Announcement that the Bank Has Loaned Over Twelve Million Dollars to the Kingdom of Iraq on June 15, 1950

,-,ocr· 0 FOR THE .'RESS Press Release No. 192 June 15, 1950 The Interna·tional Bank for Reconstruction and Development tc:dr~r md~ a .loan ot ~12,soo,000 (or the equivalant in other currencies) 'to J,he King<ie>il1 of :t1•aq ro1· tbe aont>tru.ction on the ·TJgris IU.ver of a flood control system urg~i1tly noedcd to pre·1ent rfJcurrcnt flooding of large areas ol' . cultivated land an~. urban property·. Thls is the fir.st loan the International Banlc ¥s·· made to _a I-fiddle Ea~ltern .oowit:c,. - a The loan, which is a cured by an assierunent of oil royal ties, js for •• · a term or 15 years and c~rr.tea and interest rs.tc of 2-3/45;,, plusi corsun:tssion (; at the r~te ot 1%, uhich ill accordance 111th the Bank's Ar·~:l.cles of Agreement is aUocuted to its ~·peaial' reserve i'wld.• Amorti~at:l.on payments, calculated to retire the loan by maturity, will start on April 1; 1956. The system to be: constructed, known as the Uacli 'ihQrtbur Flood Control Project, uill involve a total capitul cost of the equivalent of $28,700 1 000, or which the DarJc•s loan of $12,HOo,ooo will cover only ·the astimatea foreign cxcbanee costs. The foreign exchange copts aro expectc~d to include p1n'chaseG in the United States, the starling area and possibly elsewhore, C • ot equiplnent and ma.terialo to be used in exQava l;ion. and in the co,1str1.1Qtion '-' or levees and headworks. ::,: The. lonn arrar4gerjlen1;,s include provision for I~q ,;:, . ' to ,set nside from i·fjs oil royal·ties sufficient fun:-ls to meet the domestic costs of the project. The Hadi Thpn,har Flood Cont:rol,;Project contains only the flood con- trol elements of a more comprehensive pl.G111, which prov:Ldee for wo.te~".. storage, !l  n ::; () ~) , 0 regulation of waiter supply and· 'irrigation, in addition,- to flood protection. Tl.re initia:J, flood control p:rojeet, for ·which·Baz;ik financial aaaietimce is being rendered, :provide~ for tbe::,'constructton of a dam ac~os·s (,the Tigtis . 0 0 River at a. poit\t abo,1t 50 miles, above Baghdad,·. which will direct excess flood wate:rs _,·t1u-ough a d·:lve':rsion ch~el t.o an ~pop1.Jlated and barren depreesio11, 11 known as the Wad;l Tb,~th,a.r, situate~ bt:>tween the Euphrates and Tigris north• weQt of 13$.ghclad. 0 The w.,.di Tharthar PJ'oject is of v~~al importance to the n economic develo~"" ment of Iraq. Ove:r 8~ Qf the popul~~ion of I;re.q is engaged ln agriculture~ Ag,ri~ultural development, uowev-er, is primarily depend~?lt on :f.rrigation,. w·hich, in. t~n, depends upon cont:rol of the country• s ri've:rs:, the· Tig:ris and Eupbrate,L \ \1 and their tributaries. Although water· is relatively a'bl.Uidant in ;Iraq; 1is • productive use in a modern sense :remains to be 1\llly develo:ped.. floods still recur every ruw ye~s, 1··· Destruct1,ve anc:t: even1 ·1n the fe;rtile area between= the twin rivers, there ia a va~t nie,rgµi for new and :f,.ntensive development. It is e:,cpecte(l tl.lat th.~ project will reault !n th'e prQteetion of crops an<l µrban property from destructive floods, in im:prove~ente in health and se.njtation, and economic sec\ltity for :\~ge aec;:tiona of the pol)ulation~ l:n i;i il\cree~ed "'~ addition, t~ougp the :ProJect, the G<!