lend themselves admirably to the formation of producers' cooperative societies. The milk could be individually pro- duced, taken to a central collecting station on the settle- ment and communally transported to town for either pasteurizing or direct processing and retail to the public. The cooperative could also provide the producers with cheaper feeds bought in bulk, dairy utensils and other provisions. (f) The existing government pasteurizing plant might also be turned into a producers' cooperative. As a first step, a government board, including selected members of the pri- vate trade, might be appointed to supervise the plant. In 252 THE ECONOMIC DEVELOPMENT OF IRAQ trained agriculturists.11 In each province there is an agricultural staff of five to 20 men, but the officers are not qualified to direct research or extension work. The trained staff of the Veterinary Department is correspondingly restricted. It has already been mentioned that there are only 17 trained veterinarians in its field service. In 1950 the Agricultural and Veterinary Departments had only 108 and 40 officers respectively with a base pay of over ID 15 per month.12 The field services operate under great handicaps. The officers are underpaid and thus often supplement their income by engaging in other work or by extending special favors. Neither their pay nor their standing in the community is such as to attract promising talent. Transport or other equipment such as laboratory facilities is frequently lacking. Excessive centralization leaves little room for initiative. Even the taking of a field trip requires the consent of the central office. The staff is preoccupied with routine tasks, generally of a regulatory or control nature, to the virtual exclusion of real research or extension work. They grow and distribute seed and nursery stock, do some control work on pests and diseases, carry out inspections and collect rather inadequate information on production. Moreover, their work is rigidly compartmentalized. There is little or no contact between those dealing with livestock and those concerned with agronomy and no coordination between agriculture and irrigation. Organization of an Extension Service One of the principal tasks of the future should be to organize an extension or advisory service to farmers and livestock keepers. Such a service, adequately equipped with transport, would devote itself entirely to assisting the farmers and shepherds in the field. Its main emphasis would be on education through demonstration. For this purpose it would need to establish crop, livestock and 11 These include in the Central Office at Baghdad, the director-general, two junior agricultural officers, one plant protection officer, one extension officer and one technical assistant; in the agricultural station at Abu Ghuraib, one senior livestock officer, two plant pathologists, one senior entomologist and four junior assistants; in the agricultural school at Abu Ghuraib, one director and two teachers; and in the horticultural station at Zafanaria, one director, two assistants and two junior officers. 12 With living allowances, this ranges from ID 23.750 to ID 26.750. AGRICULTURE AND ANIMAL HUSBANDRY 253 poultry demonstration units in all parts of the country. Suggestions for such livestock units have already been made. In many cases it will not be necessary to establish government-owned farms, for it should be possible to stimulate the more enlightened landowners to lead the way in adopting better methods and permitting those in the neighborhood to come and see for themselves the results achieved. The ultimate goal should be to make some practical demonstration of the value of such improved methods accessible to nearly all cultivators. In addition the officers of the extension serv- ice would need to work intimately with the rural primary and secondary schools in a program to bring children a knowledge of the principles of good agriculture and animal husbandry as early as possible. They should also play a prominent role in any adult edu- cation programs launched by the Ministry of Education. For this purpose they should be equipped with visual teaching aids. Obviously, such an extension service cannot be created over- night. The first step should be to appoint an expert who has had considerable experience in extension work abroad to recruit and train the necessary staff and take other preparatory measures. His initial staff might consist of an assistant responsible for collecting materials for use in the service and two or three supervisors to direct the gradually increasing amount of advisory work in the field. A few people should be sent abroad each year to gain practical experience of extension work. The supervisory person- nel would initially have to be obtained abroad. Those officers who would work directly with farmers and livestock keepers in the field should not be highly specialized. Rather they need a good gen- eral training in agriculture and animal husbandry. In the past too much stress has been placed on specialization. Many of the candidates for the extension service could be educated at the secondary agricultural school and the more advanced institute at Abu Ghuraib. The first of these now gives a three-year course to students who have completed three years of secondary schooling while the latter provides a two-year advanced course to graduates of secondary schools. The institute's course has recently been extended to three years and will soon be increased to a full four years leading to a bachelor's degree in agriculture. Both these schools should be in the position to train 254 THE ECONOMIC DEVELOPMENT OF IRAQ forward-looking men for actual farming as well as for posts in the agricultural administration and the extension and educational service. Unfortunately their teaching staff and curricula have been deficient in many respects. The teaching staffs should be strength- ened by recruiting additional qualified teachers abroad and by using specialists engaged in agricultural research to teach their special- ties. More practical agricultural work should be incorporated into the curriculum. Students in the institute, for instance, might be required to remain on the government farm at least one or two summers and complete a course in practical agriculture. This course would include the actual operation of farm machinery, the establishment of simple plots to demonstrate yield, crop adaptation and other agricultural techniques, and the care of livestock. It is important that students actually work with their hands during such a course, for there is no room in a field extension service for officers who consider manual work degrading. In addition to their regular instruction, both schools should be equipped to give brief courses from time to time in special subjects such as the operation and maintenance of machinery, animal husbandry, soil analysis, forestry, and techniques of extension work. It will be some years before sufficient people can be recruited and trained for an adequate extension service. In the intervening period a complete separation between the extension service and the regulatory and inspection service cannot be carried out. Those newly trained would join the existing service and carry out both types of work, with the expectation, however, that growing emphasis would be placed on extension work. Consideration might be given, however, to establishing a full-time extension service as soon as possible within one or two areas limited to a few selected qadhas, so that different methods of working with farmers could be tested. Ultimately it will be desirable to separate the extension service from the inspection and regulatory service. The latter might then be organized into two sections: one dealing with control of injurious pests and diseases, maintenance of standards for agri- cultural and livestock products, fertilizers and insecticides, and surveys of production and land use; the other concerned with the production, processing and distribution of pure agricultural seed 1 -- AGRICULTURE AND ANIMAL HUSBANDRY 255 and nursery stock. The first of these sections should have ade- quate laboratory facilities for identifying plants, insects and diseases and for analyzing chemicals, pesticides, fertilizers, feed and food products. The second section would need better equipment than is now available at Abu Ghuraib to test, clean and process seed. It would also require at least three nurseries-one each for the north- ern, central and southern parts of Iraq-to propagate needed fruit, nut and citrus stocks. Seed stocks of proven strains would have to be either imported or produced locally either on government farms or on private farms under contract. Experience indicates that soil and climatic conditions are favorable to the production of seed of the most important field crops, as well as alfalfa, berseem clover and many of the grasses. The inspection and regulatory service in the field will pre- sumably exist separately for agriculture and animal husbandry under the direction of the departments respectively responsible for these subjects at Baghdad. Ultimately, however, the extension service should be under the unified direction of a single director, particularly since it is so desirable in the future to integrate animal husbandry with agriculture. Establishment of a Research Department An extension service will need to be complemented by a staff engaged in practical research and experimental work and a small staff of agricultural statisticians and economists. The first will develop and test new and better strains of seeds and stock, experi- ment with different methods of soil cultivation and fertilization, explore means of improving livestock breeding and feeding, and the like in order to develop the most effective and best adapted agri- cultural and livestock practices for practical application through the extension service. The small staff of statisticians and econo- mists will be concerned with developing a more accurate picture concerning farm and livestock production and land use. It will study marketing problems and provide advice on the pattern of agricultural and animal output that is likely to be most remunera- tive for the farmer in various sections of the country. It is important that a Department of Research and Experi- mentation be established within the ministry charged with respon- 256 THE ECONOMIC DEVELOPMENT OF IRAQ sibility for agriculture. Such a department should gradually be staffed over the next five years with trained personnel able to devote full time to research and experimentation. At present those engaged in research are generally charged with other duties as well. Until more staff can be trained, the available personnel will pre- sumably have to discharge several functions. It is strongly recom- mended, however, that immediate steps be taken to recruit a man with wide experience in research as the director of the new service. It would be his responsibility to coordinate such research as is now being carried on both in agriculture and animal husbandry and to build up a full-time staff. The research department should have ample facilities and therefore have jurisdiction over all experiment stations. Government farms are now primarily devoted to com- mercial production of seed and nursery stock rather than to research. In the future their principal task should be to serve as experimental and demonstration stations. Only such land as is surplus to these needs should be turned over to commercial seed or stock production. Under those circumstances part of the seed production may have to be contracted out or grown on newly estab- lished government farms. The research department would concentrate on the following fields: 1. Soil management and conservation. This would include the initiation of a complete soil survey to determine the properties of different soils by field and laboratory studies, classify the soils by their properties and possible uses and summarize the information available on each type with respect to its tilth, fertility, adaptability to particular crops and the like. Such a survey would be extremely useful in planning land use, especially in the selection of land for irrigation and drainage projects. The first step would be to carry out a preliminary reconnaissance survey. The advantages of the intensive cropping system, involving proper crop rotation and the use of fertilizer, should also be studied in comparison with those of the crop-fallow system. Finally, the various methods of conserving moisture through better cultivation, timely destruction of weeds and the prevention of soil erosion could be tested. 2. Introduction of new and better varieties of crops. Among the subjects to be examined in this field would be the suitability of different types of forage crops, including - AGRICULTURE AND ANIMAL HUSBANDRY 257 grasses and legumes; new grain sorghum varieties and hybrid maize strains; and the adaptability of sugar beets and sugar cane. 3. Horticulture. This work, which should be centered at the Zafarania station, would cover vegetables, dates, nuts, citrus and other fruits. Tests should be carried out in the northern and southern as well as the central part of Iraq. 4. Tools and machinery. This type of work would test the suitability of various kinds of hand, animal-drawn and power tools for different conditions and jobs and espe- cially seek to develop cheap but effective animal-drawn equipment and hand tools. 5. Forestry. Research on forestry should be developed with particular attention to experiments with controlled graz- ing on range and forest land and the selection and culture of trees suitable for various uses and sections of the country. It would be desirable to carry on this research not only at the forest nursery in Erbil, but also at the Abu Ghuraib and Bakrajo stations. 6. Animal husbandry. This would focus on the development of the most suitable pasture and feed crops and the best methods of preserving fodder for winter feeding. As already indicated, it would determine to what extent exist- ing types of livestock could be improved by systematic breeding and feeding. The cost and results of feeding with different oilseed by-products and date by-products should be studied and a laboratory established to work on the relative value and digestibility of various feedstuffs. A research program on range development should also be carried out, but jointly with the forestry service. The government has already taken a constructive step by inaugurating a scheme near Chemchemal in the province of Kirkuk for experimenting with afforestation and rota- tional grazing. The site appears to be unsuited, however, for the production of low-priced fodder to aid in over- wintering cattle. Experiments should also be conducted with the reseeding of pastures, using both foreign and indigenous grasses and clovers and with the possible use of fodder trees such as mesquites. 258 THE ECONOMIC DEVELOPMENT OF IRAQ VIII. Use of Incentives Through practical and realistic experimentation and demon- stration much progress can undoubtedly be made in persuading farmers and livestock keepers of the value of more modern methods. Throughout the world, however, the farmer and shepherd tend to be conservative. Even though he sees other methods yield good results on experimental farms or even on his neighbor's land, he may still be reluctant to try them himself, particularly if it involves him in higher initial costs. The government cannot, after all, prescribe what he should do, except perhaps on land which it allots for settlement. If it cannot persuade him, the government may find it necessary to give him some financial incentive to induce him to experiment with new crops or fertilizer. Thus it might make seeds or stock of new and improved varieties available free of charge or at nominal prices or subsidize the cultivation of forage or soil-building crops or the use of fertilizer. The use of such incentives to bring about the adoption of new crops or better methods of cultivation has on occasion proved effective in other countries. Experience also indicates, however, that great care must be taken to prevent them from becoming permanent. The problem of incentives is particularly acute because the pre- vailing sharecropping system appears to offer a special obstacle to the introduction of forage and soil-building crops. Although the landlord can in theory direct his fellah to grow any crop, the fellah will in practice resist the cultivation of any crop which involves curtailing other crops he can consume himself or sell for cash. Generally able to eke out only a bare subsistence, the fellah is not likely to have any interest in growing fodder for which there is no cash market, especially when he has little or no livestock of his own. Similarly he is likely to oppose cultivation of a leguminous crop for green manure, especially since he himself may not get back the same parcel for farming the following year. He might ultimately be persuaded of the advantages of a given four-year crop rotation, but only if he were assured tenure of the same land over a sufficiently long period. The ways and means of overcoming tliese difficulties inherent in the existing tenancy system should be AGRICULTURE AND ANIMAL HUSBANDRY 259 carefully studied by the government. In this study the possibility of offering financial incentives directly to the fellah and of mak- ing certain changes in the conditions of tenancy would need to be explored. IX. Agricultural Credit If farmers are to purchase fertilizer, more livestock and better draft animals, tools and machinery, they will need access to credit facilities. The Agricultural Bank with a nominal capital of ID 1,000,000 does not at present adequately serve their needs. First of all, its resources have been insufficient. As of March 31, 1950, the latest date for which a balance sheet was made available to the Mission, the capital actually paid in amounted to only ID 500,000. Its lending resources were supplemented to some extent by time deposits totalling ID 136,996. Total loans outstanding aggregated only ID 556,609. Since that date a further capital contribution of ID 50,000 has been made to the Bank, its time deposits have increased somewhat and a loan of ID 150,000, repayable in three annual installments, was obtained from the National Bank in April 1951. A shortage of liquid resources compelled the Bank virtually to suspend lending in November 1949. Not until a year later was it possible to resume credit operations and then only on a modest scale. The Bank has never been able to meet the demand for credit. Although authorized to lend up to ID 3,000 to any indi- vidual for a maximum term of 10 years, in practice it has limited the size of its loans to ID 1,000 and the duration to five years. It would be desirable to increase the capital of the Bank sub- stantially—to a total of perhaps ID 2,000,000. The Development Board would seem to be the logical and probably the only available source of funds for this purpose. The Bank would then be able to repay its debt to the National Bank and still extend its loan opera- tions substantially. At the same time, however, there should be a careful review of the Bank's lending policies to make sure they are sound. In the past there has been a tendency for its loans to become frozen. In the fiscal year 1949-50, for example, only ID 108,333 of the total amount of ID 279,975 in loans falling due was actually received. Maturities were postponed on loans totalling AGRICULTURE AND ANIMAL HUSBANDRY 261 X. Cooperatives Cooperatives have unfortunately made little progress. There is an impressive law on cooperatives which provides, among other things, for their registration and the auditing of their accounts by the government. The government also received an excellent report on cooperative possibilities made by an expert in 1947. Neither the law nor the report have really been implemented. Responsibil- ity for cooperatives is now vested in a Department of Cooperatives within the Ministry of Economics. Its entire staff consists of one part-time director, another officer and a clerk. By May 1951 it had registered 40 cooperatives of which all but one were consumers' cooperatives. Apparently nearly all of these are either dormant or of small importance. The Department has obviously been unable to give constructive, practical assistance in the organization and operation of cooperatives or even to take the initial step of send- ing some people abroad for training in cooperative management. It has neither received nor audited the financial accounts of any of the existing cooperatives. The only really worthwhile cooperative in existence appears to be the producers' cooperative in the Dujaila project where over 1,000 small-holders were settled at government expense. This cooperative, which was formed in 1947, owned in the spring of 1951 ten tractors with tillers, two trucks, a small flour mill and a clubhouse. The cooperative rents the tractors at a reasonable rate to its members and at a higher rate to nonmembers. Opera- tion of the flour mill is contracted out under an arrangement which fixes the milling charges. The trucks provide transport for men and goods both within the settlement and to the nearby town of Kut. Although its accounts leave much to be desired, the coopera- tive appears to be in a sound financial condition. (See Note 13 on following page.) It needs expert advice, however, on the proper methods of setting up its books and controlling its expenditures, and its accounts should be subject periodically to an independent audit. A consumers' cooperative also operates in the Dujaila project, but it aparently runs at a loss owing to high selling expenses and low turnover. It would be advisable either to dis- 262 THE ECONOMIC DEVELOPMENT OF IRAQ continue it entirely or at least to replace its existing three shops with a mobile store which might sell more at lower cost in this scattered settlement. The experience with the Dujaila producers' cooperative indi- cates that useful results can be obtained. Under existing conditions cooperatives will not, however, be organized spontaneously by the farmers themselves. They will need the impetus, assistance and supervision of the government. The cooperative is a rather advanced form of social organization and can therefore be expected to develop only at a slow rate. The necessary spirit of cooperation and sense of collective responsibility will have to be carefully nurtured in any program of adult education sponsored by the Ministry of Education and in any educational programs carried out by the proposed agricultural extension service. The first step should be to transfer responsibility for coopera- tives to the Department of Agriculture. It would be well to con- centrate entirely on rural cooperatives for these are most urgently needed. The next step would be to recruit and train personnel. The staff need not be large initially, but should be sufficient to permit considerable field work. It should consist of people genuinely interested in cooperatives and preferably drawn from rural backgrounds. It must include one or two accountants equipped to draw up a standardized system of bookkeeping to be 13 The cooperative has not drawn up a balance sheet of its assets and liabilities. Nevertheless, it is possible to conclude from data made available by the Dujaila Committee in Baghdad that the cooperative has apparently not operated at a loss. From February 1, 1950 to April 20, 1951, its current revenues amounted to ID 6,024.991 and its current operating expenditures on salaries, wages, fuel, and sundries to ID 3,955.695, so that the operating account showed a surplus of ID 2,069.296 which could be reinvested. A pro- visional balance sheet as of April 1951 could be struck about as follows: Assets Liabilities Property (at cost)....ID 14,055.734 Capital paid-in ...........ID 8,207.066 Accounts receivable 856.052 Debts owed 2,128.000 Cash (approximate) 260.000 Depreciation (balance).. 4,836.720 Total ID 15,171.786 Total ..... ID 15,171.786 The depreciation allowance made above represents the difference between the known assets and liabilities. This amount corresponds in fact closely to an allowance of around ID 5,000 which should be allowed on the basis of sound accounting practice to cover actual depreciation on the various items in the capital inventory (20 percent annually on tractors and lorries; 10 percent on mill equipment and buildings). AGRICULTURE AND ANIMAL HUSBANDRY 263 followed by cooperatives and to audit the accounts of cooperatives. The necessary staff will have to be trained abroad, preferably in Cyprus where a diversified cooperative movement flourishes. It will also be desirable to give some instruction in cooperatives in the teachers' training colleges and the agricultural schools. One of the logical places to start with the organization of cooperatives would be in new agricultural settlements as was done in fact in the Dujaila project. People who start afresh in a new settlement will generally be more receptive to new forms of organi- zation. In these new settlements cooperative ownership of tools and machinery will probably be most important. Care must be taken not to overburden the cooperative with too many activ- ities at the beginning. Operations should be expanded only as experience is acquired. As already indicated, the need of the fellah who continues to farm on a sharecropping basis is the most urgent. He cannot therefore be neglected in the effort to establish cooperatives even though his poverty and his relations to his landlord may make the organization of cooperatives particularly difficult. Among those fellahin, one might begin with the organization of credit coopera- tives which would make loans not on the security of the borrower's possessions but on his reputation for work, honesty and thrift. In this way the fellah might be able to obtain credit on more reason- able terms for the purchase of tools, seeds, animals and other requisites. Initially such credit cooperatives would probably need to be financed almost entirely by the Agricultural Bank, but the objective should be to base their operations increasingly on the regular savings of their members. XI. Storage Facilities and Credit Farmers are also in need of adequate facilities in which they can store their produce and obtain credit against warehouse receipts. At present, prices tend to dip sharply at harvest time because the farmer is generally compelled to sell his crop immedi- ately after or even before harvest in order to obtain needed cash. The merchants with money then reap the benefit of subsequent price advances. More storage and credit facilities would enable 264 THE ECONOMIC DEVELOPMENT OF IRAQ the farmer to get a fairer share of the price and bring about greater price stability. Even if the merchants primarily used these facilities, the farmer would still benefit indirectly because more merchants would be financially able to compete for his products. Grain stores are especially needed. Cotton can at present be stored at ginneries, and the Agricultural Bank is lending money on such cotton. Aside, however, from a 5,000 ton silo at Baghdad, which went into use with the 1951 harvest, the country possesses no modern grain storage facilities. The Grain Board which is charged with responsibility for storage projects is contemplating the construction of a 40,000 ton silo costing about ID 2,145,000 at Basra. This silo would primarily serve the export trade. It would be desirable to supplement these two with a number of smaller stores, less elaborately equipped and located nearer the centers of production. Such stores would afford necessary protection against grain pests and also help to mitigate the fear of famine which is ever present in a country with sharply fluctuating harvests. If equipped with simple cleaning plant they would help greatly to improve the quality of the grain. Grain thrashed by hand accord- ing to the prevailing custom contains from 15 to 40 percent foreign matter and from 5 to 15 percent dirt. The number, location and size could only be determined after a thorough survey. It is not unlikely, however, that from 12 to 18 such stores with an indi- vidual capacity ranging from 2,000 to 5,000 tons and a total capacity of about 75,000 tons would be needed. For the most part they will not have to be mechanized and can consist basically of simple steel or concrete sheds. The total cost would probably not exceed ID 750,000. Two possible obstacles to the actual utilization of grain storage facilities should be considered. There may be a disinclination to use them for fear of giving the government knowledge of such stocks and thereby exposing them to taxation. Much grain now escapes taxation. To encourage people to take advantage of the stores it may therefore be necessary to reduce substantially or abolish the istihlak tax which is a type of sales or turnover tax. Other reasons for abolishing or reducing this tax have already been advanced elsewhere.14 Another difficulty in the way of using such 14 See the Mission's main report, p. 95. AGRICULTURE AND ANIMAL HUSBANDRY 265 storage facilities lies in the wide variation in the quality of the grain. Those with better quality grain may refuse to store it except under conditions which will ensure that it will be kept as a separate parcel. While this may be possible in the smaller, non-mechanized sheds, it will be impossible in the silos at Baghdad or Basra. There, however, it will be desirable at least to have means for weighing each parcel of grain after as well as before cleaning. At present there are no such facilities in the Baghdad silo and none are appar- ently contemplated for the Basra silo. Under such conditions there will be a premium on the storage of grain with a large percentage of foreign matter. Those with relatively clean grain harvested by combines will, on the other hand, refuse to use he silos If credit is to be extended on grain stored in silos, there must be adequate supervision to insure the issuance of proper ware- house receipts and to prevent the release of any stored grain except against the surrender of such receipts. Presumably any new facilities would be owned and supervised by the Grain Board. This Board, however, would hardly be in the position to finance all the proposed additional facilities. In 1950 the International Bank was approached with respect to the financing of the Basra silo, but now that Iraq is assured ample sterling revenue from oil and only a small part of the necessary expenditures is likely to be in dollars, the government may consider it undesirable to contract a loan for this purpose. Financing by the Development Board would then appear to be the only alternative. The Grain Board might even have difficulty in financing the smaller storage facil- ities. Although its assets as of March 31, 1951, amounted to ID 1,123,969, over 30 percent or ID 321,113 consisted of "fixed assets" and another item of ID 687,222 designated as "sundry debtors” represented almost entirely a claim on the Treasury. Over a number of years the government has levied a one percent tax on grain for the benefit of the Board but it has retained the proceeds provisionally for its own needs. As long as the ordinary budget remains tight, as is likely over the next few years, the government may find it difficult to convert this claim into cash. Under such circumstances the Development Board may find it necessary to give financial assistance for the smaller projects. 266 THE ECONOMIC DEVELOPMENT OF IRAQ XII. Forestry Anyone who contemplates the treeless plains and the barren mountains of Iraq is quickly persuaded of the need of afforestation. The forest area comprises only 25,500 square kilometers in the four northern provinces, and of this area only 17,000 square kilometers is covered by what may really be classified as forest. The remainder is in forest pasture and sub-Alpine shrub. Yet forestry has received little attention. The only trained forester in Iraq is the foreign director of the Forestry Division which is subordinated to the Department of Agriculture. His staff is inade- quate to provide proper protection of existing forests, let alone to undertake forest development. Only a small amount of afforesta- tion, soil reclamation and propagation work is in progress. There is no modern forest law. Forests suffer severely from indiscrimi- nate cutting for fuel and charcoal, overgrazing by livestock, shifting cultivation and fire. In the clearing of land for cultivation in the mountainous areas of the North, forest and pasture have been destroyed and land laid waste by erosion. Afforestation is of vital importance not only to check erosion and help prevent floods but also ultimately to meet the acute short- age of timber for building and fuel. In the plains belts of trees are needed to serve as windbreaks. A detailed forestry program has already been set forth in a lengthy report by a British expert. The Mission can only urge that his recommendations be carried out. The first step should be to build up an adequate forestry staff and to enact a satisfactory forest law. The Department of Forestry should be given a status equal to that of the present Department of Agriculture. Trained foresters will be required not only at head- quarters and in the field but also at the forestry research stations at Abu Ghuraib, Bakrajo and Erbil. Initially some of the foresters, including the director, will have to be recruited abroad. A course in forestry might be given in the agricultural schools at Abu Ghuraib. In the northern mountains the existing forest areas should be preserved primarily as a means of protecting the catchment of the Tigris and its principal tributaries. Controlled, rotational grazing will be necessary to protect these forests. To furnish a supply of AGRICULTURE AND ANIMAL HUSBANDRY 267 timber, at least 5,000 square kilometers in the valleys of the main rivers in the north ought to be afforested by means of irrigated plantations of quick-growing species such as poplar, eucalyptus, tamarisk, ash, plane and shisham. Such forests should be able to furnish timber in growing amounts in 15 to 20 years. It will be at least equally important, however, to plant trees in irrigated plains of central and southern Iraq. The ultimate goal should be to devote at least 10 percent of the irrigated areas to forestry in the form of farmers' woodlots, plantings along roads and canals, windbreaks and shelter belts. In the new settlement areas farmers might well be required to plant a specified area in trees. Measures such as these will make timber available in the immediate vicinity where it is sorely needed. The Development Board has recognized the need for some additional expenditure on forestry by tentatively setting aside ID 250,000 for this purpose in its five-year program. It is urged that this amount be raised to a total of ID 750,000 over the next five years. More could probably not be spent in this period because staffing and organization will take time and attention. In the ensuing five-year period, however, the amount might well be doubled. XIII. Settlement of New Land In the future much of the increase in agricultural production will inevitably come from the settlement of new land. Iraq is one of the few Middle Eastern countries which have large reserves of cultivable land. While the official estimates, which indicate that the area under cultivation can be almost tripled, may be questioned, there is no doubt that there are vast areas both in the rain-fed zone and in the irrigation zone which can be put to the plow. When water from the Habbaniya and Dokan reservoirs becomes available, for example, it will be possible to extend the area under cultivation from about 11 to 15 million donums; and if the Bekhme dam is built, still additional areas can be irrigated. The way in which these new lands are settled and developed will in many respects be critical for the future of Iraq. If reserved 268 THE ECONOMIC DEVELOPMENT OF IRAQ for settlement by small-holders, they will make a significant contri- bution to the social and political stability of Iraq. They may make any strong demand for radical land reform unlikely in the areas now already under cultivation. If developed with the enlightened guid- ance of the government, the new settlements may ultimately fur- nish striking demonstrations of the value of more advanced tech- niques in agriculture and animal husbandry as well as in social organization. Under a law approved by the Parliament in 1951 land recog- nized as government-owned (miri sirf) in the cadastral survey will apparently be reserved in the main for settlement by small-holders. However, land which can only be irrigated by high-lift pumps can still be granted in tracts up to 5,000 donums to individual holders. Projects for the development of miri sirf land are to be drawn up and carried out by the Development Board. Selection of the settlers and administration of the finished projects will be the responsibility of a committee headed by an official with the status of a Director General. Two or three other members will be appointed by the Council of Ministers. The area of each project will be a minimum of 2,000 donums in mountainous lands, 20,000 donums in flow-irrigated lands and 80,000 donums in the rain-fed region. Each settler will be assigned up to 20 donums in the moun- tainous areas, 100 donums in flow-irrigated areas, 200 donums in pump-irrigated and 400 donums in rain-fed lands. Under the law every settler must agree to refrain from grant- ing his rights in the land to others and from injuring his fellow settlers in any way, to follow the committee's instructions with respect to the cultivation of the land and the planting of a garden, and to build a house in accordance with plans prepared by the committee. If he fulfills this agreement, he receives title to his allotment after 10 years without payment. For a further period of 10 years he has no right to alienate it or mortgage it except to the Agricultural Bank. The law does not confine the distribution of land to qualified and experienced farmers. In fact, it specifies that up to 20 percent of the land in each project shall be distributed to retired army and police officers, soldiers and policemen who have served at least four years, and graduates of agricultural schools, provided the AGRICULTURE AND ANIMAL HUSBANDRY 269 committee is convinced of "their agricultural capabilities”. Under the same condition the committee is also to distribute up to 25 percent of the land to retired civil servants who have served at least eight years and to unemployed graduates of elementary, secondary and religious schools. While the general intent of this law will meet with general endorsement, several of its provisions might well be reconsidered. First of all, it appears doubtful that the inclusion of the bene- ficiaries described in the preceding paragraph will advance the basic purpose of the law-namely, to establish a class of inde- pendent small farmers who till their own land. Most of these types of beneficiaries will have neither the ability nor the inclination to do the actual farming themselves. They will bring in others to do their work and may even become absentee landlords. Under such circumstances the evils of "petty landlordism" will tend to creep in. Secondly, the size of the plots to be assigned to each settler seems in some cases to be too large. Fundamentally the allotment should not be bigger than that which can be managed by the aver- age farm family without outside assistance. The size will, of course, depend on the machinery, tools and draft animals which can be placed at the settler's disposal from the very beginning. It is improbable, however, that a single family will be able to handle more than 100 donums. If a larger allotment is necessary in the rain-fed zone in view of the uncertain yields resulting from irregu- lar rainfall, a special effort may have to be made to organize cooperatives to own and operate the machinery needed to till such units. The proposed assignment of 200 donums in pump-irrigated areas is presumably based on the assumption that some private per- son will provide the needed pumps against a substantial share in the crop, thus requiring each farmer to have a larger plot of land for a decent livelihood. Now that the government is likely to have ample financial means, there would seem to be no reason why it cannot either install and operate the pumping facilities itself for a nominal charge or finance the cooperative ownership and operation of such pumps. Thirdly, the provision enabling settlers to acquire land with- out any payment whatsoever is open to question. In principle it is inequitable that no payment should be required for these exten- 270 THE ECONOMIC DEVELOPMENT OF IRAQ sive benefits, particularly in relationship to those who are not fortunate enough to be selected as beneficiaries. Moreover, the value of the benefits conferred may be all the more appreciated if some charge, which need not be burdensome, is made for them. Fourthly, it may be desirable to reconsider the provision exempting the areas irrigated by high-lift pumps from distribution in accordance with the law. Apparently this provision was also dictated by the belief that the requisite pumping facilities would need to be provided by private investment and that such investment was unlikely to be forthcoming unless a comparatively large grant of land was made for development by high-lift pumping. In the future, however, public capital should be made available for the installation of such pumping facilities. Finally, the safeguards against alienation of the land may need further strengthening. After the two consecutive periods of 10 years each, during which these safeguards would apply, it may still be desirable for the government to retain an option to purchase any of such land offered for sale. In this way it would be possible to prevent, if necessary, the gradual acquisition of excessively large landholdings in these newly developed areas. A brief comment might be made regarding the settlement possibilities in the rain-fed zone. Much of the land available for such settlement may be submarginal from the standpoint of rain- fall. Care must be taken, therefore, not to invest too much in the development of the lands the yield of which will be highly specula- tive. It is noted that the Department of Agriculture has drawn up an ambitious scheme involving the settlement of 1,000,000 donums and the establishment of 50 villages in northwestern Mosul near Balad Sinjar. There are indications, however, that the rainfall in this region may be insufficient to permit settlers to earn a good liveli- hood. If attempts are made to carry out this scheme, it is sug- gested that small-scale tests first be undertaken over a number of years. The law for the development of miri sirf lands which has been discussed at length above is basically modelled on the 1945 act under which the Dujaila settlement was established in south- central Iraq near Kut. During the period 1946 to 1950, 1,058 farmers were settled in this area on 100 donum plots allotted from AGRICULTURE AND ANIMAL HUSBANDRY 271 state-owned agricultural land. The system of cultivation is pre- scribed. Thus 40 donums must be devoted to winter wheat and barley and five donums to summer crops. In addition five donums are to be planted with fruit, although evidently only 350 of the older settlers have such gardens in which grapes, greengage, apri- cots and date palms have been planted. On the whole, the Dujaila scheme has been conspicuously successful. There is no doubt that the settlers who formerly were poor sharecroppers are now far more prosperous and contented. Most of them are obviously proud of their accomplishments. Their mud houses, although not built according to standard specifications as originally planned, are larger and more substantial than those of other fellahin. As already indicated, interesting experiments with cooperative organization have been carried out. In addition a use- ful start has been made with the planting of trees along roads and boundary lines. The Dujaila venture has not, however, been an unqualified success. The failure to install drainage facilities has led to pro- gressive salination and already some of the land has been aban- doned. The administrative staff on the spot totals 75 people. Even after allowing for the fact that the staff also controls the distribu- tion of water within the scheme and the operation of two nurseries, this number seems excessive. Aside from insisting that five donums be planted to fruit trees, nothing has been done to improve agri- cultural and livestock practices. Thus the increased prosperity of the farmers is solely due to the fact that they have more land to till and do not have to surrender a share of their crops to a land- lord. There is no agricultural extension service on the spot capable of working with the farmers. In fact, the Department of Agricul- ture is not even represented on the committee which directs the scheme. Two nurseries are located in the scheme, but they serve simply to supply fruit trees for garden plots and other trees and cannot in any sense be considered demonstration units. It is gen- erally agreed also that the scattered mode of settling the people was ill-advised, since it ignored the need for a community life and made it difficult to provide such community facilities as safe water, schools and health centers. 