Iraq - Current economic position and prospects

RESTRICTED Report No. EA-155a This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION CURRENT ECONOMIC POSITION AND PROSPr.CT. February 10, 1966 Europe and Middle East Department CURRENCY EQUIVALENTS 1 Iraqi dinar = 2. 80 U. S. dollars 1 TT S dlollar ) ' TraA d clinars TABLE OF CONTENTS Page No. MAP i BASIC DATA 11 SUMMARY v I. THE SETTING 1 II. ECONOMIC GROWTH 2 Investment, Savings and Consumption h Labor and Employment h III. DEVELOPMENT OF MAJOR SECTORS ) Agriculture 5 Oil Industry 7 Manufacturing 9 Power 10 Transport 11 IV. PUBLIC FINANCE 11 Government Revenue 13 Current Exenditure 13 Public Investment 14 Supnlementary and Indenendent Agencies' Budgets 14 nm P_qtjn Piihi j n Dpht. 1 V_ MONETARY DETVFT.OPMENTS l VT RAT.AT.p. Op PAYMPNTS 16 EPort* rowth Strnctur% and DirPetinn 16 Imports: Growth,Structure and Direction 17 7-nin a P&ST -T0 nnr ?.-r+.rn T)aleb 17 External Economic Relations 18 VII. DEVELOPMENT PROSPECTS 18 The Five-Year Plan 18 Oil 21 .LnAILuiALu rYC-ivA ,7FT1 f,r1TnfT TTQ-rf'%1T ZAKO R.n LE rend.Sh.n Boghoyo D. '~ KU --- . a n Road Z U8A Ratlwaysý 0il fields e anneiesOEMNS 025 50 7' 100 . .,LEs NEUT RAL TERRITORY*- JANUARYt#966 1BRD-1071R (ii) BASIC DATA A p- 171 - AO mi-i-prilesPc of whi ch c-1-1tiTADIe 2.90,172 Sn~inr mjlac * ~ ~ ~ ~ ~ W . AJI~' L"~/* ILJUUU, U fL U1±±.J Density (per cultivated square mile): 275 Political Status: Republic since 1958 Gross National Product Estimate for 1963: ID. 588 million Rate of growth, 1954-63: 6.3% p.a. 1962-63: 2.17 p.a. Per capita (1963):About ID. 80 ($225) Gross National Product at factor cost (1963): ID* 553 million of which, in percentages: Agriculture 20 Mining (mainly petroleum) 44 Industry 1/ 16 Services 40 Less income to abroad -20 Percent of GNP at factor cost 1963 1958-63 Gross investment(estimate) 14.8 19.5 Gross saving8(estimate) 17.7 20.1 Balance of payments Current account surplus 2.9 0.6 Investment income payments 19.9 19.1 Government tax revenue 29.3 29.0 1/ Including manufacturing, electr 'ty and construction. Relationshin to customs area: Member of Arab Common Market. Money and credit June Rate of ( 9illion ID.) 19-8_ Money supply 139 6.8% p.a. Time and savings deposits ' 1 Bank claims on private sector 69 8.8% p.a. 1964 1959-64 Rate of change in wholesale prices 5.2 3.2% p.a. Public Sector Operations (million ID.) 1904/65 Rate of increase Government total revenue 197 7.8 p.a. Government ordinary expenditure 180 13.2% p.a. Surplus 17 -5.0 p.a. Government capital expenditure 55 10.4% p.a. External assistance 9 Overall deficit 29 External Public Debt ($ million) Oct. Average of 1965 1961-64 Total debt 198 104 Total debt service in 1966 12 n.a. Debt service as % of total foreign ) exchange earnings net of invest- ) 2.7 n.a. ment income payments ) Balance of Payments ($ million) 1964 Rate of increase 1957-64. Total exports 840 7.3% p.a. Total imports -410 3.0% p.a. Net invisibles -386 9.9% p.a. (iv) Rate of Balance of payments ($ million) 1964 Increase 1957-6) Net current account balance 1 Net errors and omissions -43 1964 Average of Commoditv nonentraion of exports (oil) 94 93 r(rnq fnri gn evchanne reserves 261 30 Sept. 1965 Commitments Disbursements Total 292 198 Soft assistance 278 192 Had sssance 14 Kuwait 8 8 0.. 28 17 (v) Summary and Conclusions i. Iraq possesses considerable potential for economic development. T+. i und-enpnpilted in reat.ien to the arep tratt_ off land which could be brought under cultivation by effectively utilizing the abundant supply deposits provide the country with large and increasing revenue and foreign Vr- ~ f, 4- -o- 4 4-4 -1 +I ~ ~ .+ A 4 ~ ~ -~v1 ~ ' m n1- Y -x Since the overthrow of the monarchy in 1958, large landholdings have been ex-ropratd ol cnesosotid h rdcn re aebe ai celled and many banking, commercial and industrial undertakings were Uv.L zeu .L L7U Dieverthle"Les, sU~Iubsaniacl groUwthA Uas takn - ac in the last ten years. iii. According to unofficial estimates, the gross national product increased at an overall rate of 6.3j annualy, I_uctuating watn oiL income and agricultural production- A striking feature of the national income data is that, despite heavy investment in agriculture in the pre- revolution period, the volume of agricultural production failed to in- crease. Manufacturing increased its share in the gross national product to 12%. Gross investment rapidly increased during the period 1953-57 but since then has tended to decline largely due to a reduction in invest- ment by oil companies and other private undertakings. More recently the nationalization of banks, insurance companies and large industrial establishments in July 1964 has been a further discouragement to private investors. iv. The decline in private investment was, to some extent, offset by public investment. The pattern of public investment has changed since the 1958 revolution in favor of social welfare projects and at the ex- pense of agriculture. There seems to have been considerable wastage of funds partly because of inadequate project preparation and follow-up, especially in agriculture where much needs to be done to improve irriga- tion farming. v. Oil plays a decisive role in Iraq's economic development. It accounts for nearly one-quarter of the national income and provides the country with 90% of its foreign exchange earnings. Revenue derived from the earnings of the Iraq Petroleum Company (IPC) which produces practically all the oil, accounts for about 70% of government revenue and holds the key to fiscal operations. Oil production and exports sharply increased in the 'fifties but failed to expand during 1961 and 1962 as a result of government measures. The improvement in IPC's relations with successive governments in the subsequent period led to a 121 annual growth in nroduction. reaching 61 million tons in 196. No major investment has been made in the oil industry in the last three VpAr-, nd nrnrnbition i, annnnnnhina +.ha n-rPAnt. n +v of 70 million tons. Prospects for oil exports in the long-run seem to be good. The (vi) growth in oil production could be maintained around 9% in the future (which is what many observers feel that Iraq should do) provided new investment in the oil industry is made. Further investment to increase the capacity of the oil industry will largely depend on arrangements the government may make with prospective investors. The government has so far taken no action towards ratifying the new agreement negotiated in 1964/65 with the IPC. vi. The fiscal position was extremely strong before the revolution. Since then there has been a deterioration mainly because of a more than two-fold increase in defense and social welfare expenditure. Part of the increase in ordinary exnenditure was financed by drawing down accu- mulated cash balances and borrowing from the Central Bank. A loan of TD- 30 mllion from Kwit wn- inA t.n rpdnpE this short-term borrowing. Nevertheless the Central Bank's claim on government and semi-government APenniP in +hP fnll nf 1QC rna +.n nimny- +.h mv-imium Ivl n,rmittpid b law. vii. The present government seems to recognize the problems confront- ng th countr, particUarly the, impoanc of rest_,rin oiia stability as a necessary condition for economic growth. Besides making the~~ pu.a1 -IVicJ sleco mor efiiMl M1% UU.V1UL1 UAL , X L V U - L " L - 1965-70, it wishes to encourage the private sector to contribute effectively 1. _% .LO U Ai aer VQ.LL,LUU.L ZjU.LUU11 UV wjz1- AXU.U_DL1P W blem and wishes to coordinate its economic policies with that of the U.A.R. t came into office, however, only about five monhs ago after a period of frequent governmental changes. viii. With oil production approaching the capacity of present instal- lations, oil.. revenues during the next rew years are likely to be insuf- ficient to finance public investment at the level proposed. Debt service payments on the present external debt will reach a maximum of ID. 9 million ($25 million) in 1970, equivalent to about 6% of estimated foreign exchange earnings in lyo1. Iraq should therefore be able to service a modest amount of additional debt on conventional terms. T. TM, SETrTTNG 1. Iraq covers an area of 172,000 square miles (roughly the size of Sweden or the State of California) with a population of about 7.5 million, and is bounded by Turkey on the north, Iran on the east, Saudi Arabia and Kuwait on the south, and Syria, Jordan and the north-eastern part of Saudi Arabia on the west. Geographically, Iraq consists of three zones differing in physical features. The most important of the three zones is the central zone which is traversed by the Tigris and the Euphrates Rivers. This zone comprises about one-third of the total area and over three-fifths of the population is settled in this zone. The uplands in the north-east receive sufficient rainfall to permit rain-fed cultiva- tion. The vast expanses of desert in the south-west are arid and entirely unproductive. On the whole, however. Iraa is advantageously Placed in the Middle East in that it has not only a relatively abundant supply of water and large tracts of potentially cultivable land. but also vast netroleum deposits whose exploitation has already provided the country with substan- tial revenue for economic develonment. 2. The 1958 revoluti on. which overthrow the monarnhy has basinalIy altered Iraq's political and social structures. The revolution, started by Army eroups and sunnorted hv +.he various pnrties which ha opnose the monarchy, was closely patterned on the Egyptian precedent. Under the facade of changing regimes, Arb nat.ionaismm and mocalism akin to thoe of the UAR have prevailed since 1958 and have resulted in internal and external pTljiP.. ri mmtnPiai opposed to thoe followred nd r +h monarchy. 3. On the internal scene, the revolution meant a progressive elimi- nation1- of-L th omrruigadenrpeer cas whether based on tribal and feudal structures or on nascent capitalism. Land reform de- economic influence. The progressive shift to government control of arge eterp1iU, uJm1nang in tne LY04 nationalizations, completed the removal of the tightly-knit political and economic oligarchy. The re-volutio alo entaleu a drastic change in some of the austere economic and development policies of the monarchy. It focused investment on social welar uum or tne poorer classes, especially in urban areas. * On the external scene,the revolution rapidly shifted from the monarchy's alignment with the West to a non-alignment of the Egyptian type. Close economic relations with the communist countries were estab- lished and, during the Kassim regime, the government was strongly influ- enced by the Iraqi communists. At the time of the 195b merger of Syria with Egypt, Arab unity seemed near realization. However, every succeed- ing regime, whether that of General Kassim in 195b-63, or the Baath dominated government of 1963, or the present regime of President Arif since, has stalled before taking the last step. Every time the realities of Iraqi politics ranging from the interests vested in independence to the Kurdish rebellion have prevailed over aspirations towards Arab unity. 5. Against this background, none of the rapid and sometimes violent changes in government which have taken place since the 1958 revolution have meant as much as the latter. These changes reflect the right for power within the surviving political parties and the army which has since 1958 played an important, if not determining, role in political changes. Their conflicts derive more from personal and tactical differences than from a ouestioninp of the principles of Arab nationalism and socialism. On both scores, however, Iraq has still to choose a permanent policy. Its 1964 agreement for a merger with the UAR may not be implemented within the two-year schedule agreed upon. In the same way, the latest cabinet formed in Pentemher 196q (under a civilian for the first time since 1958) seems determined to reappraise the socialist measures previously taken without hing hond hv dntri-ire nrincinles. The main task which lies ahead of Iraq is to restore political stability - and with it administra- tive efficiennc - in the abSence of which the changes introduced since 1958 cannot easily bear fruit. TT L11)ATTlr r'_(7TPT 6. Since the 1958 revolution, successive administrations have intro- A~.- 4 .,i.. -~ +ke ^TT" c 4 " r%f' Inirid and capital. Nevertheless, although statistical information available on W,i-eo oy i ~UI1, ' l illlue U, ±tLZj LLt:CI ULIcLU OUL)U C1_LMA.. rL j '-'l the last ten years and the rate of growth of GNP in the five-year period following the Jypo revolution was more or less tne 4ame -'un years preceding it. 7. In the period 1953-55 to 1961-63, according to unofficial estimates, the gross national product in 19-6 prices increased by 6.3% annually. Per capita income increased at an annual rate of 6% (4.4% in real terms) and was estimated at about ID. 0O (522_) in 1963. Much of the groitn was concentrated in three years - 1954, 1960 and 1961 - which accounted for nearly two-thirds of total increases in GNP during this period. Output declined in 195 and 1963 mainly due to a fall in agricultural production. - 3 - Percentage Composition of Gross Domestic Product at Current Prices and Rate of Growth 2 Average of Average of Annual Growth Rate 1953-5 1961-63 (at 1956 factor cost) from l953-5) to 1961-63. Agriculture, forestry and 24.9 22.3 1.0 fishing Mining and quarrying (mainly 49.9 40.2 7.3 crude oil extraction) Industry, excluding mining 13.9 16.3 8.8 of which: Manufacturing 7.7 11.4 12.8 Construction 5.6 3.9 -0.4 Electricity 0.6 1.0 18.5 Services 33.4 39.3 8.0 of which: Public Administra- 7.1 10.8 10.5 tion and Defense Gross domestic product 122.1 118.1 6.4 Less income to abroad -22.1 -18.1 5.3 Gross national product 100.0 100.0 - Amount in million ID. 29q.9 546.0 6.3 Based on national income estimates by Dr. K. Haseeb, "National Income nf Trnn't- Emturn delivered at American Univer.ity of Rirut. NaV 196. The Ministry of Planning is now setting up a national accounts section. Agrinltural nrodntion which fluctuates r-tlv frrnm vpar to veqr, increased in terms of current prices from an average of ID. 74 million in l - to an, avera nf Tn_ 199 millinn in 1QA1-AA Tn ron +Prmq however, it hardly increased at all. Mining output, mainly crude oil, doubled over the period and cntributed an avrae of T. 190 million to the GNP in the early sixties. Manufacturing production, including elec- VI ; +'4. , - 1 - + _;- -1. J.J. ' 1-- __U I. .LAfQ -41 I.'k-;U' 5 I - - + _.; __Jb -L.U SA^u~~'kl - during the first half) declined and was only at the 1954 level in 1963. 