>Vernment will effect anpu~+ s~vi'1SS of sub~tantie.1 eums;,~,now require<]. fQ:r levee ({l~intenence and control· as well e.a (_?' ' for relief "1,easures tor the l)Op~la.t:ton, ·especially tfhen leVE3ee have to be dynam1tecl in ordeii to save Baghda.d and other q:f.ties dui-;t.ng :peak flood s,asone,. Increa,ed prodt4ct1.vity of Ir~~' 8 agric~ltm-e, resulting f'roJn floQd COl'ltro·l and e:ventually h'om imr,:roved irrige.ttQr>i.facilitiee, $~ouJld result in an ---,=/ improved bale.nee 9'f paymente po~;I.tion for Iraq.,. ae well a& in a higher a [,_· ___ t· '._ . .· ·_ ._.;' nat 1Q}1e.l income·."· r -; i, ,', t  \} • ! • 0 • •3 - · Despite recent budgetary difficulties, riot-, being remedied, there are fac~ors in Iraq's economic position which ,ermit sound external bo~ou:lng within the nation's capacity of ropayme11t. In addition '.!; = to its resources ot . r"? oil, Iraq has" considerable cult,:1.vable land, whlch, wltp more eft~ct~ve l.l88 or water, can be ·l;urned to !)reductive purpose~ at comparatively modost e,c!,ense. The oil re sources prOV'ide a reliable' and dncroasing source of revenue t'1hich should enable ,Iraq to service the l.o~n·and still leave considerable income ror further development. After approval b~ the Dank•s ~xecutive Directors, the loan 4ocumcnts were signed today by Dr. Saleh Haider, Vice--Gc;>,rernor • • " t\l • ot tho Hational Bank '~ ot Iraq, on behnlf ot Iraq,, and by We &. ,8. Iliff, Loan Director, on behalt of the International Bank for Reoons::bruiltion and Pcvcloprnent • •  . " (i • ,.. .4 • SUPPtEMEN'?At'-' S~A~ ON .Tl:IE, LOAN ':J'.'O 'lRAQ FO:R THE 1. Tigris B:f.ver Floods .J \__:-5 . ' • ,( ~ ' WADI TB'ARrHAR.PEOJEC'l' [J ~he Ti~ie which has its, source in the ?IlOU..."ltaine of East·ern Turkey, ~~ ver ha$ a length of~'about 770 miles in Iraq. The mountains of the .Ttgris' head'"' 0 waters have heavy rai,nfall and ·snow cover ,nq. a rapid"runo:ff, which causes '{) quick, hi~ l;Uld destructive floods .• ·Along its lower course, the' river is confined by leve~a at C+itical pointa, t~e ~bet import~t of which is the city of ~aghdad. As the channel ~~tween the levees is insufficient to pass the maJor floods, flooding is prevented by the costlf and not entirely r31ie.ble expedient of open-ing a breach .in the ;~~veee ~bove th~ ~ tt"y a.nd allowing tlle 0 ,) tlood waters to by-pass the c!ty to the eaatwar4-whe~e great damage ;Ls done to c~o~, i~ a la~ge and f6rtile area. The p~t of tbe city on that bank is protected by a ring of levees, a break in wh!ch causes e~tenaive ,daI?l8ge to , urban property. Flooda whic:q. r~cur frequently :reQult tn da.mage both to urban property and to ·r\l?'al imprQvements; control of the Tigris ~ive~ is obviously an urgent need. ··' ' 2. Deee~ipt~o~ .of the Project • , The Wadi Tbartpe.r Flood Cont~ol Project !s the first stage ,.,q.f a :m.ore · comprebens;ve u~dertaking which wtll :provid~, in addit!on to flood protection, water etore.ge and,. regu'.l,atJon for pcwer and ir1·i.gation purpo~es. Und,~~ the Flood Control P~oJect, ~:P,e Wadi Thartluu- Depression will be utilized·~tp ~eceive wat~ra diverted fz,om the·~igris River. The Wadi Tharthar Depreasion is ioc~te~ in a $e~i~4e~ert vall~y 'l.11ng between the E.~phratee an.d '.Ugriet ~ivere, and !e about 40 mile$· from the ptoject& dam site. It he.a no outlet, alld its etor~ge capacitf i.e estimated at approx!matel,y 55 million aere feet. A dam in the figrie River w1i1 <U:vert the e~9e$s flood waters through a ~1vers1on channel to the Depre~sion where they can be diepo~ed of by evaporatibn. The p~op~eed operation of the proJeqt consists ~~rely of the ~nipulation of the gatee ·Of the~ to release water, at rates nQt in excess of the capacity of tbe downstre~ river channels at critical poin~e, the most importa?l:t· ot which is Baghdad. '.the :p:rinci:p.