272 THE ECONOMIC DEVELOPMENT OF IRAQ On the new settlements the government will have a unique opportunity to improve on the Dujaila project. To ensure that it becomes a model project, the planning of each settlement should be carried out in close cooperation with the Ministry of Social Affairs, the Ministry of Public Works, the Ministry of Education and the Ministry charged with agriculture. There must be an inte- grated plan with appropriate provision for public health, schools and adult education, agricultural extension, cooperatives and the like. XIV. Establishment of a Ministry of Agriculture and Land Use The program outlined in this monograph does not involve large expenditures. Detailed estimates of the cost involved will need to be worked out, but it is unlikely that total expenditures over the next five years will be far from ID 7,500,000. The larg- est outlays—ID 2,900,000 and ID 1,450,000 respectively-would probably be for grain storage facilities and additional capital for the Agricultural Bank. Not much more than ID 250,000 may be needed for new tobacco warehouses. The continuing contribution to the Agricultural Machinery Administration has been assessed at ID 250,000, but more money would be required if plans to borrow from the International Bank for new equipment do not materialize. On forestry, probably not more than ID 750,000 could be spent in the initial five-year period. An arbitrary allowance of ID 500,000 might be made for financial incentives. The remainder of the total outlay would, however, really be the most important, for it would go, except for some miscellaneous projects, to expand and strengthen the agricultural and animal husbandry services which are vital to the future of Iraq. The improvement of agriculture, animal husbandry, and forestry along the lines indicated requires an energetic organiza- tional effort by an agency well staffed and vigorously directed. Within the existing governmental organization in Iraq, agriculture and animal husbandry are not given sufficient importance. These subjects should not be handled by subordinate departments in the Ministry of Economics but by a separate Ministry of Agricul- ture and Land Use. 274 THE ECONOMIC DEVELOPMENT OF IRAQ Economics. The latter, however, will retain control over industry, oil, mining, foreign and domestic commerce, and the central collec- tion and publication of statistics. In connection with the latter the Mission has suggested elsewhere that the Directorate-General of the Census be transferred from the Ministry of Social Affairs and merged with the Principal Bureau of Statistics into a single fact-finding agency. Moreover, the Ministry of Economics might also retain control of inland and maritime fisheries, particularly since fishing has no necessary organic relationship to agriculture with which it is now allied organizationally. The success of the new Ministry of Agriculture will depend above all on its field service. Little can be accomplished without continuous and intimate contact with those who actually till the soil and raise livestock. Much of the effort in the future must be concentrated on building up such a service and attracting to it people of high calibre. A prerequisite to the success of such an effort is a substantial improvement in the pay and conditions of service which now obtain. - AGRICULTURE AND ANIMAL HUSBANDRY 275 APPENDIX TABLE I AGRICULTURAL MACHINERY ADMINISTRATION BUDGET FOR 1950 (actual results) REVENUE EXPENDITURES Rentals of machinery........ID 40,262 Sale of agricultural machin- ery and tools...... 7,267 Sale of spare parts... 317 Fines 195 Repairs of agricultural ma- chinery 106 Transport charges 584 Interest on deposits.............. 2,376 Sundry 138 Salaries ID 11,073 Cost-of-living allowances .. 4,844 Transport 117 Transfer 7 Furniture 1,317 Printing & stationery.. 290 Postal, telegraph and tele- phone charges 276 Rent 1,330 Water and light.............. 1,664 Machines, cars & fuel.. 40,981 Buildings 30,284 Bonuses 399 Temporary officials and employees 20,679 Sundry 4,557 Total ID 51,245 Total ID 117,818 276 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE II AGRICULTURAL MACHINERY ADMINISTRATION BUDGET FOR 1951 (estimates) Rentals I. ORDINARY OR OPERATING BUDGET REVENUE EXPENDITURES ID 50,000 Operation of garages and repair shops Agricultural machinery operation General administration 38,726 48,708 25,884 Total cash expenditures.. 113,318 Depreciation allowance 37,145 Total expenditures ......ID 150,463 etc. II. CAPITAL BUDGET REVENUE EXPENDITURES Sale of machinery, tools, Purchase of agricultural .....ID 20,000 machinery 54,000 Purchase of trucks, jeeps and tractors 21,500 Imports of spare parts for sale 25,000 Diwaniya shop 3,000 Requisites for completion of shops ........ 7,500 Sundry capital expenditures 1,000 Total ...ID 112,000 III. TOTAL BUDGET Total cash revenue............ID 70,000 Total cash expenditures.. ID 225,318 Total expenditures 262,463 Total cash deficit..........ID 155,318 Total deficit 192,463 278 THE ECONOMIC DEVELOPMENT OF IRAQ Several geological surveys have located outcrops of iron, copper, zinc and chrome ores. The extent and quality of these ores, however, will not be known until further exploration work has been accomplished. There are surface indications of 30 per- cent elemental sulphur mixed with limestone but, as in the case of the ores, these deposits have never been adequately proven. Previous to the large-scale production of oil, some coal was mined, but actual reserves have never been fully ascertained. A large and potentially valuable salt dome was located near Basra when geo- physical surveys were being conducted in connection with oil exploration. It would appear, therefore, that Iraq has a fairly broad range of minerals which might be worthy of exploitation. Some Factors Affecting Industrial Growth Some of the basic causes of industry's retarded development are lack of private investment, technical inexperience and inade- quate markets. In the past capital has often been hoarded or invested in rural or urban property or in commerce, where the security or rate of return was believed to be higher than in industry. To some extent this tendency has been overcome through tax exemptions, tariff protection and the financial assistance of the Industrial Bank. On the other hand, little is being done to increase the number of skilled workers and technicians through education and training. One of the biggest handicaps in apprentice training is the lack of elementary education. Employees who are unable to read and write obviously can neither receive written instructions, maintain material and inventory control, select proper repair parts nor attend advanced in-plant training classes. Until this is corrected, Iraq must continue to rely on skilled foreign technicians and, in some of the larger and more complicated industries, on foreign management. The supply of common labor is now ample and will probably remain so for many years to come. A shortage of labor, should it occur, could be corrected by the employment of women in greater numbers and by further mechanization. Industry has not, however, reached the stage of development where this should be attempted, for a highly mechanized plant means high capital costs, greater INDUSTRY 279 overhead, increased maintenance and the need for a higher level of skilled workers. As long as labor is in sufficient supply, it will be better to use the available amount of capital to mechanize a considerable number of plants to a limited degree rather than to establish a few highly mechanized plants. Limited internal markets, because of a small population of low purchasing power, restrict the number of industries which may be economically justified unless the product can be produced cheaply enough to find a foreign market. This condition, however, would be corrected to some extent through a rising standard of living, especially among the rural population. Improved methods of farming, increased irrigation, better sanitation and more inten- sive education should help to raise purchasing power gradually. As government measures to these ends begin to take hold, indus- try can expect the demand for consumer goods to increase at a much faster rate. Iraq's geographic location is also a factor to be taken into account in planning industrial development. High transportation costs handicap those industries requiring the importation of a high percentage of raw materials from Europe and America. The same obstacle will, of course, confront industries relying chiefly on Euro- pean markets for their finished product. The best prospects for industrial growth are therefore found in those industries which, through advantageous production costs, are able to absorb the ship- ping costs or those in which shipping costs represent a very minor component of the market price of their product. II. Possibilities for Industrial Development Expansion of Existing Industries Many industries, such as brewing, cement making and woolen textiles, are now in the process of expansion. Partly because of tax exemptions and reductions granted by the Law for the Encour- agement of Industry, these enterprises are able to finance their expansion themselves. Other enterprises which can usefully be 280 THE ECONOMIC DEVELOPMENT OF IRAQ expanded will, however, require financial assistance from the Industrial Bank. This should be arranged just as soon as plans can be formulated. Petroleum Development The further development of the oil industry can safely be left to the internationally-owned companies now operating in Iraq. Under an agreement finalized early in October 1951, subject to ratification by Parliament, the three major oil companies—the Iraq Petroleum Company, the Mosul Petroleum Company and the Basra Petroleum Company—undertook to increase their oil output to 30,000,000 tons per year by the end of 1955 and to turn over to the Iraq Government 50 percent of the profit on their produc- tion before the deduction of taxes. Although output in 1950 amounted to only about 6,000,000 tons, there should be no diffi- culty about attaining the agreed target. The oil resources of Iraq are immense, the reserves of the Kirkuk field amounting reputedly to 1,000 million tons, with the new fields near Basra offering equal promise. In the development of these fields and means of trans- port, the oil companies have already made an investment of close to ID 90,000,000, which is now beginning to yield a rapidly rising output. Development in the Kirkuk and Mosul field has already proceeded on the assumption that a production capacity of at least 22,000,000 tons would be achieved in a few years, and with the completion of the pipeline to Banias, Syria, there should also be ample transport capacity. The balance of the projected output, namely 8,000,000 tons, will have to come from the newer fields near Basra. This may require some increase in drilling and will necessitate additional pipeline capacity to Fao, but neither of these will be difficult to accomplish. The oil companies have been among the leaders in Iraq in providing better conditions and amenities for their employees and in instituting schemes for training skilled labor and technicians. They have been criticized, however, for their failure to appoint more Iraqis to leading positions. Under the agreement already cited they have undertaken to send 50 Iraqi students per year to British Universities to study various subjects relating to the oil industry, and also to establish a school in Kirkuk to train 60 Iraqis yearly in technical oil subjects. INDUSTRY 281 By and large this new partnership between the oil companies and the government should prove mutually beneficial. The Government for several years has been considering the building of a modern oil refinery near Baghdad. In recent months, final plans were formulated and arrangements for its construction have apparently been made. This refinery, estimated to cost at least ID 7,000,000, is designed for an annual capacity of approxi- mately 1,000,000 tons and when completed should be able to sup- ply all of Iraq's anticipated requirements for refined petroleum products except for certain specialties. The project will probably make it necessary to close the Alwand refinery, owned until recently by a subsidiary of the Anglo-Iranian Oil Company, now producing something less than 70 percent of Iraq's requirements. Likewise, the use of Kirkuk crude, which can be obtained by the Government at cost, will probably make it necessary to close down the small oil field near Khanaqin which supplies the Alwand refinery, since it is unlikely that the oil resources in and near this field can be developed to such an extent that investment in a pipeline for export of the crude would be warranted. Cotton and Rayon Textiles In 1947, a cotton spinning and weaving mill was started near Baghdad, with a pilot plant consisting of 5,000 spindles and 84 automatic looms. The second stage, which is something over 70 percent complete, consists of 22,000 spindles and 500 automatic looms. The plant is modern in design and includes dyeing, print- ing and finishing equipment. About one half of the equipment has been in full operation for over a year, and shows good returns for an uncompleted plant which has not reached stabilized operation conditions. When completed and when operating on a full three- shift basis, it is expected that the spinning mill will produce 6,000,000 lbs. of yarn annually. Part of the spinning capacity is used in making yarn for sale to other small textile mills or even for home industries for weaving into cloth. In Mosul, for example, there are over 1,000 hand looms in various small home industries By an agreement reached in December 1951, the government took over ownership of the refinery, retaining the AIOC subsidiary provisionally as its operating agent. 282 THE ECONOMIC DEVELOPMENT OF IRAQ which depend entirely upon yarn from the new spinning mill, now that importation of yarn from abroad is no longer permitted. The total consumption of cotton yarn by these smaller mills and home industries is in the neighborhood of 1,500,000 lbs. per year. They also make rayon cloth from imported yarn, imports in 1950 being about 500,000 lbs. The weaving capacity of the plant, consisting of 584 automatic looms when completed, will produce approximately 15 million square yards of cotton and rayon cloth per year. This is, however, less than one quarter of Iraq's normal annual requirements for all classes of cotton and rayon piece goods. The industry would be in a far better position to meet domestic requirements if the cotton mill at Baghdad as well as the cotton and rayon weaving plant in Mosul could double their designed capacity and extend their facilities to make a wider range of products such as shirting and poplin. The finishing, printing, and dyeing departments should also be expanded. To put these additional facilities into full operation would take approximately four years and even then it would still be necessary to import con- siderable quantities of various types of textiles. The Mission recommends that such an expansion program be undertaken. The total cost would be about ID 1,300,000, of which approximately ID 900,000 would be in foreign exchange, mainly in pounds sterling. As before, the Industrial Bank, working in conjunction with private capital, should arrange to finance the additional facilities. Since private capital will be available for par- ticipation, there appears to be no need for a wholly-owned govern- ment plant for which ID 1,000,000 has been set aside in the ordinary budget for 1951-52. The new facilities will require the employment of approximately 1,500 additional workers in the textile industry. Woolen Textiles Woolen textiles have been made for many years. The first modern textile mill was started approximately 30 years ago. This mill, like the cotton textile mill, has a greater spinning than weav- ing capacity, so that yarn is available for local use both in knitting and in weaving by hand looms. The plant is equipped to make a broad range of fine fabrics and, along with other smaller mills, is INDUSTRY 283 fully capable of meeting all of the requirements of domestic con- sumption with the possible exception of minor items of a special nature. The plant's present capacity is 500,000 meters of cloth and 50,000 kilos of yarn. Recent improvements and expansion have brought the woolen textile industry abreast of the needs of the country. Leather Until recent years, there was little modern tanning of hides, most of the hides being exported. Since the war, however, several tanneries have been constructed and are now producing leather of fair quality sufficient for most of Iraq's needs, with the exception of those grades required to make the higher quality shoes. Tanneries are not showing the profits which were originally anticipated, largely because they have to use hides of very poor quality. In many cases, the hides have been cut during flaying, while in other cases they have not been well preserved. The tanneries also have not attempted to make use of waste products and in some cases do not split the hides, a practice which is essen- tial to low cost production. However, once these various technical problems have been solved, the tanneries should be able to meet all of Iraq's needs. Shoes Nearly 90 percent of Iraq's shoes are made by hand in num- erous small home industries. There is one fairly modern factory, however, which, using both local and imported leather, now makes over 30,000 pairs of high grade shoes per year. The company has also set up retail outlets in all of the provinces. An increase in the capacity of this plant would do much to reduce shoe prices to the ultimate consumer. Annual production could be raised to 100,000 pairs by the procurement of additional equipment costing approximately ID 50,000, of which ID 45,000 would be in foreign exchange, mostly in Swiss francs. These facilities could be put into operation within two years and would increase employment from approximately 40 to 120 workers. Vegetable Oil and Soap A vegetable oil extraction plant has been in successful opera- tion for approximately three years. It is designed to extract oil 284 THE ECONOMIC DEVELOPMENT OF IRAQ from the seeds of agricultural crops such as cotton, sesame and linseed. The linseed oil is blended and used in the making of paint, while the sesame and cotton seed oils are purified and distilled into light and heavy fractions, the light fractions being used as an edible oil, while the heavier are retained for soap-making. Although the expellers have a combined capacity of 20 tons of seed per day, the plant fails to satisfy present needs. Capacity should be increased by the installation of two additional mechanical expellers and a single solvent extraction unit to serve the entire plant. A washing plant should be installed for the purpose of reducing maintenance on the expellers. In addition to extending the capacity of the present facilities, new equipment is needed for the hydrogenation of oil for cooking fats. Operating in conjunction with the oil plant is a soap plant with a capacity of 7.5 tons of laundry soap and 2.5 tons of toilet soap per day. This is estimated to be less than one third of pres- ent requirements. These facilities should be increased to take care of at least one half of the country's needs. In all, the expansion program would cost an estimated ID 600,000, including ID 500,000 in foreign exchange, mostly in pounds sterling. It would probably require approximately two years before all of the facilities could be put into operation. Employment would be increased by approximately 60 workers. Cement Iraq's new cement plant is one of the more important projects sponsored by the Industrial Bank. The market for cement is expanding at a rapid rate and is well beyond the present plant's capacity of 220 tons per day. Additional equipment now scheduled for operation in 1952 will double the plant's output. Even so, production will fall short of domestic requirements. The larger plant should, however, reduce production costs and the cheaper cement should in turn open up many new markets in the construc- tion and transport fields. Brick and Tile Brick is the prime building material. Over 30 private factories are engaged in the manufacture of bricks, and even though most of the plants are very antiquated, production costs are very rea- INDUSTRY 285 sonable. However, the quality of the brick, because of the type of clay available, is rather poor. The demand for brick is easily met by the present highly competitive industry. When, however, the cement plant is enlarged, it will tend to replace brick by offering better and cheaper material in such forms as concrete blocks. In view of this, there does not appear to be any justification for enlarging the brick industry. At present, some tile is made, but it, too, is being replaced by cement. Milling Iraq possesses three fairly large flour mills. The older ones are now being modernized with the latest machinery. A very mod- ern mill was recently constructed at Basra, with a capacity of 50 tons per day, for the purpose of making possible the exportation of flour rather than just wheat. So far, a shortage of grain has pre- vented the mill from operating as planned. When a sufficient supply of grain becomes available, however, the mill will be capable of serving the export market in addition to local requirements. Aluminumware Aluminumware is very popular. It is now being manufac- tured in a small plant in Baghdad from imported sheet, which represents more than 70 percent of the production cost of the finished article. Production is limited to about 480 tons per year because of the difficulty in getting aluminum; however, even with an ample supply of material, the present capacity of the plant (600 tons) is only sufficient to meet about one third of the country's requirements. Production costs could be greatly reduced, first, by increasing the capacity of the plant, and second, by installing facilities permitting the utilization of both scrap aluminum and pig. To double the plant's capacity and install equipment to melt and roll scrap and pig would cost approximately ID 200,000, of which ID 175,000 would be foreign exchange, mainly in pounds sterling. These new facilities would require about two years to construct and, when finished, would employ approximately 40 additional workers. 286 THE ECONOMIC DEVELOPMENT OF IRAQ Breweries Iraq's only brewery, having a capacity of 50 barrels per day, is not adequate to meet market demands. The owners are therefore in the process of obtaining additional equipment to double the plant's output. The brewery, which has been in operation since 1945, is very modern in design and its product is of excellent quality. Distillery Iraq's only source of ethyl alcohol is a small, modern, well- designed distillery located in Baghdad. Surplus dates are used as raw material. Although they are not expensive, they are never- theless more costly than the raw materials, such as molasses, which are used in the alcohol industry in other countries. Thus the dis- tillery is operating at about one third capacity, since the market will not absorb its entire production at the prices it charges. Most of the current output is used in the making of the national alcoholic drink known as arak. Date Packing Date packing is probably one of the oldest industries in the country. Market requirements have kept the industry very modern and fully capable of meeting all demands on it. Matches There are two match manufacturing companies in Iraq, both producing matches of very good quality. One company utilizes paper, and the other wood. Their combined production is equiva- lent to about one half of Iraq's requirements. Cigarettes The bulk of Iraq's requirements of cigarettes are made in the country from home grown tobacco. The output of 12 factories in 1949 amounted to 2.25 billion cigarettes, but there were in addi- tion many small producers of handmade cigarettes. Even in the factories much of the work is done by hand, but further mechaniza- tion cannot be expected until labor becomes more expensive. Small Enterprises There are many small enterprises in Iraq which could be expanded, such as tire retreading, reclaiming of lube oil, wood- -- INDUSTRY 287 working shops, battery and electrical repair work, shops for repair of automotive and agricultural equipment, bakeries, confectioneries and food processing establishments of various kinds. The amount of capital required in individual cases is quite small but, in the aggregate, it adds up to a considerable sum. The Industrial Bank should arrange for a small-enterprise section to make surveys of small industries in each community, advise them concerning ways of improving their methods of production and assist in getting proper financial help where it is justified. It is estimated that ID 400,000 would be sufficient to meet the needs of these indus- tries over the next five years. The assistance of small industries by the Industrial Bank is to be preferred to assistance or stimulation of so-called cottage industries. Cottage industries may be of benefit in the over- populated areas of Asia, but for Iraq they do not appear to be an appropriate solution to industrial growth. Iraq's population is small in relation to the resources available. Over the long term its problem is not primarily one of creating a maximum number of jobs with a minimum of capital but rather one of utilizing capital resources in ways which will make a permanent addition to the productive capacity of the country and to the building of modern industrial enterprises. Establishment of New Industries The entrance of industry into new fields would help to balance the over-all development of the country and to utilize its resources more fully. At the same time it would increase employment and thereby aid in raising the general standard of living. Nitrate Fertilizer, Sulphur and Cement Plant The largest and perhaps most promising possibility for new industrial development lies in the utilization of the natural gas produced in conjunction with oil. Upon completion of the 30-inch pipeline, oil production at the Kirkuk field will be at a rate which will make more than 25 billion cu. ft. of gas available per year. For the most part, this gas will be wasted until some means is found for its economic utilization. This gas contains, according 288 THE ECONOMIC DEVELOPMENT OF IRAQ to information afforded the Mission, 10.5 percent by volume of hydrogen sulphide with the remaining products being different types of hydrocarbons, chiefly methane. In the same area there are also large deposits of gypsum or hydrous calcium sulphate. These waste gases and gypsum could be utilized for the eco- nomic manufacture of ammonium sulphate, a valuable fertilizer for agriculture; and, in the process, sulphur, carbon black and cement would become available as by-products. A plant of economic size and capable of satisfying approximately one half of Iraq's eventual needs should have an annual capacity of approximately 500,000 tons. In addition to ammonium sulphate, this plant would also produce approximately 100,000 tons of elemental sulphur and 300,000 tons of cement. The most important part of such a plant would, of course, be that making ammonia. By this process, nitrogen and hydrogen under high pressure are synthesized into ammonia by means of a catalyst. Hydrogen for this process would be obtained by thermally cracking the gas and subsequently removing the carbon black, while nitrogen would be obtained by removing carbon dioxide and carbon monoxide from the flue gases. The ammonia thus produced would then be combined with the sulphate radical from the gypsum. This is generally done by pass- ing ammonia and carbon dioxide through a slurry of finely ground gypsum and mechanically separating the resultant products of ammonium sulphate and calcium carbonate. The ammonium sul- phate which is in solution would be crystallized in evaporators while the calcium carbonate would be used in making cement. Since the gas used in making ammonia must be free of sul- phur, the plant would need to contain facilities for its removal. This could be accomplished in several ways, but a detailed study would probably show a combination of the Girbotal and Claus pro- cesses to be best suited for this particular project. Facilities for the production of the required power and pro- cess steam would be conventional in every respect and would use gas for fuel. In the first few years of operation, all of the products except cement would probably be exported. Later, however, only sulphur - INDUSTRY 289 and carbon black might be exported, with the ammonium sulphate being utilized domestically as fertilizer. The integrated plant is estimated to cost approximately ID 25,000,000, including foreign exchange estimated at ID 22,000, 000 mainly in pounds sterling. The total estimated cost of the plant may be broken down as follows: Ammonium Sulphate and Carbon Black............ID 14,750,000 Sulphur Recovery 8,750,000 Cement Plant 1,500,000 Total Cost ID 25,000,000 Estimates indicate that the plant may show net earnings of 18.5 percent on the investment and may break even when approxi- mately 40 percent of its capacity is utilized. In these estimates the gross income has been figured on the basis of c.i.f. prices currently prevailing in London and the plant has been amortized over 15 years with interest payable at 41/2 percent per annum. The under- lying calculation is summarized below: GROSS ANNUAL INCOME Ammonium sulphate ....500,000 tons @ ID 15 per ton ID 7,500,000 Sulphur 100,000 tons @ ID 16 per ton 1,600,000 Carbon black 10,000 tons @ID 93 per ton 930,000 Cement 300,000 tons @ID 5 per ton 1,500,000 Total ID 11,530,000 ANNUAL OPERATION Costs Amortization and interest...... Freight (Rail and Ocean) Bags Maintenance Salaries Labor Material and Supplies.. Gas Contingency 2,310,000 2,379,000 650,000 375,000 530,000 146,000 55,000 135,000 300,000 Total ID 6,880,000 Estimated Net Profit...... ID 4,650,000 The plant would probably need to be financed in its entirety by the Development Board, and it should be attempted only if a 290 THE ECONOMIC DEVELOPMENT OF IRAQ reliable foreign chemical firm can be secured to design and con- struct it and, at least at the outset, operate it under a manage- ment contract. The plant would give permanent employment to about 1,000 workers. Bone Meal Plants Another promising field for new industry is the conversion of the waste products from abattoirs to fertilizers for domestic use. Bone meal, for example, is a very valuable fertilizer. Yet at pres- ent Iraq, with no domestic plant to utilize them, is exporting approximately 15,000 tons of bones per year to Europe. There would probably be sufficient demand for fertilizer to support three plants, located at Basra, Baghdad, and Mosul. Their combined cost would probably amount to roughly ID 50,000, of which ID 45,000 would be in foreign exchange, principally pounds sterling. With help from the Industrial Bank, this could probably be financed by the abattoir owners. When completed the plants would give employment to about 60 workers. Steel Iraq is now producing about 5,000 tons of steel scrap per year. It is recommended that a small hand-operated mill and electric melting furnace be set up to convert this scrap into rein- forcing bars, window shapes and small angles, all of which are in great demand. This mill ought to be located in Baghdad and arrangements made to obtain off-peak power from the Baghdad power plant or from the railroad shops. As an alternative to electric melting, crucibles might be considered. In either case, the cost of the plant would be approximately ID 300,000, including ID 200,000 in foreign exchange, mostly in hard currency. This mill could not satisfy the whole of Iraq's steel needs; nevertheless, it would furnish about 5,000 tons per year of certain types at prob- ably half the cost of the imported steel it would replace. The mill could be financed by private capital with help from the Industrial Bank. Foreign technicians would be required dur- INDUSTRY 291 ing the first years of operation. Such a mill would give permanent employment to approximately 50 workers. Concrete Batching Plant Iraq will probably undertake in the near future a considerable number of construction projects for which poured concrete would appear to be the best material. It would therefore be desirable to locate in Baghdad a batching plant with ready-mix trucks to furnish the concrete. Standard steel forms would also be needed. A batching plant capable of producing cement for approximately 5,000 houses per year would cost about ID 125,000 in foreign exchange, mostly U. S. dollars. It could be financed by private capital with the assistance of the Industrial Bank. Glass Works During the war, two plants at Mosul remelted broken glass to make glass tumblers, etc. These plants are now closed as they are no longer competitive with imported glass. It has been stated that suitable sand for glass manufacture has been located near Mosul. If the Department of Industries verifies the adequacy and suitability of this sand, then a new glass factory might well be constructed to make bottles, white con- tainers and tumblers for domestic consumption. No attempt, how- ever, should be made to manufacture flat glass. No recommendation is made in regard to the construction of such a plant, however, until adequate sources of material are proven. Date Packing Crates The cost of wooden boxes for the shipping of dates has steadily increased and represents a considerable cost to the date industry. At present, the practice is to import the boxes in pieces for assem- bly in Iraq. It is recommended that a small box plant be con- structed at Basra to make these boxes from imported timber. This factory would require only a few power-driven wood-working tools estimated to cost ID 10,000, primarily in pounds sterling, and should reduce the cost of date boxes by at least 50 percent. The plant could be financed by private capital and sponsored by the Date Association. It would employ about 30 full-time workers. 