/+I ;J.rl r, (, / ;(/l/t ~ ~ u ,- { UNITED NATIONS CONCILIATION COMMISSION FOR PALESTINE

FINAL REPORT OF THE UNITED NATIONS ECONOMIC SURVEY MISSION FOR THE MIDDLE EAST

An Approach to Economic Development in the Middle East

PART I. THE FINAL REPORT AND APPENDICES

UNITED NATIONS Lake Success, New York 28 December 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.

f_c.ZS/6

28 December 1949

UNITED NATIONS PUBLICATIONS

Sales No.: 1949.IIB.S. Part I FOREWORD BY THE SECRETARY-GENERAL

At the request of the Chairman of the Concili­ their respective fields, in particular the World Health ation Commission for Palestine, the Secretary­ Organization, the United Nations Educational, Sci­ entific and Cultural Organization and the Interna­ General has the honour to transmit herewith to tional Refugee Organization; Members of the United Nations the second and "4. Expresses its thanks to the numerous religious, final report of the United Nations Economic Sur­ charitable and humanitarian organizations 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 refugees; "5. Recognizes that, without prejudice to the pro­ wish to make will be communicated in due course. visions of paragraph 11 of General Assembly resolu­ In the present report is included the first in­ tion 194 (III) of 11 December 1948, continued assist­ !~LJE_....t~PQ.tt of the Mission, dealing with· the ance for the relief of the Palestine refugees is problem of Palestine refugees, which was trans­ necessary to prevent conditions of starvation and mitted to the General Assembly in November distress among them and to further conditions of peace and stability, 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. Considers that, subject to the provisions of of the United Nations Relief for Palestine Refu­ paragraph 9 (d) of the present resolution, the equiva­ gees (UNRPR), the General Assembly, on 8 lent of approximately $33,700,000 will be required for direct relief 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 equiva­ ASSISTANCE TO pALESTINE REFUGEES lent of approximately $21,200,000 will be required for "The General Assembly, works programmes from 1 January to 30 June 1951, "Recalling its resolutions 212 (III) of 19 Novem­ all inclusive 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 "United Nations Relief and terim report of the United Nations Economic Survey Works Agency for Palestine Refugees in the Near Mission for the Middle East (AI1106) and the report East": of the Secretary-General on assistance to Palestine (a) To carry out in collaboration with local gov­ refugees (A I 1060 and A I 1060 I Add.l), ernments the direct relief and works programmes as "1. Expresses its appreciation to the Governments recommended by the Economic Survey Mission; which have generously responded to the appeal em­ (b) To consult with the interested Near Eastern bodied in its resolution 212 (III), and to the appeal Governments concerning measures to be taken by of the Secretary-General, to contribute in kind or in them preparatory to the time when international funds to the alleviation of the conditions of starvation assistance for relief and works projects is no longer and distress amongst the Palestine refugees ; available; "2. Expresses also 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 Committee for the contribution they have made to this the United States of America, with power to add not humanitarian cause by discharging, in the face of more than three additional members from 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 Govern­ 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 Near East in programme of assistance; and commends those spe­ consultation with the Governments reP'"esented on cialized agencies which have rendered assistance in the Advisory Commission; iii (a) The Director shall be the chief executive offi­ 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. Authorizes 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 (b) The Director shall select and appoint his st::ff International Refugee Organization for an interest­ in accordance with general arrangements made m free loan in an amount not to exceed the equivalent agreement with the Secretary-General, including of $2,800,000 to finance the programme subject 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. Authorizes the Secretary-General to continue shall agree are applicable, and to the extent possible the Special Fund established under General Assembly utilize the facilities and assistance of the Secretary­ resolution 212 (Ill) and to make withdrawals there­ General; 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 operations of the United Nations Administrative and Budgetary Questions, establish Relief and Works Agency for Palestine Refugees in financial regulations for the United Nations Relief the Near East; and W arks Agency for Palestine Refugees in the "17. Calls upon 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 fulfilment of its functions; vision; "18. Urges the United Nations International Chil­ dren's Emergency Fund, the International Refugee Or­ "10. Requests the Director to convene the Ad­ ganization, the 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 Organization 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. Continues the United Nations Relief for the United Nations Relief and Works Agency for Palestine Refugees as established under General As­ Palestine Refugees in the Near East, to furnish assist­ sembly resolution 212 (Ill) until 1 April 1950 or ance 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 t~ry-Genera! in consultation with the operating agen­ the Near East: Cies to contmue the endeavor to reduce the numbers (a) To appoint a representative to attend the of rations by progressive stages in the light of the meeting of the Technical 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. Instructs 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 N car East the assets and of the United Nations and specialized agencies re­ liabilities of the United Nations Relief for Palestine ferred to in Economic and Social Council resolution Refugees by 1 ~pril 1950, or. at such date as may 222 (IX) A of 15 August 1949; be agreed by h1m and the D1rector of the United (b) To place at the disposal of the Technical Nations Relief and Works Agency for Palestine Assistance Board full information concerning any Refugees in the Near East; technical assistance work which may be done by the "13. Urges all :Members of the United Nations United Nations Relief and Works Agency for Pales­ and non-l_Tlen;bers to make voluntary contributions in tine Refugees in the Near East, in order that it f!laY funds or m km? to t;nsure ~hat the amount of supplies be included in the reports submitted by the Techmcal Assistance Board to the Technical Assistance Com­ and funds reqUired IS obtamcd for each period of the programme as set out in paragraph 6; contributions mittee of the Economic and Social Council; m 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. Autlzorizes the Secretary-General in consul­ mission for Palestine in the best interests of their t~tion with the Advisory Committee on Administra­ respective tasks, with particular reference to para­ tive and Budgetary Questions, to advance funds graph 11 of General Assembly resolution 194 (III) dcen~ed to_ be available for this purpose and not cx­ of 11 December 1948; cccdmg $:J,000,000 from the Working Capital Fund "21. Rcqu('s/s the Director to submit to the General I? finance operations pursuant to the present resolu­ Assembly of the Unite

iv Agency for Palestine Refugees in the Near East, the United Nations Relief and Works Agency for including an audit of funds, and invites him to sub­ Palestine Refugees with the expanded programme mit to the 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 may wish to through the United Nations and the specialized bring to the attention of Members of the 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. Instructs 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 com­ assistance as the United Nations and the special­ ments as it may wish to make, to the Secretary­ General for transmission to the Members of the ized agencies may be in a position to provide to United Nations and to the United Nations Relief and Middle East Governments in response to their Works Agency for Palestine Refugees in the Near requests when funds necessary for carrying out East." the expanded programme have been contributed, the Secretary-General is ready and able to help It will be noted that paragraph 19 of the General forthwith with existing appropriations under the Assembly's resolution provides for close co-ordina­ authority of General Assembly resolutions 200 tion between the technical assistance activities of (Ill) and 58 (I).