~l fee.t'U'es of tile floo4 control :project a:re a daJJl ac:roas~, the Tigris Rive:r e.bo.ve S8.JlllQ8.r~ withe th~ n~ce~~ary +eve~i, ~d traini11g .works; unde;r- }) sluicee in the be~d reach of the iniet channel to dispose ot ai.lt; ~ inle, c~~el with a regu).at~; and th~ re~ocation ot existing roe.de, ra;tiw~y$ .and J structures n~ar SamJ118.ra. (1) _The dam will h~ve a discheirge ce.paoity of .2,,000 ci.ibtc feet per •• second.. It w1;1 be a oon~ret~ ~tru~ture apo~t 40 t'eot h:J.gh and 1,000 feet lo~gwith 40 ope:r~ting g~te Q1,)en~nge, e4c;ll 20 feet in width. ;;tie fo1,U1dation ("')of the dam wiU co?lsist of a inass c;o~crete. floor. 6 r,~,t tll:lek rertt(,ng on }lard clv."' \:.::~_,}_ ,  • • • .. ~ .. (2) Vndersluices in the head ree.cn. of the in1.,et channel will have a diacha:rge capacity of 35,000 cu'bic feet pel." second and will be provided for the cl)urpose pf disposing of silt. ., " § ( 3) The :!.nlet .Ptianttel will extend about 40 miles 1'1-em the,) daui. It will " be excavated to a cate.~ity of 17,506 cubic feet per second only and i~tl regul&to1 9 will be designed for 2.6,500 cubicr.feet per second to meet f~t,.ire requ:l,rements, A channel ,of suff'icieflt capacity?/to dispose of all the flood waters would 1 involve very large q'1antit1ee of eJtcava.tion and would be correspondingly ' 0 expensive. 1oJ avoid the principal part of that expense the excavated materi&l w:J.11 be used to construct a strong levee on the eastern bel}k of the Tigl."is tor a distance of 34 miles from the d~. ihe regulator will control the flow w.nen l~ss than ban~ full. ],low in excess of the ·ca:pacity of the regulator w:tll 0 eacape freely l)e,.et it and overflow into the 'unoccupied wasteland· to the wesiwar~. '-1'he levees wi 11 protect the valua'ble .,l8.l'lQ. to the east. It is necessary to exc~vate .a channel to the full Width from t~e 34 mi~~ point to the Depression to allow the flood wate:re to pass t,nrough the d;f.vide between the Tigris River Valley and the W~df Tharthar ~epresaion. ( 4) l3ecau.se of '~he new installaticms it will be necessary to IijOVe the .. S~ra railroad. f, statiQn ano. to reconstruct 13"3 m!Iee of railway traclf. . --two ... 0 11ew bridges wili\ be con$tr\lcted,, one over the i~.iet channel and one over::, the s:pillw~y oh@neli of the q~. . A new +O~d 15 miles long will be b~tlt. Bailroad • reaide~tial buildings @d "offices, workshops and stores will ~:/:i:·econstructed • ' Construction Schedu.le . ' () /,/' _,,-,P\, At an economical :rate of progress the project should be completeq. in/:f'tve years. . The equipment .. ·to pe py,:reh~~e.d . )n! f:ro'1t\ the United ' Ste.te~ will. be used fo'JJ cb:e.nnel e.xcavatir.>n and leve.e 'con.at:ruct:J.on. The d~live:ry of the t:ractora and scra~era ~d of the other earth m~fin~ e~ujp~en:t will be completed1dUfing the aecot.id year. l · iJ ~ f \ The equ.i:pIJ1e?lt to be purc'Baied fr-'o~~ the ate:pling areEt. wil+ be used for conatru.ction of tlle headwo:rk~ and will 1)~. delive~ied by the elld of tl:l.e second ,yea:r. T.b.ereafter the .d,ei1very of t:tie conat:ructi.oll materials, cernent and steel, and the gates, w:Ul take place during the .,third e.nq. fourth year.a wh:J,ch will be the peak period of coll$t~qetion. 