UNITED NATIONS CONCILIATION COMMISSIdN FOR PALESTINE

FINAL REPORT OF THE UNITED NATIONS ECON,OMIC SURVEY MISSION FOR THE MIDDLE EAST

An Approach to Economic Development in the Middle Eat

PART I. THE FINAL REPORT AND APPENDICES

I

UNITED NATIONS Lake Succme, New York 28~1949 Note. For convenience in handling and consultation, the Report of the Economic Survey Mission for the Middle East is published in two parts: Part I, The Final Report and Appendices; Part II. The Technical Supplement.

28 December 1949

I UNITED NATIONS PUBLICATIONS I Soles No.: 1949.11B.S. Part I I T I SECRETARY-GENERAL

At the request of the Chairman of the Concili- their respective fields, in articular the World Health ation Commission for Palestine, the Secretary- Organization, the Unite B Nations Educational, Sci- entlfic and Cultural Organitation and the Interna- General has the honour to transmit herewith to tional Refugee Organization ; Members of the United Nations the second and “4. Exjwesses its thanks to the numerous religious, final report of the United Nations Economic Sur- charitable and humanitarian organitations which have vey Mission for the Middle’East. Such comments materially assisted in bringing relief to Palestine on the report as the Conciliation Commission may re? ees; f . Recognirtes that, without prejudice to the pro- wish to make will be communicated in due course. visions of paragra h 11 of General Assembly resolu- In the present report is included the rst in- tion 194 (III) of P 1 December 1948, continued assist- &ri; w of t* Mission, defling w& ante for the relief of the Palestine refugees is pro em of Palestine refugees, which was trans- necessary to prevent conditions of starvation and mitted to the General Assembly in November distress amon them and to further conditions of peace and sta‘6 ility, and that constructive measures 1949 at the request of the Palestine Conciliation should be undertaken at an early date with a view to Commission. On the basis of that interim report the termination of international assistance for relief; and of the Secretary-General’s report on the work “6. Contiers that, subject to the provisions of of the United Nations Relief for Palestine Refu- aragraph 9(d) of the resent resolution, the equiva- gees (UNRPR), the General Assembly, on 8 Pent of approximately d 3,700,OOO will be required for direct rehef and works programmes for the period December 1949, unanimously adopted resolution 1 January to 31 December 1950 of which the equiva- 302 (IV), the full text of which follows : lent of $20,200,000 is required for direct relief and $13,500,000 for works programmes; that the quiva- ASSISTANCE TO PALESTINE REFUGEES lent of approximately $21~00,000 will be required for “The General Assembly, works rogrammes from 1 January to 30 June 1951, “Recalling its resolutions 212 (III) of 19 Novem- all inc Pusive of administrative expenses ; and that ber 1948 and 194 (III) of 11 December 1948, affirm- direct relief should be terminated not later than 31 ing in particular the provisions of paragraph 11 of December 1950 unless otherwise determined by the the latter resolution, General Assembly at its fifth regular session ; “Having examined with appreciation the first in: “7. Establishes the “U$ed Nations Relief and terim report of the United Nations Economic Survey W&s Agency for Palestme Refugees in the Near Mission for *the Middle East (A/l 106) and the report : of the Secretary-General on assistance to Palestine (a) To carry out in collaboratiotl with local gov- refugees (A/1060 and A/106O/Add.l), ernments the direct relief and works pro ammes as “1. Expresses its appreciation to the Governments recommended by the Economic Survey nr ission ; which have generously responded to the appeal em- (6) To consult with the interested Near Eastern bodied in its resolution 212 (III), and to the appeal Governments (oncernin measures to be taken by of the Secretary-General, to contribute in kind or in them preparator to tfi e time when international funds to the alleviation of the conditions of starvation assistance for re rief and works projects is ~10 longer and distress amon st the Palestine refugees ; available ; “2. Expresses afso its gratitude to the International “8. Establishes an Advisory Commission consist- Committee of the Red Cross, to the League of Red ing of representatives of France, Turkey, the United Cross Societies and to the American Friends Service Kingdom of Great Britain and Northern Ireland and Commit& for the contribution they have made to this the TJnited States of America, with wer to add not humanitarian cause by discharging, in the face of more than three additional members p”rom contributing great difficulties, the responsibility they voluntarily Governments, to advise and assist the Director of the assumed for the distribution of relief supplies and the United Nations Relief and Works Agency for Pales- general care of the refugees ; and welcomes the as- tine Refugees in the Near East in the execution of surance they have given the Secretary-General that the programme ; the Director and the Advisory Com- they will continue their co-operation with the United mission shall consult with each Near Eastern Govem- Nations until the end of March 1950 on a mutually : ment concerned in the selection, planning and execu- acceptable basis ; tion of projects ; “3. Commends the United Nations International “9. Requests the Secretary-General to appoint the Children’s Emergency Fund for the important contri- Director of the United Nations Relief and Works bution which it has made towards the United Nations Agency for Palestine Refugees in the Nqr East in programme of assistance ; and commends those spe- consultation with the Governments refiesented on cialized agencies which have rendered assistance in the Advisory Commission ; . . . Ill (a) The Director shalt he the chief exewtive di- 1950 from the voluntary governmental contributions cer of the United Nations Relief and Works Agency requested under paragraph 13 above ; for Palestine Refugees in the Near East responsible “15. Author&~ the Secretary-General, in consul- to the General Assembly for the operation of the tation with the Advisory Committee on Administra- programme ; tive and Budgetary Questions, to negotiate with the (6) The Director shall select and appoint his staff International Refugee Organization for an interest- in accordance with general arrangements made in free loan in an amount not to exceed the e uivalent agreement with the Secretary-General, including of $2,800,000 to finance the programme sua ject to such of the staff rules and regulations of the United mutually satisfactory conditions for repayment; Nations as the Director and the Secretary-General “16. Autho&res the Secretary-General to continue shall agree are applicable, and to the extent possible the Special Fund established under General Aseembly utti;:;llthe facilities and assistance of the Secretary- resolution 212 (III) and to make withdrawals there- . from for the operation of the United Nations Relief (c) The Director shall, in consultation with the for Palestine Refugees and, upon the request of the Secretary-General and the Advisory Committee on Director, for the o rations of the United Nations Administrative and Budgetary Questions, establish Relief and Works r gency for Palestine Refugees in financial regulations for the United Nations Relief the Near East; and Works Agency for Palestine Refugees in the “17. C&r upoh the Governments concerned to Near East: accord to the United Nations Relief and Works Agen- (d) Subject to the financial regulations established cy for Palestine Refugees in the Near East the privi- pursuant to clause (c) of the present paragraph, the leges, immunities, exemptions and facilities which Director, in consultation with the Advisory Commis- have been granted to the United Nations Relief for sion, shall apportion available funds between direct Palestine Refugees, together with all other privileges, relief and works projects in their discretion, in the immunities, exemptions and facilities necessary for event that the estimates in paragraph 6 require re- the fulfilmer,, of its functions; vision ; “18. Urges the United Nations International Chil- dren’s Emer ency Fund, the International Refugee Or- “10. Requeh the Director to convene the Ad- ganization, tf e World Health Organization, the United visory Commission at the earliest practicable date for Nations Educational, Scientific and Cultural Organ- the purpose of developing plans for the organization ization, the Food and Agriculture Organisation and and administration of the programme, and of adopt- other appropriate agencies and private groups and ing rules of procedure ; organizations, in consultation with the Director of “11. Continue8 the United Nations Relief for the United Nations Relief and Works A mcy for Palestine Refugees as established under General As- Palestine Refugees in the Near East, to furn ‘f sh assist- sembly resolutron 212 (III) until 1 April 1950, or ante within the framework of the programme; until such date thereafter as the transfer referred to “19. Requests the Director of the United Nations in paragraph 12 is effected, and requests the Secre- Relief and Works Agency for Palestine Refugees in tary-General in consultation with the operating agen- the Near East: cies to continue the endeavor to reduce the numbers (Q) To appoint a re resentative to attend the of rations by progressive stages in the light of the meeting of the Technic J Assistance Board as ob- findings and recommendations of the Economic Sur- server so that the technical assistance activities of vey Mission ; the United Nations Relief and Works Agency for “12. Ztr.rtrrtct~ the Secretary-General to transfer Palestine Refugees in the Near East may be co- to the United Nations Relief and Works Agency for ordinated with the technical assistance programmes Palestine Refugees in the Near East the assets and of the United Nations and special&d agencies re- liabilities of the United Nations Relief for- Palestine ferred to in Fxonomic and Social Council resolution Refugees by 1 Aprii 19.50, or at such date as may 222 (IX) A of 15 August 1949; be agreed by him and the Director of the United (b) To place at the disposal of the Technical Nations Relief and Works Agency for Palestine Assistance Board full information concernin *any Refugees in the Near East; technical assistance work which may be done %y the “13. Urges all Members of the United Nations United Nations Relief and Works Agency for Pales- and non-members to make voluntary contributions in tine Refugees in the Near East, in order that it may funds or in kind to ensure that the amount of sup lies be included in the reports submitted by the Technical and funds required is obtained for each period o P the Assistance Board to the Technical Assistance Com- programme as set out in paragraph 6; contributions mittee of the Economic and Social Council ; in funds may be made in currencies other than the “20. Directs the United Nations Relief and Works United States dollar in so far as the programme can Agency for Palestine Refugees in the Near East to be carried out in such currencies; consult with the United Nations Conciliation Com- “14. Aufhor’ixes the Secretary-General, in consul- mission for Palestine in the best interests of their tation with the Advisory Committee on Administra- respective tasks, with particular reference to para- tive and Budgetary Questions, to advance funds gra h 11 of General Assembly resolution 194 (III) deemed to be available for this purpose and not ex- of P I December 1348 ; ceeding $5,000,000 from the Working Capital Fund “21. Requests the Director to submit to the General to finance operations pursuant to the present resolu- Assembly of the United Nations an annual report tion, such sum to be repaid not later than 31 December on the work of the United Nations Relief and Works

iv Agency for Palestine Refugees in the Near East, the United Nations Relief and Works Agency for includin an audit of funds, and invites him to sub- Palestine Refugee8 with the expanded programme mit to t$I e Secretary-General such other reports as of technical assistance for economic development the United Nations Relief and Works Agency for Palestine Refugees in the Near East ma wish to through the United Nations and the specialized bring to the attention of Members of t ii e United agencies set forth in resolution 222 (IX) A of the Nations, or its appropriate organs; Economic and Social Council and approved by the “22. Irr~frlcct~ the United Nations Conciliation General Assembly on 16 November 1949 (reso- Commission for Palestine to transmit the final report lution 304 (IV) ). In addition to such technical of the Economic Survey Mission, with such coln- assistance as the United Nations and the special- ments as it may wish to make, to the Secretar - General for transmission to the Members of t z e ized agencies may be in a poaition to provide to United Nations and to the United Nations Relief and Middle East Governments in response to their W&cc Agency for Palesttne Refugees tn the Near requests when funds necessary for carrying out the expanded programme have been contributed, the Secretary-General ia ready and able to help It will be noted that paragraph 19 of the General forthwith with existing appropriation8 under the Assembly’8 resolution provides for close co-ordina- authority of General Assembly resolutions 200 tion between the technical assistance activities of (III) and 58 (I). TABLE OF CONTENTS

Chop& Pegs FOREWORD BY THE SECRETARY-GENERAL. . . , . . . . . , . . . . . , . , iii

INTRODUCTION ...... vii

I. WATER, LAND AND PEOPLE...... 3

II. PRESENT OBSTACLES TO E~ONOMX DEVELOPMENT ...... 3

III. PILOT DEYONSTRATION PRBJECTS--THE W&Y TO BEGIN...... 6

IV. CONCLUSIONSAND PROPOSALSOF THE MISSIUN SIGNATURES., . . . . , ...... 12

APPENDICES

I. A. Interim R.eport of the Economic Survey Mission (dated 6 November 1949) in- cluding terms of reference. , , . , , , . . . . , . . , . , , ...... 14 B. Resolutinn 302 (IV) adopted on 8 December 1949 by the Geueral Assembly of the United -Nations to carry out the recommendations of the interim report. . . . . 31 II. Financial survey ...... 34 III. Research and technical survey requirements in the Middle East countries...... 61 IV. Annotated list of certain development projects in the Middle East...... , 66 V. Description and preliminary estimates-Pilot demonstration projects...... % .

vi INTRODUCI'ION This is the Final Report of the Economic The contrast between poverty and plenty within Survey Mission for the Middle East. It follows a single country, like the contrast between the so- and expands the interim report, signed by the called rich and poor regions of the world, is a Mission on 6 November 1949 and transmitted to source of envy, a stimulant to unrest, a basis for the United Nations Conciliation Commission for fear and an incitement to wars-both cold and hot. Palestine for consideration by the United Nations How simple, therefore, to suppose that could General Assembly (see appendix I, A). The hiis- the poorer people and the poorer regions but ac- sion’s interim report, published under the author- quire from those more blessed materially a pro ity of the United Nations on 18 November 1949, ruta share of the world’s goods, poverty would be recommended a programme of public works to eradicated and a great cause of strife would disap- employ Palestine refugees, start them on the road pear* to rehabilitation and bring an end to their en- But comparative differences in standards of liv- forced idleness and the demoralizing effect of a ing cannot be adjusted so easily. Indeed, the dole. different values for which human beings expend The recommendations of the interim report their energies illustrate the lack of agreement on were enacted by the General Assemtly of the the validity of purely material standards as a United Nations in resolution 302 (IV) of 8 De- measure of advancement-or even of content. One cember 1949 (see appendix I, B), and if all goes should be slow to condemn the peasant who es- well the works programme for the refugees pro- chews a tractor for a nailboard plow, because he posed by the Mission should be under way at an may not covet the leisure the tractor would fiord. early date. He may fmd a greater value in ineficitncy, as This final report, “An Approach to Economic judged by western standards, than in an idleness Devtiopment in the Middle East”, does not deal to which he is unaccustomed, or a leisure which he directly with the problem of the refugees from knows not how to use, Speculation about what Palestine. Yet the obstacles in the way of eco- he might do with his leisure, if he had it, begs all nomic development in the Middle East are much sorts of controversial questions. Perhaps his chil- the same as those hampering the rehabilitation of dren, or his children’s children, will come to think the Arab refugees. differently about these things. The Arab refugees are chiefly agricultural Technical and scientific knowledge can con- workers, of varying degrees of skiil and expe- tribute to increasing material standards of living rience, now landless and unemployed ; others of in underdeveloped areas. The better use of water their kin, normally serving their daily needs, are and land, the control and eradication of disease consequently also without means. But this is also and pests, an increased manufacture and flow of ‘the cast with many of the regular population of goods and the spread of education, require the those Arab countries to which the refugees have application of what man knows or can find out fled. about the productive capacity of men and things. The solution of the problem of the poverty and But higher living standards cannot be bestowed unemployment of the refugees is, therefore, in- by one upon another like a gift. An improved separable from a solution of the problem of pov- economy does not come in a neat package sold or erty and hunger as that already a%zcts a large given away in the market place. A higher stand- section of the population of the Middle East. ard of living must grow out of the application of Hunger is a basic disease in many parts of the human skill and ingenuity to the physical re- world. The hand-to-mouth existence of millions sources of a country or a region. is a challenge to the technical and scientific knowl- The highly developed nations of the world did edge of, and to the wealth possessed by, those not make their way by wishing. By work and risk peoples whose standard of living is a measure of they forced the earth, the soil, the forests and the the goal to which the people of the under-dtvel- rivers to yield them riches. They pooled their oped areas may aspire. energy and resources by taxation and mutual vii r t enterprise to discover new ways of doing things. giving them asylum, if given work. The admin- They worked, they invented, they educated and istration of the relief and public works programme trained their children, and they invested in their for refugees . . . can, in the considered judgment national and in their private enterprises. This of the Economic Survey Mission, become a con- they must continue so to do, if they are to main- tributing factor for peace and economic stability tain the standard of living they have achieved. in the Near East.” There is no substitute for the application of In this, the Mission’s final report, the beginning work and local enterprise to each country’s own of productive works recommended in the interim resources. Help to those who have the will to help report is assumed as a prelude to the proposals themselves should be the primary policy guiding made herein, which, in the opinion of the Mission, and restraining the desire of the more developed if translated into action, can lead the way to a areas of the world to help the less developed lands, fuller development of the resources of the coun- The judgments formed by the Economic Survey tries of the Middle East. Such development is Mission for the Middle East from its examination essential to stability. Such development can help of the economic potentialities of the countries of to asure and maintain peace. At the same time, the Middle East point unequivocally to this con- since economic and political questions inevitably clusion. mingle in human affairs, economic development There is no easy short cut to a balanced ecoil- cannot of itself make peace or progress where the omy or to material prosperity. Time can be short- political will to peace is lacking. ened by sharing knowledge and providing, where Each country of the Middle East will, sooner invited, friendly technical and financial assistance. or later, learn that the resources of its neighbours The rate, the objectives and the strength of devel- have‘an important and frequently determining in- opment should be geared to the growth of compe- fluence upon the economic growth of each indi- tence of the people and of the Governments who vidual country. And, where physical resources, dwell among the resources awaiting development. especially water, are not abundant to start with, In its interim report the Economic Survey Mis- the interdependence of the countries of a geo- sion said : graphic region is an elementa;ry fact which cannot “Many of the small works projects envisaged in be evaded indefinitely. the public works programme for the employment Economic growth among interdependent coun- of refugees . . . can be the prelude to larger de- tries requires peace among neighbours. Thereby velopments. For the immediate future, the refu- only can the full complement of nature’s gifts to gees are viewed as a reservoir of idle man-power; man be organ&d to produce a creative system of of greater service to themselves and to the lands life and living.

viii CHAPTER I

WATER, LAND AND PEOPLE The Economic Survey Mission was instructed nity or live by marketing its produce. Yet, when “to examine the economic situation in the coun- the area is regarded as a whole, the total produce tries affected by the recent hostilities” between of the land only offers a bare maintenance of life Arabs and Israelis, and it was requested “to make to many, The social and economic structure is recommendations for an integrated programme . . . generally characterized by a high degree of con- to promote economic conditions conducive to the centration in the ownership of land, widespread maintenance of peace and stability in the area”.’ illiteracy, a striking gap between the standard of The Arab world, from the frontiers of Turkey life for rich and poor and the small size of a and Iran to the Atlantic Ocean, contains many middle income group which, in Western societies, countries, all of which have to a greater or lesser usually furnishes professional and technical skill degree been affected by the recent hostilities in and initiative, enterprise and civic leadership. Palestine. All are principally agricultural countries, tra- But the national economies and standards of versed by rivers, large and small, whose waters living of the Arab lands in Africa, from Egypt are the peoples’ life-blood. Yet vast areas of all through Libya to Morocco, differ considerably, but Lebanon are desert. Cultivation barely suf- and none is inseparably linked to the Middle East. fices to grow food enough to keep life ic the people. Petroleum, found only near the eastern The countries of the Arabian peninsula, Saudi borders of Iraq and exported through hundreds Arabia, Kuwait, Oman, the Hadhramaut, Aden of miles of pipelines to the Mediterranean coast, and Yemen, have a common practice of life, phosphates in Jordan and potash in the Dead Sea more closely related to standards of earlier days are the principal known sources of mineral wealth. than those of other Arab-speaking lands. There Of these, oil alone is presently significant; but the may be rooTl in those countries for economic de- production and export of oil can give work to but velopment and social reform, but it cannot be said a handful. As a source of energy and an export either that their national economies have close to gain hard currencies, ci: is the outstanding eco- economic ties to their neighbours or that they have nomic link between the West and the Middle been much affected by the recent hostilities. East. There remains a group of countries around Basically the area is, and for a long time to Palestine-Lebanon, Syria, Iraq and Jordan-11 come will remain, agricultural. The first rquire- of which have been deeply disturbed by the fight- ment for the area is to quip itself to feed its own ing in Palestine. The standards within these peoples and to provide exports to other lands, by countries may differ somewhat the one from the these means paying for imports of those manu- other, but their economic inter-relation is clear factured goods necessary to modemize agriculture and determined by geography, culture and aspira- and raising the very low standard of life to which tions. Israel, now a Member of the United Na- the mass of the people are now forced down by tions, is a new State occupying a major portion of existing conditions. Palestine, a new force in an Arab world, aiming There are some small manufacturing industries ; at a wholly different economic structure. more are needed. A modem&d agriculture would These countries2 comprise nearly 750,000 square allow for industrial crops as well as foodstuffs. kilometres and are inhG4ted by about 12 million The soil and climate are well suited to this in people, of whom some 7.5 million, or nearly 70 many places where now, from sheer necessity, per cent, are supposed to gain a livelihoorl by coarse grains alone are grown ; but to talk or plan agriculture, omitting many others who minister now of the industrialization of any of the five to the essential needs of an agricultural conmu- ‘A pendix II attached gives a brief financial survey of ‘The terms of reference appear in full attached to the the if ve countries in the area covered by the EconoJc interim report incorporated herein as appendix I, A. Survey Mission. 1 2 Final Reuort-TJnited Nations Economio Survey Mission for the Middle East-Part I countries in terms appropriate to the great indus- must be to start with reality, with thingu as they trial centres of the world would be to fly in the are; then, with the help of modern science and face of nature and common sense. Technical in- technical skill, to help the peoples of the Middle vestigation, greater skill and experience based on East to help themselves in rebuilding what they research, the development of better water supplies have lost and forgotten for a time but can still and the creation of electric energy are among the regain. most important requirements for future industry The land and water of the Middle East, proper- as well as for agriculture. ly developed and used, can support greatly in- The achievement of a more efficient agriculture, creased populations and at a higher standard of and the industrialization which can be built upon living than now prevails. This may come to pass that base, cannot be realiaed immediately. But at if the rain-fed areas of Syria and the vast plains one time in man’s history the Middle East led the of Iraq forming the valleys of the Euphrates and world in what was then the modern way. The Tigris come into their own, and if Lebanon makes deserts themselves offer the evidence, displaying use of its beautiful and powerful Litani River. the ruins of once great cities and abundant relics But Palestine-Israel and Arab Palestin-d of an ancient civilization. No sudden cataclysm Jordan cannot individually, or through combina- of nature, nor a gradual alteration of climate is tian of their physical resources, achieve or long responsible for the change. The cause of decline maintain western material standards without eco- is betrayed by the traces of the past. nomic ties in the adjacent geographic areas, or In Syria, in Jordan, in Iraq and in southern unless someone else makes up for the natural Palestine can still be seen ruins of one-time water- deficiencies inherent in those lands. works: great cisterns dug out of the rock below Because the present standard of living is very the earth to treasure the spring rains ; stone head- low, the natural resources available in Jordan, works and channels to preserve the natural springs with Arab Palestine, can, if properly developed, and dole their water out on to the land; irrigation help to raise the standard of living for its increas- rnnals of mud and brick, once filled from the ing population. But Israel, with its higher stand- perennial rivers by primitive but effective water- ard of living, faces a different situation: even if wheels. Israel did include the whole of Palestine, the land Old-time wars destroyed these things. The land and water resources thus available, however in- has dried up and the people have gone. Cisterns geniously arranged and exploited, could not offer are silted up, springs filled in and fouled, irriga- hope of supporting the present standard of living tion works broken down. Yet the land remains, for the existing population, much less a greater the rain still falls, the rivers flow. If the water be one. Indeed, with the high capital costs of devel- once more saved and spread upon the land, crops opment entailed for Israel, in keeping with its will grow again. Men, now unemployed for lack higher standard of living, this additional land area of soil to till, living on the verge of starvation, carrying with it the necessity of development gathering elsewhere one precarious catchcrop of would more probably make Israel’s present eco- poor cereals a year, could once more find a modest nomic plight more difficult. acreage which, if irrigated and properly culti- vated, would redeem them from penury and give In the future, as in the past, land and water and them a chance to achieve that measure of pros- what is done :vith them, and the interchange of perity which makes for stability and peace. goods and services among neighbours, will deter- This report suggests that all this can be done, mine the life and living of the Middle East. but all cannot be done at once. A good living for There are many obstacles to be overcome in the the present population will not be achieved easily forward drive for a better standard of living in the or quickly. The important first step is to begin- Middle Eastern countries. These are discussed to break with the habit of inertia. The principle below. CRAPI’ER II

PBESENT OBSTACLES TO ECONOMIC DEVELOPMENT Much has been written about the possibility of ects yielding a relatively small return. So long as reorganizing the land and water resources of the interest can be obtained on private loans ranging Middle East. At the beginning of its task the as high as 30 per cent, the lower rate of return to Economic Survey Mission cherished a hope-a be anticipated from public development invest- faint hope to be sure-that several large develop- ments will not be attractive, Another deterrent to ment projects, devised on the basis of the nu- resident private investors is their apparent unwill- merous surveys and reports already made by ingness to regard their Governments as stable and government missions, private engineers and other prudent custodians of public enterprise. ej

However, lack of capital is not the only, nor is In the case of those river development projects it the most immediate, difliculty. Were unlimited upon which prior international agreement is un- funds available, no beginning could at present be necessary, few of them have reached a stage at made upon some of the most promising develop- which construction could begin. ment schemes for various reasons. For example, the Litani River, lying wholly Rivers show little regard for man-made bound- within Lebanon, presents an attractive source of aries. Thus the development of water resources great potential value for irrigation and hydro- frequently involves prior international agreement. electricity for Lebanon’s dense population. Engi- The widely publicized plan for the development neers have prepared genera1 studies of the Litani of the Jordan River system is, for the Middle many times, and its full development offers East, a tragic illustration of the inseparability of promising prospects for the benefit of Lebat?on. political and engineering planning of a major But an intensive survey of the whole Litani water- water resource. The waters of the Jordan run shed, viewing the river and its hinterland as a partly through territory occupied by Israel and unit, has not been made. partly through the Hashemite Kingdom of Jordan. The Litani is one of Lebanon’s most precious The Yarmuk River, the Jordan’s most important assets. Piecemeal devetopment of the river would tributary, is partly in Jordan territory and partly be wasteful and unwise. The engineering plans to in Syria. support credits or loans for construction have not The Mission’s engineering St& analysed the been made, or begun. Geologic investigations to Hayes engineering plan’ for the development of test feasible dam sites, calculations based on the Jordan River system and found that, at most, stream flow records, reservoir areas, and alterna- 15 per cent of the work contemplated could go tive hydro capacity assumptions need to be checked forward without taking water from neighbouring by competent engineers who know from experience countries. Diversion of a portion of the Yarmuk what a river can be made to do. These investi- River as contemplated would require an agree- gations take time and cost money-substantial ment between Israel, Jordan and possibly Syria, sums in relation to the present revenues and bud- Likewise the use of the Hasbani’s waters would gets of the Middle Eastern countries. Thus, for require an agreement with Lebanon, Use of the want of the precise engineering studies beyond Jordan River proper would involve Arab Palestine the stage of reconnaissance surveys and general- and Jordan. In the absence of a peace settlement ized analyses, a potential asset remains relatively between Israel and adjoining countries on out- idle. standing issues involving repatriation and com- Important but piecemeal technical studies cover- pensation of Arab refugees and territorial bound- ing several rivers have already been competently aries, 2 is unrealistic to suppose that agreement carried out by private firms of consultants, both on the complex question of international water English and French. In order to save time and rights could be negotiated among the parties, money, these valuable studies will have to be util- Moreover, an engineering plan has yet to he de- ized. But in many cases they ate relatively out vised for the Jordan River and its -tributaries of date and must be revised and modernized by which treats the system as a whole without pre- the uae of the moat recent methods of investiga- judging specific political interests. Until that is tion and operation. In any case, previous sqfveys done the countries concerned will not be aware of to be brought up to date and any new ones 8411 the possible alternative costs, losses or benefits any to be carried out will need preliminary technical particular scheme for development might involve. investigation on a wide scale before they can be Whatever promise the full development of the used to support a well-founded application for Jordan River system may hold for better living loans and credits. These preliminary investiga- and economic productivity in the Middle East, tions will require the services of technical expert8 this must await a mutual desire to create and of high competence, as well as experts in eco- share benefits from a better use of waters now nomics and social science. denied to all parties. Engineering, technical and A complete investigation of this type requires financial assistance in this problem must assume not only cartographers, geologists, engineers, but peace and co-operation before men and money also the help of agricultural and economic advis- can be applied to the development of the Jordan ers. The whole enquiry must be subject to decision River system as a whole. by the Government of the country wherein the

‘For a detailed analysis of the Hayes proposals, see the supplement,section B, Engineering Report on the Middle Economic Survey Mission’s final report, part II, technical East. Bound separately. ChaDtcr II. Prcscnt Obstacles to Economic Development 5 project lies, which, with the advice of any experts of the Arab State8 in the Middle East, whether it may have or procure, must gauge who will born therein or immigrants, unemployed because benefit from the project; who will own the new there is no land for them to cultivate, cannot wait land brought under cultivation; what crop8 can for years before a serious attempt is made to most usefully be grown thereon, taking due ac- solve their problems. The young people of the count of home demand and export. The Govetn- Middle East must indeed be given the opportunity ment must also study and decide what meagures to become skilled technicians of all kinds, both by it will have to take to spread profit8 equitably; education abroad and by the expansion of oppor- what new taxes or charge8 it may justly impose tunity at home. Meanwhile, a way must be found upon those who benefit from the completed work; to start at once developments in the Middle East how any loan obtained to finance the project can which will offer work to all who have none and, be funded or repaid ; what laws and regulations by that natural means, lay the foundation of stabil- must be passed to reap the greatest benefit for ity and peace. the nation. The United Nation8 Economic Survey Mission Research is also needed to discover what types for the Middle East is fully aware of the many of profit-making crops can best be grown upon obstacles to the economic development of the re- the soil under the new conditions to be created by gion. I3ut there are inrportant things that can he a particular development. Forest trees, fruit trees, started now. The way these beginnings are made, industrial crops and foodstuffs must be examined the methods used and the procedure8 by which in their turn. Men must be interested and trained outside assistance and internal execution are as- in the cultivation of the selected crops. sured, will have important effects upon the later If a project is planned to supply electricity, in course of large development. addition to providing water for irrigation, thought The Economic Survey Mission believes that it must be given to the uses and sale of power; how can suggest an approach to these problems-an it can best be distributed to the country’8 indus- approach that contains promise. The proposals trial, agricultural and social benefit. which follow-a series of “pilot demonstration” If new land becomes available for cultivation, projects-may not seem ambitious ; in the judg- road8 and transport will be needed to open up the ment of the Mission they fit the realities of the area to trade and commerce. present situation. The financial aid needed for this approach is Many other aspects of the economic life of the relatively small; enough to prime the pump and country in which the project is located will come to set going normal operations of gainful effort, under review. preceded by careful planning in amall but signifi- For such widespread plans, made so that the cant area8 where water, land and people can be future prosperity of a great undertaking of this joined in a productive demonstration of self-help kind can be reasonably assured, it is essential for with friendly technical assistance at their elbow. the responsible Government to be assisted by the These small beginnings can 8tart the process of best advice procurable. If, as in Middle Eastern building up the natural resources of the countries. countries, there are yet but few sufficiently skilled Men and Governments learn by doing, by expe- men among the inhabitants of those countries rience. These projects will provide that practical competent to give this advice, skilled technical experience for the bigger tasks necessary for help must be hired. larger river scheme8 which will demand the high- The latent skill of Middle Eastern peoples could es9 modem skill in planning and execution, if be realized, in time, by sending picked men and waste and loss are to be avoided through piece- women to universities and technical college8 in meal development. more advanced countries. The cost in money The pilot project8 described in the following would be small, but the time lag greater than the chapter have this further advantage: they are urgency of the problem allovvs. The unemployed feasiblenow. CHAPTER HI

PILOT DEMONSTRATION PROJECTS From the projects included in the plans of the officials engaged on the work, but others whom the individual countries considered by the experts of Governments might select to observe and learn, the Mission, four have been selected as “pilot and so build up n skilled cadre of technicians demonstration” projects, one each in Jordan, Arab among their own peoples. Palestine, Lebanon and Syria. The Economic Sur- Though no essential feature of the scheme, it vey Mission has chosen these by appraising their would certainly heli, future development in the characteristics in the light of the following criteria : Middle East were Governments of countries, (i) They are high on the list of projects which wherein pilot projects are carried out, to allow the Government of the country concerned would officials, technical men and students from other like to undertake ; Middle Eastern countries to visit the works, to (ii) They are of a size and cost which is either observe and learn from the technique employed. limited by the very nature of the project itself or After due consideration, the Economic Survey which can be limited without doing violence to pos- Mission has not felt itself able to recommend the sible future expansion of the project; initiation of a “pilot demonstration” project in (iii) They are capable of completion within a Egypt, The knowledg: and skill available in that few years and will exemplify in a practical manner, country are already on a high level. Moreover, and in a relatively short time, the steps required to no development scheme possessing the special char- turn ideas into action ; acteristics set out above is in view. Egypt indeed (iv) They are varied in their nature and require has a problem of unemployment among its agri- in handling some interesting differences in tech- cultural population at least as great as that of any nique ; Middle Eastern country ; but Egypt is, in fair (v) They will demonstrate technical team-work measure, able tb tackle this problem for herself, and on a small but important scale; already has plans to do so. (vi) They will give the Governments of the Nor does the Economic Survey Mission recom- countries concerned experience in planning and mend a “pilot demonstration” project in Israel- execution ; held territory, The reasons which have led the (vii) They will employ labour and lead to the Mission to this decision are very similar to those permanent employment of other labour when com- relating to Egypt. pleted, through the settlement in newly opened Israel already has available technical men of all areas of families engaging in agricultural pursuits ; kinds and of the highest skill, knowledge and expe- (viii) They can be included among, or become rience in modem scientific methods. Moreover, the the logical extensions of, the short-term pro- Israeli Government has already begun, on its own grammes of relief works recommended by the initiative, with the relatively large funds placed at Economic Survey Mission in its interim report ; its disposal from abroad, to develop irrigation and (ix) They can lay the basis for more important to employ modem agricultural methods in an and larger development schemes. endeavour to find employment for the continuing The Economic Survey Mission also considers stream of immigrants. In addition, Israel posses- that these selected pilot projects, in addition to ses, in the Weizmarm Institute and other research contributing towards the development of the coun- stations and laboratories, a means of enquiry, edu- tries in which they are located, would be specially cation and progress which is not only superior to educative in nature and give experience in over-all anything available in the neighbouring Arab States, planning to the Governments, officials and tech- but may compare favourably with similar institu- nicians of Middle Eastern countries. tions throughout the world. With the co-operation of the Governments con- Iraq, with a standard of life and economic prob- cerned, these pilot projects can serve to instruct lems corresponding to those of other Arab coun- not only Middle Eastern Governments and their tries in the Middle East, undoubtedly forms part 6 of llrill arcii with which this report is concerned. which now pour unchecked and wasted, laden with However, the Economic Survey Mission is in- silt, into the Jordan River. formed that, on the initiative of its own Govern- The basin of the Wadi Zerqa is the largest of ment, Iraq is in negotiation with the International those drained by the Jordan wadis. Small areas on Bank for a loan wherewith to finance the comple- the Zerqa valley floor and in the Jordan Valley are tion of two schemes for flood control on the Eu- at present irrigated, but the amount of land under phrates and Tigris respectively. One of these two irrigation is limited by the minimum flow of the projects-that connected with the Euphrates and stream which can be counted upon in the dry sea- known as the Habbaniyeh project-is already son of the year. The rest of the water is now under way. Lack of funds prevents its completion. wasted. Work on the Wadi Tharthar to control the Tigris It is proposed that this watershed area be devel- floods has not begun. Until the outcome of nego- oped completely and as a unit. Roads would be tiations between the Iraqi Government and the constructed to make the area easily accessible; a International Bank is knowt. 5e Economic Survey dam of rock and earth, about 35 metres high, would Mission feels unable to recommend the construc- bc built across the wadi to control the floods in the tion of a “pilot demonstration” project in Iraq. rainy season and to save some of the surplus water Should the Governments of Egypt, Iraq or Israel for release in the summer, thereby doubling the request the help or advice of the international com- land to be irrigated ; small check dams on principal munity or friendly Member Governments in the gullies in the upper watershed would be built to prosecution of their plans, there is every reason to reduce silting; forest trees would be planted in the believe that technical assistance could be made rim above the reservoir; terraces on the hillsides available. and fruit trees would be established where thie A brief description of suggested pilot demonstra- proves to be leasible. Construction of a central vil- tion projects follows. A more complete discussion lage would be included as part of the development of each project, together with preliminary esti- in order to provide adequate housing facilities for mates, is contained in appendix V. construction workers and, in the future, to satisfy, in part, the permanent housing requirements of the area. JOIdtUl Where the wadi enters the Jordan plain an addi- THE WAIJI ZERQA PROJECT tional “headworks” would be built to lead the water into the irrigation canals which would allo- The Jordan Valley is by far the greatest land cate the water to the various users on the land. asset in the Hashemite Kingdom of Jordan for With more water available, changes in the pres- development under irrigation farming. At present ent cereal agriculture of the Jordan Valley would only a small proportion of the land there is inten- be possible, thereby providing an unusual opportu- sively cropped or irrigated. nity to test and demonstrate a fundamental reform For some years the Hashemite Kingdom of Jor- in the use of land and water in the area. dan has considered the possibility of developing the Because the Jnrdan Valley lies some hundreds of Eastern Jordan Valley by use of the combined feet below sea level, its crops ripen for the market waters of the Jordan and Yarmuk Rivers and the earlier in the season than in the plateaux above the seqeral wadis which lie wholly within Jordan. Sur- valley, and thus would command premium prices. veys to determine these possibilities have already A change from cereals production to intensive cul- been carried out, but lack of funds and the need for tivaticn of more profitable crops, such aa sugsr- agreement on the share of water which will fall to cane and cotton, with accompanying industrial Jordan will almost certainly defer extensive devel- possibilities, or vegetables, fruits, and possibly opment of the Jordan River as a complete system. forage crops if dairying should prove profitable, There are no such difficulties, however, with the would comprise a new and more profitable system waters of the wadis rising in Jordan. They belong of agriculture and be a great boon to Jordan and to Jordan alone. Should the major irrigation the whole area. scheme from the Jordan and Yarmuk Rivers prove Research and experiment carried on concur- to be feasible later, work done previously on the rently with the physical developments will show wadis will not be wasted. The waters of the wadis the way to these important results and will consti- on both sides of the Jordan River will still be tute an outstanding part of the whole demonstra- required to the maximum extent to which they can tion. be developed. Full development of the wadis Thus the Wadi Zerqa project can be of great demands storage of the winter floods, much of importance to the future of Jordan and, by dem- 8 Final Report-United Nations Economio Survey Milan for the Middle-__-- East-Part I