V TABLE OF CONTENTS

Chapter Page FOREWORD BY THE SECRETARY-GENERAL...... iii

INTRODUCTION ...... Vll

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

II. PRESENT OBSTACLES TO EcoNOMIC DEVELOPMENT ...... 3

Ill. PILOT DEMONSTRATION PROJECTs-THE WAY TO BEGIN...... 6

IV. CoNcLUSIONS AND PROPOSALS OF THE MISSION SIGNATURES...... 12

APPENDICES

I. A. Interim Report of the Economic Survey Mission (dated 6 November 1949) in­ cluding terms of reference...... 14

B. Resolution 302 (IV) adopted on 8 December 1949 by the General Assembly of the United Nations to carry out the recommendations of the interim report. . . . . 31

II. Financial survey ...... 34

Ill. 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...... 96

VI INTRODUCTION

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 reEort, signed by the called rich and poor regions of the world, is a Mission on 6 November 1949and 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 Mis­ 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, rata 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 Assembly 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 afford. early date. He may find a greater value in inefficiency, as This final report, "An Approach to Economic judged by western standards, than in an idleness Development 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 skill and expe­ tribute to increasing material standards of living rience, now landless and unemployed; others of in under-developed 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 case 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 affects 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-devel­ rivers to yield them riches. They pooled their oped areas may aspire. energy and resources by taxation and mutual

vii 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 assure 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 econ­ 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 elementary fact which cannot "Many of the small works projects envisaged in be evaded indefinitely. the public works programme for the employment Economic growth among inter-dependent 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 organized to produce a creative system of of greater service to themselves and to the lands life and living.

viii 11 I f

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".1 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 m 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 in 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 room 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, oil 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 J ordan-all come will remain, agricultural. The first require­ of which have been deeply disturbed by the fight­ ment for the area is to equip 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 modernize 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 modernized agriculture would These countries2 comprise nearly 750,000 square allow for industrial crops as well as foodstuffs. kilometres and are inhabited 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 livelihood 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 commu- 2 Appendix 11 attached gives a brief financial survey of 'The terms of reference appear in full attached to the the five countries in the area covered by the Economic interim report incorporated herein as appendix I, A. Survey Mission.

1 2 Final Report-United Nations Economic Survey Mission for the Middle East-Part I countries in terms appropriate to the great indus­ must be to start with reality, with things 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 realized 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 Palestine--and of an ancient civilization. No sudden cataclysm Jordan cannot individually, or through combina­ of nature, nor a gradual alteration of climate is tion 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 canals 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 with 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. CHAPTER 11 PRESENT 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. experts, could be recommended for immediate ex­ Taxation yields also are low, but no great in­ ploitation by large capital outlays. The Mission's crease in revenue from indirect taxation can be hope has not been realized. The region is not obtained without pressing unbearably upon the ready, the projects are not ready, the people and great mass of the poorer sections of the popula­ Governments are not ready, for large-scale de­ tion. Indeed, any considerable increase in revenue velopment of the region's basic river systems or in these countries requires reform in taxation major undeveloped land areas. To press forward which will shift a larger share of the obligation on such a course is to pursue folly and frustration upon the wealthier groups. Such reforms, how­ and thereby delay sound economic growth. ever, will not come soon, though it is encouraging Appendix IV lists various development projects to note that Egypt has just passed legislation to which the Mission is informed have received con­ impose a tax on incomes. sideration from the Governments of the Middle Nor is there much prospect of substantial for­ Eastern countries concerned. The list is long but eign credits on a business basis, public or private. not exhaustive. The Governments of each of the countries studied Most of these schemes are the outcome of valu­ by the Mission suggested many useful economic able work done by persons and firms of high projects, believed by the Governments concerned repute, at the request and expense of the Middle to offer opportunity for foreign investment. Ce­ Eastern Governments concerned. Many of them ment mills, phosphate production, vegetable oil aim at making new land available for agriculture refineries, soap and leather factories, are typical. through irrigation. Some combine with this the Some of these industrial ventures would improve production of electricity by water power. Others, the foreign exchange position of the countries con­ equally important, are concerned with the de­ cerned-a factor prerequisite to obtaining foreign velopment of the country's communications by credits; but the prospective contribution of such road, rail, sea and air. small ventures as may prove attractive to foreign Work has actually begun on but few of these investors is small indeed in relation to the basic projects. The reason usually given is the lack of development requirements of the area. available capital. There is truth in this. This is well illustrated in the case of Israel, Low per caput national income in Middle East­ where a certain degree of industrial development ern countries is accompanied by low levels of has helped somewhat to reduce exchange require­ savings, and these savings cannot in existing cir­ ments. But there seems little possibility of further cumstances be mobilized for economic develop­ extensive industrial development that would pay ment. for itself by major import savings or improve­ Except in Israel, the wealth of these countries, ments in exchange earnings. Moreover, commer­ from which Governments derive little revenue, is cial as distinct from sentimental investment in concentrated in the hands of relatively few indi­ Israel is further discouraged by the existing high viduals who show, at the moment, little disposition cost of labour in Israel in terms of dollars and to lend their money for long-range economic proj- sterling.