292 THE ECONOMIC DEVELOPMENT OF IRAQ Machine Shop There are about 150 very small machine shops in Baghdad. The total labor force in these shops is approximately 400. They do various types of metal work but by far the most important is the normal maintenance work on more than 3,000 diesel-driven irrigation pumps. While the workmanship is good, costs are very high because of the heavy overhead. All of this work could be readily accomplished in one small, modern machine shop equipped with metal fabricating facilities, electric repair shops and including a modern foundry. With such facilities, not only could maintenance work on irrigation pumps and engines be carried out, but completely new diesel-driven pumps could be manufactured, replacing those now imported. It would, of course, be necessary to import special items such as fuel pumps, bearings and gears. Likewise, the design should be obtained through a license arrangement with some international firm. This plant would reduce the cost of present maintenance work by about one third and constitute the beginning of a modern equipment manufacturing concern. The shops thus replaced could be moved to rural areas to handle local automotive and agricultural machin- ery repairs. The cost of such a machine shop would be about ID 600,000, including ID 500,000 of foreign exchange, mostly pounds sterling. It should be financed by private capital in conjunction with the Industrial Bank. Jute Mill Jute products such as sacks, hessian cloth and twine are now being imported at the rate of about ID 384,000 per annum. The demand for such products is increasing and appears to be large enough to warrant establishment of a jute industry, even though the raw material will need to be imported. Ultimately it may even prove feasible to grow jute in Iraq. The plant should be capable of making about 10,000 tons of jute products per year. The cost of such a mill would be about ID 500,000, including ID 400,000 in foreign exchange, mostly in pounds sterling. This mill could be financed by private capital and the Industrial Bank. It is recommended that it be located INDUSTRY 293 in Basra, close to both shipping and the agricultural area which may prove suitable for the growing of jute. It would employ about 300 workers. Automobile Tires The importation of automobile and truck tires is increasing at a rate of approximately 15 percent per annum, the value of all tires imported in 1950 being ID 468,000. A plant of economic size to manufacture tires could be justi- fied with a market of approximately twice that which now exists. Such a market will probably be reached in 1955. Since it would require approximately two years to construct a tire plant, it is recommended that plans be formulated to start such a plant in 1953. The plant would be so designed as to utilize the maximum amount of labor and, accordingly, should cost no more than ID 750,000, including foreign exchange of ID 600,000, mainly pounds sterling. It could be financed by private capital with the assistance of the Industrial Bank. Foreign technicians would be required during the first years of its operation. Salt Geophysical work gives conclusive evidence of a very large salt dome near Basra. Unfortunately, the analysis is not known. This dome could be the source of very cheap salt for both export and domestic consumption. It might make feasible the establish- ment of an alkali plant, particularly since the nearby oil field would be able to furnish gas as a source of cheap power. It is recommended, therefore, that core drilling of this dome be started as soon as possible to permit a proper evaluation of the possi- bilities of its use. Sugar Mill Considerable thought has been given to the recommendation of a sugar refinery. Such an enterprise would, of course, have to depend on agriculture to supply the raw material, either in the form of sugar beets or sugar cane. Since this cannot be assured at this time, it is recommended that the development of this indus- try be held in abeyance for the present. 294 THE ECONOMIC DEVELOPMENT OF IRAQ Paper Mill Iraq does not have a suitable source of material for a pulp plant at this time. The development of a paper making industry would therefore require the importation of pulp to meet its various requirements. This procedure would ordinarily be both practic- able and economical; however, the world market for pulp is now very critical and may remain so for several years. It is recom- mended, therefore, that the paper mill be held in abeyance until an adequate supply of pulp is assured. III. State Assistance to Industry Financial Assistance The widespread reluctance of private capital to venture into industry can be overcome only gradually as the profitability of industrial investment is demonstrated in various fields. In the meantime, it will be necessary for the government to furnish most of the capital for industrial development. Plants which will require a large amount of capital and will need completely foreign management at least in their beginning may have to be financed completely by the government through the Development Board. The oil refinery and the fertilizer plant are projects which fall into this category. Other more modest under- takings will require relatively small amounts of capital and in most cases may be economically operated by Iraqi management even though some foreign technicians may be necessary. This com- bination lends itself to the use of private capital, which should be encouraged as much as possible by the government, by means of financial assistance where justified. The Industrial Bank is now the principal agency for rendering financial assistance to the development of private industry. The Bank, which began operations in 1946, has already performed useful work in promoting industry. At the end of February 1951, it had outstanding loans totalling ID 238,650 and participations in industrial enterprises amounting to ID 629,272. It has been handi- capped, however, by a shortage of funds, since the government has INDUSTRY 295 paid in only ID 600,000 out of an authorized capital of ID 1,000, 000. Its resources have to some extent been supplemented by borrowing ID 100,000 and ID 200,000 respectively from the Awqaf Administration and the National Bank. The Mission suggests, therefore, that the Development Board gradually supply the funds necessary to increase the Bank's capital by ID 5,000,000. The Bank would be authorized to use this sum for making loans to, and investments in, industry within the framework of an over-all pro- gram approved by the Development Board. The Bank's capital should be used primarily as a revolving fund. The Bank should generally dispose of its industrial shares whenever an enterprise becomes profitable and, therefore, capable of attracting more private capital. Profit-making assets should be kept only to the extent necessary to create a reserve against possi- ble losses. While the Bank should presumably show a small profit to inspire confidence in its operations, it should not retain its par- ticipation in profit-making enterprises for the sake of maximizing its profits, particularly when this limits its ability to assist other industries. The Bank at present is understaffed. The directors pass on projects without the benefit of expert assistance, and, as a result, some phases of a project may be completely overlooked. With a shortage of staff, the transaction of business with the Bank is also time-consuming and thus discourages applicants. The Mission recommends that, first, the Bank's staff be both increased and strengthened and, second, that it be reorganized to give greater responsibility to the head of the Industrial Schemes Section who should be a properly qualified man with broad indus- trial experience. Members of the Industrial Schemes Section should have thorough training and practical experience in power and mechanical engineering with special reference to industrial planning and layout, and in operations, management and control of industry with special reference to cost accounting. Protection of Industry The "Law for the Encouragement of Industry” enacted in 1929 was replaced by new legislation in 1950 which grants limited exemptions from income and surtaxes for four years; exemptions 296 THE ECONOMIC DEVELOPMENT OF IRAQ from import duties on machinery, material, equipment and spare parts; exemptions from property tax for 10 years; and use of rent-free government land not in excess of 25,000 square meters for a period of 10 years. Iraq-owned industrial enterprises can qualify for these benefits as long as they primarily use raw materials available in Iraq or produce goods imported in consid- erable quantities. Neither of these conditions is necessarily rele- vant to efficient production; and it is therefore suggested that the law be amended to stipulate that such benefits should be accorded only to enterprises which have a reasonable prospect of becoming efficient enough to withstand foreign competition. Industry is protected in many cases by high import duties and in some cases, such as cotton yarn, beer and cement, by import prohibitions. Industrial enterprises have not so far taken full advantage of these restrictions, but if they should do so the demand for their products would undoubtedly diminish significantly. Foreign competition is always a useful check on inefficiency. Its beneficial effects in bringing about lower production costs and a better product have been demonstrated many times in Iraq. For example, even industries protected by high tariffs have been forced to modernize in order to reduce costs and meet competition. To attempt to shut out foreign competition will, in general, retard, rather than foster, industrial growth. In some cases, it is true, new industries may need protection during the early years of operation. Protection should not, however, be allowed to become a permanent shield for inefficiency; as experience is acquired and production costs are stabilized, protective measures should be greatly reduced. In a country like Iraq where the limited market affords oppor- tunities for only one or two plants in certain fields, there is an acute danger of monopoly and attendant high prices. This danger is aggravated further by a tendency in some industries to empha- size limited production with high profits per unit rather than mass production with lower unit-profits. Foreign competition would appear to be the proper means of restraining trends toward monopoly within a particular field, just as it operates to stimulate modernization in plants suffering from high costs because of obsolete methods. 298 THE ECONOMIC DEVELOPMENT OF IRAQ in economics and finance capable of acting as company secretaries or as economic and financial experts in business or government. Greater emphasis should be placed on practical training; the teach- ing staff should be strengthened; and more attention should be paid to banking and accounting, particularly cost accounting. Advisory committees consisting of representatives of leading banks and business houses should be appointed to both the College and the secondary school to review the curriculum. They could assist in arranging for part-time apprenticeship training and would pro- vide a means for checking how well graduates of these institutions measure up to the requirements of business. Effective Government Organization for Industry Government activities relating to industry, except for the Industrial Bank, are now handled by a Department of Industry in the Ministry of Economics. This Department under its present director concentrates primarily on research and laboratory work and is not equipped to analyze and record the commercial and economic operations of industry. As industry expands both types of activity will become increasingly important. The Mission there- fore recommends a realignment of the present organization to pro- vide for two separate departments within the Ministry, a Depart- ment of Industrial Research and Standards and a Department of Industries. Research and technical functions now being carried on would be continued under the Department of Industrial Research and Standards. Its facilities need, however, to be expanded to meet industry's growing requirements for laboratory testing and quality control. The newly organized Department of Industries would carry on economic research and analysis. Among its functions would be the maintenance of adequate statistical records of industrial pro- duction, the analysis of economic problems relating to industry such as marketing, and the administration of the laws providing special protection to industry. Both departments should gradually be equipped to give increasing assistance to industry in improving its output and reduc- ing its cost of production. This type of assistance should be stressed more and more in the future, as compared to special mea- INDUSTRY 299 sures of production and assistance which tend to shield industry against competition. There is much to be done to help industry to achieve better control of the quality of its products, in reduc- ing waste through material salvage, in analyzing production costs, in making market surveys and in raising labor efficiency through improved lighting, noise abatement, in-plant training programs and better work flow. IV. Other Suggestions for the Improvement of Industry Possibilities for Economies in the Use of Capital Whenever the capital cost of a plant is an important determi- nant of production costs, it becomes essential to utilize the plant to the fullest extent. This may be accomplished, for example, by increasing the number of shifts, by extending the work week and by stepping up machines to their maximum economic speed. Com- pletely integrated plants seldom if ever offer the opportunity for this type of operation, because certain machines are never called upon for continuous use. This is, of course, very noticeable where the plant does all its own maintenance work, even to all of its foundry items. The solution is obviously one of resorting to con- tracting or sub-contracting with concerns specializing in particular operations. For example, a single finishing and dyeing concern might advantageously serve two or more textile mills, where the capacity of these mills is insufficient to load separate finishing departments to their economic limit. In Iraq there is a tendency in industry to generate its own power rather than to purchase it. This leads to the installation of expensive facilities which are utilized only part of the day. While industry is operating, many municipal power plants stand virtually idle because they serve primarily lighting needs and their peak load accordingly comés at night. In some cases, where large quantities of process steam are needed, industrial enterprises may be justified in generating their own power, but for the most part, the purchase of power is preferable. Unfortunately, power rates, except in Basra and Baghdad, are so high that the purchase of 300 THE ECONOMIC DEVELOPMENT OF IRAQ power by industry is out of the question. It is hoped, however, that in time this may be corrected. Even in Baghdad the purchase of power by industry would be greatly stimulated by a reduction in the industrial rates of the Baghdad Light and Power Company. Profits, after depreciation but before taxes, are now over half of gross receipts. Under the terms of its concession, the company pays a substantial part of these profits to the Iraq Government, the remainder being allocated to United Kingdom taxes, reserves for capital expenditure and dividends. The Iraq Government's share in the profits effectively constitutes a tax on electricity consumption, which it might be well advised to forego if it could thereby secure an equivalent reduction in power rates to Iraqi industry. The government might, therefore, explore with the Company and with the tax authorities in the United Kingdom the possibility of an equitable arrangement, whereby power rates would be reduced as far as possible, while still providing adequate funds for capital improvement and con- tinuing a fair return to stockholders. A possible arrangement that has to be considered is the exercise by the government at the end of 1954 of its option to purchase the undertaking as a going con- cern. If such a course should be decided on, it would be desir- able to enter into a management contract with the Company in order to ensure the continuance of efficient operation. The amount of working capital required in Iraq per unit of production is exceedingly high, partly because enterprises want to be as self-sufficient as possible with respect to needed supplies and materials, partly because Iraq is relatively distant from interna- tional markets. Probably the best means of reducing the need for working capital would be through the erection and operation of a bonded warehouse which would provide all industries with facilities to store, until needed, supplies, material and chemicals of all types under conditions that would enable banks to extend credits on the stocks in bond. In this way the banks would have assurance that the stored material would not be released prior to full payment plus interest, storage and service charges. In effect, this would permit operations along lines very similar to those in highly developed countries where supplies and materials are obtained in accordance with production schedules. INDUSTRY 301 Measures to Improve Productivity and Quality of Output 1. Improved Lighting, Noise Abatement and Temperature Control Good lighting is important in reducing fatigue, improving the quality of work and increasing production. Light that glares has the same effect as too little illumination; in either circumstance workers tire easily and their efficiency is quickly lowered. In designing new industrial buildings care should be taken to avoid the direct rays of the sun and to arrange wherever possible for the light to come from the north through the roof. In many exist- ing plants, especially in the two-story buildings, the amount of artificial lighting needs to be increased. Tests have also shown conclusively that a continuous high level of noise quickly brings fatigue and boredom. The resulting loss in productivity fully justifies taking whatever steps are feasi- ble, such as the installation of sound-absorbing ceilings, to reduce the noise level to generally acceptable limits. While the average temperature in Iraq is high, the humidity is quite low. This greatly simplifies the conditioning of air for comfort, it being necessary only to increase the humidity to decrease the temperature. This practice, known as “desert cool- ing," is now being adopted with considerable success and should be extended in those industries (especially textile mills) where it is of distinct advantage. 2. Improvements in Flow of Material With the exception of the new textile mill, industrial plants are poorly arranged from the standpoint of material flow. Most buildings have two stories, requiring either stairs, conveyors or elevators to move material through the plant. Columns to sup- port the upper floor interfere with operations on the lower floor. Such an arrangement requires duplicate handling of material and interferes with the use of modern equipment such as fork trucks. Similarly, the buildings which comprise a plant are frequently laid out without regard to the flow of materials from one to the other. There are, moreover, many cases of duplicate operations (for example, separate power plants). While it is difficult to correct existing conditions, the layout of any new plants should be 302 THE ECONOMIC DEVELOPMENT OF IRAQ arranged so that the material flows through the plant with a minimum of handling. 3. Use of Time Studies and Cost Accounting Time studies are indispensable in some industries. In textile and machine shops, for example, these studies are essential to break down production costs for proper evaluation. To illustrate, a large costly lathe might show a greater return by speeding up its operation through the use of a different design of cutting tool, or a planer might show such a low return that its replacement by a milling machine would be fully justified. In textiles, time studies might show that it is actually more costly to have one operator tending five looms than to have him tend only four looms; or the reverse could be true, depending on all of the related factors. There are numerous other examples which could be cited to show the need of time studies in certain sectors of industry. Cost accounting is very important to good operations and must be practiced before an industry can expect to reach maximum operating efficiency. Without it, many losses, which could easily be avoided, go unnoticed by management. 4. Improved Administration At present there is very little delegation of responsibility by management to foremen and supervisors. This limits the economic size of plants and tends to complicate the work of management. There are good reasons for this situation, chiefly the widespread lack of education, experience and training, which has already been described. While the basic problem can be overcome only in time, industry can take steps to alleviate the immediate situation through such measures as on-the-job training programs suggested earlier, special courses for supervisory personnel, and better organization of inventories and distribution of stores of spare parts. The result should be an increase in production and, at the same time, a reduc- tion in per-unit cost. 5. Greater Emphasis on Workers' Welfare To hire and train a worker requires time and money, and the investment is lost if, because of sickness, the worker is unable to hold his job or to turn out a full day's work. A physical examination prior to hire would insure that a worker is physically INDUSTRY 303 fit. After hire, improved working conditions and the provision of simple health services and adequate sanitary facilities would help to maintain his efficiency. Living conditions outside the plant must also be maintained in a manner which gives the worker some degree of contentment and satisfaction. This might require new housing, better food, improved sanitary conditions or other changes, depending on the locality and type of industry. Most of these will, of course, involve further capital investment. The increase in worker efficiency when such measures are properly planned and implemented should, however, fully justify their cost. Improvement in the workers' welfare ought to be a matter of concern both to the employers and the government. Inside the plant it is the primary responsibility of the employer; outside, that of the government. In neither sphere, however, is the jurisdic- tion or interest exclusive. For example, while a considerable improvement in working conditions in the plant can be brought about only if the employer realizes it is to his own interest, the government can and should intervene to maintain certain minimum standards. Legislation with respect to working hours, holidays, sick leaves, disability compensation, child labor and the like, is already on the statute books, but the law has been poorly enforced. The staff of the Labor Department in the Ministry for Social Affairs needs to be strengthened to enable it to do an effective job. At the same time a special effort should be made to educate employers to the role of better working conditions in raising labor productivity. | 306 THE ECONOMIC DEVELOPMENT OF IRAQ are unsurfaced and impassable for long periods in wet weather. All-weather roads are at present found only in the Baghdad area and in the mountains in the North. The only passable trunk roads are those from Baghdad to Khanaqin, Baghdad to Kirkuk, Erbil and Mosul, and Baghdad to Rutba and Syria. Even these have shorter or longer sections in very poor condition. There is no all-season road between Baghdad and Basra. Two civilian airports, Baghdad and Basra, serve the principal air routes between Europe, Asia and beyond. Internal air services are limited to one line between Baghdad and Basra. Military air- fields and landing grounds and a few private air strips are avail- able in certain places, but demand for internal air transport has so far been negligible. One state air line, Iraqi Airways, operates services with neighbor countries and Egypt through Baghdad and Basra with a small fleet of four aircraft. Administration and management of the airline are combined with those of the state railways. Oil from the oil fields at Kirkuk is carried by pipelines across the country to the Mediterranean ports of Tripoli and Haifa, but the line to Haifa is now out of operation. A shorter pipeline connects the southern Iraq oilfield with the Shatt al Arab oil port at Fao. Transport connections with the outside world are well served by the Port of Basra for ocean-going traffic, by the airports of Baghdad and Basra in international air traffic and by the oil pipe- lines to the Mediterranean. At present only one railway line, begin- ning at Baghdad, connects Iraq with Syria, and via Syria with Turkey and Europe. A desert road exists for through road traffic between Iraq and Syria and Lebanon. A private company, Nairn Transport, operates an international bus service on this route. There are two main roads for exchange of traffic with Iran, one from Baghdad via Khanaqin, and one from Erbil via the Rowan- duz Valley and Rayat. Future economic developments may per- haps demand new traffic outlets to the Mediterranean, shorter and better equipped than the existing railway and road routes, but at present there are few signs of such a demand. TRANSPORT AND COMMUNICATIONS 307 On the whole the existing transport system serves the present needs of the country well, but there are certain shortcomings and problems. The principal difficulties are: Insufficient means of transport in the Tigris valley between Baghdad and Basra, serving the Kut and Amara districts; The lack of roads, shortage of surfaced trunk roads and non- existence of rural feeder roads; The lack of control over road transport, urban as well as inter- urban and rural; and The renewals and the gauge problems of the railways. I. Ports The Port of Basra was developed as a modern port from initial installations constructed during the first World War. Dur- ing the second World War, the Port had to cope with a vast increase in traffic. Certain extensions, necessitated by military requirements, were carried out, including supply lines into Iran and through Iran to Russia, but normal maintenance, renewal and improvement works were severely restricted. The postwar period presented the problem of overcoming the arrears in maintenance and renewals, under an additional handicap of shortage of tech- nical staff. Today the Port operates efficiently; it is equipped to handle all traffic, incoming and outgoing, without congestion and there is sufficient margin to cope with the increase in traffic to be expected from further economic development of the country. Par- ticular credit must be given to the Directorate of the Port and a depleted but devoted staff for the results achieved. The activities of the Port extend along the Shatt al Arab from the main wharves at Magil to the mouth at Fao. In addition to handling export and import traffic for Iraq, it also performs certain services for the Iranian oil port of Abadan; in recent years the number of ships calling at Abadan has been five to six times the number at Basra. The principal developments in the postwar period are set out in Table I. The activities of the Port cover a wide field. Besides actual port services such as harbor, wharves, sheds, pilotage, lighting and buoyage, civil, mechanical and elec- TRANSPORT AND COMMUNICATIONS 309 TABLE 2 PORT OF BASRA BUDGET* (in millions of dinars) Expenditures Capital Year Revenue Ordinary Total Balance +0.36 +0.26 +0.22 1942-43 1943-44 1944-45 1945-46 1946-47 1947-48 1948-49 1949-50 1950-51 1951-52 1.11 1.19 1.19 1.14 1.25 1.51 1.66 1.62 1.52 1.53 0.71 0.90 0.93 1.05 1.14 1.27 1.50 1.43 1.45 1.53 0.04 0.03 0.04 0.09 0.10 0.22 0.18 0.19 0.65 0.65 0.75 0.93 0.97 1.14 1.24 1.49 1.68 1.62 2.10 2.18 +0.01 +0.02 -0.02 -0.58 -0.65 * Actual budget figures for the years up to and including 1949-50; revised esti. mates for 1950-51, and budget estimates for 1951-52. It will be noted that until recent years there was a surplus of income over both ordinary and capital expenditures. Current deficits are being met from the cumulative surplus of the past. Development programs of the Port now in progress consist of an extension to the power station, extensions and improvement of roads in the Port area, machinery and plant for road maintenance, improvements of the airport, an extension of the hotel, new build- ings, staff quarters, laborers' dwellings, river conservation work, and extensions and improvements to wharves and warehouses, including handling equipment. For the financial year 1951-52 the cost of this capital budget program has been estimated at about ID 650,000. Similar expenditures will be required in the years to follow. The Dredging Scheme The Port's most important maintenance works program is concerned with the dredging of the entrance channel through the Fao Bar, so much so that a separate budget is maintained for the Bar Dredging Scheme with its own revenues from dredging dues levied on shipping. Up to four and a half million cubic yards must be dredged in a year to maintain the channel's width and depth, at a cost of from ID 500,000 to 600,000 per year covered 310 THE ECONOMIC DEVELOPMENT OF IRAQ by dues received from Abadan and Basra shipping. The budgets of the Dredging Scheme are summarized in Table 3. It will be noted that until the last two years surpluses accrued even after allowing for capital expenditures. TABLE 3 Fao BAR DREDGING SCHEME BUDGET (in millions of dinars) Expenditures Capital Year Revenue Ordinary Total Balance 0.01 0.01 2 1942-43 1943-44 1944-45 1945-46 1946-47 1947-48 1948-49 1949-50 1950-51 1951-52 0.44 0.51 0.69 0.73 0.70 0.76 0.91 0.95 0.94 0.95 0.34 0.39 0.45 0.49 0.48 0.54 0.54 0.61 0.73 0.79 0.04 0.05 0.07 0.17 0.19 0.36 1.10 0.35 0.40 0.45 0.53 0.53 0.61 0.71 0.80 1.09 1.89 +0.09 +0.11 +0.24 +0.20 +0.17 +0.15 +0.20 +0.15 -0.15 -0.94 1 Actual budget figures for the years up to and including 1949-50; revised esti. mates for 1950-51, and budget estimates for 1951-52. 2 Negligible. Thorough investigations and studies by the Port's engineers and consultants, supplemented by experiments on a tidal model of the river constructed by the National Physical Laboratory at Teddington, England, have now reasonably well established that the dredging of a new channel straight from the mouth of the river should ensure reduced maintenance dredging after completion. The present channel, though shorter, has a bend near the river mouth and now runs at right angles to cross currents which deposit more and more silt in the channel. There is no doubt that the new channel should be constructed. The dredging of this new channel is the only major develop- ment facing the Port authorities. The cost would be at least ID 2,000,000 spread over a few years, but the ultimate savings in current dredging expeditures would make it a very worthwhile investment. Part of the cost is already reflected in the Dredging Scheme's capital budget for 1951-52 which, for instance, provides TRANSPORT AND COMMUNICATIONS 311 ID 400,000 for the purchase of a new dredger. The Port cannot, however, be expected to finance the construction of a new channel out of its own resources. The combined current receipts of the Port and the Dredging Scheme, together with the surpluses of the past, should be sufficient to cover the cost of ordinary capital improvements, but not of a large project such as the channel. It was originally expected that the Anglo-Iranian Oil Company might lend the necessary funds for the channel. Recent developments have made this possibility more remote, and in any event it may now be much more advisable to finance the project out of the oil revenues which will accrue to the Development Board. Proposed Port at Umm Qasr From time to time proposals have been put forward for the construction of a new port at Umm Qasr, on an inlet from the Gulf, south of Basra. Temporary installations at this site and a military branch line of the railway from Basra were in operation during the war. The alternative was warranted in those excep- tional years, in case war operations should impede the operation of Basra Port. The Umm Qasr port installations have since been abandoned and there is now nothing left which might be used as a nucleus for port development. The advantage of a shorter entrance channel which would require less dredging than the river to Basra is offset by the considerably greater cost of inland trans- port over sea-going transport. The entrance is not free from silt- ing, and the Fao bar will still have to be kept passable for Shatt al Arab shipping. For several other reasons this project should not be pursued further at present. Basra Port is capable of handling much larger volumes of traffic than at present. The construction of a new port would be expensive; a new town would have to be built; the port would duplicate, not supplement, existing facilities; and the port would require communications with the hinterland involving addi- tional capital expenditures for railways and roads. As mentioned earlier the new port's site would be nearer the sea, thereby shorten- ing the cheaper ocean haul and materially lengthening the expen- sive overland haul. Trade concerns now well established at Basra would be reluctant to duplicate their operations at the new port, let alone transfer their business there. 312 THE ECONOMIC DEVELOPMENT OF IRAQ Staff The Port Directorate has done its best to train Iraqi person- nel in every level of employment. It takes time to develop the highly specialized skills required but the training process is well advanced. In May 1951 two senior and seven assistant posts of primary importance remained unoccupied in the Port Administra- tion, and two senior and two assistant posts of the same urgency were unfilled in the Bar Dredging Scheme offices. These should be filled promptly for a period of years by qualified foreign nominees. The training of Iraqi staff members in the Port's own territory and abroad should be continued and extended as much as is practical. In summary, the Mission's recommendations concerning the Port's development problems are: 1. The training program to overcome the shortage of techni- cal staff experienced in port operation, administration, maintenance and construction should be continued and expanded as much as possible. 