4" Eoonomj_c:) Situ~tion in Iraq . . . , .-, , . . ;•u·, e..• x ' , •. ;:. Iraq ie, pote?lttallY, one c;,t tbe wealthiest eo1,1ntriee t~"the M!dclle E~st. lt has ~o:re c~lt;I.vabl~ lr;md. than its people. can .-ti:J.l by the ;piethods p.reaentJ.y u,:,ed; an.d inc:reaaing <?>11 royalties~ a large propo~tion of which will be ut1:uzed fQr" economic develop'118nt ~n the yeeirs ahaa.C,.. p A+tho1,1glt>there ~e some ~•ll indust:ri~l ~opeerns in I:raq, over soi of the 0 Po:pulation of 5· m'i~}ton is depepdent on ~g:riou~.:tn1re. In additi.on to <fe.tes, of • whicb it is t~e wo~~'.:~(l's most imJ>prt@t prod~cer~ the country's p;r!nc~pal crops ~:re be.r.ley, ,t:tiee.t , and rice •  Q \I 0 - 6 - The full development ·of Iraq •e agricultural potential depends on irrig$.tfon., and, in turn, irrigation 4~pends upo?\, the control of the country's rivers, the Tis:ris and Eup~\i-ates· and their tributaries. Plans for e. comprehensive system of flood coptr~,;L and irriga~ion have long been EJtudte<l _ by Iraq' Q Irrigation D~velopment Com\nies!on and, as a :resul't of._.:~he Commission's report last June, t:ti~ :SaPlt was requested to asEJtst i~ financing ~he Tigris flood cont:rol project, wh:Lle a s:l,~ilar :proJect tor the eon-erolr, of the Eup~ates_ River was re~ent:,.Y ., unde~a~en and will be :finane-e,d out of Iraq' Q own re~oµrce$ • Theee, together u with ~several Sffl8lle~ ptoJeots a'.l.B<> i::n tlle plan, woul:,.d b~jng ~ total of _ , 9 1111111.pn acres \U\der adequate irrigation ~ .. - while elim4no.t1Jlg floods 9n botb '{>f ?raq 1 $ amain :rive:rs. . For tlle first tw.o post-war yea.rs lraq's public acco\lllts were iJi 1:>a:J.at1,ce. In subsequent years sizable def:1:d~$ occ\11,'red, maiJilY becau~e C>f e?Jte;rgency expenditures made eia a. reet~lt \C·ot the unµe~u, severe crop f~l.11.lre of 194 7, Recently, however,) gover~ent~ deficits ~v~ bee~ materially reduced atld ~re being met without ~-,-e~o~ree to new. borronng. 1 I . The country'''-\ 'be.le.nee of paym.~;nUJ in post-war yeeu;,~, too, has be~n chare,ctertzed by rEf~urrj.ng deficits. ~ilte most coU?J;triea after the war, Irtq ne~ded substentiai imports of ~onsumer goods of all kinds an4 of capttal ,good.$ for repl~ceinent and expansion of its ;productive fac:l,litiE)a. I:n 1948 the e~ceptione.lly ba.d harvest of the p~eceding year made i~ necee~a.ry to im~ort large q~antitiea of grain wbile at the same ti~e an ~mbargo was plae~d on grajn • expoTta '! The enlarged tr~(le defiett · which resulted was met ~inly by $Ubsten~ tia~ drawings ~gaµist Irfl.q's $Qewiuiated ete:rU.ng ba.l~c'?*3 abroad. Becaµse of good erqps in 1949, s+ain p~od~ctton ~,in attain~d :tts nor~~ level ~d the export embargo va.e lifted • .Ae «t- ;'~$ult of thts ~d of the ~tringen.t im:port and exchange cont:rols vhtcp had be.en UQpQe$d, tl}.e c9unt:r, 1 s bale.rice of '\. payments showed a significant improvoment dui"ing that ;year ~nd the ctJ.ITent one. The longer ra~ge outlook tor tb.~ cowitrY'$ tnternaiional a~counta is favorable. Mate:rially increased oil prodl.lct!on b expeetod :to roeult in larger" royalties, Agrtculture.Jr pro<tuotion and. elll)orts shc;,\114 ~l:,eo e~fa.nd, s;!.g:- niftcantly as a :result o.t fflOre i~te~ive and efftet!ve eµ\tivation t\lld the exten- (• sion of cultivation to newl1 iJ;':r;-:J,gated le,~d • •• \\ ; ~: