Announcement of Jordan Mission Report on July 28, 1957

WOIILD 1818 H STREET, N.W., WASHINGTON 25, D. C. TELEFHONE: EXECUTIVE 3-6360 PRESS RELEASE NO. 491 SUBJECT: Jordan M5.ssion Report Sunday, July 28, 1957 The report of e World Bank survey mission on the economic development of Jordan is today being published by The Johns Hopkins Press. The. missioh was organize~ by the Bank ~t the request of the Jordan Government and spent the second quarter of 1955 in 'Jordan. A dra.~ of its rep9rt was sent to the Govern- ment in April 1~56, formal transmittal taking place in January 1957. The published report is a single bound volume of 512 pages; it is priced at $7 .50, and is available from The Johns Hopkins Press, Baltimore 18, Maryland • • The report outlines a 10-year program of public investment designed to increase Jordan's productive resources, to raise the standard of living, and to reduce, as far as possible the country's reliance on external financial. assistance. The cost of' the recommended program is estimated at 42.35 million Jordanian dinars ( about $118 million) • Execution of the full program would require a continuation of foreign economic aid. The mission believed that somewhat less than half the cost could be financed out of the Government's own revenues, provided that foreign aid does not fa.11 below the level which was being ma.de available in 1955/56. The mission emphasized that its conclusions were based on the assumption.that the Government would not have to bear the cost either of aid to the Palestini1;m refugees in Jordan, or of defense. expenditures previously met entirely by foreign grants. The chaJ.lenge of development in Jordan is both difficult and urgent. The country for the most part is desert; all but a fraction of its 37,500 square miles are too remote from water. supplies to be irrigated. Yet Jordan is primarily a.n agricultural country.  - 2 - . Deposits of potash and phosphates do exist, but there a.re n~ known cOJmDer- • .~ially e~..ploitable quantities of coal or oil or metal.1ic minerals. With a ·tew exception& I industry bas not progressed JDUCh beyond the handicraft Stage• The co1:1!1try's transport facilities are also far from adequate. At present Jordan's populat~on is about a million and.a half, a.nd is increasing at a rate ot about '31, a year. Almost one person ~ three is a refugee from the Arab-Israeli hostilities. Economic growth in Jordan 1 while not inconsiderable in recent years ( 1~ annually between 1.952 and 1954), has been tar from sufficient to provi'3.e wcrk for all. More than half of the refugees were Without mlY' occupation in 1955, and most of the remainder, as well as many of the indigenous population, fOWld only casual or seasonal employment. Approximately half of the rapid increase in econanic activity between • 1952 'and 1954 1i,13.a attributable to the expenditure Within Jordan of foreign grant and loan funds. In 1954 foreisn loans and grants accounted for a1:>0ut 8:11, both ot Jordan' a total foreign exch&Dge receipts and of the Government 's total revenues. It was against this background that the mission's 10-year pl"Ogram of government actian 1118 torailated. The program, together with the increased private inveatment it vould make possible, could be expected to lead to a . . suata:b:>.ed increaae 1n total procmeti<m ot J'augbly 4i a year. At this rate· the mission believed it might be possible by 1965 to taper ott foreign aid tor . . uvelc,pment purposes, and to bring about a noticeable rise in ~e standard of 11v1ng of at least those with access to land or paeeeseing industrial. skills. However, even a auata1ned growth ot 4~ a year tor a decade is not likely to reduce unempl~yment appreciably among the refugee population. The mission • envisaged a continuing need tor international aid to refugees atter 1965 •  - 3- AGRICUL'l'URE • ID years of good harvests, agriculture accounts tor about halt of total pr,oduction ~ the private sector of Jordan's economy, end was therefore given first priority by the mission. The 'possibllitiea of· expanding irrigation are limited. The greatest potential. lies 1n a project for the development of the water resources ot the Jordan Valley, but the mission clid not include this in its program pending the resolution ot certain questions which affect the interests of neighboring states. It did suggest, however, that the Jora&nian Government proceed immediately