3 4 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

However, lack of capital is not the only, nor is In the case of those river development projects it the most immediate, difficulty. 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 general 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 Lebanon. 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 development 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 staff analysed the been made, or begun. Geologic investigations to Hayes engineering plan1 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, it 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 ~oreover, an engineering plan has yet to be de­ ized. But in many cases they are 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 use of the most recent methods of investiga­ judging specific political interests. Until that is tion and operation. In any case, previous surveys done the countries concerned will not be aware of to be brought up to date and any new ones still 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 experts 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 Il, technical East. Bound separately. Chapter 11. Present Obstacles to Economic Development 5

project lies, which, with the advice of any experts of the Arab States 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 crops 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 Govern­ Middle East must indeed be given the opportunity . ment must also study and decide what measures to become skilled technicians of all kinds, both by it will have to take to spread profits equitably; education abroad and by the expansion of oppor­ what new taxes or charges 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 Nations 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. But there are important things that can be 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 procedures 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's indus­ approach that contains promise. The proposals trial, agricultural and social benefit. which follow-a series of "pilot demonstration" projects-may not seem ambitious; in the judg­ If new land becomes available for cultivation, ment of the Mission they fit the realities of the roads and transport will be needed to open up the present situation. area to trade and commerce. 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 small but signifi­ For such widespread plans, made so that the cant areas 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 start 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 schemes which will demand the high­ The latent skill of Middle Eastern peoples could est modern 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 colleges in meal development. more advanced countries. The cost in money The pilot projects 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 allows. The unemployed feasible-now. CHAPTER lll

PILOT DEl\'IONSTRATION 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 a 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 help 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 knowledge 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 to 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 modern 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 modern 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 Weizmann 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 e.xperience 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 Chapter Ill. Pilot Demonstration Projects 7 of that area 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 known, the Economic Survey dam of rock and earth, about 35 metres high, would Mission feels unable to recommend the construc­ be 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 this A brief description of suggested pilot demonstra­ proves to be feasible. 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. Jordan Where the wadi enters the Jordan plain an addi­ THE wADI ZERQA PROJECT tional "headworks" would be built to lead the water into the irrigation canals which would allo­ The Jordan V alley 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 V alley 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 Jordan V alley 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 Y armuk Rivers and the earlier in the season than in the plateaux above the several 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 tivation of more profitable crops, such as sugar­ 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 Economic Survey Mission for the Middle East-Part I onstration and imitation, to the whole area. Irriga­ The mountain valley, through which the Litani tion, flood control, engineering and construction, flows as it leaves the fertile Beqaa Plain in central crop experiments 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 land 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 Palestine 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 adequate preliminary engineering, geologic, economic, agri­ THE LITANI RIVER INVESTIGATION PROJECT 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. - 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, Chapter Ill. Pilot Demonstration Projects 17 9 under the guidance of experienced experts 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 J ezira 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 rivers. areas of the great spaces of Syria-future, profit­ 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 Syria Mission, could begin the long and complex process of basic resource development in the countries of THE GHAB V ALLEY 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 effect 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, and 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 land. tion of a central village would also be included as The experience of other countries has shown part 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 com­ 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 Nations Economic Survey Mission for the Middle East-Part I projects", once the Governments concerned ac­ yet further, with the development 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 Pal­ 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 Ministers might be ex­ gees, established by a resolution of the General officio members of the board, such as the 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 expenditure 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 eo­ The negotiation 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 certainly have to be demonstration project, its detailed planning and consulted, might usefully be represented. 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 tends 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 ern countries, recognizing the importance and with development by cultivation of the land 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 Ill. Pilot Demonstration Projects 11

Moreover, it is probable that those Govern­ 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 schemes proposed 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 A further task of the highest importance devolv­ mended by the Economic Survey Mission in this ing upon the national development boards would report, or if Governments find other means for be the institution and prosecution of research-in themselves of beginning work on different projects agriculture, engineering and any activity contrib­ for the development of their own countries. uting to the more profitable development of the The urgency of this problem has persuaded the countries' national resources. Research is a con­ Economic Survey Mission that special funds for tinuous process, which can only be carried out research should be made available at once from through research establishments and by experi­ external sources. The United Nations disposes, at ment involving the employment of trained scien­ present, of no fund expendable for this purpose. tists and technicians and the use of apparatus and The Mission therefore appeals to the Governments material which at present can only be made avail­ of the countries, Members of the United Nations, able to Arab States from abroad. charged by the General Assembly in its resolution 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 highly paid services of highly skilled men. 10 million dollars in all, this fund to remain avail­ The conduct 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 Commission, it is most needed. This tion. Therefore but little of the cost of research, capital fund would 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. CHAPTER IV

CONCLUSIONS AND PROPOSALS

The approach to economic development in the portant enough to affect 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 afford 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 modernized 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 ment 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 ~astern 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 Eco­ 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 affected 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 Proposals of the Mission 13 definition and prosecution of the Litani investiga­ development from internal resources, a request 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 resources, 7. Creation of a fund, not to exceed $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. (a) Prosecution by the Hashemite Kingdom mission of the United Nations Relief and Works of Jordan of a pilot demonstration project on the Agency for Palestine Refugees; 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 Eastern Gov­ shed and stream bed of the Wadi Qilt, which will ernments as grants, reimbursable or otherwise as 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 J or­ research, technical studies and investigations in clan River from the east and west respectively; agriculture, engineering and other modern scien­ by building storage dams, to stabilize the down­ tific aids to development, and assisting in the com­ stream flow of the wadis and thereby increase the pletion of pilot demonstration projects approved year-round water supply, reduce the damage of by the Advisory Commission, upon application floods and add to the areas under irrigation and made by the Middle Eastern Government con­ cultivation; by using the development of these cerned. wadis as an opportunity to employ Arab refugees and as an encouragement for them to establish 8. Preparation by the Governments of the Mid­ themselves as 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 Nations Relief and W arks Agency for Palestine Refugees and in connection with the functions of special opportunity to provide technical and ad­ 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 recommendations for the (b) Financial and technical assistance to the further development of the economic and natural Jordan Government by the international com­ resources 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 countries con­ Nations for the refugee works relief programme, cerned. in order to begin these projects; together with an * * * assurance that later requests for credits or grants This approach to the economic development of with which to complete these pilot projects will the Middle East and the policies and actions set 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 Nations and ernments, prior to the conclusion of the refugee the Governments whose active implementation of works programme. this approach will bring the Middle East into a hopeful and significant era of economic, social and 6. (a) Prosecution by the Syrian Government political advance. of a pilot demonstration project on the Orontes River in the Ghab Swamps, to reclaim, by drain­ Signed at Paris, France age and other devices, potentially fertile lands now on 18 December 1949 useless and uninhabitable, and to provide homes and other facilities needed for the people who will Gordon R. CLAPP be required to populate and till the land thus Chairman reclaimed. H. Cemil G6K<;EN (b) Encouragement and technical assistance by Deputy 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 Govern­ Desmond MoRTON ment find itself unable wholly to finance this Deputy Chairman APPENDIX I