'Bs e a -IiiULa.. ctuJ. ring an eueet rLicit Uy, It 1h eJ se.L L cc sto Ia SJ~~JIS b'. ecm mr important than it was a decade ago and contributed ID. 215 million in the and defense has grown more rapidly, and ownership of dwellings less rapidly, o. in 1yo- gross national proaucu uecinea acut 27o largely attriou- table to a sharp decline in agricultural production and a slow-down in manufacturing and trade. Substantial improvement in agricultural production and a 9% increase in oil output indicate that GNP may have grown by about 77 in L9o5. Investment, Savings and Consumption 9. From 1950 to 1954 gross investment averaged about 12% of gross domestic praduct, in 1956 the investmert ratio rose to around 2h% and thereafter began to decline, and by 1963 the level had fallen to about that of a decade ago (refer table 8). This downward trend in the gross investment ratio was associated with fluctuations in investment in oil and a substantial fall in the share of other private investment which fell from one-half of total investment excluding that of the oil comnanis in 1956 to a arter in 1(l Tn 19l nrivat.e investment was affected by nationalization measures. In total, public investment during ho period 1nai-63 amounted Tn c YnA million, investment.by the oil companies to ID. 140 million and other private investment to about TID q' millinn T 1 heut+ +emse ,nvsment almost doubled from 19 3/Mh to 1963/64, most of the increase occurring in public invest- _-4, .4 e- . . 4 1 )e7/ A -' .IJ. InJ?~ 1V 30MTL±L ULLA1, .L7'2_') 4 bV ~ _LL,j I 11 .A7 f)J i1 ±~ - almost entirely by domestic savings (refer table 9). External capital, Uwever, became more important as a source u fusU, prUviuig, on an average, nearly 10% of the funds in the early sixties compared to 5% in Il U-L U_L uIlWe. 11. Except during the early fifties when the private sector, other than oil, had to borrow to meet its investment needs, its savings with a moderate inflow of private foreign capital met its needs and in fact exceeded its investment in most of the years since 1957. The reverse trend was perhaps true for the public sector and a substantial part or the gap between public investment and public savings was covered from external borrowing which rose to as much as about 20% of total public investment in the sixties. 12. A corollary of the fall in government savings was a steady growth in general government consumption from 16% of GNP in the early fifties to 22% in the early sixties. Private consumption which increased moder- ately until 1959, rose rapidly thereafter, its share in GNP rising from 58% in the mid-fifties to 63% in the early sixties. The rapid growth of private consumption was associated with a substantial increase in consu- mer goodst imports, and that of government consumption was due mainly to increased defense and social welfare expenditures. The growth in consump- tion led to a fall in foreign exchange reserves from ID. 129 million in 1959 to ID. 79 million in 1962. Labor and Employment 13. The population appears to be increasing at about 2% to 2.5% a year. About one-third of the total population was estimated to be economically active in 1963,and a little over 3% of the labor force was considered unemploved. A major problem facing the country in the immediate future is likely to be providing gainful employment to those entering the labor market. Younj people below 15 years now constitute h5% of Iraa's population. 14. Between 1957 and 1963 the number of employed people rose by 15% to Pt million. Ari niltnrp nontinnp. ton h tip main onnnation nrnvirl- ing employment for over 1.7 million though proportionately its importance haS slichf+.1 a llen The othe branchens f ac+ivi+e emnloying more than 100,000 are services, transport and industry. Of these three sectors, emplnumn+ t in n+e vone h n+E 0 Servince cnnue to be the second most important from the point of view of employment and employ- The proportion of the work-force engaged in transportation more than .'L ere seem LLo haUV.U Ui). UIiL LU UV ~ .L I-JU:.J. ,U L Ul of industrial workers in the last decade. The average annual wage of inuuUtrial worKers in large estaolisnments employLg more than 1u peUple seems to have more than doubled to ID. 260 in 1963. Since the nationali- zation measures of 1964, workers also receive one-fourth of the net profits of industrial undertakings excluding the oil companies, subject to a maxi- mum of ID. 100 per worker in any industry L/; the oil companies are required to distribute one month's wage as bonus. Wages on all levels are generally determined on the basis of the legal minimum wage for each industry or occupation. The oil companies, however, maintain their own wage system and wage levels are much higher than those prevailing in the rest of the economy. 16. Estimates of output per worker for the years 1957 and 1964 suggest some improvement in the overall productivity. However, agricultural pro- ductivity remained the same or at best slightly increased against a sub- stantial increase in productivity in mining, manufacturing and services. Productivity in construction and transport almost halved during this period. III. DEVELOPMENT OF MAJOR SECTORS Agriculture 17. Iraq has an abundance of agricultural land in relation to its population. Although, due to climate and topography, only 17% of the total area is cultivable, it is estimated that 10 million hectares could be brought under cultivation by extensive irrigation and drainage, in addition to the 8 million hectares cultivated at Dresent. ApOroximately 4 million hectares have irrigation available; half is cropped each year, and the remainder is left fallow. In the irrigated areas the land is reasonably fertile but extreme care needs to be taken to keep down sali- nization. The princinal crons in the irrigated area are barlev in the winter and rice and cotton in the summer. The area cultivated in the rni n-fpd zone accounts for ahont one-half of the tot_l. Wheat and barley 1 In the first year after nationalization, workers in only one factory rece-1trovhe statutry mavamum. are the main winter crops grown in that area. The world's largest date nalm belt lie in Southern Iraq making the onuntry the orlds larpest producer and exporter of dates. 18. Agriculture provides employment for three-fourths of the total workng opuation but accouns fCor only abu ne-fifth of gross -natina product. Year-to-year fluctuations have obscured any basic trend in agri- ~LL L~L± ~ U UPU U HgUU. 1i .LU u L.L4 UUVPjUU' trJuS yC~LilCu.lu1lly I.LL61111 .L.7k.JC an"L very low in 1955. Although agricultural production in the last decade appears hardly to nave Lucreaseu at aLl, the contributious fU garuen crops, fisheries and livestock have risen. Agricultural exports, the most important oeing uates, nave fllen both absolutely and proportionately over the decade and provided only about 10% of Iraq's foreign exchange earnings in 196. 19. A comparison of production and yield of major field crops such as wheat, barley, rice and cotton in 1952-54 with that of 1962-64 suggests that only cotton production and yield have improved (refer table 10). With population expanding at 2 to 2.5% per annum, foodstuffs have had to be imported. Imports of wheat rose to an average of 150,000 tons a year during 1960-64 compared to a net trade surplus in the early fifties and those of rice or paddy to an average of 80,000 tons. Barley exports fell from over 400,000 tons to an average of 50,000 tons. Import requirements dropped considerably in 1962, due to the excellent harvest; however, they rose again in 1963 following low agricultural production in that year. The increased need for grain imports, particularly rice, continued into 1964. The latest estimates for 1965 suggest a good agricultural year. 20. The failure to make substantial progress in the agricultural sector is due to traditional farming practices, lack of adequate exten- sion services, inadequate drainage facilities leading to increased salinity of the land, failure to adjust the government's administrative machinery since the land reform to meet the needs of the farmer who looked to the landlord for almost everything in the pre-revolution days, and the govern- ment's policy of favoring investment in housing, social services and industries in the post-revolution period. 21. Improved agricultural methods have not been extensively used, althouLh they have been introduced on exnerimental farms. Many neasants have no draft animals or equipment. Most of the farmers still use tilling methods little different from those iqed in the iqnq. npntnrv. H-fowevr, peasants are beginning to realize the importance of using fertilizers, new c~rop~ rnt.nt.ionq q-rp hp-ino +t-iri nd,spcill in t.he ninr+.pTn-rqin- fed areas, agricultural machinery such as tractors and combines is 22. Onl half of th e edlsting rigtion fea iliteu is utized y because of -the traditional fallow system and inadequate drainage. In -7- increased the salinity of land. The government recognizes the need for drainage systems which will help to reduce the necessity for so much land to lie fallow and to overcome or at least reduce the salinity of land and allow more intensive cropping. 23. The Agrarian Reform Law of 1958 abolished large land holdings and limited existing ownership to a maximum of 250 hectares of irrigated land or 500 hectares of rain-fed land. The former owners were to be com- pensated with government bonds and the expropriated lands were to be dis- tributed to the farmers. The law also instructed the Ministries of Agriculture and Agrarian Reform to provide services which were formerly rendered by the landlord. However, the imnPmentation of the law progressed very slowly; up to December 1964 the government had distributed only 525,000 hectares to the farmers- of which nearly )ioc consisted of state-owned land. The Five-Year Plan aims at distributing about a million hectares, or about three-fift.h!7 of theP Irl uindriy then cntro"l of* then Acrarmyi an Reform r.oMmitt.. A large number of the peasants who received land from the government left the.ir fie1rivrld unculivated b-ECaus of -- a-lini -;- problem C) lac of services such as agricultural credit and marketing. Perhaps the most important ele- m~1~ ~ +h~ ~-~"~p-'a0unt~ now to makedeion r farming practices which were formerly made for him by the landlord. Even the lmite Ourvico provueu Uy tne government in the past have nuu yiel- ded good dividends because of lack of coordination among government depart- ments. necently the government has been endeavoring to improve and co- ordinate extension and credit facilities. An independent administration has been set up for one irrigation scheme, the Greater Yussyab project, and the government is seeking technical assistance for running the project. 24. Government investment in agriculture seems to have fluctua- Ud wltn its development strategy. During 1951-58 ID. 74 million went to agricultural development, mainly for flood control and irrigation, corresponding to one-third of the government's development expenditure in this period. The Provisional Economic Plan of the Kassim regime shif- ted the emphasis away from agriculture and consequently, the share of agriculture in the Development Budget was gradually reduced to an average of l6 in the period 1959-64; total government investment in agriculture in this period amounted to ID. 40 million. The present government recognizes the importance of agriculture and the recently announced Five-Year Plan covering the period 1965-70 places greater emphasis on agricultural develop- ment. Oil Industry 25. The oil sector plays a decisive role in Iraq's economic develop- ment. It accounts for nearly one-quarter of the national income and pro- vides the country with 90% of its foreign exchange earnings. Oil revenues account for about 70% of government revenue for the Ordinary and Develop- ment Budgets and hold the key to fiscal operations. 26. Exploitation of Iraq's oil resources is carried out by the foreign- owned Iraa Petroleum Company (TPn) and its affiia-tq whoe (-ont-P.enn.q run for 75 years ending 2013. In return for the exploitation rights, the - R - oil companies undertook to pay to the government at least 50, of the nrofits resultine from their operation in Irao. The main product of the oil companies is crude oil and almost the entire quantity is exnorted Tran s rpfininr canacitv is insipnificant. and the government- owned refineries with a capacity of less than 2 million tons meet only 27. raq, S rven Oil 1reseves ath re end of 1 Q amonni +. ann+. 3 billion tons (7.5% of the world reserve), or enough for 55 years of produc- tion atP th4rsn aeo 1 +n" n1 nrn Ta ) a; nlmi 0. million tons short of the present capacity of the pipelines and terminal .1 -Li1. U.L .J* J V VAL1 t.±J ~ ± 0 _LdL "JU c~U.. Li J- . LL - _JJ. increasing at a higher rate since 1962 due mainly to new investment which was completed in that year. The rate of epninin thelas 10O _QYears.L exceeded the growth in world output, but fell short of the average for te Vidue fEasu. Iraq', Znare accounts Ur 5ro U worlU output,Ubut is share in Middle East production has fallen from 23% in 1954 to 16Z in 1964. 28. Oil production and exports failed to expand during 1961 and 1962 as a result of the withdrawal of uPC's rights to /99.57 of the concession area and the imposition of cargo dues. The improvement in IPC's relations with the government in the subsequent period led to a 25% increase in pro- duction, reaching 60.6 million tons in 1964. Production in the first 11 months of 1965 amounted to 50 million tons. 29. Oil revenue has more than doubled from ID. 57 million in 1954/55 to ID. 129.6 million in 1964/65 and its share in total tax revenue rose from almost 65% to 70%. This buoyancy in oil revenue has enabled the country to expand its current expenditure and to increase investment. Prior to 1959, 707 of the revenues went to the development budget and 30% to the ordinary budget. Since 1959 revenue has been divided equally between these budgets. Despite some transfers, in recent years, of oil revenue from the development budget to the ordinary budget to meet rising current expenditure, the general policy is to maintain the proportion of oil revenue going to the investment budget. 