with a scheme to irrigate about 24, 700 acres in the East Ghor o't the Jordan Valley. In addition, it recamended an acce1erated program f'or the development of underground water resources. The .m1asion believed the potential tor increased production to be greater for rain"".ted farm areas than irrigated areas. ID particular, there nay be aa • much as 750,000 acres 1n rain-fed areas· availab1e for growing olives, figs., apricots and grape~ tor raisins -- all ot which could be fairly easily absorbed on the world market. The mission suggested that the Government aim at bringing into production 15,000 acres a year over the 10-year period. Bxpansioii 9t·e.gri.cultural production w1ll require an illlDediate expansion ot research ~d education facilities. The m1saian HCOJllllended the establisbment of a Farm Institute and concentration Oil agricultural schooling at the primary and secona&ry levels of education. Also emphasized was the continuing· need to search out and develop profitable out1eta for fruits and vegetables and to adopt proper packing, grading a.lid marketing procedures to expand ma.rketa abroad. The missic:m. also recommended action to stabiliie wheat pri~es. The Government 'a grain office should be empowered to regulate ~ " and to buy ,., • and sell grain on its own account., although the mission cautioned against fixing the· price of wheat for a whole seaacm. Some storage facilities would  .. 4 - be needed to acco!IIDOda.te govermnent sr,aiD imports; it vu reccmmelided that • total capacity be lind.ted to 10,000 - 15.,000 tons. A complete restatement and acJJustment ot agricultural indebtedness was .&1.so needed.. Many' farmers had contracted debt at ueurioua rates ot interest, and mortgaged themselves hopelessly far into the future; also., for almost 10 years there had been a morator1Jm on the toreclof:Nre ot ta.rm land which ha4 disrupted the credit structure and property relationships. The mission suggested th&:t' tribunals be established to determine the aa:nmta owed by individual farmers and to adjust the debt outstanding in suitable cae4ta. It a fa:rmer could not make repayment even a:f'ter adjustment of·his debt, the law should be enforced. Existing ta.rm credit agencies should be ccmaolidated, largely by expanding the scope ot :the Government's Agricul~ureJ.. Bank. MINERALS AND mDUSTRY • While the mission endorsed more extensive surveys and explorations for metallic minerals, it did not consider exploitation ot t:he ~own c!epoaits ot manganese, copper and iron ore to be commercially justifiable at present. The mission did, however, recommend a revival' ot Jordan's potash industry and a rapid e~ion ot phosphate m1n1ng. A.a a first step in the revival of the potash industry, the_misaion urpd that the Joraan Government hire a technical expert Yith broad experience in the recovery ot potaah from salt brines con- taining masneaia. Under his supervision, a start should be mc,e promptly on the ~ehabUitation ot the Alt pane at IC'alli.a and on protblct1cm r,t medium- srade ~ h . At the - t i . plans ~hould be drawn up tor a purif'1cat1on plant to yi~ld a higher sraae potash. S1·W1 l ar technical assistance- is needed 1n Jordan' a .pboapbate mines. A research program ia required to ~'3lop simple processes of band sorting, screening or air separation, to assure that high grade phosphate Will be miDed. The mission believed such measures could increase Jordan.' s phosphate production  ~ 5 - from abou~ 250,000 tons a year to perhaps one million tons by ~965. The • mission also suggested that consideration be given to a superphosphate plant with an initial output of 20,000 tons a year, capable of expansion~:' 40,000 tons. Local Pr<?duction could mean a materially lower price to Jordapian farmers•' The mission considered the potentialities of a variety of industrial ventures and found the follow:tng warranted: A petroleum refinery,With sufficient' capacity to cover the country's requirements. Efforts should be ma.de to induce a foreign oil company to participate in this project. A textile weaving ·mill of perhaps 100 to 200 looms, to be followed, if ~u~cessf'ul, by a spinning plant of 5,~00 to 10,000 spindles. Several pilot olive mills, in addition to the olive oil refinery 'being established, designed to raise the quality of Jordan's olive oil. The mission • also recomnended that attention be paid to the recovery of by-products, especially soap