A. First Interim Report of the United Nations Economic Survey Mission for the Middle East

Letter from the Chairman of the United Na· ~enera.l Assembly will wish to give urgent con­ tions Conciliation Commission for Palestine sideratiOn to it. The Commission is of the opinion to the Secretary-General that the Assembly will wish to obtain additional information concerning certain of the findings and New York, 16 November 1949 recommendations contained in the report. In 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-General with the International communicate to you, for transmission to the Gen­ Red Cross organizations and the American era~ Assem.bly, the first interim report of the Friends Service Committee (A/1060), particular U~ited 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 Secretary-General (A/AC.25 jPR.4) .1 (Signed) Hussein C. YALCIN The Conciliation Commission considers that this Chairman, United Nations report. constitutes a constructive approach to the Conciliation Cam mission Palestme refugee problem and believes that the for Palestine

United Nations Economic Snrvey 1\lission for the 1\liddle East

TABLE OF CONTENTS Page ~freword ...... 14 1e problem ...... 15 The Economic Survey Mission ...... 15 Interim findings ...... 16 Re<;ommendations ...... 16 G?tdin~ policies f

Foreword ter for more than half a million homeless people. l\Iore than a year ago the United Nations em­ The appeal was answered and the funds obtained barked upon a programme of relief for the Pales­ have averted added disaster in the Near East. But tine refugees. Acting upon the appeal of the late the funds so far subscribed will not last through Count Bernadotte, the United Nations Mediator the winter. in the hostilities between Arabs and Israelis and In the face of this emergency, the United Na­ the report of his successor, Mr. Ralph tions Economic Survey Mission, deputed by the Bu~che, Conciliation Commission for Palestine to examine the General Assembly of the United Nations, economic conditions in the N car 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 concentrate first upon the refugees ~nd to 1Reproduced at Lake Success as A/992. report without delay upon this distressing subject,

14 ., Appendix IA 15 leaving for a subsequent report other matters of around Jerusalem and territories on the Arab side longer term. of the armistice lines. They entered into Israel Recognizing that the plight of the refugees is where most of them have now been absorbed. both a symptom and a cause of grave economic The worsening plight of the refugees as an instability, the Mission recommends in this report obstacle to peace in Palestine prompted the Gen­ that steps be taken to establish a programme of eral Assembly of the United Nations, in Novem­ useful public works for the employment of able­ ber 1948, to appeal to the nations of the world for bodied refugees as a first measure towards their funds to provide food, clothing and shelter for the rehabilitation; and that, meanwhile, relief, re­ refugees.2 This emergency relief programme was stricted to those in need, be continued throughout established with great despatch. Governments the coming year. contributed in the hope that conciliation would These recommendations are intended to abate produce peace and lay the basis for a permanent the emergency by constructive action and to re­ solution for 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 stating: ". . . that the refu­ expected to assume any remaining responsibility. gees wishing to return to their homes and live at These 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 greater use by the peoples and Gov­ compensation should be paid for the property of ernments of the Near East of the still 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, Jordan, Lebanon, Signed at Beirut, Lebanon, Saudi-Arabia, Syria and Yemen. on 6 November 1949 No settlement has been reached. The Arab refugees have not been able to return Gordon R. CLAPP to their homes because Israel will not admit them. Chairman Israel has to date offered to repatriate only H. Cemil GoK<;;EN 100,000, and only as a part of a general peace Deputy Chairman settlement of all other issues. Eirik LABONNE The Arab refugees have not been able to gain a Deputy Chairman livelihood in the Arab 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 refugees are still on relief. million men, women and children-are the symbol United Nations 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 struggle winter. between Arabs and Israelis, a struggle marked by a truce that was broken and an armistice from The Economic Survey Mission which a peace settlement has not emerged. In these circumstances the United Nations Con­ Before the hostilities in Palestine these families ciliation Commission for Palestine established the lived in that section of Palestine on the Israeli 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 shops and benches, they fled to countries affected by the recent hostilities, and to nearby Arab lands. Tens of thousands are in make recommendations to the Commission for an integrated programme : temporary camps; some are in caves; the majority " (a) To enable the Governments concerned to have found shelter in· Arab towns and villages, in further such measures and development pro­ mosques, churches, monasteries, schools and aban­ grammes as are required to overcome economic doned buildings. Some seventeen thousand Jew­ ish refugees, too, fled from their homes in and dislocations created by the hostilities ; 2Thirty-three Governments made voluntary contribu­ and through contract! with the International Red Cross tions amounting to $32 million, and the United Nations Committee, the League of Red Cross Societies, and the established an emergency organization, the United Nations American Friends Service Committee, supplied the refu­ Relief for Palestine Refugees, with Stanton Griffis, then gees with foo? •. shelter and .other se:vices .. Man:f other American Ambassador to Egypt, as its director. The charitable, rehgwus and social agenc1es ass1sted m sub­ UNRPR purchased and scheduled materials and supplies, stantial ways. 16 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