30. Oil production is likely to expand up to the present maximum capacity of 70 million tons. Further investment to increase the capacity will largely depend upon the government's arrangements with prospective investors. Expansion of the IPC's capacity will hinge upon the govern- ment's action on the agreement concluded in the first half of last year by government and IPC negotiators, which provides for increased production from the existing concession, increased revenue for the government and for joint exploitation of oil in 9% of the former concession areas. The agree- ment remains unsigned. Ratification of the oil agreement would clear the way for new investment to expand capacity which will, however, take several years. 11 The Traq National OIl Company, establishd tn Pnloit Traqn's oil resources outside the small area left to IPC, has had discussions with inepennmade. oil c p ibu n fi anm seems sofarto have been made. -9- Manufacturing 32. The manufacturing sector consists largely of very small factories employing less than 5 people. Large establishments employing more than 20 people account for only about 1% of the total number of establishments, but they provide employment for about 50% of all non-oil industrial workers. They also seem to account for a substantial part of the value added in manufacturing. 33. Manufacturing has plaved an increasing role in the formation of gross national product and in 1963 contributed 11.4% to Iraq's gross national nronrbit.. amomnt.in, to T. 61 million whinh wq.q mnr. thrn threp times its contribution a decade ago. Output expanded at nearly 12% a ve-r pr thpnnq tpr~ vpAr.q- AfP-rp n Ma lp1nyn rb~irina 1 Q*~-A0_ P.Ynqr.qinn a -_ _ _ ---- p ast ten .- k'- _ -J slowed down and output actually declined in 1963. This was largely attri- butableho t .he uinsettleocl co1+en1,nd1it.ions prevailing, in thatn+ yero. Production seems to have recovered since. The growth in manufacturing an+nn+ -rqn +Jm-l n+nA her +n-A mf -+a+4n- - nA n.,4. 1 cvem+J n n-P mfa+ new industries from taxes and import duties. 34. Until the mid-fifties, manufacturing industry outside the oil sector consisted mainly of4 food processin - --A --4- -4 1A4 materials and light consumer goods manufacturing industries. Since 1955, many steps have belen. utken to expandYand Cl diLversif:uY ute mant1uauLL.rin sector, mainly through the establishment and expansion of a number of relatively large-scale government-owned enterprises ine_e iuude expansion of government-owned oil refining, cement, asphalt, textile, footwear and food processing plants. A number of government-owned fac- tories such as the electrical equipment plant at Baghdad, the knitting and hoisery factory at Kut, and an agricultural machinery plant at Iskandariya are being erected. The Five-Year Plan contemplates many projects which are capital intensive,requiring high technical skill. 35. The structure of ownership in the manufacturing sector has changed considerably following nationalization in 1964 - private ownership has fallen from about 47% to 22% of paid-up capital. The nationalization measures provided for a complete take over by the government of all enter- prises producing cement, asbestos and cigarettes and certain large indus- tries producing textiles, steel, paper, tanned leather and flour. Generally, private ownership is restricted to the operation of medium-and small-scale industries. 36. Public investment in industry was limited during the monarchy. Since the 1958 revolution it averaged ID. 8 million a year (including power); this expenditure was considerably lower than established targets. In the first year of nationalization, government-owned enterprises apparently invested considerable amounts for expanding capacity and start- ing new ventures. The policy regarding nationalized enterprises is broadly that they should be operated on a commercial basis. The profit motive seems to be taken into account in policy decisions,but prices may also be regulated with social objectives in view. 37. In December 1965, a new Economic Establishment Law was passed ablishi_M .in the .e Vta e-nconie rrcni ati nn Trlqi fh name infntoviC +.ostncr- after nationalization. The new law created four general establishments - activities of public enterprises. It calls for the formation of a Higher Finance, Industry and Economy and chairmen of the four establishments as ordinate their activities. The minister concerned will supervise the establLbll[lt 1l ILU,WI--U-- fl-LIS-----t. Ilt. UU- _LULUl general establishments will be given more freedom of action in regard to their day-to-day operations to leave the implementation of decisions to officials of the undertakings. It remains to be seen how far the new arrangements will improve the efficiency ol government enterprises. 38. Private industrial investment has generally declined since the 1958 revolution. A number of fiscal measures (such as amendment of the inheritance tax to exclude industrial shares and temporary exemption from income tax and customs duties) adopted in 1961 seem to have had a favorable effect on private investment in 1902,but unsettled conditions in 1963 reduced private investment in industry, and the 1964 nationaliza- tion measures came as a further shock to the confidence of the private entrepreneurs. 39. Besides developing the public sector, the present government is trying to encourage private investment. To this end, tax incentives, long- term credit facilities and technical assistance will be made available to private entrepreneurs carrying out approved new investments. The govern- ment also wishes to encourage foreign investment in joint ventures with the State to relieve the development budget and to provide the necessary technical skills. Power 4O. Power consumption nearly tripled during 1954-64 and in 1964 was estimated at 1.2 billion kwh. Apart from the oil company's plants, which generate power for their own use, all electric power generation is undertaken by the state-owned National Electricity Administration (NEA). 4l. Despite the growth in power production, per capita consumption in 196h was only 160 kwh. More than half of the power produced is consumed by industries - mainly oil companies - and most of the remainder is used by households and commercial undertakings. Most of the power produced by the NEA is used for household consumption; the tariff is about 10 fils (2.8 TS. 1) ner unit. Power demand is exnented to more than double during the plan period. 42. To meet the expected growth in consumption, the government envisages a total investmn+. of' TD h millinn nvor 10A-70 to treble the generating capacity of the NEA from 273 MW to 867 M1. Nearly 60% of this amount is to be pnton r neaton an then t e lanceotrans ssti;n I. and dmi Sti on The Export-Import Bank has extended three loans tota:ling ID. 4.9 million - 11 - to meet part of the cost of expanding Baghdad South Station. The con- installed capacity of 84 MW is expected to be completed during the Five- Yba r.dL~p L' LL 43. rne transport system is largely confineU to Wlu nar-a-nagnuau- Mosul route, along which a large proportion of the population is settled. For most of this route, a modern paved highway has recently been construc- ted; there is also a standard gauge railway linking Mosul and Baghdad, and the replacement of the existing meter gauge line from Baghdad to Basra by standard gauge will be completed shortly. In addition, barge transport on the Tigris carries a substantial share of' traffic between Baghdad and Basra. 44. Besidesl,620 kilometers of railways, Iraq has approximately 8,400 kilometers of roads; one-fourth of this length is built to modern standards, about the same length consists of old paved roads which are inadequate for present traffic and the rest of earth and gravel roads. h. The only available index of growth in road traffic is the number of vehicle licenses issued. On this basis the total number of vehicles seems to have more than doubled over the last decade, passenger cars including taxis almost tripling against a doubling of buses and trucks. In 1964 there were 74,000 vehicles, consisting of 50,000 passenger cars and 24,000 commercial vehicles. Railway traffic has been fluctuating in recent years with no clear trend; in 1963/64 the railways carried 2.5 million tons of goods, which accounted for nearly 80, of its traffic receipts, and 2.3 million passengers. 46. In the last decade about ID. 125 million, nearly one-fourth of public investment, has been spent on transport and communications. In the last three years the average was ID. 15 million. The Five-Year Plan, 1965-70, discussed later, envisages a total investment of ID. 99 million for this sector, including ID. 7 million for developing the port at Umm Qasr which will help ease traffic as Basra port and ID. h million for a highway construction program devoted largely to rebuilding or extending the trunk road network. There is also, however, a need for improving secondary and feeder roads, particularly to enable the farmers to earn more by taking their produce directly to nearby markets. With the com- nletion of rebuilding the trunk road connecting Basra. Baghdad and Mosul. emphasis should be shifted to secondary and feeder roads. TV PTTT,T. FT\AN.P 47. Government saving has declined in recent years in absolute terms to 1 te Jn *W a4 to 4-+A TrW 0 C! 1 increase in d++Yex thII+--- e to the increase in defense and social service expenditures since the r voluti.L'I - 12 - Consolidated Bu etary Performance of Public Sector Z! (Millions of Dinars) 1954/55 1957/58 1962/63 1963/64 1964/65 1965/66 (prov) (B.E.) Domestic Revenue 103.9 11.8 194.9 211.1 221.3 310.1 including Supple- mentary Budgets of which Oil Revenue (57.2) (48.9) (99.0) (114.5) (125.9) (168.0) External Assistance - - 11.4 8.2 9.0 n.a. TOTAL RECEIPTS 103.9 11h.8 206.3 :219.3 230.3 310.1 Exnenditures under 63.1 86.6 14.8 168.3 202.6 217.5 Ordinary and Supp- of -uihi Tl:fnsi nnri (20r) (30v) ( C)- ') (61I.3) (70-.3) (87-0) Police Investment Expenditures 20.9 57.4 59.3 54.2 54.5 113.9 TOTAL EXPENDITURE 84.0 144.o 204.1 212.5 257.1 331.4 Surplus or Deficit 19.9 -29.2 2.2 6.8 -26.8 --21.3 z ThUiUU1uir D~.ugujt:b 0l ii1UU~iUt::p--11Ut: 11 Vid41 Ul0± Ji LiL I IUV1 ever, depend on appropriations from the ordinary budget. The table may understate onth revenues and expenditures by about ID. 5 to 10 million in the earlier years and by about 35 to .0 j.""ons1I ±1n the- beIJ~~cause of excl.u-Sin 0±C 10uUU0 0± enterprises responsible to the Ministries of Oil and Industry. / Excluding subscriptions to the capital of government-owmed banks and transfers to the Higher Agrarian Relform Body and the Atomic Energy Commission. As against a doubling of domestic revenue in the last decade, ordinary expenditure more than tripled and thus diminished the surplus available for public investment. Since 0% of oil revenue is set aside for the Development Budget, a substantial part of ordinary expenditure was financed through drawing down accumulated cash balances and borroing from the Central Bank. This trend continued in 1965 and, although a loan of ID. 30 million from Kuwait had been used to liquidate a substantial part of the short-term borrowing, the Central Bank's claim on the government and semi-government agencies rose to near the maximum level permitted by law. - 13 - Government Revenue 48. Excepting 1957/58 and 1962/63 when special circumstances affected oil production and revenue, the tax-income ratio, though fluctuating in most of the years of the last decade.was in the nighbourhond of In (refer table 21). Excluding oil revenue, tax revenue was around 12% of national income excludin, oil innme The mjne prmt o the incree in tax revenue came from oil revenue, but the relative share of oil revenue in total tax revAnue remained more no lne he came. Or n ++.n + revenue of ID. 185 million in 1964/65, the oil sector contributed ID. 129 million. Other irctnvoc Tn t s 15 million a,-A Indrect taxes TD. I.i million. Non-tax revenue, accounting for about 10% of the total receipts of' thp orriin.--r n devlopen b,Udgets, --~ -1-.4- 'r" 1 in 1964/65. The estimate of total revenue for 1965/66 anticipates additio- nalJU_11 oiLeeu eutn rom. ratificL_Lation1 of the ol. agreemetU, andi May not therefore be realized. 49. The government receives about ID. 2.2 in revenue for every long on o UICud Ul exported. The only other direct tax of some significance is income tax, revenue from which has risen substantially in recent years, due man.ly to an increase in yield from corporate taxation which accounts for about 60% of total income tax revenue. In 1964, the basic income tax Law of 9Y9 was amended, raising the rates onhigher income brackets; this is expected to increase the yield to ID. 12 million in 1965/66. Some incentives in the form of a reduction in income tax rates are being contem- plated with a view to encourage private investment. 50. The composition of indirect taxes has considerably changed since 1961 when excise duties on oil products and tobacco were increased. The government also exempted raw materials, machinery, etc. from import duties. In 1963/64, excise duties on oil products, tobacco, alcohol, salt and cement contributed over ID. 12 million to the excheauer. and customs duties about ID. 27 million. Together they accounted for 22% of total tax revenue in 1964/65. Current Expenditure 51. About half of the growth in current exoenditure in the last ten years occurred in 1963/64 and 1964/65, due largely to a further expansion in defense expenditure by ID. 21 million, to exoenditure totalling TD. 13 million on account of I'asha (Bread Distribution Agency) which was brought into the 1964/65 budget. and to a considerable innreasp in misc11anpois expenditure including that for foreign affairs. Over the last ten years, most of the expansion in ordinary ePnnditure has been fn dAfnzP qn police which now accounts for two-fifths of the total, and for education which. increasing its share, accounts for one-fifth The rise in uAcn- tion expenditure, after more than doubling during the Kassim regime, slowed down in rmcann. years. The buAgn+ fo 19A/6A howver, iAdae a 33% rise in education expenditure over the preceding year. Pensions, amutn to ID. -11mllo VinJJ 19±..AtI-,, ILCAVU UtUV1: .L1.LCt1LU,11 amounting to ID. 11 million in 1964/65. Public Investment 52. Until recently, the public investment program was solely financed hIT nil Tn -rPnPe. Pnrecen years, mprcd of qnvipt. loansq nndl UT.S- Export-Import Bank loans and surpluses from government agencies have pro- 1957/58; since then the trend has been downward to perhaps 9% in 1964/65. less than ID. 60 million in each year. A substantial increase is expec- LU Lor L7VD1UU DL)UU Ul.lu Lota.L rnay la±l-L Ett, Xueacil .LU. W4J ILL-L."Uli Z511U-1U 04. the budget estimate of ID. 114 million. 