2. The dredging of the new entrance channel should be car- ried out. 3. Construction of a new port at Umm Qasr should not be undertaken. II. Maritime Shipping The Port of Basra is extremely well served by many experi- enced world shipping lines. There is, therefore, no justification for the creation of an Iraq shipping line. Coastal shipping is non- existent, since Iraq possesses only one port and neighboring coun- tries can provide no traffic for such a venture. III. Inland Water Transport Nature has provided Iraq with a number of important water- ways in its two large rivers, the Tigris and the Euphrates, and their many tributaries. Until a few years ago, the Tigris, in its lower reaches in the plains, was navigable at all seasons from TRANSPORT AND COMMUNICATIONS 313 above Baghdad to Basra, but this is no longer so. The variations in the flow of water are wide, floods occur at high water, there is heavy silting at low water, the river bed steadily rises and the cur- vature increases more and more—features typical of the behavior of rivers which remain untrained for centuries. The Port Directorate of Basra has control over inland navi- gation. The control is nominal, however, and is limited to the Tigris between Basra and Baghdad and the Gharraf canal, a tribu- tary joining at Kut. There is a separate budget for the purpose but it amounts to only a few thousand dinars annually, spent on navi- gation aids, few and far apart. The last remaining regular naviga- tion company, the Euphrates and Tigris Steam Navigation Com- pany, ceased operations in 1949, and only small private concerns continue to operate barges which are mostly propelled by low- powered motor launches. At the present time the Tigris between Basra and Baghdad is navigable for vessels up to four feet draught during the seven months from February to August, except for short flood periods in April and May in some years. Navigation during the remaining five months, September to January, is impeded for long periods by: 1. Low water in the Narrows in the lower reaches below Amara, for periods up to three weeks, 2. Low water at Amara, causing the floating bridge to ground, for periods up to six weeks, 3. Closure of the Kut barrage lock for irrigation require- ments, for periods up to eight weeks. Between seasons the water levels vary up to 25 feet at Bagh- dad, up to 35 feet south of Kut barrage and up to 7 feet at the Narrows. Inland water transport has ceased to be a factor of importance in the country's transport system. The waters of the rivers are used primarily for irrigation and their flow is controlled only with a view to serving irrigation requirements. In the future irrigation will continue to have the principal claim on the available water supply. This does not mean, however, that a revival of inland navi- gation will be incompatible with irrigation. In the monograph on flood control and irrigation it has already been pointed out that measures to control the dissipation of water from the lower reaches 314 THE ECONOMIC DEVELOPMENT OF IRAQ of the Tigris into the marshes would leave more water in the river bed.1 Navigability might be improved further if the river bed were trained by dams, locks, groins and cribs into a narrow channel at low water and progressively wider channels at higher water levels. Through such measures, limited but uninterrupted navigation could be made possible. It would be necessary, however, to consider whether the cost would not be such as to make river transport uneconomic. As a first step it might be advisable to have the feasi- bility and cost of training the river bed studied by engineers from the Netherlands who have had experience with similar problems. IV. Railways The railways are the principal means of inland transport, car- rying by far the greater part of the country's imports, exports and internal traffic. The chief commodities carried in bulk are oil, bricks, cement and other building materials, grains and dates. The total length of the railway system is 1,030 miles (1,648 kilometers) of which 330 route miles (529 kilometers) are stand- ard gauge and 700 route miles (1,119 kilometers) meter gauge. The first railway line in Iraq was completed in 1914 and ran north from Baghdad to Samarra as part of the projected Berlin- Baghdad railway. The Iraqi portion of this standard-gauge rail- way was not fully completed until 1940 and it is now the only railway link between Iraq and neighboring countries. The balance of the railway network consists of meter-gauge lines, large portions of which were first constructed during World War I when only meter-gauge rolling stock was readily available. One of these lines runs from Basra to Baghdad, following the Euphrates River. The other extends from Baghdad to Erbil via Kirkuk, with a short spur to Khanaqin. The part from Kirkuk to Erbil was finished only in 1949. Until 1950 when a railway bridge was completed across the Tigris, the two meter-gauge lines were connected only by a wagon ferry. Even now there is virtually no through passenger traffic on the two lines. It should be noted that there is no longer a railway south of Baghdad serving the towns along or near the See Annex B, Flood Control, Irrigation and Drainage, pp. 202-203. TRANSPORT AND COMMUNICATIONS 315 Tigris, although during each of the two World Wars there was a temporary railway connection with Kut. The railways are state-owned and operated under the manage- ment of a Director General who is responsible to a Railway Board appointed by the government. The administration is autonomous and has its own budget which must, however, be submitted annually to Parliament for approval. The administration is well organized, the management capable and the operation efficient and economical. Capacity The railway system consists entirely of single track lines built to light standards, and the permitted axle loads are very low. This limits the capacity of the lines and increases the operation problems. There is no doubt, however, that the system's capacity is ample for present demands. During several war years it actually carried about twice the tonnage of goods transported in recent years, even though the length of the system was only about one third greater through the temporary construction of military branch lines (see Table 4). Railway carrying capacity is in reality rather elastic. The railways could carry as a minimum 15 percent more goods, and, in a pinch, could probably carry considerably more. In consequence of the over-all development program, traffic requirements will undoubtedly increase quite rapidly. For example, the value of imports may double within about five years, and the amount of TABLE 4 TRAFFIC ON STATE RAILWAYS PASSENGERS GOODS Route Passenger Passenger Total Revenue Total Revenue Kilometers Journeys Kilometers Tonnage Carried Ton Kilometers Year 1943-44 1944-45 1945-46 1946-47 1947-48 1948-49 1949-50 2,011 1,555 1,555 1,555 1,555 1,555 1,648 4,418,590 4,869,523 5,292,441 4,300,413 3,725,463 3,340,034 3,609,337 662,256,369 669,987,674 775,107,476 630,705,454 529,066,676 473,075,056 517,939,859 3,586,081 2,390,402 1,970,107 1,860,296 1,714,290 1,674,289 1,980,795 905,104,309 648,482,848 513,643,871 600,138,802 556,623,270 497,306,309 657,097,000 316 THE ECONOMIC DEVELOPMENT OF IRAQ internal traffic, particularly in building materials, will also rise substantially. The burden on the main trunk line from Basra to Baghdad will increase especially. If steps are taken, however, to carry out the necessary replacement and rehabilitation measures outlined in this monograph, the railways should be able to handle much of the increased traffic. Part of the increase will presum- ably be absorbed by the roads. The financial position of the railways has not been wholly satisfactory in recent years. To be sure, they have had a consid- erable operating surplus until the last few years, as is indicated in Table 5. Since 1945-46, however, this surplus would have actually disappeared or been converted into a deficit if it had not been for the fact that the sum set aside for renewals and deprecia- tion was rather inadequate. In 1948-49 a small surplus was achieved only because the amount appropriated to the renewals account was cut from ID 400,000 to ID 250,000; and when the 2 See the Mission's main report, pp. 88 et seq. TABLE 5 RAILWAY FINANCE (in dinars) Operating or Ordinary Budget Year Revenues Expenditures Balance Capital Expenditure 1938-39 1939-40 1940-41 1941-42 1942-43 1943-44 1944-45 1945-46 1946-47 1947-48 1948-49 1949-50 1950-51* 1951-52* 733,613 752,546 953,379 2,241,657 4,775,646 5,067,899 4,141,110 3,769,823 3,436,403 3,794,003 3,633,022 3,991,297 3,949,200 4,211,100 753,063 733,530 800,712 1,440,546 2,316,576 3,781,525 3,132,064 3,241,988 3,206,164 3,549,115 3,614,569 3,705,542 4,041,400 4,274,100 -19,450 +29,016 +152,667 +801,111 +2,459,070 +1,286,374 +1,009,046 +537,835 +230,239 +244,888 +18,453 +285,755 -92,200 -63,000 938,115 559,492 176,866 159,937 161,905 137,258 112,366 387,684 789,095 1,761,123 2,778,902 1,068,558 1,734,000 902,500 * Budget estimates. - 318 THE ECONOMIC DEVELOPMENT OF IRAQ As of the spring of 1951, when the Mission visited Iraq, the financial situation was about as follows. Capital expenditures had been reduced far below the amounts budgeted. Preliminary actual budget figures for the first half of 1950-51 indicated that total capital expenditures for the year might be only about one fourth of the amount authorized by the budget. For 1951-52, projected capi- tal expenditures had been slashed well below the original estimates of the preceding year. The railways needed about ID 1,500,000 to meet commitments for the completion of capital works under way. More important, deferred renewals of locomotives, rolling stock and track were becoming more urgent just when no money was available to meet the cost. The Palmer Report Growing concern and anxiety about the railways' financial position led to a decision in 1950 to seek advice from independent consulting engineers. In May 1950 Messrs. Rendel, Palmer and Tritton, consulting engineers of Westminster, London, were invited to investigate and report on certain affairs of the railways in accordance with the following terms of reference: 1. To examine the railway accounts and ascertain the true financial position; 2. To examine and advise on the sanctioned Major Develop- ment Program in its economic aspects, with particular regard to the financial position of the Railways; 3. To advise on the rehabilitation and modernization of the system; and 4. To investigate and advise on the most suitable form of motive power for the system. The investigations were completed and the Report issued in March 1951. The Report is lucid and valuable, and its recommendations and suggestions should be implemented as far as practicable. Since it is clearly limited, however, to advice on developments with a view only to the economic and financial aspects of the railways, its recommendations may have to be supplemented and in some cases amended when considered in a wider framework. The main conclusions of the Palmer Report can be briefly summarized. With respect to the accounts and financial position TRANSPORT AND COMMUNICATIONS 319 of the railways, the Report recommends that the renewals fund be restored and adequate allocations made for renewals in the future, that the financial department be reorganized to some extent and that the structure of rates and fares be studied and revised. On the Major Development Program the Report suggests completion of the Baghdad-West railway layout but on the basis of a revised plan. For the rehabilitation and modernization of the railways it proposes a detailed renewals program for a 10 year period and makes several minor recommendations. Finally, with respect to motive power, the Report recommends the conversion of the meter- gauge lines to diesel traction within 10 years. The Mission approves these recommendations in general, but offers below a number of comments, amendments and additional recommendations so as to fit them into the wider field of coordi- nated economic development. Financial Situation and Accounts The Palmer Report envisages a renewals program costing ID 10,600,000 over an 11 year period. Of this sum it anticipates that the railways may be able to finance ID 8,175,000 out of cur- rent revenues on the assumption that the total set aside for this purpose from operating income can be gradually increased from ID 600,000 in the first year to ID 875,000 in the last year. A balance of ID 2,425,000 would therefore have to come from other sources. If it is decided, in accordance with a recommendation made later in this monograph, to standardize the railway gauge, the whole program of renewals will have to be considerably accel- erated. The amount of financing required over the next five years will then be substantially increased. The railways would undoubtedly be in a better position to finance these renewals out of their own resources if the adminis- tration were not burdened with expenses for other government operations, unconnected with the railways. For example, the rail- ways have carried all the losses of the government airways through- out their existence, and the government has taken valuable rail- way land without compensation for projects entirely unconnected with railway operations while, at the same time, forcing the rail- ways to pay high costs for new land required for railway use. The TRANSPORT AND COMMUNICATIONS 321 and rates per kilometer or ton-kilometer unit vary between the different sections of the system. They should be standardized. The abnormally wide variations in rates between commodities should be adjusted. The Palmer Report recommends the appointment of a rates and fares expert to study the matter. The Mission agrees that a traffic research officer with expert knowledge of tariff struc- ture should be appointed as a temporary consultant to the railways. It is particularly important that he be conversant with traffic research so that he may provide for rate adjustments when traffic in certain commodities declines or increases exceptionally. With increased road traffic competition such research will become imperative in the very near future. Baghdad-West Railway Developments The plan for this major development scheme consists of a new terminal station building and railway headquarters to replace the existing separate Baghdad-West meter-gauge and standard-gauge stations, and the rebuilding and extension of the goods and mar- shalling yards. The plan was inspired chiefly by two desires, one to provide Baghdad with a modern central station, the other to make room for a town extension in the southeastern area planned on modern principles free from railway level crossings. The plans would necessitate the realignment of the line to Basra, around the development area so that it enters Baghdad terminal station from the northwest. The Palmer Report rejects the official scheme principally because (1) increased length of the line to Basra would mean increased operating costs for the Railway and higher rates and fares for the public and (2) the operation of Baghdad station as a terminal instead of a "through" station would further increase operating difficulties and reduce the station's capacity. The Report submits a revised scheme in which the passenger terminal station is retained for the Mosul and Kirkuk lines, and the Basra line is retained along its present alignment with its own platforms, con- nected with the new terminal building. A plan for a provi- sional Stage I to bring the new station building into operation is also submitted. The Report is on sound ground in pointing out the disad- vantages of the increased mileage on the Baghdad-Basra lines 322 THE ECONOMIC DEVELOPMENT OF IRAQ and in stressing the disadvantages of operating the station as a terminal in so far as goods traffic is concerned. An additional major disadvantage of the plan would be that in the new align- ments the two meter-gauge railway yards would be on opposite sides of the standard-gauge railway yard, thus presenting very serious operating difficulties. A terminal station for passenger traffic, however, presents a different case and would actually offer advantages in concentrated operations, safe and easy circulation of passengers, luggage, mail and parcels. But it is obviously out of the question to build a new passenger line outside the town and at the same time retain the existing line for goods traffic through the town. It is obvious that a considerable time must elapse before a final decision as to the town planning, including government build- ings, will be reached, and it is essential that at least the new terminal station, now nearing completion, be brought into opera- tion. It is also desirable that no major reconstruction of yards be carried out until a final decision is reached. It is recommended, therefore, that a provisional plan be carried out, but on a modified, simpler scale than the Palmer Report Stage I. A modified plan is attached to this monograph as Appendix A. Its cost would be approximately one third of the Stage I project scheduled in the Palmer Report. In any case the Basra line platform should be sited immediately alongside the station building. It is indefensible to erect a terminal station costing ID 4,000,000 with the principal main-line platforms as appendices far away from the circulating area. If future decisions for Baghdad town expansion demand the removal of the Basra line from its present alignment, the whole layout should be revised and the goods-marshalling yards con- structed as a through yard, outside the present area, as indicated in outline on the plan attached to this Report as Appendix B. This layout would overcome the disadvantages of increased mileage and higher operating costs. The Mission therefore recommends that the funds be made available for completing and bringing into operation the railway terminal station and headquarters and that an additional sum for a simplified provisional layout be also allocated. It suggests further that the new station building be used as follows: 1 324 THE ECONOMIC DEVELOPMENT OF IRAQ tion, and it is recommended that the trial period be begun at the earliest possible date with due regard to considerations set out in the following paragraphs dealing with possible gauge conversion. The cost of converting to diesel traction, estimated in the Palmer Report at ID 4,155,000, has already been almost entirely included in the projected outlay on renewals given earlier. Gauge Conversion One major problem remains practically untouched, that of unification of the railways' gauge. The problem has never been studied in detail. At various times estimates have been produced, usually at short notice and always based on the assumption of the necessity of complete replacement of track and rolling stock. It has often been forgotten that the construction gauge, formation, bridges, etc., of the meter-gauge lines were originally designed with a view to ultimate conversion to standard gauge. There is no doubt that the division of the railway system in two gauges with a transshipment point at the center is a handicap to full traffic development. The question is whether the cost of conversion and the temporary disturbance of the free flow of traffic can be reduced sufficiently to be outbalanced by the increased effi- ciency and cheaper operation that the unified system would bring. There are several reasons why the problem should now be studied in minute detail. 1. The long-term general development program of the coun- try will probably entail capital expenditures of about ID 160,000,000 over the next five years and perhaps even larger amounts in later periods. Such an expenditure must result in increased production and consumption and in consequence increased transport. With this in view it might be sound and reasonable to include in the capital program a project for rail gauge conversion which would make railway transport more efficient. 2. Although existing administration, operation, service of workshops, stores, etc., for the two gauges are admirably integrated, there exists, of necessity, a large amount of duplication in activities, of reserves, of stand-bys and spares, in all departments. 3. The developments contemplated in the areas now served by the standard-gauge line north of Baghdad will be handi- capped by transshipment on the main export and import route. - TRANSPORT AND COMMUNICATIONS 325 4. The meter-gauge system is completely isolated from the standard-gauge systems in all adjacent countries; and such isolation may become a growing handicap to Iraq if addi- tional rail connections become desirable in the interest of security or international trade. 5. Serious consideration must be given from now on to road transport. The proper economic use of both road and rail transport facilities will be much more difficult as long as the railway system suffers from a transshipment handicap. A decision on gauge conversion should be taken now, in view of the major developments contemplated in the next five or ten years. Once these major developments are achieved with retention of the existing system, an opportunity for conversion, however desirable, will not recur again under circumstances as favorable as the present. The major developments contemplated and directly affected by possible gauge conversion are: 1. Diesel traction to replace steam; 2. The intensive renewal program of track and rolling stock, which is now required in view of the age of the railway, and which must be carried out in any event; 3. The Baghdad-West layout in conjunction with town development. It is emphatically recommended that the problem of gauge conversion of all meter-gauge lines be made the subject of a serious and thorough study in all its details. The existing railway staff is fully capable of doing this work; its members know all the local possibilities and difficulties, but, already overburdened in their day-to-day duties, they cannot possibly find the time to carry out the study alone. They should therefore be assisted by consultants for a period of, say, three to six months; and the consultants Messrs. Rendel, Palmer and Tritton might accordingly be recalled to carry out the study under the direction of the Director General and in close cooperation with the railway staff. Such a study should cover the following subjects: 1. Assessment of the principal reasons for conversion; 2. A possible conversion program, completely integrated with the programs for renewals, introduction of diesel traction and completion of the Baghdad-West scheme; TRANSPORT AND COMMUNICATIONS 327 V. Roads Organization Iraq's road system is controlled and maintained by the Public Works Department under the Minister of Communications and Public Works. It is headed by the Director General of Public Works and under his direction five divisional engineers assure the maintenance and works service in divisions centered in Baghdad (four provinces), Hilla (three provinces), Basra (three prov- inces), Kirkuk (two provinces) and Mosul (two provinces). A sixth divisional engineer is in charge of central operations in the capital. District engineers, usually stationed at the provincial capitals, are in charge of day-to-day maintenance. Planning is carried out at the headquarters of the Director General. There is a lack of technical staff to carry out surveys in the field. Except for this fact, the organization is efficient and effective. It may have to be expanded as the road construction program progresses. Pro- vincial governments and municipalities control secondary and urban roads and streets. At present the road system controlled and maintained by the Public Works Department consists of approximately 2,500 kilometers metalled and surfaced, 500 kilometers metalled only, 5,000 kilometers earth roads. Many of the metalled roads were built in the two war periods, and most of them are concentrated in the immediate vicinity of the capital, between Baghdad and the East and North, and in the North. All the roads in the southern plains are earth roads, and their maintenance and use suffers from the effects of rains on the salt-impregnated soil. Roads within municipal boundaries are gen- erally in a very poor state of repair, not excluding the streets in the capital. Roads in the Basra Port area are controlled and main- tained by the Port Directorate and are in good repair. Maintenance was, until a few years ago, extremely poor, but today every effort is being made, and with conspicuous success, at least to prevent further deterioration. Maintenance costs are allo- cated on the Ministry's budget and calculated at ID 40 per 328 THE ECONOMIC DEVELOPMENT OF IRAQ kilometer treated. For the present this appears to be about suffi- cient, but costs will increase as the system expands and traffic develops. On the completion of a metalled system of 7,000 kilometers, as planned, the costs would rise to approximately ID 70 per kilometer per year, a total of ID 490,000. Road Construction A program was drawn up in 1950 by a Committee appointed by order of the Minister of Communications and Public Works on February 7, 1950. The Committee consisted of the Directors Gen- eral of Public Works, State Railways, Irrigation, and Surveys, and the Chief Engineer, a British road expert from the London Min- istry of Transport temporarily attached to the Public Works Department in Baghdad. This Committee is a laudable example of departmental coordination, and the plan drawn up by the Com- mittee shows unmistakably the value of this cooperation. The program schedules 37 roads, of a total length of 3,463 kilometers, to be built, or improved as the case may be, in a period of 10 years at a total cost estimated at ID 14,500,000. Construc- tion costs are expected to vary from ID 3,500 to ID 7,500 per kilometer, including drainage, culverts, bridges and costs of super- vision. The program assigns first priority to the main trunk road, Baghdad-Kut-Amara-Basra, now an earth road, and the trunk road, Baghdad-Kirkuk-Erbil-Mosul, some sections of which are already metalled. The roads are to be built to accommodate two traffic lanes, together six meters (20 feet) wide with verges for pedestrians, pack animals and cattle. Specifications drawn up by the Public Works Engineers provide for three types of foundation-stone blocks, broken stone or gravel, eight to nine inches thick; and for two types of surfacing—bituminous macadam or graveled maca- dam, three inches thick. The program is sound and the specifications are effective. The Mission recommends that both be adopted as the basis of the future road construction plan, but with the following qualifications: 1. Although trunk roads like the Baghdad-Basra and Bagh- dad-Kirkuk-Erbil-Mosul arteries and a few others should have a metalled width of six meters and wide verges on each side, the initial width of metalled surface on other - TRANSPORT AND COMMUNICATIONS 329 roads should be kept to four meters until traffic develops. Even on the latter roads, however, space for six-meter lanes and wide verges should be set aside. 2. Earth roads with little or no traffic at present should initially be raised to 50 centimeters, or somewhat less than two feet, above surrounding levels, with proper grading but no metalling until traffic actually appears. In this category should be scheduled such sections as Baghdad- Kut on the right bank of the Tigris, Diwaniya-Ur and Samarra-Shargat. The materials used for foundations ought to be selected from those found in the area, so as to avoid long haulage Suitable stone or gravel or even broken brick of sufficient hardness appears to be found within at most 100 kilometers of any given road section. 3. All depressions styled “Irish Crossings” should be removed. 4. Railway bridges should be disallowed for use by road traffic in trunk roads. The first bridge to be duplicated should be the Baquba bridge. Feeder Roads Agricultural and forestry development areas need feeder roads to the nearest railway station or main road or both, and provision for them should be made in development schemes for these areas. For the most part this could probably be done by improving exist- ing country roads or tracks by grading, draining, and sometimes raising them. Good maintenance of these feeder roads is essential and might appropriately be assured by the provincial governments; generally only hand labor and a grader would be required. No hard surface is recommended for these roads. Assuming a total length of 8,000 kilometers for this system of secondary country roads, construction and maintenance of such a network would probably demand an expenditure of ID 100 per kilometer per year, i.e., ID 800,000 per annum in the initial period of five years. One problem remains to be solved. The Public Works Depart- ment has no trained or skilled technical staff to carry out detailed surveys of existing or new roads. It is all important that correct location, alignment, levels, gradients, transition curves, camber and cant, etc., be established and maintained. It is therefore recom- mended that competent consulting engineers be engaged to do the plans and surveys and supervise the first large-scale construc- tion, and that a nucleus of Iraqi surveyors be recruited to carry on 330 THE ECONOMIC DEVELOPMENT OF IRAQ the work in the future. The work should be carried out by con- tractors of repute. Since they will generally possess the appro- priate plant, it should not be necessary for the government to purchase any large amount of roadbuilding machinery. Traffic Road traffic is still extremely light in the country. As Table 6 indicates, the number of motor vehicles operating in Iraq is still very modest, and of this number most operate in or around the large cities. The personal observation of Mission members confirms that traffic density even on the most travelled roads is very low. TABLE 6 REGISTERED MOTOR VEHICLES Year Passenger Cars Buses Trucks Motorcycles n.a. n.a, n.a. n.a. 1942 1943 1944 1945 1946 1947 1948 1949 1950 4,522 4,333 3,972 3,771 5,902 7,422 8,678 9,601 11,438 n.a. 1,942 1,900 1,720 2,017 3,497 5,136 6,088 7,262 6,381 82 100 116 127 524 1,015 577 1,029 1,636 n.a. n.a. n.a. 3,007 n.a.-not available. Road Usage The improvement and construction of roads will undoubtedly bring about a rapid increase in road traffic in the future. It will then become necessary to regulate the usage of the roads. At pres- ent both the condition of the vehicles using the roads and their loading can only be described as extremely dangerous. On the many tours made on Iraq's existing roads, far too many of the very few vehicles seen on the roads were observed to be overloaded both with respect to the weight and to the height of the load. Top-heavy vehicles are particularly dangerous, especially on the sharply curved roads in mountains and gorges. Many bridges have been height- ened—often in a way which is unsound structurally—to accommo- date such vehicles. Vehicles unfit to operate endanger the safety TRANSPORT AND COMMUNICATIONS 331 of all road users as well as their passengers and cargoes. The expectation of increased road traffic makes it imperative that appro- priate measures of control be devised without delay. The following measures are suggested for adoption: 1. Construction of road weighbridges at suitable check points. 2. Compulsory inspection of all vehicles carrying passengers for payment and of all trucks before a periodic license is issued. 3. Appointment of qualified inspectors with sufficient author- ity and responsibility to ensure adequate enforcement of vehicle regulations. With the development of traffic on the new highways it will be necessary to introduce and enforce proper traffic rules and regu- lations. The Mission, therefore, recommends that a highway code be drawn up and that traffic police be instructed and trained in the application and enforcement of the code. Traffic conditions in the capital are at certain times of the day chaotic, even though city traffic is by no means dense. It would appear that, with training, the formidable force of traffic police now regulating the city's traffic could without expansion serve for traffic control on the country's highway system as well. It would pay the government to engage the services of a traffic expert, pre- ferably from a metropolitan police such as London's, for a limited period, to design the highway code and to instruct the traffic police. Public Road Transport It will become increasingly necessary to regulate public road transport of passengers and goods by a licensing system. If this transport is left entirely free and uncontrolled, chaos will be the result; too many operators are likely to engage in public transport, run their services on borrowed money, find their vehicles run down before the loans are repaid and end in bankruptcy. The country's economy will suffer both from the waste of resources involved in such uneconomic ventures and from the probable need of protecting the railways by subsidies from the consequences of such wasteful operations. A reasonable number of capable private operators should provide healthy competition among themselves and with the railway. 332 THE ECONOMIC DEVELOPMENT OF IRAQ Transport licenses should be granted only if the proposed operator appears responsible and sufficiently well equipped to per- form the transport services and if there is evidence of present or prospective need. Operators should be required to take out insur- ance, to adhere to published rates, routes and schedules, and to conform to loading regulations. Maintenance The maintenance of the new road system when once com- pleted is even more important than its initial construction. Service and funds must be assured to keep the roads in the condition in which they have been built. The Minister of Finance should budget for annual expenditures, to be estimated by the Public Works Department, for maintenance of the road systems and all accessories including sign posting, for improvements necessitated by increased traffic, for inspection and control of road traffic and for the traffic police required. The expenditures should, in general, be covered by revenue from those who actually use the roads. Subsidiary Roads and Urban Streets It is recommended that at the earliest opportunity a system of cooperation between the Public Works Department and provincial and municipal road departments be established to bring mainten- ance, traffic control and municipal licensing in line with the govern- ment's policy in these matters and that appropriate provision for this cooperation be made in the budget. City Transport An essential part of the country's transport system is passen- ger transport service in the capital. Baghdad and its suburbs form a city of a population of over half a million spread over an area with a radius of four to eight miles. In 1938 it was decided to establish a municipal passenger service to be operated with buses. The war intervened and limited services were brought into opera- tion in 1942 with converted army trucks equipped with locally built bodies. A loan of ID 500,000 was raised, more vehicles purchased and workshops and garages of sorts installed. The services deteriorated with the poor equipment, which was all that was avail- able in wartime, and the municipality was unable to carry the financial burden. Early in 1950 the service was taken over by TRANSPORT AND COMMUNICATIONS 335 the present sites, nor is surface transport by rail, road or water in any way hindered. Plans for removal of either airport away from the present site have been abandoned and ought not to be revived. Development Both airports are now scheduled to be built up to the speci- fications required for an International Civil Aviation Organiza- tion's Class B standard airport. The development projects embody the following works: 1. A runway of 2,500 meters to accommodate the newest heavy aircraft; 2. Navigation aids; 3. Communication, point to point, and ground to aircraft; and 4. Meteorological service. It is recommended that these projects be carried out without delay. Some of the work is under way; equipment has been pur- chased, some has arrived on site. Work on the runways is still to begin. At the Baghdad airport an entirely new runway, parallel to the existing one, should be constructed and the existing runway, constructed as a temporary structure five years ago and now show- ing signs of deterioration, used as an aircraft taxi-way. In addition to these projects already prepared and ready for execution, the present air terminal building at Baghdad, which has become too small, should be removed, and the wing of the new railway building facing the airport should be adapted for use as a new air terminal. The capital expenditure involved in the projects may be esti- mated at between ID 250,000 and ID 300,000 for all works at Baghdad and between ID 100,000 and ID 150,000 at Basra air- port. The latter expenditure appears to be within limits which can be financed from the Port's revenues. The former, however, will need to be financed out of the revenues of the Development Board. VII. Air Transport Since 1945 internal air transport has been assured as a part of air services to neighbor countries by the government-owned Iraqi Airways. The administration and management of Iraqi Airways are integrated with those of the State Railways, and for the sake 336 THE ECONOMIC DEVELOPMENT OF IRAQ of efficiency and economy this should remain so. The British Over- seas Airways Corporation acts as technical adviser, deputizes per- sonnel to the airways and trains Iraqi personnel. Iraqi Airways operate regular services between: Baghdad-Basra-Kuwait-Bahrein Baghdad-Damascus-Beirut Baghdad-Damascus-Cairo Baghdad-Teheran. The first route serves as an internal traffic link. The fleet consists of four aircraft: three Vikings and one Dove. In addition to the regular service, special flights with chartered aircraft assure sea- sonal traffic of pilgrims. The first route serves as an internal traffic link. The fleet consists as is indicated in Table 8. The financial results, however, leave much to be desired. The operating accounts shown in Table 9 reveal substantial deficits which have been met from the State Rail- ways' revenues. The Railways have also paid the initial capital outlay of ID 259,976 for aircraft and ground installations. TABLE 8 AIRWAYS TRAFFIC Regular Lines Traffic Excess Baggage Ton Miles Mail Ton Miles Passenger Journeys Cargo Ton Miles Pilgrims Charter Passenger Miles Year Mileage 1945-46 1946-47 1947-48 1948-49 80,953 .669,083 .779,159 .846,810 559 6,386 12,397 15,237 709 11,456 26,694 30,838 0 2,495 9,314 8,774 86 12,757 64,087 98,792 7,770 104,072 175,563 608,957 TABLE 9 AIRWAYS BUDGET (in dinars) Year Cash Revenue Cash Expenditure Deficit 1945-46 1946-47 1947-48 1948-49 1949-50 5,504 89,130 106,580 265,024 257,280 13,587 133,719 187,600 302,470 363,172 8,083 44,589 81,020 37,446 105,892 1 TRANSPORT AND COMMUNICATIONS 337 Future Developments It must be expected that Iraqi Airways will continue to operate at a loss for some years to come. This should be accepted because the air services serve a real traffic need and there are rea- sonable prospects of reducing and perhaps ultimately eliminating operating deficits. The Airways Accounts are separate from the Railway Accounts and the steps recommended in the Palmer Report for complete separation of the finances of the Railways and the Airways should be adopted. There is no reason why the Rail- ways should be expected to defray the deficits of the Airways. There appears to be room for expansion of services in the area where Europe, Asia and Africa meet; and the government should encourage Iraqi Airways to play an increasingly important part in air traffic in this area. Internal demands appear to be negligible at present but may be expected to develop in conjunction with extended international services. These services appear to present an opportunity for far-reaching economies through closer coopera- tion between Middle Eastern airlines in their services, their admin- istration and agencies outside the home countries. VIII. Post, Telegraph, Telephone, Radio Communications Organization Responsibility for communications is concentrated in the Directorate General of Postal, Telegraph and Telephone Services in the Ministry of Communications and Public Works. Iraq is a full member of the International Postal Union and the communica- tions services of the country, including their tariffs, comply with the standards of the Union. The number of post, telepragh and telephone offices has devel- oped as follows: TYPE OF OFFICE 1940 1951 24 hrs. service....... 14 46 16 hrs. service.............. 12 12 hrs. service............ 18 4 7 hrs. service.... 42 54 Local and rural agencies.... 155 171 37 338 THE ECONOMIC DEVELOPMENT OF IRAQ Mail is carried : on regular railway routes......... 1,604 kilometers on contractors' routes (road)..... 3,010 on occasional routes (roads, tracks) ................. 1,214 by air............... ..a maximum of 14 daily routes The only recommendation to be made regarding these services is to speed up air conveyance by moving the sorting center at Basra from Basra town to Magil. Communications with other countries are as follows: Postal services to all Union countries. Telegraph and telephone with: Iran by land lines, Turkey by land lines, Syria by wireless telegraph and land line telephone, Transjordan by land lines, Lebanon via Syria, Saudi-Arabia by wireless telegraph, Yemen by wireless telegraph, Egypt by wireless telegraph (two services, government and Marconi), Tangiers, relay point for wireless telegraph overseas, United Kingdom by direct wireless communication (projected). A British submarine cable from Fao to Karachi-Bombay has been out of operation since 1950. Repairs are not contemplated, and wireless telegraph has been substituted. Internal Communications Trunk lines and carrier lines connect the towns and villages of any importance, and outlying villages and police posts are con- nected by wire from nearest exchanges. The telephone network is being continuously expanded, generally keeping up with demands. A new transmitter and a new broadcasting station have recently been installed near Baghdad. The Mission suggests that an independent or at least auxiliary power plant be provided for the newly-built transmitter. A break- down in the power supply, now assured by a long, open air trans- mission line, would have serious consequences. The PTT service is a revenue earning department, but the revenues accrue to the government treasury so that all expendi- tures must be authorized by the government's annual budget. Operating revenue and capital expenditures are shown in the fol- lowing table. 