" (b) To facilitate the repatriation, resettlement all direct relief t<;> be cut of! now, many refugees and economic and social rehabilitation of the refu­ would face a wmter of d1sease and starvation. gees and the payment of compensation pursuant to Were charity alone to be provided for another the provisions of paragraph eleven of the General year, it would be more difficult and costly to take Assembly's resolution of 11 December 1948, in constructive measures later. Nevertheless, the order to reintegrate the refugees into the economic exte_nt of direct relief provided through United life of the area on a self-sustaining basis within a N atwns funds should be stringently cut within the minimum period of time; next two months. There is no doubt that, how­ " (c) To promote economic conditions con­ ever commendable it may be to extend interna­ ducive to the maintenance of peace and stability in tional charity to the needy, rations greatly in the area." ~xces~ of the number justifiable within the original The Economic Survey Mission assembled at mtentwns of the General Assembly of the United Lausanne on 8 September 1949, where it received Nations have been and are being issued. its terms of reference from the Conciliation Com­ 4. Work in place of relief cannot be provided mission and met with each of the delegations rep­ immediately for all. One thing, however, is clear. resenting the Governments of Egypt, Israel, Rather than remain objects of charity, the refu­ Jordan and Lebanon. The Mission proceeded to gees who are idle must have an opportunity to go Beirut, Lebanon, where it began its work in the to work where they are now: work which would Near East on 12 September 1949. The heads of increase the productive capacity of the countries the Mission have discussed the problems covered in which they have found refuge. Until such work in its terms of reference with the members of the has been found, those refugees who are idle must Governments in Alexandria, Egypt; Baghdad, remain a burden upon others, the United Nations, Iraq; Tel-Aviv, Israel; Amman, Hashemite King­ cl~aritable societies supported by voluntary con­ dom of Jordan; Beirut, Lebanon; and Damascus, tnbutions, or the countries in which the refugees Syria. The experts attached to the Mission have now find themselves. studied in the field the problem of the refugees, 5. Useful, gainful employment can, however, be the economy of the areas in which the refugees are found for all the refugees able and willing to work. now centred, and, in extensive discussions with There are many potential opportunities for useful technical committees established by most of the and productive work to improve and reclaim the above Governments, have considered measures land, increase the supply and use of water, which might remedy the "economic dislocations strengthen and extend road systems and improve created by the hostilities". sanitation and shelter. Suitable employment for the refugees can be provided in many places, especially Interim Findings in Jordan and Arab Palestine, where nearly half the refugees are located (see appendix C). As a result of the Mission's studies, discussions 6. This and other similar work could begin as with Governments and investigations in the field, soon as funds can be found to finance it. But the the Mission finds that: resources of the Arab countries sheltering most of 1. The refugees themselves are the most serious the refugees are inadequate to cope unaided with manifestation of "economic dislocation" created by the present cost of emergency relief alone, much the Arab-Israeli hostilities. The refugees repre­ less to finance the cost of putting the refugees 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 employment in the Arab tion. Resolution of the demoralizing, unproduc­ countries is but a symptom of the need for devel­ tive and costly problem of the refugees is the most opment of the unused resources of the Near East, immediate requirement "conducive to the main­ where lack of available capital is responsible for tenance of peace and stability in the area". much idle man-power. This is a task for the Near 2. The continuing political stalemate in the rela­ Eastern Governments to do in their own way, and tions between the Arab countries and Israel pre­ in due course, with the help of competent counsel cludes any early solution of the refugee problem and substantial financial credits. by means of repatriation or large-scale resettle­ ment. Recommendations 3. The relief supplied by the United Nations Relief for Palestine Refugees (UNRPR), the In the light of these findings, the Economic Sur­ United Nations International Children's Emer­ vey Mission makes the following recommenda­ gency Fund (UNICEF), the World Health Or­ tions, which are explained later in the report. ~anization (WHO), and the many local and 1. The emergency relief for refugees made pos­ foreign voluntary agencies of charity operating in sible by voluntary contributions from Member the Near East has averted a worse calamity. Were Governments of the United Nations should be Appendix IA 17 continued through the winter months, and until 1 This would reduce the amount required from April 1950, under 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 approximately $48 million, or an average reduced by 1 January 1950 from the present rate of $2.7 million per month. This is the same as the of 940,000 to 652,000 (for an analysis of the num­ present monthly rate of expenditure by the United ber eligible for relief, see appendix B). This Nations upon direct relief alone3 (see appendix would cost $5.5 million for the three months A). beginning 1 January 1950. Thereafter, further 3. An agency should be established to organize reductions should take place as men become em­ and, on or after 1 April 1950, direct the pro­ ployed in gainful labour and thus become ineligible grammes of relief and public works herein recom­ for direct relief. mended. As a minimum requirement to the 2. A programme of public works, calculated to successful implementation of the relief and works improve the productivity of the area, and such programmes, the Economic Survey Mission urges continuing relief as will be needed should be that: organized as an integrated operation, in co-opera­ (a) Subject to rendering such reports of its tion with the governments of the countries where activities and accounting for its expenditure to the the refugees are located. This programme should General Assembly of the United Nations as may be planned and arrangements negotiated with the be required of it and within the policies established appropriate Near Eastern Governments to begin in its terms of reference, the agency should have 1 April 1950. full autonomy and authority to make decisions within the sphere of activities 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 administration 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 handling direct relief on April 1950, or as soon thereafter as possible, in behalf of the United Nations should be empowered order that the functions of direct relief 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 may within their territories. so desire concerning measures to be taken by such 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. million, which sum would include such relief as might be needed. Guiding Policies for Administration The United Nations should be prepared to con­ of Proposed 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 demoralizing 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 projects for the eighteen months' pro­ refugees, and thereby encourage a more realistic gramme, the Mission estimates that approximately view of the kind of future they want and the kind 25 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 Missiori considers that a considerable countries where the refugees are located; the proportion of this sum, perhaps up to one-half in chance to earn a living will reduce the need for certain cases, might be supplied by 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 should prefer to maintain the present rate of gradual reduction from 940,000 rations per day to 652,000 940,000 rations per day, except as affected by work relief, on 1 April 1950, through monthly reductions of 100,0.00, throughout the calendar year 1950 and thus provide charity beginning on 1 February 1950, the cost of the alteration to many thousands who are not refugees, the cost of this in schedule would amount to $1.2 million. If the United alteration in schedule would amount to $7 million. 18 Final Report-United Nations Economic Survey Mission for the Middle East-Part 1