54. Investment priorities in the development budget have changed con- siderably over the years. Flood control, irrigation and land reclamation received top priority in the pre-revolution years, followed by transport, housing and building, and industry and power. Since the revolution, actual expenditures on housing and building have accounted for 42% of total public investment, followed by transport (25%), agriculture (157) and industry (15%). 55. In recent years,public investment has fallen short of both budget estimates and past performance in the pre-revolution period. In the last three years, only housing investment was near expectations. In the trans- port sector, about 50% of planned investment was carried out, in the indus- trial sector only one-third and in the agricultural sector only one-fourth. Finance does not seem to have been the constraint; administrative problems associated with changes in government and inadequate project preparation have slowed down expenditure. 56. In addition to investment under the development budget, government enterprises and local bodies also incurred some investment expenditure. The amount invested by government enterprises is not available; fragmentary data on municipal budgets indicate development expenditure of the order of ID. 5 to 6 million a year. Supplementary and Independent Agencies' Budgets 57. The Supplementary Budgets relate to semi-government organizations such as the ports administration. railways, tobacco monopoly. etc. and the Independent Agencies' Budgets to the government oil refineries, National Electricity Administration and government-owned industries, local adminis- tration, etc. While all semi-government organizations, except the Higher Aerarian Reform Body and the Atomic 'hermy Commission. earn most of their revenue, and their revenues have, in total, exceeded expenditures, many of the TndenAndent Aaencies a1nend on annronriations from thp nrdinary Budet. - 15 - Domestic Public Debt 58. The domestic public debt consists largely of treasury bills. The long-term debt amounted to ID. 11 million in October 1965, more than three- fourths of which was held by the Central Bank and commercial banks. Short- term borrowing from the Central Bank amounted to ID. 45 million in October 1965. V. MONETARY DEVELOPMENTS 59. In 1964, two laws affecting the operations of the banks were passed. The powers of the Central Bank in supervising and controlling commercial banks were greatly strengthened and all commercial banks operat- ing in Iraq were nationalized. The largest commercial bank was government- owned before the nationalization. The commercial banks were amalgamated into four groups and placed under the control of the Banking 7stablishment which was supervised by the Central Bank. In December 1965, this Establish- ment was attached to the Ministry of Finance to coordinate the policy of the commercial banks with the general economic and financial nolicy of the government. Since nationalization, monetary instruments have been little nsedand it. remiin. to h.e qp.n hoTw this 1gi.1tion will qffet, the role of the Central Bank in influencing the supply of credit. 60. The money supply more than doubled during 1954/63 and, after womainin nt +n 1Ivi mrvedam manidly hv 10rV Anivn 10AC +n hnut ID. 141 million in August 1965. Since 1962, there has been a substantial -i ncre,a- in. t1na ratio ofcurren,y to mo-neir -1-i - -Prohm Ao in I OA9 +n '77 in 1965. While currency increased about 12% a year, demand deposits declined and .stood a .+ Tn. In M4 I Lio 4n A - - -4- .t 1-As-,,: 04~tt , ff l'-r- --il nn'- Qdl..LV L''~ j. _j% LU. ) J - .L L.JJI .LJL IIA L V JLy -.A* IAU1j - --.J S*. AUA4CC ~A S, AS'A CC ted the government budgetary position. In the early fifties, there was a VUUO ~ ~ J L.V.i,.V .L L1IC2.0~~t- _LL .LU1-U_L.11 ~~ UUU 0_LZE-C1U.LE; L1i -UUL1j DyoL.UIl se largely offset the expansionary effects of the external sector. During 4L7) U ,7 UiIV Lj.L U hA L , i AIL L~ U W it-, ak;UUWILL.LV.U ,kA .~I U V._L Uit - but also incurred debt leading to a 50% increase in money supply. In the deficit was offset by a drastic decline in foreign assets following import J-10era1i ~jU i n 11 n 1 7 lilt; I'Aliuii _Lll L7U.) wasO ei-L _.,Y ULLt LU CLd C1r increase in net foreign assets partly offset by improvement in the govern- ment's cash position' in 1o96 the reverse was true. 61. There was also a considerable expansion of credit to the private sector, a substantial part of which occurred in three periods, during 1953-5 associated with the multiplier effect of increased public invest- ment, in 1960-61 as a result of import liberalization, and during the first half of 196 due to increased domestic economic activity following the revival of confidence by the private sector in the economy. Net claims on the private sector are given as ID. b million in June 195, accounting for nearly two-thirds of total domestic credit outstanding, but this figure includes loans to undertakings which were nationalized in 1964. As noted earlier, the present government wishes to encourage the private invest- mpnt hv. inter alia. nroviding credit facilities through the commercial banking system which, at present, has a moderate liquidity. 62. Besides the commercial banks, there are five government-owned -necialized banks - he A( rijninal Bank t Tneust.r±ri al Rqnk the Fstnt, Bank, the PMortgage Bank and the Cooperative Bank. In terms of volume of cred+ -vl+. .- +.'h P+ nnI 7hnnk whi b n-rni v imq n fr)-n.czt?nirtj nn I ninq - qnri the Nortgage Bank, which lends against moveable property, are the most Tlnni's~r nl ^n.iin+nrl f-Pn" "nm jvl tr O n-me nrs+ nsf* Inny)c! ov+.o-ri, h-i .]-ion specialized banks. The Agricultural Bank's lending reached the highest part of this may not be recovered. The Industrial Bank, which essentially in large ones, has so far invested in 16 companies and, on an average, lent abuL ij ±1) Mj_I±.L_JU11 a. p-cuv± L Iie J-LZD~ U, UJUL~ Y,G VI BALANCE OF PAYENTS 63. Iraq's balance of payments position is largely determined by the net receipts from oil exports which account for over three-fourths of total foreign exchange earnings. During 1950-04, non-ol exports expan- ded only 3% a year against about a 4% growth in imports, thus widening the trade gap in the non-oil sector. This gap was almost entirely met by net foreign exchange receipts from the oil sector which nearly doubled during this period. Service payments exceeded service receipts in 1960, and since then the deficit under this category has been expanding. Exter- nal assistance, especially from Russia and Kuwait, has been significant in recent years. The foreign exchange reserve position, which sharply declined during the Kassim regime, substantially improved in 1963 due mainly to the Kuwait loan. After declining again in 1964, the foreign exchange reserves stood at ID. 100 million in November 1965, equivalent to about 8 months' imports. Exports: Growth, Structure and Direction 64. Total exports expanded at a somewhat lower rate than GNP in the last decade. After reaching the lowest level in 1957, due mainly to pipe- line sabotage in Syria following the Suez crisis, total exports began to increase up to 1959. The imposition of cargo dues in 1961 affected the growth of oil exports and net receipts from the oil sector remained more or less the same during 1960-62. After better relations between the IFC and the government had been established in 1963, total exports, rising 13.6% a year, amounted to ID. I55 million net of oil investment income Dayments in 1964. Estimates for the first half of 1965 compare favorably with the corresponding period in the previous year. 65. Oil exports contributed 90% of export earnings in 1964 as against hont 805 a decade ago. Among other exnorts. barley. which was the most important agricultural export crop accounting for about two-fifths of non- - 16a,- Summary of Balance of Payments, 1956, 1964 and First half 19b5 (in millions ID) 1956 1964 1964 1.96g L/ Jan - June Jan - June 1. Transactions of oil sector Exports and re-exports (f.o.b.) 157.3 281.9 138.9 147.8 Tinorts-. -nv---nt -nm capital movements, and net errors and omiqsion 77.8 1h2.1 73.2 75.3 Forelpm exchanop prcints (ret)' 7Q-E: 119- R 0E7 72.q O ft.hpr goods Andervce of which re-exports (1.2) (2.7) (n.a.) (n.a.) T,,w-+ np- I -I) ff ' -~ 74 0) -70 E Services (net) 4.1 - 11.8 - 7.5 - 9.7 Total 90.5 -139.3 -75.6 -79.4 3. Private transfer payments and L. Central government transfer pay- ments and loans received (net) o.4 9.5 7.1 1.8 5. Net errors and omissions (excl. oil sector) 13.1 - 32*1 -- 0. Tota1 for non-oil sector - 07. -LOU.. -((.0 7. Overall balance 11.6 - 20.6 -12.1 12.9 8. Monetary movements (-increase) - 11.6 20.6 12.1 -12.9 9. Year-end foreign exchange reserves 133.8 93.3 104.0 104.9 Preliminary; based on data provided by the Central Bank of Iraq and in International Financial Statistics, October, 1965. - 17 - oil exports,.has now become negligible except in good crop years. Dates have become the most important non-oil export since 1962, largely because of better prices. However, the share of dates has fallen from over 50% of non-oil exports in 1963 to about 40% in 1964. 66. The share of Iraq in both World as well as iddle East oil exports declined, from 11.5, of World exports in 1954 to 9.1% in 1964, and from 23.2% of Middle East exports in 1954 to 17.1% in 1964. About 80% of Iraqi oil goes to Western Europe. Imports: Growth, Structure and Direction 67. The buoyancy of oil revenues enabled the country to more than double its imports during 1951-56. After remaining around that level, imports rose by 35% during 1959-61 following the import liberalization of 1959. This resulted in a depletion of foreign exchange reserves, leading to new restrictions in 1961, at first through import licensing and later by raisini customs' tariffs- and by 1963 imports of consumer goods had fallen to their 1959 level. A nearly 30% increase in imports during 196)b to TD- 1i million was nartly dn to thP imnrovement in domes- tic economic activity in the first half of 1964, to the crop failure in 1963 and to the monst harvest in 19nL On the whol imprnnts inreaqsed !db a year since 1956. 68. The structure of imports changed considerably during 1956-64. Imprts of acjnr n qimn oh ~ A n~~oae declined, while the share of food imports increased from one-fifth to because of increasing domestic production. 69. Socialist countries, especially the U.S.S.R. and China, rapidly incre-ased- their share in raq_simpr trde accounting for 17%of-total imports in 1964. The share of the U.K., until recently the principal supplie, 1-dropped from,i 2,5 in 0Y) t~ n .YL,an' L~~L~UjULoie Jestern countries remained more or less the same at 40% of the total. Foreign Exchange Reserves and External Debt 70. Iraq's gold and foreign exchange reserves reached a peak of ID. 13h million in 125u. After declining by I.1. v million during the Kassim regime, they increased by about 50 to ID. 117 million in 1963, mainly because of the Kuuait loan referred to earlier. In 19o, they fell again by IT. .24 mil.lion to-ID. 93 million and recovered thereafter. In November 1965 they were equal to 8 monthst imports. 71. Total public external debt increased substantially during the last three years and amounted to ID. 71 million in October 1965, consisting of a Kuwait loan of ID. 30 million, Russian loan of ID. 34.7 million and U.S. loan of ID. 6.3 million. In 1966, servicing of the above debt may be in the region of ID. 4 million. The total service payments on the existing debt will reach a maximum of ID. 9 million in 1970, equivalent to 6% of export earnings in 1964. External Economic Relations 72. Iraq is a member of the Arab Common Market; the other members are TT AD Q rm- T A lA n Ihe M++ i C f7n- f n %1+ nn+ V 111 Vfl. , L a , U o-rd-m Wnd NL K u'.1-nit yet ratified the agreement, which came into effect at the beginning of I n4r MJ.1 11J~iI1L forL aLJ nr' AU/ ,,c4-,--'J.I L 4 LLJ~J 4,+-- ^-V~~ . agricultural products each year for 5 years and a 10% annual reduction in UtiesUZ onJ ind1ustri.a-L products forE the net 0U y"LErs, W.i U"kCertain exceptions. Actual implementation of the agreement, however, has been delayed until detailed lists of goods affected and rates applicable are prepared. In 1964, Iraq imported only 61 of its needs from the members of the Arab Common Market and its exports to them accounted for nearly 40% of the total non-oil exports, total trade amounting to ID. 12 million. Iraq has also entered into trade agreements with many Eastern Bloc and Arab League countries, Japan and Greece. VII. DEVELOPMENT PROSPECTS 73. Since 1951, Iraq has had a series of development plans, none ful- filled. Prior to the revolution, development planning was the responsi- bility of the Development Board which was replaced by the Ministry of Planning in the post-revolution period. To overcome the weaknesses in existing planning, the government established a new Planning Board in 1964 under the chairmanship of the Prime Minister. The Planning Board has been given extensive powers in the formulation and execution of development policy, including the coordination of departmental activities, the approval of proposals for development expenditures and the institution of new policies through decisions having the force of law. In addition, it was made responsible for preparing and implementing the new Five-Year Development Plan. The Five-Year Plan, 1965/66 - 1969/70 74. The Plan went into effect in April 1965. It aims at achieving a rate of erowth of 8% per annum and diversifying national production to reduce the reliance on t 9 oil sector. It envisages an investment pro- gram of ID. 760 million - . nearly 80% of which will be in the nublic sector. 1 Excluding amounts alloted for Defense Department projects and settle- men. n,f Jn+Ayn_+Ar%vnn1 Kk47n4 -rjl-p, +-+C, Tn An _zi14_ - 10 - SECTORAL DISTRIBUTION OF INVESTMENT k.Ln --U.L.L±Ji 1.