stock, from olive oil refining. The mission also endorsed in general the manufacture of glazed clay pipes and.other commercial pottery; an expansion of the dairy products industry and of fruit and vegetable canning and fish processing; modern facilities for the processing of animal skins; and a beet sugar factory. In many ot these ventUrea the mission could find no practical alternative to a. sizeable government participation. However, it also app~ea·~hat there is a growing °b9~ ot investors Willing to share in proyiding capital for new industrial. ventures. The mission therefore re.commended that the co-financing of ventures which cannot be undertaken by.private capital al.one be le:f't as fa.r as possible to the_ Development Bank of Jordan, after suit~b1e change• had been ma.de in its organization and functions. The mission urged both the· Development • Bank and the Government to sell their interests in industrial ventures a:s soon as priva.te purchasers could be found~  - 6 - TWSPQRT AND COMMUNICATIONS • In the early yea.rs of the propo,ed 10-year program by .capital expenditure has been allocated to transport. far the largest In th~ mission' a opinion the moe:t urgent tranaport needs ~e a road from Amman to the port of Aqaba and the development of the port, includ:l.ng a deep- water mineral loading berth, storage facilities, a lighter wharf, a line of ,; mooring liuoyB, and numerous offices, workshops and access roads. All-weather roads linking village, to main highways and 1118.int~~ce of the road network are other needs. The mission urgently recmmnended that the Jordan Public Works Department set up a permanent maintenance organization. The mission did not recommend any new railway construction, stressing instead the need f9-r rehabilitaticm -.\d reorganization, and· endorsing a change- over to diesel traction. . • POWER The high cost and uncertain supply of electric po~r are major barriers to development 1n Jordan. By 1965 the mission estimated Jordan would need 30;09() kilowatta·, three times the present capacity. The mission reccamended I ·new thermal power stations at Jerusalem, Ramal.lab, and Bethl.ehem in ad.c1:ltiem 0 to the proposed station 1n tbe Zerka-Ruseifa region. HOUSING AND COMMUNITY SERVICES· Housing, water supplies, and gewerage facilities are all inadequate and are becoming more so.. The mission recommended that credit and· technical ,.-· ~ assistance be ma.de available to the mun~cipalities in Jordan to enabJ.a_,,them to achieve a target ot at least 10,000 new developed urban building plots by i965. A Municipal Equipment and Development Flmd was suggested, to provide improved credit taciliti~s and the necessary technical.. assistance for town • planning and regional development studies. The Devel.opment Bank should al.so exp~d ·its activitie:$ to include municipal· and housing finance. A modest ... - 7 - . • government· !lousing construction program, ma a pilot buis, was recomeD.ded; ·- . the mission urged that the Covernment also test a variety of construction materials and make desigoa available to private buildera. School and hoapit&l construction ehould continue to receive priority of :tunda 4ur1Dg the ti~~ tev yeara, end over the deca4e new ottice apace should be bullt., to reduce the present heaV7b,.1rden of rented accommodation on the budget. PUBLIC FINANCE AND AmmISTRATION In the mission• s view I the single factor moat likely to 11111.1.t the pace ot development 1n Jordan vu the shortage ot administrative and technical ak1l.la: The neecl tor these skills ia most urgent now at the governmental level. Where . . necessary 1D the early years ot the program., the miaaion urged the Jordan . . Government to hire competent technical personnel. from abroad. 'l'be mieaion euggeated certain institutional. m:id procedural changes to • help the Government carry: cut its development program •. Progreaa towards an effective and independent monetary authority, revisions 1n the tax lava, particularly the i~com and real. property taxes, and improvements 1n their a&niniatration,.. and the· pranot:lon ot foreisn trade were recommended. F:fnaJJ7, the miaaim-suggested tba~ the Jordan JAwelc,pment Board, which ·in practice has had only lf.mitecl responsibility te,r development, be reorganized and given the task, under the general supervision et the Council ot Niniatera, ot drawing up and superri.aing the entire 4evelopment .program • •