With these purposes in mind, the work-relief relationship between these projects and the plans programme, to be successful, mu~t be planned ~nd of each cou~try for its own future development. carried out in the closest possible co-operatiOn Moreover, smce 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 negotiation and agreement between t.he otl!er. forms <;f dir~ct. relief, ~he Economic Survey national Government and the agency charged Wlth M !SS IOn con sHiers It unperahve that the two activ­ administering the programmes. The actual execu­ ities he 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 proposes supervision by the international agency. ·.n!is that supervision and control of direct relief be a arrangement will help to strengthen the adnums­ function of the agency undertaking the works re­ trations of the Near Eastern Governments con­ lief programme. cerned by the responsibility they thus accept and discharge. In this course lies the only possibility DiHeUHHion of that the need for international relief will p:tss and FindingH unci Hceommcnclations that the refugees will ultimately be reh:tbilitatcd. In pursuing this course it will be important to TilE PALESTINE REFUGEES remember that no Government of the N car East, Their 1111111bcr. No one knows exactly how or any government anywhere, can indefinitely many refugees there arc. After considering all provide special benefits to a particular group, tran­ available information, the Economic Survey Mis­ sient in its domain, while there is substantial sion estimates that the total number of refugees unemployment among its own nationals. N egotia­ does not exceed 7n,ooo, including 48,000 in tions of works programmes will have to take this Israel, of whom 17,000 arc Jews. Of this 774,000 into account. it is cstimatecl that H7,000 arc self-supporting or The opportunities for employment on works otherwise provicled for. This leaves 627,000 refu­ projects will vary in quantity and duration accord­ gees at present dependent upon United Nations ing to local circumstance. \V here ref ugecs arc un­ relief. In addition, the Mission recommends the usually congested, individuals may be employed inclusion of some 25,000 Arabs who, though living on an alternating part-time hasis so that more in their original homes in Arab territory, are des­ may work. An understanding of the value of work titute through being separated from their l~nds by as a cha!"lce to earn and restore self-respect to­ the armistice agreements. This would brmg the gether With concern for the low morale and debili­ total ligme of j1er~ons who arc eligible for relief tation condition of men long idle and under­ from the Cnited :\ations to 652,000 (see appen­ nourished will suggest policy and practice. dix B). The amount of relief and the amount of em­ Their /ocatin11. \\'here did the refugees go ployment in each family or village group should when thev ldt their homes? About 70,000 crossed have a direct relationship. The formula is more the lonl;~n ]{iver to the east and are now in the work and less relief. Humanitarian considerations 1 Iasiwmite Kin"dom of Jon !an. About 97,000 should temper administrative decisions, but the fled into I.chan.~n. just 1;orth of Galilce. Some success of the works relief programme \\'ill inevit­ 75,000 arc clmtered ncar the ~outh and western ably be measured by the speed \\'ith which direct bounchries of Snia, ancl in and around Damas.cus relief diminishes, as men and their families begin and other towns. About 200,000 arc crowded u~to to earn a living. the tinv coa~tal (lc;;ert area called the Gaza stnp, ~he League of Red Cross Societies, the I ntcr­ at pnI rip an cl the we;; tern part of the h.mgdom of thcrcon \\ 1th N car !:.:~stern Gnvcnuncnts. Such Jorclan, has. a~gra vatcd t.he . ai:~·a~ly dcprcss~d tasl~s require an agency of a clifTcrcnt kincl, st:~ncbrcl of hfe 111 the~(' rcgtons. llus.may h~P.I 0 cqu~ppcd. to plan in. the fidel works projccts in acrmmt for tiH" cqo,OOO rations now. Issu.cd a1 y, cngmccnng and agnculturc, and to visu:~lize the as again~t the (i52,000 recomllle!Hlcd 111 th1s report. Appendix IA

Their effect on local resources. The effects of them in exile until it was too late for them to the influx of the refugees upon the resources of return. Even if they were told their houses had the Arab States can be suggested by comparing been destroyed, they would still claim that the the numbers of refugees to the total population of land remained. This seems a final argument to the areas where they are now chiefly concentrated. farm people. The population of the Gaza strip, before the But, the repatriation of Arab refugees requires Arab-Israeli hostilities, was about 70,000. Refu­ political decisions outside the competence of the gees have swelled the population to about 270,000 Economic Survey Mission. in an area of less than 150 square miles. Gaza is Why do not the refugees go somewhere else? now cut off by the armistice lines from its normal Why not resettle them in less congested lands? trade area; most of the farmlands normally tilled There are several reasons. The refugees do not by the villagers in the Gaza strip are now inacces­ take kindly to moving again-unless it be a return sible to them, because the armistice line 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 life. 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 Israeli troops, had an estimated issues of repatriation, compensation of the refu­ population of 460,000 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 refugees, an increase of 60 per cent. ment of additional population until much money The refugees were able to bring few assets with has been spent and work done to make the land them, and many of those who did have since used suitable for cultivation or for industrial develop­ them up. They claimed and, in general, received ment. the help of the countries to which they fled. For In 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 refuge opportunity to work where they now are. provided relief as best they could. Nor have their efforts ceased since the United Nations relief pro­ gramme started. Of the $32 million provided by PROSPECTS FOR EMPLOYMENT contributions to the United Nations for relief, 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 occurring ment for the refugees in place of relief. The Gov­ to the United Kingdom, an addition of 3,500,000 ernments of Iraq and Israel had already begun to people, if occurring to the United States of Amer­ develop this idea in practice. The Government of ica about 10 million, if to France nearly 3 million. Syria had 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 justice, they should be permitted to return to their grant a Jordan passport to any Palestine refugee homes, their farms and villages, and the coastal applying for one. cities of Haifa and Jaffa whence many of them All Governments 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 projects of a local nature which 11 December 1948. For purely psychological rea­ might afford a further opportunity for employing sons, easily understandable, 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 choice between experts attached to the Mission of a number of working in a foreign land or returning to their possible projects in the different countries visited homes and to conditions understood and experi­ by 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 refugee be happy there again. They would be reluctant labour, save in the Gaza strip. Ample labour for to believe it. They would suspect a trap to hold the great works already planned by the Egyptian 20 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