1 11 TRANSPORT AND COMMUNICATIONS 339 TABLE 10 FINANCIAL ACCOUNTS OF PTT (in dinars) Year Operating Revenue Operating Expenditures Capital Expenditures 1940-41 1941-42 1942-43 1943-44 1944-45 1945-46 1946-47 1947-48 1948-49 1949-50 1950-51 434,979 481,809 626,356 669,057 712,865 748,110 857,200 991,741 992,049 1,119,478 1,154,000 243,684 298,688 250,161 447,110 392,764 449,238 522,078 587,913 596,720 747,193 799,675 84,590 25,931 10,171 23,688 3,445 18,554 42,810 303,355 349,046 298,510 600,000* sanctioned Developments Major development projects are chiefly directed toward extensions of telephone communications, increased trunklines and carrier lines between the large centers, telephone lines to rural areas, and telephone exchanges to cope with the increased number of subscribers. The telephone equipment is ordered abroad, and the buildings are provided by local action. However, coordination between the two is almost completely lacking. Equipment more often than not arrives in Iraq before buildings are ready to receive it. Equipment is stored and maintained, in some cases for more than a year, waiting for the buildings to be completed and even, on occasion, to be started. This fact gives rise to the Mission's single important recom- mendation in the communications field. Basically the PTT service should be given responsibility for the proper coordination of capital expenditures on communications no matter how financed. It has sometimes been suggested that the best means to this end would be to make the PTT financially autonomous so that it can spend its operating surpluses on capital development at its discretion. The Mission does not believe, however, that this would be the appro- priate solution. In the last analysis the amount and rate of invest- ment in communications facilities should be determined by the 340 THE ECONOMIC DEVELOPMENT OF IRAQ Development Board which is responsible for coordinating the development program of the country as a whole. The Board should also provide the financial means but leave to the PTT responsibility for execution of communications projects. IX. Pipelines Inconspicuous, but most important, in Iraq's transport and communications systems are the oil pipelines. The existing lines are: a dual line, 12 inches and 16 inches, from the Kirkuk oilfields to Tripoli, the Lebanese Mediterranean port; a 12-inch line to Haifa in Israel, closed in 1948; and a new 30-inch line under con- struction between Kirkuk and the Syrian Mediterranean port of Banias. A short line runs from the Basra oilfields at Zubair to the shipping stage at Fao. The pipelines carry a tonnage of oil which far outstrips the total carried by the country's railways. They are operated, maintained and expanded by the oil companies, and need only be mentioned to complete the picture of Iraq's transport system. X. Surveys No development in any branch is possible without maps and surveys. The Directorate General of Surveys, which is under the Ministry of Communications and Public Works, has surveyed and mapped the southern part of the country aside from the desert to scales varying from 1:5,000 to 1:50,000. Few topographical sur- veys have been carried out in the rest of the country, and the exist- ing maps are not very reliable. The education and training of competent surveyors is difficult. Terms of service are not attrac- tive to young engineers and surveyors who find better prospects in engineering, planning and construction work. Air surveys can, to all practical purposes, solve the problem and progress with them is now being made in the North. The skilled surveyors who are available are at present employed in cadastral work, land settlement surveys and mapping to fix the demarcation of land ownership. TRANSPORT AND COMMUNICATIONS 341 It is expected that once this work is completed, the personnel problem will ease somewhat. The development program of the service provides for a sur- vey and mapping to a scale of 1:20,000 at an estimated cost of ID 200,000. For the appropriate housing of the service, a new building with 10,000 square meters of floor space is now under construction and is expected to be completed in January or Febru- ary 1952. This will facilitate administration of the service which is now scattered in three widely separated buildings. The new building will also house the up-to-date printing plant ordered in Great Britain. Funds for building and plant have already been sanctioned. Air surveys now in progress should be continued at an annual cost of approximately ID 40,000. XI. General Observations Teamwork Not only the development of the transport services but also the general development program, with all its implications of temporary and seasonal demands for transport of construction materials and imports of machinery and plant, will materially affect the tasks before the transport managements. The teamwork in the existing transport departments is exemplary. It is therefore emphatically urged that no change be made in the present organi- zations and their leading personnel until after the main develop- ment programs are completed. Intermediary Staff In all the transport services there is a great dearth of inter- mediary staff-foremen, inspectors, surveyors, supervisors, and the like—for whom practical training in workshops and on construc- tion sites is far more important than school or college education. In all transport development projects, special courses should be provided to train adaptable Iraqi apprentices under skilled teachers in shops, factories and on tracks and roads in the country. These observations apply to all forms of transport, port, rail- ways, roads, airways and communications. Unless continuity is maintained with a gradual, cautious transfer of responsibility from foreign to Iraqi personnel, efficiency will be seriously jeopardized. 342 THE ECONOMIC DEVELOPMENT OF IRAQ XII. Projected Cost of Proposed Programs The projects recommended for consideration are summarized below as to cost and time of realization. The total cost which the Development Board might have to defray over the next five years would be approximately ID 31,000,000. TABLE 11 Cost OF TRANSPORT AND COMMUNICATIONS PROGRAMS SUGGESTED FOR DEVELOPMENT BOARD FINANCING Project Costs (in dinars) Period (years) 2,000,000 4 Token 2 143,000 100,000 1 1 213,770 341,000 500,000 6,300,000 6,000,000 1 4 5 5 6 14,500,000 4,000,000 Token PORT New channel INLAND WATER TRANSPORT Study of river training by experts.. RailwAYS Baghdad Station commitment......... Baghdad new layout, provisional.... 22 continuation and completion projects under way labor quarters Rehabilitation and modernization projects......... Renewals including diesel traction...... Extra for gauge conversion (tentative) ......... Roads Trunk road system....... Secondary road system... Road transport control. URBAN TRANSPORT Baghdad transport services, workshops, garages and vehicles AIRPORTS Baghdad development Basra development AIRLINES Iraqi Airways Post, TELEGRAPH, TELEPHONE, Radio Telephone extensions and buildings (if not financed from Communications budget).......... Auxiliary power plant for transmitter........ SURVEYS AND MAPPING Air surveys a On assumption of gauge conversion. b To be financed by Port of Basra. 10 5 1 500,000 3 300,000 2 2 b 600,000 4 300,000 30,000 Annually 1 40,000 Annually APPENDIX A IRAQI STATE RAILWAYS REVISED LAYOUT BAGHDAD RAILWAYS & ROADS IN NEW TOWN PLAN RAILROADS ROADS 2:2 ROADS TO BE N MA QIL 0.5 LO MILES 0.5 1.0 KILOMETERS MOSUL 344 THE ECONOMIC DEVELOPMENT OF IRAQ APPENDIX C Additional Railway Projects 1. Railroad bridge across Tigris at Baghdad—completed and financed. 2. Kirkuk-Erbil line-ID 100,000 required of which ID 85,000 for land already occupied. 3. Musayib bridge—ID 3,500 for land occupied, but not yet paid for. 4. Machinery for workshop-ID 11,000 for installation of plant already purchased and paid for. 5. Railway station and headquarters-ID 143,000 commitment plus ID 100,000 for provisional plan. 6. Rolling stock—no allocation required. 7. Crane-no allocation required. 8. Labor quarters-ID 341,000 required to be spread over three to four years. 9. Signalling-ID 4,620 for installation of equipment already procured. 10. Workshop extension-completed. 11. Power house—ID 4,700 for installation of plant already procured. 12. Aircraft to be provided for under air transport allocations. 13. Construction of stations-not urgent. 14. Construction of officials' quarters—not urgent. 15. Army assets-completed. 16. Land already purchased for station extensions-ID 41,000 for two years. 17. Shamiya station-scheme abandoned. 18. Electric plant-ID 12,000 for installation of plant already procured. 19. Accounting machines—ID 20,000. -- TRANSPORT AND COMMUNICATIONS 345 20. Electric plant-ID 6,050 for installation of plant already procured. 21. Permanent way—ID 5,000 for installation of plant already procured. 22. Weighbridges—ID 5,900 for installation of plant already procured. 346 THE ECONOMIC DEVELOPMENT OF IRAQ APPENDIX D Notes on Conversion from Meter to Standard Gauge of the Basra-Baghdad-Erbil Main Line and Branches The conversion plan, if carried out, should establish an approximate D-day of conversion for the Basra-Baghdad line five years ahead and a second D-day of conversion for the Baghdad- Erbil line in the following year, i.e. in six years' time. As a preliminary step there should be a careful survey of the number of tracks in yards, loops and sidings in stations which are unused or in excess of requirements, so that the conversion can be concentrated on tracks and sidings truly necessary. The conver- sion mileage can thereupon be determined. A further preliminary step would involve a study of revised timetables, which take account of the new form of traction and the reduction in motive power units and rolling stock resulting therefrom. The conversion will require the substitution of standard-gauge sleepers for the entire length of track to be converted from meter gauge. On certain sections this will involve broadening of the existing earth or stone ballast bed. On some bridges slight struc- tural alterations to longitudinal girders may also be necessary. No other substitution or expansion is required for the conversion since any strengthening of the track by new rails, new turnouts, stone ballast or earth, etc., should properly be considered a replace- ment or development requirement, not a conversion requirement. The conversion will also require the substitution of standard- gauge rolling stock for existing meter-gauge stock. New diesel locomotives will in any case be required by the change-over to diesel traction, and since carriage and wagon bodies have been built to standard-gauge dimension, the only change rolling stock conversions will require is the substitution of standard-gauge undercarriages for the existing meter-gauge. Any replacement, renewal or expansion of rolling stock carried out at the same time should be considered, therefore, a development rather than a con- version requirement. TRANSPORT AND COMMUNICATIONS 347 The raising of platforms and loading bank levels may be con- sidered a conversion requirement, but it is not an essential part of conversion, and it may, in most stations, be postponed or even dispensed with. Buildings, fencing, signalling, communications sys- tem, water supply, power plant and machinery are, for the most part, not directly affected by the conversion. To the limited extent that they may be affected, as in the case of machinery and stores, there is a reduction, rather than an expansion, involved. The two D-days for conversion should be determined inside two successive years' seasons of low traffic. The conversion pro- gram before and on D-day, and the completion program after D-day are scheduled in outline in the following paragraphs. Standard-gauge sleepers in the existing track scheduled for conversion after the survey prescribed earlier should be substituted for meter-gauge sleepers, over as long a period as practicable, well in advance of D-day. This can be done by the ordinary mainte- nance gangs, strengthened where required, in slack periods. Special gangs or contractors, or both, should proceed to put out of service approximately half the number of sidings in the yards and wharves, etc., at Magil and Baghdad, and at the most important intermediate stations bring these to standard gauge. At each crossing station which has more than one crossing loop, one or more loops would be put out of service and similarly converted, including the turn-outs at either end, in or by the side of the track. If agreement is reached on remodelling of the yards in Baghdad-West, the new yards will need to be built for standard gauge, leaving the abandonment of the meter-gauge yards until after the conversion. Some days before D-day a proportion of the rail fastenings in the remaining track would be loosened, and key turnouts at entrances and exits to stations and yards built at the side of their final position. On D-day the conversion would be carried out with might and main over the entire length of the line, joining the already con- verted halves of yards and at least one loop at crossing stations, all within an allowed space of not more than 24 hours. 348 THE ECONOMIC DEVELOPMENT OF IRAQ The special gangs and contractors would then continue to convert the remaining halves of yards and loops and remove sur- plus sidings. Rolling stock and locomotive requirements will have to be met as follows: 1. Motive power. Diesel engine types will have to be ordered forthwith for standard-gauge trial. After a suitable period of trials under all conditions and circumstances, including try-out of alterations resulting from the trials, the order for the full requirements must be placed so that delivery of the absolutely essential number of units can be made before the two D-days of conversion. 2. New rolling stock. No new rolling stock for meter- gauge lines should be ordered from the day the conversion is decided upon, and new units of coaching stock and wagons which would have been ordered under the meter-gauge renewal program will need to be ordered for standard gauge. The number should be increased so as to cover a renewal program of 10 years concentrated in a period of five years. 3. Conversion of old rolling stock. With due regard to the reduced number of coaching and wagon units as calculated by the preliminary survey, any deficiency remaining after the provisions outlined under paragraph 2, will have to be met by rebuilding of meter-gauge to standard-gauge stock from existing bodies on new undercarriages. New standard-gauge rolling stock imported through Basra port should be held at Basra on the converted portions of wharves and yards in readiness for operation from D-day. Converted stock, handled at Baghdad workshops, plus the surplus now existing on the standard-gauge line, is to be similarly held ready at the Baghdad end. Traffic must be interrupted for a few days before D-day, prob- ably three days or less in the down direction and one day in the up direction. These days must be used to bring all meter-gauge stock, except the units to be sold or scrapped, under load or empty from Magil to Baghdad for use on the Erbil line. All units to be sold must be brought to Magil before D-day. This process will already have started several weeks before by a judiciously planned distribution operation. Both the public and the trade must be warned in advance so that traffic, though interrupted for a few days, need not suffer. TRANSPORT AND COMMUNICATIONS 349 The same procedures, on a far smaller scale, would be repeated a year later on the Baghdad-Erbil line. In the planning arrange- ments outlined above the estimates of costs may be calculated in considerable detail. The cost of conversion of track and accessories will consist of (1) the actual cost of labor, materials and supervisions involved in the operation of 800-plus miles of standard-gauge sleepers, less the cost of 10 years' replacement of meter-gauge sleepers and the scrap value of removed meter-gauge sleepers, and (2) the cost of widened earth or ballast section and of some structural altera- tions to bridges. The difference in cost between the 75-pound rails required for standard gauge and the 60-pound rails that would otherwise be used for renewals might also be included, although this item is not a real conversion cost. There is no doubt that developments in any case would demand heavier rail than 60- pounds even if the meter gauge is retained. The conversion cost in terms of motive power and rolling stock will consist of (1) the difference in cost of standard-gauge and meter-gauge diesel locomotives; (2) the difference in cost of standard-gauge and meter-gauge coaching stock and wagons scheduled for renewal; and (3) the cost of extra standard-gauge rolling stock required to reach the numbers necessary for operation. From the costs so calculated must be deducted the saving in new procurement resulting from the smaller numbers of locomo- tives, carriages and wagons as standard-gauge and former meter- gauge stocks are pooled. The resulting savings in maintenance and renewal costs will accrue over a period of 15 to 30 years during which old stock will be completely replaced by new stock. Finally an attempt should be made to assess in some detail the savings in operation, maintenance, warehouses, stores and administration generally resulting from the conversion; also the saving in transshipment costs plus the increase in revenues from the larger traffic which will undoubtedly develop once transship- ment has been abolished. One further factor will affect the cost of rolling stock. Standard-gauge wagon stock should comply with the requirements of the European Wagons Union (RIV) but the designs should follow the existing simple standards of meter-gauge rolling stock. 350 THE ECONOMIC DEVELOPMENT OF IRAQ The wagons of most European railways, including the present standard-gauge wagon stock of Iraq State Railways, are unneces- sarily luxurious and far too heavy for Iraq's needs. The railways' traffic consists largely of smaller than bogie load consignments, and the four-wheeled wagon type should be retained in preference to a switch to bogies stock. 352 THE ECONOMIC DEVELOPMENT OF IRAQ also frequent causes for hospitalization. In 1949 there were 5,876, 336 visits to health institutions for treatment. Public Health Budget In 1951-52, ID 2,089,180 (7.6 percent of the total budget) were allocated to health services, as compared to ID 187,672 in 1931. Because of the prevalence of endemic diseases and the con- stant danger of epidemics, it would not be unreasonable to spend 10 percent of the total budget on health services. Salaries for personnel in the medical service appear to be low in relation to the cost of living, although they are not low compared to other civil service salaries. The basic salaries, exclusive of cost- of-living allowances, range from ID 5.15 a month for a dresser, to ID 25 for a doctor and ID 80 for a director-general. Current Health Conditions In spite of the undeniable progress in health conditions, there is need for further improvement. Definitive data are lacking on total birth and death rates, but some figures are available on the infant mortality rate, which is probably the best index of the social circumstances of an area. For Baghdad, the recorded rate in 1949 was 128 deaths per thousand births. Iraqi doctors who have worked in different parts of the country consider the rate to be about 250 per thousand, on the average, compared with about 34 deaths per thousand live births in highly developed countries. Among the people as a whole, malaria seems to be the chief killer, especially in country districts. In the main cities the lead- ing causes of deaths were intestinal diseases, tuberculosis and respiratory diseases. These diseases and trachoma seriously affect the ability of men and women to work efficiently and are among the major causes of low productivity of labor in Iraq. For example, candidates for the police service are frequently rejected because of defective eyesight and what is characterized as “poor physique" associated with chronic malaria, schistosomiasis, etc. About 20 percent of the young men liable for military service are found to be unfit. Heart trouble, cancer and other organic disturbances are far outnumbered by diseases which are essentially social in origin. Most of them can be traced to lack of hygiene, poor sanitation and PUBLIC HEALTH 353 congested living conditions combined with a coarse and monoton- ous diet. In common with many other countries, there has been a drift to the towns, and unsanitary slums have formed on the outskirts of some cities. Steps should be taken to improve the living conditions of these slum dwellers. So far sewers and sewage disposal are generally lacking in the cities and towns. Baghdad has septic tanks and cesspools, but there are still some open drains; most of the larger towns have similar systems of sewage disposal but condi- tions in the smaller towns and villages are still very primitive. The disposal of household refuse and the cleaning of streets are generally well carried out in the bigger cities but not in most towns and villages. Constant pilgrimage traffic creates another problem in public health. The holy shrines of the Shia sect of Moslems are in Iraq and a large number of Iraqis are members of this sect. There is a continuous stream of travelers through the country, including both Iraqis and foreigners, mostly Iranians, visiting the holy shrines, and Iraqi and foreign pilgrims on their way to Mecca. All this traffic exposes Iraq to the dangers of imported epidemic disease and stringent quarantine regulations have been enacted. But the land frontier with Iran is so long that it is quite certain many incoming pilgrims never are subjected to any control measures. This means that Iraq needs internal preventive services of the highest possible standard. Currently, all pilgrims leaving Iraq for Mecca are vaccinated against smallpox and inoculated against cholera. The need for greater emphasis on preventive measures stands out clearly in even a brief analysis of the most debilitating diseases and their causes. Intestinal Disorders Ankylostomiasis (hookworm disease) in itself produces anemia. Many patients are so weak by the time they reach a hos- pital that they require lengthy treatment. It thrives in an unsani- tary environment characterized by inadequate sewage disposal, open drains, and lack of proper latrines. Incomplete surveys indi- cate that it is most prevalent in the South. 354 THE ECONOMIC DEVELOPMENT OF IRAQ Ascaris, caused by round worms living in the intestinal tract, is found particularly in the North. Sewage disposal is the worst offender in this case; the custom of using the contents of cesspools as manure for vegetables is probably among the chief factors in spreading the disease. In the case of the dysenteries, the incidence has been cor- related with fly-breeding seasons, and is thus generally lower in winter and in August and September. Many Iraqi doctors main- tain there are now fewer cases of dysentery in those cities in which pure water supply systems have been installed. Unlike dysentery and typhoid fever, enteritis common throughout the land and particularly among infants—is, in the opinion of Iraqi doctors, as common as it ever was in spite of some sanitary improvements in the cities. Malaria The desert climate prevailing over the greater part of the country is not in itself conducive to the breeding of mosquitoes. Man-made conditions, specifically irrigation projects, are largely responsible for the breeding of the disease-carrying mosquitoes, especially in the central plains where they thrive in seepage water, open pools and the small irrigation channels of the date palm gardens. There can be no doubt that every year malaria causes many deaths (estimated by Iraqi doctors at 50,000 a year), much sickness and permanent disability and, consequently, immense loss to the country. It must also be remembered that malaria is com- monly associated with schistosomiasis (carried by the snail thriving in polluted water) and ankylostomiasis, causing widespread anemia and debility. Malaria is therefore of profound significance to the economy of Iraq. Tuberculosis Although the total population is not large, many parts of the country are, even in the villages, densely populated. In a poor district of Baghdad and in many villages an average of 4.5 persons live in one room. Iraqi doctors are generally of the opinion that tuberculosis is increasing in the country although there are no PUBLIC HEALTH 357 Additional provision for reconstruction of the Karkh and Kut Hospitals... .ID 200,000 Repairs to the Maude Hospital (Basra), Amara Hospital, Erbil Hospital and Suleimaniya Hospital 250,000 Infectious disease blocks for the Erbil and Mosul Hospitals 65,000 Maternity block for the Hilla Hospital............... 25,000 Laundry for Diwaniya Hospital............... 12,000 Additional wards for Mosul and Kirkuk Hospitals 80,000 Completion of Mental Diseases Hospital......... 250,000 Additional provision for operating facilities at Royal Hospital 50,000 Children's Ward at Royal Hospital. 40,000 Maternity block at Royal Hospital.. 40,000 Dental equipment for hospitals........ 20,000 Total .ID 1,032,000 As it becomes possible to devote more attention to increasing facilities for treatment, priority should be given generally to the construction of additional dispensaries in the rural areas. Doctors At present there is about one practicing doctor to every 7,000 of the population, but many of the doctors are concentrated in Baghdad. Only about 35 doctors are now being registered annually, but with increased accommodations and more laboratory facilities, it will be possible to enroll more students so that at least 50 will qualify as doctors annually. This number may be sufficient for Iraq's needs, provided that an adequate number of suitably trained health officers are available for service in village dispensaries and that nurses and dressers receive more training. Doctors receive their training at the Royal Faculty of Medi- cine, which was founded in 1927. The syllabus and teaching seem, on the whole, to be good. They emphasize adequately the study of the endemic diseases, although they do not give enough weight to the teaching of public health and preventive medicine. The recent appointment of a professor of public health should give a better balance to the program of instruction. Public health as such should probably be taught as a postgraduate course. It would include such subjects as public health administration, public health 360 THE ECONOMIC DEVELOPMENT OF IRAQ An estimate of the cost of the full scheme follows: (a) CAPITAL (1) Quarters for women nurses.. .ID 125,000 (2) Demonstration rooms 28,000 (3) Quarters for foreign sisters'. 80,000 (4) Equipment, etc. 7,000 ID 240,000 (b) RECURRENT Salaries for foreign sisters (only) ................ID 37,000 Training schools are also necessary for hospital storekeepers, laboratory assistants, radiographers and probably for physiothera- pists and dispensers. Storekeepers should be appointed to every hospital to preserve equipment and to check the use of expendable items. Dressers, who are already familiar with the names of many articles used in hospital work, would probably be the most suitable candidates for training. The schools could be started with the existing staff and facilities of the Royal Hospital and of the Central Medical Stores, and as each trained group is ready to go to work an appropriate pay scale ought to be established for them. Pharmacists and Medical Supplies A School of Pharmacy and Chemistry was founded in 1936. The five-year pharmacy course is comprehensive and the facilities for teaching, including laboratories, are good. So far 218 pharmacists have qualified from the school but many have gone into private work and only 64 remain in govern- ment service. Apparently the salary paid to a pharmacist working in a private shop is at least twice as high as that paid by the gov- ernment. Further, a number of qualified pharmacists have recently left the country. With the existing accommodations the school can graduate about 20 pharmacists annually. Meanwhile there are only 64 pharmacists working in the 89 hospitals and in some hospitals the dispensing, including that of poisons, appears to be carried out entirely by health officials. * It is estimated that 37 foreign nursing sisters would be required : 27 for the 14 provinces (there is already one in Basra); five for the Royal Hospital at Baghdad; and five additional for replacements during sickness and leave. PUBLIC HEALTH 361 Pharmacists are licensed by the Director General of Health. An Inspector of Pharmacies inspects private pharmacies, although it would appear reasonable to place the supervision of these phar- macies more directly under the local chief medical officer. Certain drugs, such as the anti-biotics and sulphonamides, are supplied in most countries only on a doctor's prescription. In Iraq, however, these drugs can be freely obtained at any pharmacy. Hospitals at times suffer from a shortage of drugs owing to the limited funds made available by the government. Thus patients admitted to hospitals sometimes have had to buy drugs for them- selves from pharmacies in the towns. It is to be hoped that future budgetary provisions will be sufficient to supply hospitals with the drugs necessary for their work. Under the present system, local hospitals send their requisi- tions to the Director General of Health, through the chief medical officer of the province. These requisitions are scrutinized by the Director of Supplies, who passes them on to the Director General of Health for authority to issue the supplies required. The issues are then made direct to the hospital concerned. It seems that most medical supplies—although by no means all-are purchased from the Crown Agents of the British Government. The central sup- plies are kept in Baghdad in what seems to be an orderly and well- run department. There is at present some congestion in the drugs and dressings section, and new buildings are required to provide adequate space for the many items stocked. Because Iraq is a country of great distances with many scattered villages and hamlets, during certain seasons of the year small communities may be cut off from medical aid by snow, rain and mud. It is not possible to place hospitals and dispensaries within easy and certain reach of all people throughout the year. There are, however, many simple household remedies such as the anti-malarial drugs, aspirin, DDT powder, iodine and Epsom salts that could be put up in suitable packages with full directions for use. It is suggested that the government package such remedies for sale in village shops at a price within reach of the local people. PUBLIC HEALTH 363 chiefly at the prevention of mosquito and fly breeding and the cleaning up of conspicuously unsanitary conditions. House-to-house inspectors are necessary only in towns with a population of over 25,000, which means some 250 inspectors would be required. The 134 health inspectors already employed could form the nucleus of this group and it should not be difficult to find recruits with at least elementary school training. The sanitation overseers would supervise the work of the house-to-house group and would also undertake a wider range of sanitary inspection, including restaurants, foodstuffs supplies, etc. Probably 100 overseers would be enough, and a one-year course should be sufficient to train men for the job. Candidates for training should be drawn, as far as possible, from the ranks of the house-to-house inspectors. A number of sanitation inspectors, about 50 in all, would be required to take charge of districts, to supervise the work of sanitation overseers and the house-to-house inspectors, and to advise on all matters concerned with environmental hygiene in their districts. Candidates for this job would need a sound, gen- eral education (i.e. completion of the full intermediate school course) and would require not less than two years of training which would include practical sanitation work of all sorts. Train- ing schools for these inspectors should be set up by a foreign sani- tation expert, preferably one with knowledge of and experience in the Middle East. Some buildings will also be necessary, at an estimated capital cost of about ID 10,000.2 Training of Midwives Midwives, who by the nature of their work have free entry into village homes, are among the most important potential health workers. It is they who can give acceptable advice in the home and consequently they could do a great deal to improve health con- ditions in the villages. Although 803 midwives are licensed to practice, scarcely any of them in either cities or villages have * The recurrent cost of operating the school would be about ID 2,000 yearly. The recurrent cost of the sanitation service when fully organized might be approximately ID 75,000 annually. 364 THE ECONOMIC DEVELOPMENT OF IRAQ received training of any sort. In Baghdad there is a government maternity home but it has had very little to do with the practic- ing midwives. It is presently estimated that 900 midwives are needed in the villages, 300 in the towns and 80 in the hospitals. In order to take into account the great difference between conditions in the towns and villages, it would be desirable to institute two courses of training : 1. A one-year course for literate girls and women who will become midwives in urban populations and fill govern- ment posts; and 2. A course lasting approximately six months for illiterate (or largely so) practicing midwives who, after training, will return to their own villages. A few Iraqi women have taken a course in midwifery outside of Iraq and these women, together with three foreign midwives, could serve as the teaching staff at the outset. An estimate of the staff and buildings required and their cost follows: (a) SCHOOL FOR Town MIDWIVES: 1. Staff: three staff midwives, one director, cook, etc. 2. Buildings : quarters for 20 pupils, 10 maternity beds, etc. 3. Capital cost : ID 40,500 Output-20 trained midwives a year. (6) SCHOOL FOR VILLAGE MIDWIVES : 1. Staff : three staff midwives, one director, cook, etc. 2. Buildings : quarters for 15 pupils, six maternity beds, etc. 3. Capital cost: ID 31,500 Output—30 village midwives annually. (c) ONE PRINCIPAL FOR THE SCHOOLS Establishment of Village Health Centers Iraq is a country of scattered villages and hamlets and of great distances; to bring medical aid, however simple, to the great- est possible number of people it would seem wise to increase the number of dispensaries as staff becomes available. It might even be possible to attach some mobile dispensaries to the larger sections of the nomadic tribes. The village dispensary should become a center for all health activities in the area. Not only should the health official (or medi- PUBLIC HEALTH 365 cal assistant) treat simple conditions--and he could well treat cases of most of the major endemic diseases—but he should also be the village "sanitarian". The village midwives should be based at the health center and draw their supplies there. Vaccination against smallpox-of prime importance in Iraq-and other protec- tive innoculations could, as required, be carried out in the centers. Later, public health nurses could be added to the center staffs. The number of health centers must necessarily depend, among other things, upon local population density, distances and means of communication. Visiting doctors from the hospital to which the center is attached could call at regular intervals to see special cases referred to them by the health official. By such means as these, medical assistance and advice could be brought within reach of most of the people and the best use be made of the doctor's services. At present the district or qadha doctors have no means of transport to visit dispensaries. The additional health officials who would staff these centers could be selected from among the hospital dressers. Since these men have already had considerable clinical experience, it should be possible to train them in about a year. Because they are much closer to the village people than the visiting doctors, they can do a great deal to help the local people. One Iraqi doctor stated that an experienced and happy health official can do better work in a village than an unhappy and disgruntled newly-qualified doctor. There are about 400 dispensaries at present, some of which are staffed only by dressers. Assuming 20 medical assistants can be trained annually, it should be possible to staff all the present dispensaries and 200 new ones with medical assistants in less than 20 years. The buildings and staff now used by the School for Health Officials (founded in 1932) could equally well be used as a training school for medical assistants. Training of Public Health Nurses As soon as some midwives have been trained, a program should be started for the training of public health nurses. These women would hold positions of considerable responsibility, and every candidate for the course should already be a trained nurse and a midwife. 366 THE ECONOMIC DEVELOPMENT OF IRAQ Expansion of Health Education Iraq has a small, wealthy upper class and a small middle class. The great majority of the people are poor and ignorant, most espe- cially in regard to health measures. Health education is badly needed and there is no doubt that the people would respond readily to teaching. Large groups enthusiastically attended all the shows put on for the health week held in Diwaniya province; competi- tions for the best eating-house, butcher's shop and barber's shop were keenly contested and visitors thronged to see the model house and the medical exhibition. The oil company in Kirkuk employs a British sanitary inspector and the Railways Administration in Baghdad recently sent their Iraqi sanitary inspector to take a course of study in the United Kingdom. The response of the householders in these places to sanitary measures is striking; their pride in their homes is obvious and the absence of flies conspicuous. To begin with, every doctor should have a thorough under- standing of the relation of environmental factors to disease. Greater emphasis on the teaching of preventive medicine and particularly of social medicine in the medical school, as has already been recom- mended, would help to inculcate a wider appreciation of the importance of the preventive outlook in all medical work. Like doctors, nurses have a unique opportunity to teach their patients, and personal and domestic hygiene should take their proper place in the training courses for nurses. Every hospital should be an object lesson in hygiene and every patient should learn by his stay in it. Health education must be given an important place in the curriculum of the teachers' training schools, and special courses in the prevention of the diseases associated with irrigation and culti- vation should be included in the syllabus of the School of Agri- culture and of the School of Engineering. Hygiene is already taught in the schools but ought to be given greater emphasis. Personal hygiene is essentially a matter of habit formation and young school children should be trained in good habits as a daily routine. Special classes could be given in the prevention of the main endemic diseases-possibly, in some cases, by the school medical officer. It is for the Health Department to 368 THE ECONOMIC DEVELOPMENT OF IRAQ The most important links with the people are, of course, those who belong to them and who work anong them: that is, the dispensary medical assistants and midwives in villages and the midwives and public health nurses in the towns. Maternal and child welfare centers in towns could also provide health education. There are already a few centers operating in Baghdad but there is a great need to open more centers throughout the country as soon as trained staff are available. The proposed house-to-house inspec- tors, sanitary overseers and sanitary inspectors could all be most valuable teachers. There is no doubt that health weeks would stimulate great interest and health exhibits could be included in agricultural and other shows (e.g. to display measures designed to prevent the spread of malaria, schistosomiasis, etc.). Travelling vans giving filin shows might also be of some use. Elected public health committees of the village elders, advised by the medical assistant or visiting doctor, might do much to improve conditions in villages. Mobile dispensaries should include in their staff a sanitary inspector and a health visitor (public health nurse) who could go round the village while the doctor is seeing patients. It should be noted that the government plans to inaugurate a rural health center at Abu Ghuraib, which is designed to provide curative and preventive services for the population of the area and at the same time serve as a practical field for training rural health workers, with particular emphasis on the control of com- municable diseases and maternal and child health. It has requested advice from the World Health Organization on the planning and establishment of the center. Accordingly, in 1950, provision was made under the technical assistance budget of the World Health Organization for a rural health survey. Provision has been made under the 1952 technical assistance budget for one public health administrator with general experience in rural health, one epidemi- ologist, one sanitarian, and two public health nurses, one with gen- eral experience and one with the experience in midwifery. It is ex- pected that the government will submit a request to UNICEF for appropriate supplies and equipment. At a later stage the program may be developed in cooperation with other specialized agencies. PUBLIC HEALTH 369 IV. Endemic Disease Prevention One of the most important sectors of the entire public health program should be a well-planned attack on the leading endemic diseases, e.g. schistosomiasis, malaria and ankylostomiasis. The need for better housing, sewage disposal systems and safe water supplies has already been mentioned. Measures to accom- plish these improvements are discussed in detail in Annex H, on Community Planning and Facilities. Schistosomiasis It is clear from available records that at present relatively few persons suffering from schistosomiasis receive treatment. The Schistosomiasis Section of the Endemic Diseases Institute has carried out a survey which shows that the disease does not occur south of Basra and that, north of Basra, after reaching a peak in the Lakes Area, its incidence declines steadily up to the Kurdish mountains, where the disease does not occur at all. In Basra province the incidence reaches 23 percent, in Amara province 67 percent and in Baghdad province 35 percent. Apart from its debilitating effects, the disease is complicated in a number of cases by bladder stones and calcification of the bladder. Associated as it commonly is with attacks of malaria and infestation with hookworms, schistosomiasis is of profound eco- nomic significance since it lowers the individual's capacity for work and his ability to overcome intercurrent infections. The intermediate host is a snail which lives in stagnant water. Irrigation therefore provides conditions which may cause an increase in the prevalence of the disease, as has been shown in Egypt where schistosomiasis is a major public health problem. Investigations made up to the present indicate that the only fresh water snail which carries the disease in Iraq is the Bulinus truncatus. It does not appear to occur in either the Euphrates or the Tigris, or in streams in which water flows at a rate of three or more miles an hour. The cold winter weather inhibits the snail's activity and it is able to multiply freely only during the months of June and July. 370 THE ECONOMIC DEVELOPMENT OF IRAQ Spread of the disease may be limited by: 1. Destruction of the snail through the use of copper sulphate (or other compounds) and the elimination of stagnant water. The rapid lowering of water levels will also destroy the snail by desiccation, and in irrigation canals a free flow of water makes conditions unsuitable for the snail. 