~j PublIC 0eCtOr- Private Sector Iua.L Agriculture 14 12 1t Industry (including Power) 210 5 215 Transport and Communications 99 20 119 Other Services 126 144 270 TOTAL 580 181 761 -' Includes the Economic Organization and government establishments which are expected to invest ID. 54 million during the plan period. Thirty percent of public sector outlay is allocated to industry, exclud- ing power, 25% to agriculture, 17% to transportation and communications, 7% to power and 21% to others. In addition, the government now contemplates the establishment of a mixed sector which will undertake projects not included in the plan. 75. The bulk of the funds for financing the public sector plan will come from the oil revenues which are expected to provide ID. 390 million during the plan period. Independent government agencies are expected to contribute ID. 12 million, the carryover from the previous Development Budgets is ID. 30 million and proposed domestic borrowing ID. 30 million. Foreipn borrowing of ID. 9q million is also nronosed. MIOVERNMF.NT TNVP.qTMP.NT - PAqT PVRFRMANr AND ALLOCATIONS ENSAGED IN THE PLAN, 1965-70 a Avernae Avernae MJE 196A<16A QAA/A7 1QA7/AA 1QA~R/(Q 19;7 1953/54 1959/60 (Prov.) Aericulture 11.6 8.3 5.0 2q.1 37.0 37.1 37.1 37.2 Industry 5.2 7.5 12.6 32.1 4O.5 40.6 40.4 33.7 (incl. Power) Transport and 8.4 13.6 10.3 26.6 27.5 24.9 15.1 16.1 Communications Housing and 10.5 22.6 24.3 29.5 28.4 27.4 25.3 24.1 Buildinps Others 0.9 1.7 0.5 0.5 0.5 0.5 0.5 0.5 TOTAL 36.6 54.o 54.5 113.8 133.9 130.5 118.4 111.6 a Excludes investment outlay in Defense Department projects and settlement of + + A 4.+.fni.tnel va4.'4M,c V.TA& ± mA.+ + TT) Ad. m-LL41 - A nl, +In proposed investment of ID. 54 million by the Economic Organization and JEconomL",j LV,.4-. U1 c :. Jn.L.LO1Imllent - 20 - 70. The total of annual allocations envisaged for the five years 1965-70 is about ID. 80 million larger than the amount provided for government investment in the plan. This higher amount has been recommended to make some provision for shortfalls. The Planning Board does not expect to implement all the projects included in the plan but it is not yet sure which of the projects will be either postponed or dropped because several of them are not supported by feasibility studies. The proposed invest- ment outlay has been deliberately set at about twice that of actual govern- ment investment in recent years to make the country aware of the importance of development and the need to invest more to accelerate the rate of growth. The investment target is not expected to be achieved. Since there are no official indications of the alternative pattern of investment that may actually take place in the plan period, any assessment of the planned investment outlay has to be made in the light of nast nerformance. This would suggest that even the optimistic investment estimate in Iraq of ID. 45o-oo million in thn pnlan neriod nannnot. ho a-ly ahar. Th. pattern of annual investment may well be different from that proposed and nublic investment. outly may alon rie nead of deiAning in +.ha latter years. In any event, it is more important to implement projects highest possible rate of investment. Agriculture 77. The plan envisages a growth of 7.5% in the agricultural sector over th lan. pej,-; -±~u A ±W~ d'(?st past--- 2_ -- --_. performance, -r- - optimistic. Furthermore, the base year 1964 is considered to be a fairly gn od agrculural year. There eXists, however, a vast scope for realizing larger gains by increased use of fertilizers and by providing proper irri- gation and drainage facilities and extension services. In the last five years, the government spent less than 30% of the investment in agriculture proposed in the annual development budgets. This rate of investment, amounting on an average to ID. 8 million a year, may be due to low priority -iven ou agriculture since the 195o revolution. With the improvements in agricultural administration and project preparation, investment in agricul- ture could be substantially increased from the present level. But what is required now is to effectively use the past investments to realize higher returns than hitherto obtained, and to emphasize the development of the agricultural services indispensable to yield higher returns. 78. Sustained improvements in the agricultural sector could consi- derably reduce grain imports and increase barley exports. Prospects for larger exports of dates are very limited. Cotton exports, which now account for about 10% of domestic production, may perhaps be increased somewhat, provided problems confronting cotton cultivation can be reduced. Livestock and livestock products may make some gains. On the whole, agri- cultural exports could increase by something like 10% a year in the plan period. Oil 79. As already noted, oil production is likely to expand up to the nrnqent maximum canaritv of 70 million tons. Any further investment in the oil industry will depend upon the arrangements that the government may make in future ither with the TPC groun nr others. Fnrther exnansion of the capacity of the IPC group will largely depend upon the government's action on the recently concluded oil narent be-h+Teen t.heoi coI(-mpnnePs and the government. Any new investment, however, will take time to understood to have had discussions with independent oil companies but no 00. 0U LCL.L J. --pIL have been m l . LU±LULI~ 1k LJ good. Free world crude oil requirements are expected to triple by 2000. to 1700 million tons in 1970. If there are no new major discoveries of oln in importing countries, the bulk of the import requiremenWS wil remin to be met by the members of the OPEC who are seeking to coordinate their oil policies in such a way as to maximize their gains. Tne uPE seems to think that 'Iraq should restrict its expansion of oil production to a maxi- mum of 90 in the next year. Further, recent international oil develop- ments seem to indicate that there is not likely to be any serious threat to price. Industry 81. According to the Plan, government investment in manufacturing may be of the order of ID. 120 million and manufacturing is expected to expand at about the past decennial rate of growth of about 12%. The successful implementation of the plan projects will largely depend, in many cases, upon the results of feasibility studies now under way. It remains to be seen how the new organization making nationalized industries directly responsible to the Minister of Industry will affect progress with new industrial projects. 82. The main emphasis in the plan is on chemical, cotton textile, and metal industries. If the feasibility studies are found favorable, public industrial investment could rise. Should the present government's aim to encourage private investment and develop a mixed sector be realized, private industrial investment may favorably respond to the stimulus offered by the government and may even reach the 1962 level of ID. 8 million, part of which is likely to take the form of small-scale investment. 83. The plan envisages a total investment of about ID. LO million in power which may go through as planned. The U.S. Export-Import Bank made three loans totaling about TD. q million for the exnansion of Baghdad South Station. Power, oil and gas projects are at advanced stages of con- sidertion. Tnvet.ment. in other ec.rs may h carried ut ni nlanned. However, there is a need to have a road study before some of the projects innliidea in t-he +tannport_ scorv n" mlyDa VIII. CONCLUSION 84. The development of Iraq for many years to come will largely depend on the amont of oil revenues the cnnty may receive in future the extent to which these revenues are effectively spent to spur economic delopment, andl thei speedl at wMi prg ess cn beo rradel in -reduciing existing impediments to growth. 85. Oil has been the main source of public revenue for many years and nw acountsfor Of' the total receipsofte h expansion in government expenditure has been closely linked with the recently, financed almost entirely from increasing oil revenues. During U1nte n to wu years, however, Ol revenues may level uV.L ao F1VUUUun reaches the capacity of pipeline and port facilities. If and when the government formally enters into an arrangement with he iPrC, revenue derived from the oil industry is likely to increase. Until relations with the !PC are clarified, however, investment to increase the capacity of its installations is likely to be deferred. Production of oil in the area that lies beyond the IPC's concession area could provide a further source of government revenue, but the establishment of a new undertaking would take time. Iraq needs to take decisions to enable the oil industry, and the revenue it provides, to continue to expand. It also needs to ensure that the revenue is well spent. 86. In the last two years, expenditure on the ordinary budget, mainly because of increasing defense expenditure, has far exceeded the growth of revenue and recourse has been made to the Central Bank and to funds earmarked for the Development Budget. Defense expenditure now accounts for about 40% of the Ordinary Budget and is larger than the total development expenditure. Defense expenditures should, however, be substantially scaled down once the Kurdish question is settled. The present budgetary difficulties have also emphasized the need for better control of public expenditure. The Minister of Finance is responsible for the ordinary and supplementary budgets, but is able to control only a quarter of public spending. 87. Half of the oil revenue is allocated by law to the Development Budget and, until recently, revenues available for government investment were more than sufficient. Development expenditure has lagged behind allocations. Such lack of "absorptive capacity" reflects limited ability to invest in soundly conceived development programs and projects that can be carried out well and operated economically. Investment in flood con- trol, irrigation and land reclamation has been large, but the benefits have not been commensurate because of salinity problems and inadequate exten- sion services. 88. The revolution placed additional burdens on the central adminis- tration. Services which wprp nrpvionslV nrovided hv individuals hecame the responsibility of the State. The administration was not equipped to nnRr.n- n1 h.ptq. n nrPnnpIn rf-mu zn+ - 23 - by sufficient provision for services formerly rendered by landlords. The need to make suitable arrangements for the administration to fulfill its responsibilities is appreciated in Iraq and some decisions have been taken in the right direction. 89. The government is seeking to encourage the participation of the private sector in the growth process rather than to add to the nationa- lization measures of 1964. To relieve the Development Budget and to pro- vide the necessary technical skills, it wishes to encourage local private and foreign investors to join in ventures with the State. The private sector's response to the government Pnnouriament will amdnpnci nnon the creation of suitable investment climate and its continuance for a long- time. It is too snon to +ae nh likaly response 90. 7,1P i l CZOt1 n,-i e;^M;Vn+nA 'kir Co,- .,. .1 * -''~S - - I - - A V ' A t.5 S .*VaV w' V - 4lL A, tJ. tinues to be the "leading sector" providing stimulus for the growth of the resqt of theI T Pf adm--nistratiMve eff-Ici ency is i Jmproved , h public sector could make a greater contribution to development. Apart from maj r -i-i deeopet saving shul nomal be,- sufficien to provide for the expansion of the economy. During the next few years, ho-e , there may be need or some external assistance, especially because oil revenue may not increase throughout the Plan period. Debt service payments on the existing debt are likely to reach a maximum of ID. 9 million in 1970, equivalent to 6% of foreign exchange earnings in 9LU4. Iraq should, therefore, be able to service a modest amount of additional debt on conventional terms. STATIS TICAL APPELIDIX Table Fwternq)-t . . .. . . . . . . (yrnuth nnd Cnmnosition of Pnnuiation and Estimates of Employment by Sectors . . . . . . 2 Gross Domestic Product, Gross National Product an ejT MNtinal Prouc .a Current Factor Cost, 1953, 1956 and 1959-63 . . . 3 National Product by sectors, 1953, 1958 and . 1953-63 . . . .. . . . . . . . . . . . . . 5 Per Capita National Income, 1953-63...... . . . . 6 Output per Worker, 1957 and 1963 . . . . . . . . . .. 7 Investment as a Percent of GDP and GNP, 1953-64 . .. . . . . .. .. . .. . .. Financing of Gross investment, 19>53-6 . . . . . 9 Area, Production and Yield of Principal Crops, 1952-65 . . . . . . . . .. . . . . . 10 Area of Land Distributed as of May 1965 . . . . . . . 11 Iraq Oil in Relation to Middle East and World Oil . 12 Production of Major Industries . . . . . . . . . . . 13 Transport . . . . . . . . . . . . . . . . . . . .,. . 1 Consolidated Budgetary Position, 1954/55 to 1964/65 . . . . . . . . . . . . . . . . . . *. 15 Ordinary Budget: Revenues and Expenditures, 12/55 - 1965/66 .. . . . . . . . . . . . . . . 16 Development Budget: Revenues and Expenditures, 1954/55 - 1965/66 . . . . . . . . . . . . . 17 Development Budget: Allocations and Expenditures, 1954/55 - 1965/66 . . . . . . . . . . . . . 18 -2- Table Supplementary Budgets: Revenues and Expenditures, Budgets of independent Government Agencies . . . .. 20 Tax Revenue and its Relationship to National Income . . . . . . . . . . 21 Consolidated Statement of the Banking System, 1954 to 1965 . . . . . . . . . . . . . . . . . . 22 Money Supply and Factors Influencing Money Supply, 1954 to 1965 . . . . . . . . . . . . . . . . . . 23 Loans Extended by Specialized Banks . . . . . . .. .2 Wholesale Price Indices and Cost of Living Indices for Unskilled Laborers in Baghdad . . . . . . .2 Balance of Payments, 1956 - 196h and First Half 1965 26 Value and Volume of Principal Exports, 1956 - 1965 . 27 Value and Volume of Principal Imports, 1956 - 1964 . 28 Geographical Distribution of Foreign Trade, 1956 - 96 . . .. 29 Five Year Plan: Sources of Revenues and Planned Contral Government Investment Expenditures . . . 30 Planned Annual Allocations Under the Plan . . . . . 