Government for the development of the land of The Governments of Iraq and Israel are both Egypt is immediately available from the ranks of engaged in finding work for the relatively small Egyptian unemployed. On the other hand, certain number of refugees within their territories, and works might usefully be undertaken in the Gaza advised the Mission that they do not immediately strip. Unfortunately, this is the most congested need external assistance to this end. area. Possible relief 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 recognizes that the problem of the refu­ The execution of such works projects, leading gees in the Gaza area will not be solved, save by to improvements in the productive capacity of the permitting the excess to farm their adjacent lands areas in which they are undertaken, is bound to from which they are now cut off by the 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 during work opportunities may be open to them. which it may be hoped substantial progress will In Jordan, relief works are envisaged which be made towards a settlement of the outstanding would soon absorb more than the breadwinners political issues by the agencies entrusted with that among the 70,000 refugees actually in Jordan ter­ task. ritory. The Economic Survey Mission has learned Many of the small works projects envisaged in with satisfaction that His Majesty's Government the public works programme for the employment in the United Kingdom has already made to the of refugees, as noted in appendix C, can be the Government of the Hashemite Kingdom of Jordan prelude to larger developments. For the imme­ an interest-free loan of one million pounds sterling. diate future, the refugees are viewed as a reser­ This loan is to be expended by the 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 Government 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 together under the initiative of one agency, can, presses the hope that the two Governments con­ in the considered judgment of the Economic Sur­ cerned will find it possible to begin work at an vey Mission, become a contributing factor for early date. peace and economic stability in the Near East.

APPENDICES

(A) Cost of Programme

The estimated cost of the total programme of and non-refugees. If it were decided to continu!! 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 paid to refugees sion, for the eighteen months from January 1950, employed on work schemes, whether in cash or in is $48 million. kind, will be the locally prevailing rate, ar:d that This estimate includes $29 million to finance this wage will enable the worker to prov1de for works projects for the eighteen months, including three dependents, for whom no separate relief wages, administration and 55 per cent of the cost will be needed. of materials, tools and equipment. The remaining It is assumed that 25 per cent of refugees are 45 per cent of the cost of materials, tools and able-bodied men and that the numbers available equipment ($6 million) it is assumed will be made for work are therefore: in Jordan and Arab available by the local Governments. Palestine, 78,000; in the Gaza strip, 48,000; in The cost of direct relief for the calendar year Syria, 15,000; and in Lebanon, 22,000. 1950 (see recommendation 2) is estimated at With regard to the amount of employment $19 million. This includes the cost of food, which can be provided, the Economic Survey clothing, tents, necessary health measures, admin­ Mission is satisfied that work can be found, on istration and a small reserve. schemes of the types described in appendix C, for These estimates arc based on the assumption substantially all the able-bodied refugees in J or­ that, for the quarter beginning 1 January 1950, dan, Arab Palestine and Syria. In Gaza it appears the present ration load of 940,000 will be reduced that the schemes described in appendix C exhaust to 652,000, thus eliminating refugees not in need the possibilities. In Lebanon, employment of refu- Appendix lA 21 gees 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 employment can be found of the year. on engineering works. The 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 programme and who would, there­ fore, become ineligible for relief. In addition, it is (In thousands) to be assumed that some may obtain employment Number for Dependents of Maximum whom work workers number not generated by the works programmes, as many can be remo·ved eligible provided from relief for direct in the total figure of 726,000 have already done. relief The estimates do not attempt to take account of this possibility. 1950 (quarters) Of the total cost of $48 million, $5.5 million 1st ...... 652 falls in the first quarter of 1950. This is all for 2nd ...... 13 39 600 3rd ...... 40 120 492 direct relief because work schemes will not have 4th ...... 65 195 392 started. During the remainder of 1950, it is estimated 1951 (quarters) 1st ...... 88 264 300" that the number of people engaged on work 2nd ...... 100 300 252" schemes will increase steadily until it reaches 65,000 at the end of the year. The total cost for •If the recommendations of the Economic Survey Mis­ the period is estimated at about $25 million, made sion are adopted, direct relief from United Nations funds up of a diminishing expenditure on direct relief will end at the end of 1950. The works programme would and a rising expenditure on work schemes. continue and such direct relief as may be required would In the .first half of 1951, the cost is estimated at become the responsibility of the local Governments.

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

1950 1951 Quarters Quarters Estimated cost I 11 Ill IV I 11 Total 1. Direct relief 5.5 5.1 4.5 3.9 19.0 2. Work schemes : (a) Labour and administration ...... •...... •.. 0.9 2.8 4.6 6.2 6.9 21.4 (b) Materials, tools and equipment...... 0.6 1.8 2.8 3.8 4.3 13.3 (c) Total cost to United Nations and local Govern- ments ...... · · · · ·. · · 1.5 4.6 7.4 10.0 11.2 34.7 (d) Less 45 per cent of item 2 (b), assumed to be made available by local Governments ...... 0.3 0.8 1.3 1.7 1.9 6.0 (e) Cost to United Nations ...... 1.2 3.8 6.1 8.3 9.3 28.7 3. Direct relief and work schemes : (a) Total cost to United Nations and local Govern- ments ...... · · · · · · · · · • · · • 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 Nations Economic Survey Mission for the Middle East-Part I

(B) Analysis of Refugees and Relief Recipients

A. NUMBER OF REFUGEES 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) able, at 726,000. This figure is arrived at by taking the former non-Jewish population of the Thousands territory at present held by Israel and deducting 1. Estimate of total non-Jewish population of therefrom the present non-Jewish population of Palestine on 31 December 1947 Settled non-Jewish population on 31 Decem- that territory. Details of the calculation are given ber 1946 . . . • ...... • ...... 1,230" in section B below. Nomadic population ...... • ...... 127b To this figure of 726,000 should be added some 25,000 people who still live at home, but are with­ Total non-Jewish population on 31 December 1946 ...... • ...... 1,357 out means because they are separated from their Plus natural increase in settled population lands by the armistice lines, 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 31 December 1947...... 1,388 number 751,000. Not all these are in need. It is estimated that 2. Estimate of total non-J ewish population who 20,000 are in employment and capable of support­ could have fled Israel (assuming that births since 31 December 1947 were offset by in­ ing another 60,000. In addition, there are some creased mortality) 19,000 refugees who are presumed not to be receiv­ Settled non-Jewish population as of 31 De­ ing UNRPR rations (of whom 15,000 are of cember 1946 within boundaries of territory independent means and 4,000 are supported by the held by Israel Defence Army on 1 May 1949 736d Plus natural increase 31 December 1946 to 31 Iraqi Government). There are, therefore, 652,000 December 1947 ...... • ...... 18• genuine refugees in need (including the border­ line cases) . Total as of 31 December 1947...... 754 The UNRPR ration strength is now 940,000, Plus estimate of nomads...... 105• but rations are in fact issued by the agencies to Total non-Jewish population within 1 May 1,019,000 recipients. Rations are allocated in bulk 1949 boundaries ...... 859t to the agencies, who stretch them to cover desti­ Less: non-Jewish population still in Israel... 133g tute and other needy persons as well as refugees. These figures are set out below : Total refugees from Israeli-held territory.... 726