2. Prevention of infection of the snail by the human host. This can be effected by treating the human carriers and by preventing the pollution of water. In new irrigation projects it is strongly recommended that steps be taken: 1. To design major canals so that they maintain a flow of three miles an hour or more and minor distributory canals so that they dry out rapidly. 2. To site villages and canals, wherever possible, at a distance not less than a mile apart. 3. To provide villages with a separate, protected water supply so that water is not drawn by the inhabitants direct from canals. Where the underground water is unfit for use, water could be drawn from the closest canal by pipe and be passed through a simple filter. The filtered water (it could in some cases by chlorinated) could then be raised by “hydrohoist” or by semi-rotary pump into a gravity tank-if so required. Another important measure would be the installation of village baths. 4. To provide suitable village latrines, some of which should be on the side of the village towards the canal. Experi- ments should be made to test the feasibility of using pit or bore hole latrines. Public water supplies, baths, and latrines require, of course, attendants to keep them in order. Householders should install their own latrines. 5. To examine, as far as possible, the people who will live and work in the project. If necessary, they should be treated for schistosomiasis before irrigation begins. 6. To treat the canals and all collections of water that harbor the snail with copper sulphate twice a year. 7. To examine annually representative groups such as school children to determine whether the measures taken are effective. 8. To educate the people not to foul water and to promulgate regulations to provide for the protection of water from pollution. PUBLIC HEALTH 371 Shitwi (winter) cultivation is, on account of the low tempera- ture, far less likely to spread schistosomiasis than saifi (summer) cultivation. In considering any expansion of summer cultivation, therefore, the attendant health hazards should be carefully considered. To carry out mass treatment of the people an expansion of the dispensary system is necessary together with the provision of mobile dispensaries. Initially four of these mobile dispensaries might be put into operation in the provinces having the highest inci- dence of schistosomiasis. The cost of each, including three motor vehicles, tents, 20 beds and supplies, would probably not exceed ID 5,000. In addition, an increase is required in the number of vehicles available to the Endemic Diseases Institute and provision must be made for an adequate and constant supply of copper salts. Malaria There can be no doubt that irrigation has been associated with a considerable increase in the malaria of the plains. Gravity or flow irrigation may lead to flooding of land or to seepage due to the faulty construction of canal banks. Water is precious where irrigation is carried out by lift and is not commonly wasted; con- sequently, flooding of land is rare. A third form of irrigation employed—namely that by natural inundation—is only seasonal. Much work has been done in the Endemic Diseases Institute on studies of malaria in Iraq and also on the bionomics of the chief vectors of the disease. It has been discovered that in the North the mosquito A. sacharovi is associated with high endemi- city. It breeds mostly in seepage water, open pools and in rice cultivation, and appears to be associated with sharp outbreaks of malaria when it descends occasionally into the plains. In the South and spreading as far north as 34°N., A. stephensi breeds in similar conditions to those in which A. sacharovi develops in the North; it favors particularly water in small borrow pits, seepage water and the small irrigation channels of the date palm gardens. The A. stephensi mosquito is generally found in those areas where the level of the subsoil water is high. It is a highly efficient carrier of malaria and used to be found in the houses of Baghdad during the summer. PUBLIC HEALTH 375 for the promotion of 'social centers'. It is understood he will also “take an interest” in the numerous voluntary societies that under- take work of a social and medical nature. While this organization does not seem satisfactory, no alterna- tive can be suggested at the moment without further study. The Mission would recommend that a foreign public health adminis- trator be appointed to advise the Minister of Social Affairs on the organization and further development of the health services. His appointment, incidentally, would enable the Professor of Preven- tive Medicine in the Royal Faculty of Medicine, who is at present also acting as adviser to the Ministry of Social Affairs, to devote his full time to teaching and research. The public health administrator should have had wide experi- ence in the Middle East or in a tropical or sub-tropical country. He should have a good knowledge of the English language. To assist him he will require the services on temporary appointment of a foreign epidemiologist and a public health or sanitary engi- neer. The epidemiologist would undertake a study of the most prevalent diseases and recommend the best methods of attacking them. The public health engineer should have had considerable experience, preferably in a state medical service in a tropical or sub-tropical country, and be able to speak English. He would advise on measures to be taken to improve sanitation and environ- mental hygiene throughout Iraq and assist, if necessary, in teach- ing at the Royal Faculty of Medicine. The public health administrator would require sufficient and suitable transport for himself and his staff; he would also need adequate office accommodation and office staff for himself and his own expert staff (epidemiologist and public health engineer). He should have at all times direct access to the Minister of Social Affairs. As a result of the studies made by this team of advisers, it may be possible to give the organization of the health services a clearer focus. In any such scheme the preventive aspects of public health will need to be featured much more prominently. Although the borderline between curative and prophylactic mea- sures may not always be clear, it may prove feasible to have one division responsible for all the services primarily curative 376 THE ECONOMIC DEVELOPMENT OF IRAQ and another division responsible for those characterized as prin- cipally preventive. Meanwhile one important improvement could be effected by delegating more responsibility to the chief medical officer in each province and enabling him to devote his entire time to his public duties. The chief medical officer is responsible for all medical work, both preventive and curative, within the boundaries of the province. As such, his main duties should be to inspect the health institutions, to appraise the state of public health and to guide, advise and encourage his subordinate staff. To carry out this task effectively he needs to devote his full time to the job and should be free to travel freely about the province. At present, however, the chief medical officer usually has a private practice on the side. Without means of transportation at his disposal and, in fact, unable to travel without express permission from the Director General, he seldom leaves his headquarters. It is strongly recom- mended that these officers be paid salaries commensurate with their responsibilities and the importance of their post. Further, they should be provided with suitable transport and be required to submit a monthly report on the inspection work undertaken throughout the province. When necessary, a director (or medical superintendent) should be appointed to the hospital of the chief town of the province to free the chief medical officer for general inspection of all medical facilities under his direction. Similarly, doctors in charge of districts or qadhas should be provided with suitable transport to enable them to visit the dispensaries in their area. In certain districts they should also be provided with suit- able housing It should be remembered, however, that without qualified per- sonnel no reorganization, no matter how effective on paper, will succeed. In the health service, as in many other branches of the administration, conditions of employment must be considerably improved, particularly outside of Baghdad. Unless adequate salaries and accommodations are provided for the health services staff, doctors and trained personnel will continue to prefer private practice and specialized work in Baghdad and other cities. 378 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE 3 CLASSIFICATION OF HOSPITALS IN 1949 Beds Kind Number 1st Class 2nd Class 3rd Class 53 185 2,720 61 37 I. HOSPITALS OF THE MINISTRY OF SOCIAL AFFAIRS General 39 For Eye Diseases...... 2 For Venereal Diseases 2 For Infectious Diseases 6 For Leprosy 1 For Children 1 For Children (Welfare Hospital) 1 For Women & Children 1 For Mental Diseases 1 Prison 6 13 9 563 240 89 35 25 85 105 4 2 60 70 196 3,960 1 3 14 40 II. OTHER GOVERNMENT HOSPITALS Railways Ministry of Education Police Port 1 1 1 26 5 6 o solo 25 14 cola 4 51 79 III. Non-GOVERNMENT HOSPITALS General ...... 4 For Eye Diseases.. 1 Oil Companies 4 American Mission.. 1 57 2 18 26 2 16 147 8 109 38 ...... 10 77 44 302 382 THE ECONOMIC DEVELOPMENT OF IRAQ TABLE 8 INCIDENCE OF SCHISTOSOMIASIS (By provinces) Percentage of Incidence of Schistosomiasis Province Baghdad Basra Mosul Amara Erbil Diwaniya Diyala *Dulaim Hilla Kerbela Kirkuk Kut Muntafiq Suleimaniya Survey for all the districts of the province not yet completed. 35 23 0 67 0 26 28 36 15 28 0 48 47 0 TABLE 9 CASES OF SCHISTOSOMIASIS TREATED (By provinces) Province 1944 1945 1946 1947 1948 1949 4,920 1,922 92 Baghdad Basra Mosul Amara Erbil Diwaniya Diyala Dulaim Hilla Kerbela Kirkuk Kut Muntafiq Suleimaniya 4,544 1,527 83 865 15 1,546 611 74 594 1,077 14 1,868 2,969 5 973 27 2,142 288 375 2,158 930 26 1,976 2,909 6 6,986 1,836 110 1,300 10 2,035 259 283 802 1,471 5 1,616 4,310 6 6,175 1,934 85 1,518 45 2,024 243 704 2,381 1,567 5,358 2,384 90 1,680 16 2.756 238 622 1,514 1,544 27 3,099 4,942 2 6,733 4,508 59 843 25 3,166 357 838 1,113 1,458 5 2,482 5,801 12 2,346 5,890 2 Total 15,792 18,744 21,029 24,926 24,272 27,388 386 THE ECONOMIC DEVELOPMENT OF IRAQ mobilization of the energies of the entire population. People must be awakened to a full appreciation and understanding of their problems. Only in this way can they be brought to a realization that without well-directed cooperative self-help on their part the government's development program cannot succeed. Since the whole process and system of education—from the primary school to the university—must be visualized as an integral whole and its different stages intelligently dovetailed into one another, it is to be hoped that the government will give due atten- tion to educational needs at all stages. During the last two decades, these problems of education have been studied and reported upon by several committees and educational experts; e.g., in the Report of the Monroe Commission, Allen's Report on Rural Education and Welfare in the Middle East, the Report of the Higher Com- mittee of the Ministry on the Revision of Courses, the Report of the Departmental Committee on the Ten Year Plan, Morgan's Report on the University of Iraq, and Clark's Report on the Intro- duction of Compulsory Education in Iraq. These reports contain a number of excellent suggestions and proposals which are almost as pertinent today as they were when they were originally made. It is a matter of regret that circumstances should have stood in the way of their implementation. The Ministry of Education should make a careful study of these documents and take their recom- mendations into account in formulating an over-all policy of edu- cational development. The present Mission, however, is primarily interested in the part which education can play to facilitate and support the develop- ment program as a whole. Its studies have been directed therefore to the establishment of “priorities” with a view to concentrating on those aspects of education which are most directly and immedi- ately connected with the economic development of the country. It has thus come to the conclusion that the following three aspects of education impinge directly on the improvement of produc- tive capacity : 1. Compulsory, universal, primary education for children ; 2. Fundamental education for adults; and 3. Vocational and technical education related to development needs. EDUCATION 387 Compulsory primary education is the only way to broaden the educational base. Without it illiteracy can never really be stamped out and the people given the means of acquiring the practical knowledge which will enable them to raise their standard of living through their own efforts. Similarly, adult education is necessary if nearly the whole of the present generation beyond primary school age is not to remain illiterate and be denied the opportunity to learn ways and means of improving their living conditions. The need for vocational and technical education should require no detailed justification in a country where the lack of technical skills seems to be one of the most serious obstacles to rapid development. II. Introduction of Compulsory Primary Education It is sometimes argued that the country is not yet ripe for the introduction of compulsory primary education and also that, if the government provides the educational facilities, it will be sufficient to rely on voluntary school attendance. Judging from the testi- mony not only of educational officers, but of many men in public and private life, the Mission believes that there is a widespread conviction that the time is ripe for a big advance in the direction of compulsory education. This opinion is also reflected in a num- ber of recent reports and educational publications, including the Report of the Committee appointed by the Ministry of Education in 1946 to draw up a Ten Year Plan for Education, and Clark's Report prepared in 1950. A striking testimony to this awakened public consciousness is provided by the fact, revealed by Directors of Education in several provinces, that in many villages without schools, local people (and the local landholders in some cases) were prepared to construct school buildings provided the Ministry of Education was willing to find the teachers. Compulsory vs. Voluntary Attendance This does not mean, however, that the problem of universal education will be solved simply by creating adequate educational facilities. First of all, the government must plan a school-building and teacher-training program in advance, and this can take place EDUCATION 389 devoted to children who drop out in the last three years must be regarded as at least a partial loss. Enlightened educational opinion all over the world is agreed that six to seven years is the minimum period in which a child can acquire the basic modicum of knowl- edge, skills, habits, interests and social attitudes necessary for civilized living in a modern community. The Iraq Government has prescribed six years as the period of primary schooling, but the objective is obviously not being achieved if more than half the children are eliminated, for one reason or another, before com- pleting this period. The Quality and Orientation of Education It is sometimes contended that a program of nation-wide edu- cation should be postponed until the quality of education is consid- erably improved. While the Mission does not support this conten- tion, it is firmly convinced that education will not win the support of the people or have any perceptible impact on their lives unless it is given a new orientation. It is, therefore, necessary to take simultaneous measures for the improvement of education—its methods and techniques, its curricula, its organization and admin- istration and, above all, its personnel and their ideology and out- look. Education, as it is provided at present, is concerned with only a part of the child's development. It leaves a large area of his aptitudes and his mental and emotional make-up untouched. In the proposed reconstruction of education, it will be most important to give it a more practical, realistic and rural bias in order to relate it intelligently to the psychological and social needs of the individual child and the adult society. It is a well-known fact of child psychology that the child is by nature an active, pragmatic person who delights in doing, creating, playing and generally expressing himself in various practical ways which grow increas- ingly purposeful with age. Unfortunately, the primary and second- ary schools as well as training colleges at present seem to be hardly aware of the basic importance of bringing education into harmony with this crucial fact of child psychology. In fact, with the excep- tion of a school handwork exhibition at Baquba, a promising dis- play of handwork specimens in the Primary Teachers' Training College in Baghdad and some quite good examples of stitching and embroidery and the like in a few girls' schools, the schools were 390 THE ECONOMIC DEVELOPMENT OF IRAQ found to be entirely preoccupied with the classical and literary tradition. It is true that the Arab mind has a flair for language and literature and delights in oral self-expression, and young children learn to read and write quickly and speak with a fluency and feeling for words which children of other lands would find diffi- cult to emulate. But with the increased importance of science and technology and the need of improving productive efficiency in industry, agriculture and other occupations, the people of Iraq cannot afford to remain content with a system of education which does not equip the younger generation to play its part in the pro- jected plans of development. Once educational authorities clearly recognize that the intro- duction of activity-centered methods and curricula and of craft work is basic to the whole idea of educational reconstruction, it should not be difficult to work out the necessary measures. In many other countries, such a reorientation of education has been actually achieved, and not only detailed theoretical discussion but records of concrete, practically worked-out schemes are available for con- sultation and guidance. It will, of course, not be possible—and even if it were possible, it would not be desirable—to copy these methods and schemes mechanically, because education is a creative field in which ideas have to be applied to the particular situation in which one is working. It will be necessary for Iraqi educators to work out their own pattern of “activity schools” and their appro- priate forms of craft work. In fact, some gifted educators have already envisaged this problem in its true perspective. Dr. Matta Akrawi's thesis on Curriculum Construction in the Public Primary Schools of Iraq (published in 1942) is an effective presentation of the case for reorganized methods and curricula breaking with the narrow academic tradition. What is more, it gives concrete instances of how units in social studies and health education can be worked out in such a way as to break down the barriers between school- ing and life. What kind of crafts can be introduced in the village and city schools which will appeal to the children and will also be related to their environment so that they can leave school with trained skill and aptitudes and participate effectively in the work of their communities? The answer to this question can be given only after EDUCATION 391 study, but two important considerations should be kept in mind. The crafts should be as varied as possible and linked to local occu- pations, and they should make maximum use of cheap local materials so that the cost of their introduction will not be too high. The object would not be to produce trained craftsmen, but to make children adept at working with their hands, to give them an oppor- tunity for creative expression and to inculcate an appreciation of the value of manual labor. For the same reason the teachers need not be specialists in individual crafts, but people who are handy with tools, can work with different materials and in different media, and have a general understanding of the principles, objectives and methods of craft work by children. In rural schools in particular, it is important to have small plots of land for gardening and agriculture where children can learn simple agricultural processes and the care of livestock as well as the use of tools. They should also have the opportunity to visit any government demonstration farms in the neighborhood. In order to insure that rural schools really cater to rural needs it will be necessary to draw more teachers from rural areas and to estab- lish more rural training colleges where effective practical as well as theoretical training is given in agricultural subjects. More rural secondary schools with a dominantly agricultural bias in their curricula are also needed. They can serve the dual function of providing teacher candidates with suitable education and back- ground and also of providing centers for agricultural extension work in the neighborhood. One of the primary objectives of the reorientation of educa- tion should be to challenge children to meet the problems of their environment squarely instead of running away from them. A school is not just a place for academic learning or even a combination of academic and practical work. It is essentially a community where young people should learn the basic art of living through actual experience. It should afford opportunities for cooperative and group work, for leadership and discipline, and at the same time place before the children projects and activities which will enable them to understand the problems which dominate the life of their local, and later national, community. The school should inculcate an appreciation of the value and dignity of hard, manual work. In EDUCATION 393 Ministry prepare a simplified syllabus and curriculum for such rural areas. It should concentrate on the basic essentials of knowl- edge and skills related to everyday living that can be easily grasped. This applies both to the school program for children in schools and to the program of fundamental education for adults. Steps Toward Compulsory Primary Education Many problems and difficulties will undoubtedly arise in enforcing compulsory education, but once the need is recognized and the policy agreed upon, attention can be concentrated on solv- ing them. Public opinion in certain regions and groups will have to be educated; a careful survey of each locality will be needed to assess the existing educational provision as well as future needs; an effective administrative and supervisory organization will have to be established; some special provision will have to be made for children who cannot afford books or midday meals or whose parents want their help in work on their farms; and, most of all, the type of education to be provided will have to be related intelli- gently to the real needs of rural or urban life so that the children, as well as their parents, may feel that it is really worth their while and perceptibly useful. The special problems and difficulties of Bedouin education will have to be carefully examined. Fortunately, a good deal of exploratory work of a theoretical nature has been done and, as already pointed out, a number of valuable studies are available which offer useful suggestions in all these fields. The Report of the Monroe Commission lays down general principles of educational reorganization, some of which have special relevance for primary education; Clark's Report is a good and careful, if rather unduly cautious, study of the issues involved in the introduction of compulsion ; Dr. Jamali's book, The Education of the Bedouins, is a sympathetic and penetrating study of the whole sociological and psychological background of this problem; Dr. Akrawi's thesis on curriculum construction tackles competently the question of how the curriculum can be related dynamically to "the political, economic, social, hygienic and edu- cational conditions and problems of the country;" and the Depart- mental Ten Year Plan and certain reports of other government committees endorse to some extent the various suggestions made in these studies. Theory has yet to be translated into practice, 394 THE ECONOMIC DEVELOPMENT OF IRAQ however, and there is little evidence to show that a majority of educational officers and administrators have even successfully assimilated the ideas in theory. In fact, the Ten Year Plan Com- mittee complains that even the officials of the Ministry have not had access to many of these documents and, therefore, are obvi- ously not conversant with the suggestions for reorganization made from time to time. It would be advisable to give due publicity to them among teachers and educational officials. The Mission makes the following proposals in connection with the initiation of a program for the expansion of primary edu- cation and the introduction of compulsion: 1. A careful survey should be made of each locality in order to determine the requirements which must be met in carry- ing out the program. If possible, senior students should assist in making the survey. This will have the incidental advantage of giving them a close and useful contact with the life and educational needs of the local community, 2. The Ministry of Education should organize an effective campaign in favor of compulsory education through the traditional as well as the modern media of mass communi- cation, e.g., religious leaders and organizations, tribal chiefs, public platform, drama, press, film, radio, publicity vans, and the like. 3. As the program is carried out through the construction and opening of new schools, a continuing and imaginative effort must be made to enlist the support of the local com- munity and give it a definite sense of participation. Thus the opening of a new school might well be made an impor- tant community event in a manner which will make the local people realize that something of real value is being added to their life, something which does not "belong to the government" but really belongs to them and which can succeed only with their cooperation. 4. Arrangements should be made for the proper administra- tion and supervision of the program both through depart- mental and local agencies, with an intelligent demarcation of the functions of each. The general organization and control of this and other large schemes of educational expansion should, at this stage, remain in the hands of the Ministry which will, however, need to be strengthened to handle them properly. The role of the local authorities, while undoubtedly important, should be advisory in the early stages. EDUCATION 395 5. It would be well to introduce the scheme gradually in different areas according to a carefully considered order of priority, preference being given to places where there is a strong demand or where other factors are favorable. 6. Pending the introduction of full-fledged compulsion it might be advisable to experiment in some localities with a legal requirement that parents who have once enrolled their children in school keep them there until they com- plete the primary school course or, in the event of failure in any grade, complete the six years' period of schooling. This would mean that, while admission would be voluntary initially, continued attendance for six years would be com- pulsory for every child admitted. This suggestion can be more profitably enforced in the larger towns and cities, where there is greater realization of the need for educa- tion; it might also be tried out in localities where wastage is most marked. 7. In order to minimize as much as possible the difficulties of the rural parents in sending their children to school, it will be desirable to adjust the school schedule and the school holidays to the requirements of agricultural seasons as far as possible. The time of harvesting, for instance, varies in different parts of the country and there is no reason why the school vacations should not take that important factor into account. Again, even when the school has to remain open in the busy agricultural season, the hours can be shortened during that period to enable children to help their parents in their work. 8. Steps should be taken for an immediate expansion of training facilities for teachers as discussed later. At the same time there should be an improvement in the quality of training imparted. 9. The school construction program must be geared to the requirements implicit in the introduction of compulsory primary education; and, simultaneously, efforts ought to be made to improve the equipment of the schools. It is not necessary to discuss at length the administrative questions involved in the introduction of compulsion since they are known to the Ministry and have also been elucidated in Clark's Report. It is desirable, however, to treat in somewhat greater detail the problems of the training and conditions of employment of teachers and the construction and equipment of the necessary schools. 396 THE ECONOMIC DEVELOPMENT OF IRAQ Requirements for Teachers The Mission has estimated, as will be indicated in detail later, that about 18,750 additional teachers will be required for the introduction of compulsory primary education. If it is proposed to bring all children of school age into school within 10 years, an average annual output of approximately 1,800 additional teachers would be necessary. In view of the many administrative, social and economic difficulties which are to be expected, it may be necessary to accept an annual target of about 1,500 new teachers. In any event, prompt measures must be taken to establish new teachers' training colleges. The following tentative time schedule is suggested in this connection on the assumption that the average period of training for primary school teachers—with perhaps some- what higher academic qualifications for admission than those pre- scribed at present-will be about three years. 1952 - Preparation of plans for the opening of new training col- leges so as to insure the requisite number of teachers. 1953–1954—Opening of additional training colleges which may take two years. (In view of the fact that most of the existing institutions are overcrowded, it would be inadvisable to increase admissions in them.) 1956 -The first group of trainees will complete its training. 1957 – The full annual quota of additional teachers will become available for the opening of new schools. During these five years, 1953-57, compulsory attendance should be introduced in some suitable localities with the help of the teachers being trained in the existing colleges and the first group of new trainees under this scheme. This period should also be utilized, as suggested in the preceding paragraphs, for sur- vey work and for preparation of public opinion, as well as for getting underway a systematic program of school construction. The bulk of the plan can then be put into effect during the next 10 years, i.e., 1958-67, with the determined object of bringing almost all children of school age into school. Even then it is likely that there will be many children in remote and comparatively inaccessible areas and scattered nomadic groups for whom school- ing may not have been arranged by that time. The next five years, 1968-72, should therefore be utilized for taking education to such children, for tying up loose ends, for checking and assessing results EDUCATION 397 and generally making sure that educational provision of a reason- ably good quality is available to every child in the country. By 1970 the program should thus be fully and adequately implemented. Quality of Teacher Training As more teachers are trained, the quality of their professional education also needs to be raised. In many respects their training is now deficient : The present size of most of the training colleges appears to be too big to allow for adequate personal contact between the teachers and students or to make satisfactory arrangements for teaching practice possible. The proper concept of a train- ing college is that of a small, well-knit social community, living, learning and working together. This is difficult to achieve when several hundred teachers are being trained in a single, overcrowded institution. A reduction of numbers is, therefore, desirable in the case of the bigger colleges and should be gradually brought about. The members of the staff of the training colleges have often lacked not only the requisite technical skill but the personal qualities necessary to inspire young teachers. Unless each teacher goes out of the college with a real sense of mission, he will not be able to play his part in the proposed educa- tional transformation. At present the colleges have to give too much attention to general education at the expense of professional education. As soon as the Iraq University begins to function and its Arts and Science Colleges are properly organized, institutions like the Higher Teachers' Training College and the Queen Alia College should become centers of professional education for teachers. The possibility of a similar change should be explored in the case of primary training colleges which are also at present providing partly secondary and partly pro- fessional education. The courses prescribed in these colleges are too crowded and miscellaneous. They are not related closely enough to the real teaching problems and situations in rural and urban areas, nor are the methods and techniques of teaching irradiated by modern and progressive educational ideas. The whole problem of making the courses and methods more dynamic and realistic should be examined by a competent committee. Except in one or two institutions, practical work and crafts are conspicuous by their absence. Even the members of the staff do not recognize clearly enough that no far-reaching 398 THE ECONOMIC DEVELOPMENT OF IRAQ change can be brought about in the schools unless a place of honor is given to hand work and crafts in the education of teachers. The committee suggested in the preceding paragraph should examine this problem also. No training college has a “Demonstration School," in the real sense of the word, attached to it. The practicing schools of the colleges are dull and uninspiring and do not generally differ from the routine of ordinary primary or secondary schools. They enjoy no special freedom and apparently have no special facilities to work out new techniques or to pioneer in curriculum or organization. This is a very serious defect which should be remedied as early as possible. There are only a few rural training colleges, established with the laudable idea of educating teachers in a rural milieu and with special reference to rural needs and problems. But they do not appear so far to have been given a real opportunity to prove themselves, and the conditions necessary for their suc- cess—material as well as those relating to personnel—have not been satisfied. Given a fair chance, these institutions can play an important role in the reorientation of teachers' education. A determined effort to overcome these defects of the training colleges should be made. It is necessary to recast their curricula radically, to reduce the overcrowding of subjects, to simplify the syllabus, to find proper place in it for practical and productive work and to bring the whole training nearer to the realistic conditions of the rural or urban areas for which teachers are being trained. All the rural training colleges—whether existing or to be estab- lished-should, in the first instance, be located in rural areas, should work under rural conditions and should study rural prob- lems. They should develop as leadership centers for the recon- struction of the neighboring community life. Their extension work should spread into the neighboring villages and they should take the lead in working out methods and contents of education suited to village schools. Such things have been done, with varying degrees of success, in other countries and there is no reason why they should not be attempted in Iraq. It is also important to develop a spirit of self-help and resourcefulness in the teachers under training. At present they rely for almost everything on government help and finances. A com- munity of several hundred teachers, all resident in hostels, should have enough talent and productive capacity to work out practical 1 EDUCATION 401 wise investment to spend some money on intelligent research and experimentation in this field. The program of buildings should also include, as suggested above, the construction of teachers' houses-particularly for women teachers—in places where they are not otherwise available. More attention might well be paid to the equipment of new and existing schools. The libraries, for instance, are generally poor: the number of books is small; they are not chosen with refer- ence to the needs of the children for whom they are meant; their arrangement and display leave much to be desired; and the serv- ice provided is very unsatisfactory. No proper individual records of students' reading are maintained and no imaginative steps are taken to stimulate the desire to read and to make the library a dynamic and integral part of the school and of the life of the students. The library often consists simply of a few crowded, dust-laden bookshelves in one of the classrooms to which students have access at odd times and for short periods for borrowing books. School libraries not only should be stocked with a large number of well-displayed and suitable books but should be made the most pleasant and attractive place in the school. The laboratory and workshop facilities provided, even in full- fledged secondary schools, are also inadequate. There can be no proper teaching of science or crafts unless the equipment is greatly improved and practical work is given its due place. Apparently there is no examination in practical work at all at the end of the secondary school, and obviously there can be none so long as most schools have no laboratories or workshops, or very poor apologies for them. In fact, of the large number of secondary schools visited, only two, one government institution and one foreign school, had adequate laboratories. Under the circumstances, science is gen- erally taught theoretically, as a lesson from the printed book or as a lecture by the teacher, with occasional demonstration of experi- ments by him in front of the class. This kind of vicarious experi- mentation, which never allows the students to handle any appa- ratus, does little to foster the scientific attitude. The provision of laboratory facilities will not by itself, however, make any great difference—what is needed is the introduction of activity methods in the teaching of science and the use of science as an instru- 402 THE ECONOMIC DEVELOPMENT OF IRAQ ment to develop the students' powers of inquiry and independent work. In the proposed transformation of "book schools" into "work schools" this change coupled with craft work may well form the starting point of the process.1 Financial Implications of the Introduction of Compulsion It is difficult to work out the cost of the proposed scheme for primary education with any degree of accuracy because reliable figures and statistics are not easily available. However, on the basis of information supplied by the Ministry and obtained from other sources, it is possible to form an approximate idea of the order of expenditure that will have to be incurred. It should, how- ever, be borne in mind that, generally speaking, the basis of calcu- lation adopted is the per capita educational expenditure being incurred at present and, as the current provision for such items as books, furniture, apparatus and hostel accommodation is rather inadequate, the total cost worked out represents the minimum esti- mate of the requirements. The three main items of expenditure in this program would be (1) the cost of operating primary schools for all children; (2) the cost of training additional teachers; and (3) the cost of construct- ing new buildings and improving or extending existing buildings. Cost of Primary Schooling According to available figures, the total number of additional children to be brought into school eventually, when compulsion has been introduced throughout the country, would be about 575,000. The present annual cost of primary education per child, according to the calculations of the Ministry of Education, works out at eight dinars. This estimate is also endorsed by Mr. Clark in his report. On this basis it can be assumed that the ultimate annual cost of schooling for all children of primary school age will be about ID 4,600,000. It should be remembered, however, that this esti- mate does not allow for higher salaries and prices which will * In this connection, all science teachers might make a careful study of the fascinating pioneer work in the domain of science teaching done by the eminent British educator, Sanderson (Headmaster of the English Public School, Oundle). An account of his work will be found in two books—his biography by H. G. Wells entitled The Story of a Great Schoolmaster and a book written by his colleagues entitled Sanderson of Oundle. EDUCATION 403 almost certainly increase costs. As the Plan goes into operation, the cost may also tend to rise for other reasons—because the num- ber of children will increase with the growth in population during the next two decades, and because the provision of a better type of education, with a more practical orientation, and the strengthen- ing of the inspection agency will mean a somewhat higher per capita cost. The organization of schools into community centers as recommended elsewhere will also affect the question of cost. On the other hand, it is likely that, during the stipulated period, per- haps 10 percent of all the children may escape schooling, which will lower its cost correspondingly. In this approximate estimate, it is not necessary to allow for these factors, because it is expected that the increase, if any, will be met by the normal expansion of the national budget. Table I in the appendix gives a breakdown, year by year, of the number of children to be admitted and the cost to be incurred on their schooling. This table envisages the extension of compulsory education to 562,500 children in 13 years, and the annual cost has been worked out on the assumption that 22,500 children, on the average, will be brought into school every year. If the scheme is put into operation in 1956, when the first group of trained teachers will become available, then during the one year that will fall within the next budget quinquennium, 1952-53 to 1956-57, the additional expenditure to be incurred will be ID 180,000. In the following 10 years, the total expenditure to be incurred for compulsory primary education will be about ID 21,600,000 or an average annual expenditure of ID 2,160,000. Cost of Training Additional Teachers The total number of additional teachers required for intro- ducing universal, compulsory education has been estimated in Clark's Report at 15,000. The Ten Year Plan Committee, which aimed at bringing 50 percent of the children into school in 10 years, puts the figure at 8,000, allowing for the normal wastage due to superannuation, etc. Both these figures appear to be an underestimate. In calculating the cost of universal, compulsory education the Mission has aimed at putting 562,500 children in school in 1968. If the average number of children per teacher is put at 30, this means that 18,750 additional teachers will be required for the purpose, and provision will consequently have to 404 THE ECONOMIC DEVELOPMENT OF IRAQ be made for their training.? The annual cost of training per teacher is estimated by the Ministry of Education to be about ID 70. If the average period of training is taken to be three years, as is likely to be the case in the future pattern of teacher training, the cost of training per teacher would be a little over ID 200. Table II in the appendix shows the number of teachers under training each year from 1953 to 1967 and the expenditure to be incurred every year over the project. From these figures it will be seen that the cost of the scheme during the next five budget years (1952-53 to 1956-57) will be about ID 737,500. Total cost until 1967, spread over 13 years, will be a little below ID 4,000,000 which means an average annual expenditure of about ID 300,000. It may be pointed out that, after this period, when the full quota of trained teachers is available, the annual expenditure on this item will be considerably reduced as provision will have to be made only for training the number of teachers required for normal replacement. Cost of School Buildings The problem of the construction of school buildings was sur- veyed recently by the Special Committee on School Buildings appointed under Ministerial Order No. 36314 of December 7, 1950. After consulting experts, the Committee drew up a program for the construction and improvement of schools and other educa- tional buildings at a total estimated cost of approximately ID 8,110,000. The Mission was not able to ascertain definitely the premises on which this estimate was based. The Development Board has made a provision of ID 3,800,000 for school construc- tion in its program for 1951-52 to 1955-56. The Mission suggests that the adequacy of this allocation as well as the total amount which would need to be spent over the next 10 years be care- fully reviewed. In this review the Committee's estimate should be carefully checked, particularly to determine whether it took fully into account the needs arising out of the introduction of com- pulsory education as well as requirements for replacing old or 2 If the basis of calculation were 35 childre per teacher, the total num- ber of teachers required would be about 16,000. But as the Ministry of Education has itself wisely adopted the ratio of one teacher to 30 children, the Mission accepted that as the basis for calculations. 406 THE ECONOMIC DEVELOPMENT OF IRAQ eradication of illiteracy, but primarily as a means to an end—so that adults may benefit more fully from a continuous program of education which will show them what they can do individually and collectively to improve their own lot. As one authority has said, the task must be conceived “as a matter of going out into the field, of working in the communities, organizing their activities, improv- ing their health and farming methods, establishing cooperatives and small cottage industries and tying all this up in the education and making the whole thing as closely knit an activity as possible."3 The object must be to awaken in people an understanding of their problems and an urgent desire to solve them, not relying upon government to do everything but developing local initiative and resourcefulness to overcome some of the handicaps which they have suffered passively for centuries. Only this type of funda- mental education, which, in recent years, has been advocated by UNESCO and many discerning educators in various countries, will be of practical value to the people of Iraq. In fact, unless the general receptiveness, understanding and cooperative spirit of the people are greatly quickened and stimulated by an educational campaign of this nature, the pace with which the country's develop- ment program can be carried out will seriously lag. Magnitude of the Problem The proposed adult education campaign should be aimed pri- marily at those groups in the population which are beyond primary school age but are still receptive, namely those between the ages of 12 and 45 inclusive. On the basis of the census results available for the four provinces of Basra, Baghdad, Kirkuk and Mosul, it may be assumed that roughly 40 percent of the population are in this age group. In a total population of about 5,000,000 it may therefore be estimated that 2,000,000 should be reached by adult education. The number in this age group will gradually increase » Dr. Matta Akrawi, Background Paper on Fundamental Education in the Arab World presented to the Second United Nations' Seminar on Social Welfare in the Arab States, held at Cairo in 1950. Aside from this paper and the Report of the Committee on Rural Basic Education drawn up for this Seminar, a large amount of useful information on the aims and methods of fundamental education is available in UNESCO publications such as Adult Education—Current Trends and Practices; Fundamental Education-Descrip- tion and Program; The Use of Mobile Cinema and Radio Vans in Funda- mental Education, etc. 408 THE ECONOMIC DEVELOPMENT OF IRAQ ment of the masses to their full stature as democratic citizens. This will only be possible if, on the one hand, there is close and cordial cooperation between official and nonofficial agencies and, on the other, close, well-organized interdepartmental cooperation. Such cooperation, though always assumed in theory, is very difficult to secure in practice. The government can, however, facilitate it by various measures, including the establishment of advisory councils consisting of representatives of various ministries and departments concerned as well as of nonofficial organizations. The village school will form, as suggested later, the focal point for the coop- eration of all local departmental officers in the work of funda- mental education. An education program of this nature can be launched and carried out successfully only if a special department is established for this purpose. The Mission therefore strongly urges the estab- lishment of a separate Division of Fundamental Education within the Ministry of Education and the appointment of a person with vision, ability and enthusiasm to head it. The Division would, of course, need to have the fullest cooperation of all other divisions and departments in its work. It has at times been suggested that there should be a Directorate of Mass Culture in the Ministry dealing with all the activities bearing on mass education-adult centers, libraries, radio, music, art, cinema, etc. The difficulty in implementing the suggestion would be to find persons of such many-sided ability and interests as would be able to shoulder that responsibility. There might also be a danger that the more urgent and specific issues of fundamental education would take a second- ary place in such a program. In any case, there is no doubt whatever that there is need to insure that these various agencies pool their resources and pull together instead of pulling in dif- ferent directions. Stages in the Development of the Plan The Pilot Project The first step in the developing program of fundamental edu- cation should be the organization, in some suitable locality, of a Pilot Project which will draw upon the services of the best local educators and secure the help of such outside experts as may be required. It should give special attention to the following points: EDUCATION 411 Provision of the necessary minimum of additional equipment required by the schools for conducting the social centers; Adequate supervision of the centers through the employment of additional inspection staff, if necessary; and Arrangements to insure that the rural officers of relevant government departments use their appropriate publicity material and their visual education apparatus, if any (projec- tor, radio, gramophone, charts and pictures), at these centers so that they become the natural focal point for the educational work done by all departments. This should apply specially to the departments dealing with health, agriculture, irrigation, cooperatives and local administration. The work is not entirely new and has been attempted, in different forms, in many countries. Moreover, the technical help given by the UNESCO and the experience gained in the Pilot Project centers should provide the guidance necessary to orient the work in the right direction. It is, however, essential that each step should be a firm step which will not have to be retraced because it was taken without sufficient thought. In order to assure this, it would be wise at the outset to choose a few schools in each province with competent, enthusiastic and conscientious teachers, to organize them as community centers and use each as a model and observation center for teachers in the neighborhood. In this way, the movement will gradually spread outwards and, within about 10 years—the exact period depending on the success of the pioneer- ing schools-it should be possible to use most of the existing schools as community centers. An attempt should be made, wherever possible, to add a hall to the village school which would not only provide an evening center where adults could meet but would, in many cases, also prove a boon for the day school itself. In many cases, the hall might be constructed through cooperative local effort and local subscriptions. Villages and small towns may even, in the course of time, come to compete with one another in constructing com- modious, simple and attractive halls, equipped with the necessary furniture for this purpose. Where this is not feasible, the govern- ment should include the construction of such halls as part of the building program. The new schools that are established for primary education should be designed from the outset as combination school- 412 THE ECONOMIC DEVELOPMENT OF IRAQ community centers and this idea should permeate their buildings, their equipment and their staffing. It will mean a modified and improved school plan, and the inclusion in the school equipment of material that may be useful for adults. The whole organization of the school and its timetable should be so formulated that this work with adults will not be regarded as an extra burden or an after- thought but will become an integral part of the educational func- tion of the school. Even if this means giving the school an additional teacher, it will be both worthwhile and economical in the long run. The time schedule of the program, which should be carried out irrespective of changes in administration, is difficult to estab- lish because it will depend on a variety of factors which cannot be forecast. It is suggested that the target be to bring fundamental education, including literacy, to virtually all the adults in the pro- posed age groups within a period of 20 years, i.e., the same period set for the complete introduction of compulsory, universal educa- tion. It is therefore proposed to establish 1,500 adult education centers in accordance with a schedule which would make it possi- ble to reach almost 1,500,000 adults during this period. Of this total period, approximately the first two years would be required, as suggested above, for the Pilot Project and the preliminary work; the next three years would be used to convert about 10 percent of the schools, i.e., 120 selected schools, into community centers; and in the following 10 years nearly all the rest of the existing schools would be brought into the scheme. The final period of five years should be utilized for extending the program to more remote and inaccessible regions and to less receptive groups and communities. Thus the suggested time schedule for the program would be as follows: 1952-1953: Pilot Project 1954-1956: Establishment of 120 centers in selected schools 1957-1966: Establishment of centers in all the other schools 1967-1971: Completion of the program. The Organization of Centers How are these centers to be worked and staffed? It would probably be best to use school teachers and senior school students for this purpose. Unfortunately there are no large, well-organized 414 THE ECONOMIC DEVELOPMENT OF IRAQ cessful unity of the school and the community in this most important educational task of improving the quality of life among all the people.” Financial Implications of the Introduction of Adult Education It is difficult to work out the financial implications of this scheme because there are hardly any tested data to go upon and the progress of the scheme itself depends on a variety of fac- tors which have been indicated. The main items of expenditure would be: The establishment of a Division of Fundamental Education at the Ministry with adequate staff and resources for its func- tions as outlined. The cost of continuing the Dujaila Pilot Project (whether it is met from UNESCO funds or the national budget). The cost of conducting about 1,500 centers to be organized in the schools. The cost of a follow-up program. The first two are comparatively small items for which pro- vision should be easily possible through the normal expansion of the educational budget. The third item could involve considerable expenditure. However, the cost should not be too great if, as has been suggested, existing schools are used and the services of their teachers and senior pupils are made available on a voluntary basis. The teachers and senior students, who assist in the conduct of adult education centers, should be encouraged and expected to work primarily from a spirit of social service. The chief expendi- ture for staffing the center would thus be the payment of a small honorarium, perhaps five dinars per month, to the teacher (or two teachers in the case of larger centers) who will be directly respon- sible for supervision of each center. In addition, it will be neces- sary to provide for each center some necessary equipment as well as books, charts, pictures, and other materials, and to meet the cost of lighting in the evenings when it will usually be functioning. The fourth item will cover the cost of a number of fully equipped mobile vans (which may be partly met out of the funds made available by one of the international technical assistance pro- grams), the preparation of audio-visual aids, the publication of 416 THE ECONOMIC DEVELOPMENT OF IRAQ Thus the total expediture on these centers within the next five years will be within ID 30,000. Table 1 shows the number of centers proposed to be opened during the following 15 years, the recurring and nonrecurring cost of these centers, the cost of the follow-up program and a rough idea of the number of persons who might be made literate by the program. The latter number is calculated on the assumption that a period of three to four months will probably be sufficient to achieve literacy and that each center might therefore be expected to make three groups of 30 to 40 adults literate in each year. If experience shows that this period is not sufficient, the number of adults expected to be educated will be reduced and the calculations made will be correspondingly affected. It should, however, be borne in mind that these calculations are based on the assumption that only 1,500 such centers will be func- tioning. Actually, it has been suggested—and it is to be expected- that many voluntary agencies will, in due course, cooperate to set up centers of their own, and most of the new schools to be opened will be combination schools and community centers from the out- set. Thus, even if the centers cannot work with the full efficiency expected of them, it should not be difficult, with the help of these TABLE 1 PROJECTED NUMBER AND RECURRING COST OF CENTERS OF FUNDAMENTAL EDUCATION (in dinars) No. of centers Teachers' honoraria and lighting Year Follow-up program Adults made literate 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967-71 220 320 420 520 620 720 820 920 1,020 1,200 1,500 14,520 21,120 27,720 34,320 40,920 47,520 54,120 60,720 67,320 79,200 495,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 27,000 165,000 22,000 32,000 42,000 52,000 62,000 72,000 82,000 92,000 102,000 120,000 750,000 Total.......... 942,480 336,000 1,428,000 EDUCATION 417 additional centers, to bring about an almost complete eradication of illiteracy within the period specified. Thus it may be tentatively estimated that the total recurrent cost of adult education as scheduled in the above table would amount over 15 years to ID 1,280,000, to which a nonrecurrent cost for equipment estimated at ID 45,000 would have to be added. If the expenditure for the initial five years is also taken into account, then the total cost of the 20-year adult education program will be approximately ID 1,355,000. Even if the total reaches ID 2,000,000, the cost cannot be regarded as a high price to pay for the virtual eradication of illiteracy among the adult population and the inauguration of a broad program of adult education. IV. Agricultural and Technical Education The need for and urgency of a program for the improvement of agricultural and technical education has been stressed elsewhere in this report. Such a program for technical education may, how- ever, prove wasteful and disappointing unless it is planned intelli- gently at every stage with reference to the developmental needs of the country and steps are taken to insure that its qualitative standards are high. A competent specialist should therefore sur- vey the whole field of agricultural and technical education in order to determine the adequacy of present facilities and the need for trained technical personnel during the next 10 years in the light of the total development program projected by the government. It is understood that UNESCO is providing specialists for this purpose. It is important that these specialists be enabled to obtain some idea of the total requirements in the field of techni- cal personnel, the number of such persons available in different fields at present, the need for additional personnel, the policy to be followed in training Iraqi technicians in the country and abroad and the extent of the need for foreign technicians to meet immedi- ate needs. In view of the limited size of the country and the fact that technically educated persons are almost all to be found in * See Annex C, Agriculture and Animal Husbandry, pp. 251 et seq., and Annex D, Industry, pp. 297-8. EDUCATION 419 that most of their graduates are not equipped to set up a workshop or business of their own or even to find useful employment in estab- lished private business. Instead, most of them hanker after gov- ernment jobs or clerical positions in banking and commerce. The total number of students in all technical institutions at present is a little more than 750. This is very small both in rela- tion to the total population and the growing technical needs of the country. Moreover, so far as the Mission could discover, many technical graduates are not being fully utilized in types of work for which they are qualified. This represents a source of wastage which can be avoided partly by better coordination between techni- cal schools and technical occupations, and partly by placing more stress on practical training in the schools. In expanding the exist- ing facilities, provision must presumably be made for (1) the training of full-time students, and (2) supplementary training of promising workers selected from factories and workshops. In the latter case the course will need to cover not only the kind of techni- cal knowledge best imparted through classroom instruction but also any deficiencies in formal education such as reading, writing and mathematics. In both cases the practical training with tools, machinery and other types of equipment should be given in well- equipped workshops like those of the railways and the Iraq Petroleum Company. Technical education should therefore be planned jointly with the management of such shops, and a system of apprenticeship should be instituted in all factories and on con- struction projects. The State has sent about 780 candidates for study abroad dur- ing the last 10 years. It will no doubt be necessary to continue this policy for some years but it should be carefully reviewed in the light of the developing needs of the country. The Mission would urge three points on the attention of the government in this connection. First, the availability of training facilities abroad should not delay establishment of such facilities in Iraq, particu- larly for the training of people at what may be called the inter- mediate level. Local technical institutions should give special attention to training foremen and supervisors who would act as intermediaries between the highly trained engineers at the top and the semiskilled or unskilled labor. There is a general com- EDUCATION 421 V. Administration It is an obvious truism that no educational policy or program can be implemented with any chance of success unless there is rea- sonable stability in the administration and approved schemes are carried on without being affected by ministerial changes and the varying fortunes of party politics. Such, however, has not been the case in the country during the last few decades. There have been quick changes not only of government but also, and in conse- quence, in the higher administrative personnel of the Ministry of Education. It has been calculated, for instance, that during the 18 years between 1927 and 1945, there were 14 different Directors General of Education, although the post is supposed to be perma- nent and the person in charge is expected to work as the head of the administration. The Departmental Committee which formu- lated the Ten Year Plan has itself rightly and courageously drawn attention to this distressing situation; its report points out that frequent changes of Ministers has led to instability in personnel and programs and that officials at the Ministry have often been too weak to defend programs and policies before successive Min- isters who wished to make changes before they had been long enough in office to study the needs of the situation carefully. The Mission believes, therefore, that the government should take immediate steps to insure that there is reasonable stability of administration in the Ministry so that, once basic educational poli- cies and programs are approved, they are not subject to change without mature consideration. In order to secure this objective, the following measures relating to the operation of the Ministry of Education are put forward: 1. A statutory Board or Council of Education, consisting of appropriate officials and nonofficials conversant with dif- ferent types of educational problems, should be established to assist the Ministry of Education in the formulation of educational policies and programs and to guard against the possibility of hasty and ill-considered changes or the abandonment of approved programs. If the Board is created by statute, its constitution and personnel will not be easily upset as an incident of changes in the Ministry. 422 THE ECONOMIC DEVELOPMENT OF IRAQ 2. There should be a permanent secretary in continuous charge of the Ministry and reporting directly to the Min- ister. He ought to be a qualified and experienced educator who would serve as a connecting link between successive Ministers and thus help to assure reasonable continuity of policy. The government might consider whether to merge the existing position of Director General of Education with that of permanent secretary or to have two separate posi- tions. In any event, the present arrangement, under which separate and independent Directors General of primary, secondary and higher education work directly under the Minister, is administratively and educationally unsound and makes integration and coordination of educational effort extremely difficult. 3. An effort should be made to build up within the Ministry a body of competent educators, possessing vision and enthusiasm as well as experience, and enjoying reasonable security of tenure, who would specialize in different aspects of education. They should be able to speak with authority and confidence in their respective fields and guide and advise teachers in all types of schools. If they are to do so, it is essential that they be relieved of much of the petty administrative detail which at present hinders them from devoting themselves to larger issues. This would involve a certain amount of delegation of power to local educa- tional officers, which would need to be carefully worked out but which is sound in principle. 4. It is certainly desirable to associate local administration and influential local persons with the working out of the program that the Mission has recommended. Such asso- ciation will go a long way to stimulate public interest and cooperation in education. The Mission is, however, of the opinion that, at this stage, this assistance should be enlisted chiefly in an advisory capacity and that the over-all direction and supervision of the new and far-reaching educational reforms and measures should remain in the hands of the Ministry for the present. The Mission strongly questions the wisdom of the steps recently taken to entrust the provincial councils with the responsibility for primary education. Experience in other countries has shown that a sudden devolution of authority to local administration may lead to serious complications and diffi- culties and endanger the success of the entire program. This should not be taken to imply that many of the func- tions and powers which are at present exercised by the officials at the center need not be delegated, say, to the 430 THE ECONOMIC DEVELOPMENT OF IRAQ connection, the method of "aided self-help" which has already been referred to in the main report can be a very useful tool. Basically, this method is a very simple one. Whenever a group of people, a small village community, for example, wishes to carry out a project for the common good but lacks the means or the knowledge to do it, the government might agree to supply a few of the essential manufactured materials in return for an under- taking that the people will supply the labor by working on the project under the supervision of a government technician. This method has been successful in many parts of the world and can be applied to a variety of projects, such as housing, village dispen- saries, and drinking places for cattle or dams across small streams. Beginning with simple projects, the people will, as experience is gained, be able to undertake more complex projects of improve- ment. One of the objectives in stimulating the people to build for themselves and on their own initiative is to give them pride in their accomplishment and the will to maintain what they have built in good order. And this can be done at a minimum cost to the government in money and, what is perhaps more important in Iraq, at a maximum saving in the time of trained employees. The force of example often leads neighboring communities to embrace with enthusiasm similar methods of improving their conditions. The function of community planning and the principles behind it apply equally to all types of communities, although their applica- tion may vary from case to case. In subsequent sections the rural and urban communities are described and their problems discussed separately for the sake of convenience. Although there is a wide gulf between the typical small village and the larger cities, the distinction is to some extent arbitrary, there being little difference between the larger villages with 1,000 to 2,000 inhabitants and the smaller towns with about the same population. Apart from this, it is important to remember that the principles of good plan- ning, as distinct from the details of their application, are the same wherever they may be applied. COMMUNITY PLANNING AND FACILITIES 431 II. Rural Communities About one third of the people live in towns and cities; of the remainder, a small proportion are nomads and the bulk live in villages. In terms of population, therefore, the villages are the more predominant type of community. Although the distinction between a village and a small municipality is, as already noted, somewhat arbitrary, even the smallest municipalities are centers of local administration and have certain facilities of a higher standard than the villages. The distinction will, in any event, serve for present purposes. Virtually all the rural population live in villages, isolated dwellings being very rare. Landowners, in fact, frequently count their fellahin by villages. Except for the extreme northwest, where there are seminomadic pastoral tribes who live in settled com- munities for only part of the year, the inhabitants of the villages are mainly cultivators. A few members of the community may have other occupations such as the tending of sheep and goats, the keeping of small shops and coffee houses or the building and repair- ing of huts. There are, also, villages where a considerable number of the people are engaged in handicrafts (e.g. weaving) but these are rare, In the North, stone is generally available and is the common- est material for buildings, while in the South and the Center, mud is the usual material. The mud plaster of walls is reinforced with straw or cow dung to minimize the washing of clay in the mortar when it rains and to prevent temperature cracks. Where the climate is drier and palm leaves or reeds are available, especially in the marshes and palm belt of the South, these materials are more extensively used. Another feature which distinguishes the North from the rest of the country is the greater permanence of the villages. The main reason is probably that there is a much older tradition of settled cultivation than exists in the recently irrigated areas. Not only are there more small-holders, who would naturally have a close association with their land, but the fellahin also appear to have 432 THE ECONOMIC DEVELOPMENT OF IRAQ a greater security of tenure. Other factors, which have no doubt affected the permanence of villages in some parts of the irrigation zone in central and southern Iraq, are the salination of the land and the silting of canals. In such cases, the fellahin have no choice but to abandon their villages. In spite of these differences, however, the villages have a number of characteristics in common. The typical village is a cluster of huts huddled together without any orderly design. There are no communal facilities or open spaces for the recreation of the children. The huts are so constructed as to keep out heat, cold and sandstorms at the minimum expense. Consequently, they consist of a single room with thick walls and a doorway, which usually opens on a small enclosed yard that is used for both cooking food and keeping draft animals. In order to avoid sand and sunlight, windows are either very small or totally lacking ; sashes are expen- sive. Furnishings are limited to such elementary necessities as a mat and a plain table or a bench. Sanitary facilities, including latrines, are generally lacking. The villages are necessarily located near a source of water, by a canal in the irrigation zone, by a stream or a well in the North. The water is not piped, but must be carried from its source to wherever it is used. Nor is it purified, although the canals in the irrigation zone may be heavily polluted. The water which has been used by men for washing and in which animals have immersed themselves while drinking is often used for human consumption. The constant trampling of the canal banks for these purposes leads to leaks and, hence, to stagnant pools near the adjacent village. Where the source of water is a well, the earth nearby may be dug out for use in the construction of houses and so, similarly, a stagnant pool may be the result. Such pools, combined with the total absence of any sanitary disposal of waste and garbage, con- stitute a serious danger to health. Trees are rarely seen in the villages, although they would give relief from the sun and from sandstorms. Trees would also pro- vide firewood instead of the fuels currently used-animal dung, which could be used instead as fertilizer, and brushwood, which has to be gathered with considerable effort. Small gardens for vegetables are unknown. In fact, fruit and vegetables are almost COMMUNITY PLANNING AND FACILITIES 433 exclusively grown by farmers who specialize