otlstratiw and imitation, to the whole area. Irriga- The: mountain v&y, through which the Lit& tion, flood control, engineering and construction, flowr’ as it leaves the fertile Beqaa Plain in central crop experiment8 in new systems of agriculture, Lebanon, drops the river more than 2,500 feet to including afforestation and the several aspects of the sea in the short distance of some eighty miles, soil and water conservation and lend use, combined To an engineer this means power-power from in one project, would provide an unusual opportu- falling water-captured by dams to regulate and nity for a new experience for the people; and a stabilize the flow of the river, to release it through chance for the Government of Jordan to gain turbines on its way to the sea, The engineering knowledge and confidence in the future develop- experts of the Mission estimate that a series of ment of the country’s idle resources. storage dams on the Litani could develop as much as 200,000 kilowatts of power, capable of produc- Arab Palertine ing 750 million kilowatt hours of electricity each year. In addition, these storage dams would in- THE WADI QILT PROJECT crease the water supply for irrigation far above In the hills north-east of Jerusalem a deep, nar- even the maximum needs of the irrigable land along row gorge reaches into the Jordan Plain near the coast from Tyr to Sidon. Jericho. This is the Wadi Qilt in the central part But before any dams are built on the Litani a of Arab Palestine. As in the Wadi Zerqa, the sur- complete investigation of the whole river and its plus water runs in wasted flood in the rainy season drainage area should be made. The Litani is too and land otherwise useful is denied sufficient water precious an asset to be developed in piecemeal, for the rest of the year. Here again, construction unplanned fashion. Its full development will re- of a dam will permit efficient use of the water, and quire a relatively large capital expenditure. If this in turn will increase the usefulness of land properly studied and planned the Litani can be now idle. developed step by step and thus set the pace for an intensive economic growth of Lebanon, accom- This development, like the Wadi Zerqa demon- panied by substantial financial and social benefits. stration, can start as a works project, employ ref- It is proposed that the task of making a complete ugees and give them an opportunity to settle on the study and technical investigation of this river and State-owned lands their work enriches. But the its watershed be undertaken as a pilot demonstra- Wadi Qilt has important value as a demonstration tion project. A more complete description of the project for other reasons. Some of the experience scope of the proposed field investigation is pre- gained by the research required to meet the agri- sented in appendix V. cultural problems of the Wadi Zerqa can be applied The Middle East needs a first-hand demonstra- to the planning of the Wadi Qilt and vice versa, tion of how to plan a river’s development and use thus demonstrating how forethought and careful as a whole. The experience of the Middle East planning can save expense in overheads, make one countries has for the most part been limited thus pound serve to do the work of two; while the far to general descriptive surveys, inadequate to results achieved in a relatively short time, patent determine the economic or engineering feasibility for all to see and appraise, will stimulate similar of river developments, or else to investigations of action on the other wadis-not a few in the Jordan a part of a river seeking a fair site for a single Valley, both east and west of the river-and so project unrelated to any others that might later bring work and prosperity within the grasp of many. be built. Countries learning to think about the development of their rivers need to understand Lebanon and experience the necessity of combining adquate THE LITANI RI~~XR INVESTIGATION PROJECT preliminary engineering, geologic, economic, agri- cultural and financial studies and investigations as In many respects the Litani River is the key to a part of the process of wise planning. the economic future of Lebanon. It has great pos- Here is an opportunity to demonstrate the value sibilities as a source of low-cost electric power use- of technical assistance, the need for competent ful to urban and rural life, to pump water for irri- engineers and experts. Here is an opportunity to gation, to process and conserve the seasonal teach the process of making plans for immediate surplus of fruits and vegetables and to encourage action and proceeding step by step toward actual the growth of industry. The Lebanon mountains development. m give to this important river an annual average The prosecution of this investigation and study rainfall of some 27 inches-an advantage enjoyed would provide an opportunity for training and by few areas in this part of the world. experience for local engineers and technicians, ! 9 ______. -__. ...- - ._I_... ._-Chapter ._^ -. 111.-..- ._Pilot Demonstretion__--- . .. _. Projects~. _ _. .-_------. I ---_-- under the guidance of experienced experta from haps the much planned and discussed develop- outside. ment of the more remote areas of the Khabur A demonstration of the modern way to plan a River and the savannahs of the Jezira would ap- river system will furnish a valuable example to pear more feasible than at present, if experience other Middle Eastern countries as they become could be gained first in the development of the practically interested in the development of their Ghab. These are the most important unsettled rivets. areas of the great spaces of Syria-future, ptofit- The completed investigations would make it able living space for Syria’s people. possible for Lebanon to decide how to proceed- where to build dams, how to finance them and how * * * to realize the great benefits latent in its priceless asset-the Litani River. These, then, are the pilot demonstration proj- ects which, in the opinion of the Economic Survey Mission, could begin the long and complex process sea of basic resource development in the countries of THE CHAB VALLEY PROJECT Lebanon, Jordan and Arab Palestine and Syria. These projects could command the interest of In prehistoric time a volcanic flow filled up the local people, once the work was started. The channel of the Orontes River below Karkour and meaning of “potential resources” would be demon- formed a great lake in north-west Syria, near what strated by the work of their own hands. The is now the Turkish border. Then, with the passing experience and pride which come from successful of time, silt from the Orontes and from the ad- execution of work could stimulate enthusiasm for jacent mountains filled the lake, forcing the river next steps, other projects. to drive a new channel to the Mediterranean. Pilot projects, skilfully spot-lighted by the na- The new course of the river carried the waters tional Government, could be the beginning of the slowly through great, flat, fertile plains, which dynamic process which brings hundreds and eventually became a swamp. This is the Ghab finally thousands of small reforms and changes of Valley. benefit to peoples and their Governments. The Through the years a number of comprehensive cumulative educational e&t of the many small studies have been made of this area by French facets in a single unified development project engineers and others. Each plan has proposed a would influence social, economic and administra- scheme for drainage, a dam for flood control and tive practices in neighbouring lands. Local edu- canals for irrigation. The flood control dam might cators and teachers, observing and studying the also produce electric power. The fertile plain demonstration, could relate the occupational re- would thus be restored for use and habitation, ;ind quirements of the work to the educational pro- a rain-fed area and its river would be added to the grammes of their schools. They could play a part productive economy of Syria and the Middle East. in exploiting the training possibilities inherent in The construction of roads to connect the new the construction of the dams, the reclamation and land with the populous cities nearby, and the crea- development of new 1ar.d. tion of a central village would also be included as The experience of other countries has shown papt of the development. that the power of example and demonstration as This pilot demonstration project would thus an aid to progress cannot be denied. If properly consist of a complete engineering-agricultural and carried out and interpreted, these demonstrations economic plan for the development of the valley can help to build democratic opportunity for emu- as a whole. The problems of drainage, highways, lation and initiative reaching into villages and housing, malaria control, public health, village countrysides and into municipal and national Gov- organization, flood control, irrigation, hydro-elec- ernments. tric power and agriculture would combine in a These projects, to be most useful, must corn- single project a veritable small-scale model of the mand major leadership and participation by the problem of Syria as a whole. This pilot project national Governments of the countries carrying would provide a rare opportunity to devise practi- them on. Unity in planning and executing the cal plans and test them in actual experience. development project itself will require some in- Through such a unified development programme strument for uniting administrative and technical the potentially fertile Ghab Valley would be trans- resources within the Government. formed from an unproductive swampy area into These observations suggest that the first essen- one of the most productive areas in Syria. Per- tial for carrying into practice the idea of “pilot 10 Final Report-United Nationa Eaonomio Survey Miuion for the Middle EmtcPart I prnjrrta”, once the Governments conscrncd as- yet further, with the dcvcloyment of industry cepted the suggestion in principle, would be for where need and opportunity were found to exist, each Middle Eastern Government in whose coun- It might also usefully handle certain questions try a project was to be undertaken to set up its relating to public health, education and social own national “development board”. This board, services. appointed by and serving the Government which It therefore seems inevitable, and is certainly sets it up, would have a permanent character, desirable, that a national development board relatively independent of political changes, though should be set up as soon as possible in each’ Arab naturally accepting and obeying the instructions State temporarily harbouring refugees from Pd- of the Government of the day. Through this or- estine where a programme of relief works giving ganization that essential continuity of purpose, temporary employment to those refugees is to be without which the enterprise can hardly succeed, started. should be largely ensured. But, since funds for financing relief works will It is not intended that development boards come largely from the United Nations, through would consist entirely of officials and technical the Relief and Works Agency for Palestine Refu- men. For example, certain Ministera might be BX- gees, established by a resolution of the General oficio members of the board, such as :he Minister Assembly, it follows that the development boards of Finance, the Minister of Public Works (or should be the agents of Government for contact whichever Minister is charged with corresponding and negotiation with that body. duties), the Minister of Agriculture, and the Min- This last-named agency, being the United Na- ister for Foreign Affairs. tions trustee for the expeuditure of United These development boards would not only serve Nations funds, whether on direct relief for Pales- to ensure continuity, but also to focus liaison and tine refugees or for relief works, will be bound to negotiation between the Government of the coun- act on the basis of an agreement drawn up be- try, on the one hand, and, on the other, any tween itself and each Middle Eastern Government external body, advisory or executive, international concerned. These agreements, while similar in or otherwise, through which technical or financial principle, may differ in detail according to cir- assistance might be made available or requested. cumstance. It might well be desirable to provide for the co- The negotia.tion of such agreements with the option on to the Board-as a temporary measure United Nations Relief and Works Agency for and from time to time-of other authorities. For Palestine Refugees would be among the first tasks example, at certain stages the Ministers responsi- of a national development board. ble for National Health, Education and Social Similarly, the choice and prosecution of a pilot Welfare, who would certain!y have to be demonstration project, its detailed planning and consulted, might usefully be retzesented. Never- definition, provision for its execution, the co- theless, it would be advisable to adhere to the ordination of the various types of technical assist- principle that an unwieldy committee teuds rather ance required and used on the project would be to slow down progress than speed up action. The determined under the auspices of the development object to be attained would be thoroughness and board. competence in technical planning and speed in Assurance that pilot demonstration projects decision and administration, combined with an provide training and experience for the younger assurance that the best interests of the nation, as technical personnel locally available, leadership in seen by the Government, were being duly served. relating educational systems to the training of The national development boards envisaged additional people, interpretation of the purpose, above would be appropriate bodies to co-ordinate progress and results of the projects to the national all plans and action relating to the development of leaders and the public-all are necessary functions a country’s resources, in accordance with the appropriate to the national development board terms of reference given to it by the government sponsoring the project within its country. of that country. It is therefore assumed that a Some of the Governments of the Middle East- development board would concern itself, not only em countries, rccognizing the importance and with development by cultivation of the Iand need thereof, have already established or are in through irrigation works and the application of process of establishing a development board, They other forms of modern engineering and agricul- will thus be in a better position to proceed quickly tural science, but also with the development of with their part of the work relief programme for housing, of communications by road and rail, and, Palestine refugees. Chapter III. Pilot Demonrtration Projects 11

Moreover, it is probable that those Govem- Yet the need for modern research on Middle ments that have set up a development board will Eastern technical problems is urgent. This has find greater and more effective opportunities to long been recognized by all Governments con- draw upon technical assistance from the United cerned. It is the more urgent if the best value is Nations, the United Nations specialized agencies to be obtained, even from things as they are or and individual Member Governments ready to from schemesproposed as work relief projects for provide technical and financial assistance when Palestine refugees; still more so if pilot demon- specifically requested. stration projects are to be undertaken, as recom- mended by the Economic Survey Mission in this A further task of the highest importance devolv- report, or if Governments find other means for ing upon the national development boards would themselves of beginning work on different projects be the institution and prosecution of research-in for the development of their own countries. agriculture, engineering and any activity contrib- T&e urgency of this problem has persuaded the uting to the more profitable development of the Econclmic Survey Mission that special funds for countries’ national resources. Research is a con- research should be made available at once from tinuous process, which can only be carried out external sources. The United Nations disposes, at through research establishments and by experi- present, of no fund expendable for this purpose. ment involving the employment of trained scien- The Mission therefore appeals to the Governments tists and technicians and the use of apparatus and c>fthe countries, Members of the United Nations, material which at present can only be made avail- charged by the General Assembly in its resolution. able to Arab States from abroad. of 8 December 1949 with appointing their repre- While not demanding an outlay comparable to sentatives to constitute and serve upon the Advis- that required for the actual construction of a great ory Commission of the Relief and Works Agency development project, research costs money for for Palestine Refugees, jointly to make available land, buildings, scientific apparatus, experiments to the Advisory Commission a sum not exceeding and the hi, ,11ypaid services of highly skilled men. 10 million dollars in all, this fund to remain avail- The condu.; of research is a matter for but a few able until expended by the Advisory Commission people. Research will not of itself employ refugees for the promotion of research activity in those from Palestine, however much it may contribute Middle Eastern countries where, in the opinion of indirectly to their eventual successful rehabilita- the Advisory Con*mission, it is most needed. This tion. Therefore but little of the cost of research, capital fund woul be made available as grants, if any, can legitimately be charged against United reimbursable or otherwise, as might be determined Nations funds earmarked for the direct relief of by the Advisory Commission, upon application Palestine refugees, or even for works projects made by a Middle Eastern Government and upon designed to give those refugees employment. terms to be negotiated between the Advisory Part of the essential expenditure should prop- Commission and the Government concerned. erly fall upon the governments for whose benefit In addition to serving as an aid to the founding and under whose jurisdiction research is carried of research establishments and experimental work, on. Certain of the Governments should be able to this fund could also be drawn upon to assist in the find some money for this purpose from their own completion of pilot demonstration projects where internal resources. The cost of providing land and and when United Nation funds were not available buildings, and the wages of unskilled or semi- for that purpose. skilled labour should be borne, save in exceptional By this means the Economic Survey Mission circumstances, by the Government. On the other seeks to provide against the collapse of a pilot hand, the cost of apparatus, scientific instruments demonstration project through lack of funds to and other similar needs, together with the salaries carry it to its planned conclusion, and to stimulate of foreign experts, may be beyond the immediate the spirit of enquiry and research in those Middle means of certain interested Governments to pro- Eastern countries ‘whose hopes are set on this vide, in view of the many other claims upon the essential need but which have hitherto lacked the exiguous funds at their disposal. : means to achieve their just and purposeful desires. CIIAPTER IV

CONCLUSIONS AND PROPOSALS

The approach to economic development in the portant enough to a&t the country’s economy Middle East proposed by the Economic Survey favourably, and comprising a sufficient variety of Mission thus includes the following elements : problems and technical requirements to tiord 1. Recognition by the Governments of Middle overall training in a broad field, while being simple Eastern countries, by the United Nations and by enough to assure success; the Member Governments which desire to proffer (vii) That the process by which the greater friendly assistance to the Middle East : resources of the international community and the (i) That peace and stability cannot be achieved individual aid of friendly Governments are made in the Middle East until the masses of its peoples available to the Middle Eastern countries must are able to enjoy a higher standard of living than respect the sovereignty while strengthening the at present ; competence and independence of the country re- (ii) That the path to a higher standard of living ceiving assistance. for the population of the Middle East is a long 2. Prosecution of the programme of work relief one ; for refugees to be inaugurated by the United (iii) That, through the efforts of Middle East- Nations Relief and Works Agency for Palestine ern peoples and Governments themselves, a higher Refugees (established by the resolution of the standard of living can only be achieved through General Assembly dated 8 December 1949) in the development of the natural resources of Middle such a manner as to shift more and more responsi- Eastern countries which, to begin with, should be bility for the execution of the programmes on to reflected in an improved and modemized agri- the shoulders of the individual Governments and culture, without which substantial industrial op- to ensure that these programmes for temporary portunity is denied them ; employment include those projects which can add to the productivity of national and regional econ- (iv) That the obstacles to economic develop omies and lay the basis for subsequent larger mcnt leave few opportunities, if any, for the developments offering a permanent livelihood to immediate prosecution of large-scale schemes or more people in the years to come. the fruitful application of large long-term credits 3. Establishment by each of the Middle @stem for productive, self-liquidating developments ; Governments of a national Development Board, (v) That the proposed public works pro- fully contained within the sovereign jurisdiction of gramme to provide temporary employment for its governmental administration, charged with re- Palestine refugees, as recommended in the Rco- sponsibility for planning balanced, overall develop- nomic Survey Mission’s Interim Report (adopted ment, defining and recommending individual and approved by the General Assembly of the projects, and providing for their execution, with United Nations, by resolution 302(IV) dated 8 the help of such technical and financial assistance December 1949), by mobilizing a great body of from the international community or friendly Gov- man-power, now idle, will improve the productiv- ernments as each Middle Eastern Government ity of the countries where the refugees now reside concerned may seek. and can be the start of larger developments ; 4. (a) Prosecution by the Government of (vi) That several of the Governments of the Lebanon of a pilot demonstration project to countries most directly a&ted by the recent hos- achieve a complete survey, field investigation and tilities between Arabs and Israelis need an oppor- technical report, preparatory to the ultimate de- tunity to learn, by doing, the art and skill of plan- velopment of the Litani River as a unit; ning, organizing and carrying out a development (b) Encouragement and technical assistance by project, conceived on a small enough scale to be the international community, or individual friendly within the competence of those Governments, im- Governments, to the Republic of Lebanon in the 12 Chapter IV. Conclusions and Proposala of the Misrion 19 definition aud prosecution of the Lit;mi invcstiga- developmeat from internal re8ource8, a rqueat for tion with an assurance that, should the Govern- external financial aid would receive careful and ment of Lebanon find itself unable wholly to friendly consideration. finance this investigation from internal fe8ources, 7. Crmtion of 0 fund, not to utceed $10 mil- a request for external financial aid would receive lion, by the Governments which, by action of the careful and friendly consideration. General Assembly, are called upon to appoint their representatives to form the Advisory Com- 5. (Q) Pro~~crction by the Hoshemite Kingdom mission of the United Nation8 Relief and Works of Jordan of a pilot demonstration project on the Agency for Palestine Refugee8 ; this fund to be watersheds and stream bed of the Wadi Zerqa, available to the Advisory Commission, until and a pilot demonstration project on the water- expended, for allocation to Middle &&em Gov- shed and stream bed of the Wadi Qilt, which will ernments a8 grants, reimbursable or otherwise a8 achieve the full and unified development and use may be determined, for the purpose of facilitating of the waters of these wadis flowing into the Jor- research, technical studits and investigations in dan River from the east and west respectively ; agriculture, engineering and other modem acien- by building storage dams, to Std%Zc the down- tific aids to development, and assisting in the com- stream flow of the wadis and thereby increase the pletion of pilot demonstration project8 approved year-round water supply, reduce the damage of by the Advisory Commission, upon application floods and add to the area8 under irrigation and made by the Middle F&&em Government con- cultivation ; by using the development of these cerned. wadis a8 an oppor+unity to employ Arab refugees and a8 an encouragement for them to establish 8. Preparation by the Governments of the Mid- themselves a8 permanent and productive residents dle Eastern countries concerned, in consultation on the lands they thus bring into use ; and by with the Advisory Commission of the United using these pilot demonstration projects as a Nation8 Relief and Works Agency for Palestine special opportunity to provide technical and ad- Refugees and in connection with the functions of ministrative experience in the overall planning and that body as laid down in paragraph 7 (b) of the actual execution of public works. resolution of the General Assembly of 8 December 1949, of plans and recommendation8 for the (b) Financial and tech&d assistance to the further development of the economic and natuml Jordan Government by the international com- resource8 of the Middle East, with particular munity, through the funds to be made available reference to those involving economic arrange- by the Member Governments of the United ments between two or more of the count&a con- Nation8 for the refugee works relief programme., cerned. in order to begin the8e projects ; together with an l + * assurance that later rque8t8 for credit.8 or granta This approach to the economic development of with which to complete these pilot project8 will the Middle East and the policies and actions ti receive careful and sympathetic consideration by forth herein are recommended for the early and the United Nations or by individual friendly Gov- careful consideration of the United Nation8 and ernments, prior to the conclusion of the refugee the Government8 whose active implementation of woi;ks programme. this approa-h will bring the Middle East into a 6. (4) ProJecwtion by the Syrian Government hopeful and significant era of economic, social and of a pilot demonstration project on the oronta political advance. River in the Ghab Swamps, to reclaim, by drain- Signed ut Paris, France age and other devices, potentially fertile lands now useless and uninhabitable, and to provide home8 on 18 December 1949 and other facilities needed for the people who will Gordon R. CLAPP be required to populate and till the land thu8 Chuitvnan reclaimed. H. Cemil G~KCE~ (b) Encouragement and tech&d assistance by Depwty Chairman the international community, or individual friendly Eirik LABONNE Governments, to Syria in the planning and execu- Deputy Chairman tion of this project by the Syrian Government, with an assurance that, should the Syrian Govem- Desmond MORTON ment find itself tmable wholly to finance this Deputy Chhnan APPENDIX I

I A. First Interim Report of the United Nations Economic Survey Miooion for the Middle Eart

Letter from the Chairman of the United Na- General Assembl will wish to give urgent con- tlons Conciliati Commiwion for Paleothe sideration to it. 4 he Commission is of the opinion that the Assembly Will wish to obtain additional to the Secretary=General information concerning certain of the findin s and New York, 16 November 1949 recommendations contained in the report. f n this On behalf of the United Nations Conciliation connexion, in the light of the arrangements made Commission for Palestine, I have the honour to by the Secretary-Genera1 with the International communicate to you, for transmission to the Gen- Red Cross organizations and the American eral Assembly, the first interim report of the Friends Service Committee (A/1060), particular United Nations Economic Survey Mission for the reference is made to the recommendation that the Middle East. The establishment of this Mission number of rations issued should be reduced by was described in paragraph C of the fourth prog- one-third as of 1 January 1950. ress report of the Conciliation Commission to the Secretar -General (A/ACZ/PR.4) .r (Signed) Hussein C. YaLcrN The 2 onciliation Commission considers that this Chazrm.an, United Nations report constitutes a constructive a preach to the Conciliation Commission Palestine refugee problem and beP ieves that the for Palestine

United Nation Economic Survey Mission for the Middle Eart

TABLE OF CONTENTS POfi Foreword ,...... ,...... ,...,...... 1.... The roblem .,...... ,.....,...... The E conomic Survey Mission ...... ii: Interim findings ,....,...... ,.....,...... Recommendations ,....,...... ,...... ,....,...~...... ;: Guiding policies for administration of proposed programme 17 Discussion of findings and recommendations : The Palestine refugees *...... *...... *...... , Prospects of employ-ment ...... it ...... 20 2$ D) Terms of reference ...... I... 30

Foreword ter for more than half a million homeless ople. The appeal was answered and the funds or tained More than a year ago the United Nations em- have averted added disaster in the Near East. But barked upon a rogramme of relief for the Pales- the funds so far subscribed will not last through tine refugees. x ctm u on the appeal of the late the winter. Count Bernadotte, t NJe nited Nations Liediator In the face of this emergency, the United Na- in the hostilities between Arabs and Israelis, and tions Economic Survey Mission, deputed by the the report of his successor, Mr. Ralph Bunche, Conciliation Commission for Palestine to examine the Genera1 Assembly of the United Nations, economic conditions in the Near East and to make through the Secretary-General, Mr. Trygve Lie, recommendations for action to meet the dislocation called upon the nations of the world to contribute caused by the recent hostilities, has found it essen- funds to feed, clothe and provide temporary shel- tial to concentra+e first upon the refugees and to ‘Reproduced at Lake Succur aa A/992, report without delay upon this distressmg subject, 14 ./ Appendix IA 15 lrnving for a subscqucnt report other niatttcrs of arouilcl Jerusdenl anal territories on the Arab side ion ef term. of the armistice lines. They entered into Israel l! ecognizing that the plight of the refugees is where most of them have now been absorbed. both a sym tom and a cause of rave economic The worsening plight of the refugees as an instability, tR e Mission fecommen ds in this report obstacle to peace in Palestine xompted the Gen- that steps be taken to establish a programme of era1 Assembly of the United ri ations, in Novem- useful public works for the employment of able- ber 1945, to ap en1to the nations of the w&l for bodied refugees as a first measure towards theit funds to grovt s e food, clothin and shelter for the rehabilitation ; and that, meanwhile, relief, re- refugees. This emergency re4 ief pro lctnme was stticted to those in need, be continued thtoughout established with great despatch. e overnments the coming year. contributed in the hope that conciliation would These recommendations are intended to abate produce eace and lay the basis for a permanent the emergency by consttuctive action and to re- solution Por the refugees. duce the refugee problem to limits within which On 11 December 1948 the General Assembly the Near Eastern Governments can reasonably be adopted a resolution statin : “. . , that the refu- ex ected to assume any remaining responsibility. gees wishing to return to ta eir homes and live at %hese measures, together with those which the peace with their neighbours should be permitted Mission, in a subsequent and final report, will sug- to do so at the earliest practicable date, and that gest for the eater use by the pea lea and Gov- compensation should be paid for the property of ernments cl ta e Near East of the stif 1 undeveloped those choosing not to return . . .” riches of their own lands, will not alone bring The same resolution established a Conciliation peace. But if the Palestine refugees be left for- Commission for Palestine to negotiate a settlement gotten and desolate in their misery, peace will of outstanding differences between Israel and the recede yet further from these distracted lands. Arab States of Egypt, Iraq, Jotdan, Lebanon, Saudi-Arabia, Syria and Yemen. Signed at Beirut, Lebanon, No settlement has been reached. on 6 November 1949 The Arab refugees have not been able to return Gordon R. CLAPP to their homes because Israel will not adtnit them. Chairman Israel has to date offered to repatriate only H. Cemil G~KCEN 100,000, and only as a part of a general peace Deputy Chairman settlement of all other issues. Eitik LABO;. NE The Arab refugees have not been able to gain a Deputy Chairman livelihood in the Atab lands where they are be- Desmond MORTON cause there is insufficient opportunity for them to Deputy Chairman do so. The Arab refugees have not received compensa- tion for the property they abandoned, nor have the The Problem Jewish refugees in their turn. The Arab refugees-nearly three-quarters of a The refu ees are still on relief. million men, women and children-are the symbol United r$ ations funds so far subscribed for the of the paramount political issue in the Near East. feeding of refugees will not last through the Their plight is the aftermath of an armed stru le winter. between Arabs and Israelis, a struggle marke #I y a ttuce that was broken and an armistice from Tbe Enonomic Survey Mihm which a peace settlement has not emerged. Before the hostilities in Palestine these families In these circumstances the United Nations Con- lived in that section of Palestine on the Israeli ciliation Commission for Palestine established the side of the present armistice lines. Abandoning Economic“ Survey Mission on 23 August 1949: their homes and villages, their fields and orange to examine the economic situation in the groves, their sho s and benches, they fled to couh&iks affected by the recent hostilities, and to nearby Ar,> lan a s. Tens of thousands are in make recommendations to the Commission for an temporarj. camps ; some are in caves ; the majority integrated programme : have fotmd shelter ixi Atab towns and villages, in “(a) To enable the Governments concerned to mosques, churches, monasteries, schools and aban- further such measures and development pro- doned buildings. Some seventeen thousand Jew- grammes as are re uired to overcome economic ish refugees, too, fled from their homes in and dislocations created 1 y the hostilities ; ‘Thirty-three Governmentr made voluntary contribu- and through contract8 with the International Red Croto tions amounting to $32 million, and the United Nations Committee, the League of Red Cross Societies, and tha established an emergency organization the United Nation American Friends Service Committee, supplied the refu- Relief for Palestine Refugees, with Stanton Grif?is, thm gees with food, shelter and other rrervicea. Many other American Ambassador to Egypt, as its director. The charitable, religiow and !&al agencier assistedin rub- UNRPR purchased and scheduled material8 and rupplier, stantial ways. 16 Final Report-United Nation0 Economio Surww Miarion for the Middle East-Part I

“(h) To fncilitnte the rc ntrintion, rcsettlctwnt all direct relief to te cut off mw, muly rcfugecv and economic and social re hpabilitation of the refu- would face a winter of disease and starvation. gee8 and the payment of compensation pursuant to Were charity alone to be provided for another the provisions of paragra h eleven of the General year, it would be more difficult and CO8tl to take Assembly’8 resolution o P 11 December 1948, in constructive measures later. Neverthe r e88, the . order to reintegrate the refugees into the economic extent of direct relief provided through United life of the area on a self-sustaining basis within a Nation8 fund8 should be stringently cut within the minimum period of time; next two months. There is no doubt that, how- “,(c) To promote economic condition8 con- ever commendable it may be to extend interna- $lrv;e;,;he maintenance of peace and stability in tional charity to the needy, ration8 greatlv in excessof the number justifiable within the original intentions of the General Assembly of the United The Economic Survey Mi88iOn assembled at Lausanne on 8 September 1949, where it received Nation8 have been and are being issued, it8 term8 of reference from the Conciliation Com- 4. Work in place of relief cannot be provided mission and met with each of the delegation8 rep- immediately for all. One thing, however, is clear. resenting the Government8 of Egypt, Israel, Rather than remain objects of charity, the refu- Jordan and Lebanon. The Mission proceeded to gee8 who are idle must have an op ortunity to o Beirut, Lebanon, where it be n its work in the to work where they are now : wor fc which wou7 d Near East on 12 September !T949. The heads of increase the productive capacity of the countries the Mission have discussed the problem8 covered in which they have found refuge. Until such work in its terms of reference with the members of the ha8 been found, those refug6es who are idle must Government8 in Alexandria, E pt; B hdad, remain a burden upon others, the United Natione, Iraq ; Tel-Aviv, Israel ; Amman, gahemi&ing- charitable societies supported by voluntary con- dom of ordan ; Beirut, Lebanon; and Dama8CU8, tributions, or the countries in which the refugees Syria. I he experts attached to the Mission have now find themselves. studied in the field the problem of the refugees, 5. Useful, inful emplo ent can, however, be the econony of the areas m which the refugees are found for all tr e refugees aI? le and willing to work. now centred, and, in extensive di8CU8SiOn8with There are many potential opportunities for useful technical committees established by most of the and productive work to im rove and reclaim the above Governments, have considered measures land, increase the supp Py and use of wat6r, which might remedy the “economic dislocations strengthen and extend road systems and improve created by the hostihties”. sanitation and shelter. Suitable employment for the refugees can be provided in many lacea, especial1 in Jordan and Arab Palestine, wR ere nearly ha rf Interim Findingo the refugees are located (se6 appendix C). A8 a result of the Mission’s studies, di8cu88ion8 6. Thia and other similar work could begin as with Governments and investigations in the field, soon as fund8 can be found to finance it. But the the Mi88iOn find8 that : resources of the Arab countries sheltering most of 1. The refugees themselves are the most serious the refugees are inadequate to co unaided with manifestation of “economic dislocation” created by the present cost of emer ency r6p” ief alone, much the Arab-Israeli hostilities. The refugees repre- less to finance the cost of putting the refugee8 to sent about 7 per cent of the population in the work. Money for this purpose must be found from countries in which they have sought refuge. outside sources. About 65 per cent of the refugees fled to Arab 7. The inability of the refugees rapidly to find Palestine and Gaza, almost doubling the popula- for themselves gainful emplo ent m the Arab tion. Resolution of the demoralizing, un roduc- countries is but a symptom o r” the need for dcvel- tive and costly problem of the refugee8 is t Re most opment of the unused resources of the Near East, imm6diate requirement “conducive to the main- where lack of available capital is res aible for tenance of peace and stability in the a&‘. much idle man-power. This is a task r or the Near 2. The continuin political s&mate in the rela- Eastern Government8 to do in their own way, and tions between the 1 rab countries and Israel pre- in due course, with the help of competent counsel eludes any early solution of the refug66 problem and substantial financial credits. by means of repatriation or large-scale resettle- ment. Recommendations 3. The relief supplied by the United Nation8 Relief for Palestine Refugee8 (UNRPR), the In the light of these findin 8, the Economic Sur- United Nations International Children’8 Emer- vey Mission makes the fo f lowing recommcnda- gency Fund (UNICEF), the World Health Or- tions, which are explained later in the report. nization (WHO), and the many local and 1. The emergency relief for refugees made pos- $orei voluntary agencies of charity operatin in sible by voluntary contributions from Member the r$”ear East has averted a worse calamity. It ere Government8 of the United Nations should be Appendix IA -_I_____- 17

continued throu h the winter months, and until 1 This would reduce the amount required from April 1950, un(B er the present UNRPR system; outside sources for eighteen months from 1 Janu- the present minimum ration should not be re- ary 1950 for a programme of relief and public duced, but the number of rations issued should be works to a proximately $48 million, or an avera e $!Jgg.J~ &yg# 1950 from the present rate of $2.7 mil Pion per month. This is the same as t Ii e (for an analysis of the num- resent monthly rate of ex nditure by the United ber eligible for ‘relief, see appendix B). This R ations upon direct relie r alone8 (see appendix would cost $5.5 million for the three months A). be inning 1 Januar 1950. Thereafter, further 3. An agency should be established to organize re ductions should ta %e place as men become em- and, on or after 1 April 1950, direct the pro- loyed in gainful labour and thus become ineligible grammes of relief and public works herein recom- Por direct. relief. mended. As a minimum requirement to the successful implementation of the relief and works 2. A programme of public works, calculated to r;;tuammes, the Economic Survey Mission urges improve the roductivtt of the area, and such continuing reP ief as wi r1 be needed should be (d) Subject to rendering such rerts of its organized as an integrated o ration, in co-opera- activities and accounting for its UC n iture to the tion with the governments op” the countries where General Assembly of the United E ations as may the refugees are located. This programme should be required of it and within the policies established be planned and arrangements negotiated with the in its terms of reference, the agency should have ap ropriate Near Rastern Governments to begm full autonomy and authority to make decisions 1 1prtl 1950. within the sphere of activtties entrusted to it, No more rations should be supplied by the including the selection of its subordinate stafF and United Nations after 31 December 1950, unless the admmistration of funds made available to it. otherwise ordered by the United Nations at the (b) The agency should be located in the Near fifth session of the General Assembly, at which East. Near Eastern Governments concerned would have (c) The personnel and assets of the UNRPR an opportunity to present appropriate proposals. should be turned over to the new agency on 1 Meanwhile, the agency handlin direct relief on Aprrl 1950, or as soon thereafter as possible, in behalf of the United Nations shouI! d be empowered order that the functions of direct rchef may be to negotiate with Near Eastern Governments for directed by the new agency in appropriate relation the latter to take over as soon as possible, and at to the works programme. latest by 31 December 1950, responsibility for the (d) The agency should be authorized to coun- maintenance of such refugees as may remain sel with such Near Eastern Governments as ma so desire concerning measures to be taken by sueh within their territories. Governments in preparation for the time when This programme, for the nine months from United Nations funds for relief and works projects April through December 1950, would require $27 shall no longer be available. mrllion, which sum would include such relief as might be needed. Guiding Policies for Administration The United Nations should be prepared to con- of Propoeed Programme tinue the works programme until 30 June 1951 (subject to review at the fifth session of the Gen- The purpose of the proposed programme of eral Assembly). relief and public works is four-fold : it will halt the The works programme for the six months of demoralizmg process of pauperization, outcome of 1951 would require $21.2 million. a dole prolonged ; the opportunity to work will Of the total of $53.7 million for the cost of relief increase the practical alternatives available to and works pro’ects for the eighteen months’ pro- refugees, and thereby encourage a more realistic amme, the d ission estimates that approximately view of the kind of future they want and the kind Y5 per cent, or $13.3 million, represents the cost of they can achieve ; a works programme properly the necessary work materials, tools and equip- planned will add to the productive economy of the ment. The Mission’ considers that a considerable countries where the refu ees are located ; the proportion of this sum, perhaps u to one-half in chance to earn a living wi‘i 1 reduce the need for certain cases, might be supphed 1y governments relief and bring its cost within the ability of the of the countries in which the refugees are now Near Eastern countries to meet without United concentrated. Nations assistance. ‘Should the United Nations decide to bring about a Nations ahould prefer to maintain the present rate of gradual reduction from 940,000rations per day to 652,000 940,000rations per day, except as affected by work relief, on 1 April 1950, through monthly reductions of 100,000, throughout the calendaryear 1950and thus rovide charity beginningon 1 February 1950,the cost of the alteration to many thousandswho are not refugees,8 e coat of this in schedulewould amount to $1.2 million. If the United alteration in schedulewould amount to $7 million. 18 Final RaDort-united Natlonr Eoonomlo &~rvey Mirrion for the Middle Eart-Part I

With ttrcsc urposcs in mind, the work-rclicf relationship between these projects and the plans programme, to TX successfut,must be planned and of each country for its own future development. carried out in the closest possible co-operation Moreover, since the results of the work entailed with Near Eastern Governments concerned. Spe- will have an immediate effect on the policy of the cific works projects should be selected and planned agency organizing the distribution of food and through negotration and agreement between the other forms of direct relief, the Economic Survey national Government and the agency charged with Mission considers it imperative that the two activ- administering the programmes. The actual execu- ities be under the same direction. Since the pro- tion of the programmes should devolve upon the gramme of works relief must take precedence over national Government to the fullest degree possible, that for direct relief, the latter decreasing as the with agreement for audit, inspection and general former grows, the Economic Mission roposea supervision by the international agency. This that supervision and control of direct re Pief be a arrangement wilt help to strengthen the adminia- function of the agenCy undertaking the works re- trations of the Near Eastern Governments con- lief programme, cerned by the responsibitit the thus accept and discharge, In this course ries t Ke only ossibility DIecusrion of that the need for international relief wil P pass and Findings and Recommendationr that the refugees wilt ultimately be rehabilitated. In pursuing this course it will be im ortant to THE PALESTINE REFUGEES remember that no Government of the If ear East, Their number. No one knows exactly how or an government anywhere, can indefinitely man refugees there are. After considenn all provi Ye special benefits to a particular group, tran- avai rable information, the Economic Survey h is- sient in its domain, while there is substantial sion estimates that the total numhr of refugees unemployment among its own nationals. Negotia- does not exceed 774,000, including 48,000 in tions of works programmes will have to take this Israel, of whom 17,000 are Jews. Of this 774,000 into account. it is estimated that 147,000 are self-su rting or The opportunities for Fmplo ent ,on works otherwise provided for. This leaves 6 rr ,000 refu- projects wit1 vary in quantlt an CTduration accord- gees at present dependent uJpon United Nations mg to local circumstance. x here refugees are un- relief, In addition, the Misston recommends the usually congested, individuals may be emptoyeu inclusion of some 25,000 Arabs who, though living on an alternating part-time basis so that more in their original homes in Arab territory, are de+ may work. An understanding of the value of work titute through being separated from therr lands by as a chance to earn and restore self-respect to- the armistice agreements. This would bring the gether lvith concern for the low morale and debiti- total figure of persons who are eligible for relief tation condition of men long idle and under- from the United Nations to 652,000 (see appen- nourished will suggest policy and practice. dix B). The amount of relief and the amount of em- Their location. Where did the refugee8 go loymert in each family or villa e group should when they left their homes? About 70,000 crossed Rave a direct relationship. The f ormula is more the ordan River to the east and are now in the work and less relief. Humanitarian considerations Has i emite Kingdom of Jordan. About 97,000 should tern er administrative decisions, but the fled into Lebanon, just north of Galilee. Some successof tR e works relief pro amme will inevit- 75,000 are clustered near the south and western ably be measured by the spee8 with whicbdirect boundaries of Syria, and in and around Damascus relief diminishes, as men and their families begin and other towns. About 200,000 are crowded into to earn a living. the tiny coastal desert area called the Gaza strip, The League of Red Cross Societies, the Inter- at present held by Egypt. About 280,ooO are m national Red Cross Committee and the American that part of Palestine not occupied by Israel- Friends Service Committee have, hitherto, by o>n,n- west of the Jordan-from Jenin in the north to tract with the UNRPR, distributed relief supplies ericho and the Arab portion of Jerusalem and on rovided by the UNRPR from funds or uiva- i eyond to Bethlehem in the south. About 4,000 Pents sup bed by voluntary contributions cot7 ected crossed the desert to Ba hdad in Iraq, far to the by the 2)ecretary-General of the United Nations east. In addition, some f 1,ooO Arabs and 17,000 trom Member countries. In addition, many un- Jews, classed as refugees by the international relief heralded charities have supplemented this United agencies, are in Israel. Nations relief. The influx of these destitute families into al- None of these orpnizations is qualified to ad- ready crowded areas, notably Arab Palestine, the minister a works rehef programme or to negotiate Gaza strip and the western part of the Kingdom of thereon with Near Eastern Governments. Such Jordan, has aggravated the already depressed tasks require an agency of a different kind, standard of life m these regions. This may help to equipped to plan in the field works projects in account for the 940,000 rations now issued daily, engineering and agriculture, and to vtsualize the as against the 652,000 recommended in this report. Appendix IA I2 :‘I 19

l’hrir tqfrcc on local ruso~rces. The e&t8 of them in exile until it was too late for them to the influx of the * *fugees upon the resources of return. Even if they were told their houses had the Arab States can be suggested by comparin been destroyed, they would still claim that the the numbers of refugees to the total population o4 land remained, This seems a final argument to the areas where they are now chiefly concentrated. farm people. The population of the Gaza stri , before the But, the repatriation of Arab refugees requires Arab-Israeli hostilities, was about 7p0,ooO. Refu- olitical decisions outside the competence of the gees have swelled the po ulation to about 2%~ k conomic Survey Mission. m an area of less than 1‘5 0 square miles. Gaza in Why do not the refugees go somewhere else? now cut off by the armistice lmes from its normal Why not resettle them in less congested lands? trade area ; most of the farmlands normally tilled There are several reasons. The refu ees do not by the villagers in the Gaza strip,are pow inacces- take kindly to moving again-unl:ss it %e a return sible to them, because the armistice lme separates to their homes, a prospect they cling to because of the farmer from his land. He can see his land the General Assembly s resolution. Moreover, the across the line, but he enters upon it to tend his Arab Governments have made it clear to the Mis- orange groves or harvest his crop at the peril of sion that they feel bound to respect the wish of the his hfe. refugees. Resettlement of the refugees outside of Arab Palestine, that portion of eastern Palestine Palestine is a political issue poised against the not occupied by Israel1 troops, had an estimated issues of repatriation, compensation of the refu- population of 460,ooO before the outbreak of hos- gees and a final territorial settlement. Finally, less tilities, To this has been added about 280,000 congested lands are not available for the settle- refu ees, an increase of 60 per cent. ment of additional population until much money T a e refugees were able to brin few assets with has been spent and work done to make the land them, and many of those who di d have since used suitable for cultivation or for industrial develop- them up. They claimed and, in eneral, received ment. the help of the countries to whit f they fled. For Tn these circumstances, the only immediate con- the first few months the Governments of the Arab structive step in sight is to give the refugees an States where the Palestine Arabs sought refute opportunity to work where they now are. provided relief as best they could. Nor have their efforts ceasedsince the United Nations relief ro- PROSPECTS FOR EMPLOYMENT gramme started. Of the $32 million provide B b contributions to the United Nations for relie r , Direct consultations between the Economic $6 million is credited to the Arab States. Survey Mission and Near Eastern Governments An addition to the population, similar to that established that Governments were ready to sup- which has occurred in the Near East as a result port the principle of trying to find gainful employ- of the influx of refugees, would imply, if occurrin ment for the refugees m place of relief. The Gov- to the United Kingdom, an addition of 3,500,008 ernments of Iraq and Israel had already begun to people, if occurring to the United States of +qer- develo this idea in practice. The Government of lea about 10 million, if to France nearly 3 mllhon. Syria Ead recently passed a decree granting refu- The refugees’ dilemma. Why do not the refu- gees equal rights with Syrians to be employed in gees return to their homes and solve their own that country. The Government of Jordan already problem? That is what the great majority of them had plans under active consideration with the want to do. They believe, as a matter of right and same objects in view and has already offered to ‘ustice, they should be permitted to return to their grant a Jordan passport to any Palestine refugee ll omks, their farms and villages, and the coastal applyin for one. cities of Haifa and Jaffa whence many of them All 8 overnments gave their assent to a visit by came. the technical experts attached to the Mission for They are encouraged to believe this remedy the purpose of examining, in collaboration with open to them because the General Assembly of the experts of the Governments concerned, exist- the United Nations said so in its resolution of ing or additional prcjects of a local nature which 11 December 1948. For urely psychological rea- mrght af?ord a further opportunity for employing sons, easily understandab Pe, the refugees set great refugee labour. store by the assurance contained in this resolution. The results of the general examination by the Most men in their position, given a chvice between experts a-ached to the Mission of a number of working in a foretp land or returmng to their ssible projects in the different countries visited homes and to conditions understood and experi- $y them are summarized as appendix C to this enced from youth, would strain towards their report. homes, even were they told that, in their absence, Conditions differ in each country. Egypt offers conditions had so changed that they would never no opportunity for the employment of refu ee be happy there again, They would be reluctant labour, save in the Gaza strip. Ample labour pior to believe it. They would suspect a trap to hold the great works already planned by the Egyptian 20 Final &port-United Nntions Economio Harvey Mirrion for the Middle East--Part I tiovernmcnt for the develo ment of the land of The Governments of Iraq and Israel are both Egypt is immediately availa Kle from the ranks of enga ed in finding work for the relatively small Egy tian unemployed. On the other hand, certain num & r of refugees within their territories, and wor Bs might usefully be undertaken in the Gaza advised the Mission that the do not immediately strip. Unfortunate1 , this is the most congested need external assistance to t i is end, area. Possible relic r works in this small area can In Syria and Lebanon works projects are avail- employ only a very small proportion of the refu- able, if means can be found to finance them, which gees accumulated there, but soil and water con- would contribute materially to the solution of the servation projects, important in their effects and immediate problem of finding gainful employment value, can provide useful work for some. The in lieu of relief. Mission reco nites that the problem of the refu- The execution of such works projects, leading gees in the E aza area will not be solved, save b to improvements in the productive capacity of the rmitting the excess to farm their adjacent lan ds areas in which they are undertaken, is bound to p”rom which they are now cut off by tni armistice have a dynamic and cumulatively beneficial effect lines, or to move to other regions where more on the whole situation. It will gain time durin work opportunities may be open to them. which it may be hoped substanttal progress wi Ii In Jordan, relief works are envisaged which be made,towards a settlement of the outs)anding would soon absorb more than the breadwinners l$$cal issues by the agencies entrusted with that among the 70,000 refu ees actually in ordan ter- ritory. The Economic 8 urvey Mission has learned Many of the small works projects envisaged in with satisfaction that His Ma’eety’a Government the public works programme for the emplo ment in the United Kin dom has aI ready made to the of refugees, as noted in appendix C, can & the Government of the 5-I ashemite Kingdom of Jordan prelude to larger developments. For the imme- an interest-free loan of one million ounds sterling. diate future, the refugees are viewed as a reser- This loan is to be expended by tR e Jordan Gov- voir of idle manpower-of greater service to them- ernment on development projects considered by selves and to the lands giving them asylum, if the Jordan G vemment to be of value to their given work. The administration of the relief and country and to the benefit of Arab refugees from public works programme for refugees, brought Palestine. The Economic Survey Mission ex- fogether under the initiative of one agency, can, presses the hope that the two Governments con- m the considered judgment of the Economic Sur- cerned will find it possible to begin work at an vey Mission, become a contributin factor for early date. peace and economic stability in the R ear East.