31 TABLE - 1 IRAQ - EXTERNAL MEDIUM- AND LONG-TERM /1 PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF SEPTEMBER 30, 1965 (Preliminary Estimates) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) Outstanding September 30, 1965 Item Net of Including undisbursed undisbursed TOTAL EXTERNAL PUBLTC DEBT 197.622 291.L92 Privately-nlaennAd ht/2 __ 973 Loannsq from - ALS '1impr 26I93 Export-Import Bank 5,196 12, 36 D-artment of Agricunltar 11 ATO 13,957 T,~~~av,nn 9r, R.CC), 000 L oan from TT Q.Q.RD /3 o i Rnq( 1 Debt with an original or extended maturity of one year or more. /2 Participation in Export-Import Bank loans. /3 It is not certain that the whole amount represented here is _on'~rac'~i et TABLE 1 CONTINUED IRT M-" ETMT C MTTA n ni-rTUALnA XnERVICEI PAE T " EVIlnTEAT RMDYTUM- -LtY. na P1011PLRIZIJL UUINJJ.IrRUIUlllj OWLrV-U',F, rMIPWin~ iM UIN 1141LIMI IDJ.LU-l- AND LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF SE-iElBER 30, 1965'> /1 Debt Repayable in Foreign Ourrency (In thousands of U.S. dollar equivalents) Page 1 GRAND TOTAL DEBT OUTSTANDING PAYMENTS DURING PERIOD YEAR (BEGINNING OF PERIOD) BEGINNING INCLUDING AMORTI - APRIL 1 UNDISBURSD ZATION INTEREST TOTAL 1965 288,574 /2 3,495 2,ho 5,899 1966 287,993 ¯ 9,189 3,286 12,475 1967 278,804 9,53h 3,768 13,302 1968 269,270 9,979 4,209 l,188 1969 259,291 16,906 h,562 21,h68 1970 242,385 21,324 h,117 25,h4l 1971 221,061 21,323 3,670 24,993 1972 199,738 21,324 3,222 24,5h6 1973 178,41 21,323 2,775 2h,098 1974 157,091 21,323 2,325 23,6h8 1975 135.768 21,32å 1,877 23,201 1976 li1,hhh 21,323 1,h31 22,75h 1977 93,121 19,032 985 20,017 1978 74,089 12,713 594 13,307 1979 61,376 12,309 38h 12,693 PRITATETY-PLACED DEMT DrT UTRTATDING PAYENTS DURING PERIOD YEAR (BEGINNING OF PERIOD) PAYMENTS DURING PERIOD BEGIIIINING INCLUDING AMORTI- APRIL 1 UNDISBURSED ZATION INTEREST TOTAL 1965 973 /2 - 26 26 1967 917 126 43 169 .7JU 79 6 40 23u 1969 595 196 30 226 19 n7n 399 19 21 2-n i17 .L7J v >77 L7U CJ.L . 1971 203 133 9 142 197 70 70 3 73 TABLE . CONTINUED IRAQ - ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL MEDIUM- AND r um mT'nis TrnvYn no~mrnm fATTmc'm annrunt~T TaTAT TTnrunTt TITh nTmcTTD LUIN1rI[ FUDLIC DED UUTSliv'uLt IULUUlu UAvI.LTDUflU AS OF SEPTEMBER 30, 1965 /1 (CONT.) Debt Repayable in Foreign Currency (In thousands of U. S. dollar equivalents) Page 2 U.S9 GOVERNMENT LOANS - TOTAL DEBT OUTSTANDTIN YEAR (BEGINNING OF PERIOD) PAY.ENTS DURING PERIOD BEGTNTING TINLT.TING AMORTT- APRIL 1 UNDISBURSED ZATION INTEREST TOTAL 1965 23,575 /2 1,204 316 1,520 1966 22, 9o1 8A 615 1,.81 1967 22,128 1,1L0 679 1,819 1098 20,O 1,515 706 2,221 1969 19,473 1,517 651 2,168 970 17,956 F ,517 59 ,0 1971 16,439 1,579 540 2,119 17fL 4,UUU 1,L47L ,U10 1973 13,218 1,712 414 2,126 1975 9,794 1,712 275 1,987 1976 8,82 1,712 209 1,921 1977 6,370 1,712 143 1,855 1978 4,658 1,369 751,4 1979 3,289 965 38 1,003 LOAN FROM KUWAIT DEBT OUTSTANDING YEAR (BEGINNING OF PERIOD) PAYMENTS DURING PERIOD BEGINNING INCLUDING AMORTI- APRIL 1 UNDISBURSED ZATION INTEREST TOTAL 1965 84.000 /2 - - - 1966 84,000 - - - 1967 8. - - - 1968 84,000 - - - 1969 8)4.000 - - - 1970 84,000 4,418 - 4,418 1971 79,582 40118 - 4,)418 1972 75,164 4,019 - 4,419 1973 70,7)45 4))418 . ,41 1974 66,327 4,418 - 4,418 107cf A-i ono L, I-a 1. I.1o -97 619g4494,L4.9 1976 57,490 4,018 -4,18 977 53,07 4L418 -4,4L18 1978 48,654 4,419 - 4,419 FO979 4423 4,41 4,418i I TABLE 1 CONTINUED T A T.N T tX ,-mfA, rr1 ^ ~TI A nlMTT 7 Iý 'fTT ~ TI A YT~1TTC 1.T""rTln1T A T 1urT'r=TTR~r. A ITTN IRAQ - ESTIATEL.LID CTiiDiiCCUAL SERV riPAEN ON- EXENLumu MEDuj.UVI- uDV LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF SEPTEMER 30, 1965 il (CONT.) Debt Repayable in Foreign Currency (In thousands of U.S. dollar equivalents) Page 3 LOANT FMn TT.S S R Q T'ILIDMf n£C~ IjfAl *J*JA. YEAR (BEGINNING OF PERIOD) PAYMENTS DURING PERIOD nvel' TIT -nmT( T"åMTfT lTTT KUNT( ARffetr1 APRIL 1 UNDISBURSED 3ATION INTEREST TOTAL 1965 180,026 /2 2,291 2,062 4,353 ,n,1y 0 ~-,0 19u 1ouu2 0,267 2,629 10,896 1967 171,759 8,268 3,046 11,314 1968 163,491 8,268 3,h63 11,731 1969 155,223 15,193 3,881 19,074 1970 ih0,030 15,193 3,501 18,69h 1971 124,837 15,193 3,121 18,314 1972 109,644 15,193 2,741 17,934 1973 94,451 15,193 2,361 17,55h 1974 79,258 15,193 1,981 17,174 1975 64,065 15,193 1,602 16,795 1976 h8,872 15,193 1,222 16,415 1977 33,679 12,902 842 13,744 1978 20,777 6,925 519 7,44 1979 13,852 6,926 346 7,272 See footnotes at end of table. TABLE 1 CONTINUED IRAQ - ESTMATED CO4TRACTUAL SERVICE PAYMENTS ON EXTERNAL MEDIUM- AND LONG-TERM PUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF SEPTEMBER 30, 1965 A1 (coNT.) Page 4 /1 Includes service on all debt listed in Table 1 prepared December 20, 1965, except the undisbursed portion of the U.S. Department of Agriculture loan of $2,918,000 since re- payment is dependent on future dates of deliveries. /2 Outstandina as of September 30, 1965; payments are for the entire year 1965/66. 13 Since it was reported on Form C that "The Government of the Republic of Ira nays back the amounts of the disbursed loan for each project in 12 equal annual installments commencing one vpnr nftpr the delivprv nf the compett setn of eqninment nareed upon in each contract", and in the absence of data on deliveries, the following assumption.s wern mad in order to nrnint qervine payments on the loan: a. Principal repayment of $2,291,000 reported by Iraq as havyin,11; heon. mha!de. iin +_^ +ho nimiinti anrling r_:Z )0n+ mhur '10 1965, was assumed to be the first repayment made on na_mipp+ 4pli,n"imoe +n fl ip ^-P 497 ).Q9 nnrA assumed to have been completed in the year 196h/65. b. $71,723,000, representing the difference between the amuunt repuote asoutstanding ao s o epember W) 1965 and the amount assumed to be the cost of the project mentioned inka)W&O L wan raUu at UUUC". UVOU of deliveries for the second project, which were as sumiek A ) UV U %LJJL;J.V%A. "L". .L1r UAL', YUCd.1 _LZW'JJ J d. a 0).L , vvIt n114u i.ed as Lun-'-* L ~ s - ed~ as of Sepember :)r% 1965, was assumed to represent the cost of a third project, deliveries on which were assumed to be made from 1965/66 through 1968/69. Statistics Division IBRD-Economics Department December 20, 1965 TABLE 2 (rPAnTP ANT\D r,0MP0.qTTTrOv nF P0PTTT.ATTrN Census Total Population Rate of Percentage composition ir-w_ f~ thuans ______ Tj ,a Tran %m +hNnVAXe Ur..r+ TT,u, ral -1 A 47 1 3Qr -7 J.V %aI -L.. C- UL1C4 t U 1890 1,726 1.3 25 75 1919 2,848 1.7 na na UV I 1947 4,816 2.4 34 66 1965(est) 8,000 3.0 na na ESTIMATES OF EMPLOYMENT BY SECTORS (in thousands) Economic Activity 1957 Percentage 1963 Percentage Agriculture 1,610 78.7 1,760 74.5 Industries (including oil, gas and public utilities) 128 6.3 140 5.9 Trade and Commerce 63 3.1 69 2.9 Construction 35 1.7 50 2.1 Transport 56 2.7 154 6.6 Services 154 7.5 191 8.0 Total 2,046 100.0 2,364 100.0 Labor force estimates 2,111 -- 2,439 -- Source: Data provided by the Ministry of Planning. TABLE 3 Gross Domestic Product, Gross National Product and Net National Proauct at Current vactOrCost (in millions of Iraqi Dinars) 1953 1956 1959 1960 1961 1962 1963 Agriculture, forestry and fishing 71.5 89.3 82.0 97.8 117.0 14,.4 107.6 Mining and Quarrvina 129.8 154.1 191.8 209.8 211.2 212.1 2140.7 Manufacturinz 19.7 32.1 hh.8 5h.h 59.5 65.1 63.2 Construction 11.3 2L.8 28.7 23.1 23.9 19.7 20.0 E1Pt.riritv ind Tatr I.q 2.q 3.0 3.6 5.0 5.5 5.7 T-~nncvHn. nmrnmi nnft.i n and storage 21.4 27.8 34.3 39.7 46.0 47.0. 48.1 Wholesale and retail trade 17.9 26.9 26.2 32.6 36.6 38.6 35.3 Banking, insurance and defence 18.3 28.1 145.7 145.7 51.5 59.8 66.14 services 16.8 214.8 33.3 38.1 141.4 146.5 149.2 GDP at factor cost 323.0 tj28.9 509.6 565.14 615.1 658.14 660.7 Less income to abroad 57.6 65.5 85.7 95.1 914.2 93.9 108.1 GNP at factor cost 265.3 363.14 1423.9 1470.0 520.9 5614.5 552.6 Less depreciation 21.1 28.7 32.3 32.9 36.6 38.0 37.2 Net national product at factor cost 323.0 338.7 09.6 1437.1 6581.3 26.5 66.7 Source: K. Haseeb, "National Income of Iraq", Lecture delivered at the American University of Beirut, May 1964. TABLE 4 Nati onal Procit by Setor. (percentages) Sector 1953 1958 1961 1962 1963 Agriculture, Forestry and Fishing 28.9 24.5 23.9 26.3 20.7 Mining and Quarrying 50.0 44.9 41.4 38.1 44.6 Manufacturing 7.6 8.5 11.2 11.2 11.2 Construction 4.0 6.8 4.3 3.3 3.4 Electricity and Water 0.5 0.6 0.7 0.7 0.7 Transport, Communications and Storage 7.1 6.8 7.9 7.h 7.7 Wholesale and Retail Trade 7.1 7.1 7.3 7.1 6.7 Bankin2. Tnsirance and Real Estate 1.3 2.0 2.2 2.2 2.4 Ownership of Diellings 3.0 2.1 1.6 1.5 1.4 Public Administration and Defence 7- 0 10 IA 11 19 Services 6.6 7.7 A. 8. P.3 IVO L LIwfll±CVJ L I...0 L J- "LL LI. - . Factor Cost 123.6 121.0 119.4 117.8 121.0 Less Income to Abroad -23.6 -21.0 -19.4 -17.8 -21.0 RTI. DJL ,II. 71TUI n . AU Factor Cost 100.0 100.0 100.0 100.0 100.0 et 14ationai Product At Factor Cost (Amount in 244.0 374.0 484.2 526.5 515.4 Source: National Income Estimates by Dr. K. Haseeb. TABLE 5 RATES OF GROWTH OF SECTORS AND NATIONAL INCOME. .19563 Rate of Sector 1953 1956 1955 1956 1957 1958 1959 1960 1961 1962 1963 Growth 1953-63 1. Agriculture, Forestry and Fishing 100 133 80 103 136 104 78 89 113 132 94 -0.6 2. Mining and Quarrying 100 117 126 119 81 138 161 187 193 1964 223 8.4 3. Manufacturing 1C 11 131 154 159 169 205 25h 274 305 296 11.5 4. Construction 100 137 167 182 201 199 180 143 151 125 127 2.4 5. Eaectricity and Water 100 10 163 195 236 252 275 326 -369 458 467 16.7 6. Transport, Conuunication and Storage 100 103 110 123 126 125 131 159 181 188 179 6.0 7. Wholesale and Retail Trade 100 12h 1:18 140 151 139 128 157 188 199 174 5.7 8. Eanking, Insurance and Real Estate 100 157 166 190 215 261 268 258 279 295 292 11.3 9. Cnership of Dwellings 100 102 105 107 109 112 115 118 122 125 128 2.5 10. Public Administration and Defence 100 106 122 12L 131 152 179 176, 211 24L 272 10.5 U. Services iCO 108 113 121 125 13h 151 172 207 215 222 8.3 12. Net Domestic Product at Factor Cost 10C 120 113 121 119 134 110 159 176 187 188 6.5 13. I-ss Income to Abroad 100 108 112 98 67 118 1-0 16L 168 168 193 6.8 .1. Net National Product at Factor Cost ic 123 114 127 133 138 1"0 157 178 191 186 6.4 Source: K. Haseeb, "National Income of Iraq", Lecture delivered at the American University of Beirut, May 196L. TABLE 6 PER CAPITA NATIONAL INCOIE, 1953 - 1963 National Income Per Capita Income (ID. million) Year At Cur- At 1956 Population At Current At 1956 Prices rent Prices (000) Prices Prices ID. % Inc- ID. Inc- rease rease Over Over Prece- Prece- ding ding Year Year 1953 244.0 262.8 5832 41.8 - 45.1 - 195h 284.0 322.6 5945 47.8 1.4 5h.3 20.h 1955 289.3 299.0 6061 h7.7 -0.2 h9.3 -9.2 1956 334.8 33h.8 6180 5h.2 13.6 5h.2 9.9 1957 352.7 3h8.h 6301 56.0 3.3 55.3 2.0 1958 37h.0 363.2 6123 5.2 39 96. 2.2 1959 391.6 368.6 65h8 59.8 2.7 56.3 -. 1960 )i37.1 )12.7 6675 65.5 9.5 61.8 9.8 1961 8h.2 68.6 68o 71.2 8.7 68.9 11.5 1962 526.5 03. 636 75.9 .6 725 l 9 1. 89 7?7- 69.2 -.6 Source: K. Haseeb, National Income of Iraq, Lecture delivered at the A zeia UILLversity of BIeUlu, iaty 1704. TABLE 7 OUTPUT PER WORKER_ 19 AND 1 63 1957 1963 Output Per Output Per Value Added Eloyed. Worker Value Added Empiy Worker Sector (in million I.D) (in thousands) M(3 :L11ion I,D) (in thousands) I.D) Agriculture 111.6 1610 69.3 124.0 1760 710.5 Mining 166.W/ :16 915.0 04l 1714.3 Manufacturing and. Public Utilities 37.9 112 338.4 68.9 126 546.8 Construction and. wellings 40.7 35 1162.8 32.0 50 640.0 Trade and Commerce 36.3 63 576.2 17.9 69 694.2 Transport 29.9 56 533.9 48.1 154 312.3 Services 59.0 154 383.1 115* 191 6 04.? TOTAL 430.1 2046 210.2 660.7 2364 279.5 Source: Computed from national income data supplied by Central Bank of 'Iraq, Fenlon's labor force estimates for 1957 and data provid,ed by the Ministry of Planning. 1/ Average of 1962 and 1963 because 1963 was a poor agricultural year. 2/ Average of 1957 and 1958 because of low crude! oil production in 1957. TABLE 8 Thw ronATm A V A n'rTTM rV O'n A AT rlKM .1JV r LIL1A. O K -Er UDI V. U U01 ItIliv ULvK (in million dinars) Gross investment Dy - ke) , a ) ao Investment Oil Companies of GDP of GNP (2) k~4) 0 1953-54 44 14 30 13.6/ 11-3 1954-55 57 7 50 15.2 16.3 1955-56 80 7 73 20.7 23.1 1956-57 104 12 92 24.2 25.3 1957-58 107 17 90 24.8 23.4 1958-59 99 15 8h 20.4 20.7 1959-60 105 23 82 20.6 19.4 1960-61 94 21 73 16.6 15.5 1961-62 103 17 86 16.7 16.5 1962-63 92 2 90 14.0 15.9 1963-64 82 2 80 12.4 14.5 Source: Computed from data in International Financial Statistics, IIF Balance of Pavmpnts Year Rooks. and national income estimates by Dr. K. Haseeb. TABLE 9 Financing of Gross Investment (Millions nf Dinar) Year Gross Investment Govt. Savings Private Savings External Capital 1953/54 44.o 32.4 10.5 1.1 1955/56 80.0 69.5 3.9 6.6 i1 ^~' r ' - Irl 7 a^ I - - I- .-I -L. l )(LVJ4 U, 4--U >[.> 40 1957/58 107.0 26.5 57.1 23.4 195/5 9.0 59.y o 34.60. 1959/60 105.0 38.0 59.9 7.1 .LYUU/ 01 94.0 43.0 45.1 5.9 1961/62 103.0 63.9 31.5 7.6 19621 3 92.0 48.0 32.6 11.4 1963/64 82.0 44.5 29.3 8.2 NOTES: 1/ Gross investment estimates are taken from International Financial Statistics, Supplement to 1964/65 issues. 2/ Government savings are assumed to be the difference between general government revenue excluding foreign assistance and expenditure under ordinary budget plus surplus or deficit under Supplementary Budgets. 3/ Residual estimates. 4/External capital inflow estimates are based on data in the IMF Balance of Payments Yearbook (Volumes 6, 12, 14 and 16) and the Development Budget. TABLE 10 AREA, PRODUCTION AND YIELD OF PRINCIPAL CROPS AREA ('000 hectare7s Average of 1956 1957 1958 1959 1960 1961 1962 1963 1964 Average of CROP 1952-54 _ __ __ __ __ __ __ 1962-64 Wheat 1,186 1,314 1,456 1,528 1,089 1,271 1,346 1,591 1,705 1,627 1,641 Barley 1,033 1,171 1,240 1,158 1,090 1,038 .1,o41 1,189 1,219 1,098 1,169 Rice 97 70 91 89 59 76 6,4 84 108 109 100 Cotton 43 58 65 56 37 31 37 34 25 40 33 YTIELD (tn e hect are Wheat .68 .59 .77 .49 .38 .47 .64 .68 .29 .50 .48 Barley .97 .87 1.05 .83 .67 .77 .88 .95 .65 .57 .72 Rice 1.61 1.58 1.62 1.53 1.49 1.55 1.06 1.35 1.32 1.69 1.46 Cotton .28 .43 .68 .66 .70 .77 .73 .76 .68 .73 .73 PRODUCTION ('000 tons) Wheat 801 776 1,118 754 564 592 857 1,085 488 807 793 Barley 1,001 1,016 1, 305 965 725 804 911 1,126 790 623 846 Rice 156 111 154 137 88 118 68 113 143 184 146 Cotton 12 25 1414 37 26 24 27 26 17 29 24 Tobacco 7 5 5 5 11 12 9 8 3 24 12 Dates '61 480 ?60 300 450 270 300 350 420 320 363 PRODUCTICON INDICES Ileat 100 97 140 9 4 70 74 107 135 61 101 99 Barley 100 101 130 96 7? 80 91 112 79 62 84 Rice 100 71 99 88 56 76 44 72 92 118 94 Cotton 100 208 367 308 217 200 225 217 142 242 200 Tobacco 100 71 71 71 157 171 129 r14 43 3143 171 Dates 100 n.a. n.a. n.a. 172 103 115 146 161 123 139 B'sed on data in Statistical Abstracts and data provided by Central Bank of I.raq. TABLE 11 Area of Land Distributed Up To 31st May 1965 (Ln ljuusII)51 State-Owned Nationalized T I - , PVine L anU Land ToTal Ilu93U.L 02 5,48,9U4 4uý>,uuu226 ?215 Kiruk20,860 20,35526,5 Sulaimlaniyah 1,680 19,067 33,747 Daghiad 41,154 12,701 165,855 Au t 108,967 336,150 445,117 Hilla 81,360 113,953 195,313 Diyala 64,417 18,532 82,949 Diwaniya -- 57,586 57,586 Kerbala 1,790 9,625 11,h15 Amara -- 11,156 11,156 Ramadi -- 6,226 6,226 Basra 3,866 -- 3,866 TOTAL 618,136 1,403,899 2,022,035 Source: inistry of Planning TABIE 12 1L IN RFELATION TC MIDDLE EAST AND0 WORLD OIL (Million tons) 1964 1964 FRODUCTION L '1954 1.2, 19 19U2 I9U8 12. 