in these commodities and who market their produce in the towns. Planning the Improvement of the Villages Clearly it will not be possible to bring about any substantial and lasting change in the state of some thousands of villages until the root causes of poverty, ignorance and insecurity have been tackled. Only then can thriving communities replace the present villages with their primitive and almost static mode of life. Legislation for the improvement of villages is already in exist- ence. In 1936, a law (No. 70) for the construction of new villages was passed, empowering the Ministry of Interior to construct or renew villages, having regard particularly to health requirements, such as the construction of sanitary facilities and public baths, the hygienic disposal of waste and the provision of drinking water. A draft law on similar lines, but placing the responsibilty on the Ministry of Social Affairs, was put before Parliament during 1951. Parliament sent it back to the Council of Ministers for amalgama- tion with the earlier statute. Both are admirable in objective, but both are focussed primarily on the reconstitution of villages on more hygienic lines without regard for the urgent educational and economic aspects of the problem and without recognizing the need to enlist the cooperation of the people. Only a comprehensive and popular program can really reach the people and encourage them to help themselves. That little, in fact, has been done under the 1936 law is itself eloquent testimony to this. The task of remaking the villages is typically one for the new Community Planning Office. In cooperation with all the gov- ernment departments concerned and with their advice, it should be able to formulate and issue the necessary regulations, of which those that affect health are only a part, under the power conferred on it by the projected planning enabling act. The Mission has elsewhere made a number of recommenda- tions designed to raise the standard of living of the rural popula- tion. On the agricultural side, these include the organization of an extension service, the creation of cooperatives, measures to improve livestock and the provision of better drainage. Medical recom- mendations include the opening of more village dispensaries, the 434 THE ECONOMIC DEVELOPMENT OF IRAQ distribution of household remedies and measures to control endemic diseases. In addition, the recommended Housing Authority could design huts which could be built cheaply, would allow light and air to come in and would still afford protection against the elements. The Community Planning Office should initiate and regulate a program to remake the villages according to simple, workable plans which conform to these requirements of economic and social prog- ress and which do not merely consist of a more orderly layout of the village with improved huts. There is little point in improving a village if drainage fails and crop yields begin to fall. Education, too, is of fundamental importance. An adult education program as recommended in Annex G, Education, could help people to cope more effectively with their practical problems and prevent what might have been a well-planned community from deteriorat- ing into its old way of life. Provision should, therefore, be made for the needs of education and cooperation by building a com- munity center which could serve both as a school and as a meeting place. Shade trees, wood lots which would serve also as wind- breaks and, possibly, small gardens could be laid out in accordance with the agricultural department's recommendations. Simple stor- age of grain could similarly be provided. Stabling and drinking troughs for animals should be provided in cooperation with the health and veterinary authorities. Water supply and sanitary facilities will also have to be included in accordance with health requirements. These are merely examples of the desirable attributes of a village designed to better the living standards of its people. The Application of Self-help In view of the magnitude and the continuing nature of the program, it is vital that the will to recreate the villages come from the people themselves. Unless it does, little of lasting benefit will be accomplished. In this connection, the method of aided self-help would be particularly valuable, since there are great potentialities in the force of example, one village following another. But, to be effective, the examples will have to be striking and of practical value. The Mission suggests as one possible approach that, initially, a few villages be selected in different parts of the country and plans prepared for their improvement. An important element in this will be the choice of villages. The villages chosen should have an COMMUNITY PLANNING AND FACILITIES 435 intelligent and capable Mukhtar (headman), to whom the benefits of the replanned village and the methods by which it will be improved can be explained. He should be selected only if he shows enthusiasm for the plan and can carry his village with him. If such a man can be found, he should be consulted frequently, not only to give a sense of participation both to him and, through him, to the people of the village, but also because the Mukhtar may well be able to give valuable advice. In areas where the people are fellahin, the chosen village should be on the property of a land- owner with a genuine interest in his people's welfare. Once the plans have been agreed upon, they could be explained in general terms to the people of the village and the schedule of work outlined. Work should start at a time of the year when it will not interfere with the normal pursuits of the people. The first project should be one of interest to the village as a whole, perhaps the school. As the monograph on education notes, there have already been cases where villages have demonstrated their will- ingness to build their own schools. It would also be important to undertake at an early stage projects of obvious practical utility to the village, such as a piped water-supply with a simple purifica- tion plant and a drinking place for cattle. Ultimately, a start should be made on the rebuilding of the huts according to a design or a number of designs prepared by the Housing Authority. Prefer- ably, this too should be a cooperative venture, each hut being built not by one family, but by a larger group which would build in turn for each member. If work on the initial group of villages can be successfully completed, the country should have at its disposal several well- planned and executed demonstration units, where the people them- selves will be able to point to the benefits they have received, largely through their own efforts. To the extent that they are con- vinced that, as a result, they enjoy a higher income, better health and a more pleasant environment, other villages will become keen to follow their example. Eventually, the program might extend to one village in each qadha, then one in each nahiva and so forth. One warning must, however, be made about such a demon- stration program. It should not be too elaborate. The initial demonstration units should not be show-places in the sense that 438 THE ECONOMIC DEVELOPMENT OF IRAQ 500M 500M EXISTING LAYOUT House Roads FARM AND HOUSE 500M X 500M = 250,000 SQ.M House Form 100 FARMS IN THIS ARE, EACH PROVIDED WITH A HOUSE Form Boundaries HOUSES ARE IN GROUPS OF FOUR Secondary Roads RURAL UNIT SUGGESTED LAYOUT 300M Tertiary Roads Farm Form Boundaries FARM 300M X 825M = 247,500 SQ.M LOT AND HOUSE 30M X 84 M = 2,520 SQ.M TOTAL OF FARM, LOT AND HOUSE 250,020 SQ.M LOT AND HOUSE = 10% OF TOTAL 94 FARMS & HOUSES Residential Groupo" Secondary Roods School s Market 825M VILLAGE CENTER 440 THE ECONOMIC DEVELOPMENT OF IRAQ The Mission has noted elsewhere other defects in the Dujaila settlement: the large administrative staff, the tendency of the settlers to become minor landlords, the lack of participation by the Department of Agriculture, and the rapid deterioration of the soil owing to bad drainage. It has been made too elaborate and there has been insufficient coordination of effort. As a result, the settler relies too much on the benefits he has been given and too little on self-help, largely because self-help has not been aided in the way it should be by the concerted action of the appropriate govern- ment departments. III. Urban Communities The municipalities in Iraq range from Baghdad, the capital, with well over half a million inhabitants down to small towns with less than a thousand inhabitants. They cannot, therefore, be con- sidered as a homogeneous group. The largest of them have certain distinctive functions. Baghdad is the seat of the government, the center of much of the wholesale trade and the hub of the rail and road systems. Since the war, a number of modern factories have been built so that industry is now becoming an important element. It is a rapidly growing city, a particularly large influx having occurred during the war. Growth has taken place along both banks of the Tigris, expansion away from the river being limited by the bunds, which protect the city from flood. Mosul, the second largest city, has less than a quarter of the population of Baghdad. Lying on the rail line to Turkey, Syria and Lebanon, it is a center of trade to the west, especially in wool. Associated with this trade are industries such as the cleaning and packing of wool and the tanning of hides. In addition, there is a sizeable cotton and rayon textile industry, both factory and handi- craft. It is an old city and formerly the capital of the Turkish Vilayet of Mosul ; it does not appear to be growing. Basra, the port on the Shatt al Arab, is really a complex of three towns situated a few miles apart: Magil, the modern sea and air port; Ashar, an older port; and Basra proper. Apart from its COMMUNITY PLANNING AND FACILITIES 441 port traffic and such associated activities as the packing of dates, cleaning of barley and flour-milling (a new industry), Basra is closely bound up with the development of the new oil field at Zubair, some 10 miles inland. Basra, like Baghdad, received a large influx of people during the war, especially from nearby Amara. The population of Kirkuk, the fourth city, is believed to have tripled in the last 25 years as a consequence of the development of Iraq's major oil field. The two holy cities in Kerbela province, Kerbela and Nejf, have a large transient population due to pilgrim traffic from Iran and other Moslem countries. These two cities have many handicraft workers in such trades as jewelry, brass- work and embroidery. These six cities, together with Amara, are the only ones with a population of over 40,000. With a few exceptions, such as Khanaqin with its small oil field and refinery, the other municipal- ities function primarily as centers of administration and trade for surrounding districts. Broadly speaking, their size varies with their administrative importance. Of the provincial capitals, other than those already mentioned, five have a population between 20,000 and 40,000 and three between 10,000 and 20,000. Of the remaining municipalities, none has a population exceeding 20,000; less than 30, most of them centers of qadhas, have a population of more than 6,000. Despite differences in size and function, the cities and towns have a number of characteristics in common. The older parts are usually congested with narrow streets and alleys. Houses are built around courtyards, the only opening to the street being the main doorway. The houses usually have a flat roof or a partially open second story for sleeping outside in the summer. Brick is the commonest building material ; most of the larger towns have brick- works nearby, many of which are small and primitive. There are also a few modern concrete and steel buildings, mainly in Baghdad. Schools and hospitals can be found in the heart of these congested areas. An important section in every city is the Suq or bazaar, a network of alleys, often covered by crude roofs forming a series of arcades. These alleys are lined with the small shops of retail merchants and handicraft workers in textiles and metals. The Suq is usually located near the principal mosque. 442 THE ECONOMIC DEVELOPMENT OF IRAQ The development of the new parts of the cities is in striking contrast to the old. Broad tree-lined boulevards have been laid out in the form of dual carriage-ways, the dividing strip being orna- mented with flowers and shrubs. Along these boulevards there has been intermittent residential building activity, so that vacant lots alternate with the houses and gardens of the well-to-do. In Bagh- dad, particularly, many of these vacant lots have been occupied by squatters. In the largest cities, the new boulevards and the main streets are paved, but the paving is apparently of poor construc- tion, as it has deteriorated rapidly. In the other cities and towns, however, the streets have merely been graded. Most towns with a population of over 6,000, and a few smaller one, have both a piped water supply and an electricity system, which are, with three major exceptions, managed by municipal boards under the direction of the Ministry of Interior. The water is, however, not always purified and the electricity is invariably expensive. No city, not even Baghdad, has a sewage system. Waste water is disposed of into cesspools or allowed to run into the streets where it is apt to collect in stagnant pools. The Lack of Coordination in Urban Planning In spite of their superficially impressive appearance, the new sections of the cities have not been properly planned. Streets and traffic circles have been laid out according to prescribed geometrical patterns without paying much attention to their functions or to the need for creating integrated residential areas with appropriate housing for the different income groups and provision for schools, shops and hospitals or clinics. In the largest cities, the importance of allocating zones for different purposes and of establishing a proper interrelation between the zones has been largely neglected. Growth has been, in fact, piecemeal and spasmodic rather than coordinated and regular, and emphasis has been placed more on the ornamental than on the useful. Some traffic circles, for example, are unnecessary; others are even safety hazards. The practical value of new streets is vitiated by the common and dangerous prac- tices of using both carriage-ways in both directions and of taking short cuts in the wrong direction around traffic circles. Sometimes streets have been ruthlessly cut or widened through built-up areas COMMUNITY PLANNING AND FACILITIES 443 with little regard for the consequences; the remnants of buildings which have been sliced through at odd angles can still be seen. By law, the Ministry of Interior, through its Directorate General of Municipalities, is already responsible for the planning of municipalities. The Directorate General of Municipalities in turn has under it the Technical Section for Planning and Organi- zation (or Planning Office) which has among its duties the sub- mission of "technical advice as regards municipal schemes for the organization and planning of cities and towns in accordance with modern principles" and the carrying out of “any of the said schemes which are required to be performed ...".3 This office with a staff of 17 does topographic surveys of towns and prepares development plans from such surveys. It also plans for and supervises construction of some municipal structures, including housing, and attends to legal matters concerning land sub-division and assessment. Also by law, the Ministry of Interior has jurisdiction over the administration of municipalities. Law No. 84 of 1931, as amended, provides that municipalities should attend to "the division of the town into areas having regard to its development capacity and the specification of plans to be followed for the improvement of streets, public places, and buildings in such areas." This particular duty concerning planning is assigned to the Office of the Municipal Engineer Although both the Planning Office and the Office of the Municipal Engineer are under the Ministry of Interior, the two entities involved with planning are quite distinct from each other. Duplication of work and conflict in jurisdiction both occur. Muni- cipalities prepare their own plans and then forward them to the Ministry of Interior but apparently they do so only for information, and not for approval. Some plans are merely sketches. Others have been made without surveys. Where surveys have been under- taken, they are mainly topographic surveys showing the existing layout of streets and buildings, and not the diagnostic surveys required by scientific planning. In several cases plans have been altered without submission to the Ministry. Some streets which Regulation of the Ministry of Interior, No. 39 of 1947. COMMUNITY PLANNING AND FACILITIES 445 ment, which are usually forthcoming only at irregular intervals. The loans usually have to be amortized over a period of 10 years or less, which places an onerous burden on municipal finances. The municipal authorities in a number of northern cities, which were allocated funds in the fall of 1950 and had spent a large part of them at the time of the Mission's visit, were still in doubt as to whether they had received a grant or a loan. Uncertainty as to income or capital funds inhibits advance planning. Moreover, when the authorities do receive funds, they are apt to spend them as fast as possible for fear that, if they have not actually been spent, they may otherwise be withheld. The usual way of overcoming this situation, and possibly the only way in the circumstances, has been to build new streets, which are relatively easy to plan and execute. In addition, the municipality is by law entitled to recoup part of its expenses from the owners of land that has increased in value. The provincial authorities, who are responsible for carrying out the projects of the central government and who might be expected to cooperate more closely with the municipalities, have been faced with similar difficulties. They, too, have had hand-to- mouth experience with capital expenditures. Nearly completed buildings have sometimes been left standing for months, because funds ran out before the construction could be finished. Further- more, the projects to be undertaken are normally prescribed by the central government. Apparently, some advance on this pro- cedure has been made recently and the Mutasarrif and the Provin- cial Administrative Councils have been given more latitude in plan- ning their own development. Planning in the Future The opportunity now exists to substitute an entirely new approach to urban development for the old haphazard methods. An example of how well the development of a town can proceed, given the right spirit of cooperation, is provided by the small town of Bedrah, which lies near the Iranian border in Kut province and which has a population of about 4,000. This project involves the reconstruction of the old town on a new site. Several streets had been constructed and 24 dwelling units were ready for occupancy when the Mission was in Iraq. Thirty more units were scheduled to be finished during the year. Besides COMMUNITY PLANNING AND FACILITIES 447 are at present an amalgam of a building code and zoning regula- These two distinct parts need to be separated and each properly administered. While the Community Planning Office will have to take the lead in organizing the program, it is essential that it should not attempt to do all the detailed work itself. Although, in some cases, technically good plans may be prepared in this way, the result will be neither popular nor lasting and the planning authority may become a bottleneck. On the other hand, if plans are prepared independently by local authorities or by other government depart- ments, the results will probably be uncorrelated and, therefore, unsatisfactory. The most desirable kind of planning is likely to be achieved by a combination of the two. Although plans should be initiated and later executed by the agencies immediately concerned, the central planning body should guide and coordinate them throughout the various stages. In the larger cities it could probably confine its activity to stimulating interest in the benefits of plan- ning, advising on the preparation of plans and reviewing them at intervals in the course of preparation. In the smaller muni- cipalities, it may have to do more of the actual work, but it should certainly endeavor to enlist as much local advice and cooperation as possible. As was noted earlier, imposition from above is undesirable. Once plans have been drawn up, the financing of development should be placed on a more satisfactory footing. The principal source of funds for capital expenditure should be the Development Board. Whether they are in the form of loans or grants, they should be committed (although not actually credited) sufficiently far ahead for the municipalities to arrange a schedule of work with some degree of confidence. Loans should be made for a longer period and on less burdensome terms, especially as regards amorti- zation. A careful study of a municipality's finances should be made to assess its probable ability to repay. Slum Clearance One of the major problems confronting the municipal author- ities is the eradication of the worst slum areas of the cities. In Baghdad and Basra, this is a formidable undertaking, since the influx of people from Amara has been very large. Estimates vary COMMUNITY PLANNING AND FACILITIES 449 tion 750 dwelling units on a site five kilometers from the city. This and three other city development projects were financed by a 10-year bank loan, guaranteed by the Ministry of Finance. The original resettlement plans were, however, hastily and incompe- tently prepared; they were submitted to the Ministry of Interior only a few days before the foundations were laid. Subsequently they were found by the contractor to be so defective that an advisory committee of experienced engineers had to be appointed to review them. The committee recommended many changes in the layout and site engineering of the project, in the design of the houses and in the specifications of materials. Some of the changes, including the installation of an adequate sewage and drain- age system, had to be made after construction was well under way. Ultimately the cost of two-room houses is expected to be about ID 250 and of three-room houses, about ID 300. It is unlikely that the sarifa dwellers can afford to purchase these houses by installment as originally intended. The Municipality now has in mind to build 1,000 mud-and-mat huts at a cost of ID 40 each for sale to the sarifa dwellers. Other cities besides Baghdad and Basra have their slum prob- lems, though not necessarily of the same kind. For example, all but the most modern part of Erbil is situated on a high mound, rising almost sheer from the surrounding plain. On this mound, which is probably on the site of a city continuously occupied for several thousand years, the houses are packed together with only narrow alleys between them. Waste water runs down the middle of the alleys. The incidence of tuberculosis is said to be high. Less extensive examples of these so-called ancient "citadels" can be found elsewhere, for example, in Kirkuk and at Nabi Yunus near Mosul. The problem of resettling large numbers of slum dwellers varies, in kind and in degree, from city to city, but it should in essence be treated as a national problem. It is too important to be subjected to the kind of expediency and faulty technical plan- ning with which it has so far been approached. The job is one for the new Housing Authority, although the municipalities will clearly have to play their part. 452 THE ECONOMIC DEVELOPMENT OF IRAQ Due to the nature and magnitude of the work involved, the Housing Authority should be firmly established in the Ministry of Social Affairs and provided with powers commensurate with its responsibilities so that it may perform its functions effectively. It should ultimately have a staff composed of technical men trained in housing design, architecture, site and sanitary engineering, law and project management. As in the Community Planning Office, they should also have some knowledge of the sociological and eco- nomic aspects. On the financial side, the Housing Authority should be pro- vided with a Housing Fund to which the Development Board would allocate money set aside for housing and into which the proceeds of rentals would be paid so that maintenance and repairs could be financed without constant resort to the Treasury. Pend- ing a housing survey the amounts set aside for housing in the five-year program of the Development Board, namely ID 300,000 annually, might be increased to ID 400,000 as a provisional target for housing expenditures. On the technical side, the Housing Authority should be com- plemented by the establishment of an Applied Building Research Station attached to the proposed Department of Research and Standards in the Ministry of Economics. Such a station should test, develop and demonstrate improved methods and techniques for low-cost housing; collect and disseminate technical housing and building information; experiment with and develop new uses of local building materials, construction methods and house designs; and carry on other useful research in the housing field. The Station should be staffed as far as possible with local techni- cians, but for the first year or so one or two building research experts from abroad should be engaged to start and run the Sta- tion and train the local technicians in order to enable them to operate the Station themselves after a time. A new building should be constructed for the Station and equipped with the basic instru- ments and machines necessary for starting tests and experiments. It will clearly be necessary for the Authority to work closely with the Station and to insure that the broad outlines of its work con- form with the need of the country. COMMUNITY PLANNING AND FACILITIES 453 Labor and Materials The Housing Authority could also take the lead in improving the quality of labor and materials in order to bring the costs of building down. In this task, it should cooperate with the Ministry of Education in reorganizing training methods. It could also advise the Industrial Bank on desirable types of specifications of building materials and should estimate probable requirements so that the Bank could initiate investment to this end in partnership with private enterprise. The materials produced locally for housing construction are on the whole inferior and expensive. For example, a casual inspec- tion of house construction in the cities will reveal that unevenly burnt bricks with cracks and chipped-off edges and corners have been and are being used. To remedy the shortage of good building materials, foreign goods have been imported at high cost. In the case of the IPC housing project, it was estimated that the cost of imported steel window and door sashes alone amounted to as much as 20 percent of the cost of the structures. The inferiority of building materials is matched by the poor quality of building labor, which again adds to the cost of construc- tion. There is urgent need for good carpenters, masons, plumbers, electricians and painters. Unfortunately, attempts to improve skills through vocational schools have not been altogether successful. The schools lack competent instructors, a number of those teaching in Baghdad, for example, being illiterate. Workshop accommoda- tions are restricted and the equipment is out-of-date or in bad con- dition. These deficiencies might be overcome by importing instruc- tors from neighboring countries, by obtaining new equipment and by running evening classes until more laboratory space is available. This is not, however, the full answer. Graduates from vocational schools tend to prefer desk jobs to field work. It would be pre- ferable to concentrate more on training schemes on the job under good supervision. Government Housing The Ministry of Social Affairs is empowered by Law No. 38 of 1941 and Law No. 22 of 1945 to "construct dwellings for COMMUNITY PLANNING AND FACILITIES 455 the vicinity of Basra were not up to specifications and the addi- tional cost of haulage from Baghdad had to be borne. Municipalities, which come under the Ministry of Interior, carry out projects such as those at Bedra and Basra. For various reasons, principally lack of finance, there have been few such pro- jects. Other ministries occasionally provide houses for their offi- cials who are stationed in the provinces, but, on the whole, the standard of housing for these officials is deplorably low. The incentive to obtain jobs in Baghdad is already considerable. The government needs able officials who will work willingly in the field and who will have a standing in their community. A decent house is certainly one of the prerequisites to attract such men. Housing by Transport and Industrial Enterprises The Port of Basra, which has over 5,000 employees, is at present completing the construction of 50 dwelling units for junior employees and is contemplating further building. Although there are plans for smaller houses of 45 square meters to cost about ID 300, most of these houses, which are of brick, concrete and steel, are much larger and have such additional facilities as a bath, store- room and veranda leading to the roof. Their cost is, accordingly, high, ranging from ID 1,500 to ID 2,000, but they are let at a nominal rent. Although the buildings were well designed and the materials used were of good quality, the site planning was not thoroughly studied. Too many structures were crowded in a limited area in spite of the fact that the Port has plenty of available land at its disposal. The yard spaces between the buildings and the high brick fences separating the units are hardly six feet wide. Build- ings having different orientations have identical plans. In 1926 the Iraqi State Railways started a program for the replacement of temporary buildings built after World War I. It is estimated that about 60 percent of the needed permanent quar- ters for artisans and laborers in stations other than those in Bagh- dad and Magil (Basra) have already been provided. Suitable quarters at Baghdad and Magil have been provided only for those members of the staff who are required, for operational reasons, to live in close proximity to the work. 456 THE ECONOMIC DEVELOPMENT OF IRAQ The quarters which have so far been provided for laborers and artisans of the Iraqi State Railways are: 283 units consisting of two-room quarters, 2,090 units of one room and 60 units of sarifas. Shortly after World War II, the Iraq Petroleum Company embarked on a large housing project in order to provide accommo- dation for its entire staff of artisans and their families. This was done because the increase in its activities and employees had caused a strong pressure on the available housing in Kirkuk. When rents became exorbitant, the company give its employees a rental allow- ance, but this failed in its purpose as rents rose by a correspond- ing amount almost immediately. The project has already succeeded in lowering rents in the town, the artisans' families who have moved in having released space in the town for laborers' housing. It is not proposed to extend the project to laborers' housing, first because of the shortage of materials and secondly because of the generally transient nature of the unskilled labor force. The present housing project under construction in the Arrapha Ridge Area near Kirkuk will be finished in five to six years and will eventually consist of 1,028 houses. Of this number, 284 have been completed and accommodate about 1,485 people. At present there are 58 more under construction. There are three basic types of houses: the one-bedroom, the two-bedroom and the three- bedroom semi-detached and attached units. Except for relative sizes and the number of bedrooms, the various types of houses have the same number of rooms : a living room, a kitchen, a storeroom, a bath, a water closet, a veranda and an enclosed courtyard. Stairs lead up to the flat roofs. The houses are surrounded by gardens. The houses have walls made of bricks and stones with port- land cement mortar, floors and ceilings of concrete, and window and door sashes of steel and glass. They are provided with both cold and hot water and with electricity. Each one-bedroom unit costs about ID 1,400 to build including utilities, and rents for ID 3.6 per month plus a service charge for water, power, etc., of ID 1.2. The biggest or three-bedroom unit costs about ID 3,000 and rents for ID 7.5 per month plus a service charge of ID 2.1. The housing project has been planned on the neighborhood unit scheme—there being two units with schools, open spaces, stores and clinics. In addition the entire project will ultimately 458 THE ECONOMIC DEVELOPMENT OF IRAQ operating is under the control of Municipal Water and Electricity Boards. The Boards appear to be inexperienced in the management of such concerns, financial control being especially inadequate. Water One of the prime requisites of a community is a safe water supply. The principal source of water is the rivers. The Tigris, the Euphrates and their tributaries offer continuous and generous supplies of fresh water during the entire year. Communities have naturally stayed close to these sources of water and close to the many irrigation canals which now extend from the river systems. While water from the rivers and irrigation canals is fresh (low in salt content), it nevertheless is high in colloidal and organic material, and usually high in bacteria. It is necessary, therefore, to treat such supplies of water for human consumption if general health is to be maintained (see Annex D, Health). There are also a number of communities, mainly in the North, which are not situated near surface sources of water. These have to rely on subsoil water which, although it may be free from pollution, is apt to be brackish. The first modern water works was constructed shortly after the first World War. Development in this field has reached the point where approximately 40 municipalities have modern water systems, the outstanding ones being in the larger cities of Baghdad, Basra and Mosul. All water works follow a similar pattern and consist of a raw water pumping station, sedimentation tanks, sand filters, chlorine treating equipment and an elevated surge tank. The capacity of the various water works is usually premised on the basis of 25 gallons per person per day with an allowance for a population growth in 25 years of 1.5 percent per annum. Administration by the Water Boards has thus far been good. The Boards have established water rates for large consumers on a metered basis, while small consumers receive a flat rate. In either case, the rates are very reasonable and vary from 10 to 30 fils per cubic meter or from 100 to 250 fils per month, where a flat rate is established. The development of municipal water systems has not taken place as rapidly as it should, primarily because of the lack of suffi- COMMUNITY PLANNING AND FACILITIES 459 cient funds. The Department of Municipalities, however, antici- pating assistance from the Development Board in its financing, has prepared a plan of construction during the next five years which will include the expansion or construction of new facilities in 114 municipalities having an aggregate population of approximately 950,000. The plan is practical and technically follows present methods. Many of the treatment plants are of the same size. This, fortunately, permits standardization which considerably reduces capital costs. The total estimated cost of the program is ID 5,651,600 of which approximately 50 percent would be in foreign exchange, mostly in sterling. There are numerous villages in addition to municipalities where the problem of obtaining water is very critical. In many cases, this could be relieved by either a single well or by pumping small quantities of water at some distance from streams or irriga- tion ditches. Such sources of water would in many cases be impure and would require the use of clay filters. Nevertheless, it would relieve the people of the burden of carrying water for human consumption a great distance. These facilities should not cost more than ID 1,500 per installation. With the need for pure water so critical, it is recommended that the Development Board assist the Department of Municipal- ities in financing the five-year program for the municipalities. In the meantime, the Department should study the problem of supply- ing water to the numerous villages and formulate plans for con- sideration by the Development Board. Sanitation Adequate disposal of waste water is an acute problem through- out Iraq and a long-term program needs to be drawn up. Pending this, a start should be made with a sewage system in Baghdad, since the rise in the subsoil waters makes the need of this city most acute. In 1947, an English firm prepared a report on the installa- tion of a sewage and drainage system for the city-complete with pumping stations, sewage purification works, etc., and estimated to cost ID 4,600,000 on the east bank of the Tigris and ID 4,300,000 on the west bank. The proposed scheme could be undertaken in stages. 460 THE ECONOMIC DEVELOPMENT OF IRAQ The initial step might be to carry out the plan for the east bank according to a schedule based on the relative importance of its various elements. It would be useless, however, to proceed unless connections with the system are made compulsory for all property owners. No new constructions or major building alterations or enlargements should be permitted without adequate provision for such connections. Existing structures which are connected to the water supply system should be required to connect gradually to the sewer, according to a scheme to be worked out by the govern- ment and based on sanitary, engineering and financial considera- tions. The administration of the sewage system would logically come under the jurisdiction of the Water Board. The system might be made to help pay for itself by setting a certain surcharge over the cost of water actually used and then discharged into the system. For the other larger cities, surveys should be conducted now to gather the data necessary for the actual design of each system. For example, the preliminary studies for the sewage problem of the City of Mosul should be preceded by a topographic survey. It is believed that the entire flow of the sewage and rain water could be designed so that no pumping will be needed. Chemical treat- ment of the sewage is to be preferred to discharge into the Tigris, because people living in downstream villages get their drinking water directly from the river. For the smaller towns and villages, efficient and inexpensive individual sewage disposal units should be installed privately according to models prepared and tested by the government. Com- munity bath and toilet facilities should be provided in the poorer sections of towns to supplement private individual units. Public lavatories should also be provided in the cities wherever there are concentrations of people, such as in business areas, parks and other public places. Electric Power Municipal power plants serve primarily public and domestic lighting needs. Most industrial plants supply their own power. Cheap fuel also makes it possible for small direct-connected diesels to compete favorably with electric motors as prime movers, pri-