APPENDICES

(A) Cost of Proppanune The estimated cost of the total programme of and non-refugees. If it were decided to continue direct relief and work schemes for refugees con- distributing rations to these ineligibles, the addi- sidered eligible for aid from the United Nations, tional cost in 1950 would be $7.2 million. as recommended by the Economic Survey Mis- It is assumed that the wages id to refugees sion, for the eighteen months from January 1950, employed on work schemes, whet r er in cash or in is $48 million. kind, will be the locally prevailing rate, and that This estimate includes $29 million to finance this wage will enable the worker to provide for works projects for the el hteen months, including three dependents, for whom no separate relief wages, administration an % 55 per cent of the cost will be needed. of materials, tools and equipment. The remainin It is assumed that 25 per cent of refugees are 45 per cent of the cost of materials, tools an% able-bodied men and that the numbers available eqtu ment ($6 million) it is assumed will be made for work are therefore: in Jordan and Arab avai P,ble by the local Governments. Palestine, 78,ooO; in the Gaza strip, 48,000 ; in The cost of direct relief for the calendar ear Syria, 15,000 ; and in Lebanon, 22,000. 1950 (see recommendation 2) is estimate i at With regard to the amount of emplo ment $19 million. This includes the cost of food, which can be rovided, the Economic 3 clothing, tents, necessary health measures, admin- Mission is satis% ed that work can be founirvg istration and a small reserve. schemes of the types described in a dix C: for substantial1 all the able-bodied repp” ugees in Jor- dan, Arab 6 alestine and S ria. In Gaza it a ars that the schemes described in appendix C exT aust the possibilities. In Lebanon, employment of refu- 21 -____ _.. __,_-_--_ .,__ ,. ._.-...-....----I .- ..----_-. Appendix IA --- - . _..___--e gccs on schemes of an agricultural nature is at $17.6 million, entirely due to work schemes since present excluded. It is believed, however, that a direct relief is assumed to cease at the beginning substantial amount of em loyment can be found of the year. on engineering works. F he actual amount of Table I shows estimates of the numbers of refu- employment (at the peak) assumed for the pur- gees on work relief and direct relief, and table II poses of estimating the cost is: in Jordan and shows estimates of the cost of work relief and Arab Palestine, 75,000; in the Gaza strip, 2,300 ; direct relief, for each of the six quarters of the in Syria, 15,000 ; and in Lebanon, 8,000. period from 1 January 1950 to 30 June 1951. No account is taken in the estimates of refugees who may find gainful employment outside the Table I. Estimated numbers of refugees on work works programme as a secondary effect of expen- schemes and direct relief in Arab countries ditures on that pro amme and who would, there- (In thousands) fore, become ineligl %te for relief. In addition, it is to be assumed that some may obtain employment Nwmbtr for L’rjwdtnrs of whom worh w0rkcr.r not generated by the works programmes, as many con bc rcmorrd in the total figure of 726,000 have already done. providrd jrom relief The estimates do not attempt to take account of _ ___ .__..__- ._ .-_ .~__.. - this ossibility. 1950 (quarters) 0 P the total cust of $48 million, $5.5 million ...... I.... 652 2d . . . . . * . . . . , I * . w 39 falls in the first quarter of 1950. Thjs is all for , I . . . * I . . * . . * . di ;%g dirlir;;drellef because work schemes wrll not have z! ..I...... lE 1951 (quarters) During the remainder of 1950, it is estimated ..a... 264 300’ that the number of people engaged on work :“,b ...... 1: 300 252’ schemes will increase steadily until it reaches 65,000 at the end of the year. The total cost for ‘If the recommendationsof the Economic Survey Mis- the period is estimated at about $25 million, made sion are ado ted, direct relief from United Nations funds up of a diminishin expenditure on direct relief will end at t Re end of 1950. The works togmmmewould and a rising expen d iture on work schemes. continue and such direct relief as may & required would In the .first half of 1951, the cost is estimated at becomethe responsibilityof the local Governments.

Table II. Estimated cost of programme (In millions of dollars)

1950 295f Qwatttrt Q*&tVt Bttimottd coaI I II III IO I II Total 1. Direct relief ...... 5.5 5.1 4.5 3.9 - - 19.0 2. Work schemes: Labour and administration ...... **...... *.*. Materials, tools and equipment...... , ...... 2 28I:8 2. f:f 2:, 2:-f1 Total cost to United Nations and local Govern- ...... *...... 1.5 4.6 7.4 10.0 11.2 34.7 (dj E:F45 per cent of item 2 (6), assumedto be madeavadable b local Governments...... (e) Cost to United &ations ...... 0.31.2 0.83.8 i:: ii:: ES 2% 3. Direct relief and work schemes: (a) If;;:: cost to United Nations and local Govern- ...... *...... ,...... ,.. 5.5 6.6 9.1 11.3 10.0 11.2 53.7 (b) Less item 2 (d), assumed cost to local Govern- ments . . ..*...... *...... *...... ,. 0.3 0.8 1.3 1.7 1.9 6.0 (c) Cost to United Nations.. , ...... 5.5 6.3 8.3 10.0 8.3 9.3 47.7 22 Final Report-United Nationa Econoxu Survey Miwion for the Middle East-Pmt I

(B) Anmlyda of Refugeem and Relief RwipIentr

A. NUMBER OF Hmwm.s B. ESTIMATE OF NUMBER OF ARAB REFUGEES The number of refugees, in the sense of persons FROM ISRAELI-HELD TERRITORY who have fled from Israel and are unable to return, (Prepared on the basis of population estimates by is estimated, from the most up-to-date data avail- villages and religion as of 31 December 1946)

Estimate of total non-Jewish population of Palestine on 31 December 1947 Settled non-Jewish population on 31 Decem- her 1946 ..“...,“““““...““““““’ 1,?3 Nomadic population , ...... , . . . . , . , . . . c To this fi ure of 726,000 should be added some ?;$I non-Jewish population on 31 December 1557 25,000 peopf e who still live at home, but are with- ...... I... , out means because the are separated from their Plus natural increase in settled population lands by the armistice rines, the so-called “border- from 31 December 1946 to 31 December 1947 31’ line cases”. Therefore, the refugees considered by the Mission to be within its terms of reference Total non-Jewish population estimated as of - number 75 1,000. 31 December 1947...... , . . . . . 1,386 Not all these are in need. It is estimated that Estimate of total non-Jewish population who - 20,000 are in employment and capable of support- could have fled Israel assuming that births since 31 December 194s were offset by in- ing another 60,000, In addition, there are some creased mortality) 19,000 refugees who are resumed not to be receiv- Settled non-Jewish populution as of 31 De- in UNRPR rations Pof whom 15,000 are of cember 1946 within boundariesof territory in !i epndent means and 4,000 ate supported b the held by Israel DefenceArmy on 1 Ma ;9:$ 736’ Iraq1 Government). There are, therefore, 65i ,000 Plus natural increase31 December1 94i enuine refugees in need (including the border- December 1947 .,..,.....,...... ,... 18’ f;me cases . Total as of 31 December1947...... , . . . - The U k RPR ration stren h is now 940,000, Plus estimate of nomads...... :& but rations are in fact issuef by the agencies to Total non-Jewish population within 1 May 1,019,OOOrecipients. Rations are allocated in bulk 1949 boundaries “““.~““““““““” to the agencies, who stretch them to cover desti- Less: non-Jewishpopulation still in Israel.. . % tute and other needv Dersons as well as refugees, These figures are’s& out below: Total refugeesfrom Israeli-held territory.. . . -z

1. Refugees who fled Israel and are in need., . , 627,000 ‘Obtained by subtractin 7,600for non-Jewssaid to have 2. Plus borderline cases...... 25,ooo been overstated in officra4 estimate of 1,238,000,through under-registration of deaths. Refugees in need 652,000 bE;stimateof total Bedoninpo ulation of Palestinebased 3. Plus refugees in gainful employment and not on the partial enumerationwhit R took place in May 1946. in need ...... Figure taken from “Note on BedouinPopulation of Pales- 9%ooo tine” presentedby the representativeof the United King- Total refugee8 dom. ... 751,000 ‘Computed at 25 per 1,000 population, a conservative 4. Minus refugees presumed not to be receiving estimate of the natural increase rate basedon observed rations ...... I...... 19,ooo average of previous years. dObtainedby subtracting 52,000nomads from total nor.- Refugees receiving rations in Arab countries 732,000 Jewish populationas of 31 December1946 in villages with- 5. Plus non-refugees in Arab countries receiv- in boundariesheld by Israel Defence Army on 1 May ing rations ...... 160,000 1949. List of villa es so held is given in appendix B of document Com.Tec1 ./7/Add.l, and ulations were ob- Total ration strength in Arab countries 892,000 tained from mao of villages. Sub-P* lstrrct totals are not 6. Plus Arab and Jewish refugees in Israel.. . . woo strictly comparablewith those given in “Sup$ement to Survev” becauselatter are “revised de facto” estimates,but Total UNRPR ration strength 940,ooo total differs by only a fraction. 7. Plus ration receivers in excess of UNRPR *Of 127,000estimated Bedouins (hosedon partial enu- ration strength ..*.,..**..*...... *...... 79,000 22,000were said -- Total ration receivers 1,019,ooo State under UNSC P (United Nations Special Cam- mittee on Palestine) majority plan, leavin 105,000in Jewish State. Since boundariesof 1 May 1#4 9 include a The number used by the Mission in estimating larger area than UNSCOP, it is estimatedthat 105,000 the cost of the recommended programme is Arabs may be included. Loftus estimates95,000 remaining 652,000, the estimated number of refugees in need, within boundaries. If this fi ure is used, total “refu- including the borderline cases. gees” becomes 716,000instea If of 726,000. ‘Assuming no natural increasesince 31 December1947, The figure of 751,000 desi ,mated as “total tefu- this 31 December 1946 estimate would be the probable gees” in the above table is CrJmposed of 726,000 number of non-Jewswho could have fled. refugees plus 25,000 borderline cases. IIn the Stafitic~l Bulletin of hael, vol. 1, No. 2, for Appendix IA 23

August 1949, a totai of 108,000 non-Jews in Israel is by the Technical Committee,3 July 1949. This figurt is iven, based on the results of the census of 8 November lven aho in the Jewish Agency’s Uigesl of Prw and f 948 and an additional registration durln January 1949 8 vettk, No. 49. in the areas of Nazareth, Acre, BeersheBb a, and in the town of Majdal. This estimate is said not to hlclude Arabs in remaining areasof the Negeb,the Arab villager C. GEOGRAPHICAL DISTRIBUTION OF REFUGEES la the Sharon, or non-Jews accrued since registration. AND OF RELIEF RECIPIENTS It is assumedhere, however, that Arabs in these areas tended to flee, and that natural increase has been offset Estimates are available of the geographical dis- by increasedmortality. An allowanceof 25,000 is made for Arabs said to have entered Israel since the end of tribution of the 1,019,OOOrelief recipients and of 1948 the figure having been taken from the answer made the 726,000 refugees. They are given in the table by jewish authorities as to the questionnairecirculated below.

Alirprd r&f rrripirnk Pwaom.~uty~. kd 30 SIptrmba 1949

Arm Numbrr Swcr Nwmbn ‘ltG4

~&Palcstine ...... 431,500 280,000 ...... 7,000 ...... 210;987 190,000 Z”P” ...... or an ...... loi$% 7%z I.”ebanon ...... 1g#g 100:ooo Syria ...... # 75,000 TOTAL 971,243 In Israel ...... Q-w@ (31,000Arabs, 17,000Jews) - GRAND Tmru. 1,019,243 ‘Basedon the probablepercentage of duplicateregistrations, destitute personsand other non-repatriablerelief recipientsin th;tE:::nt areas.

D. CHARACTERISTICS OF THE RECIPIENTS OF per cent. A conservative estimate would be 25 per RELIEF cent. Females employable under certain circum- stancesmight constitute an additional 10 per cent.* 1. Family units For corn rison it can be noted that the total The average size of famil among ill recipients settled Ara r labour force in Palestine was given of relief, including non-re Yugees, is almost six as 300,000, or 25 r cent of the total non-Jewish persons. This would result in approximately population in 194r .8 The census of 1931 reported 170,000 family units,’ or 121,000 famil units of that the ratio of earners to dependants was about genuine refugees but only 109,000 fami r y units of 1 to 3 in the settled Arab po ulation. refugees in need of relief. Of the employable males, ! 5 per cent is esti- mated to be able to undertake heavy labour. This 2. Employables estimate, derived from sample surveys conducted Although no accurate fi res are available for in camps, is based on the assumption that suffi- the proportion of employaI? le males amon those cient calories will be p,.ovided to permit heavy eligible for relief, estimates range from 1f to 45 labour. and rdugee leaders,include a ctrtain number of older ‘This and subsequentestimates, except where otherwise children and adults over SO.as well as somecoersons listed indicated,are basedupon figures provided by UNRPR and as dependants. the three operating agenctesand checked by field visits ‘Under-estimated by omission af part-time fini’; to campsand other refugee concentrations. wozkerr. National Income of Palestime,1944 . . ‘These estimates,.based on samplestaken. in various Loftus, Government statistician. No. 5 of 1946.x0 vem- campsand upon opinionsgiven by the operating agencies ment Printer, Palestine. Final Report-United Nations Economic Survey Misrion for the Middle East-Part I 24 -

3. Occupation The low pro rtion of a iculturalists in this Very little information is available as to the sample may wep” 1 be unusuaY in that the refugee occupational capacities of the relief recipients. A families came from villages near Lydda. census of population which included an mvestiga- It may be said that the majority of the refugees tion of occupation was conducted in 1931, but are unskilled workers, but that there exist a ntun- changes have taken place in the economy of Pales- ber of skilled and semi-skilled workmenP the tine since that time, which make it difficult to probable distribution of whom, by detailed occu a- estimate the present situation, A survey of the tions, can be roughly estimated from the first tat le occupations of skilled tradesmen conducted in given above. It may also be noted that, according 1943’ among 14,631 non-Jewish workers showed to P. J. Loftus, the pattern of employment among that 62 per cent of the skilled and semi-skilled the Arab population changes according to the were distributed as follows : needs of the time and season, for example, much of the unskilled labour is sup lied for construc- PtT WJ tion work by the Fellaheen in tK e off season. Mechanics and fitters .*.*...... ,.,...... 17 Carpenters ..I...... ,,..,.....,..... 13 Shoemakers ...... 8 4. Rural-urban distribution 7 Weavers . . ..**...... *...... *..,. Blacksmiths ,...... ,.**.**,...... ,,,.... t T$lors *...... *.*...... *..I..*..*.***.,**,,.. Pn ctrt si;nsn;hs ,....,...... ,... : Rural settled Arab population (1944)...... , 64 ...... *..*...... 3 UrbansettledArabpopulation...... , 36 z A survey conducted in June 1949 among 22,692 refugees in the Gaza area, which is well known to 5. Age groups shelter mainly a iculturalists, gave the following Ptr ctnt percentage distri r ution by occupational categories : . . ...*..*..*..*.**...**...... *.*.. Ptv ctnt xr ,...... *,.,.,,.*...*,..**...... ’ 4; 16-50 ,..,...... ,...... I...... a*.., Professional and proprietary...... , , . . . 1: Over 50 *.*....,.,*,...... *...*.*...... * :; Clerical and supervisory...... , . . . . Skilled and semt-skilled ...... ~...... I. Unskilled ...... *...... *.....*... 3 6. Number of dependant ii Another survey, taken by the League of Red PIT ctrt Cross Societies in the Zerqa cam in May 1949, Children (O-15 ..**.,...... *..*.....*...... 50 analysed the occu ations of 1,ooi families. The A ed (over 50 1 ...... **....a..*...*...... results were as fol Pows: Ilf and infirm ...... *...... ‘S Nursing and pregnant women...... 12

Government service and trade ...... *..*...... *...... * ; 7. Religion ~~y~;~re .,*...,.. e...... ,* ...... c. Craftsmen ...... *.**...... **.*...... Street vendors **.*....*.....*..*.....*...... !i PIT ctrt Food salesmen .*,...... *..*...... I...... ii Moslem ...... Motor trade Christian .*.,....***.....*....*..*.*....*....*. 9: Public services .,...*..*...... *..*.....*..... 10 Jewish .,....,,,.,...... 2 Other ,...... ,,.*...***.,...... *...*..,. 5 iii ‘Nationul Income of Pdestine, 1944, by P. J. Loftus, Government Statistician. No. 5 of 1946. Government ‘Survey of Skilled Tradeemcn, 1943, compiled tile Printer, Palestine. Department of Statistics on behalf of the Control ? er or ‘Census of Palestine 1931 gives 65, r cent pral, 35 vanpower No. S.2 of 1945. Government Printer, Pales- per cent urban for settled non-Jewis population, and tine. 68wpe; cen\lgri and 32 per cent urban for total non- 8Suruey of Skilled Trademen, 1943, corn iled by the Department of Statistics on behalf of the E ontroller of *A num“g, r of these dependants are employable, includ- Manpower No. S.2 of 1945. Government Printer, Pales- in some children under 15, and persons over 50. tine. fu NRPR report, 30 September 1949. -. Appendix IA______- .-- _ _~ _ . 25_

(C) Illu#rativa Outline of Worka Projects This is a brief summary omitting calculations afforestation. But the survey has been ‘oint an 6technical detail contained in two extensive throughout, and the two types of projects h ave reports, one by Sir Herbert Stewart and asso- been Inter-related. ciates, the other by William L. Voorduin and associates. The estimates of work project costs 3. PROCEDURE and employment loads in appendix A are based upon the data in these reports. The complete The procedure adopted has been that the groups reports will be made available with the final report of en meering and agricultural consultants first of the Economic Survey Mission,) visit J the capitals of the countries concerned to discuss with senior and technical local officials the The first task of the agricultural and engineer- possible work projects in which these countries in consultants to the Mission has been to examine were interested, and to make further suggestions. SCa emes which can provide early employment for After genera1 tours of the principal areas ron- the maximum number of refugees. This appendix cerned further discussions were held with these embodies the principal conclusions of the consult- officials in order to reach agreement on individual ants resulting from their examination, or typical projects, obtain data, and estimate the cost and absorptive capacity of schemes.Co-opera- l.PtJRPOSE tion with the constituted authorities has therefore The purpose of the examination made by the been continuous, and in particular existing plans consultants has been, in the limited time available and needs have been taken into account. and in harmony with the constituted Government authorities, to seek out useful works pro’ects 4. CRITERIA OF SELECTION which might relieve the present situation oi’ the Arab refugees. The aim was to select typical The main object has always been kept in mind, projects, to examine them in accordance with the tis., the provision of short-term engmeering or criteria set out below, make an estimate of the agricultural projects which would provide oppor- funds required and ascertain approximate1 the tunities for refugee employment and contribute to amount and duration of employs lent whit K can the welfare of the different countries, without con- reasonably be expected. The projects were thus flictin with any long-term rejects formed by approached with the object of ascertaining those indivi 5 ual States as the basis Por a more complete categories of schemeswhich could be utilized. The economic development. Special criteria applied in references to specific projects made in this present selectin tYpc projects were: appendix do not therefore indicate that these are (4 fh e Presence of a hi h labour factor in the the only ones either examined or contemplated, cost of the scheme, and tt e probability of the but that they exemplify the type of project which absorption in the work of a large number of per- should be developed. sons over the whole period under review; b) The possibility of earl commencement ; 2. SCOPE c) The susceptibility of t li e projects to a uni- fi 1 development, i.e., the likelihood of constitut- The survey made by the consultants has been ing satellite and contributory projecta round a restricted in scope in two ways: nuclear development ; (a) Since the rime object is the finding of (d) The place which the short-term works temporary work Por Palestinian Arab rdu ees, projects can take in leading to a more complete the examination has not covered the whole of the economic development. Near East but has been limited to those countries or areas in which substantial numbers at present ~GENERAL CONSIDERATIONS find shelter, These territories are Jordan, Arab Palestine, the Gaza Strip, Lebanon and Syria. The principal industry of the Near Eastern (b) Since the matter is extremely urgent and countries is agriculture, which is at&&d and cannot await long-term decisions, attention has restricted by certain major factors in the two been concentrated on short-term projects. eat basic natural resourcer+soil and water. There has hen a natural division of the task F he former, except in the saline areas, is, in gen- of examination : the engineering consultants have 1 eral, in the Near Eastern countries, highly pro- considered projects which will employ labour use- ductive, and the limiting factor is therefore fully on road construction, housing schemes,water frequently water supply. Rainfall in the Near conservation structures and similar public works. East is normally sparse and is unevenly distrib- While the agricultural consultants have examined uted ; but other morsture sources may be found by the possibility of employing refugee labour on the better utilization of surface waters or the such phases of development as terracing and exploitation of those underground. It is clear that 26 Final Report--United Nations Economio 8urve~ Ml&on for the Middle Eart-Part I no country in the Near East has sufficiently taken, racing with at least a single row of stones, and in in the past (except perhaps in remote antiquity), really steep country stone walls will be required ; nor is taking at present, adequate measures fcr such terracing is expensive but well justified conserving either of its rest basic reaourcee. because of the greater reductive capacity of the Consequently the soil is %eing eroded ; water, treated land. As the ef9 ects of this work will last which is the life-blood of agriculture, is wasted; for many years it fits readily into any long-term land is not being used to the best advantage, nor economic develo ment scheme. Moreover, terrac- for the urpose to which it is best suited, and the ing has the adB itional advantage ihat ,it can be financia Preturns which are being obtained from it commenced early. are insufficient. It is evident that two directions in which refu- gee labocr can be employed in a manner which (6) Aflorestotion will also give very material aid to the economy of Ver little practical action has been taken in the the countries concerned are: conservat:on of the Near H astern countries to extend the area under soil and the natural moisture in it, and the better forest, although tbe importance of afforestation is utilization of existing water resources. Schemes now gradually becoming recognized. Afforesta- of this type have the peat advantage that labour tion can be carried out either by direct sowing of forms an extremely hl h percentage of the total seeds (which results in large areas being treated cost involved. Such SCf emes have the support of in a short time), or by the planting of seedlings the Governments concerned. from a nursery. This is a comparatively slow It is considered, therefore, that the four major process since seedlings may require two years to ways in which temporary refugee labour can be develop, and nursery reduction is thus a rinci- employed in quantity and at the same time ro- pal limitin factor in t Re rate of this type oP afEor- mote the economic development of the Near rp.‘.;st- estation. ‘: t is considered that schemes should ern count-+ by striking at the root of their include the “Gradoni” system of tree-planting, grea$;~roblems~ are : which is simple and effective, and offers good e terracing of sloping land so as to retain scope for the employment of labour. This, like the natural rainfall, protect the soil from erosion, seed sowing, has the advantage that it can be and allow the growing of better crops or the begun almost at once. Afforestation must be lanting of fruit trees, more particularly the undertaken with the advice and guidance of forest- Patter ; ry s ecialists, and the new plantations must be (b) The tiorcstation of land not suited to * ’ cf, closed to grazing, and m particular be pro- other purposes, partly as an erosion control meas- %e’ B against the inroads of man for fuel and ure rnd partly to contribute additional fuel and goats for fodder. timber supplies ; (c) The development of good roads to open up the area eo as to allow materials for the construc- (c) Roads tion of irrigation and similar works to pass in, Adequate highwa communications are unques- and icultural products, particularly fruits and tionably necessary r or full economic development vegeta“$ les, to pass out; in any country, the more so in an agricultural (d) The construction of irrigation projects and country, since product. must move free1 to the water conservation works on a moderate scale. markets. Road making is clearly a suita ITle work Certain other rejects trot falling into these four project, for the labour forms a hi h element in its categcries have 1 een specially selected, either be- total cost. It can be begun qui?k f and the mate- cause they are well advanced and it would be rials are generally present in aiy 1 too abundant uneconomical not to complete them or for some quantities on the spot. special economic importance and labour absorp- However, highways by themselves do not nec- tlve power. essarily biing about an improvement in an econ- omy. There must first be a sound base of agricul- 6. GENERAL DISCUSSION OF TYPES OF PROJECT tural development or some other economic reason before highways can be of much value. In some (a) Termcifig of the areas traversed by the highways pro osed Terracing is not an innovation in Near &stern in plans drawn up by countries visited, suerl de- countries; mdeed, in many places it is already velopment has not yet reached the sqe which practised. The wclrk to be done, therefore, is of will make highway construction economical. two types-the reconstruction of existing terraces The road projects selected are, therefore, of two in a state of disrepair, and the construction of types : terraces on new ground, It is considered that in (i) Highways which are missing or defective some cases,even on new land, relatively inexpen- in the present system and which do have an eco- sive terracing will be sufficient, Many areas to be nomic ustification since lack of them strangles the planted with fruit trees will, however, require ter- flow 0/ normal traffic; Appendix IA 27 -

(ii) New roads required for the unified devel- with horticultural crops it is high1 productive, opments discussed in the next paragraph, Agriculturally, the present Are ii area is prob- ably not the best land in Palestine. It consists of a collection of hills, some eroded down to rock skeleton and others carrying shallow atches of Schemesconsidered for the utilization of water soil which, somewhat surprismgly, pr J uce cereal resources fall in general into two types, of which crops. The rainfall is in the main ade uate in the the second is based on a special concept, regarded hills, though in Jericho in the Jordan ‘t alley it ia as fundamental, only six inches and is re laced E y artificial lrriga- The first type of project consists in the con- tion. The region is reB ominancly fruit-growing. struction, at various points, of irrigation and water Approximately ha1P the refu ees at present fmd supply works already planned or commenced. shelter in Jordan and Arab Pa Bestine, and in addi- Projects of this nature include ca-tals and drain- tion the refu ee population in the latter so closely age works in the Lebanon and in Syria. Such approaches t %e number of local inhabitants that it rejects in the main involve construction works, may be necessar for some to find work east of the eut are also for the most art already planned so Jordan river. i t i: ‘ecessary, therefore, to rec- that they can be embarke a on ithout undue de- ommend extensive tvdrk projects in both areas. lay. In many cases incomp ccc works already T’ko;;pes of such projects recommended are as exist. The conce tion of the sect id type of project stems from t Ke view that such Lngmeerin devel- opments as highway construction or dam %uilding (i) Unified deuelopments cannot be economically justified in isolation. High- A specific area selected for such development is, ways must bt built simultaneously with improve. as stated above, the catchment basin of the Wadi ments in agriculture, and agriculture cannot be Zerqa, which is located north of Amman. It is improved without the simultaneous conservation recommended that this area be developed com- and better distribution of water resources. It is, pletely as a unit, that is to say, that action be therefore, proposed for the short-term programme, taken to build all necessar roads in the area, to to develo;l certain comparatively small areas inten- provide water for perennia r irrigation, to build the sively instead of proceeding with extensive pro- necessary small check dams on the principal gul- grammes of highway development and the like. A lies to minimize siltation, and to do all necessary typical area considered suitable for such develop- afforestation work, etc. A centrallj cated village ment is the catchment basin of the Wadi Zerqa, should also be made a part of the scheme in order the largest of the wadis east of the Jordan River. to provide adequate housing facilities for the tem- It is proposed that this area should at one and the porary refugee construction workers. At least four same time be provided with roads, dam construe-. roads are recommended for improvement under tions, terracing, afforestation, etc. this Fcheme; and surveys should be undertaken at OFF. And completed within three months for the (e) 0th~ engineering schemes construction of a dam at a suitable site which exists in the deep valley of the river. It is con- Other engineering schemes selected include the sidered that this dam can be of such a type as to improvement of certain airports. These have the rovide for the maximum employment of hand advanta e that plans can be prepared in a short Pabour, and that it can be raised as required. More time and that the work has a significant effect on intensive geological surveys can proceed rallel the general economy of the Near East and may be to construction, which should be well ar vanced of outstandin long-term importance. Work on a before the high flow begins in December 1950. harbour has af so been recommended for somewhat There is a suitable storage area in the wider part similar reasons. of the wadi above the darn site. At the same time a headworks structure, alread envisaged by the 7. TYPES OF PROJECTS RECOMMENDED, BY Jordan Government as part or a scheme for com- ~OIJNTRIES pleting headworks on several wadis-a scheme which it is now recommended should he revised- (a) Jnv&an and Arab Palestine will be required where the wadi enters the Jordan The economy of Jordan is almost entirely agri- Plain, Parallel to this engineering development, cultural, and crop production is dependent on win- priority should be given to the terracing and ter rainfall, which rarely exceeds eighteen inches tiorestation of the area. even in the best areas. An important physical The ex rience gained in planning this first uni- feature of the country is the series of deep wadis fie~l deve p”opment will be invaluable in devel in running into the valley floor of the Jordan, which several other wadis both in Jordan and “Al%ra is far below sea level. The rain-fed areas produce Palestine. The limiting factor, however, is the’ cereals, but where the land is terraced and planted capacity of the Jordan and Arab Palestine Public 28 Final Report-United Nationa Economia Sarve.~ Miuion for the Middle Eut-Put I

Works Departments to absorb these heavy addi- (6) tsbanon tional work loads, and to some extent the rate of Lebanon is a mountainous country in which rogress will de nd on the expansion which can only a quarter of the land is cultivable, and most Ii e achieved by tf ese Departments. of this is already utilized. Taking into account the high existing utilization of the cultivable area, the (ii) Highway development importarne of agriculture to the country and the possibility of further fruit- rowin it will be seen Considerable highwa development can be un- that it is vital to protect t% e so1*f against erosion dertaken in ordan an d Arab Palestine, provided and that an important means of increasing agri- the Public lv orks Departments can handle the cultural productivity is by better utilization of the heavily increased load. water resources (which at the same time may create opportunities for industrial develo ment by (iii) Other irrigation projects providing low-cost hydro-electric power P . Some consideration is now being given to re-afforesta- A scheme is now being investigated west of the tion and several irrigation schemes are either com- Jordan for temporary refugee settlement on land menced or planned, Irrigated from water obtained by pumping. It is It was understood that the Government did not considered that the irri tion water for this tract wish to concentrate on employment of refugees of land can better be o‘f;” tained by conserving the on projects closely identihed with the land ; and surplus waters of the Wadi Qilt, and that this may, for this reason alone, and not because there is no therefore, become a project similar to that de- outstanding need for projects of afforestation, scribed in (i) above. have the consultants concentrated on engineering works projects. The following schemes for the em loyment of (iv) Airport improvement refugee labour are therefore visualize f; ; these are This work is also considered as a short-term all of the irrigation/water su pl type. Harbour project and it is believed that improvements to and railway improvements, w I3tc were suggested Amman Airport, to Class D international stand- by Government officials, have, for the purpose of ard, would not far anticipate the need. this report, been considered as long-term projects. (i) Irrigation and drainage in ths South Brqw (v) Afomtation Here detailed ptans are almost completed and There are 2 million nursery seedlings availab’e construction problems are simple ; there is good in Jordan for afforestation pur oses, and it is land well situated for irrigation, and this project proposed that this should proc eJ , but, at the out- should be made an early priority. set, he concentrated in the catchment area of the Zerqa basin. At the same time there should be an (ii) Akkar Pluir, iti@ion extension of the present area under forests in Arab Palestine and restoration of several of the existin It is planned that this area in North West forest reserves. A scheme has been drawn up anf Lebanon will utilize water from each of the four is proposed covering fourteen such areas. rivers which cross it. This can also he made an early priority, for construction work is simple and consists mainly of concrete lined canals. (vi) Tewucing It is proposed that terracing in ordan should (iii) Completion of Ty~/Suida irrigation projsct commence as part of the unifi 4x! development Most of the major works are already completed scheme. In Arab Palestine there are already some in this scheme for the irrigation of the stri of good practical examples of terracing. The area i8 land ad’acent to the sea coast in the Tyr/ spaida essentrally a fruit-growing one. It is proposed, area. T/l e main source of water supply is the Nahr therefore, that extensive terracing should be car- el Litani. Mainly secondary canals remain to be ried out in Arab Palestine, continuing the licy built. of the former government, a work which wil p”pro- vide am le scope for the useful employment of (iv) ChekkalTripoli project refugee rabout. Such work can make a valuable contribution in the preparat’o” of land for new This is a more costly project involving tunnel orchards and in the unprovement of land already construction to utilize an underground source of under fruit. The only hmiting factor is the maxr- water supply for irrigation of the coast south of mum labour force which can be controlled and Tripoli and for eventual potable water for the supervised, which is said to be about 16,ooO la- Tripoli area. The project is rrtly. red and bourers a day. is recommendell to be procee ed wrt . Appendix IA-- __.-__ - .-.,...I---- -.._...-...._ .._-... - ,.

(v) Minor water supply projects tnent which will greatly assist the linking of sev- eral important towns. In additioi, labour might be employed on a develo ment of water supply systems for numer- (iv) Irrigation and drainago ous vi Plages in Lebanon. The consultants consider that the reclamation of the Madkh swamp, which is partly completed, (c) Syria should be proceeded with as a works project for Syria, the largest of the countries under con- the employment of refugee labour. sideration, is divided physically into a number of rainflrll and agricultural zones. In, the mountain (v) General public works regions on the shores of the Medtterranean the A number of public works have been examined ramfall is high, and there is a further zone of and it is considered that a considerable portion of cultivable rain-fed land beginning at Jebel Druze refugee labour can be employed on the improve- and the Nauran, becoming very narrow or disap- ment of the Mezze Airport, the constructton of pearing entirely east of the Anti-Lebanon, and Latakia harbour (which should, however, first be reappearing as a broad band in the Aleppo area. further studied), and the works for the Aleppo Further east is a third Lone where there is no rain- water supply. fall and which is suitable for grazing only, To the north of this belt lies the Jeziteh, where the (d) Gam Ship rainfall is higher and cultivation is possible. There are many areas of hilly country with steep Of the former Gaza district of Palestine, an slo es. area of only about 50,000 acres now remains in f; earing in mind these considerations, the size Arab control in the form of a long narrow coastal strip, a few kilometres wide, extending from a of_- the~~ countrv. and the fairlv well advanced devel- little north of Gaza to the Egyptian border. With- opment-projddts of the Sy>ian Government, the in it some 200,000 refugees and the 70,000 normal consultants visualized works projects of the fol- inhabitants are,concentrated. A small proportion lowing types in Syria for the employment of of the area is irrigated by wells from which are refugees : watered certain portions of intensive cultivation ; ( i ) Terracing but the greater part of the strip consists either of sand dunes along the sea coast or of a rain-fed In some places terracin already exists but area producing cereals as a winter crop. what has been accomplished is only a fraction of It is clear that in the small area concerned what is needed. Projects are, therefore, recom- there is no possibility of finding works projects to mended for the terracing of a considerable area of employ more than a small proportion of the large land up to 85,000 hectares) which can be used number of refugees concentrated there. Two types both 1or forest pu ses and for growing fruit rejects are however considered advisable : trees, particularly o‘p” Ives and figs. of v i) Sand fixation of the dunes by the planting of trees to prevent further encroachment on the arable land. This should be a continuation of a Large areas in such regions of Syria as Mount scheme introduced by the Palestine Forest De- Hermon, the Anti-Lebanon and part of the moun- partment, which in 1947 brou ht into eil? ect a tains of the Latakia area are unsuitable for culti- ten- ear programme for fixing f ,000 hectares of vation for field or orchard crops, but would sandy dunes per ear. This project should be re- , become, in time, a source of much economic value vived, as it wil r confer an important long-term to the country if entirely planted under forest benefit on the agriculture ani people of the tract, trees. Of the tli racing programme above, 50,000 ii) Certain minor engineering works can be hectares are intended for afIorestation. This un 6 ertaken, e&r., asphalting of roads and the pos- should be done both by planting seedlin s and sible installation of drainage systems in Gasa. sowing seeds, The utilization of the piormer From the foregoing summary it will be seen method will be limited by the capacity of Syrian that useful rejects, meeting the criteria set out nurseries, and it is recommended that these be above, can L Initiated in every country. These extended; the latter, while simple as an operation, projects will absorb a very substantial portion of is unfortunately unimportant for the absorption the refugees in each area, with the exception of of labour, the Gaza strip. A summary of the numbers which can be absorbed even In the specimen schemes out- (iii ) Road construction lined above (all of which must be regarded as type Work is ready to start in Syria on a good many schemes susceptible ‘LO ex ansion or repetition) short-term projects of road construction, and the and of the estimate!1 pro /iiable cost is given in consultants have examined and selected a number appendix A. It will be remembered however, in of schemes for road construction and improve- outlining the rate at which proposed projects can 80 Final Report-United Nations Eoonomio Survey Mission for the Middle Eut-Part I

be brought into operation, that a number of other don of certain projects. It is strongly recom- factors are invo$ved. mended in this connexion that terracing and agorestation be considered as one, and in conjunc- Apart from the genezal or&isation rqufred tion with the conservation of water resources. The to supervise and carry on the whole rogramme best course will probably be, therefore, for the for the Arab refugees taken together, cR anger will Governments concerned to set up a soil conserva- be required in the organization of the aervicee of tion or land use division, either independent or the Governments, to ensure adequate local execu- under the appropriate existing Ministry.

