Announcement of Cancellation of Balance of Loan to Iraq on January 7, 1955

,"\. ' " 0 .-' FOR IMMEDIATE RE:LEA SE () INTERNATIONAL BANK FOR ;y ·~ECONSTRUCTl.,ON AND ·DE\IE,LOPMENJT <WORLD BANK) 1818 H,,STREET, N.W., WAS,HINGTON 25, O.C., :~ELEPHONE: EXECUTIVE3-6360 PRESS RELEASE NO. 384 \\ SUBJECT: Balance of Loan to January 7, 1955 Iraq Cancelled. \\ ~ ~ () :J /I . , . ii The World Bank announced· today that the Government of Iraq had. cancel.led th~ unused,.balance/::$6.~5 million, of the 15-year lo~n of $1~.8 million made by the Bank in June 1950. Bank funds amounting to $6 .. 3 million hav~ already b~en· • ' .; ,.. u /I " •' spent or/obligated in carryirig through the W~di TharthaJ flood control project , n . for which the loan t.ras made. The remainder of the foreign exchange required ~ r canpletion of the project '•~+l,;c,now be provided from Iraq!S o,,.ri resources. · . The Bank welcomes thi~i evidence of the growing financial strength of Iraq. Follow:ing the) signing of a n a-, agreement with the Iraq Petroleum Company in August 1951 the financial resources of Iraq increased more rapidly than had b~en. expected at the time the loan was made. Oil production in Iraq has risen to 30 million t,ons a year, about 5 times the rate in 1950, and the income from this source is now nearing an annual rate 0£ !i>O million ($,).68 million). The foreign exchange reserves of the National Bank of Iraq have almost doubled, rising,, from '~2 million ($117 million) at the end of 1950 to i78 million ($217 million) in the third quarter of 1954. <The aim of the project financed by the Bank loan is to protect Baghdad and -!) nearby agricultura'l areas from the periodic flooding which has caused severe damage in the past; a particularly destructive f1ood occurred as recently as the -, CJ • ._... spring of 1954'· The project consists of the construction of a barrage and  - 2 - ~ di~er~ion channel on the Tigris cRiver at Samarra., SO miles upstream of the city. •--T~e c!Ja,rmel will draw orr nood'~ter in the d~c.tion or a barren depression lmown as the Wadi Tharthar ~ c, The project represents the·:first step in a comprehensive plan to solve the q age-old problem, of =flooding in Iraq. It incl~·ades provision for grea'tiiu- use of C \ the water for iITigatiOI\ :;t~d for power gene:ration, and will make it possi~le to c, keep open vital road and rai). links which have often been cut . by flood.cs. Work jJ has reached an advanced stage~ and is exp~,cted by 19.56 to be sufficiently far forward to prevent flooding. The Government is pressing .f'orward plans for economic deyelopment on many fronts. .'l'he Development Board, set up ·1n December 1950,, receive,s 70% of the . , C<;>Wltry' s· oB.~ -..;ya.lties for investment in .a gricult \lre J transport, ) ·•!ih<lYEt?y ai,d -.. other fields. In preparing the .5-year program which the Development Board is now carrying out, the Goverrunent took into consideration the recommendations of ~ n e r a l · survey mission sent to Iraq by the Bank, at the Government• s request, in the spring of 1951.