126 196. 1 126 J&4 over over 1954 1359. (a) Iraq 4.3 30.1 32.8 30.7 21.7 35.2 41.1 46.7 48.2 48.4 55.8 60.6 7.2 8.1 (b) Middle East 15.7 133.7 157.8 168.1 173.4 208.3 224.4 257.7 275.9 303.2 334.2 374.2 10.8 10.8 (c) World 239.1 637.6 709.2 764.4 794.8 802.3 858.4 914.6 966.8 1943.2 1115.5 204.7 6.6 7.0 (d) Iraq as % of MIddle East 273 22.5 20.8 18.3 12.5 26.9 18.3 18.1 17.5 16.0 16.7 16.2 - -- (e) Iraq as % of World 1.8 4.7 4.6 4.0 2.7 4.4 4.3 5.1 5.0 4.6 5.0l 5.0 - -- (a) Iraq -- 29.2 31.6 29.2 19.9 33.3 39.2 44.6 45.9 45.9 53.2 58.3 7.2 8.3 (b) Middle East 13.0 126.0 145.0 155.0 154.0 187.0 203.0 230.0 248.0 273.0 301.0 340.0 10.5 10.9 (c) World 83.,0 254.0 290.0 319.0 334.0 352.0 378.0 417.0 455.0 514.0 569.0 638.0 9.7 11.0 (d) Iraq as % of MLddle East -- 22.2 21.8 18.9 12.9 17.8 19.3 19.4 18.5 16.8 17.7 17.1 - -- (e) Iraq as % of World -- 11.5 IC.9 9.2 6.0 9.5 10.4 1-'.7 10.1 8.9 9.3 9.1 - -- / iddle East includes Iran, Iraq, Ku'.:ait, Saudi Arabia Qatar, Neutral Zone and other sall producers; World excludes LBSP, Eastern Europe aid China vhose production and export in 1964 Were 2/ illion tons and 39 million tons respectively. Source: Computed fram data in Stati-tical Review of World 011 InJustry (196.) :ublished by Dritish Petroleum Company and data provided by the Mirästry of Cil. TABLE 13 PRODTICTTON OF MAjOR TDISTRIES. 1960-1963 Unit 1960 1961 1962 1963 Cotton (ginned) tons 8,093 8,710 8,819 6,050 tool tons 2,957 3 A7 3,208 23 90 Sugar 1000 tons 24 33 30 30 Vegetable ghee 1000 tons 22 25 26 30 Toilet soap tons 3,850 5,509 5,564 5,085 detergents tons 12,464 13,113 13,552 9,547 and beer 1000 liters 9,614 7,955 7,343 6,911 beverages million bottles 239 273 374 421 Cigarettes million cigs. 49,yo 4L441 40006 4,t01 Textiles 1000 meters 37,762 44,18 42,067 40,417 Blankets 1000 nos. 255 331 307 338 Yashmaghs 1000 nos. 1,257 1,045 1,149 1,120 Shoes and boots 1000 pairs 2,670 3,298 3,951 5,456 Bags 1000 nos. 33 Uh 58 50 Leather (inner and outer) 1000 sq. ft. 5,754 8,539 7,603 6,902 Sole leather tons 837 1,013 917 825 Cement 1000 tons 813 937 892 942 Asbestos pipes 1000 meters 188 224 469 506 Bricks million nos. 696 859 923 979 Aluminium ware and plates tons 1,805 1,810 1,789 1,600 Matches 1000 gross 912 1,006 1,036 1,069 Source: Data provided by Central Bank of Iraq TABLE 14 TRANSPORT 1ighways (as of January lyo> Kilcmeters Modern paved 2100 Old paved 1960 Earth and Gravel .300 Under construction 320 TOTAL 8680 Railways Length of main line 1620 Kilometers Number of Vehicles Licensed 1954 1964 Rate 2f.rowth Private Cars 13,965 35,804 9.9% Taxis 4,463 14,h6 12.5% Buses 3,976 6,498 5.0% Trucks 8,212 17,473 7.8% TOTAL 30.616 7h,221 9.3% Railways 1960/61 1961/62 1962/63 1963/64 Freight traffic 2713 2419 3474 2501 (non t.n) Passenper 2qq8 2708 252h 2293 traffic (000 nassengers) Source: Ministry of Communications. TABLE 15 CONSDLIDATED BUDGETARY POSITION OF PUBLIC SECTOR (Millions of Dinare) Rcoee 4 954/55 1956 1956/57 1957,58 1958/59 1959/60 1_62¿ 1 961/62 1962/63 1963/_66 On revenwe 57.2 84.4 68.9 118.9 86.9, 86.6 95.2 16.2 99.0 11L.5 125.6 Other tax revenue 28.7 32.5 32.3 316.6 35.9, 35.6 h2.9 46.5 47.9 47.3 56.0 Other reveme 7.0 9.2 12.6 12.3 1L.5 11.1 13.2 16.1 26.5- 21.5 15.5 Revimmnn 1 , Supplentary Bdgets 11.0 13.3 13.0 17.0 17.2 21.0 23.7 22.0 21.5- 24.8 24.2 E nal assistance - - - - - - - 7.6 l.4 - 8.2 9.0 TOML 103.9 139.14 126.8 114.8 154.5 154, 17.-0.4 263 21.9.3 :230.3 _.3 17. 20 906, !~pfnitarea Odinary Budget cpienlitures V 52.1 55.6 66.5 73.8 73.1 100.1 U3.7 118.7 128.1 1142.5 130.1 of whLah Defensc 20.1 22.2 28.7 30.0 31.3 37.3 44.1 45.1 49.3 61.3 70.3 Social services 13.7 14.8 17.7 22.6 26.1 33.3 36.2 42.4 47.7 L9.3 53.4. S3plentary ;ut caenditures 11.0 12.9 11.6 12.8 15.2 15.9 16.7 17.0 16.1 15.8 22.5 Invetent expenditure 20.9 34.0 t3.0 57.4 52.2 49.7 L,5.6 61.2 59,3 54.2 54.5 TOMIL .1. -02. J.1. .11n, 165.7 17,6.o 19c>.9 20LJ. 21.2.5 .257,. Swrplum or Daficit 19.9 26.9 5.7 -29.2 9.0 -11. -1.0 11.5 2.2 6.8 -26.8 1ote: _/9 Exoludbes Budgets of IndependMt Agencies because of lack of data. Many of them, ho~ver, dhpend on appropriation from the ordinary bcdget. fmcludes Budgeta of the Higher Agrarlan Reform Bo4y and the Atomic Enhrgy Commission because their expenditures are wet out of transfera from the ordinary budget. Eg=lades U.S. assistane under PL.å80. Ordinary budget expenditures xcolude transfera to capital stock of . overiument-owned banks. Souret Comuted fr= data provided by Central Bank of Iraq. TABLE 16 RIY-REVENUES, AND EXPENITURES millions of 5inari7) EEN= 193 196/57 12527/8 1C8/59 1.9h9/60 1960/61 1961/62 1962/6 193/6 _ _1,5/66 (Prov) (Est) 011 revenue 15.0 20.7 14.5 26.1 43.3 47.6 58.1 48.5 57.2 64.8 84.0 Gustozs and excise taxes 18. ~25.5 29.1 27.7 27.5 33.5 37.3 36.2 34.6J 41.1 42.0 Income, death and inheritance taxes \/ 2.2 2.5 2.7 3.8 3.8 4.7 5.1 7.6 8.4 J 9.8 13.0 Agricuiltural tar v 3.5 2.6 2.8 2.4 1.9 1.9 0.8 0.8 0.7- 0.6 0.9 P>roperty tax and stamp duties 1.2 1.7 2.0 2.0 2.4 2.8 3.3 3.3 3.6 - 4.5 4.9 Posts and telegraphs 1.7 2.2 2.6 2.7 2.9 3.2 3.1 3.1 1.9 - - Other revenues _i _8 12,.2 _'ZD _1.J2_2l. 1.2^ 20., _25 TOTAL 47.7 62.7 61.9 75.6 89.7 103.6 120.7 114.7 126.8 143.1 189.9 UEPEDITIRES Iktional defense, justice and security 22.1 33.,5 33.0 33.8 40.1 47.1 48.2 52.6 64.6 72.8 89.8 Education 10.9 17.7 11.2 14.4 20.2 24.5 29.0 32.4 33.3 37.2 42.9 Health and mnicipal affairs 11.4 11.7 :13.1 11.7 13.4 15.3 16.0 16.2 :17.3 Financial and economc affairsä/ 11.7 11.9 9.2 9.2 12.8 15.9 12.6 12.7 18.8 32.9?/ 2L.1 Cornunications, water and housing 3.0 2.9 3.6 3.3 4.1 /.1 4.4 4.7 3.6 1.9 2.3 P ensons 1.2 2.9 3.8 5.0 6.3 6.9 7.4 8.13 9.8 10.7 10.0 Foreign affairs and others _1.8 _IL _ 0 _ 2.4 2.9 . 9.4 _4.1 TOTAL 50.2 70.3 73.8 79.2 100.2 114.2 119.2 128.4 149.0 181.1 190.5 Surplus or Deficit -2.5 -7.6 -11.9 -3.6 -10.5 -10.6 1.5 -13.7 -22.2 .-38.0 -0.6 :L/ Fiscal year ends March 31. Includes ID 10.8 nillion as advances by oil companies againjt oul income. Includes ID 10.7 million prepaynent of oil royalties hich were :ald late in March ratý.er than in early April 1962. Includes expenditues of MidstriTs of Finance, Trade, Astriculture, Agrarian Ref rm, Cil, Planning, Industry and certain welfare and other schemes. / Includes an advance of ID 8.55 million in 1964/65 and of ID 28 rillion in 1965/,6 from the development budget. 6f Expenditures t.otalling ID 13 milii n innurred vr a five yrar 'eriod ending FY 1>61. by'aha (Feod Dli,:ributicn Ad:i-istration) are inciuded un:er thir category. Source: Basvd on data pr-vircd 'y th ini. ry of -lnaince. TABLE 17 DEVELPMNT BUDGEr - REVENUS AND EIPENDITURE ( million dina) RE~mU 192h/jl 19M56 1956/57 1957/5 198/59 1229/6j 1960/61 ý1961/62 1962/63 19 666 6 6 3/(rov) 1øt)- Incomei tax on oil companies 4 40.0 59.,1 48.2 34.2 60.8 43.6 47.6 58.1 50.5 57.3 64.8 84.0 Net profit of government agencies - -- - - - -- - 0.9 6.6 3.3 1.0 n,a. Sovet -- - -- - 7.6 11.4 8. 2/ (Other __ l2 ..a --- .al _. _ -. .. TOTAL 40.7 60.8 51.1 35.9 61.7 43.6 47.7 66.7 70.1 67.7 66.6 n.a. EnDIITURN Agriciultre 9.8 12.9 13.6 14.2 12.6 10.3 10.8 9.7 6.3 4.5 5.0 25.5 Industry 2.0 2.9 5.0 8.6 11.9 4.8 5.7 7.1 10.3 9.5 :12.6 45.1 Tranport and comicat.ons 4.9 9.9 11.1 14.2 7.9 12.6 7.9 14.1 15.8 18.3 10.3 21.5 Iuidings and housing 3.8 5.55/ 12.7 19.8 18.1 20.1 18.1 27.1 26.4 21.2 24.3 21.8 Other _Ql _2 _07 0.7 1.7 __8 0 . - _Q -a - TOTAL 20.9 34.0 43.0 57.4 52.2 49.7 45.6 61.2 59.3 54.2 54.5 113.9 L sluding funis earmarked as reserves and leans and adv&nces to government and seri-governrment agencies. 2f Includes other rervenuEs. Afflount withdrawn from Soviet loan is not knomr. a/ De to subtraction of Iraqi Port Admnistration revenue ror the year 1962/63, which was erroneously included in the total revenue of that year, frc the current year revenue. / Includes ID 2,247,700 repayment of IBRD loan for Wadi Tharthar project. Sourci: Mindatry of Finance and Central Bank of Iraq. TABLE 18 DEVELDPNT UDGET -- ALLOCATIONS AJUD EXPENID1TUlE3 (Millions of DInars) Average of Average of SECTORS 9 4 195/ ;1955/56 1356/57 6937L8 195/2 1959/6 1960/61 1961(/62 162/j 163/6A 1964/6 96/66 1953/54 thro'1959/60 throI ýrov) -Et) 18S L/ 6/, I.Agricultur A. Allocations 15.0 16.3 14.1 27.0 26.6 29.2 45.8 18.1 31.2 20.2 22.8 24.7 25.5 21.4 27.6 B. Erpenditures 6.2 9.8 ~12.9 13.6 14.2 12.6 10.3 10.8 9.7 6.3 4.5 5.0 - 11.6 8.3 C. (B) as % of (A) 41.3 60.1 91.5 50.4 53.4 43.2 22.5 59.7 31.1 31.2 19.7 20.2 - 54.2 30.1 D. (B) as % of total expenditures 50.4 46.9 37.9 31.6 24.7 24.2 20.7 23.7 15.8 10.6 8.3 9.2 - 31.7 15.4 A. Allocations 5.0 6.0 4.1 17.0 16.0 11.10 15.3 12.6 24.9 24.6 39.6 43.0 45.1 9.9 23.4 B. Expenditures 0.5 2.0 2.9 5.0 8.6 11.9 4.8 5.7 7.1 10.3 9.5 12.6 - 5.2 7.5 C. (B) as % of (A) 10.0 33.3 70.7 29,4 53.8 108.2 31.4 45.2 28.5 41.9 24.0 29.3 - 52.5 32.1 D. (B) as % of total ~xnditures 4.1 9.6 8.6 11.6 15.0 22.8 9.6 12.5 11.6 17.4 17.5 23.1 - 14.2 13.9 III. Transnort and A. Allocations 4.7 5.3 14.1 17.7 29.3 32.9 41.1 36.2 51.0 32.4 29.8 27.9 21.5 17.3 38.1 B. ERxpenditures 2.2 4.9 9.9 11.1 14.2 7.9 12.6 7.9 14.1 15.8 18.3 10.3 - 8.4 13.6 C. (B) aÉ % of (A) 46.s 92.4 70.2 62.7 48.5 24.9 30.7 21.8 27.6 48.8 61.4 36.9 - 48.6 35.7 D. (B) as % of total cpenditures 17.9 23.4 29.1 25.8 24.7 15.1 25.3 17.3 23.0 26.6 33.7 18.9 - 23.0 25,2 IV. Housing ai: Bu;Lidine A. Alliocatins 3.7 3.9 14.3 20.2 28.9 27.2 54.7 52.1 7.4 30.3 25.4 24.0 21.9 16.4 47.3 B. Exoendituree 3.1 3.3 5.5 12.7 19.8 13.1 20.2 18.1 27.1 26.4 21.2 24.3 - 10.5 22.6 C. (B) as % of (A) 83.8 97.4 38.5 62.9 68.5 66.5 36.9 34.7 36.9 85.7 83.5 101. - 64.0 47.8 D. (B) as % of total expeituresa 25.2 13.2 16.2 29.5 34.5 34.9 40.7 39.7 44.3 L4.5 39.1 44.6 - 28.7 41.9 V. Othex B. Expenditires 0.3 0.3 2.7 0.6 0.7 1.7 1.8 3.1 3.2 0.5 0.7 1.3 - 0.9 1.7 D. (B) as of total expenitureø 2.4 1.4 7.9 1.4 1.2 3.3 3.6 6.3 5.2 0., 1.3 2.4 - 2.,5 3.1 VI. TTAL A. ALICATIONS 28.4 31.6 46.6 81.9 100.9 102.9 175.4 143.9 169.2 108.5 117.6 119 11 113.9 65.4 143.1 B. EPENDIT'MS 12.3 20.9 34.0 43.0 57.4 52.2 49.7 t5.6 63.2 59.3 5/.2 54.5 - 36.6 54.0 G. (B) AS % OP (A) 43.3 66.1 73.0 52.5 §6.9 50.S 28.4 31.7 31.0 54.7 46.1 45.6 - 56.0 37.3 Sur Based on data provided by the Gentral Bank of Iraq and e :'iistry of Finance. TABLE 19 SUPPLIMEMTARY BIDGETS - REVENUES AND EXPENDITURE3, 1955/56 965 (Millions of Dinars) R9VENUS 2aå56 2151. 1957/58 1958/59 19U9å/6 1960/61 2961/62 J2jd 6 6/64. 19A/5-19k666 Iraqi Railwys 6.2 6.5 7.3 6.9 7.0 7.4 5.3 5.9 6.9 6.-4 6.8 Porte Administration 3.7 3.7 4.3 4.4 7.2 9.5 10.2 9.9 12.4 9.9 FM» Dredg"ng Scheme .1.2 1.8 2.7 3.0 3.1 3.0 2.9 2.5 2.2 2,1 )15.0 Tobacco Admänistration 2.2 1.0 2.7 2.9 3.4 3.7 3.5 3.1 3.3 1.3 1.3 ligher Agrarian Refori Body -- - - 2.0 2.0 2.3 2.7 2.7 4.5 9.0 The AtomI Energy Comnission - - -- - - - 0.5 -- - DG of Administration of Ex-Royal Family Properties - -- - 0.3 0.1 0.1 0.1 neg.- neg. -- äwa Bealth Services Organization - - - - 0.5 0.:2 Tålegraph, Telephone & Post Office Service - - - - - -- -- 4.0 4.0 TCITAL 13.3 13.0 17.0 17.2 23.0 25.7 24.3 24.2 28.0 28.7 36.2 EIPEITR Iraqi Railwys 6.1 6.6 7.1 7.7 8.2 7.8 6.0 6.1 6.0 6.4 6.7 Porta Adeinistration 2.8 3.2 3.2 3.9 4.7 5.6 6.5 7.1 6.4 8.0 ) 0 Fao Dredging Sch~m 0.9 1.2 1.4 1.4 1.6 1.9 2.0 2.2 1.9 23 )15. Tobacco A~ datiration 3.1 0.6 1.1 2.2 1.0^ 1.5 2.4 1.0 1.5 1.3 1.3 ligher Agrarian Reform Body -- - - 1.2,- 2.6y 2.8, 2.7 2.7 4.5 9.0 The Atomic ECnergy Comnission -- - 1.0 OäA 0,1 o.1 0.01 0.1 Da of Ad åtration of EU-Royal Family Properti -- - -- 0.4 0.1 0.1 1~ neg- nog - Rural Health Service, Organisation --- - - - -- 0,.5 0.2 Telegraph, Telephone & Post Office Service -- - - - --- 4.0 3.6 TOTAL 12.9 11.6 12.8 15.2 18.1 19.6 19.9 19.2 13.9 27,.1 36.0 1/ Estimates 2/ Less than ID 50,000 ogM_ Compiled from data available in Statistical Abstracts 1959 and 1960 anhd uarterly Bulletins of the Central Bank cf Iraq, nos. 47 and 54. TABLE 20 BUDGETS OF INDEPENDENT GOVERNMENT AGENCIES In Thousands of Pinars 1962 1963 Ministries & Independent Government Agencies Attached Thereto Expenditures Revenues Expenditures Revenues Council of Ministers: *79o *790 1,147 1,169 Directorate General of Wakfs Ministry of Guidance: 133 8 15 l4 Theatre & Cinema and Iraqi News Agency Ministry of Agriculture: 754 782 969 786 The General Dairy Services & Directorate of Govt. Farms Ministry of Comunications: 4,754 *1,681 5,Ga6 1,31 Iraqi Airways, The Main Projects of Basrah Port and Fao Dredging Scheme Ministry of Economics: 2,311 3,864 3,485 3,130 Date, Regulation of Animal Products Trade, Exhibitions, Purchases, Marine Transport Co., National Insurance Co. & Grain Trade Regulation Ministry of Mqunicipalities and Village Affairs: 16,050 14,647 16,005 15,738 Municipality of Baghdad, Water Supply, Water & Ele ctricity Supply Authority in Basrah, Sewage, Directorate General of Passenger Transport and Municipal Administrations Mtinistry of Labour & Social Affairs: 966 6L)4 l,C98 735 Summer Resorts & Tourism, Cooperative Bank and Social Security Ministry of Defence: 392 23 381 56 Directorate of Army Martyrs Factories Ministry of Industry: 9,825 10,782 12,438 13,675 Industrial Bank, National Electricity; Baghdad Electricity; Medical Cotton; Spinning & Weaving, Government Sugar Fac- tory, Hammam Al-Alil Cement Factory, Sulaimania Cigarrette Factory, Sarchanar Cement Factory, Kufa Shoe Factory, Kerbala Canning Factory, Govt. Tailoring Service and Industrial Management Development Center Ministry of Finance: 2,571 8,531 3, 71 9 ,62 The Central Bank of Iraq, Rafidain Bank, Mortgage Bank, Estate Bank, Pension Fund and Attached Properties 1962 1963 Ministries & Independent Government Agencies Attached Thereto Expenditures Revenues Expenditures Revenues Ministry of Interior: 12,013 98 1 Local Administration, Passenger Transport in the Liwas, Administration of Properties of Denationalized News Ministry of Oil: 23,332 29,516 23,391 30,933 Oil Products Distribution and Government Oil Refineries Ministry of Agrarian Reform 233 182 239 222 The Agricultural Bank Ministry of Education 3,044 3,0U 3,257 3,304 Baghdad University Total 77,168 84,337 82,895 9C,498 Provisional Figures Source: Quarterly Bulletin - Central Bank of Iraq No. 5h. TABLE 21 TAX REVENUE AND ITS RELATIONSHIP TO NATIONAL INCOME (Millions of Dinars) Year Oil Revenue Other Direct Indirect Taxes TOTAL National Tax - Income T axes Inco-. Ratio ( 195h-55 57.2 7.1 21.6 85.9 28h.0 30.2 1955-56 8h.h 6.5 26.0 116.9 289.3 4c.4 1956-57 68.9 6.8 25.5 101.2 334.8 30.2 1957-58 L8.9 7.5 29.1 85.5 352.7 24.2 1958-59 86.9 8.2 27.7 122.8 374.0 32.8 1959-60 86.6 8.1 27.5 122.2 391.6 31.2 1960-61 95.2 9.4 33.5 138.1 437.1 31.6 1961-62 116.2 9.2 37.3 162.7 484.2 33.6 1962-63 99.0 11.7 136.2 16.9 526.5 27.9 1963-64 11h.5 12.7 34.6 161.8 515.h 31.3 1964-65 125.6 1i.9 hi.1 -181.6 552.0 32.9 Average of 70.2 6.8 2.4 101.4 302.7 33.5 1954-57 Average of 113.0 13.1 37.3 -163.4 531.3 30.8 1962-65 Sourae: Computed from data provided. by the Ministry of Finance and national income estimates by Dr. K. Haseeb. TABLE 22 COISCLIDATED S'TATE.NT OF US:KINOSY,T]: (in mil:lions of Irari Dinre) June AS SE1. 