(D) Term@ of Reference of the Economia Survey Mirrion The Conciliation Commission for Palestine, de- In collaboration with the Governments con- siring further to im lement paragr hs 10 and 11 cerneci . of General Assembf resolution 19“$ (III) of 11 (0) Explore the keasutes which can be taken December 1948, and to obtain information which by the Government8 concerned without outside will 8erve as the baeis for recommendations for financial assistance to achieve the objectives of further action by the General Assembly, Member paragraph 1 above; Statee, appropriate specialized agencies, and in- (b) On the basis of existin plans and surveys, tereated organieations, and examine roposals submitted %y the Governments Having noted the declarations of re resentatives concerne B for economic development and settle- of Israel and the Arab States wit R respect to ment project8 requiring outside assistance which re atriation, resettlement and compensation of YouId make posstble absorption of the refugees re Pugees : mto the economy of the area on a self-sustained 1. Pureuant to the authorization granted to it basis in a minimum time with a minimum expend- under para raph 12 of the foregoing resolutkxi iture ; hereby esta73 li8he8, under its auspices, an Eco- (c) Examine other economic projects which nomic Survey Mission to examine the economic can, with outside assistance, provide temporary situation in the countries affected by the recent employment for the refugee8 not employed on the hostilities, and to make recommendations to the c$elopment and settlement projects of paragraph Commission for an inte ted programme: . (a) To enable the 2-lovernments concerned to (2) Examine such other development and set- further euch measures and development pro- tlement projects requiring outside assistance mmes as are re uired to overcome economic which, though not associated directly with the !r islocations created a the hostilities ; employment and settlement of refugees, would b) To facilitate t Ke r tdation, resettlement serve to achieve the objective of paragraph 1; an6 economic and social rex bilitation of the refu- stimate the number of refugeea who can- gees and the payment of compensation pursuant, not(81!e%pported directly or indirectlyeB oB throu 5 h to the provisions of paragraph eleven of the Gen- the employment envisaged under aragra hs (a - eral Assembly’8 resolution of 11 December 1948, (d), to ether with the estimat ri during in order to reintegrate the refu ees into the eco- which f erect relief will be rquir er and the coat nomic life of the area on a sef f-sustaining basis thereof ; within a minimum period of time ; (f) Study the problem of compensation to refu- (c) To promote economic conditions conducive gees for claims for property of those who do not to the maintenance of peace and stability in the return to their homes, and for the loss of or dam- area. ye to property, with special reference to the rela- 2. Instructs the Economic Survey Mission to tmnship of such compensation to the proposed include in its recommendations an o rational plan settlement projects ; for carrying out the recommende 8” programmes (Q) Study the problem of rehabilitation of refu- together with the estimated costs and methods of gees; including matters concerning their dvil financing. etatus, health, education and social services ; 3. Authorizes the Mission, ursuant to para- aph 14 of the General AssemYl ly’s resolution of (h) Propose an organisational structure to !f 1 December 1948, to invite the assistance of achieve the objectives of paragraph 1 within a those Governments, special&d agencies and inter- United Nations framework ; to co-ordinate, super- national organizationa which may be able to facili- vise and facilitate measures for relief, resettlement, tate it8 work. economic development and related r uiryep The Conciliation Commission recommends that such as community service facilities, %a the Survey Mission approach its task along the mind the interest8 of all Governments conzz$ following lines ; 1 Septmber 1949 Appendix IB -- ..-... ..-.. 31.-_

B. Rerolution 302 (IV) adopted by the General Aeuembly at itr 273rd plenary meeting on 8 December 1949

The General Assembly, 6. Considers that, subject to the provisions of paragraph 9 (d) of the resent resolution, the Recalling its resolutions 212 (III) of 19 No- equivalent of approximate Py, $33,700,000 will be vember 1948 and 194 (III) of 11 December 1948, required for direct relief and works programmea affirming in particular the provisions of paragraph for the eriod 1 January to 31 December 1950 of 11 of the latter resolution, which tii e e uivalent of $20,200,000 is required Having examined with a preciation the first for direct re? ief and $13,50( ,000 for works pro- interim report of the Unite x Nations Economic rammes ; that the equivalent of approximately Survey Mtssion for the Middle East (A/l 106) f 21,200,OOO will be required for works pro- and the report of the Secretary-General on assist- grammes from 1 January to 30 June 1951, all ance to Palestine refugees (A/1060 and A/1060/ inclusive of administrative ex enses; and that Add. l), direct relief should be terminate 1 not later than 31 1. Expresses its appreciation to the Govem- December 1950 unless otherwise determined by ments which have generously res onded to the the General Assembly at its fifth regular session; appeal embodied in its resolution f 12 (III), and 7. Establishes the “United Nations Relief and to the ap eat of the Secretary-General, to con- Fa;;ks Agency for Palestine Refugees in the Near tribute in ii ind or in funds to the alleviation of the )P. conditions of starvation and distress amongst the ((I)’ To carr out in collaboration with local Palestine refugees ; governments t il e direct relief and works ro- 2. Expresses also its atitude to the Intema- grammes as recommended by the Economic l ur- tional Committee of the R ed Cross, to the L.eague vey Mission ; of Red Cross Societies and to the American (6) To consult with the interested Near Eaat- Friends Service Committee for the contribution em Governments concerning measures to be taken they have made to this humanitarian cause by by them preparatory to the time when interna- discharging, in the face of eat dificulties, the tional asststance for relief and works projects ia responstbihty they voluntarr Yy assumed for the no longer available ; distribution of relief sup lies and the general c8re 8. Establishes an Adviso Commission con- of the refugees ; and we Pcomes the assurance the sisting of representatives of 7 rance, Turkey, the have given the Secretary-General that they wi r1 United Kin dom of Great Britain and Northern continue their co-operation with the United Na- Ireland, and: the United States of America, with tions until the end of March 1950 on a mutually ower to add not more than three additional mem- acceptable basis; Ii ers from contributing Governments, to advise and assist the Director of the United Nations 3. Commends the United Nations International Relief and Works Agency for Palestine Refugees Children’s Emer ency Fund for the im rtant in the Near East in the execution of the pro- contribution whit ii it has made towards the Q(;nited gramme; the Director and the Advisory Commia- Nations pro ramme of assistance; and commends sion shall consult with each Near Eastern Govem- those speciaPi ized agencies which have rendered ment concerned in the selection, planning and assistance in their respective fields, in particular execution of projects ; the World Health Organization, the United Na- 9. Requests the Secreta -General to appoint tions Educational, Scientific and Cultural Organ- the Director of the Unite % Nations Relief and ization and the International Refugee Organiza- Works Agent for Palestine Refugees in the Near tion ; East in consur tation with the Governments repre- 4. Expresses its thanks to the numerous reli- sented on the Advisory Commission; gious, charitable and humanitarian organisations (a) The Director shall be the chief executive which have materially assisted in bringing relief officer of the United Nations Relief and Works to Palestine refugees ; Agency for Palestine Refugees in the Near East 5. Recognises that, without rejudice to the responsible to the General Assembly for the opera- provisions of para raph 11 of 2 eneral Assembly tion of the programme ; resolution 194 (II ! ) of 11 December 1948, con- (6) The Director shall select and appoint his tinued assistance for the relief of the Palestine stag in accordance with eneral arran emerita refugees is necessary to prevent conditions of made in agreement with t a e Secretary- E eneral, starvation and distress amon them and to further including such of the staff rules and re l&ions of conditions of peace and stat ility, and that ccm- the United Nations as the Director anfr the Secre- structive measures should be undertaken at an tary-Genera1 shall agree are applicable, and to the early date with a view to the termination of inter- extent ssible utilize the facilities and assistance national assistance for relief; of the !?ecretary-General ; a2 Final Report-United Nationr Eaonomia Survey Miuion for the Middle Em-Part I

(c) The Director shall, in consultation with the ramme subject to mutually satisfactory conditions Secretary-General and the Advisory Committee on f or repayment ; Administrative and Budgetary ,Questions, estab- 16. Authorirus the Secretary-General to con- lish financial re lations for the United Nations tinue the Special Fund established under General Relief and Wor 8”a Agency for Palestine Refugees Assembly resolution 212 (III) and to make with- in the Near East; drawals therefrom for the operation of the United (d Subject to the financial regulations eatab- Nations Relief for Palestine Refugees and, upon lished pursuant to clause (c) of the present para- the request of the Director, for the operations of graph, the Director, in consultation with the Ad- the United Nations Relief and Works Agency for visory Commission, shall apportion available funds Palestine Refugees in the Near East; between direct relief and works projects in their 17. Calls upon the Governments concerned to discretion, in the event that the estimates in para- accord to the United Nationa Relief and Works gra h 6 require revision; Agent for Palestine Refugees in the Near East hi. R sqwds the Director to convene the Ad- the prr vileges, immunities, exemptions and facil- visory Commission at the earliest practicable date ities which have been granted to the United Na- for the purpose of developin plans for the organ- tions Relief for Palestine Refugees, together with itation and administration of the programme, and all other privileges, immunities, exemptions and of adopting rules of procedure ; facilities necessary for the fulfilment of its func- 11. Con:inuss the United Nations Relief for tions ; Palestine Refugees as established under General 18. Urges the United Nations International Assembly resolution 212 (III) until 1 April 1950, Children’s Emergency Fund, the International or until such date thereafter as the transfer re- Refugee Or nization, the World Health Organ- ferred to in paragraph 12 is effected, and re uests i&ion, the f? nited Nations Educational, Scientific the Secretary-General in consultation wit R the and Cultural Organization, the Food and Agri- operating agencies to continue the endeavour to culture Organizatlon and other appropriate agen- reduce the numbers of rations by progressive cies and private ouqs and or uations, in stages in the Ii ht of the findings and recommen- consultation with tI? e Director of tr e United Na- datlons of the EConomic Survey Mission ; tions Relief and Works Agency for Palestine 12. ZnsCruct~the Secreta -General to transfer Refugees in the Near East, to furnish assistance to the United Nations Relie7 and Works Agency within the framework of the pro amme ; for Palestine Refugees in the Near East the assets 19. RB~~BS~Sthe Director of tpi: e United Na- and liabilities of the United Nations Relief for tions Relief and Works Agency for Palestine Palestine Refugees b 1 April 1950, or at such Refu ees in the Near East: date as may be agrc ecf by him and the Director of Cay T o aP[ oint a representative to attend the the United Nations Relief and Works Agency for meeting of t e Technical Assistance Board as Palestine Refu (es in the Near East ; observer so that the technical assistance activities 13. Urges api 1 Members of the United Nations of the United Nations Relief and Works Agency and non-members to make voluntary contributions for Palestine Refugees in the Near East may be in funds or in kind to ensure that the amount of cosrdinated with the technical assistance ro- supplies and funds required is obtained for each grammes of the United Nations and speciBP lzed peruxl of the programme as set out in aragraph a encies referred to in Economic and Social Coun- 6 ; contributions m funds may be m at! e in cur- crq resolution 222 (IX) A of 15 August 1949; rencies other than the United States dollar’in so (b) To lace at the disposal of the Technical far as the programme can be carried out in such Assistance PIoard full information concerning any currencies ; technical assistance work which may be done by 14. Authorises the Secre -General, in con- the United Nations Relief and Works Agency for sultation with the Advisory T ommittee on Ad- Palestine Refugees in the Near East, in crder ministrative and Budgeta Questions, to advance that it may be included in the r rts submitted funds deemed to be availati: le for this urpose and by the Technical Assistance BoarTO to the Techni- not exceeding $S,OOO,OOOfrom the v? orkmg Ca cal Assistance Committee of the Economic and ital Fund to finance operations pursuant to Jr e Social Council ; present resolution, such sum to be repaid not later 20. Dire& the United Nations Relief and than 31 December 1950 from the voluntary gov- Work Agency for Palestine Refu ees in the Near ernmental contributions requested under para- East to consult with the Unite 8 Nations Con- graph 13 above ; ciliation Commission for Palestine in the best 15. Aulhokw the Secretary-General, in con- interests of their respective tasks, with particular sultation with the Advisory Committee on Admin- reference to ra aph 11 of General Assembly istrative and Budgetary uestions, to negotiate resolution 198°F (I I) of 11 December 1948 ; with the International R 2 ugee Organization for 21. Rsqlcests the Director to submit to the Gen- an interest-free loan in an amount not to exceed eral Assembly of the United Nations an annual the equivalent of @,800,ooO to finance the pro- report on the work of the United Nations Relief Appendix IB ~--,-- 33 and Works Agency for Palestine Refugees in the 22. Ins&u& the United Nations Conciliation Near East, including an audit of funds, and invites Commission for Palestine to transmit the final him to submit to the Secretary-General such other report of the Economic Survey Mission, with such comments as it may wish to make, to the Secre- reports as the United Nations Relief and Works tary-General for transmission to the Members of Agency for Palestine Refugees in the Near East the United Nations and to the United Nations may wish to bring to the attention of Members of Relief and Works Agency for Palestine Refugees the United Nations, or its appropriate organs; in the Near East. APPENDIX II

Finandd Survey General Summary should of cour8e note the exception of Israel where the contribution8 of world Jewry precariously The six countries 8urve cd by the Mission- support a standard of life far above that attainable Le., Egypt, Iraq, Israel, f ordan, Lebanon and from local production. Elsewhere in the Middle Syria-are all very youn States in terms of au- East, however, most of the population-perha 8 tonomous government an8 administration. Egypt, a8 much as Xl per cent-lives virtually on tIi e the oldest of the group, has had no more than margin of subsistence. Conspicuous example8 of twenty-aeven year8 of self-government 8Ince it8 re- may of course be found emergence a8 a sovereign State in i922. Iraq fn”‘gQg~8,8gnd’“$* ut w tie 8uch maloirtribution of achieved it8 independence upon termination of the income obstructs economic progress in a variety British Mandate rn 1932. Syria and Lebanon, after of ways, it ia secondary to the basic problem in having been joined under a French mandate, be- each country of 088ly inadequu;; ~~~tc~:,“,; came distinct sovereign States in 1946, although lation to the tota P population. continuing to maintain a customs union. In that fact of economic life in the Middle East. 8ameyear of 1946, Jordan also became independent while Israel did not come into existence until 1948, Estimated annual income par capita: In view of the relatively limited experience of these States in managing their economic anal financial affairs, the progress already achieved cowlwy us, $ l qdd0lu in certain inetanceo ia noteworthy. Nevertheless, Afghan&an . . . , ...... , , . . . . 50 in moat of the countries surveyed by the Misdon, the statistical and other economic data required to 3&l; ’ : : : : : : : : : : : : : : : : : : : ,,....I...... make a thorough appraisal of economic and finan- KL ,I.,...... ,.....‘.,. cial conditions are not yet available. Lack of Lebanon I,...... ,,. E! factual information on the national income, budg Saudi Arabia , ...... , ...... et8, balance of payments, etc., of the Middle Ea8t S ria ,...,...... economies has prevented a detailed 8tudy of each ? urkey ..,...... ,.... country’8 economic position. Severe limitation8 of time have further closely restricted the 8urvey From this fact of poverty, which eve here undertaken by the Miwion. springs to the eye, there inevitably folr” ow8 a But from even this brief study, we ,believe that familtar chain of economic and institutional prob- certain broad conclusion8 may justifiably be drawn lems that have 80 far defied effective solution. a8 to the eral nature of the Middle East eco- Under such conditions of intense pressure of nomic pro r lem and the obstacle8 to its solution. hungry population8 upon closely limited resources, First, it is only too clear that the Middle East consumption naturally tends to ab8orb all available suffers from poverty in the extreme. None of the output. As a consequence, the rate of savings in- countries concerned has as yet succeeded in meas- evitably falls far short of the rate of investment uring by means of national income studies even required to produce significant improvements in the ap roximate degree of its impoverishment. The output and resource utihzation. A Lebanese repre- FA0 K as ventured, on the basis of unstated statisti- sentative in the United Nations Economic and cal techni ues, comparative estimates of income in Social Council has cogently described the problem : various 9 iddle Eastern countries.1 “The Middle East provides an excellent example These estimates are undoubted1 subject to a of what is described a8 a hand-to-mouth economy. considerable margin of error, whit K would render Gentlemen, it is literally hand-to-mouth. This it hazardous to attempt any close comparison of being the ca~~c,the Middle East can never provide one national standard of life with another. But we internally the capital with which to develop invest- hardly need wait upon precise studies of national ment goods as all its energy is spent on the pro- income or even of caloric availabilities for proof duction of consumption goods. Yet again, when of the pervasive incidence of crushing poverty such production is considered on a #trr capita throughout nearly all the Middle East area. One basis it is revealed that the productivity per “‘Review of Food and Agricultural . . . Outlook in the man-hour is much lower than in more developed Near East” (1949). economies. . . . The plight of the Middle East is Appedix II 35 truly a vicious circle. To increase it8 consump- import saving8 or increased export earnings. tion good8 it need8 to increase its investment Moreover, in all the countries concerned, the ex- goods, but to increase its investment good8 it change mechanism itself-ran ing from the rigidly need to increase it8 consumption goods. . , . The controlled system operated by i srael to the floating process will inevitably be lengthy, strenuous and rates permitted by Syria and Lebanon rate8 painful.” a8 a major deterrent to any significant “A”in ux of This basic problem of capital accumulation is private capital from abroad. rendered all the more acute by the resent inability In general, therefore, the Middle Eastern econ- of most of the Middle East c! overnments to omies find themselves on dead centre and, in mobilize, throu h public loans, even such saving8 their effort8 to move on to a dynamic phase of a8 now materia 8 ize. Private saving8 are attracted development, encounter at every turn obstacles by high rates of interest into even more lucrative created by the very fact of their poverty. profit venture8 or Borne form of usury, or run to .S’y~b afford8 a striking example of the broad seed in the form of gold hoards. range of these developmental problems. Here one Nor have the neveral Middle Eastern Govern- find8 in no more than rudimentary form the basic ments succeeded in devoting any significant ahare monetary institution8 upon which any develop- of their bud etary revenues to basic developmental mental programme must rely. Such eavinga a8 may activities. If xpenditure requirements, frequently be eked out of an oppressively low national income inflated or misdirected, are currently bemg fi- yield only a trickle of deposit funds to the Banqur nanced from an exceedingly narrow tax base which ds Syrie and the few other institution8 that now exempts the broad area of non-monetary income handle the banking requirements of Syria. Far and covers only a relative1 minor portion of mone- more 8igdfiCW’it a8 a medium of savings ate tary income. Existing d seal techniques, which private hoards of sovereign8 and other gold coins, have not succeeded in tapping the income8 of the which further 8erve a8 an act ted etandard of wealthy, are grosaly inadequate to finance any value and often a8 a mean8 oP exchange. The lar e-scale programme of economic development. availability of loan funds for productive enterpriw 8 uch paucity of internal financial resource8 is is further sharply restricted by the competition of parallelled by even more acute shortages of foreign high-profit commercial ventures, which can appar- exchan e for financing capital imports. At present, entl afford interest char es of 20 per cent or more. the exefl ange receipts of near1 all of the Middle Sueii shortage8 of cte tf it facilities *bear heavil Eastern economies ate devote CKalmost entirety to upon the agricultural community and also ch ed financing consumption imports. This is not in- the growth of infant industries. tended to imply that, in certain countries, consider- On the bud etary side, the Syrian Government able amounts of exchan e could not, under is currently al f ocating only a negligible roportion favourable circumstances, te diverted to capital of it8 public revenues for developmenta P purposes. purpose8 b cutting down upon luxuries im- Broad possibilities undoubtedly exist for economies ported for t Ke benefit of a few. But such mobiliza- in current outlay and the development of greater tion of exchange resources for the general eco- and more pro ressive taxation. But progress in this nomic welfare would encounter no less sition direction wil f robably tend to proceed concur- from powerful private interests than Tt at con- rently with, rat Ret than to lead, economic develop fronting reform of the tax structure. And in the ment. Similarly, mobilization of &ate savings cases of Lebanon and Syria, governmental effort8 by governmental loan offerings P or capital in- to ifnpose control8 upon the excha;lge matktts vestment will remain out of the question until the might well result in a drying up of the 8ubstantId current value of savings is vey substantially en- hard currency earnin s whtch now depend upon larged and prevailing rates of mterest reduced to unrestricted trading, B t and Iraq might, by a more reasonable levels. Meanwhile, the Syrian further tightening of exeT ange and trade controls, Government can do much to prepare for the attempt to divert to capital account a considerable basic budgetary reform8 that must eventually be proportion of current sterling receipts, but one undertaken, ,by informing itself, and the general encounters here the familiar obstacle of sterling public, more precisely and promptly a8 to the inconvertibility. Finally, the balance of payments nature of it8 actual budgetary operations. of most Middle Eastern countries is acutely vul- On the exchan e side, the Syrian authorities nerable to the frequently extensive variation8 in have no detailed in owledge of their balance of domestic output and to fluctuations in foreign payment8 position. The current rate of import8 market demand for their closely limited range appear8 to depend mainly on three key ex ort8, of eXpOlt8. wheat, wool and cotton, together with misce Plane- These exchange difficulties have in turn dis- 0~8 receipt8 arising out of a variety of brokerage couraged private investment from abroad, even transactions. Although the Syrian Government within the relatively narrow range of development might have attempted to divert a certain percent- Ventures promising to amortize themselves through age of these exchange receipt8 to capital require- 96 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

ments, it has, in fact, recently chosen to remove money is confined to a relatively small proportion virtually all import licensing controls as well as of the population. The budgetary system of the the remaining exchange restrictions. Government country is primitive, the tax base narrow and the officials ex lain such final abandonment of earlier Government’8 credit position is weak. Scarce ex- control etp orts in terms of the impossibility of change resources are allowed to go to waste on effective administration and the risk of losing luxur imports. To compensate for these failings, brokerage transactions dependent upon a free the c!overnment has been forced to draw heavily exchange market. However, this pohcy amount8 upon its capital assets. to a confession of inability to secure more ex- If Iraq ie ever to allocate a significant share of change for development purposes than the sterling its oil royalties to economic development, there- derived from the Iraq Petroleum Company and fore, the Government must first seek to cover a the dollar expenditures of the Trans-Arabian much hi her percenta e of its operating expense8 Pi eline Company. from a %roadened an i more productive tax base. K oreover, the availability of Trans-Arabian The owth of deposit banking and other institu- Pipeline dollar recei ts for developmental purposes tion ar expressions of a monetary economy should is further restricte cr by the Government’s current be encouraged. Public confidence in the govem- efforts to stren hen the gold reserve backing of mental financial position should be strengthened the currency w8’ ich is at the moment based pri- by reform of present budgetary techniques. Lux- marily upon f rant ,balancesaccumulated during the ury imports must somehow be reduced and the war years, Although a modicum of exchange sta- exchange resources so released diverted to capital bility has prevailed during recent months, the account. decision to reinforce the currency backing would Ira i reeources have been well surveyed and, seem a wise one. The sooner ade uate reserve with tR e important exception of basic agricultural backing is provided, the sooner will % yria be able research, there is sufficient knowledge of many to effect an official stabilization of the present float- technical possibilities to warrant the early inaugu- ing exchange rate and thereby render its market ration of a development programme. It is unlikely, more attractive to foreign investors. however, that this rogramme will ever gain Syria’s lon -term development ossibilities are momentum without tR e initial stimulus of foreign impressive. I!5et boundaries inc Pude territories assistance and technical advice, But with adequate which are thinly inhabited to-day, but were reform of its finances, Iraq might at a relatively rendered fertile in antiquity by irrigation and early date succeed in fully financing ‘its exchange could be again. The existence of these highly requirement8 for capital import8 through the ear- promising resources lays upon the Syrian Govern- marking of oil royaltiea for this purpose. In this ment the imperative duty of exploiting such pea- connexron, the degree of converttbihty into local sibilities to the fullest on behalf of the Syrian currencies of it8 sterling receipt8 from oil royalties people. will unquestionably prove of crucial importance. fraq pesesses a potential of economic develop- Jordan is by far the leaat developed oihrt ;f ment holding greater promise than that of any the Middle East economies surveyed h w other country 8urve ed by the Mission. Alone aion. All of the 8hOttCOming8 of the 2 yrian and among the Middle EL at countries, Iraq has both Ira i economies with respect to income, aavinga, undevelo d resources in the form of water and cxcI ange earning8 and developmental progress potential p”y Certile land, and 8ubstantiJ exchange apply with much greater force to ordan. For earning8 from oil royalties accruing directly to year8 the country ha8 relied upon L ritish sub- Government account, with which capital develop- sidies for coverage of a major proportion of it8 ment might be financed. In brief, the economic import requirements. And now Jordan must be Problem of Iraq is one of translating oil revenues considered for all practical purposes a8 one with mto the rehabilitation of the TigrisEuphrate8 Arab Paleatine. Into this new geographical unit valley. of Jordan-Arab Palestine there have fled refugee8 Until now, however, the financial resource8 numbering from one-third to one-half of a total available to the State not only from oil royalties population now ewelled to nearly a tdiOn. In but also from wartime-accumulated sterling bal- other Middle East countries, this refu ee roblem ances, have been very large1 devoted to financing can be dissociated from long-term 8 eveP opment consumption imports and t ii e ordinary operating considerations. Not 80 in ordan, whose Govern- expenses of the State. Such dissipation of irre- ment appear8 to contemp /ate the settlement not placeable capital assets upOn current consumption only of the refugees it i8 harbouring today, but demands is lar ely explamable in the terms of the even of more, provided the necessary means can be same basic di I culties that retard progress else- supplied from abroad, where in the Middle East. Thus the Iraqui econ- During the year, the annual British subsidy omy has as yet been unable to develop any eub- ha8 been suppp” emented not only by United Nation8 stantial flow of monetary bavings. Even the use of relief assistance but aleo, and perhaps moat im- Appendix I1 :7 portant of all, by the redem tion a ainst sterling foreign investors from assisting Lebanese de- of Palestine Currency Boar B notes t rought in by velopment. the Palestinian refugees. But this last-named re- Egypt. Frequent reference has been made in source, which has reportedly provided Jordan with earlier pages to two major obstacles to develo - ap roximately s 12 million, is rapidly approaching ment, namely, the inadequacy of savings and tR e ex Raustion. Unless additional exchange resources difficulty of mobilizing such savings as there arc. can be found, Jordan will face the inevttable neces- While these obstacles continue to impede the de- sity of severe import cuts with consequent deepen- velopment of the Egyptian economy, there has, in of its present poverty, and a possible heavy nevertheless, appeared in Egypt an impressive tof 1 of human suffering. Jordan’s immediate prob- growth of modern financial institutions which lem is to adopt short-term measures of economic neighbouring countries may advanta eously study. survival which may lead into progressive economic Thus, Egypt has succeeded in deve‘i oying a ov- development. ernmental bond market, in converting much oei its Lebanon. In comparison with Syria, Iraq and external indebtedness into domestic obligations, in Jordan, the Lebanese economy undoubtedly pro- substituting governmental paper for exchange as- vides a significantly higher standard of living sets in the currency reserve, and even in mtm- for its population. Although agriculture is a basic ducing income tax le@slation. This institutional source of income as in the other Middle East econ- rogress on the financial side has been facilitated omies, Lebanon’s relatively advantageous position xy a concurrent rowth of national output and has been primarily achieved through the extensive has in turn contri %uted to the rise in the national service transactions which Lebanese merchants income. undertake on behalf of forei markets. Tran- But such striking developmental gains have ap- shipments through the we1a -equipped port of parently failed to yield any perceptible improve- Beirut to neighbouring countries, gold brokerage ment in the individual standard of life. Thus, fees, exchange and commodit arbtt*.*ige, etc., all despite major increases of national output during contribute to comparatively suii stantial earnings of the past century, the “marginal” group in the hard, as well as soft, currencies. Egyptian population, i.e., those afflrcted by pov- The merchant tradition of Lebanon has in turn erty, illiteracy and disease, is commonly estimated encouraged a much more extensive growth of at around 90 per cent. For example, the vast irri- modem financial institutions than may be found gation works carried out during the last two gen- in Syria, Iraq or Jordan. Money savings are erations in Egypt have been followed by cor- higher, interest rates tend to be lower, and the responding increases in population and truly general flow of credit to productive enterprise less ap dling growth of debilitating diseases, such as restricted. But here a in one encounters the bll 1:arzia and malaria. familiar difficulty that tf? e State cannot yet corn’- It would seem reasonably clear, therefore, that mand any part of such internal financial resources an effective solution of the social problem created through public loan offerings for purposes of by such population pressure cannot be entirely as- economic development. Nor does the present sured by further expansion of output and national heavy reliance of the Lebanese budget upon con- income. Education and more diversified oppor- sumption taxation encourage hope of major allo- tunities for employment must also assist in bring- cations of public revenues to capital investment in ing about a gradual release from ancestral habits, the near future. long in rained in an economy which has so far dn the exchange side, the Lebanese Govern- offered f ut little choice to the mdividual. ment abandoned even earlier than Syria all quan- Israel. The case of Israel is sui gewis. There titative controls over exchange and import trys- one finds a western civilization of the most mod- actions. Exchange receipts passing through official ern type which is making prodigious efforts to channels are now virtually limited to payments by draw life from the barren soil of Palestine. On the Iraq Petroleum Company and the Trans- the financial side, Israel possessesa reasonably Arabian Pipeline, which, currently at least, are in- well-equipped and excellently managed banking adequate to finance any substantial development system, a remarkably high rate of savings, and a programs, such as that required to utilize thy smoothly operating budgetary mechanism, which promising developmental possibilities of the Litam has so far succeeded in financing very substantial River. As in the case of Syria, moreover, the outlays for developmental and military purposes Lebanese Government has author&d the Bunque as well as current operating expenses. In the ab- de Syn’e et du Liban to utilize part of the dollar sence of this vitally important machinery for receipts accruing to governmental account for mobilising national economic resources, Israel strengthening the gold reserve. It is to be hoped could not possibly have sustained its effort of the that this poltcy will eventually enable Lebanon to past year. effect a firm stabilization of the present floating But the basic problem now confronting Israel rate of exchange which currently discourages is whether, even with further improvement of its 33 Final Report-United Nationr Foonomio Survey Miuion for the Middle Eart-Part I

financial machinery, it can safely absorb immigra- terrents to foreign investment, i.e., low and erratic tion at the rate currently contemplated. The stark foreign exchange earnings, vulnerable exchange fact is that incoming immigrants create, at least rates, ineffective budgetar licies, etc., are Ji initially, heavy %mands on both domestic output rooted in the ba8ic fact o w t eir poverty and can and foreign pxchange re8ource8, while contribut- never be entirely overcome 80 long as this poverty ing little or rIothing to either, remains. This is a vicious circle common to all un- Thus, the Israeli balance of payments is sur- developed State8; because they are r they can- rently maintained only precariously in equilibrmm not attract forei investment anr because they by foreign contribut1on8, investments, and other cannot attract r oreign investment they remain capital transfers covering more than 75 per cent poor. of current exchange outlay, Furthermore, the There is, of course, the possibility of breaking most crucial item on the recc1 ta side, the contri- the vicious circle through foreign assistance in the butions by world Jewry, evi cfence a pronounced form of grants, or loans on especially favourable tendency to decline while foreign exchange re- terms, for the initial financin of carefully se- quirements for support and absorption of incom- lected development projects. .Q dynamic process of ing immigrants continue to mount, Even if the development will not be generated, however, un- contributions of world Jewr do not further de- less the Governments recendng forei aid arouse cline, the arrival of 150,aid immigrants during their peoples to work and hope for a %i tter future. 1950 might well open up an exchange deficit ap- Governments must seek to enlighten the ublic as proximating 25 per cent of total exchange rquire- to its stake in economic development ancr thereby merits. To a very considerable extent, this pros- deliberately expose themselves to the political da pective gap in the Israeli exchan e accounts for mands from which effective reform action will 1950 could be as satisfactorily c fosed by rtial then spring. With such a revival of national effort releaee of its frozen sterling balance8 of 2 r to 30 and risin national income, it may then prove pos- million pounds as by larger dollar recei s. But sible gra dually to remove the resent institutional whether the British Government will fin 8’ it pos- obstacles to progress. But eli ective and lasting sible, particularly in view of the 2resaing re ay- financial reforms can only stem from a truly na- ment demands of its other creditors, to re Pease tional realization of their necessity and purpose. sterling on the scale r uired by Israel remains a The institutional problem naturally varies from tween the two Govern- country to country, and only a detailed study of matter for negotiation 7x each ca8e in the light of specific plans for devel- ments concerned. opment could show in precise detail the policies The exchrnge outlook for 1951 is even more and adminietrative reforms required, It 18 I- grave. Although the Israeli authorities express Bible, however, to indicate the general lines a p”ong strong hope that rising exports and a growing in- which all these countries could mobiliw more flux of commercial rnvestment will prevent a fully their own resources in support of economic further broadenin of the exchange gap, foreign development. investors have ao I ar evidenced but little interest, First, the diversion of some portion of currently while Ierael’s export potential remains highly un- earned foreign exchange from expenditure on certain. luxury consumption to capital imports. Cenwal finaurncti outho&. With the pception Secon: preparation of exchange stabilization of Iraq and possibly Egypt, the prospect of early plans witl?. a view to reducing risks to foreign in- improvement PI the domestic and external finan- vestment. cial position of the various Middle Eastern coun- Third, tax reforms designed to broaden the tax tries thus does not appear encouraging. However, base and to raLc a larger proportion of revenue promising the poss1klities of resource devel.op- from the higher income groups. merit that engineering surveys may reveal, it is Fourth, the establishment of development t&g- most unlikely that major projects can be financed ets providing a concrete expression of an agreed without substantial outside assistance. development policy and constituting a hi h prior- But so long as the Middle Eastern countries re- ity charge upon the national revenues an8; receipts, main economtcally prostrate, the risks confrontin Fifth, improvement of budgetary procedures, potential foreign investors are likely to outwei if including the adoption of ca8&1accounting, and the prospective returns. We believe it improbab f e, the prompt publication of results, therefore, that private investment from abroad None of these changes can come quickly, nor will suppl the generating power required to ini- can they be expected to yield dramatic returns. tiate the ll eve!opmental process. In this connexion, They w1;1inevitably encounter determined polJtica1 one often encounters the belief that undeveloped and social opposition which will subject govem- countries such as those in the Middle East could mental leadership to a searching test. Neverthe- attract investment capital simply by undertaking 1~88,beg&in a in these direction8 are within the a thorough financial house-cleaning. But it is per- competence oP all the countries concerned. They haps insufficiently appreciated that the major de- are a prerequisite of economic progress. Appendix II 41 89 mm --.._._ ._.. -- .~ -.

Having rapidly rcvicwcd the whole field in the foregoing sections, WCwill now go, in some detail, Syria has a customs union with Lebanon. The into certbrin financial problems confrontin the system is frcqucntly criticizcd, Rut on balance, individual countries, taken one by one. %hcsc official opinicn in both countries appears to be in problems have an important bearing upon dcvel- favour of maintainin it, while recognizing that opmcnt prospects. reconciliation of the d ivergcnt development plans Grants cannot supply all the funds which the of the two countries ma 3omctimc.sbc dificult. countries believe they could uoefully cmplo for Public Fittatw. Like Praq, Jordan and Lebanon, development purposes. If the Governments d ccidc Syria’s traditional policy is to achieve a budget to proceed with their plans, they may one day surplus wherewith to fee! a reserve fund out ?f be aceking foreign loan3 on commercial terms. But which emergency cxpcndlture may be met. As m the extent to which loans can be found abroad for the other countries named, money is still too dear development projects, however well prepared and for the State to be able to borrow from the ublic. justified economical1 these may be, will bc largely Definitive budget accounts arc publishc cf after determined by the &orrowing countries’ capacity audit by the Court of Account3 and Approval by both tti service loans in hard exchange and to meet Parliarner.t, which normally involves a delay of local-currency expenditure on thcsc projects out several ycara, the most recent now available being of their own resources. It is here that the devclop- those for 1945, when the reserve fund stood at ment problem link8 u with that of Public finance fS49 million. No provisional rctuma arc made throughout this area. Fv hen conaiderrng the draw- ublic, useful and illuminating a3 these would he. backs of prevalent fiscal systems, except in Israel e stimates are published, and always forecast. ex- and to some extent Egypt, it may hc tempting to penditure and rccci ts in equilibrium : at f S125.8 condemn these systems root and branch. Certainly, million for 1947, B S127.9 million for 1948, and changes making for a more equitable distribution fS130,f million for 1949. In 1945, the last year of charges could and should be introduced. It for w,hich accounts have been ublishcd, actual would be well, however, to proceed with caution in cx cnditure on the ordinary bu 0get amounted to this matter. Hasty reforms might result in a dan- f !&Q million, and actual rcccipts to 8S119 mil- crous falling off of receipts at a critical ‘uncturc. Yen, leaving an accountin surplus of E S20 million, %here is virtue in a tax that is underat ood, casv to It is estimated that in 1546 this au lus declined collect and difficult to evade. The French saiing to rough1 f Sl3 million, and in 168 7 to perhaps that a ood tax is an old tax dcacrvcs to be pon- f,S6 mil rion ; that a deficit will probably matcrial- dered. $r he whole question should bc gone into ize for 1948; but that 1949 will produce a surplus, erhaustivcly, and innovations tried out in prac- once more. It will bc remembered that expendi- tice, as far as possible, before reliance is placed, ture not provided for in the budget is currently upon inccnnc-tax as the main so~cc of rcccipts, bein met out of the rcscrvc fund, as to the amount capable of taking the traditional place of customs of w% ich, at sny given time, no conclusions should duties and taxer itn t*ctu8umption. The same may be drawn from these fi urea. It should also bc be aaid of other =,dminietrative reforms which are realizcd th ‘, extra-bu t gctary expenditure 50 being urged upon Governments: not too much at financed is just as inflationary from the monetary a time ; and remember that changes arc not al- point of view as Gcvcrnment borrowin 3 2; way necessarily for the better. the Banqur de .S@, althou h far less la Mprcovcr, when assessing the probable results from a psychological point o f view. of development work3 in this area, it should not There is a dual 3yAtcm of account3 : (0) on au hc forgotten that if such projects were to attract accrual basis, including extra-budgetary items a considerable portion of available labour, greatly (audited by the Court of Accoun,s but not eub- increased spending habits, rather than a solid im- mitred to Parliament) ; and (b) on a cash basis, provement in the standard of living, might I:- comprising the budget pcti& (the calendar year) suit, swellin import3 and impeding exports by plus a cot.lplementary p(! iod of four months (or making for z &her production costs. A somewhat more if prolonged by Pa rliomeni ), audited, and nrecarlous equtlibrium, such as has been achieved submitted to Parliament. in countries like Syria and Lebanon, might be Military cxpnditurc ia normally included in compromised by this process if care were no’: the ordinary budget. Eut an cxtraordrnary mih- taken to control it. Much will de nd on the c ual- tary budget, with expenditure totalling f S90 ity and continuing availability o r the advice c;ov- milli ‘q., rc,ndcred necessary by the recent fighting, ernmcnts receive m this connexion. was laid before Parliament In August - 74r , and The following studies arc based on publlb.,X d ia to hc included in the ordinary budget tclr 1050, documents, supplemented by consultation with rc- in deference to the priqciplc of budget unit?: ‘i’he spocsible officials in the capitals which it has been rester part of the c::penditure thus provic II fo, possible to visit for the puTose: i.e., Damascus, Ii as already heen paic out, and has brcn met from Amman, Beirut and Tel Avn. cash balacccs and adv. nccs by the I anqup dr 40 Final Report-United Nation6 Eoonomic Survey Mission for the Middle Eart-Part I

Syrie. Its inflationary impact has been consider- The State possesseslarge landed estates, chiefly ably alleviated, however, by the fact that the agricultural, most of which it farms out under greater art of the outlay has been spent, not on va’rious systems of tenure, with promise of sale the locae market, but abroad via French francs, after a stipulated period of tenancy. and pounds sterling supplied from the reserves Foreign Exchange Rkgime, As in Lebanon, the of the Uunque ds 3yrie. Definitive cover for the legal parity of the U.S. dollar is ;ES2.185. Rut ex- whole amount has not yet been found. change-control restrictions designed td su port Char es in addition to those figuring in the or- this rate have gradually been relaxed; unti P two dinary I?udget may fall upon the State in respect months ago exporters were permitted to retain the of the railways, some of which are owned by the foreign exchange proceeds of their sales abroad State; of the Post, Telegraph and Telephone (an without surrendering any part of these to the Ex- autonomous enterprise, but which on occasion re- change Office, importers being left to provide ceives State support) ; of the Grain Office; of the themselves with exchange, to ay for the goods Agricultural Bank and of the Forei n ExrLange they purchase abroad, on tK e open market, Office. Further, there are “annexed t udgets” for throu h authorized dealers. Allotments through the Arab Academy, the Service of Antiquities and officia7 channels are now limited to French francs the Syrian University, whose deficits figure in and some other European soft currencies. It is the ordinary budget. Occasional loans are made note ,rorthy that customs duties are still calculated, by the Treasury to municipalities, which also bor- as in Lebanon, on the basis of the official parity row (with maturity not exceeding ten years) from ( ;E S2.185). This results in substantial reductions the Banque de Syrie with the State’s guarantee, in the tariff schedule, in real terms. the relevant recc, nizances of debt being eligible In these circumstances, the activities of the Ex- for inclusion in t hge cover for the note issue. change Office have greatly fallen off, now being Aside from its borrowings from the Banque de ractlcally restricted to operations effected for the Syde, the State has no debts, foreign or domestic, !t tate’s account at the legal parity of ES2.185, out other than its obligation to a7 pensions (figuring of resources made up b receipts from foreign oil in the budget) to retired oB clals. It is planned to companies, whose locar currency purchases take set up an autonomous Pensions Office (with a place as to 80 per cent at the official parity (cf. State subvention) to handle expenditure under Lebanon). However, there is no legal restriction this heading. on the State’s right to buy such foreign exchan e The municipalities’ budgets are published in the as it may need on the open market, through t a e Statistical Bulletin. Receipts are provided from Exchange Of&e, which ls at present in course of local surchar es on ordinary State taxes, as in transformation into a Stabilization Fund, devised France. No s tate subsidies are granted to the to fit the changed situation now that exchange municipalities, but these may obtain the State’s dealings have been largely set free. uarantee on loans from the Bank of Issue Transactions involving movements of capital 4 Banque de Syricr). still require special permit, and must take place The S rian State’s budget estimates balanced through authorized dealers. It is recognized that at ES 12Y .8 million in 1947, the last year for which these restrictions are not in fact operative at the figures for the munici alities are available; these moment. The purposes for which exchange is pur- then amountin to & t 21.7 million on the revenue chased are not strictly scrutinized. The view ap- side, and fS1 8 .7 million for expenditure. Neglect- pears to be that if a flight of capital wert taking ing the relatively small fraction of receipts repre- place on a dangerous scale, this would soon be seated by income from public property, and also apparent. Repressive action might then be called the fact that actual recel ts are usually rather ‘in for; but unless and until such a problem arises, it excessof estimates, the 9 yrian pe le thus appear seems prc ferable not to incur the expense of set- to have contributed sS147.5 mi“K ion for public ting up the complicated organization that would purposes in 1947, or less than fSS0 per crzput of be required in this connexion. population. State receipts for 1949 are estimated At present, residents in Syria are not required as fS130.7 mil!ion, or about 4 per cent more than to report their exchan holdings, nor are there for 1947. If it is assumed that municipal receipts any restrictions on saT es and purchases of ex- increase in like proportion, the total charge still change inside the country, or on transfers of inter- works out at a shade over fS50, or between $15 est on foreign investments in Syria. Purchases of and $16 per cap& of population. Even if, in 1950, dollars appear to take place directly through somewhat more has to be demanded from the tax- Syrian pounds and not by way of a third currency. payer to cover the extraordinary military expenses This lifting of foreign exchange control is al- referred to above, the resultant burden is not a leged to havI. stimulated export, and thus to have heavy one, even when considered in relation to a made for an approach to equilibrium in foreign national income estimated by FA0 at only $100 trade, Imports are still heavily* in excess of ex- per caput. ports, but this difference is entirely compensated Appendix II __.-- I. -- 41 by invisible items and drafts upon reserves. In- Syrie’s eleven branches having little or no access deed, it is asserted that the balance of payments is to credit other than that supplied by money- favourable, although no official or semt-official at- lenders. The Banque de Syric! also handles dis- tern t at working it out appears to have been counts for the larger houses, these perhaps repre- ma Be. Brokerage, commission and exchange trans- senting some 20 per cent of Syria’s total volume actions out of which profits accrue to Syrians are of discounts. being carried on the world over, if not on as large The Banque de Syvie’s discount rate varies from a scale as in the case of Lebanon. The Syrian 5 to 7 per cent for three months’ bills and advances pound has stren hened on the open market, in up to 9 to 12 months, and 3% to 4% per cent for terms of the U. f , dollar, since transactions have rediscounts. It appears that other banks’ charges been free. However, a slight discount substitute range appreciably hit her than these, and that 30 vis-d-tis the Lebanese pound, per cent or more is Lurrently paid on unsecured No official estimate of gold hoards is available, loans. but their total is believed in some well-informed Under its agreements with the State, the Banque (luarters to be not less than $150 million. This is de Syrie aims at accumulating gold, as and when probably more than they amount to in Lebanon, circumstances permit, to provide cover for the where there are more inducements to put such note circulation ( f S240 million at November 15) money to work. In Syria, there is little Idishoard- rn a proportion of 30 per cent. A beginning has ing, so far. To hoard gold is an ancestral habit in been made towards this goal, to the extent of about this country, accustomed as it is to see wealth in 5 per cent, the balance now being represented by other forms lose its value. Indeed, many Syrians some 11 to 12 billion French francs, holdings of prefer to have recourse to bank overdrafts, for which are being gradually reduced in agreement which they pay heavy rates of interest, rather with the Banque de France, and by Treasury Bills than to invest capital that lies idle in gold. For the of the Syrian State, short-term but renewable; moment, moreover, the alarm caused by the recent these are, however, not to represent more than 40 disturbances in this area has not altogether sub- per cent of the total cover. The old in the cover is sided. Contracts may not legally stipulate payment valued at the official arity o P $1 = fS2.185, in gold; but the gold clause (payment in local the difference caused Ey a plication of this rate currency at a rate based on the open market quota- being made up to the bank 1 y the State. tion for gold) is permitted. As in Lebanon, it is not open to the Bank to The retention of the $S2.185 official parity acquire dollars with the French francs released is regarded as important, on the ground that the under the agreement above referred to, but only psychological effect of any departure from it such European currencies as the Banque de France would be incalculable. All prices are highly sensi- ma designate. tive to changes in the dollar quotation, and this s yria receives a proximately 3 million pounds would apply even to the official rate, which every- sterlin annually Prom the Iraq Petroleum Com- one knows no longer obtains in ordinary foreign paw % or the time being, these receipts appear trade transactions. somewhat in excess of open market demands. Bank of Issue. The a eements in force be- It has been noted that, since exchange trans- tween the State and the F anqus de Syrie confer actions have been practically free (the subsisting upon the latter an exclusive rivilege of issuing obligation to deliver 10 per cent of hard exchange current notes, until 1965. 4)his bank also holds purchases to the Fund at the official pari apply- all the $ t&e’s free balances, including the reserve . mg actually to a very small proportion o!Y deals), fund, and on occasion makes disbursements on the Syrian pound has rather strengthened on the the State’s account, though the Finance Ministry open market, in terms of dollars. This is held to normally acts as the State’s cashier, except as re- be attributable to the following factors: gards the Railways, the Post, Telegraph and (1) Gold movements are free ;

Telephone, the Agricultural Bank and the Grain (2) Ex rts are increasing l Office. (3) ReKively large sterling receipts * The Banque de Sytie is also the chief institution (4) Relative budgetary and monetary’ stability ; engaged in commercial banking. Apart from the (5) The existence of gold hoards in Syria operations of the Stabilization Fund, which is amounting perhaps to the equivalent of some 150 managed by it, the Banque de Syrie is said to million dollars. Virtually no bank notes bein transact some 60 per cent (in value) of the hoarded, and bank deposits being very smalB , country’s exchange deals (at a free rate), and Syrians preferring to pay interest on overdrafts about the same percenta e of advance, besides the for current needs rather than part with gold, there bulk of short-term ban& credit to farmers, the are no loose masses of Syrian currency at the Agricultural Bank’s business being confmed to mercy of speculation, or which might slide about long-term loans, and farmers livin in pa: LS of dangerously at uneasy moments. the country not served by any of t R e Banqrce de This state of &airs, contributing though it 42 Final Report-United Nation Eaonomio 8urver Miuioa for the Middle Eaa~Part I does to excha9 e stabilit bas its serious draw- to avoid the Syrian tariff: a further argument, in backs in that it oBa structs t it’c mobilization of wealth some eyes, for lowering the rates of numerous for productive purposes. duties. It should be remembered, however, that when Stafo of Bwiness, and Prosjmts. Deflationary oil be ‘ns to flow through the Trans-Arabian Pi e- pressure is at work on prices in Syria. Wheat de- line, if ollars in respect of transit and guard Pees serves special mention. A drop, said to amount to will accrue to the Syrian Government at a rate 60 per cent from the wartime , ha8 occurred which it would be rash to attempt to estimate at in adjustment to present wordp”k prices,; but the the present time. new price still permits the reducer to cover his Foreign Trade. Return8 for the Syro-Lebanese expenses. Moreover, this 2 ecline seems to have customs union from 1938 to 1948 inclusive will be provided a healthy stimulus to export. Lese severe found attached. price declines are occurring in other fields, tend- The key for the distribution of customs receipts : mg to create some unemployment and wage-rate 56 to Syria, 44 to Lebanon, is regarded as unfair cuts. But tht present situation is not viewed with by each country. But no attempt to work out a alarm by the authorities. more acceptable method of calculation, or indeed to Takin a lon er view, there are difficult prob- ascertain recisely the facts of the ca8e, has 80 far lems to %e tack f ed before more opportunities for B gainful employment can be given to a population succeede . This would be no easy undertaking, in whose current standard of living represents an the circumstances, it must be admitted. ever-present threat of political and social in- It will be recalled that visible exports play a stability. much larger part in Syria’s balance of payments Public works for development on a large scale than in Lebanon’s, Syraa, indeed, is an exporter of would be re uired in order to increase the cul- primary produce, es &ally wheat. Syrian raw tivated area. % here is no lack of land wti+ might cotton also commant 8 a ood price on the mar- be made fertile, of water for the purpose; or of ket ; an increase in it has f one something towards rain-fed areaa which only rquire mechanization. offsetting this year’s decrease in receipts from The question is: where to find money for capital sales of wheat, due to readjurtment of ptrces. Ex- outlay7 It has been seen that interest rates ran e ports for 1949 romisc to reach a satisfactory high, and that there is an inveterate habit of 8af t- total. Skin8 and 1 idea contribute, and to a lesser ing away profit8 by hoarding gold, not a few extent cotton good8 and worked leather. people apparent’ managing to run their business A rough and ready calculation, believed in on the margin L tween the high rates paid for Syria not to be far from the mark, set8 the two borrowed money and the return obtained from it. countries’ impcuts at 50 per cent of the total each, In these circumstances, chance8 of tempting and Syria’8 export8 at 75 per cent as against Syrians to invest in agricultural development Lebanon’s 25 per cent. Lebanon ha8 attempted to projects must look remote, further the setting up of some induetriea since the Given Syria’8 potentialities, and an exchange war, but Syria ha8 one much farther in thia di- position that #hasimproved and may well improve rection, and is on tff e whole better qui d for still further when dollar8 from the Trana-Arabian the purpose, although some enterprise8 !!Yve not Petroleum Company start coming in, foreign turned out to be justified economically, and indeed capital might in favourable circumatancea reek are considered a8 failures, not meriting the pro- employment here. Money wae;es in industry are tection that ha8 been granted to them. % low, it is true, but 80 is the individual worker’8 In one important bran& i.e., cement, n7 output. Strikers in the Al po cotton mill9 have works now being set up at Alepp are e been demanding that no in7 ividual worker should shortly to start producing at a rate of a- tons be required to tend more than one loom, a8 againat dail , which added to an even quantity produced three at present (and an average of forty m the at d amascua should supply Syria’s normal needs U.S.A.). In terms of production costs, factory at the preoent rate. The rice at work8 ir f SllO labour is dear in Syria. Alao, the workers, or- the ton, and delivered in tR e country ia ;E S119 the ganized in uniona, can press their demands in an ton. This eition comparea favourably with that effective manner. These demand8 might be ex- ruling in 9”ordan, for instance. petted to become even more inristent were there Cotton goods are ex rted, in some coarser to be a substantial influx of foreign capital, with grades, mainly to Iraq ; r ut .ine qualities have to resultant threats to the present precarious balance be imported. Syria produces only a very small between wages and prices, and an qually fragile uantity of raw eilk, importing the bulk of the equilibrium m the balance of payment. %t read it spins. Given these conditions, new indu-try requires It is believed in Syria that amug ling, inevitable, tar8 protection, in order to make 8 beginning, given the country’s Ion and open f rontiers, mainly at a rate which in its turn makes for excessive brings in manufacture d good8 via Jordan, in order prices even for internal consumption, let alone Appendix II 43 competing on foreign markets, The well-worn ent to projects for building a modern port at argument seeking to justify high prices at home Latakia, draining works in the Ghnb marshes on the ground that they permit ex rt at competi- (Orontes valley) and an electric-power station tive rates is hard! convincing in r ria’s case. on the Yarmuk. Even these plans are in an early Development pr ans appear to be r imited at pres- stage of preparation.

Visible trade of the Syro=Lebanere cuatomr union, 1938 to 1948

(Valuesin Syrian or Lebanesepounds) (000 omitted)

Y*ar Bahrcr V&W Quantitkr V&lW# 1938 . I.. * . . . . * . . 2,848 107 w3 179 40 1939 . *...... 2,692 113 2,481 211 38 1940 ..*.. **..... 1283 WJo 192 37 1941 . . * * . * , . . , . * 311 ii 67 244 29 1942 . . e. . . . . a. . . 579 174 479 83 1943 . * . . I . . . . . * . l,@JJ 246 7: 1944 * . ...*.*... * 121 375320 :‘: 1945 ...... , . . * . . 2: 1;; 146 376 89 1946 ..*.*,,, . . . . 394 268 107 1947 . . * * * . . , . . . . 413 361 150 286263 iit! 1948 ..*. ..,.*,., 804 491 125 678 411

1-q kilometres. The rate of natural increase ma be A visit to Baghdad could not be arranged for about 1 per cent per annum. Both birth and creath the purposes of this study, which therefore had to rates, and es ially infant morta!ity, are believed be based on published material, unsupplemented to be high. 8” f a!! the countries in this area, I by fuller and more recent information such as seems to be the one whose natural conditions tin7 was made available in the capitals of other resources hold out the greatest promise, provided countries. the loss of cultivable land caused by ages of Iraq attained full national status in 1932, bei.]g neglect can be made good. But at present the the second of the countries now under review to standard of living of its people is exceedingly achieve it. Its current unit, the I i dinar, is low, national income per crrpwr being estimatefj linked to the pound, ancr of the same o?? cial parity. by FA0 at $85, as against $100 for Syria and The foreign exchange receipts, amounting to some $125 for Lethr~on. At least 60 per cent of the 9 per cent of its budget in 1946-1947, which the national income is estimated to be derived from State derives from the companies ex loitink agricufture. The peasant is burdened by taxes and Iraq’s rich oil deposits, are in sterling. I! ending an inequitable profit-sharing system. the setting up of a central bank, now in course of Public Finance. Iraq has an ordinary budget, formation, the currency is administered by a and an extraordinary one, includin developmmt Board, meeting in London; and note circulation schemes only, financed chiefly by oi7 royalties. In is covered by sterling securities. addition, there are several State-owned enter- Petroleum production is capable of being greatly rises, e. .. the railways, having indepe~ tnt expanded ; prospective reserves ensure Iraq a place Ii ud ets o !I their own. The aggregate expenditure of iucreasing importance among the oil countries of tt ese cannot be given, but is stated not to be of the world. Also, the rain-fed area of the North relatively large. Full information is not available is on! partially exploited, and the alluvia! soil of as to the extent to which the State may be called the Id esopotamian lain is fertile. If the country upon to make good their losses. Estimates re uire can adequately uti Pize and control its immense parliamentary approval, and accounts are au8 ited water resources, its potential as an exporter of by a semi-independent department. food appears great indeed in relation to the pres- Cash results of the ordinary and extraordinary ent q!lantities exported. The same applies to the (development) budgets have been seen in pub- possibility of its supporting a far larger popula- lished form down to and in&din 1946-1947 (the tion than the present. This was found by the first financial year ending on March 3 k as in the U.K.). real census ever taken in the country to be only Estimates only can be given for 1947-1948 and 4.8 million in 1947, for an area of 435,228 square 1948-1949 : 44 Final Report-United Nation@ Eaonomio fiurvey Miemion for the Middle Emt-Part I

Ordhoq 8xhowdhwvy Combhwd YOW R8dpt8 R#pmd’hW8 xz~~~P R8Cd)i8 B#Prrdlkrr ‘%+izw ‘E:zw

(Milliom of Iraqi dinarr) 1938-39 * *. . . . . *. *. *. . . . . *. *. . 5.8 5.7 $0.1 2.0 2.4 -0.4 -0.3 1942-43 . . , . . , . , ...... a. . . 11.6 10.6 +1.0 2.2 +1.2 $2.2 1943-44 * I.. . * * I.. . *. I. I . I *. . * 14.4 13.8 f0.6 3.7 :1 +2.1 j-2.7 1944-4s . . . . . * * 6. . .a. * * 6 6* I * . . 18.9 19,O’ -0.1 . -0.1 1945-46 . I.. . . . * . *. * #. . * * *. *. . 17.3 19.8’ -2.5 2; 1.5 +1:4 +1.1 1946-47 . . , . . , ...... 22.7 22.4’ $0.3 2:s 3.1 -0.8 -0.5 1947-48’ ...... , ...... 21.6 23.1’ 1948-4P *. * * * *...... *. . *. . 25.0 250 - 2.2 2.8 -0.6 -0.6 ‘Including emergency, expc nditure (cost of living allow- ‘In 1944-1945 extraordinary receipts and expenditure ance) of about 4 millianr per annum. about 2.9 and 2.0 millionr rcapcctively) were merged with ‘Including amergency expenditure of aboutID 6 million, t6 e ordinary budget accounts. ‘Estimatea.

Receipts ap r to be derived 60 er cent from than on a c.i.f. basis). However, when all allow- taxation, chicr y indirect, and the i alance from ances for this practice have been made, there other sources, the most important of which is oil. remains a large lm rt balance, which is covered Taxes are estimated to absorb 22 per cent of the chiefly by receipts r rom oil companies, national income. National defence and police to- Exports consist mostly of foodstuffs and raw gether account for just under one-third of ex- materials : barley, dates, hides, wool, and live penditures, before the recent fighting. animals ; imports of textiles, machinery and ve- No audited cash results or even provisional hicles, construction materials and equipment. returns are available for the last two years listed. Prior to 1939, :he U.K., U.S.A., Ja n and Ger- Serious strain was imposed upon Iraq by the Pal- many accounted for 50 per cent o r the foreign estine war. The closing of the Haifa pipeline trade. During the war, these countries’ shares caused a heavy fall in receipts from oil royalties. were heavily reduced, or discontinued altb ether, The difficulty of budgeting m these circumstances their places being taken by India and other I iddle led the Government to proceed, in 1948-1949, by Eastern markets. Since the war, India has main- two-monthly estimates. It appears that by May tained its share ; those of the other Middle Eastern 1949, the Iraqi Government had incurred a debt countries have fallen off; and the U.K., U.S.A. amounting to several million dinars, including an and Italy arc in process of recovering their earlier internal loan authorized in 1947. The chief lenders sitions. Transit trade with Iran was formerly were the banks. Also, advance payments ‘on oil r alf as large as Iraq’s whole foreign trade ; but royalties hav; been obtained. Negotiations are in it has decreased sharply of late. rogress for loans from the International Bank for Accordin to the Iraq Statistical Abstract, 1947, PCeconstruction and Development and other sources. foreign tra f e may be summarized as follows, in As in other countries in this area, the Government millions of dinars: is unable to borrow on any significant malt from its own public, the rates of interest obtainable on Y808 ht#Od8 B8pWi8 BJonrr private loans being so high as to attract all avail- Lord R8.8r)ov#r TOM able capital. The end of hostilities has doubtless brought 1938 ...... 9.4 3.5 0.2 3.7 - 5.7 some relief. A relatively li ht charge is incumbent 1941 ...... 6.9 3.9 0.3 4.2 - 2.7 upon Iraq in respect of Paf estinian Arab refugees, 1943 ...... 15.7 9.1 0.3 9.4 - 6.3 whose numbers appear not to be in excess of 1946 ...... 28.0 12.7 13.1 -14.7 4,000. The long-range view is brightened by the 1947 ...... 39.9’ 13.8 ii 14.7 -25.2 prospect of increasin oil royalties. However, the ‘C.i.t valuation. sums devoted to deve‘f opment in the extraordinary budget are as yet inconsiderable in relation to the B&ace of Payments. For several years before task of equippmg the country on a scale worthy of the war, this had been calculated (the period being its unparallelled potentialities. the financial year), and the work was resumed in Foreign Trade. According to Iraqi statistics, 1947, to cover 1946, now on a calendar year basis. the value of ex rts not including oil) ie normally A calculation has been made for 1947, but is with- less than one- r alf oI imports, but this difference held, apparently for security reasons. appears to be partly accounted for by over-valua- The three pre-war years showed im rt sur- tion of imports (at internal wholesale prices rather pluses amounting to roughly ID 2.8” million, Appendix II -45

ID 4.6 million and ID 5.2 million respectively, and been some improvement, the wartime dislocation a deficit on services and interest, partly offset by of the price and cost structure has by no means profits and brokerage on transit and ex rt trade, been rectified. transport fees, British military expen r iture, pil- Problems and Pros+cts. Broadly s eaking, it rim traffic and tourist expenditure, and above all may be said that oil developments m Praq ‘are in Ity oil ro alties, which rose from ID 900000 in the hands of the companies. Agriculture, on the 1936193$ to ID 1,968OOO in 19381939 ’ But a other hand, provides the livelihood of the great current account deficit itill ersisted: ID 2.3 mil- mass of the population; and here the Iraqi Gov- lion in 1937-1938 and ID 1.B million in 19381939. ernment is responsible for devising and carrying It was covered by investments of the Iraq Petro- out an appropriate policy, ca able of raisin a leum Company, a governmental loan of 1 million standard of living which is depP orably low. So f ar, pounds sterling negotiated in the U.K. and draw- few minerals other than oil have been discovered in mgs upon short-term assets in London. Iraq, apart from some indications of copper in the The balance of pa ments for 1946 may be north-east part of the country. Industry cannot summarized in Iraqi d inars as follows: make a great contribution. to the national wealth, at any rate for a long time to come. Prospects of improvement depend largely upon increasing the CWdh DlbiU Nrm (OOO’r omllrd) area under cultivation, and by cultivating a larger area per cart, e-p., by mechanisation. At gresent, A. Goods and services : only one-fi th of raq s terrrtory is cultiva le, and Merchandise’ . . , . . . , . . , . , . . 15,171 only Interest and dividends.. , , . . . 424 of Ihis a small part is cropped in any one year. Other services ...... 14,521 The Irri ation Development Commission, work- Deficit on current account.. , - 2,213 ing from f 946 to 1949 under the residency of B. Gold movements : Mr. F. F. Hai h, made a generaP survey and Gold coins and bullion...... , . . . . 1,593 3,181’ prepared detaile fi lans for many projects in the Deficit on current account.. . , . , . . - 3,881 first stage of deve eopment. These projects are set C. Capital item8 : Amortisation of State debts...... 18 forth in appendix IV. Hydro-electric power may Advaraxs by oil companies, and be developed by some of them, the estimated total repayment of previous advancer 116 cost being over ID 90 million. Long-term investment8 . . ..*.a.* % 148 If these works could be finished, an appreciable Decreasein Ira i balannr abroad ; decrease in 1oreign dinar bal- betterment of the Iraqi people’s lot would doubt- anCf8 in Iraq . . ..*...... * 2,815 182 less be the result. The total involved is a relatively large one and completion of the schemes would re- Total capital transactione...... 3,365 464 quire many years. Increases in Iraq’s exchange Balance on capital tramactions...... + 2,981 Error8 and omissionr...... + 908 receipts might expedite the process. J3ut in any case, questions would arise as regards Ira s ‘Adjusted for over-vahtatlon of imports and with allow- capacity to produce its own currency to meet tB e ance made for a contraband estimate. very large part of the expenditure that would be ‘Separate item, as being of doubtful accuracy. spent on wages and ot,herwise, locally, without incurring danger of inflation ; and also to earn The deficit on visible trade is offset chiefly by hard currency to service loans to pay for such port-dues, British military expenditure, receipts equipment as it might have to purchase outside from pilgrims, oil royalties and oilcompanres’ the sterling area. local expenditure. There is nevertheless a deficit The Eashemdte Kingdom of Jordan on current account, and adverse gold movements, and Amh Paleathe largely covered by drawing down Iraq’s sterling balances to the extent of nearly ID 3 million. This The Refugees. In Jordan, there is no getting process has been accelerated until the total of away from the refugee roblem. It dominates Iraq’s sterling balances in May 1949 is believed to the scene at every turn. i; o plans can be made have been some 9 million pounds only in excess without taking account of it. Also, whatever the of the amount required for a 100 per cent currency formal position may be; from a practical point of cover. view, Jordan and Arab Palestine must be con- The sharp rise in money incomes during the sidered as a whole. war, unaccompanied by an expansion in the supply There are varying estimates of the numbers of goods, resulted in a rapid increase of prices, of refugees in this area. But whether they repre- despite a variety of measures designed to combat sent one-third or one-half of the total population inflationary pressur . After the end of the war, does not signify so much as that they are mostly a moderate decline in prices occurred; but crop destitute, and deteriorating ;n every way as time failure and a rise in world prices revers(.d this goes on. The territories they are living in are bar- movement during 1947. Although there has since ren and the Government lacks the means to keep 46 Final Report-United Nationr Ecmomio Qorvey Miuion for the Middle East-Part I them on a relief baaie, let alone the capital outlay Jordan’8 ordinary bud et (estimate8 for the that would be necessary to enable them to earn a year to 31 March 195 f ) balance8 at roughly livelihood. It is calculated that absorption would BP23 millions. The last year for which clored cost &P700 for each family of five persona. account3 (audited by a department of the Finance Incidentally, this works out at about $400 par Ministry) are available is 1947-1948. It produced ca at as a ainst the Israeli estimate of $2,500: a a surplus of fP500,OOO. The ordinary budget for dr*k erence, f owcver, which is understandable given 1948-1949 is said to have ended with a 8urplu8 the res ective backgrounds. Thus, for example, also, though a smaller one. Ths actual Treasury 50,000 fordan-Arab Palestine fam.lies, a minimum position, within the narrow limit8 of its applica- number to be considered, whether or not refu ee8 tion, is described as not causing anxiety at present. go elsewhere, would require about ;EP35 mil P;ion, But in order to give a more comprehensive view to which it ia aaid that a further sum of say of the country’8 financial position, even if the & P5 million would have to be added for hospitals, refugee problem is left aside, it must be added schools and other public services. that lrince Jordan forces have been occu ying Arab 0 inions differ a8 to how many refugees the Palestine, there hae been a separate Ii udget for Jor&-Arab Palestine area could take, grven the that area, which balances for this current ear at necessary outlay on development. But there 8eem8 fPl.1 million estimates), and that the e .K. i8 to be a general willingness to tr to absorb all aubsiditing the a rab Legion except for the Ha- those who cannot go elsewhere. T Kis is an impor- shemite re iment, provrded I or in the bud et) tant faciur- in the whole refugee situation, whatever at an annua‘f rate of fP2.5 or SP3 milliona #i reserves may have to be made a8 to the possibility out of total &ate expenditure of about &P6 rn!! of securing funds for the urpose. lions, the U.K. seem8 still to be contributing over There it insistence in Pordan on the wasteful- 40 per cent. ness of spending at the present rate on mere relief, The Government treats its bud et 3urpluse3 as thus leaving the future as black as before, when an emergency fund out of whit t , ink a&, it a relatively modest outlay on definitive settlement buy8 crop8 which farmer8 are otherwise unable mi ht mean 8ome real orogre88, and radually to market, relling them as occasion offers. No r d uce the need for relief, It is argued %Eit t if an account8 of these transactions are published. initial Bum of say from &P6 million to PPIO mil- lion could be provided as a grant, much might be Batancr of Paymmts. When it come8 to at- done towarda supplying a production barns for tempting to cast a balance of payments, Jordan’8 later borrowing on commercial term8, which it dependence on the U.K. become8 even more rtrik- I8 realized is out of the quention a8 thing3 stand in than appear8 from the budget. A8 against 8ome at prerrent. An inter&-free loan of one million &9 milhons im rts for which foreign exchange pounds sterling recently granted by the U.K. t i8 being provid eB0hy the Jordan authorities, there not lar erbugh to enable a 8erioua beginning to seems, according io official ertimates, to be a rmall be ma tre in this direction. But it8 importance ir by fraction of 6Pl million on1 reprermting exportr. no mean8 underrated in Jordan, in the pre8ent Together with expen1~8 o 1 foreign legation8 and &ration, when there is urgent need for 8 other minor itemr, exchange incoming8 may per- t-Ii hap8 amount to Mrmethin in the ndghborhood more than can be rupplied by the budget or auc of f P1.4 millions to be aif ded to 8ay &3 million8 urpo~~ as ublic health, schools and irri tion. contributed by the U.K. for the army, leaving Pt IS claim MP however, that the present r udget about f P4.5 millionr, which during the mark8 some improvement over previou8 yea&, in t Y- this respect. has heen made up hy depletion of 8terlin !Jz ance8, Jordati’a Finances. Jordan% finances are being latterly 8tollen by large amount8 of %aleatinian managed largely without reference to the refugees. currency rted by refugees, backed 100 per It must be admitted that it would be hopeless to cent by sterlT ng. attempt to budget on the as8umption that Jordan There setm8 to he little prospect of thi8 po&ott would have to su rt the refugees by its own being rapidly changed for the better by improved unaided efforts. Jr1 ere is, however, outside the admmi8trative methods. Whatever can be done budget, a Jordan refugee fund, fed a special stam tax, occasional contributions 7 rom other Mos fem States, and a vote of & P70,000 in Jordan’8 current budget itself. Altogether, if is esti,mated that Jordan s refugee expenditure IS runmn at anannual rate between fP170,OOOand fP200, bo This, of course, is an insignificant amount in corn: patison with the U.N. contributions from other sources, But it should be recognized that the dis- ruptive impact of the influx of refugee3 cannot be measured in term8 of state expendrture. Appendix II 41

Demands for allotments of impqrt exchan e to discern in what respect complete liberty would are being pressed, which, if yielded to, wou 7d not be preterable to, or at least less waste&u1than, increase Imports from the resent level of sP9 the present state of affairs. millions yearly to &ZP12 mil Pions, while it is wished YW.JS$WCI~.In a situation such as ordan’s, the to reduce the figure first to 6P13 millions, and then official mill& harassed as it is by prob iTems pressing gradual1 to &Pp6 millions. As indicated above, in from aI1 sides on so small a community, readily current iyevels of imports are being largely financed turns to broader horizons. There is a tendency to by depletion of sterling balances acquired a ainst assert that no radical improvement can be brought redemption of Palestinian currency broug a t in about unless Jordan forms art of a union corn4 by the refu ees. Imports thus financed have been prisin S ria and Iraq, ant,P eventually Lebanon primarily of the consumers’ goods variety and, as we iiTI ’ ‘his aspiration raises pulitical issues fall- slthou h temporarily alleviating inflationary pres- ing outside the scope of the present inquiry, which sure, fl ave contributed little or nothing to the must take for granted the frontiers that exist production capacity of ordan. The important capi- to-day. tal assets representeti I! y the sterling balances ac- If consideration be limited to economic factors uired by redemption of Palestiniati currency has and to Jordan and Arab Palestine alone, it will be b us been lar ely wasted. Despite the approaching seen that development desi ed to make the state exhaustion o f ,Jordon’s sterling baiances available viable should proceed on Your lines: for financing Import surpluses, there appears to (1) Expanston of a ricultural production to be continuin pressure for even triore liberal alloca- absorb refugees, ive a !l igher standard of livin tions of exea ange. It i8 not generally realized that to the local po u7 ation and provide certain casii the Palestine Arabs, instead of aying Jordan for crop exports. 7fhis in turn involve8 the setting up its produce in exchange there!I making for a of processing industries. balanced foreiml trade, as former ry, have increased (2) Such development of minor local indus- the number 01 mouths that must be fed inside tries as seams possible, partly with a view to the country, which now includes the wretchedly providing some exports, but more in order to re- poor parts of Palestine that are still Arab, without duce imports. adding to productive capacity. It is argued in offi- (3) Development of transport facilities, since cial circles that resumption of trade with Israel, transportation is at present a very heavy item in in present circumstances, would create grave prob- the cost of imports and a bottleneck for both im- lems, as the intercourse would tend to develop ports and exports. spending habits in Jordan, which are already ex- (4) Export of such raw materials as the coun- c csive in the light of what the country can reason- try possessea,a development with which trans- ly afford, burdened as it is by the adverse factors portation is closc!y linked. enumerated above, and by the expense of keeping In addition, the development of a primitive in- up the apparatus of a state based on so small a dust is desirable in order to give work to the productive population. u7 ation of Amman, which has risen from 25,- Before passin on, it will be recalled that ter- If3 before World War II to about 100,000 to-day, mination of the %ritish Mandate involved Jordan’s and thus gradually to train experts and engineers exclusion from the sterling area. The Government of whom there is a great dearth in the country. plans to introduce a new currency in 1950, the The economy of Jordan and Arab Palestine is. dinar, qua1 to the pound sterling, and hopes to essentially agricultural; in the main, cereals are re-enter the sterling area at the same time. This grown and in certain years the country is an ex- pdsition largely determines Jordan’s economic porter of them. But a cereal economy can be licy. It is indeed clear that, dependent as it is adverselv a?Tected by climatic conditions and the p”or its living on the U.K., Jordan must conform, alternatibn of bad and good years. It has, therefore, to the required extent, with the pattern that pre- been strongly recommended by various specialists vails in the sterling area. But its circumstances are that Jordan should develop its agriculture hy sub- such that the uestion arises whether it is neces- stitutin fruit growing--olives, grapes, etc.-on sary or desirab9 e that this struggling little country a consifi erable scale, for cereal cultivation, articu- should attempt to impose regulations which are not larly on land which is in any case obvious Py mar- and cannot be enforced. The aim is to curb imports ginal for ordinary crop production. The soundness and etimulate exports. But this system subsidizes of such a polic is illustrated by what has already imports hy attotting exchange at chc, per than com- been accomplis r ,ed in this directton in north Jo&r 1 mercial rates, and penalizes lawful export by and in parts of Arab Palestine. Only by such demanding that the exchange proceeds be surren- means can much of the poor land throughout the dered at a corresponding rate, the result being country support a larger population or even pro- that exports leak out across frontiers which are vide a reasonable livelihood for those alrcady too long to be effectively patrolled, and the “fist” depending on it for their existo*T-e. never sees the resultant exchange. It is difficult The development of fruit gt ping and intensive 48 Final Report-United Nationr Ecmnomio Survey Miuion for the Middle EutPart I cultlvatlon of vegetables and fruits in the ordan on locomotive5 and workshops would greatly im- Valley can be made possible b a num L r of prove the railways. schemes already in plan for tlie L tter utilization The crucial point, however, is the siting of a of the country’s waters. With these must be ort. At the moment, the cost of transport via coupled the expansion of governmental horticul- I; eirut is a heavy handica . There is support in tural stations and nurseries and the development Jordan for substituting a rs&h-South axis Am- of processing industries, which (like better road man-Aqaba, in Jordan territory) for the k ast- facilities) are necessary in order to utilize the West one ( Aqaba-Beirut) upon which the count products of a more developed agriculture. now depends. Althou h the distance between cap7 - Among such industries, vegetable canning is ta! and port is roug a ly the same in both cases, considered a promisin investment, At the present it is evident that what would be spent on the time transportation di ii culties result in the loss of Amman-Aqaba haul (in addition to port dues and large quantities of perishab’q crops which, if pre- landing charges) would remain in Jordan instead served, might help to keep down prices in the of being spent abroad as it is on the Amman-Beirut off season. It is thought also that a BU r industry line. Fish-tannin could be developed at Aqaba. might be developed in the Jordan Val ‘i”e and that The difficulty is t% at the railway from Amman is there is room for expansion in the uti r ization of built only as far as a int some 50 miles north dai products. The pal ts of Palestine which have of Aqaba and that this Jrast section would be costly notTe en occupied by Isael are on the whole poor to build and to double by a modem road because and barren, but vines a.ld olives row there. In- of mountainous country and bad climatic condi- dustries must, therefore, be devef aped to utilize tions. However, a road to Aqaba is included in their product, particularly since these fruits are the road development scheme of she Jordan Cov- excellently suited for an expansion of planting on ernment. State ownership of small vessels to ply terraces, the building of which is already planned. between Aqaba and the Suez Canal is already It is not likely that the local wine will ever com- contemplated. vete internationally, but grapes can also be turned An important source of raw materials for Jordan into non-alcoholic gra e juice, for which there is may be her minerals ; and it is clear that a very a market. For olive oiP there is always a demand; early priority in the country’s development must pressing plants would be remunerative. Still larger be a detailed geological survey. One mmeral, how - use of the roduct of the olive t.,ee could be found ever, is alread well known. Within 18 kms. of by the ma Bemization and expansion of the existing the capita!, an cr also on the railway further south, soa,‘ industry at Nablus. Here corn ratively good there are vast deposits of phosphate which are grade soap is already produced. & ith technical already exploited, on a small scale. For the large- assistance and some capital, the industry might scale export of unprocessed phosphate (on which become a large one. It does not seem probable that negotiations have been proceeding for some time), the existing tobacco industry can be greatly the limitin factor is the high cost of transport. ex nded. It is said tf! at with an outla of from sEP150,OOO p”n the second field, that of the development of to 0 P200,000, super-phosp Kate could be produced local industries with a view to reducin imports, 1”,‘” , thereby largely soltng the .transport prob- the most important item is unquestionabf cement. ch e other raw material within reach of the None is made in Jordan at present; it h s to be Jordan Government is potash. It may be recalled imported from such far awa countries as Czeho- that an Anglo-Palestine Company was o rating slovakia or Yugoslavia via T.3eirut. At Amman it two potash lants on the Dead Sea bePC ore the is sold at an official price of sP22 per ton, mostly recent troub Pes: one at the south end, one at the made up of freight. As middlemen often manage north, the product being barged up from the to corner the supply, it is said, cement may change southern to the northern plant, and trucked thence hands at as much as BP40 per ton. Suitable to the rail-head at Jerusalem. The southern plant stone is available near Amman and some pro ress is on the Israeli territory, and is intact, but is not has hem made towards setting u a company. %ll is working because there IS, at prestnt, no way of should have an important e4 ect in reducing moving the product out. The northern plant lies on Jordan’s im rtr. It may also be possible to Arab territory ; but it was completely wrecked develop brie I?-making and tanning. during the recent hostilities. Keen regret is ex- In connexion with these industries, transport pressed over this wanton destruction of plant facilities must clear1 be developed. Plans exist for needed to manufacture a valuable product, but the improvement o r a road net-work throughout there appear to be no plans at present for repalrlng the country designed to draw off the pro$cts of the damage. agriculture and provide access to mdustnal sites (m particular to minerals), and to open uf the Lebulon remarkable antiquities rlf the country m or er to Need for Developwnt. Lebanon’s population develop tourism. Comparatively minor expenditure is increasing rapidly. Est!mates vary : according Appendix II 57 49 to some, the present figure of about 1,200,OOOwill a fact from which it would not be safe to draw be doubled in ten years; others sa twent conclusions as to the country’s financial licy. There is unemployment already. T h e tren J t gears’reat- The note circulation stands at about OLl 7p”0 mil- ens to deteriorate dangerously unless increased lion, havin declined slightly over the past year. o ortunities for earning a livelihood are pro- Provisiona f estimates indicate that upwards of viv ed in time, which will require outlay on a rela- fL93 million in budget receipts were collected tivel large scale. This would be the case even in 1948. It appears that the fiscal effort demanded if ar 1 the Palestinian refugees now in Lebanon of the country in 1949 and 1950 will be less heavy, were moved elsewhere. Their continued presence to allow for a business recession, on the degree in the country, however, would aggravate a eitua- of which there is no general agreement, but which tion which exists independently of them. The is indicated by a contraction of the note-issue. In Lebanese Government is indeed contemplating a these circumstances, it might at first sight be six-year rogramme, thus recognizing the impor- temptin for a Government to try to collect a tance of t1 is problem. share oif the hard exchange earned by Lebanese Finance may be forthcoming to carry out some nationals and residents. But this could only be done projects on terms that do not make it necessary by coercive measures, which would have the effect to inquire closely into Lebanon’s ability to obtain of driving lucrative transactions awa , Lebanon a ton -term loan abroad, and then to service it. has attracted this business from ot Ker centres But i-fle extent to which such prospects can be where skills, economic information and experience counted upon is uncertain. It a pears urgent to may not be equal to those possessedin Beirut, but consider what the country coulR do, by its own which would undoubted1 recover the trade if efforts, to im rove its chances of successfully ad- Lebanon attempted to app ry exchange control. dressing itselP to the market. It is doubtless wise to ermit these profits to Lebanon’s financial capacity is remarkable, rela- be made, and to re ard tK e fact that the State tivel , although it has not operated hitherto so cannot directly ta tf em an a lesser evil. But the much to the advant e of the State as to that of Government, wit Ii out harming invisible trade, private individuals, ?i he bbanese have proved could do more towards building up a financial posi- their ability to turn their little country into an tion that is sound and carries conviction as such active and efficient centre for exchange, gold deal- because the key facts are readily available. Two ings, brokerage and trade involving many curren- things might reatly help towards the development cies besidestheir own, and the mwement of goods projects net dcd to give work to its increasing which may never touch Lebanese territory, In population. Lebanon might : (1) put itself in a November 1948, the authorities encouraged these position to finance some local currency expendi- activities by removing in practice the remaining ture under development projects out of its own restrictions on sales and urchases of exchange. resources, partly out of current receipts, artly While an official parity of d 18.50 Lebanese iastrrs by borrowing internally, and (2) prepare to Bevote (2.185 Lebanese pounds) to the U.S. do Plar has its future hard-currency earnings to senricing been maintained, and is still applied to certain foreign loans for the purchase of the equipment governmental transactions, the rate is left to take required by these projects. care of itself where private business is concerned, Public Finance. This is the first protlem in order and now stands at about $1.00 = 320 Lebanese of ur ency, and one which it lies within the power piastres. of Le% anon itself successfully to solve. The fact that Under ‘the Syro-Lebanese customs union, it a surplus is being produced does not mean either appears to be impossible to determine the respec- that the fiscal system is well adapted to the court-, tive shares of the two rtners in visible trade with try’s needs, or that the State’s finances are being the rest of the world. F here are no official returns managed in the way best calculated to foster the illustrating the size of Lebanon’s invisible dealings, confidence that would prompt Lebanese citizens Profits earned on them go to private firms and and residents to invest their savings in bonds ex- individuals and not to the State, and largely escape pressed in Lebanese currency, and attract capitat taxation. No balance of pa ments estimate having from abroad. an official or even semi-oflY cial character is avail- The undertaking ought not to be discouragingly able. But some notion of the invisible items’ rela- difficult. A certain degree of confidence in the tive importance may be gained from a passage in currency exists already : there is less reluctant the Bank of Issue’s Report for 1948 where it is to hold domestic bank notes in Lebanon than in stated that Lebanon’s excess of visible import some other countries in this area. A bond market over e ort values, huge as it is, constitutes “a does not seem to be an impossible development, minor 7 actor in the balance of accounts, which here. What is needed is to make the fact8 available is substantially favourable”. to public opinion by applying the appropriate Lebanon’s State budget has shown a surplus of principles and mechanism, and to improve the receipts for several years past; this however is fiscal system so as to tap wealth where it can be 50 Final Report-Unbred Nationm Eoonomio Sumey Miuion for the Middle East-Part I

reached, while increasing the efficiency of the com- paid to dismissed employees, the least vexatious munity as a whole by helping its weaker sections and most effective way of dealing with this prob- to reach a reasonable standard of Iiving themselves. lem might be to work gradually and unobtrusively The LeDanese Budget. This is subject to ap- towards an ap ropriate establishment, the number proval by Parliament, as are also yearly statements of posts in w Rich would be determined having a showing how the bud et has been executed. The strict regard to requirements, and to exercise a s stem, however, wor & s very slow1 , At present, vigilant control to ensure that, as present officials t h e most recent year for which “de ll nitive results” in excess of this establishment die off or are are available is 1947. Those for 1948 still await retired, their posts are effectively discontinued. Parliamentary ap roval. The accounts are not au- The same remarks probably apply to the muni- dited outside the b inance Ministry, although there cipal budgets, qually if not more, given that is a IJill before Parliament rovidin for an inde- they get less publicity than the State budget, penrlent audit authority. ft is d#icu!t indeed Fiscal Policy. It appears difficult at resent to Impossible, to form any o inion on the’ current estimate the fiscal burden per caput of tK e Leban- trend from the estimates, !I ecause (a) these are ese population. The State budget is given as prepared on an accrual basis, “expenditure” often amounting to some 75 million Lebanese pounds, including credits which are not spent and “receipts” and those of the municipalities to about one-half including debts to the State which are unlikely that sum. This would mean about &El13 million to be collected, and (b) recourse has fr uently for public expenditure. It would be prudent to been had to additional credits voted at od7 times allow for additions to this sum in respect of out- during the fiscal year. Further, some public serv- lay for refugees, losses on public services or other ices are not included iu the State bud et at all, charges on the State; subject to these reserves, and their accounts are not published, alta ough the the per cu ut charge would appear to amount to State is liable for any losses they may incur and at least JZe 94, or roughly $30. should receive any profits they may make, Ex- This is a considerable charge, given Lebanon’s penditure for Palestinian refugees and receipts wealth and earning capacity, especially if it is not from taxes imposed for this purpose are also out- equitably distributed according to the ca acity of side the budget, and have so far not been published. the various classes of tax-payers. Ur t an real It would greatly contribute both to strengthen estate and unfinished buildings get off lightly, as confidence in the currency and to encourage for- do inheritances, gifts or sales of propert , and eign capital to regard Lebanon as a good risk luxury ex nditure, e. g., automobiles. d n the if the principle of budget unity were applied and other han 8”, duties on mass consumption goods returns on a cash basis were made avallable with appear to be heavy. the least possible delay. It would probably be we!!, Without advocatin hasty measures aimed at during an initial period, to prepare estimates of bringing about radi cl!i changes in a minimum of cash receipts and expenditures and to publish the time, or discouragin initiative, and while making corresponding results, on a quarterly or even a allowances for the I act that Lebanon has a CUE- monthly basis. This could be done, given the size toms union with Syria, it seems that the total of the territory, within a short time of the end of proceeds of taxation could be increased, and the each period once an adequate mechanism had been burden on the poorer sections of the community introduced for determining the respective Shares relieved, by a careful revision of the system, de- of Lebanon and Syria in customs receipts. - vised to make the wealthy contribute m a fuller Improvement of the budget mechanism might measure to the cost of running the Government. advantageously bc accomplished by a revision of Some Lebanese economists advocate a fiscal re- the purposes to which expenditure 1sdevoted. This form based mainly on income tax, But it may be is a question on which hasty judgments would be doubted, in local conditions, whether income tax dangerous; it requires careful study before action could be made to yield on a satisfactory scale in is decided upon. But at first sight it is striking a short time. It would perhaps be safer to rely that well over one-third of budget expenditure upon taxes on visible property and the like that is absorbed by national defence, gendarmerie, are better understood, easier to collect and harder police and security, taken together. Further, it !o evade, at least during a transitional period. appears that the number of public employees has The Banque du Liban, which possessesthe sole trebled over the last ten years. While making due right of note issue, is not a central bank in the allowances for the increased tasks assumed by full sense of the term. It does not have custody Government, and for a growing po ulation, it of all State balances. This question needs con- seems probable that numbers could 1 e reduced sideration, as does that of prompter and more without loss of efficiency. Given the political diffi- frequent publication of the significant facts of culties that always attend such operations, espe- the bank’s position. A desirable solution might cially when publicized, and the pensions and require re-negotiation of contracts. separation indemnities that would have to be Prospective dollar earnings of the Lebanese Appendix II 51

Government, out of which eventual hard-current steps can, and indeed must, be taken by Lebanon loans for develo ment pu sesmight be servic ecr, itself. An attempt has been made above to outline ale scanty for t ii e time be‘p” ng, but may increase if the problem. The essential oints are that Lebanon and when the flow of oil through the Trans- cannot hope to borrow aE road for development Arabian Petroleum Company’s ipelines begins, projects unless : The present position seemsto be tR at the Lebanese (1) It can prove its ability to provide the rqui- Government has bought old with dollars it has site local currency out of its own resources; so far received from the % rans-Arabian Petrole- (2) Its own State finances are run on the lines um Company and has turned this gold over to the best suited to the count ‘s needs ; Bcnque dn Liban towards building up a backing (3) Its State financia7 position can be deter- for the note circulation. The company is com- mined at any moment by means of up-to-date mitted for over a year more to paying for 80 per returns on a cash basis ; cent of the Lebanese currency it needs at the offi- (4) The projects for which it tries to borrow cial rate of $1 = BL 2.18. Appreciable amounts are realistically chosen and prepared, and are not of dollars may be expected from this source, which over-ambitious in relation to Lebanon’s size. appears to have produced $3.6 million (part of Many other things mi ht be done in order to which goes to Syria) since the company started improve conditions in Le‘f, anon. It would be pru- operations in 1947. As from the time when oil dent, however, no& to pursue too many objectives starts to flow through the line, dollars for transit at the same time, but to concentrate on what must and guard fees should accrue to the Lebanese be accomplished in order that the country may Government at a minimum annual rate of over carry conviction as a good credit risk. $24O,ooO,and these receipts might increase con- siderably with a greater flow of oil. WPt It is stated that if delimitation and afFranchise- Egypt is distinguished, in this area, for the merit of the land required could he romptly promptness with which information on public finished, construction could he completecf and the finance and economic matters is made avarlable. linert into rtion $ the end of 1950. If the The National Bank publishes a quarter1 bulletin corn any deci ed to but d a refinery at Saida, a giving not its own position at the end o f the pre- furt er source of dollar receipts would be opened ceding month only, but the essential data on the uPa execution of the budget, note circulation, bank de- The Iraq Petroleum Company cannot be looked sits, prices and foreign trade. A statistical year- to by Lebanon for hardturren earnings. The l&J k, being on a very comprehensive scale, a fees it pays are in sterling, an8 are earmarked long after the end of the relevant ‘cd- tlrG to buy imports from the sterling zone. Formerly, volume now out is that for 198” 3-194, but a its requirements in Lebanese currency provided sterling which was available for other purposes, but receipts from thir source have have heen spent, and now that the refinery at Tripoli has been corn- pleted, it a rs that local sales of petroleum products w/l=1 product all the Lebanese currency this company needs. There are doubtless other uarters from which dollars may accrue to the e, banese State, but th are uncertain and, at the best, unlikely to m 9 e a dgnificant addition to what is received from the Trans-Arabian Petroleum Company. And receipts are, to a great extent, dependent on the new pi line bein set to work, which, even SSSUming Jz t the Le ta nese authorities show the greatest desire to carry out their part of the o c tion, and that no delays are caused outside E - non’s horders, can take place only towards the end of 1950. CuncZu&on. There seems to he about one year qtrarter of the (calendar) year 1949. to run before Lebanon will have assured hard- The last two years before the war, when ex- currency receipts on a scale making it worth penditure was runnin at rou hly IEE 48 million, while to explore the possibilities of obtaining a produced deficits ( P B 3.6 ml!* bon for 1938-1939, lean from some institution which has to consider and IEE 2.5 million for 1939-1940). Since then repayment prospects. There is much to do, in this revenue each year has exceeded iture, and interval, in order that Lebanon should be able to a reseervefund has been built up, wh“p”’ ck is oflicially make the most of its opportunity ; and the nv stated to have totalled f E 76 million at the close 52 Final Report-United Nations Economla Survey Mhion for the Middle Eart-Part I of 1947-1948, and may have increased since then, war, and wholesale prices roughly two and one- as there was a surplus of SEE 12.7 million for half times, the relation between money and whole- 1948-1949, revenue for that year havin risen to sale prices having, however, shown no great XE 170 million. At this rate, the bur Ben repre- change since 1945. sented b the State budget alone, without the The National Bank’s Bulletin published in July, municipa r ities, amounts to over OE 9 per catit, 1948 contains an interesting study of Egypt’s as compared with a per caput income which has balance of trade for 1945, 1946 and 1947, which recently been estimated by FA0 at roughly $100. is summarized as follows, reserves being made as The war and post-war period has also seen the regards the completeness of the figures available: accumulation of sterling balances. Those on No. 1 Account, which ip free, amounted to SE 77 mil- Miiiiorr of Egyptian powrdr lion on July 2, 1949, and fell off considerably after 1945 1946 imr that because of traders’ anxiety to place orders Sterling area ...... , . . . . +53.3 before sterling prices rose following devaluation, Non-sterling area ...... , . . . - 8.8 22:: . t:g . but stand at about &E 70 at present, Those on -- +44.5 -19.4 -31.7 No. 2 Account ( f E 256.3 million at July 2, Of which known increases 1949) are blocked, subject to periodic releases, (+) or demtases (-) of : negotiated between the interested Governments. Sterling balances ...... +45.3 -11.8 -35.1 Although Egypt is not in the sterling area, to Foreign currencies . . , . . . . , . . - - + 3.9 quote the Bank Bulletin, Vol. II, No. 3: “There was no free choice for Egypt when she was ut Allowing for some capital expenditure resulting before the alternative to follow suit or not, a Pew in increase of carltal assetsabroad or reduction of hours before the decision (to devalue) was made debt, a net balance is obtained: public in London. In the circumstances of Egyp tian economy the alternative to the devaluation Milliorr of Egy)tiocl pour& at the same rate would have been a free-currency. 1945 1946 f947 This would have brought E into conflict A. Known capitalitems: with the regulations of the I.T .F. as well as Government investments . . 3.5 3.8 1.0 Redemptions of public debt with the Anglo-Financial Agreement. Moreover, held pbroad ...... 0.4 0.8 12.3 Egypt’s foreign currency resources are mainly A;qu$on of gold for in sterling . . ,” . * ...... *.... - I.4 - Indeed, the National Bank’s position at Sep- tember 30, 1949, shows that, as cover for a note Total ...... 3.9 7.0 13.3 of circulation fE 151 million, this institution milKonaof Eoy#ibn pmwda then published gold holdings valued at f E 6.3 1945 1946 19n million (practically unchanged since 1939), the balance, SE 144.6 million consistin of Egyptian B. Balauce of pawtunic +44.5 -19.4 -319 and British Government treasury bif Is and securi- NetAh+h; of payment, ties. .*...... +48.4 -13.4 -18.4 Formally, Egypt’s foreign-exchange control The link between Egypt and the sterling area system is similar to the United Kingdom’s, In comes out clearly in these figures. Differences be- oractice, circumstances make for rester eltisticity tween trends in the two cases would be difficult to in Egypt. It is not without signi f! cance that trav- illustrate from published material, but are no ellers are allowed to bring in and take out less remarkable for that. f E 20, and that the Egyptian pound note has Problems and Prospects. Egypt’s great rob- strengthened of late, in relation to sterling, on lems are maldistribution of wealth, popu Pation the Beirut free market. pressure, and the decline in cotton prices over the The total circulation increased by leaps and last thirty years. It should perhaps be noted, how- bounds during the war, from $ E 31 million in ever, that the relation between cotton prices and 1939 to f E 150 million in 1945, since when there wholesale prices, or costs of living, as reflected have been minor movements up and down only. by the official indices, although it has deteriorated Allowing for the increase in population that has since the ak prices reached in 1948, appears to taken place in the interval, circulation per m/M be more p”avourable now than it was just before appears to have risen since 1939 from under .ZE 2 the outbreak of World War II. to over f E 8. The wholesale-price index (June- At over 18 million, the country’s population is August 1939=100) rose from 122 for the year excessive in relation to existing posstbilities of 1939 to 333 for 1945. Since then, there have been earning a livelihood. As for prospects of increas- small rises and falls, the most recent figure avail- ing these possibilities, it is estimated that the able (July 1949) being 296. Thus, circulation ap- upper limit of cultivation in Egypt would be pears to have increased five-fold since before the reached if the area were increased by about one- Appendix II 53 quarter, and that this would cost hundreds of and do not go to camps, the net number for whom millions of dollars. Even if ample allowance is housin must then be provided would appear to be made for a possible increase of dry farming, as 165 & T’he Minister of Labour and Social well as other improvements, and for such indus- Weifard states that 50,CNXlnew housin unit8 will trialization as the country’s circumstances permit, be completed by then. In addition, tz e housing there remains the limitin factor of the narrow- programme demands i2,OOOunits for earlier im- ness of Egypt’s own mar1 et, due mainly to mal- migrants who have be?n in Israel five years or distribution of wealth.’ more and are living in excessive1 congested In the presence of this position, the Egyptian quarters. Construction of these 12,a-h additional Government has appropriated, since 1946, a total units will release some 3,000 rooms for the use of of ;EE 35.6 million for a five-year plan consisting new immi nts. of a lon list of public works projects. The 00 the Tir sis of past experience, Israeli officials National B ank Bulletin published in July 1949 estimate the par capita cost of immigrant absorp- (Vol. II, No. 2), in commenting on this plan, tion into the economy at $Z,soO. Although 8tated states that actual expenditure on it had so far m dollars, this figure does not represent the dollar amounted to EE 12.5 million only out of the outlay euperimposed on the extsting balance of fE 35.6 million appropriated, difficulty having payments for each new immi rant. It indicates, in been encountered in importing requisite material. fact, merely the relation of investment to the Given the rate of spending on the five-year plan number of people over an indefinite period. It and the size of the reserve fund, it does not look includes local expenditure for housing ($700), as if Egypt’8 main trouble la in meeting the local investment in new enterprise for immigrant em- currency requirements of CJevelopment projects. loyment, as well as tools and quipment for If a foreign loan were needed to bu equipment Pabourere and farmers in addition to the immi- abroad prospects would be influence d by E t’s grants’ own contribution, if any, to his resettle- ability to produce hard currency for service.5% is ment. In fact, of f 186 million estimated invest- does not seem to be large, ‘udgmg by the balance- ment for the current year, 45 per cent is being of -payment estrmates re 1erred to above. The raised locally and 55 per cent from abroad. State s funded debts are not in themselves of a Without the above explanations, this figure of size likely to constitute an obstacle accordin to $2,500 /.w ca#ut mi ht give rise to erroneous the latest figures available at the moment (1 1 43- concludons a8 to har ii -currency requirement8 for 1944). Foreign debts, all in sterlin , amounted to the absorption of new immigrants in 1950. How- f E 90 million, and domestic to &B 93.4 million. ever, the financing of immigrant absorption does Since then, foreign debt does not appear to #have confront Irrael with a formidable problem. increased. Additions to the domestic debt have No official estimate8 were available showing taken lace; but even if it were assumed that its how it is expected to finance this operation, the total Rad doubled since 1943-1944, the figure relative m,agnitude of which may be measured by would not be alarming. what IS disclosed of the State’8 present expendt- tttre. This falls into three categom8: hmel balancing at $112 million Thr MatitiPr~blm lsrael’s&E;8,Tttt n..ehisap roxunately 1,150, are Arab8 and l,OOO,OOOJews. About on&third of the latter have entered the country since the end of World War II. On 1 No- vember 1949, there were 90,O accumulated in immigrant cam II. 24,000 new-comer8 are ex- tilities cost the country “over SI 100 tnlllion”, pected during k ovember and December. With and that not more than 25 per cent of this ex- 41,ooOleaving the camp8 during theee two montha, diture was met out of ordinary bu et receipt8 there should remain a net accumulation of 73,000 F his might mean some f I75 mrlllon B tom extra- on 1 January 1950. 26,ClRI new immigrant8 are budgetary sources, includln 8ome f 125 million expected between anuary 1st and April 1st of stated to have been provi d ccl by world Jewry. 1950, and 105,ooO L tween April 1st and Novem- Military expenditure is eaid to have decreased since ber lst, making a tota! estimated immi tio+{~ the armistice, but to remain a heavy load, even the firrrt ten months of 1950 of 131,%lz now. Supposing, in order to make a rough gue88 at this figure is added to the 73,000 estimited for Israel’8 task, that the security budget may amount January lst, the total number of immigrants to to about one-half of the ordinary bud , we arrive be abeorbed by 1 November 1950 amount8 to at an over-all budget figure of $3 d!F million, as 204,000. Allowmg for those who settle themselves f ollowa :

‘A muabk &ud on these robfan by Charler Issawi: bank Manariol Fund Quarterly, Vol. XXVII, No. 1 “Pojmlation and & ta&h k & gypt” appearedin the Mil- (January 1949). 54 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

hmtionrof crucial aspects of Israel’s exchange position is dollars undertaken in the appendLd study. (a) Ordinary budget ...... , . . . , , , 112 The preceding comments on the prospective (0) Security budget (about one-ha!f of foreign exchange position of Israel assume, mainly $112 million-a guess)...... 56 for lack of evidence to the contrary, that the ex- isting disruption of trade between Israel and its (c) Development budget . . . . , 154 ileighbours will subsist. Obviously, however, a Total ...... , . , 322 restoration of normal commercial relations. would significantly relieve the pressure upon the Israeli Of this total of $322 million, not more than economic position, and also the general outlook one-third is covered by ordinary receipts at their for the Arab countries. present rate. It may be that the above guess of WLhout touching upon any of the political &I 56 million for the security budget is too high, problems involved, further factors to be taken into but Israel’s financial position would remain pre- consideration arz : carious even if the figure were greatly reduced. (1) Israel, with its strict system of control, It is possible that Israel can continue financing has so far been forced to forego the opportuni- its extra-budget security outlay, as at present, ties for international exchange and brokerage by placing treasury bills with the banks and the business which can be so profitable where trans- p*qblic, and by gifts from abroad, without causin actions are free, and for which many Israelis disastrous inflation. There remains the over-a f 1 have the requisite training and aptitude; cost of immigrant-absorption including the $154 (2) There is evidence that the Israeli pound is million budgetary outlay earmarked for this pur- con ideraily over-valued at the current rate of pose, and secondly a sufficient amount of other $2.80, with resultant adverse effects on exports. In investment, domestic and foreign, required to an effort to render export prices more attractive, complement Government outlay to absorb the and to counter inflationa ressure, the Govem- immigrants. ment has launched a 7ffe ationary programme Israel’s officials, in forecasting the balance of which, over a period of six months, has resulted in payments for 1950, estimate that cash require- a deciine in the cost-of-living index from 371 in ments for financing imports will amount to $140 April to 329 and in wholesale prices from 491 in million ( f: I 50 mrllion), as cornpared to $112 March to 397. Money wage rates of industrial million ( f I40 million) for the current year, workers have been reduced by an average of 10 representing a net increase of $28 million ( SI 10 per cent ; and over-all wages by 7% per cent ; million). On the receipts side, there is in prospect (3) In appraising these spectacular results, it a falling off of exchange avai,aLilities of over should be borne in mind that in so rigorously cbn- $20 million. The uncovered exchan e gap may trolled an economy, the significance of a decrease amount to ap roximately 40-55 mi f lion dollars in the price index is not what it would be in a equivalent in 18 50. A detailed examination of this market economy. Thus an enforced reduction in aspect of the question is appenc,ed. As a means prices may result in further intensification of of closing the gap, Israel s officials place high the inflationary potential ; hopes upon foreign investment in productive en- (4) T*here is not full employment in Israel terprises in the country. So far, however, the at present ; jobs are rationed hke everything else ; results have been disappointing, primarily owing, and immigration is constantly adding to the suply on the economic side, to a serious discrepancy of labour. Production per man-hour is not nn- between the wage line and the official exchange pressive by Western standards ; rate. In terms of dollars, Israeli wage rates appear (5) There is some evidence of latent in&- excessively high to the foreign investor. tionary ressure. The note circulation haa risen A second possibility of closing the gap would from f P 28 million to f I 48 million during the lie in a further compression of domestic consump past year. The Government has increased the tion, either by more severe taxation or by a higher rates of taxes, partly for revenue, but partly in rate of voluntary savings. While Israeli officials order to reduce the ressure of money in circula- tend to discount the possibilities of additional tion on prices. The 8 overnment’s greatest asset in taxation, they express hope that savings may be this connexion is its people’s firm confidence in 1 further expanded, citing in this connexion the the currency ; Jewish people’s habit of savin methodically for (6) Israel has already contracted a $100 million investment. Thus, banking ofl! cials estimate ac- loan from the Export-Import Bank. Assuming cumulated savings per capita at roughly fI50 that this total is allocated, service will reach sub- for 700,600 savers. stantial proportions within three years in relation The most important sources from which means to prospective availabilities. The Government’s of closing the exchange gap might be derived programme will require other investments in sub- are contributions from world Jewry and releases stantial volume. The question arises whether the of sterling balances. Further examination of these country can attract enough capital for its settle- Appendix II 55

merit-absorption purposes without contracting from primitive regions, and especially their chil- to pa more dollar debt service than it can man- dren, will be absorbed rapidly. Standards of ur- age. I?ta chief prospective market for its present b@sm and public service are high, given the main export, cltrue fruit, is the United Kingdom. drfficulties, and realization is improvmg at a Prospects. A cool examination of the relevant sharp rate. figures and of the fact that certain crucial data Jewry the world over has its eye8 fixed on are with 6 eld), is apt to provoke wonderment at Israel, and will doubt!ess make great &ort8 to the magnitude of the task Israel’s Government give it the help it demands. Exchange difficulties has set itself. But there are forces which cannot are certainly a grave obstacle. About threequar- be measured in figures, and these forces sometimes ters of total contributions now come from the decide issues in a rent defutnce of reason. Israel dollar area. The USSR and it8 satellites, where has accomplisheBP” astonishing things already. It the bulk of Jews survivin outside the U.S.A. would be as rash to predict that it ~111not succeed live, permitted some trans f ers up to last year. as that it cannot fail. Much depends on the extent Now, no longer. But it is said that Latin America of help from abroad. is a ready giver, and even in the case of the Among the factors working in Israel’s favour exchange-control countries it is not impossible to more otently than in that of other countries, work out legal means to enable aid to reach the fo Plowing deserve mention : Israel, A relative!y large proportion of expenditure Final1 , it may be that the very magnitude of the goes to education and public health. task, and of the disaster that would attend failure, There is, among many of the Israelis who have are the stimuli needed, at 8o critical a time, to already found a place in the country a8 well as spur on welLwi8hers abroad to redouble their among newcomers, a high level of education and/or efforts, and indeed that the Israeli Government craftsmanship. These people can turn to almost itself regard8 it8 chances of survival as better in any pursuit to which a planned economy will an atmosphere of peril than they would be if pro8- direct them. pects appeared more assured. Next to instruction, public health and welfare are the Government’s chief care. In spite of an BALANCE OF PAYMENTS OF ISRAEL acute housing 8ho e and an austerity diet, the 1. swnwy -and concltionr people in general loo7 strong and well ; the mor- tality rate is very low. The attached memorandum endeavour8 to pull There is a spirit of national-racial solidarity, a together some of the material that ha8 lxen made willingness to make sacrifices in the common in- available to the Mission upon the balance of pa - terest, a faith in Israel’8 ability to overcome all merits position of Israel in 1949 and upon x e obstacles, the like of which it would be hard to prospect8 for 1950. With respect to the 1949 ‘find elsewhere. sition, most pf the ba8ic data 8upphd by the In the eye8 of its leader8, Israel is running alo r sraeh authorW8 r-ding civilii rt8, a- a one-way road carrying hea traffic, on wlli x rts, rates of contribution by world T ewry, re- it cannot turn back, or even 7s ow down, without p”ea8e of sterling balances etc, are based u disaster; a road leading to the abso ‘on of all published data. Although any forecast for 1$” 50 Jews who, for whatever reason, find T ife in their must necessarily be b88ed upon a number of more present abodes intolerable. The idea that any or less arbitrary assumptrons, the a8sum@ns selection 8hmld be made among tho8e wishing to chosen are believed to be on balance optm&tic come i8 utterly rejected. “When one’8 relatm8 and to tmderatate rather than to -rate the are faced with misery or destitution, one doe8 not achange difficulties likel to be encountered by rtop to consider whether one can afford to take 18~1 in 1950. The br WI umclU8ions reached are in all or an? of them. One 8hare8, what p”e has as follows : with than.’ In varying forms, thl8 8entlment ill A. Israel is currently dependent to the extent expressed at every turn. There is, however, recog- of more than 75 per cent upon extraordinary a- nitnm in some quarter8 that the rate of influx of temal aid-cash contributions, donations in kind, immigrants must not be allowed to cause an Export-Import Bank financing, and release of economic breakdown. sterling balance-for covering its balance of payment requirementa. Immigrants have reached 18IYkd from almo8t all over the world. But although the present inflow B. Even in the absence of further in&ration, comes chidly from Arabia and North Africa, the this exchange situation could not be expe&ed sub- Israeli way of life has already been set don 8tantially to improve during 1950. ruer8tern lines, largely by Jew8 from ($J! l-3 C. The actual prospect of an immigration of at with wme experience of, and admnatron least 150,000 during 1950 threaten8 to open up for, Tt e U.S.A. There is every prospect that thie an exchange gap of EI 15 to 20 million or about pattern will prevail, and that the immigrants 40 to 55 milhon dollar8 equivalent. This estimate 56 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

assumes no further decline in the annual rate of of the new Israeli State, the exchange-earning contributio*ls by world Jewry, forecasts a 30 capacity of the former Mandate area has still per cent increase in export values, and takes full further deteriorated, while exchange requirements account of Export-Import Bank financing now have continued to mount. available to Israel. D. Although the Israeli authorities express 3. Estimated balance of payments of Israel confidence that new commercial investment may i?t 1949 be counted upon to narrow the gap to manageable The current balance of payments position in proportions, foreign investors are unlikely to Israel, as estimated by the local authorities, may venture any substantial placements in Israel so be outlined as follows: long as Israeli wage costs remain so exorbitantly A. Payments Requirements high in terms of dollars and sterling. 1. Imports. With respect to the visible balance E. Nor does there seem to be a reasonable pos- of trade, recorded import arrivals in Israel during sibility of further reducing the standard of living 9 months of 1949 amounted to &I 59.8 million. via exchange depreciation, taxation, or forced Of this total, the Israeli authorities estimate that savings to the degree required to yield significant foodstuffs, raw materials, and other imports for exchange economies. current consumption accounted for 75 per cent, F. Against this background, the problem of the i.e., &I 45.2 million. The balance of f1 14.6 appropriate rate of release in 1950 of the 25 to 30 million, or 25 per cent, was comprised of ma- million of frozen sterling balances held by Israel chinery, building material and other capital sup- assumes more critical significance than may be plies, reflecting the remarkably high rate of capi- generally realized. To a very considerable extent, tal investment currently in progress. the prospective gap in the Israeli exchange ac- counts for 1950 may be as satisfactorily closed by Composition of imports~ additional sterling availabilities as by larger dollar January--September 1949 receipts. But whether His Majesty’s Government will find it possible, particularly in view of the repayment demands of its other creditors, to re- CWl7gmY lease sterling on the scale required by Israel 1. I~)porr current requirements : . . . ..**...*...... *. 10.111 remains a matter for negotiation between the two I 6) Industrial raw materials.. . . , . lfj.63~ Governments concerned. (c) Agricultural raw materials. . . . (d) Fuel ...... , . . . . . l12:tg 44540 (e) Other . . . ..*...... a. . . 2. Historical dependence of Palestine 2. Capital imports: @on foreign aid 0) Industrial equipment . . . .,.*.. b) A ricultural quipment ,..... i*‘E The central fact in the present economic posi- I c) Ot4l er equipment...... a.. :614 tion and prospects of Israel is that the area now d) Building materials . . . . . , . . . . . 3.298 I e) Transport ,...... a . . ..a. 3.269 14.649 occupied by the Jewish State would probably re- ,..... fIS9.189 main heavily dependent upon a continuing flow Total . . of foreign aid for some years to come, even if ‘Excludes unclassified items amounting to about (a) no further immigration were accepted;- and f I 600.008. (b) the present obstacles to trade with the Arab world were swept away. Thus, the former Man- More than 37 per cent of Israel’s imports during date area of Palestine, of which Israel now con- the first 9 months of 1949 were purchased in stitutes an uneconomically isolated segment, was Western Hemisphere markets. basically a parasite State, largely supported by foreign contributions, by capital inflows induced Distribution of importe by by political rather than commercial considerations, countries of origin and by the local expenditures of the British mili- Milliom of tary forces. Even in 1939, less than 40 per cent of Couwcltd88of oritir Iaadipownddr Palestinian exchange expenditures of about 1. v6; Hemi.s#here XP 14 million were covered by current earnings a . . *...... ,,...... 16.3 on export or service account. The residual sum of (b) Other Western Hemisphere... . 6.2 22.5 about f P 8.7 million, or more than 60 per cent, 2* $y& . . . . , ...... 5.9 was almost entirely supplied by foreign donations, (b) Other Europe ...... --21.3 investments, and other capital transfers. During 3. Asia ...... the war and immediate post-war years, moreover, 4. Africa ...... the economy of Palestine became geared to an 5. Awtralti ...... even more seriously adverse balance on current 6. Other ...... account. And since the emergence in May 1948 Total ...... Appendix II 57

It would seem probable, however, that such im ort arrivals in the early months of 1949 prob- unusually heavy recourse to Western Hemisphere ab Py correspond to exchan e commitments made marketa is not entirely attributab!,: to rigid im- in the closing months of f 948, or even earlier. port requirements that could not be, at least par- This time lag would not be of serious consequence tially, satisfied in the sterling and other soft-cur- if the rate of exchange commitments remained rency markets. There may well exist a rather unchanged during the period under consideration. extensil .‘ange of import r uirements for which But since, in the case of Israel, the rate of ex- sterling would provide virtua“t ly as effective a pur- change commitments has sharply varied during chasin power as dollars. With a resumption of the past eighteen months, a balance of pa ents norma f commercial relationships with the Arab estimate for 1949 cannot rel upon recor x”ed im- countries, this range would be further substantial1 port arrivals without serious r7 misleading results. enlarged. Such substitutability, potential as we-r 1 Thus, the Israeli authorities report exchan e as actual, of sterling for dollars should be borne allocations during the first nine months of 194B in mind when considering the prospective ex- of near1 $132 million, or an annual rate of abou; change requirements o f Israel, during 1950 and 81 42.!?million. This compares with actual import subsequent years. arrivals, similarly financed, during the same Of total im ort arrivals during the first nine period, of f I 44 million ( f I 58.6 million annu- months of 194!I , approximately 2144 million, or ally), a strikingly severe cutback of PI 16 million an annual rate of f158.6 mtllion were financed annually, or nearly 30 per cent, in the rate of b exchange allocations granted by the Israeli ex- exchange allocations. Since the Israeli Government c Kange control authorities. Although deliveries is reportedly not accumulating reserves, this cut- of ca ital equipment financed by the Export-Im- back presumably reflects developing exchange port 8 ank did not exceed an estimated 61800,000 scarcities of grave significance to the Israeli during this period, shipments during the closing economy. months of the year are expected to raise the To the extent of perhaps PI 6 million, this re- annual figure to about $16 million. duction in exchange allocations will be cushioned The residual f I 15 million of total import by rising deliveries of basic capital imports, values, an annual rate of $120 million, were financed by the Ex rt-Import Bank loan. The provided by commodity imports requiring no ex- Export-Import B allr loan is roviding, in effect, change payment. T.hus, in addition to donations a partial r lacement of decP ining conttibutions in kmd and the ersonal belongin s brought in from world ‘p ewry. But since Export-Import Bank by immigrants, tR e Government itas permitted funds may not be freely allocated to exchange foreign investors to transfer ca ital to Israel in requirements in general but must instead be re- the form of commodity imports Por resale on local served for specified projects, the Israeli Govem- markets. ment has apparently no alternative but to cut back In terms of modes of financin , therefore, the imports requirin payment in free exchange by import trade of Israel during the I rst nine months about 01 10 mil r ion, representing a net reduction of 1949 may be broken down roughly as follows: of more than 15 per cent from the annual rate of import arrivals during the lirst nine months of 1949. Here is a highly mgnificant reflection of the c-WY of Ilu*cirp austerity programme which is rendered all the more severe by the continuing growth of the l., From the exchangereceipta of theIsraeliGovernmeat...... lation and resultant compression of the indivi?? t$ 2. Domtion8, etc., in kind., . . . . . share of the national income. 3. Export-Import Bank loan. . . . . To recapitulate, it is estimated that, for balance of payments purposes, the debits on im rt account 59.8 duri the calendar year 1949 may c estimated rough7 y as follows : For the pu ses of calculating a balance of payments for ‘p”srael during 1949, the estimates presented above of import arrivals in the form Eatinuted debita on import account 1949 of donations and investments in kind and shi - Jon.&pt. h.-D#C. ments financed by Export-Import Bank fun crs, cowww of Jkurc(rg uKionJ of IUUK #onrd# may be utilized without serious distortions of the current exchange position of Israel. With respect 1. Exchange commitments ...... 31.9 42.5 to these import arrivals financed out of the ex- 2. Donations, etc., in kind...... lS:j change resources of the Israeli Government, how- 3. Export-Import Bank loan..... 28 ever, one encounters the familiar tecnnical problem 7iF -iii3 that import arrivals, so financed, do not reflect the current rate of exchange commitments but 2. Inuisibbk Po~ent~. Invisible, payments re- rather commitments made months before. Thus, ported by the Israeli authorities amount to fI8.2 5G Final Report-United Nationr Economio Surpey MiMion for the Middle East-Part I

million for the first nine months of 1949, suggest- Perhaps the most significant aspects of this ing an annual rate of SI 10.9 million for the breakdown are, first, the comparative impoverish- entire calendar year. Of this total, freight pay- ment of the immi rants now flowing into Israel, ments and remittances reportedly constitute a and, secondly, the f ailure to attract any substantial major fmction. Service payments on revious volume of commercial investment from abroad, investments amounted to no more than E I soo,- despite the Governmental conces!dons, noted 000 during January-September 1949. In 1953, above, of capital imports in kind for purposes of however, service charges on the Export-Impo-t resale on local markets. Of total capilal transfers Bank loan of $100 million at 3 per cent, repayable in kind of &I 3.8 million during Janur .ry-Septem- in twenty-four annual instalments, will cause this bet, Israeli officials admit that the m:tjor propor- p?tticular charge upon the ba!a?ce of payments to tion is comprised of so-called “sentir.lental’ rather zifiig approximately $11 million or nearly $14 than commercial investment. At the present moment, the early purely commercial venture B. Re& reported to be in reasonable prospect appears to 1. Exports. On the receipts side, reported ex- be that of an electrical fixtures plant to be financed ports during the first nine months of 1949 amounted by the Philips Company, of the Netherlands. This to no more than BI 8.3 million, less than 14 per situation is unlikely to improve so long as Israeli cent of import values durin the same period. wage rates and productivity remain so far out of However, nearly 90 per cent of such export values line. Thus, at the $2.80 exchange rate, Israeli la- were concentrated within only three items-citrus bour appears exorbitantly expensive to any foreign fruits, diamonds, and fruit juices-reflecting the investor concerned about making money. exceedingly narrow range of Israeli export avail- 4. National Institutions and Funds. The most abilities at the present moment. crucial factor in the exchange position of Israel, IsraelI exports however, is the rate of contribution by world Jew January-September 1949 to t,he various national institutions and funds, suex as the United Jewish Appeal. Here one may note MMiow of corNoory *f rrpo9-i Zarorli pownda two sharply dtvergent trends. On the one hand, Citrus ...... 5.1 total contributions by world Jewry for assishnce Diamonds . , ...... 1:: to Jews outside of as well as within Israel evidence Fruit juices ...... , ...... an abrupt falling off. On the other hand, with Other ...... I...... 1.0 the transfer of refugee Jews in E,urope to Israel, 8.3 the percenta e share of Israe! :n the total of For purposes of balance of payments calcula- Jewish contri %utions is rising. tions, however, it is referable to employ the On balance, however, the trend of donations slightly lower figure o P $11 7.7 million in actual actually received ,by Israel, as distinct from ailo- exchange reecipts from exports reported by the cation of Jewish relief funds to other areas, ap- Israeli Government. pears to be sharply downward. Thus, donations 2. Tourism, etc. With respect to invisible re- to Israel during the 11 months’ period October ceipts, tourist expenditures, etc., provided approxi- 1948 to August 1949, amounted to ;EI 36 million, mately $1 5.7 million during January-September, an annual rate of roughly di 140 million. In St&- an annual rate of $1 7.6 million. The exch&nge ing contrast, donations during January-September assetsof arriving immigrants reportedly provided 1949 amount to only somewhat more than $120 only a negligible share of this total. million, an annual rate of approximately f127 3. Imports without Payment. Correspondin to million. This sharp decline in the rate of contribu- imports without payment running at about f: f 15 tions constitutes a most serious threat to the million during January-September, there must, economic stability of the Jewish State. of course, be noted an offsetting credit on the re- 5. Release of Sterling Balances. Finally, a sig- ceipts side. Of this general category of imports nificant share of Israeli imports duting 1949 is financed without actual cash payment, the Israeli being financed by releases of sterling balances authorities have provided the following break- granted by the United Kin dom. Thus, for the down : ten months’ period January- 6 ctober, the U.K. has Imports without payment released sterling in the e uivalent of about $18 January-September 1949 million, of which 216. s million were spent or committed during the first nine months of the Milliosr of cofe#ory Iwdi powrda year. Residual sterling balances of Israel are vari- Gifts ...... I$ ously estimated between EI 25 and 30 million. Personal assets of immigrants. . Negotiations regarding future releases of these Transfer of capital...... 3.8 blocked balances are reportedly soon to be initiated. Unclassified . . . . , ...... 5.9 In this connexion, it may be noted that as of 15.0 14 November 1949, the Issue Department of the Anglo-Palestine Bank of Israel recorded nearly tions. On the contra , internal political pressure8 &I 24 million of 8uch etcrling asects a8 backing may well force a re7 axation of the present aur- of the note issue. The Iaraeh authorities clearly tcnty programme with consequent heavier dc- intend, however, to 8UbNtitUtCdomestic obligations mands u on the exchange resource8 of Israel, as fully a8 possible for such idle exchange a88eta, While aa ditional consum tion import8 might be in the conviction that popular confidence in the financed by cutting bat t: the investment ro- currency i8 80 strong 88 to require relatively little gramme, such action would, of course, only a clay psychological support in the form of gold or other still further the ultimate achievement of economic exchange reserve backing for the currency. viability. To recapitulate, the foregoing rough estimate But by far the mo8t dangerous clement in the of the major balance of payment items may be balance of aymcnts outlook of Israel is the con- summaritcd in tabular form as follows : tinuing in tpow of immigrants. In many Jcwi8h quarter8 there apparently exists an ab8clute con- viction that Israel can absorb no lees than 1 million Edmated Bnlance of Puymenk of Imael further immigrants, thereb doublin its present for 1949 opulation, w&in the brie 7 space o f four years. ii ut in retent months, the prellent Government haa Jondet,. Jor..Dee. a arcntl concluded that immigration during Miluofu of hwu Powfbdr l!% anZ 1951 cannot slrfel exceed more than 150,000 annually. In view o P the 8Cverc political Payments: pressure8 upon these official8 to permit an unre- Importa : stricted influx, however, the figure of 150,000 im- Exchange commitmcnb 31.9 migrants annually may well prove a relatively op- Dor&onr, etc.,in kind 15.0 ~:oo Export-Im rt Bank: timistic forecast of the burden of additional popu- actual sh p”pmenta . . . . . 0.8 6.0 lation to be suddenly thrust upon an economy already strained to the utmost. 47.7 - 68.0 Invisibler With respect to the ro ctivc coat of immi- . . . ..*..*.**.*,I. 8.2 10.9 grant absorption, Israc PI?i o cials repeatedly cite Total .,....,*,., sJ.9 xi an estimate of $2,500 psr c~rput, allegedly baaed Rtcriptt: upon the cost experience of earlier yeara. If by absorption, the Israeli Government meana l l *...1 ...... * .,., 7.1 10.3 f2zzl etc...... * . . . . , , 7.6 that immigrant8 when fully “absorbed” should Don&or&, etc.,in kind., . , , , $8 contribute to exchan earnings, directly or in- National inrttutionr t fund8 2012 E8 directly, as much as if? cy increase import require- Rcleue of rtcrling balancu.. 6$ Export-Import Bank loan., . ments, more precisely, that the cntlre economy, L!i - including the new ulation, 8hould Cam a8 much Total ...... - 55.9 - 78,9 exchange as it apenp”B 8, the ca@al inve8tment re- quircd to render the new immr b 8elf -8UppOrt- Of total payments requirement8 currently ap- ing in this 8ense would prohaI? ly far exceed the proximately B I 79 million annually, rtceipt8 from $2,500 estimate. Thus, aa noted above, even the exports, tourism, and various services thus cover existing population of about 1 million is currently no more than &I 18 million, or roughly 23 r earning no more than 23 per cent of its current ant. The residual balance of more than E p”61 exchange outlay. million, or 77 per cent, is only precariou8ly But even if the $2,500 estimate I8 accepted, one financed by foreign contribution8 and other capt- immediately encounter8 the further difficulty that ta1 inflows. In terms of the national income, ouch no breakdown of this figure between foreign ex- ca ital transfer8 prohabl account for more than change and local currency cost8 is available. There 23 per cent of the total kyow of goods and services is hete involved, of course, the delicate issue of currently available to Lrael. the value of Arab property expropriated by Israel. Moreover, Israeli officials are reluctant to provide even a rough estimate of the time period over Bdance of PaymenU Pmqacta for 1950 which such immigrant coat outlay8 must be ef- and 1951 I fected. While it would seem obvmus that, ‘vzn an influx of say, 150,000 immigrant8 in 195$ , the Unfortunately, there is little if any prospect Israeli Government could not powibly spend at a of an early improvement in this dangerously un- rate of $2,500 per immi ant in a dngle year, balanced exchange position. Even in the absence even if it possessedthe ~81)r required, there k ncv- of further immrgration, it is doubtful that any erthcless no basis for choosing between the re&- significant economies could be effected in the con- tively more reasonable time period8 of 3, 5, 10 or sumere’ goods import programme, which has heen even 15 years required for full abtirption. And it already compre88ed to severely austere propor- is obvious that as the time period lengthens, the Final Report-United Nation0 Economia Survey Misrion for the Middle East-Port I 60 ------entire absorption operation becomes progressively Under favourable harvesting and marketing less economtc, i.e., the carrymp cost of providing conditions, export yields from citrus and other for the current exchange requirements of the im- shi ments might expand export earnings during m$rants will constitute an increasing share of the 1930 to, say, f I 13 million, roughly 30 per cent entire absorption cost, Thus, if the average ab- above the current rate, But the crucial item on sorption period should prove to be, say, ten years, the receipts sic;e is, of course, the donations from the exchange requirements of the immigrants for the National Institutions and Funds to be ex- purely consumption purposes might approach or pected. As noted above, Israel is currently faced even exceed the cost of machinery and other ca i- with an ominous decline in the rate of donations ta! imports required to ensure their ultimate seP f- from the National Institutions and Funds. In seek- sufficiency. ing to forecast the balance of payments position In general, it would seem probable that the Is- of Israel in 1950, therefore, an assumption that raeli officials have been unable to make, even for 1950 donations will not decline further below the their own confidential purposes, any reasonably 1949 annual rate would probably tend to err on useful estimates of the overall absorption cost and the side of optimism rather than pessimism. of its distribution over time. It is accordingly sug- On the basis of the assumptions outlined above, gested that the $2,500 estimate be disregarded en- the Israeli Government would be faced in 1950 tirely and attention focused instead upon the more with exchange re uirements for essential imports limited but somewhat less hopeless task of esti- of roughly f1 s2 million, and for services of mating the prospective cost of providing the 150,- about f. I 11 million, or a total of 21 63 million, 000 immigrants with reasonably adequate housing, against exchange availabilities that will probably State services, and more or less productive em- fail to exceed $1 48 million. This would su eest ployment. a minimum exchange ga of about $1 15 mi f lion, On this basis, the Israeli Ministry of Finance or somewhat more than &Q million. In view, how- estimates that import requirements in 1950, ex- ever, of the relatively optimistic assumptions clusive of deliveries financed by the Export- made with respect to the rate of immigration and Import Bank loan and donations m kind, will be the contributions of world ewry, the deficit to increased by roughly f1 10 million in the event be actually incurred in 195d may very well ap- of 150,000 immigrant arrivals. This estimate im- preach $1 18-20 million, or about $50-55 million plies an increase of roughly 24 per cent in cash- equivalent. financed imports, primarily of consumers’ oods, as compared with a population increase of f 5 per It is of considerable significance that this ros- cent, and a probably lesser percentage increase in pective deficit in 1950 is not necessarily a a ollar the gross national product available for cunsum - gap, as distinct from shortages of other currencies. tion, Pending further investigation, the 01 P0 As noted in an earlier connexion, extensive pos- million estimate would appear to be a reasonable sibilities unquestionably exist for diverting pur- a& Toximation. chases hitherto made in hard-currency markets to Whatever additional capital requirements may the sterlin and other soft currency areas. Thus, be occasioned by the annual 150,000 immigrants it is entire f y possible that most of the gap now in should be more than taken care of by Export- prospect might be closed by additional sterling Import Bank financing already provided. ,As a becoming available to Israel. very rough guess, the Israelis might succeed in When and if consideration may be given to putting to use in 1950 as much as $35-40 million extraordinary means of financing this prospective of capital equipment so financed, leaving a residu- deficit in Israel’s exchange accounts in 1950, there- al of $45-50 million available for 1951-1952. In- fore, the problem of the appropriate rate of release visible outlays during 1950 should not markedly of the f I 25-28 million in frozen sterling bal- increase, if at all, nor is there in firm prospect ances currently held by Israel will unquestionably any significant rise in invisible receipts. become of crucial significance. APPENDIX III

Rewarch and Technical Survey Requirementa in the Middle East Countrier The re-requisite for executing any develo technicians on the subjects in which they are quali- ment SCR eme IS technical survey, whether of t Re fied. This is due in part to a lack of education (not area and raw materials on the potential of which in the strict, but in the broadest sense) whereby the scheme is baaed, the techni ue of carrying it the “how” and “why” of utilization of such men out, or the resultant effect on ts; e regional or na- are not clearly recognised. Qualified architects, for tional economy. The degree to which such survey example, in at least one country, complain that is necessary varies with the amount of previous they are not asked to design even large buildin a, study of a country ; in some there is no need for since the genera! ublic tends to confuse such f e- investigation of geology or geography, for these sign with the wor f: of the constr(lcting engineer or are alread well known; in others no data exist contractor (the same Arabic word is often used even on t Ke basic climatic conditions. The coun- for both). Inadquate salaries aid to technicians tries of the Middle East, in the main, fall into the in government service also reau Pt in the movin of latter class. able and ambitious men from their own fiel f to Advance technical survey is therefore particu- genera! government administrative posts, since larly necessary for any development scheme in this this is the only way in which they can receive area, Without such aurve the practicabilit of the promotion. scheme itself may be dou ii tful ; and even i r , by the It is clear, therefore, that although more use employment of suitable executanta, the conatruc- can be made of local ability, most of the techni- tion and similar work are adequately completed so cians to survey, lan and deai the develo ment that the project pev SBis not a failure, there is yet schemes essentiaP for the Mi r die East wil f have no, guarantee that it has been taken in its proper to come from abroad. Not only wilt such help be priority from a regional point of view, or even necessary to meet the existing deficiency and pro- that it is of any national value at al!. Technically vide greater practical experience, but decisions of unaurveyed developments bear the same relation international bodies on the granting of loans are to, those properly surveyed as does the growth’of often made more readily if the “bankability” of wild frmta to those properly cultivated in an the reject is certillcd by an outside agency. orchard. T Re fields in which such technical assistance is For such surveys an adequate supply of compe- required can, for convenience, be divided into six tent technicians 1s required. Unfortunately, the major heads : Middle East countries (excepting Israel) have k 1) Study of the basic elements soil and water, serious lack of this type of trained specialist, not an 6 their products, the basic industry of agricul- only on the hi her but on the technical foreman ture in its broad sense; lete!. To say tf is is not to minimize the efforts xamination of the second primary source made by all these States--where this dearth of -r%eEl wealth . technicians is clearly recognized-to train their (3) Survey of ‘industrial development ; prornisin young men both at home and abroad 4) Technical advice on transportation ; over the f aat decade or more. Secondment to West- I 5) Stud of economic and administrative im- em countries, and more particularly to the United plications o P development ; Kin dom and the United States, is now a well- (6) Advice on the social effect of development. esta% liahed part of higher education policy. Much has been done by the universities in Egypt and (1) The great natural assets of the Middle ?eirut, the colleges in Baghdad, and higher teach- East are its soil, so frequently fertile yet 90 fre- mg institutions elsewhere. But the supply is piti- quently wasted, and the water, scanty in quantity, fully inadequate to the demand ; it is much leas in which alone can waken this soil to life. From the proportion to the population than in the Western union of the two spring those agricultural rod- countries ; yet the requirements, owin to the lack ucta the cultivation of which is the basic in austry of previous surveys and the need for development, of the entire region. The first priority in technical are infinitely mater. Moreover, there is often a survey must always be given to that which leads lamentable fai !I ure in the countries of the Middle to development in this field. East to employ their expensively trained local The types of technical surveys which are re-

61 62 Final Report-United Nationr Economio Survey Mission for the Middle En&-Part I quitrd in xmic or all of Llrc Middle Ihut coun- underground resources. In this field, five types tries, for some or a!! of the development projects ot survey are necessary: in the lam!, watei, alid agricultural fields, may be First, while certain Middle East countries pos- divided into four. sessa meteorological or anization, this is, in many (0) The primary surveys are those of the land cases, conditioned by tIi e needs of aviation, and itself. full studies of the meteorology and climatic fac- The basic survey of this nature is, of course, tors of nearly all countries have yet to be made. the investigation of the country’s geographic lay- Secondly, even if the climatic situation and, in out, i.e., cartographic survey. such mapping is patticular, the moisture which falls upon the earth partially complete in ever cotmtry but adequate are known, the country’s water resources cannot m almost none. It should T 2 remembered that the be developed without full investigation of the But- modern technique of air survey can readily be ap- face flow or the subsoil waters. Hence technical plied to the Middle East countries, and that this investigation of the stream flow and underground form of map making may be the answer to much water resources must be made, not merely for a of the need. short time but PS with climate) over a period, ‘Secondly, it is necessary to know the kinds of by properly quaI ified h draulic engineers. Some soil; surveys by qualified soil chemists are an es- scheme may have to ii e started either on the sential preliminary to both irrigation and agricul- inadequate data already existing or on the re- tural development. On such surveys it is possible sults of tests taken over a short period; but, in to decide, for example, the relation of irrigation general, such recordings must be carried on over to drainage in the light of the danger of salting- a period of ears, and technical assistance may be up; and on the chemical composition of the soil concentrate cr on the setting-up of an organization the choice of ctop frequently depends. to do this. At the same time special attention must be paid to floods, for the control of these and Third! , attention must be paid to the waste of the elimination of the drstruction which they cause the soil byy water and wind erosion, which is so will be one of the i;t:;or objects of many devel- widespread-and, in many places, so chronic a opments. disease of the lands of the Middle East. Hence Thirdly, it is fairly obvious that the design of many areas must be examined by erosion control construction works, themselves involving vast ex- experts, and the implicatiors of schemes from the penditures and even the possibility, in the event of erosion point of view must be carefully consid- failure, of major disasters, must be very carefully ered. Such soil conservation survey is integrally made in advance by the best available technicians. related with forestry and is often best carried out In particular, in addition to the general engineer- by experts in both subjects. ing aspects, the closest attention must be aid to Finally, it is necessary, before embarking on geologic enquiry into the nature of the Pounda- large agricultural development schemes, to con- tions of dams and the possibility of seepage from sider the present utilization of the land and to the storage reservoirs. map out, with the assistance of data of the second Fourthly, before water develo ment schemes and third studies above, the present and future are undertaken, the utilization of t Re controlled or uses to which the land can be put. At the same stored water must be considered by competent ir- time, it will be necessary to examine the land tigation engineers ; and assessment must be made, from the le al aspect of land tenure, a type of by them in conjunction with riculturists, not survey whit 1 is perhaps bettet carried out by lo- only of the canal network whit“a will carry the cal rather than by foreign experts. This is of fun- water to the land, but of the water duties of each damental importance, for some reform of the land area, bearing in mind the crops envisaged and the tenure system will be needed before development results of the work of soil chemists. At the same can proceed freely and unhampered and its fruits time, as irrigation is technically surveyed, so also made available to rich and poor alike. must drainage schemes be surve ed, for the latter In carrying out such surveys and in the plan- ate essential corollaries of the r ormer. ning which results from the new knowledge of Finally, another aspect of the utilization of the geology, chemistry, conservation and utiliza- v,ater resources-the development of hydro-elec- tion of the land, attention should be paid to the tric power-must be consideted as part of en- need for advice on the setting-up of co-ordinated gineering planning, and hydra-electric specialists departments of land use, whose function it will be must survey not only the technical aspects of el’ec- to survey and develop this basic asset. tricity generation but also the methods of distribu- (b) The second great natural asset-and that tion and the demand. The development of thermal which, in the Middle East, plays the part of its production of electricity must be considered at life blood-is water, whether in the form of rain- the same time. fall, of streams fed by more copious precipitation (c) Of major importance is the work of agri- at one point and flowing to give life to arid areas cultural specialists; and just as the technical as- elsewhere, or of concealed and as yet untapped sessment of the water resources and their Appendix II 68 development must be related to the examination where now the very sites of the workings are al- of the land itself, so both must be related to agri- most for otten. It is probable that the Middle cultural reduction, to stimulate which ir the main East cou kd again become a reducer of consid- object o P the joint development of land and water erable uantittes of ores and cR emicals. Therefore, resources, an ear? y and valuable technical survey in most Firstly, in the field of crop husbandry, special- countries would be an intensive general geological ists must examine the area and define the t es of examination. Following this, specialist mining en- crops which are most suitable either for tF e irri- gineers should examine the ssibilities of the ex- ated or non-irrigated lands ; they must estimate ploitation of specific minera p”I, bearing in mind the Pertilirer requirements ; adviw on crq rotation; power which may be developed as a result of the test and suggest the specific strains whrch are best researches of the water engineers, and the trans- cultivated and aid the production and distribution portation facilities of the countr . In one field of improved seed; design better methods of culti- alone has the mineral wealth of t Ke Middle East vation; and advise on an cx’ .sion service for been subjected to detailed technical survey and teaching such methods. Horticulture must likewise research. On the exploitation of the enormous oil be covered by such technical advice. resources, great industries have been based having Secondly, oince much of the Middle East has a decisive effect on the regional economy. Yet, been, from time immemorial, and will always be, even in this field, further exploration is possible, a pastoral land, the services of animal husbandry and technical researches on behalf of the Govern- specialists are of great importance. ments themselves may not be unproductive. In the third place, it will be seen that there is (3) If the primary production of a country is little value in the elaborate development of an developed without proper attention being paid to area’s crops or herds if they are to be destroyed secondary industry, the result may be an unbal- by the sudden plagues-locusts, the destructive anced economy. The rise in the standard of liv- drseases-which have for so long penalized the ing, or at least in the purchasin power, of a com- eastern farmer. Hence research must be under- munity, which may result f rom development taken in plant pathology, and the control of animal schemes will also increase the demand for con- diseases,as well as on the methods of combating sum tion goods. insect pests, ? et it wrll be necessary for a higher proportion Further, the methods of distributin crops must of imports, for some time to come, to consist of be surveyed from the point of view o f agricultural capital goods for development purposes. The in- economics, and it may be desirable for study to creased purchasing power resultmg from devel be undertaken of the possibility of co-operative ment and expenditure thereon must, however, “g; marketing. absorbed, or inflation will result. It is therefore Finally, technical assistance will be needed to desirable that the secondary industries of the determine the number, type, location, and quip- Middle East countries should be developed; and ment of the a ricultuml research stations neces- for this purpose technical surveys coverin the sary to cover t1 e climatic and other conditions of available raw material, the labour possiblf ities, the area. power, transportation, and the potential market must be made b specialists in industrial plannin . (d) S cial technical survey is needed in the The erection o r factories, and probably the ear f y Middle lr ast on the possibility of developing fish- management, will require planning and super- eties. More important work (though also more vision by industrial experts from abroad. In r- widely begun) IS in the field of forestry. Forestry, titular, specialists will be required to plan tr ose in its soil conservation as t, has been mentioned processirg industries which can convert, to a con- above ; but much can be 8”one by qualified forestry venient transportable and exportable form, the specialists in making technical surveys of the ac- products of an intensified agriculture. Technical tual utilisation of the forest reduction, the proper surveys might, for example, be directed towards control and re eneration o P the forests regarded sugar refinmg, cotton ginning, and textile produc- as timber pr $3 ucers, and even on the settin -up tion; the wine, spirit and fruit juice industriss; of the tramed forestry organization, in itse‘5 f a the extraction of vegetable oils ; canning and specialized accomplishment. packing industries ; the processing of dairy prod- (2) While a geological surve has been briefly mentioned as a forerunner of r arge construction ucts ; and the like. Other specialized surveys may works, and the work of the soil chemist has been be made by chemical engineers with a view to the seen to be a necessary preliminary to irrigation utilization, for chemical manufacture (and par- and agricultural planning, nothing has been said ticularly the production of fertilizers) of the of the other great primary resource--the mineral countries’ minerals. wealth of the re ‘on. It is known that many areas (4) The development of the economy of the of the Middle lE st contain minerals ; and, in re- Middle East will be strangled if adequate means mote or historical antiquity, mines flourished of transportation are not provided. One or two 64 Final Report-United Nation@ Economlo Survey Mhdol; for the Middle Eut-Part I

Middle East countries have an adequate railroad like, and the design and interpretation of field ex- system, or have at least one or two harbours; some periment ; on the taking of censusesof production ; (Iraq and Egypt) have an elaborate system of in- on the improvement of the already existing trade land waterways ; none has a completely impos- statistics; and on the production of clear and ac- sible road system. But no country would boast curate statistics of transportation. Of special im- that its trnns ortation facilities are either per- portance are such economic statistics as the na- fectly plannecp for its present needs, or at all tional income calculation, the balance of pay- likely to meet the demands of its economic tlevel- ments, the cost of living index, and the wholesale opment or demographic growth. Lack of the price index. In the minor but highly specialized means to introduce into the country, and distribute field of mechanization of statistics, expert as- through it, the necessary machinery and supplies will st.ran le development at birth ; and inadequate sistance is also necessary, facilities ‘i or distributing and exporting the prod- (b) Economic research and economic advice ucts will stifle development in its childhood. will play an essential part in the development of Hence the services of technical experts, who the Middle East cauntries. It id not too much to can survey the existing transportation network say that no development board should be set up and advise on its improvement, will be necessary by any country without a secretary-general pos- at a very early ,tage in Middle East development. sessing a broad knowledge of economic problems, Special attention should early be paid to port plus a specialized and highly qualified economic fscilities, since it is through these that the capital advisor. In addition, specialists in various fields of goods must enter; almost of equal priority is the economics will be required to study particular planning and detailed surveying of road develop- problems. Among ‘other things, production must ment. But the alignment and economic planning be studied in terms of wages and costs as well as of railways and even specialized surveys of air- the man-power resources and the available skills ; field facilities must not lag far behind. at the same time careful attention must be given (5) Technical advice, surveys and research un- to the whole field of distribution, to the price der the four previous heads are concerned with structure, the organization of retail trade, the mar- concrete matters; but in three important and in- keting system, the need for co-operatives, and the ter-related fields the work of the technician is possibility of export. Inflationary threats, already actually equally practical and no less essential. a serious problem in the area, must be closely These are : (a) statistical surveys ; (b) economic studied, particularly the pressures likely to be study; and (c) administrative reform. Without generated by the process of development itself. attention being paid to these matters the eneral In the field of finance, budgeting, the financial co-ordination of development will be a f ailyre, market, credit, and the like must be dealt with ; the and individual schemes, however successful in taxation system and in particular the incidence of themselves, will not play their proper part in the taxes on different levels of the population and national life. their utility as a means of financing a public works (a) All planning is based on known facts ; and programme must be examined. And the external the collection of certain categories of such facts financial situation of any country, its balance of is one of the m:in objects of the technical surveys payments situation, will require the most careful and research listed above. Statistics are .simply study. facts expressed in numerical form, and statistical calculations represent, in a sense, the maps on (c) Finally, development, which cannot be im- which the economist and the government officitil posed on a country by an outside agency, but can can base their judgments and assessthe justifica- only be aided and guided by it, presupposes the tion and priority of development schemes. existence of a governmental machine competent Statisiical data in the Middle East vary greatly to play its part in expansion and operate the new in quality and quantity; in no country are they schemes when they have been created. To assigt complete, and though in several statistical infor- such a machine, specialists in public administration mation is in course of improvement it is, in gen- will be required to advise on governmental or- eral, vague, inadequate, and untrustworthy. Tech- ganization in general, and to arrange, either nical assistance is being and must be further given through private or governmental channels, for to the Middle East countries in the form of sur- the secondment of officials to more efficient ad- veys of the existing statistical systems, and aid in ministrations abroad and possibly for the estab- the building up of the statistical organizations. lishment of training facilities. Special attention Such technical assistance should, in particular, may have to be paid to such matters as the survey be concentrated on the improvement of the statis- and reform of taxatio;l systems, to ensure that tics of population, mortality, morbidity, labour taxes are spread equitably over all strata of the and employment; on the assessment of agricul- population. It may even be necessary to call in tural production by sampling techniques and the advice on legal and constitutional reform. Appendix II 65

(6) It cannot be over-emphasized that even if traffic control there is room for technical survey all the above surveys are made and economically and advice. integrated, development will not achieve it8 true It will be seen that none of these technical 8ur- aim of eliminatin human suffering and raidng vey8, the need for which has been sketched above, the living atandar %8 of the great ma88 of the pov- can either be made or achieve any result, in wacuo. erty-stricken people of the Middle East, if It is The aoil chemist’s labour8 are of little value unless not accomried by widefread social reforma. they a!e used by the agriculturist ; and the agridul- Hence tee nical a vice wl 1 be required m the tunat in turn may plan crop8 without result un- fields of labour and Bocial affaira, of medicine leas hi8 work is lmked with that of the irrigation and the like. Widespread public health meaaurea expert. The economiet mU8t be taken-and these will entail detailed tech- with the utmost acuteness, nical rurveya by high ranking experts, and pro- are given a local habitation and a name by the longed research into the main endemic diseases. technical speciali8t8, they will remain an academic The level of education in the Middle East coun- exercise. Thus, not one or a few, but the majority trie8 ia generally low, and great development8 will of such aurveya must take place together bnd at take place which must be properly advieed. In the same time. National development board8 and particular, educational reeearch has scarcely been any international technical agency which is set turned, in moat countries, toward8 the spcclfic ap- u , in conjunction with the specialited agencies titudes of the local child, and too often the educa- oP the United Nations and other bodies of a rim- tional ayatem is an inadequate imitation of a ilar e, should therefore at an early date develop European one, Even in the field8 of police and a ful‘p prospectus of research priorities. APPENDIX IV Annotated Mat of Certain Development Projects in the Middle Eaat

In the following pages an attempt is made to In the case of two countries, tis., Egypt and set out, in tabular form, some of the development Israel, the treatment is not in such detail nor based projects which have either been noted on the spot on such direct sources as with others. It has not or in discussion with Government officials by been possible to discuss development plans in members of the Mission or are covered by docu- detail with the Egyptian Government, and mate- ments in its possession. To include all the schemes rial for this section has been drawn only from which have ever been adumbrated for the Middle available sm.rces. No pilot schemes are included East countries would be a virtually impossible in the Mission’s report for either of the two coun- and, in the circumstances, fruitless task. Some tries for reasons explained in the main body of have been conclusively abandoned ; others are mere the report, For these reasons, therefore, the sec- tentative suggestions ; and many are indicated only tions of this appelrdix on Egy t and Israel have by name in comprehensive general studies. Some been included more for the saR e of completeness schemes of the last type may never be realized and in Fiving a conspectus of the whole region and to almost no information on them exists. Nor, in indtcate where the schemes of various countries many cases,is it possible or desirable to enter into overlap or require co-operation, than as a working details, even on a major scheme which is seriously list. contemplated, owing to the lack of preliminary Attention is spectlly directed to column 5, “fur- surveys. ther surveys necessary”. This column at times, In general, the schemesselected in this a pendix by its very incompleteness, is significant. It tries cover the more im ortant or probable Bevelop- to show on the basis of th, best available informa- ment plans for the R iddle East cout;tries. Selec- tion the preliminary work which must yet be done tion has been made on a number of criteria. before the schemes concerned can be ‘n. Even for Schemes which have alread been begun, but are the construction of this column in Pormation has not corn leted, are include cr, and so also are the been found to be scanty; and while it is known principa f projects planned by Governments for that, for most projects, further technical data are early execution. Major schemes r-commended as required, sometimes it is not even possible to indi- foundation stones of the development structure in cate the stage reached in meeting this need. various general reports are mentioned, and certain others have been included where specific recom- The abbreviations used are thought to be self- mendations have been made by the Mission- or explanatory, e.g., M. means million, m. means some technical body in an earlier survey. metre etc. Costing has normally been given in the Thus, though the appendix is far from being local currencies, of which types and conversion comprehensive in its treatment, schemes included rates are: do give a reasonably satisfactory general picture f El (one Egyptian pound) equals $2.87 ; of the lines on which development might proceed % 11 (one Israeli pound) equals $2.87; in the countries under review. Particultr atten- ID1 (one Iraqi dinar j equals $2.80 ; tion has been paid to plans related to agriculture, fP1 (one Palestinian pound) equals $2.80; the primary industry of the whole area, and to the conservation of the two natural resourccg of land fL1 (one Lebzncse pound) equals free market and water. rate, approximately 32 cents ; It must be emphasized that the list is not ex- fS1 (one Syrian pound) equals free market haustive and that many of the estimates of time rate, approximately 30 cents. required and finances are necessarily tentative. It is hoped that this a pendix will at once indi- The tables do not pretend to a high degree of cate ,the scope of the Ik! ission’s: observations and accuracy: there are certainly omissions and there sro;de a tiseful check list for future planning are doubtless errors. .

66 (1) (2) (3) (4) (3) . (6) (7) U) 0) 1 Nile WItas Project 1.1 Equa- torial Nile Proj- ects 5

4

5 fEllM.

20 2J32M.

10 fElSM.

4 fElO.SM. The total Egntian Govamncntshartofnu costmaybeoftkorxkr offE!nl& 5 Possibly ThtJ&ptianGmm- fE6M. mmtbasestimated fE8M,ofwilichfE5M. i!iaKtaderpeaditme

Prcsmnabfy 5 Whentk dam tltc- trifiation sz

l,“,ll,,,y~,” ,,,, “,,” ,/“. (9)

4 Iron In 1937 iron ore de- In February 1949 au The stage reached is Not kuown; Not Not Not Not known. Ore posits &hated at l,f.lOO international commission not clear, but further in- but must known known. ILTIOWXL M. tons of high-grade visited Egypt to study dastrial engineering SUP follow ore were found near As- this PL (SOme oPin- vey will no doubt be re- scheme 3. wan. It is thought &js ion favours O$iXUQ’ quired as 3 approaches might be smelted by blast furnaces, wnb the completion electric power from the works on or Rear the proposed Aswan genera- coast.) tom one plan envisages ( a steel works with an output of 91,500 tons per annum. 5 Ferti- Utilization of Aswan Thisschemehasbeen Presumably further After 5 fE6M. lizer power for production of considered for many industrial engineering comple- E!z Factory nitrogenous fertilizers years. An international survey will be necessary tion of at Aswan (estimated capacity of commission was asked as 3 approaches comple- scheme 3. works 435,000 tons per in 1947 to report on the tion. amlum of calcium ni- possrbilities. The Gov- trate) . exnment -appears. to have eds&pgcw$; Like the factory at Suez (below), the but no plans have been scheme is designed to im- elaborated. prove the productivity of existing cultivated areas (as are schemes for con- version of basin irriga- tion to perennial) ; the Nile water schemes are intended to increase tbe area under cultization. 23 Not - The Export-Import 6 Nitro- A scheme for large- Nowinhand. Bankhasgrantedaloan fP?.= scale manufacture of fertilizer. This plant ii%!- of $7bf. for this project lizer should go a .long way Factory at Ed eiEY= SUC?Z of ?lsil ‘zers. Cereal yields are said to have 10 fEnM. May AStUOdfE3SM. En9 was abatal in 19l6b

8

8.4 (3 (3) (4) (5) (6) (7) Go (9) (10) Housing Workers’ To build a workers’ +&xrt 609 completed In hand. Not fJ%m. p&g - city at ci&;fs~bhouses at a by June 1949; ho00 esti- ~~Pf knowu todatc Embabeh mated by October 1949. Major To construct 40,000 Mhistry of Social Af- More detailed survey Not known 10 fE16M. 1949 It is not clear wheth- Housing town and 100,000 COUXI- fairs has drawn up a lo- of programme. especially erthisisanammalora Schemes try houses annually. YC~P~= with regard to avail- total figure. Erpeadi- Houses in towns would ability of labour and ma- gy$Shy=&=J be allocated to families terials, and the control a with incomes below fE9 of luxury. per mouth. Public Thisistheprogmmme - Health ~“h~~~$$a~h of Ministry Of Public e N0tknown.AnJndS$ - Facilities ro* HQ; a ]WJ&ecj Health. It is in opera- 1947-48. ill- L pid b a& &strict ti~n, aml excellent ho+ HQ; and a rufal health itals have already been SEl2M. centre for each 15,000 &t. Eighty Health persons (1200 village Centem were CoIIstruct- health centres). ed;hy.the end of 1948, z ~~~=~ m prog-

11 school S-10 fElOM. - - buildings

Note. In 1946 the Egyptian Governmen t approved a In 1946 fE22 million was allocated out of General five-year ph which includes some but by no means all of Reserve as follows: the above projects This is a development plan consisting of classes of desirable work, with some uamed projects, (1) Roads ...... fE 23% for which funds are regularly prc>rded in the Qyptian (2) Reclamation of swamps ...... _. . . _ Budget The plan originally inch&d the Aswan electri- (3) Cairomaindminage ...... _...... zmPoo fication project (see above) ; establishment of an Industrial (4) schoolsandhospitals ...... GOWOO Bank; electrifi~&on of some railway lines ; and general (5) Irrigation arKl draimge .-.. *...... improvement of transportation, many health measme~ new (6) Pure d&king water supplies . . , . . . . schds, etc It was prepared in 1945 and approved in (7) Agriculture ...... - _...... -. . . 1946. Certain sections are executed each year, but details (8) Other pmjectt, etc...... zm,ooo are not available. The Palestinian campaign, the cholera epidemic, and the establishment of large sepvate projects Subsequent additional funds voted have bear fE7.8 mil- have probably led to some moditication 0f the plan. lion (general reserve) in lW7j fE4 million in 1946; fE52millionin1348;with~~omin1948offE3.6mil- Work was started in 1946, and was estimated to last for lion. TheseitansareallfromCencralRcxrve;current five years. The cost was e&natal at fE% million, of re- allocations in 1947/48 were zE85 million (not which fE46 million was out of General Resave and fEl0 fully utilized), MS/49 fE9.4 million; and in 1949/50 million in each of 5 years from cm-rent rwenue. fE12.4 million. (1)

presawtinrdidaulstog gaPmasmcs.

!sam. 5 ID7M. 1W (0 (2) ~ (3) (41 (5) (6) (7) WI 3 y&la AdamontkDiyala TheHaighGmmis- Canpletionofgtol Ate *- ah 3 ID25 bf. Rivcrforwatcrstoragc sialmadea6rstSmey calsalrveyaod ("Gihal- forir+tian,andflood inmuchd&iiLGedogi- ing cngkus’ detailed ramm- tar” site). controLThissho+dpro- al surveys are now in plans and spcci6catim mended vide water for q- pmgrrss, and the om- 1951 bat tionof0veram!mill~ slllplgalgineersarere- cievelop- -a ziz%zi?a po- beeven earlier,= itlcadsto early irri- gation de

4 Itisnotclcarwh&er Nothmvn 5 ID9M. 1949

engirrcas.dehilcd==YK~pc- cianyoftheqeologyof two alternatlvc site& willhelrqlid. 5 A scheme has also .hishasbeencomid- Fnrtkrdctaikdsar-Notknown - ID3M. l? ;9 - bccamootaiforaflood crcdbytheHaighGm- veys wiil be massary. coatro&stonsc,etcdam mission. othuschemesarcap- mtheLasuziAhRivu. P-e t;rkiqs Pfie-

6 ID1.4 hf.. 1%9

1 7 Ply exist for a- ID33 AC 1949

-23* NJ3. IAwgcr irriga- Appendix XV (1) (2) 13 E!Zg- requin& as the failway merit fimds, PutlY accrued :rom World War IX, may IloL cover au the

13.1 Tigris Tolinkthetwomain Almost completel. 1948 Bridge parts of the railway sys- tem, Baghdad-Basra (on the west side of the Tig- ris) and Baghdad-Kir- kuk (on the east side). 132 Erbil A 70-mile extension of Work well advanced. 1948 Extellsion the line from Kirk& to Erbil ia northern Iraq, in&ding a bridge over the Lesser Zab River. Construction of a new Work well advanced; 1948 railway scion and lay- Tyl&eld up for lack outatBi@dad. - of new mll- Not knowu ingstockintbeU.K.

- WM. 1949 Of this f15 M. on eqr@mntfnmlabroafl.

and water facilities. . 14 Mineral First surveys have Detailedsurveysand - DWClOp- dii%~~ o?kg%fm!~ been made by the Iraq drilling are wcessary, as ment erals in the northen Go~rmnentgedogist. well as a study of mar- lznmdillJ, which may @hi% economic and justify large scale de- ttansportation problems ~opment 15 Airfidds Construction of a new Plans for a new air- Anexaminationofthe The - -. airfield at Bagbdad field at Bagbdad were economic need specifica- scheme prepa& for tbe Iraqi tions, and consideration appears Govermnentby Sir Alex- of Basrab airport, which dormant ander Gibb and Partner carries a heavy inter- (andary development national &a&, seems of the fixll new lailway required layout may mhxe the utility of the &sting airport). The airport y-b=% ==JdY

Note. Only the more readily seprable ad earlier Fk?dcomoland.storage ...... _ _...... ID2237sM.. schemes devised by the Commission which worked in Iraq, Irr+ation development . _. . . . . _. . . _. . . . . _ @ 3535 E ~rMr.F.F.Hai~havebeenshowninthisappendin z . .._...... _...... -....-... The total cost of all the schemes outlined in tbe Gnn- ...... ___...... _ ID 635 M: missi+ reports,- -- to control-_ ee tloods, raiM*the irrigatec! Navigation _ _...... _ _. . _. . . . . _...... _. ID 3.6 hi. Appendix IV lb/ 75

ISRAEL

In eummarized form, the principal dcvelo ment (4) projects in Israel are understood to be as fo Plowe: ::E I, IRRIQATION PRO JECTB ui 1. The major lan for development of the water resources of P BPestine ia described in the re ort 4,500 “Proposals for Irription and Hydroelectric 5 e- (7) velo ment in Palestine”, by James B, Ha I, June citrur concentrater) . . , ...... 11,500 1948 In this r rt the development of t Ke water 03) Miacellaneour (includes electrical equip- ment, optical, dental and surgical rup- teaources in Pa‘p” estine is planned for execution in lie,, hourehold appliances, precirion ei ht stages. These stages, which include the Pnstrlments) ...... 3,500 d editerranean-Dead Sea power canal, are too well known to necessitate detailing here; most, how- TOTAL 70,soa ever, involve international co-operation in one form oT another. The project fot a wer canal is III, OTHER DEVELOPMENTS not excluded from governmental ca$ culation ; but, for the moment, attention seems to be chiefly con- The following are the ptincipal further develop- centrated on those parts of the lan which, to- ment programmes envisaged : gether with other projects, are incP uded in the list COrC m 2 below. The total construction cost of the ia~h$u$owufJ Ha s lan was originally estimated at $251,198,000. Telecommunicationa programme 1st #ta e.. . 311. he following immediate projects are either Mot; tranaErt pk and buI WI&U: 12’Ooo under consideration of begun : lar e num ra o new bueer are arriving an more will be needed) ...... 20,000 Railroad (includea Tel Aviv-Hedera line : there ir alro the porsibility of a Negeb UC- tension, and reconstruction of the Jerusalem The proposed Yarkon reservoir. . . . . , . . ,.....,...... I...... ,.. 9,~ Pr$c\ fgt;tili8ation of Yorkon water H!:%r work, (project coated at $20 M. at ...... Tel Aviv ir not proceedi but workr will The B&an reject.. . . , ...... , ...... , be undertaken at Haifa, “so which the cost Western GoR lee water apply project.. . may be u to 50 rd.) . * * . . , ...... , ...... 20,ooo Glrhon reservoir pro’ect...... , ...... Ship acquirP tion ...... I...... Reclamation of the k a’aman River and Air transport ,...,.,...... ,,..,,...... No%fivn utilisationof the Halazonflood waters Jog$rd~y;y water apply project for TOTAL 66,000 ..,...... I...... ,.,...,,, The Harod Vall water rup ly project In addition, schemes exist for the following : Conrervation of w7 nter flood9 Prom wadir 1. Revival of the Palestine Potash Compan ; along the coa&al plain.. . &...... at present the northern works is deatro ed and tK t TOTAL 18,800 site in Jordanian temtory. The sout Eem works lacks easy accessbut a road may be constructed. 2, Lar e increases in the capacity of the existing II. INDUSTRIAL PROGRAMME themd eLf ectric plants. Israel is encoura and the main in- 3. Aff orestation (a four-year programme cover- in the five ing 800,ooO dunums, to ether with the Knin of highways with trees). d eeventualaimirtop Tant 2 million dunums. 5. Road construction, in&din an arterial.h@h- (1) Metal (mainly light metal-working indur- wa eventually stretching from + el Aviv to Hufa, .,...... ,...... ,.....~...... ,.. 16,ooO and accas to the Negeb. (2) Tg$) (importation of machine7 and de- 6. An extensive housing mgramme and hotel velopmmtof anewformofnyon)..... 26,000 (3) Building materials and woodworking (in- and industrial construction. %I e need for housing cl&~ txpanrion of Nesher cement worka immigrants makes the housing programme of ma- and completion of Shimrhon works). , . . 6,ooO jor importance : 50,000 units is the target for 1950. (1) (2) (3) (4)

2 ~Thisplanissimilarto Asabove Not - fP5.5 M. Nov. J&Y=- i.5: fo%ZT&Z that in stage 7 of the certain. Further 1wS iion from the Jordan on to Hays elan. technical Scheme the land on the Palestine StlldV bank by a low storage woaid cost dam 15 km. south of fPso,oal B&an, and an irrigation cad parallel to the riv- er. This might be com- binedwiththedamsoll Wadi Qilt (!ee alsq 3 bd;;)Ayzdx F a T t a,

3 Unified ThengineerinsCOll- Proposed by the Mis- Further examination Suggabcd 2 fPJ.455 M. Nov. OllthltbUiSOffP3.55,- Develop- sultants to the Mission sion as a short-term of gwlogy and topog- for 1950. ment propose that the Wadi works project for Arab raphy will be necessary, Schemes Zerq~ area be developed refupeeJ. asatmit,bybnildinga !I? t!z$Er z ooo; roads fPm,ooo; stolagedamonthewa~ months. stream flow is ~~~ check dams ou gullies, notwtlllnlmmsothat afForestation. terracing, the&mshouldbebuilt planting of fruit tree& toamininmmbeigbtin hoyse buil$llg, etc. The such a mamer that it ~m~m-d-=gFJ tz22?zl%Z: proved. A suitable dam site exists, and the scheme appears most feasible. should be employed thmghoe-oa. Dam. f P300.000 ; herdrab. fp44ooo; ad-

4 A dry-farming project z!Egi iUtkSlKCUuo,Sdd to he suitable for 7,m P-J WQaJo QI- .

6 Eig ZZO* . contgxngatiati~ arenowin zIeIlts comtnaion ont&eastsideoithe CmthEWti Jordan River. ziqlii (1) (2) (3) (4) (5) (8) 7 Pump rr- Irrigation by pumps of Under consideration. It is possible that the Possibly rigation an area on the left bank Wadi Qilt may be found fP31,ooo (the Zors) of the Jordan near the to be a better source of for works. Allenbv Bridge. This water. fP93,ooo may provide water for if full de- 4,600 dunmns. The relation of this velopment. scheme to the Yarmuk water project is not clear. The laud is State domain It will require to be CIearedof scmb and levelled. Bunds must bebuiltandthebank will require erosion pro- tection

8 Muss Bey A scheme sponsored Bore holes have been It is possible that the Regun. Ahmi by an Arab relief or- sunk and one has pro- Wadi Qilt may be found Scheme ganiaation and in par- duced a good water z zra better source tic&r by Muss Bey sufiply. Alami. for irrigation by pumps and wells of land on the right bank of Jor- dan near the Allenby Bridge. This is intended to settle refugees on a voluntary basis.

9.1 Road The roads of Jordan The Jordan Govern- The usual detailed Soon 1949 Devel- are, ir the main, poor. merit plan is drawn up road engiwer~ng survey @.7&bi* opment The Govermnen t has de- and includes (a) for dJ be required as am- any of which Jordan, a north-south struction proceeds. -Y- chyge =Y be about &YE t or Jordan is to road in tbe Jordan Val- f P25,ooo. fPso,alo. serviceagriculturalareas ley (agricultural) and a which mot get their road from Mad&a to products to market (and Ma’an (agricultural and which may be devel- tourism). These will be oped) and to open up complemented by a se- tourist sites (as the rks of transverse roads, tourist industry may also including one to Am-a9 ; be developed). The pro- (b) in Arab Palestine 1949 BZXdaS&O~maia- posak for Arab Pal- many new links to join tenamx may, however, estine are intended ta the severed parts of the be fP25,ooo ammauy. replace communication commnnications system lines which have been are envisaged. cut.

may cost f P3,ooo. 92 gs (a) To rejoin the Thesarcincludcdin If Aqaba port is de- Not ?l Naqb Ashtar-Aqaba the JordanGoW svd~(a)wiIlbces-known. road erpskllp in the road&anenotuiabow, SentgL Thctiaof(b) //L/-/J intarnptal stretch iabattoscwlleactaldde- issavcdbytheaiIwaY, tbcWadiYutm,andpendanthcdcvdotnncntbatthkroatcaIsoh tb) tomakctbcNaab OftbemxtofAmlm coasidcrcd-b

Isasuggestion E --- oft&c - possibility of (Q) and -E - plyming of (c) by a corcm tccbnial cx- jlcrtarcleqaid. In gma?latprt- maybemcded.

(b) Is tmdcrnegotia- Inhand. (bMP75,fMMl 1947 timwithaBritkhcoa~- WY-

(c) Has been coasid- errd,andasitennyk available.

AttlhhtiVCxhew Furtkmrveywillbc - 1949 O&. -- t!z9lL whole Ma’yI fi%s!i eLaimaat0 cost fP43. A tentative id? wIti& Noconcrck ?I fPlo,OOO. JUIK iswvvbcingdEzxmed position 1949 by Jordan& Miaistas ya B+CWWCOStiSDOt andbusii~ ii$T dekmmcd. cost f l?s,alo. ascbyFeisalandLaw- mnceuabtzxinWorld

ag& to + port and NhbtibaalmHst alls&l stwhes to be kpbmdaotfrnilv;ly. Jordan (and Arab Palestine) (continued)

(2) (3) (4) (5) (6) (7) (8) (9) (IO) Amman This airport is not Recommended by the Technical survey and f P200,OOo. 1949 Estimate. Air- suitable for large planes, engineering consultants costing of this improve- port and its improvanent to to the Mission. ment will be necessary. a Class D international There is no real eco- standardhasbeenrec- nomic value at the mo- ommended. mentinmakingtheair- ~02 t0 a hiti

Terrac- The Jordan Govem- Projects have been ex- Survey of the area to Soon. 2 ing merit has in mind vari- amined and suggested by be treated and its de- ous terracing schemes tbe agricultural consult- termination. both in Jordan and Arab ants to the Mission cov- Nov. Mission estimate. PaleStine, ‘cularly in ering an area of (a) f&L . M . 1949 the Ajlun, F ablus, Tulk- 105,000 dtmums in Jor- arm, Jenin, and Ramal- dart and (b) 320,ooO lab areas This is m- dtmums in Arab Pales- (b) Nov. &fission estimate. tended for the develop- tine (for fruit). fP5M. 1949 merit of fruit growing. Affores- (u) A project &ts Projects have been=- Further survey and Soon. 2 Nov. Mission estimate. tation for planting out 2$lo(t,~ amined and costed by especially encouragement fP%LHMI - 1949 seedlings in Jordan. The the agricultural consult- of seedling production. work is limrted bv -- ants to the Mission. sew production 20,000 2izzed.may be re- (b) sowing of seed in anareaof25,ooOduaums Nov. Mission estimate. and planting on lS,OuO 1949 dunums in Arab Pales- tk. 15 Agti- In order fully to ex- In plan only. Apparently design is Not known. Soon fW,Qoo 1949 First year figures cultural ploit the new land well advanced but no after (Jericho) . only. Some revenue Develop- brought under cultiva- doubt further technical start- would accrue. ment tion by the water schemes detail must be worked ing. and to develop intensive Out, cultivation in the Jordan Valley, the Jordan Gov- ernment proposes certain developments in its Ag- fP2,soo ricultural Department, (Khadomi). e.g., resumption of Jer- icho horticultural station, Khadouri Akficultural f P27.000. ~jwa~~-f (Qabatiya). ture station at Qahati~ and a horticultural sta- Olive tionatJiftlik,citrusand Plantins vegetable nurser& and large olive planting s9zioo. schemes in Arab Pales- tim,etc - maat of to develop or initiate in- Atic& dustries to utiIize the

16.1 S-P ?2 fPsOo,aM. 1949 Factory at N&lUS

16.2 A project for a factory It fs stated that an The following further Inphn 20r fP4 M. in the Jordan Valky to Amencan company has study is rcqnimd: (1) only. more. treat sugar-cane and made a gawrl survey technicalsurvcrindetail rovide a -taut mar- of the poss&i& of and examioiltioa by att Lt forcaltivation in an growing and truting expert of the existiJlg irrigated area of 30,000- the cant Pl=&y$.p?=Yf % 4QOOO dmnms. Jordan r -products from the ecoMmiciaspect.

16.3 Fruit C~mid~ti~a is b@ Not lamled in ;sny Full surrrcyis requkd Se ProceU- given to tbc setting up detail. B ome work, cg., with a detailed expan- only. ing of SuchiL&l!kiesincO~- prodrtctioa of sumnfi sion plan. junction wi$ tk.Qvel- (t+ed .butter) and od~&yf mtaunv ag- ohve oil IS already car- l-ted on as local or household industry.

16.4 Gripe To set up a small This is a suggestion Technical survey @l .%&wtion vet-y fPlO,OOO. 1949 Juice grape juice factory on only. kmededZtSptX&UMlt Produc- the Palestine side of the should be on a modem . tion Jo*&eT~e$y&e system for ecommy. ket for the product. - Jordan (and Amb Paleathe) (COU)

(0 (5) (6) (7) (8) (9)

18 Phosphate To expand the mining The Jordan Phosphate Detailed traaspofi etc. Extraction of phosphate, of which Cc. already mines phos- surveys were made for vast deposits of high pbate on a small Scale. the Jordan Company by quality exist at RoseiQ There are two schemes: a Rritish consulting en- northof Amman,and Al (u) junction of the Jor- Ginger in MI. These (0) (0; Nomi- 1948 Hassa on the Amman- dan Con--y with an should b- browht up to Uuknown nal capital Ma’an railroad. Italian company(already date A chemical en- owmg to ofthe achieved), to mxkrtake gineer should examine various huge-scale extraction of further the super-phos- delays. ;pT raw phosphate. This phate scheme. schemeinvolvesshipmeut ZWY to Beirut (where at one is fPl.SM. time a super-phoephate factory was envisaged) fW”ooo, . orviaAqabatotheEast, if markets can be found in Indy etc.‘; (b)a later (b) project to overcome the Urlkrlown high cost of transport to Beirut suggests that super-phosphate be man- ufactured by the sul- phuric a.% process in Jordan.

19 Mineral There are indications &de, genwal consid- A detailed geological Marble Develop- in Jordan of many min- era&n only, save that survey of the country is now ment erals, jml&ng -- marble oi a &ccrative of unportance beiog gawse, gypsa and trpe is mu b&% exploited marble. These might be worm exploited. , l Final Report-United Nationr Economia Survey Misrion for the Middle Emt-Part I

f ri a Appendix IV

I

I 2.3 N&r comp1erion of station Already beguu %ldiesseemalready~~ 3-5 - - Ibrahim 3 and installation of sta- tobefaradvaod. tion 2 on the Ibrahim. isad- Station 3 will have a headof66ra,maximmn output of 3,000 kw, and firm output of 1,500 kw. Station 2 requires a bar- rage with a storage ca- pacity of 9&m/3, and a canal 12 km. long. It would give firm output of 11,750 kw. and a max- imum of 23$JO kw.

2.4 Litani Projects exist for the A detailed hydrolog- Not fL750,ooo l!M9 River development of the Lit- ical study of the Litani el&i~~~s h% kkn. knower Scheme ani for hydro&ctrk has been published have a high priority. It S~O& dut with the most important source river as a whok, simx full devdorment of-the Utani is of grtat un- portilnec~*- &qa;l-ltheJca,md of this 650 m. is con- centrated in a 40 km. stretch. Despite major gmhgic faults, there are numexwspc6sibilitksbe- low tbe Ekqaa plain for damco-and water storage and the available power, after allowing for all losses, is estimated at 750 m kwh per amnml. MY a part of the available flow can be used for irrigation on the coastal plain. It has been sug- gested that with intema- tional co-operation sonK! of the flow, after hero- electric nhhzation. mqht provide additional m- CometotheLelkxnonby being diverted to. $e J&%r ;$~wY (I&y: Dead Sea level). Appendix IV 87 (4) (5) (6) Railroad comm&ca- Plans for the Bdrut- A full survey for the fL100,ooo. 1949 Estimated cost of 8 E:;,“x- tions are on the whole Rayak line are of long- betterment of railway ment inadequate, and rolling standing. An adk&ment communications should stock obsolescent. Plans bas been recently com- be made. The economic exist for the constmc- pleted in Beirut itself. justification of the Bei- tion of a standard gauge rut-E&yak line requires line from Beirut to Bay- further study. ak to connect with the Horns line The coastal line. which is Govern- ment owned, also re- quires improvement. 9 Industrial Lebanon may have to It is not clear whether The eugineering~ pn- fL75,ooo. 1949 s-v -b- Develop develop light industries a co-ordinated phm has sulmul a*le.~~ ment to assist in preserving been drawn up. its economic balance, dustrial survey. provided markets can be found. 10 phz- A factory in Beirut to This was projected hy The project appears to Apparently 3 fL6M. produce 300,000 tons of ee-Ital*an ~ww beinabeyanceandtrans- inabeyance phate super-phosphate annual- wluch came to an agree- portation costs render atthe Factory lY. ment with the Jordan taking out of raw phos- moment Phosphate Ca phate from Jordan, at least&Bein&amat- ter for considerable ex- amination from the eco- uomic angle.

11 Govem- Various projects exist A programme is nnder Not known fL19 M. 1949 nlellt for the construction of a consideration by the Gov- Build- presidential palace, law emment. ings courts, schools, govem- ment centres m holiday resorts, new Ministry offices, a modern prison. etc.

Sate: In addition, schemes exist for the extension of the existing thermal plants at Beirut and for the inter-conm&m ofaustationsonagridsystem SYRIA

(3) (4) (5) C6) (7) (1) VI (1.l

I.1 Expan- 4 f!+tohL 1948 ErrrnXksrdd Sian course be redmed in of ctdti- tion, of 1 to 1.75 M. propdmtooare!a vation cllltivabkraio-fcdlandhasha!nadvocatedin intiuSyrianJezireh.

12 Road There are no real Notbeguuorplanmd Detailed mgim&ngNotknown 5 fs231IL. 1947 D-b rGadsinthisue?,andindetail. plalmiug of road% tak- malt&l madconstructionmost tngtheccmmmicjasti- proceed pxalkl with ficatialintoaamlaL Ereh agricnl~ develop ma& Prokbly roads frmnRulcptoTelAbi- at& Hasset+” Ras-al- a&riEJtja~l - (a k-1. (3) (4) (5) (6) (7) (0 (19) To irrigate substantial Two schemes exist-a May have reached a Not First fS40 M. Inchaiecomtrrrtirm areas oa the banks of large-scale project pro- stage when contracting known scheme u=w of cam& villages, the Euphrates by the use viding for irrigation of could begin. Bat fixther 3. scheme). pumps, etc (an es& of h3e VP- land to suit the needs surveys of all the Eu- IlUte). ofzoo.oooperSmsinthe phratesschemesarerec- Deirez-Zor/Aba Keunl ommended, by the engi- 22a Pmp area;adaschemeonneering consultants to secod fS2oM. With 22. Irriga- a smaller scale The first the Miss& at a cost tion, is planned in detail. of fSMO,OM if- DeirsZ- Though not begun, works could be started PziYl GUIY.

22b Eu- Rerommeoded in Gibb Not fs20 M. With 2.2a. hrates kuowu l%zvn t alley- Halabiyah Gorge Hala- bi VP eir

A project to drain the Fremhengiwershve An agricultural !stdy possibly 6 l!M9 G ha b marshes in tbe completdsmg sl : soo mu have soon. EZM Orontes Valley and in- vey as 0 stitute controlled k&a- the GI= R~*.~~- tion. The project should ins the D a~- 2.h Ghab producealargeareaof LKcts.TheSJrirnhO- f !300,am Nov. DU new land for ctdtivatia8 ernmmt intends to Pw 1949 alldg-wing. dtithtbisscheme mainly for cotton grow- ias.

A considerable area- GeneralplaosontYu- Furthh sufve~~ must Not Not is4.S M. 1949 23b 22 possibly 40,000 hectxes ist bemadeindetaiL known. known the -might be irrigated by Orates new canals from the f sso,aKl t!! !ksz” upstrcam of

Irrigation from the More or less complet- ontstudiog w o r k Almast - f!34o,ow. Nov. Forcoa@khQ Yarmuk to deal with ed,buttberemaybefar- should besmveyed and can- 3,olo hecmes therworkstobecanial cotnpleted. plae. fslo,ooo. E!z FOrreUGl&* out. 1949. al- Main scheme not kmwlLFiikawtd ==Y.-of=-Y mightbef!mm.

ElstriC Power PrOjl!CtS Sir Alaaxkr Gibb Paltmrshamswr-

. . mstJlrtrosu*1. andh+rdmgmof l?s=--=sbgc2 I 3.2 Possibilitks exist -bY- - Not&air- - (e.g.. 2kizam Falls). Repatin-mI= at&L 3.3 (a) lZxtanh of a- Tksearcqgestedin - - istinginstaktionsatAl theGibbReport Ghaja and (b) ddailal iWSt@tiomrtKbu- kauandDaluwche,in conjtmction w i.t h Ghab dnirpge. 3.4 - sqp - sir1 (4) (5) (6) (7) (8) (19) Akppo To provide domestic General plans and es- Contract and detailed Possibly 4 (for fS12M. Aqueduct as stated Water water for Aleppo, and timatesweremadeinthe speci&ations for the insix whole SUPPlY also irrigate 20,000 acres GiEz;go; t, ?nd a aqueduct should now be months. scheme, in the area. The scheme =fP?= Prepared possi- includes a lift from the has prepared detatled bly less Euphrates, an aqueduct, q&fifi~ns. The Sy- for fS28 rd. 1949 Whole water supply purification plant, etc. ernment desires acque- scheme. to proceed with the con- ductas struction of the gravity section of Euphrates- Aleppo aqueduct (73 klll.1.

Domestic water sup- All these Ians are A detailed survey will - 1949 A general estimate. plies throughout S@a recommend 68 in the have to be made and 2%b1y are unsatisfactory. Cer- Gibb Report; many mi- plans drawn up. fS30 M. tain areas sufIer from nor schemes are adum- fsloo,ooo Nov. cost of survey. perennial shortages, brated, and could be de- 1949 e.g., the Jebel Druze, veloped Hauran, etc. Inueases of present supply, exten- sion of the distribution system, or investigations for a new supply have been suggested for Horns, Hama, Latakia, and Damascus. Develop- rnent of supplies in rural areas will be necessary.

Terracing for the util- This programme is Exact de&&ion of Soon. 2 f S24.7 M. consultallts’estimate. kdm of poor land for recommended by t h e area to he terraced c!!! olive and vine growing ag&ulM consultants is ve r Y n-=ry. A to the Mission, as an Programme of terracing Arab refugee works 850,~ dmmms IS ~IWL+ project aged.

Aff orest- Large areas of Syria, This programme is Further planning will ~oott. 2 fs82,uoo. Nov. consultants’ estimate. ation unsuitable for cultivation recommended by t h e be necessary, and a full- 1949 or fruit growing, should agricultural consultants er forest prv to- be planted under forest to the Missios as an gether wifh-edu=tmn of trees. Planting of seed- Arab refugee works ~u~;$PT ~11 be iii is restricted by project lack of nurseries, but the sowing of seed on 20,000 dunums is envisaged. The presemt railway Nov. 1949 ~ul~l.~

8.1 Damas- 1947 H&s

Ifdtvtl~ofLa- Asabove As alxm. Nothcgtm Not fS34 M. 1947 takisportada5dcdoxl, known StZZOlUll.lilEtO~- kia ZOOkm.lhctoRaqqa sibbmRcpom-ty Asahove Notkgtm Not fs31 M. 1947 onthenlphratu. kllOWll. at an CarlyL~C tionatalaterstagc. 8.4 Raqqa- ToopenapJezirch,a Tllisisrecommeaded As above. Not begun- Not f!34 M. 1947 HiUS& line of 310 km. for later smyy and still kllowu pa& R’pDct”” by the % Icotchdc 83 E!- To open up Jerirch ST-fzt; Asahow. - - fs41 M. 1947 and EuphratesValley, a U-ZOr 29ohnliDe iii?ih Report. 9 Port Develaganmtofkta- Thisprojectwasra- Tahrsmostkcall- NOV. Dmfw- kia as Syria’s dap-wa- ammnded in the Gihh cdforbascdoapr&mi- 1949 malt ter Dart (Tart= and Renortandthisfimhas nam olvn While this

class- d&pwater port may go forward. Plans ti~ofthtimprorr- within the State Plans now exist for better menb sboald pmceed. for improm khlde wardmsa and otbcr (Pipelim pcvdasmcnts amainbreakwaterl,SOO facilities. Thecughecr- mloogtoahsethciq dtants to thciii%~ti%i!%?% knadst@a~lKlssioaploposbdld-nias.) -~qua~etGillgpaltoftllchrtak- water as a works (1) (2) (3) (4) (5) (6) (7) (8) (IO) 10 Road The Syrian road sys- This development is A detailed engineering Soon. 2 (on fS35-40 M. Technical survey may Develop- tan is adequate, but re- recommended in t h e survey will now be nec- short- The cost f s~m,ooo rnent quires improvement of Glbb Report,andd essary. surfacing, in easing roadswere~edby z> Et cutves,andwidening. the-consult- - schemes An addition of about ants t - the Missioo as out of 1,100 km. is, however. works projects for Arab this may contemplated. r&it-. cost Nov. f SZO.8 M. 1949

11 Airports (a) The airport at This is rrcanmKnded coat-illg specifica- Within fS1.8 Md. Mezze, near Damascus, asaref&eeworksproj- tionandcommammmt tW0 is well situated and al- cct the ellgilKetiug of work. YeuS. ready carries nnxzh in- cons 3 tants to the Mis- ter+ional tnfiic It re- sion. improvemenL c$z and schemes are in hlmd to lsgthen ’ the runways and taxi W&&S.

(b) Internal airports La&iug gpnlds exist More detailed tedmi- - f sso,ocm Nov. JMmated cost of a are required at least at but much m~provement al study G now re- 1949 errport six points. is needed. quired.

12 Telecom- (a) Installation of the A contract has hecn - 1948-1949 - fSl0 M. May The Gihh Report en- munica- automatic telephone sys- given and the Damasc~ (abdut). 1949 visagedallacpeuditul-e tiOtlS tem at Damascus. .~Jep- exchange is complete. offS32M.inau. Develop- p4 Horns, Hama &nci mea. Latakia pills a netuork of circuits. (b) collstructioll of two broadcasting sta- tions.

13 Iqdus- Syrian industry is Theeugiwrillgcon- Allilldu!3trialsurvey - - fSi?oo,ooo Nov. sm-veyoaly. grcwing, ad the expan- s&ants to the Mission should now be under- lW9 ~*0p- sion of ixmeut and cot- suggest an *trial taken. tnent. ton works seems de&a- survey. ble. Appendix IV 9s

PW APPENDIX V

Description and Preliminary E&mates Pilot DemonrtraUon ProJecta Members of the Economic Survey Mission have of their waters which wi!l fall to Jordan may take conferred with overnment officials in Jordan, time to decide. Arab Palestine, h! banon, Syria, Iraq, Egypt and There are no such difficulties, however, with Israel, and the technical staff has inspected sites the waters of the wadis as they belong to Jordan for development in all of these countrtes with the alone and, even if the major irrigation scheme exception of Iraq and Egypt. As a result, areas from the Jordan and Yqrmouk Rivers should ma- were selected for development as pilot demon- terialize in time, the waters of the wadis will still stration projects. be required to the maximum extent to which they In Egypt and Iraq, as well as in Israel, resource can be developed. This maximum can only be development pro rammes are already under wa , obtained by stora e of the winter floods much of and plans are eita er completed or are being ma J e which now pours 8 own them from their catchment by the respective Governments for further expan- areas to the Jordan River unutilized. ston of their programmes. The type of project Irriaation is done at resent almost entirely selected in the other countries varies, yet there are from t%e series of 9 or 1t wadis which flow into elements of similarity in each. Each is centrally the Valley from the east and of which the Wadi located and relatively near centres of po ulation. Zerqa is one. The drainage basin of the Wadi Each deals with an area as a whole, wil P require Zer a is the largest of all the wadis east of the the effort of marry people, and will serve in the Jo&n R’.tver. Its total area at its confluence with training of personnel for further development the Jordan River about midway between Lake projects of even greater magnitude. Tiberias to the north and the Dead Sea to the In view of the varyin nature of the projects south, is about 2,100 square kilometres or 810 each country or area 1s tf iscussed separately. Fol- square miles. Located just north of Amman, the lowing discussion of the projects in each country capital of Jordan, the watershed of this wadi con- is a tabulation giving an estimate of the cost and sists lar ely of barren hills, with stee denuded time required for completion of each of the pilot slopes. 8 nly small areas on the valley Poor are at demonstration projects. present irri ted and about 30,000 dunums in the Jordan Valpy itself are irri ated annually by the uncontrolled flow of this wa%i i. Although water is Jordan essential for cultivation in this arid area, there is THE WADI ZERQA PROJECT no storage at present to conserve the higher stream The Jordan Valley is by far the reatest land flows and permit the use of that water durin the asset in Jordan for development un tf er irrigation dry season for irrigation and water supply. If o at farming. Rough estimates have led to the belief present a great part of the annual flow finds its that some 375,000 dunurns* of land in the valley way to the Jordan River and thence to the Dead are irrigable. Of this tctal 188,000 dunums are Sea without use. stated to be under irrigation at present. The extent It is proposed to develop this watershed area of the area actually Irrigated annually does not complete1 as a unit, that is, to construct the neces- seem to be known. Only a small proportion of the sary roa CKs into the area ; to provide water for land is intensively cropped, and it is probable that perennial irrigaticil through the development of the annually irrigated area is only of the order of storage; to build the necessary small check dams 100,000 dunums. on prmcipal gullies to minimize siltation and to do For some years the Government of Jordan has all necessary afforestation work, terracing and had in contemplation the possibilit of developing lantillg of fruit trees where this seems to he the Valle to the full extent whit ii the combmed Peasible. A central village is also to be included waters o r the Rivers ordan and Yarmouk and as part of the development in order to provide the several wadis will aIT low. Surveys to determine adequate housing facilities for construction work- these possibilities have already been carried out. ers and in the fnture to partially satisfy the per- Other nei hbouring States have rights in the manent housing. requirements in the area. waters of tt ese rivers and agreement on the share In order to conserve the waters of the Wadi Zerqa a dam will hat.2 to be constructed, robably * A dunum is one-fourth of an acre in area. immediately upstream from the Suelei -Jerash 96 Appendis v Pj.2, 97

road-crossing, Oue year of stream flow records is is a waste of op rtunity in the use of an asset available5 and maps to a scale of 1 :50,000 cover such as Jordan 8”MS not possess elsewhere. The the entire area. As seen from the Jerash road the valley lies some hundreds of feet below sea level wadi flows in a deep valley. An apparently sound and its a ricultural produce is ready for the dam site is located approximately 1 kilometre up- market we‘f I in advance of similar produce from stream from the highwa bridge, Rock outcrop the surroundin areas, It can thus seize the ad- apparently of hard sand stone) was observed on vanta e of higf prices which an early market t6 e right bank and rock outcropping5 could also usualf y po55e55e8. be seen on the opposite hank. No geological infor- It is proposed, therefore, if a major irri tion mation on the dam site is available at present, and scheme ehould materialize, and even if onP y the additional topo aphy for the site and reservoir waters of the wadis should be fully developed, to would have to %f obtained. In view of the inade- convert to the maximum degree possible the pres- quate information available about the stream flow ent cereal-growing economy in the valley to one and the silt content of Wadi Zer a, it is proposed of intensive cultivation of nuch more profitable that the dam be constructed initia 4ly to a mimmum crops which may be (1) ind,tstrial, such as sugar- height with adequate provision for a future in- cane and cotton, or (2 food crops, such as vege- crease ‘n height. The final top elevation of the tables and fruits or 3 ) forage crops if dairym dam can only be determined after a record of should prove a pro Atable introduction, or (4 f several ears of stream flow and ailting has been more probably all these aspects combined. obtaine d . From the information now available a It is only by research and experiment that a dam approximately 35 metres hi h should provide final decision can be taken as to the most profitable sufficient capacity for the initia P operation of the lines on which to devel the agriculture of the project for a period of about ten years. It seems Jordan Valle and to uttOf ize the valuable waters quite possible that in the future the dam may of these wa cris and rivers to the maximum ad- have to be raised by as much as 10 metres. vantage and efficiency. The dam should be of the rock-fill type with an The present Wadi Zer a reject is of rest im- impervious random-rubble masonry u stream face, portance to the future o4R t is area. It te been backed by a layer of hand-laid rock- K11, while the urpose of experi- lower portion of the dam may he dumped rock. conceived with the threefold A competent geologist should be employed dur- merit, demonstration and deve Popment. The first ing the construction of the dam and the construc- aspect will determine how best to use the irriga- tion superintendent should atso be thoroughly tion supplies of the locality, the cr s to grow, the experienced in heavy construction work on foun- water r uirements of the selecteti! crops, the in; dations where considerable grouting may be re- tensity 7o cultivation which the water resources quired in order to make the foundation watertight. and other considerations will permit, the best In addition to the storage dam, a headworks cultivation r&ices and the economies of fertilic- structure will be r uired where the wadi enters in , As a Bemonstration it will cover, on the agri- the Jordan plain. spnis structure would lead the cu‘f tural side, the several aspect5 of soil and water water into the main irrigation canal and thence conservation and land use, and in its various into the secondary and tertiary canals. The capac- ide for the future devel ity and plan for these canals will depend on the agricultural programme, which will he full deter- mined only after some years of research, i: ut will gradually develop from the outset. It,is roughly estimated that by means of storage and regulation the volume of water for irrigation purposes can be a roximately doubled as com- pared with present Ppow flow conditions, Thus by construction of essential highways, housin and the conservation of water from the Wadi k erqa drainage basin, an expanded agricul- tural programme in the area is possible, land ir available for irri ted farmin in or within a reasonable distance or the Wadi k erga land. The present agriculture of the Jordan Valley is Immediate ‘cultural activities will concern essentially a cereal-growing economy. Cereal5 pre- themselves chicT with : ponderate over all other cr whose combmed (1) The estabr ishment of a tem rary research area is small in comparison. T ome vegetables are ‘station in the valley area ccnnmanr ed hy the Wadi own and in the northern end of the valley Zerqa. At this station essential field experiments %Llanas have been introduced. The use of im- will be conducted in order to provide basic infor- g&ion water for cereal production in this valley mation on the various problems already indicated ; s Thr W&t- Rmiwcer oj Jo&w and the+ Dmlo~- (2) Practical action connected with soil and HUM by M. G. Ionides. water conservation in the catchment area of the 98 Final Report-United Nation0 Economio Qurwy Mission for the Middle East-Part I

wadi. This will he concerned mainly with land The Water Kesearch Hureau of Palestine has terracing and afforestation with forest, fuel or estimated that the run-off from Wadi Qilt would fruit trees as may be most suitable and gull - avera e just over 10 per cent of the rainfall or plugging to check soil movement and reduce sir t- 4,300500 cuI MC* metres per annum, this being in In . addition to the f,ow of the springs in the drainage k esearch activities will necessitate : basin. (a) The recruitment on a temporary bdsis from In addition to the stora e dam, a headworks a foreign country of a competent agronomist with structure would be re uire % where the water en- a knowledge of fruit growm and, if possible, of ters the Jordan plain. g. his structure would chan- farming under irrigation. R e will require two nel the water to the main irrigation canal and assistants of degree status for agriculture and fruit thence into the secondary and tertiary canals. and ve etable investigations ; However, the capacity and general plan of these (b) $h e acq uisi ’ ‘t’ ron (in preference to tE.e long canals will depend on results obtained from agri- lease) of an area of laud in the valley for the cultural research. experimental station, unless suitable state-owned A large tract of government-owned land west land is available ; of the Jordan River and-immediately on both sides C) The provision of the necessary equipment of the Jericho road lacks only an adequate water an 6 buildings. Since the station is being pro osed supply, together with agricultural research, for its only to fill a temporary need, the buildings sK ould develo ment. As in the proposed development of be as simple and cheap as possible. the d adi Zerqa the develo ment of storage and A period of five years will elapse before reliable efficient use of the water of & adi Qilt, will provide data may be expected from the experiments on a basis for an expanded agriculture in this area. field cro s, though indications, possibly enough to ‘ustify aevelopment action &long some lines, may Before the agricultural system to be adopted for i )e forthcoming earlier. Fruit trees will only have the development of the land awaitin use is deter- begun to come into bearing after five years, but it mined finally it will be necessary ‘50th to stud is robable that research information ma be avail- what is already known of possibilities in the locaf - ab Pe already from the existing horticu rtural sta- ity and to collect additional information through tions at Baqura in the north of the ordan Valley, field experimectation. and at Jericho, just outside the val /ey, to indicate There already exists, in close proximity to the the varieties of fruit most suitable for local con- undeveloped land, a good horticultural station on ditions. the outskirts of Jericho The investigations car- The extent of the necessary soil and water con- ried out on it by the fo.mer government of Pales- servation measures cannot be determined until a tine have shown that many varieties of fruit, survey of the catchment area is made. Probably including olives, bananas, grapes, pomegranates, at least five years may be required to complete papaya, citrus and date palms can be grown suc- operations within it since its area is considered to cessfully under the soil and climatic conditions of be about half a million acres. the tract, provided a suitable water sup I is Through such a unified development rogra-nme available. The knowledge thus gained w:l PC e a the watershed of the Wadi Zerqa wou Pd serve as useful guide as to the horticultural potentialities a pilot demonstration project for the further de- of the project. veiopment of natural resources in Jordan. Information on field crops is less exact at pres- ent, though within a short distance of the tract vegetables and other crops are being grown suc- Arab Paledne cessfully under irrigation. It is desirable to add to this knowledge, however, by further experimen- THE WADI QILT PROJECT tation. The conditions which maintain in the area The Wadi Qilt flows easterly from the hills intended for development do not appear to differ north east of ‘jerusalem through a deep, narrow greatly from those on the Wadi Zer a land except gorge, reaching the Jordan plain near Jericho. It m regard to altitude. The soil of tR e Wadi ilt IS located in the central part of Arab Palestine grea may also prove to be more alkaline: possi% 1~ and is crossed by the main highway passing it may require ameliorative treatment to suit it through Jericho to the north. Its watershed con- for a full range of field crops. This aspect of the sists of exceptionally steep, rocky, barren hills. At scheme is about to be investigated through a soil present the ground water flow is dil ,erted by an survey which has just been arranged. upper canal and utilized for irrigating a small area In view of the extent of the similarity with the of the Jordan plain near Jericho. There is no Wadi Zerqa it would not seem necessary to under- conservation or storage of the flood waters for use take large-sG.le field research on the Wadi &ilt in the dry season. However, storage could be and it should suffice on this area merely to utrtier- accomplished by a high but short rock-fill dam take trtals to determine the applicabihty on it of similar to that described for the Wadi Zerqa in the results obtained at the agricultural research Jordan. station which has been prop,>sed on the Wadi Appendix V 99

Zerqo. For such work very little expenditure will supplies for homes in all the cities, towns and vil- be involved. Special buildings will not be required lages-power to increase urn d water supply as accommodation can be provided in cricho. for irri ation and Provide Por tlr c prcscrvati?n, of The specialist agronomical staff at the Wa d i Zcr a food, t% us cnlargmg a ricultural op~rtumt~cfi, station can conveniently supervise the field triaI s and finally power for in d ustrial cxpanslon to pro- which would be the rcs nsibilit of the agri- vidc more lobs for more people, cultural staf! appointed r or the CTcvclopmcnt of The Litani River is in fact the kc to the future the area. of Lebanon. Some 80 per cent of r ta total drain- The desirability of addink to present knowledge a c area of 2,168 square kilometres is above the of the agricultural possibihtics of the area before 880 metre contour. The average annual rainfall dctcrmi& the final system of agriculture to be in the basin is about 690 millimetres or 27 inches. adopted w ii 1 not hold up dcvclo mcnt meantime. In its lower course, after it leaves the Bcqaa Plain, As already indicated, sufficient f: nowledgc exists the Litani River drops from an elevation of 850 of fruit and VC ctabic possibilities to warrant metres to sea-level in a distance of about 100 kilo- +vclopmcnt on t‘fi ofie lines, as fioorr as an irri$a- metres. The steepest drop of about 650 metres tlon supply becomes available. The final intcnslty occurs in a river distance of only about 40 kilo- of cultivation to be ado ted will depend, however, metres. both on the uantity o P irrigation water available On the lower reaches of the river below the and the actuaP crops to be grown. In view of the Beqaa Plain, there arc numerous possibilities for close proximity of the area to Jericho the growin construction of dams, although there arc major of forage crops for dairy ammats, cou led wit Ii co10 ic faults in the area. It seems entirely fcas- fruit and vegetable production, may rca8 ily prove c6t lc tf at sufficient storage could be developed to be very profitable. below the Bcqaa Plain to regulate the flow of the The extent to which the catchmcnt area of the river. This is important. It means that, dcpcnd- Wadi Qilt requires treatment against soil erosion in upon a more complete stud , there is the possi- and silt deposit has to be determined by survey. bi 8;rty that between the Bqaa %lain and the coastal The locality is particular1 devoid of trees and strip the stored water would be sufficient to in&al vegetation. A policy of aii orestation and of soil in the nci hbourhood of 200,ooO kilowatts, which cover3gc and fixation will be adopted in so far as could prc %ucc an estimated 750 million kilowatt the survey shows it to be required and possible hours per year. It means, depending upon a more under local rainfall conditions. complete study, that between the Plain of Bqaa Apart from the educational merit of this project and the bend where the river turns sharp!y west, as an object lesson of how other similar natural from a general, southerly direction, ap ro;;;;;s resources should be utilizcd and developed, its 150,000 kilowatts of capacity could & execution will rovidc for the permanent scttlc- that mi ht reasonably produce an estimated 550 mcnt of a num & r of homeless people, since the million %ilowatt hours per year. In addition to land to be developed is State domain. Whether the generating of electric power the water in rtor- this area can ever be develop4 satisfactorily or age would be far in cxccss of possible water economically by other means is o to doubt. requirements for the irrigablc area along the coast Irrigation is essential. The possibilit cones of dcvclop- from Tyr to Saida. ing sub-surface water supplies, which arc under The hydra-electric pro’ects could be located c?amination at present, do not appear to be cxccp- within easy transmission d istancc from the major )mnally good, whilst the difficulty and cost of cities of Lebanon. The strai ht line distance (from Irrigation by pumping from the River Jordan the nearest dam site) to B cirut is only between would,bc great. From the point of view of altcrna- 40 and 50 kilometres. Hence, the importance of tives, therefore, the present project has much to the Litani; its full development could provide commmd it as the beat method of developing this electric power for 250,000 customers, roughly four area for habitation and cultivation, times the present number, each consumin 2,000 Through such a unified development programme kilowatt hours per year or approximate s y five the watershed of the Wadi Qilt would serve as a times the present residential consum tion. This pilot demonstration project for the further dc- would utilizc only about two-thirds J the potcn- vclopmcnt of Arab Palestine. tially available amount of electric power, and the remainder would be available for expansion of Lebanon agriculture and industrial development. Because the Litani River is important, it should THE LITANI RIVER INVESTIGATION PROJECT ‘be studied and treated as a whole. Its develop Unquestionably the major natural resource of mcnt will call for a relatively large capital cx- Lebanon is the Litani River. Its waters pr rly pcnditurc. If properly studied and planned to conserved and efficient1 utilizcd could provi “8”c an ensure the maximum possible return it should abundant supply of rowcost electric powcr- rove both sound and exceptionally remunerative. power to light and facilitate development of water # his pilot demonstration project would consist of 100 Final Report-United Nationr Economio Survey Miwion for the Middle Emt-Part I a complete study of this river. The study should flood and minimum flow records, would be es- deal with the watershed aa a whole, in order that sential. The determination of the design flood its full potential ma be achieved. If the river is should also be carefully computed, for u n it and develo d piecemear without first planning it as the plan of reservoir operation would lfOepend the a who p”e, it may never be possible to realize the full determination of the spillway capacity. value of this asset to Lebanon. The study of the whole river should produce a 3. Investigation of dam site location technical report with specific recommendations. This technical report would establish and recom- Depending upon core drilling and the geologic mend a system of dams, identify individual dam investi ations, sites for dams would be determined sites, volume of storage and the capacity of gen- to ful a I the storage re uirements. Preliminary erating units for electricity. The economics of designs for dams would In! made for each of the each project, as well as the economics of the entire sites under consideration, additional topographical system, would be clearly defined. The study would surveys at these locations would be required to also provide detailed information on power rates better define structures. The spillway capacit at and utilization as well as revenues to be derived each site and the reservoir pool levels with l 0th from that source. Finally, it would outline the head water and tail %ater elevations, woulc! be recommended suggestions for construction with determined. From the preliminary designs, quan- schedules definin each &Fe. Such an over-all tities of materials required for the construction of study with speciz c determlhation of structures, the reject would be computed and a preliminary economics and finance, would clearly define the stucf y of the dam site and reservoir under con- economic feasibility of the entire co-ordinated plan. sideration would be made to determine its eco- There would only remain the detailed designs for nomic feasibility as a unit of the over-all develop- the first stage before the start of actual construc- ment. tion. This study for the unified development of the 4. Reservoir investigations Litani River should include the following: When dams are built, the water, of course, backs up. The effect of bgckwatcr from each proposed 1. Geology dam would be studied, mineral investigations in the area to be flooded would be made, as well as The geology of the Litani Valley is predom- a study of the reservoir rim to determine the need inantly limestone. Through geolo ‘c periods of for sub-surface treatment. Also, any adjustment hundreds of years, it is soluble. f here are also in existing highways and relocation of population major geologic faults in the Valley struccure which would be determined through this reservoir in- have resulted from earthquakes m the past. Pres- vestigation. ent day experience in engmeering and geolo has successfully overcome these obstacles throug Y new equipment, and techniques in foundation explora- 5. Silt invsstigations tion and treatment, In the Tennessee Valle , for An estimate of the rate of silting based on an example, extremely difficult limestone con(Y itions investigation carried out during periods of high were overcome in building the large TVA dams. stream flow would be undertaken. Terracing, Geolo ‘sts experienced in investigating founda- check dams, afforestation and other measures tions f or hydraulic structures on limestone would would be recommended to protect the reservoirs. be essential in carrying out this study, The geo- In the determination of reservoir volumes due logic investigation cartled out by such experienced allowance would be made in the storage recom- personnel should include a re ‘onal investigation mended to care for the effect of siltation. embracing; the entire watershecf with more detailed investigations for each reservoir area. It should 6. Outline of construction features also include the detailed investigation of each dam site under consideration, complete with core At the conclusion of the investigation pertaining drilling data. In addition, geologist8 should investi- to the individual dam sites the number and loca- gate the possibilities for wet tunnel location, as tion of the units of the system would be defined well as the location for t r e diversion and spillway and their order of priority established. A study tunnels. The need for geologists experienced in of the construction features with construction limestone cannot be over-emphasized. schedules for each reject would be included. These schedules wou Pd become an integral part of 2. Hydrology and meteorology the unified development report. A complete review of the basic hydraulic and 7. Estimate of cost rn-teorologic data, including rainfall and run-off records, storm records, average flow records, Estimates of cost for each dam would be in- Appendix V 101 cludcd, givin in detail the cost of land and land ac uisition, hs ghway locAtion, the dam, diversion an8 spillwa tunnels, water conductors, power In the development of Syria’s two basic rc- facilities an dythe total cost. These estimates would sources-land and water-the Ghab Valley is giv- bc based on the prclimina designs and actual en high tiority. It is one of the country%-greaiest quantities of materials an7 equipment thereby potcntia Passets. Located near the centres of large rquird. population its development could well bc the first step in an extensive pro ammc for the economic development of Syria. Tt is for this reason that 8. Power this area was selected as a pilot resources develop Operation of the reservoirs of the system would mcnt project. bc studied and intc atcd to roducc: the greatest possible power g r cm&ion, &c plan of reservoir THE GHAB VALLEY PROJECT operation woul be outlined in the report, The estimated cffcct of each reservoir on the potential The Ghab Valley is a large swam y depression s stem output would thus be determined and de- in northwest Syria. It starts with tR c outflow of Hncd in the report. An analysis of the capacity the River Orontcs from the Sedjar gorge into the requirements of each project as a unit of the Acharne plain and ends at Karkour about 9 kilo- system would also be clearly defined in the report. metres u stream from Djisr cch Choghour. The Power utilization and marketing studies would length oP the valley between these two points is also bc conducted, together with a possible rate about 68 kilometres, while the length of the Oron- structure and an analysis of revenues to be derived tcs channel is about 125 kilometres bctwccn the from the various rates of classifications. same points. In this valley located within easy access of the more densely ulatcd areas of Djisr cch Cho - 9. Economics of project hour, Horns, I-i?ama and Latakia, arc availab ‘f c some 34,ooO hectares of rich lands awaiting rccla- A corn lctc study of the economics of each mation and development. The Ghab Valley is lo- project o P the system would bc included in the cated in one of the few areas in Syria where a report, together with a plan for financing the complete development of the land and water rc- various s-es of constructmn. For the purpose of sources would be near centres of surplus popula- the cconomtc studies, the cntirc cost of the dcvcl- tion which could assist in cultivation and thus 0 cnt would bc studied from the point of view o Q”its contribution first to wcr supply, second directly bcncfit as the result of such a project. to irrigstion and water suppp” y. The benefits would In some rcmotc riod a volcanic flow filled up be wclghcd against the cost of each rojcct and the channel of the FFrontcs River below Karkour. a determination of its economic fcasi1 ility made. Subsequently a peat lake was formed. Then with the passing of time sedimentation from the Oron- The dctcrmination of the location of individual tcs and erosion from the adjacent mountains filled dams, volume of storage, capacity of kcncratin the lake. The river then created a channel to units, and the plan of rcscrvoir opcratmn are aIi Djisr cch Choghour and thence followed its an- basic factors influencing the economics of the cient route throu h Dcrkouche and Antioch to the system as a whole. Therefore, the rccommcnda- Meditcrrancan. b hen the river resumed its flow turn that the entire watershed bc studied as a its gradient was flat and as a result it did not whole and a lan for its integrated development create a channel with a capacity adequate for the be w+d. hi c study and development of such a discharge of the flood waters. Thus the lain plan dealing with a resource of ruch im rtancc bctwm Scd’ar and Karkour became inun a atcd should only be the responsibility of quali Pcd per- and the fcrti ! c lands of the valley floor bccamc a sonncl cx@nccd in dealing with problems of swamp. this magmtudc and complexity. The first step in the development of the area would relate to drainage. The entire arca has an 10. Enginswing for an entire riwev system annual rainfall of from 600 to 1,000 nuns. or from 24 to 40 inches. With this ample rainfall a large A study of the whole Litani River system and area of land, at resent in a swampy condition, its watershed rquircs the special ability of many either or al P of the year, would bc, when technicians. It requires the cfYort of a co-ordinated drain CCF, cx ted to produce crops, After com- team of specialists, including gcol ‘sts, hydraulic, ‘plction of t r is first stage and prior to the start of civil, mechanical, electrical and arcTl ‘tectural cngi- the second would come research in agriculture, nccrs, economists, cost eriimators, construction water rquircmcnts and a comprehensive study of engineers and specialists il the financing of such stream flow and flood control, including a dctcr- rojccte. It is probable that at least a year would mination of the c&ta of drainage of the Ghab on EC rquircd for the complete study. the floods of the Lower Orontca. 102 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

11 is yropwetl lo Jevetup this vdtey comptetety trol, irrigation and hydro-electric wer faci titips, as a unit. This will reqmre construction of the an ex anded agriculture in the c hab Valley is necessary roads into the area, the provision of possibP e. drainage works and canals, construction of a dam, A riculturally, this area, after reclamation, if studies indicate it essential, to provide a reser- shouf d be a very valuable asset to Syria in two voir for flood control storage during the periods main directions : of high stream flow and water for irrigation dur- (a) As an outlet for some of the dense popula- in periods of low flow, and if possible provide an tion m the neighbouring district ; acl- drtional source for the generation of hydro- (b) For the reduction of raw materials which electric power. A central village is also to be Syria requires Por the development of its indus- included as part of the development in order to tries. provide adequate housin facihties for construc- After drainage and under irri tion the land tion workers and in the f uture to partially satisfy should be highly productive and sr ould be suited the rtnanent housing requirements in the area. to a system of farming by small holdings. Under Though the ears a number of corn rehensive such a system and providing 8 to 10 hectares of engineering stud ies have been made of t Ris area by r holding, the. area of 34,ooO hectares E’rench en ‘neers and others. The main elements acres) should suffice for the settlement of each p ffan involved first drainage, then flood 4,000 families or 20,000 persons. control and irrigation. It will be necessary to determine by ex riment The prOpJSdS for reclamation included a canal s stem for draining the swampy area below the crops best suited and most profitab r e under x chame, a tunnel at Kfeir for assisting in the the conditions which prevail. Possibilities may disposal of flood waters and regulating works from well prove to be long staple cotton, sugar-cane the Orontes River to the tunnel. To assist in the and oilseeds, all of which are needed for the de- control of floods the plan included a dam at velopment and expansion of Syria’s industries. Acharne to form a reservoir with sufficient capac- Frmt rowing is unlikely to be a major activity. ity to store excessive flood waters and then release The pacef of mixed-farming in the economy of as required for summer irrigation and the Possible the area requires consideration. generation of hydro-electric power. Thus dam For this purpose it will be necessary to set up will also prevent higher floods in the Lower Oron- a small temporary experimental station for field tes Valley which would otherwise occur as a rest& investigations. An area of 100 acres should suffice of the drainage of the Ghab swamps. In addition and sufficient information should be obtained in headworks and canals would be required for irri- a period of five years to meet the needs of the gation. area. No expensive buildings need be rovided. Before the start of construction a complete re- Syria does not at present possess a suita1 ly quali- view of all past studies should be made, supple- fied agronomist to conduct these investigations. mented where necessary b new investigations, It is recommended that a first-class agronomist be surveys and designs, and sK ould include a study recruited from abroad for general agronomical of the economics of pumpin versus gravity flow research in Syria and a man of lower grade who for irri tion. This pilot d emonstration p~aject will also have to be obtained from an outside would tF en consist first, of a complete engineer- country placed in charge of the Ghab experimental ing-agricultural economic study which would form station under his control. the basis of a plan for the umfied development of Through such a unified development programme the valley as a whole and secondly, the impk- the fertile Ghab Valley would be transformed from menting of the plan by a well co-ordinated con- an unproductive swampy area to one of the most struction programme. Thus through the planning productive areas in Syria and serve as a demon- and construction of essential engmeering works stration project for the further development of including drainage, highways, housing, flood con- the basic natural resources of that country. Appendix YV li? 103

Prellmlnrry ertlmats of oort and time required Resource development pllot demonrtration projectr 13 the Middle Eaat

TABLE A

wf@hf@;{d cowry PVOj#r) Cor*w&n Total lordan ...... , . ,Wadi Zerqa 210,000 420,000’ so,ooo 4,1!iO,OOO WQ~ Arab Palertint ...... Wadi Qilt lf,oM 56,000 mQo 980,ooo l,OBl,OOo Lebanon ...... Litani River dtvelop- mtnt study 250,ooo . 250,000 Syria . . . . , ...... , . .Ghab *!alley aooo 400,ooo 25o,o!M 15,750,ooo 16,460,OOO Total estimated coat. . . . 287,000 876,000 578,000 20,880,ooo 22,621,0o(r

TABLE B

Bat. rlmr rrqd. Erfhatrd r~nwol finoarcrr my&d kn ,I.S. dollur~ for(;ywbjylar (ywa) cow*wy Projtd 1 2 1 I 5 Jordan . . . . , . . . . , , , . , . .Wadi Zerqa 5” m4,ooo 2,219,OOO 119,ofxl 119,ooo 119,ooo Arab Paltrtine ...... Wi& Qilt 5” 1,026,OOO 17,000 16,000 11,000 11,ooo Lebanon . , , , ...... Litani River development rtudy 1 250,ooo - - - Syria ...... , . . . . . , . . . . .Ghab Valley 5 4,000,ooo 3,750,ooo 2,910,OOO z900,ooo wwooo Total estimated cont. , , , . 7,530,ooo 5,986,ooo 3,045,ooo 3,034ooo 3,03Qooo

(0) F r rimplification U.S. curren&-y used ~II baeir of planntd for the Wadi Ztrqa project and need not be trtimat duplicated. (b) lnciudcr cartographical and agricultural rurvty of (e) Estimatt of construction co#t unknown unti; engi- drainage area with roil erosion and rt-atiorertation pro- neering mdy bar been corn ltted. gramtie extending over 5 yam. (f A ached& of financig ir not included in the Eco- (c) It ir estimated that the en$neering development nom I c Survey MLrion’r rtport. It should be not& how- programmt would be completed wit m two years. ever that the interim rt ort included work on the Wadi (d) It ir trtimated tht engineering development will be Ze& and the Wadi Q& completed within one year and the agricultural rertarch in relief programme. Fund, three yearr. The tort of agricultural rtwrch for this gramme would provide for project ir based on the arsunption that rimilar work ir IMuction and two-third8 of Wa SALES AGENTS OF THE UNITED NATIONS PUBXATIQNS

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