12jP 1951 1252 9 5. 1956 JU5 U5 1959 22L 1W96;1 2 1964 1 Foreign Assets (net) incl. net IMf position 52.2 53.7 65.3 85.5 105.C 125.6 137.3 113.1 127.8 127.5 106.6 87.0 77.2 113.8 93.. 106.2 Domestic Credit 10.6 8.1 -4.9 -15.2 -24.2 -35.1 -30.8 3.8 10.0 29.9 53.3 81.7 104.9 86.3 110.7 109.6 of iwich claims on Government & semi-ovt.agencies 4.4 -3.5 -16.1 -31.3 -50.5 -69.0 -67.3 -38.7 -32.0 -17.6 -6.1 15.3 36.7 15.5 34.C 40.4 claims on private sector 6.2 11.6 11.2 16.1 26.3 33.9 36.5 42.5 /2.0 /7.5 9.4 66.4 63.2 70.8 76.7 69.2 Other as1ets __. _ 2_. .2.8 6.2 02 8.7 12.4 .1.012.2 _ É 12 5 Ba Assets = Liabilities 6. _ja å6£ 72.6 U36 22& 112.7 1261 146.5 8 16 11. 212.5 29. 2 LIABIIIE:S Money suply 47,5 45.2 43.9 51.4 6c.6 65.6 75,7 1.8 9 .1 IIC.C 1C6.2 106.8 115.8 129.2 129.2 139.4 ,uasi-money 7,.2 9.4 8.6 9.3 10.0 11.7 14.7 19.4 20.3 24.9 28.8 33.1 34.9 36.9 38.4 42.C of ihich tizre & saving depositv 2.6 2.4 2.3 3.3 4.3 5.7 7.8 12.7 13.7 17.5 21.2 -4.1. 28. 29.0 30.1 32.3 Capital reserves and other provisions 6.2 M.9 7.8 9.8 11.2 i'-.9 27.2 20.7 23.7 26.0 20.8 32.2 36.3 LC.2 43.4 45.2 Other liabilities 3.e 1.6 2.1 2.1 1.s 1..6 5.1 5.0 4.4 8.9 5.6 8.9 12.8 6.2 8.1 7.4 -Note: Advances -,c econidc tr-azation and ti.e ýtab]i2ientn nat'en& iiatAcn in Juyl. 1"64 -re i:nd-uied in "ci (n r-ate ecor." Sourc-e: Zentral Bank of Iraq TABLE 23 MDNEY SUPPLY AND FACTORS INFLUEM3ING MDONY SUPPLY (Millions of dinars) June 1.2& 15 2É 1.2125 1.2 1220 1961 ID62 1-92 1964, 12 Money Suppl ý6 55_té 2',W i- 9. 1 0. ;IÄb,1002 ;1.06. 8 11g 8 229a2. ;L29.2 19 of vich Gurrency 41.2 43.2 48.5 50.7 63.6 76.1 73.4 75.2 79.8 96.3 98.8 106.8 Demand Deposits 19.4 22.4 27.2 31.1 34.5 33.9 32.8 31.6 36.0 32.9 30.4 32.6 Ratio of Currency to bney supply 68.0 65.9 64.1 62.0 64.8 69.2 69.1 70.4 68.9 74.5 76.5 76.6 Changes in Money Supply q2; .41_ 5, 1CA1 j.u2 -8 Qaí 9a llal 0.0Q ].02 Flactors Influenc£ru Chamges DomstLiasst -Ll -5s i-1.6. 120 & L 221 205 ~a8 -22 2_ --6 Net Claims on Public Sector -19.2 -18.5 1.7 28.6 6.7 14.4 11.5 21.4 21.4 -21.2 18.5 -6.4 Cliaim on Private Sector 10.2 7.6 2.6 6.0 -0.5 5.5 11.9 7.0 1.8 2.6 5.9 -7.5 Quai-Kwny -0.7 -1.7 -3.0 -4.7 -0.9 -.4.6 -3.9 -4.3 -.1.8 -2.0 -1.5 -4.2 Other Ase1m . -3.0 -2.9 0.4 -3.9 -3.1 -2.4 -3.9 -.2.6 -2.6 -2.5 2.7 Het Forin Aeto l5 20. 2 ;^2 -_å2. j& -01 -2_Q .& . - 8 66 -20.4 ' g[urca: Computed fran data provided by Central Bank of Iraq. TABLE 24 LOANS EXTENDED BY SPECIALIZED BANKS ('Tn T1imvznnHQ ^Pf Di n,'cz) 1960 1961 1962 1963 1964 Jan.-Sept. 1965 Estate Bank 5,816 5,278 4,213 6,097 9,049 6,867 Agricultural Bank 5021/ 764 986 613 1,336 619 Industrial Bank 569 968 1,195 891 909 667 Mortgage Bank 6,146 8,058 8,692 8,832 9,783 7,776 Cooperative Bank 67 245 535 520 520 894 Total 13,099 15,312 15,620 16,953 21,598 16,822 L/Excludes cash and other advances totalling ID 3.2 million given o cultivators during the last quarter of 1959 and the first quarter of 1960. Source: Quarterly Bulletins of the Central Bank of Iraq - numbers 47 and 54 and data provided by Central Bank of Iraq. TABLE 1 WHOLESALE PRICE INDICES (1958 10o) Dec. Dec. Dec. Dec. June 1961 1962 1963 1964 1965 Animal and Vegetable Products Grains and dates 116 110 127 128 113 Meat and dairy nroducts 12L 123 129 156 148 Other foodstuffs & beverages 88 95 124 97 106 OthAr nmrnetn 117 122 126 137 120 Tndustrial Prodnuts Building materials 114 117 106 108 97 Teztil 100 101 100 100 99 Fuel 11 114 114 114 114 Other goods 131 12 121 106 GENERAL IND1fEX13 11 11 13 11 PnCrnl AVT TTTTOT TIlTnTCC VnD TTQVTTTL' TAVADVVQ TAT 'DAflT)A UJWLJI. VVL 1LjL V.Lwad' L'JJJ V I1L UIILiJ.IJ4JJ 4M U MJUU LLW J.11 ~ LZ~ (1958 = 100) n n- nT% n-- r m 1961 1962 1963 1964 1965 Food stuffs 111 107 126 112 113 U-LuV u UI-L6;U 7U ;IV 73 vuU Rent 83 83 75 75 75 r :L omLpU ro 7aa po e y eao UMhLZIdUU IMM4A ±L4 .LUL4 -L-4 -LU -UQ) Source: Cwprutect from data provided by the Central Bureau of Statistics. TABLE 26 (Tn mi1lionsiof Iraq.SisiareT 2/ 122 12 122 1960 121 102 126. 126 4 A. Transactions of Oil Sector Exports and re-exports f.o.t>. 156.91 114.38 186.75 202.09 222.95 224.52 225.38 259..96 2;1.3W Imports c.i.f. -7.39 -10.37 -9.98 -16.97 -14.60 -12.06 -1.85 -1.57 -0.7] Sales of aviation fuel 0.41 0.90 0.37 0.11 0.08 0.21 0.29 C.22 - Inve.-tnent income -68.84 -48.85 -79.88 -96.56 -95.09 -94.83 -95.12 -11C.07 -126.08 Salaries remitted abroad -0.4.1 -0.42 -0.28 -0.30 -1.11 -0.95 -0.77 -C.42 -0.36 Capital movements n6y5u. y adusuent - C.Y 4.,0 - - - - - -- Other (inoludng oil sectorI3 net errors and omissions) 2/ -1.18 3.65 -5.01 3.68 0.59 -2.94 -15.64 -22.26 -14.95 Foreign exchange receipts (net) 79.50 61.79 96.47 102.05 112.82 113.95 112.29 125.76 139.34 (Iraqi Government's share of profit.) (68.84) (48.85) (79.88) (86.56) (95.09) (94.83) (95.12) (110.07) (126.07) (Theverdtturea in Iran) . (10.66) (10.L) (2&4 (15.L9 (. (19.12) (17.19) (;V.69. (13.77) (Other payments, net5 (-) (2.50) (4.5 o (--) (-) (-) (-) (--) (- B. Other Goods and Services Exports f.0.b. 13.65 14.05 15.68 14.30 10.66 11.82 21.76 13.99 18.00 Imports c.i.f. -108.30 -118,47 -101.58 -103.07 --128.33 -138.7 -1-2.49 -112.76 -145.53 OIther 4.12. 2.46 8.04 1.88 -1.90 -4.44 -8.40 -16.36 -11.8L Total -90.53 -101.96 -77.86 -86.88 --119.57 -131.59 -119.13 -11C.12 - 127 CU 0-e- Pri,ate -(, a-Mfer Pa ant nd N-on mnAt ary Sectors' Caoital (excluding Group D) 9.19 5.27 C.83 1.15 2.26 1.00 1.30 1,19 1.47 D. Central Government Transfer Payments & Loane Received Transfer payments 0.38 0.13 1.01 -2.25 -2.88 -0.93 -1.15 0.13 Drwings onloans' - 9.09 1.93 - 1.58 5.10 .3 32,C2 9.73 Repaymonts on lcanss - -- -0.57 -1.78 -4.26 -4.1 -C.10 -0.10 Total 0.38 9.22 2.37 -3.03 -4.56 -0.02 8.65 32.05 9.54 E. Bet rors and Omissions (excluding oil sector) 13.10 1.17 -8.14 -13.B6 -10.50 -3.08 -1L12 -'1.74 -22.in F. Total for Non-Oil Sector (B through E) -67.86 -86.30 -82.80 -102.62 132.37 -133.69 -222.0 -91.63 -10..6 G. Lcnetary Movenes's S:' accounts - -0.71 - - -0.63 - -- -- -- Uonorcial bank liabilities 0.32 0.20 --0.51 -0.64 0.11 0.16 ..3 -0.95 -0.20 Oonmercial Dank assets (increase -J 9.10 -7.91 -3.76 1.22 7.03 3.81 0.30 -0.9- 4.44. Central institutions' net foreign claims (increase -) -19.06 34.90 -4.40 17.98 18.07 10.75 1l.52 -33.1 21.18 onotary old (increase -1 -2.00 -1.97 -5.00 -17.99 -5.03 5.02 -4.24 -- -5.0C Total 1-7 2.51 -13.67 J25 19.55 - 10a0 1 -2 H. Year--end foreign exchange reserves 133.90 112.7C 127.30 12P.10 106.20 87.CO 78.90 l16.505 q.. 4/ The annual data in thin table 6re taken from the basic tables in the Balance of Payment Yearbook. They are rearranged to facilitate analysis. No atn indicates credit; minus oign indicates debit. ad repastents on te loan through the oil companies to the Iraoi Government are inclulei in Grosp U. 4 Foreign exchan,e receipts (nt) of Iraq from transactions of the oil sector may be entered In the balance of payments in one of t- wa--s. (1) lOhen the oil sector is considered a resident of Iran which is the tr.etment foll,weA t vint ..-eY&- - -- transactions are entered in the appropriate items, as above. Thus, net receipts represent the portion of the sector's foreer exchanre carn- s that was not retained abroad or spent outside Iraq. (2) If the oil sector is considered a foreign resident, th. balance of aynents -ouL sh' in5tuad this sector's transactions with Iraq; the entries that would be made if this treatment were adonted ar- -i-rn i, un,,mm.. . memoranduma items. 4/ The increase in foreign exchange reserves arises from the Central Bank purchases of the proceeds of Government foreign curency borrowing. aquoD: OFF Balance of Fayments Year Bonka. TABLE 27 VALUE AND VOLUMTE OF PRINCIPAL EXPORTS (Excluding Oil) Value (Millions of Dinars) 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 196 196i 1963 1964 Dates 5.6 4.7 4.2 3.5 2.8 2.6 3.4 2.9 4.0 4r.o 2,.8 7.1 9.0 6.1 Barley 12.3 9.0 8.6 8.8 6.0 5v0 3ø0 4.8 0.8 - 0 .8 6u 0a8 e.5 WJheat 1.5 -- -- 0.5 1.7 -- Gj1 0.2 -- Rice 0.4 0.1 .1 0.2 0.1 001 Ocl 0.1 0o2 -- Other Grains 0.7 0.3 D.4 0.2 0.3 0.1 0.2 0,3 - -- - 1.1 0.1 0.2 Pulses and Flour 0.4 0.2 0.6 0.3 0.5 0.3 0.1 0.2 0.1 0.1 0.1 0.1 0,1 0.2 Raw Cotton 1.8 1.1 0.4 0.3 0.6 0.8 1.0 1.3 1.5 0.3 0.2 0.4 0.2 0.6 Raw Wool 1.7 1.1 1.0 0.9 1.4 1.6 1.5 0.9 1.6 ow9 0.9 1.1 2.1 1.8 Live Animals 0.5 0.9 1.6 1.6 0.4 0.4 0.4 0.6 0.1 -- 0.1 0.1 neg neg Seeds 0.6 0.3 0.6 0.3 0.5 0.4 0.3 0.3 0.5 0.2 0.2 0.5 0.2 0.4 Hides and Skins 0.3 0.2 0.3 0.3 e2 0.3 0.4 0.3 0.5 0.6 0.6 1,0 1.0 1.2 Cement 0,l -- 0.1 -- -- 0.1 0.7 0. 0.7 0.6 0.7 0.6 1.4 1.9 Fodder and Straw -- -- 0.1 0.1 0.1 0.1 0.2 0.6 0,5 0.4 0.4 0.4 0.5 0.5 Others 1.4 0.9 1.1 1.0 1.3 0.7 1.5 _16 1.1 0.9 1.1 0.8 1.3 1.9 TOTAL 27.3 18.8 19.1 18.0 15.9 12.5 12.9 14.5 11.6 8.0 7.9 19.3 16.7 15.3 Volume (Thousands of tons) Dates 330 243 252 ?18 249 264 238 238 279 251 186 230 345 283 Barley 439 339 490 490 321 ?88 193 314 43 - 49 339 43 25 Other Grains 76 9 19 49 89 6 5 17 6 -- 1 39 2 7 Pulses and Flours -5 9 22 12 -29 15 6 9 6 -7 5 5 6 8 Fruits and vegetables -- i 2 1 -- 14 7 5 4 -- 6 i 6 5 Raw Cotton 4 3 1 1 3 4 5 7 10 2 1.4 1.6 1.3 3.0 Raw Wool 5 5 6 5 6 7 6 4 9 5 4.5 4.0 5.8 4.6 Hides and Skins 1 1 2 1 2 2 3 3 3 4 3.6 4 2.6 5.3 Seeds 16 12 12 5 9 9 7 7 11 5 3 9 3 8 Live Animals (1000 heads) 134 229 356 385 151 83 87 177 16 1 11 11 4 6 Cement 1/ -53 15 36 7 1 11 72 56 106 95 145 143 289 378 Fodder and Straw -- 11 7 9 10 13 13 34 28 20 22 19 22 23 1/ Includes earth, stone and lime,-rm15 hog 95 Suc CnaBkfr ade a 1955, Source: Central Bank of~ Iraq and Central Bureau of Statistics, Statistical Abstract. TABLE 28 VALUE AND VOLUIE OF PRINCIPAL IMPORTS Value (Millions of Dinars) 1956 197 15 99 1960 1961 1962 icW63 19ý6 4 Total Imports 114.6 122.4 109.8 116.4 138.9 145.6 129.6 114.1 147.5 imports by -il Companies ~7~: ~1J~ 10.0 17.0 17.~6 ~l12 .1 - -7 ~-~.~ Other ImporTS 107~ 11=~0 99.I 9T.97 127.~3 1:33 17,7 1125 Jh"~. Princial Consumer Goods 7W9 -U.-2 -39.-2 ~~ ¯. ~-0~ ~92 ~~3 ~I~~3 ~z7~~ F, Bferaverages a iTobacco 5 57.7 M7. 2~770 T~ -6~. 2~ 2-2_U 37~ Textiles, Clothing and Footwear 12.1 14.4 12.6 12.6 14.8 13.5 13.4 13.2 15.1 Current Consumer Goods 2.5 3.0 2.5 3.7 4.3 5.1 5.8 4.6 4.7 Durable Consumer Goods 6.8 6.1 6.5 6.2 10.2 9.7 10.3 7.6 8.9 Principal Capital Goods 14.2 4,.8 35.4 29.9 34.9 38.0 43.5 36.5 44.9 Machirery a EquLpment i67 Y1~ Ö 9.3 9-6 1-.9 12-7 :1.9 Other Capital Goods 27.6 25.8 24.9 23.0 25.6 28.4 30.6 24.8 33.0 Raw Materials 10.5 10.5 8.5 7.1 10.0 10.5 9.9 8.8 -1.9 ther G . T3 M67 ~- M.-6 29.7 19,9 1b-3 23.U Volume (In thousinds of tons) Cereals 115 55 4 186 263 484 69 73 228 Sugar l1 iL5 175 168 212 236 225 138 151 Tea 17 17 16 20 23 25 27 31 26 Vegetvible Oils 5 4 6 10 20 20 19 28 29 Cotton piece goods ('000 m2) 28 31 29 36 44 41 41 t3 50 ,Artificipl silk piece goods (C000 m2) h9 69 63 65 64 56 61 19 59 Iron nnd steel 158 1,9 122 150 160 211 234 156 19?8 MPhinery «nd equipment 27 L 2? 13 17 21 29 35 31 Chasis, parts and tyres of vehicles ?0 13 16 11 18 20 18 16 17 Flecticpl mrehinery 19 9 13 17 13 12 17 16 20 Paper ,nd crboari 15 14 14 17 24 28 18 22 27 Timber . 36 L7 46 52 69 82 82 51 77 Pharmaceutic,l products 2 2 1 2 3 4 5 4 3 Sjurce: Central Bank of Iraq and Central Bureau of Statistics, Statistical Abstract. TABLE 29 GEOGRAPHI DISTRIBTTTTON OF FOREIGN TRAFDE (Exc1. Oil & RP-Exnorts) (Millions of Dinars) IDf ID ID ID D1 _ United Kingdom 8.3 30 3.1 21 11 6 0,9 5 0.5 3 TTnited Sta4-es n.9 3 .7 5 2 11 1.p 11 .8 -i LL.L~ >JO~ ýJ 7 > #i I Ci j L J _L@S LI S* Germany 1.0 4 1.0 7 2.4 12 0.4 2 0.1 1 n 4. L5, flr,f --1 -1 f- n ? 1 ' 'N n7 -1l. nl 1. 1i nl 1, VOllher ^v E ECu 4.) 16U i.7C, i12 - 2.7 14 .94 2 .4 3 Lebanon 2.2 8 0.6 4 1.8 9 2.2 13 2.6 17 el- - r, n> f' r, fl r' n,l Lya u0 2 . 5u( .6> u o u -3 v.5 3 . >v Japan 2,0 7 0.2 1 0.1 1 0.1 1 0.1 1 Inu 2.6 10 0.u 0 .8 4 8 5 O1.5 1V Others 5.5 20 5.7 39 7.7 40 9.6 58 8.7 57 TOTAL EXPORTS 27.3 100 14.5 100 19.3 100 1.6.7 100 15,3 100 IDPORTS United Kingdom 17.3 34 30.2 28 21.2 16 18.0 16 18.2 12 United States 7.1 14 15.2 14 14.9 12 12.4 11 20.1 14 Germany 0,7 1 12,6 12 14.3 11 10.9 10 12.5 9 Other OEEC 7.1 14 13.8 13 14.4 11 19.4 17 24.8 17 Ceylon 2.8 6 5.7 5 7.0 5 7.8 7 7.5 5 India 2.3 4 1.4 1 2.8 2 2.9 3 2,8 2 Japan 3-.6 •7 8-6 --8 5.6 4 2.4 2 6.1 4 USSR -- -- -- -- 8.7 7 9.4 8 7.6 5 Others 10.1 20 22.3 19 40.7 32 30.8 26 47.1 32 TOTAL IMPORTS 51.0 100 109.8 100 129.6 100 114.0 100 16.7 100 Source: Central Bank of Iraq. TABLE 30 rv NM VPn AmRPLAN loAC/1A(,-1o Ao/70 SOURCES OF REVENUES AND PLANNED CENTRAL db 4ENT INVESTMENT EXPENDITURES REVENUES I.D. Oil revenue 390.0 Revenue from Ports Administration uy Net profits of Government establishments & institutions 4.0 External borrowing 95.u Internal borrowing 30.0 Miscellaneous revenues 3.5 Surplus from previous budgets 30.7 TOTAL 561,2 EXPENDITURES Agriculture 142.0 industry and electricity l>t. Transport and communications 91.0 Building and housing 100. Ministry of Defense productive projects 35.o Planning, Statistics and follow-up systems International liabilities and repayment of loans 25,0 TOTAL 561.2 Source: The Ministry of Planning and the Economic Planning Board. TABLE 31 PLANNED ANNUAL ALLOCATIONS UNDER THE FIVE-YEAR PLAN --- (Mlulions of Dinars) 1965/66 1966/67 1967/68 1968/69 1969/70 TOTAL Agriculture 25.1 37.0 37.1 37.1 37.2 173.5 Industry 32.1 )O.5 4o.6 L0.h 33.7 187.2 Transport and Communications 26.6 27.5 24.9 15.1 16.1 110.1 Building and housing 29.5 28.4 27.4 25.3 24.1 134.8 Planning and follow-up systems 0.q 0.< 0. nC 9.5 Ministrv of Defpnqp productive projects 10.0 6.3 6.3 6.2 6.2 35.0 International liabilities foreign loans 2.1 3.0 5.6 .4 99 25.0 TOTAL 126.0 143.1 142.3 129.0 127.6 668.0 Note: Annual allocations of funds for the main sectors are kent highnr than the planned investment outlay with a view to maintaining flexibility in implementing the projects.several of which are not suorted by feasibility studies. Source: Ministry of Planning.