1. Refugees who fled Israel and are in need .... 627,000 •Obtained by subtracting 7,600 for non-Jews said to have 2. Plus borderline cases ...... 25,000 been overstated in official estimate of 1,238,000, through under-registration of deaths. Refugees in need 652,000 •Estimate of total Bedouin population of Palestine based on the partial enumeration which took place in May 1946. 3. Plus refugees in gainful employment and not Figure taken from "Note on Bedouin Population of Pales­ in need ...... ···· 99,000 tine" presented by the representative of the United King­ Total refugees 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 based on observed rations ...... 19,000 average of previous years. •obtained by subtracting 52,000 nomads from total non­ Refugees receiving rations in Arab countries 732,000 Jewish population as of 31 December 1946 in villages with­ 5. Plus non-refugees in Arab countries receiv- in boundaries held by Israel Defence Army on 1 May ing rations ...... •...... 160,000 1949. List of villages so held is given in appendix B of document Com.Tech./7I Add.!, and populations were ob­ Total ration strength in Arab countries 892,000 tained from map of villages. Sub-district totals arc not 6. Plus Arab and ] ewish refugees in Israel .... 48,000 strictly comparable with those given in "Supplement to Survey" because latter arc "revised de facto" estimates, but Total UNRPR ration strength 940,000 total differs by only a fraction. 7. Plus ration receivers in excess of UNRPR •o£ 127,000 estimated lledouins (based on partial enu­ ration strength 79,000 meration of May 1946), approximately 22,000 were said ·························· to have been normally resident in areas allocated to Arab Total ration receivers 1,019,000 State under UNSCOP (United Nations Special Com­ mittee on Palestine) majority plan, leaving 105,000 in Jewish State. Since boundaries of 1 May 1949 include a The number used hy the 1\fission in estimating larger area than UNSCOP, it is estimated that 105,000 the cost of the recommended programme is Arabs may be included. Loftus estimates 95,000 remaining 652,000, the estimated number of refugees in need, within boundaries. If this figure is used, total "refu­ including the borderline cases. gees" becomes 716,000 instead of 726,000. t Assuming no natural increase since 31 December 1947 The figure of 751,000 designated as "total refu­ this 31 December 1946 estimate would be the probabl~ gees" in the above table is composed of 726,000 number of non-Jcws who could have fled. refugees plus 25,000 borderline cases. •In the Statistical Bullcti11 of Israel, vol. 1, No. 2, for Appendix IA 23

August 1949, a total of 108,000 non-Jews in Israel is by the Technical Committee, 3 July 1949. This figure is given, based on the results of the census of 8 November given also in the Jewish Agency's Digest of Press and 1948 and an additional registration during January 1949 Events, No. 49. in the areas of Nazareth, Acre, Beersheba, and in the town of Majdal. This estimate is said not to include Arabs in remaining areas of the N egeb, the Arab villages C. GEOGRAPHICAL DISTRIBUTION OF REFUGEES in the Sharon, or non-J ews accrued since registration. AND OF RELIEF RECIPIENTS It is assumed here, however, that Arabs in these areas tended to flee, and that natural increase has been offset Estimates are available of the geographical dis­ by increased mortality. An allowance of 25,000 is made for Arabs said to have entered Israel since the end of tribution of the 1,019,000 relief 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 questionnaire circulated below.

Alleged relief recipients Adjustment Persons who have fled 30 September 1949 fact ora from Israel Per cent Area Number Source Per cent Source Number oftutal

Arab Palestine .....•...... •.•.. 431,500 (1) 35 (5) 280,000 39 Egypt ...... •.....••.. 7,000 1 Gaza ...... •...... ••. 210,987 (2) 10 (2) 190,000 26 Iraq ...... •....••.••• 4,000 (3) 0 (3) 4,000 1 Jordan ...... •....•..•. 100,905 (4) 30 (6) 70,000 10 Lebanon .....•...... •..••.. 140,448 (4) 30 (7) 100,000 14 Syria ...... •.• 83,403 (4) 10 (5) 75,000 10

TOTAL 971,243 726,000 In Israel ...... •.••. 48,000 (31,000 Arabs, 17,000 Jews) GRAND TOTAL 1,019,243 • Based on the probable percentage of duplicate registrations, destitute persons and other non-repatriable relief recipients in the different areas. Sources (1) ICRC report dated 30 September 1949. (2) AFSC, Schedule of refugee population, 30 September 1949, and information obtained 26 October 1949. (3) UNRPR, as of 30 September 1949. ( 4) LRCS report dated 30 September 1949. (5) UNRPR, 1 August 1949. (For Arab Palestine 155,000 out of 432,000 consisting of 69,157 villagers being fed in Pal­ estine and a 20 per cent duplication in remainder.) (6) Report of the Technical Committee on Refugees of the Conciliation Commission for Palestine, 20 August 1949. (7) Conservative estimate based on UNRPR estimate of 1 August 1949.

D. CHARACTERISTICS OF THE RECIPIENTS OF per cent. A conservative estimate would be 25 per RELIEF cent. Females employable under certain circum­ stances might constitute an additional10 per cent.2 1. Family units . For comparison it can be noted that the total The average size of family among all recipients settled Arab labour force in Palestine was given of relief, including non-refugees, is almost six as 300,000, or 25 per cent of the total non-J ewish persons. This would result in approximately population in 1944.3 The census of 1931 reported 170,000 family units/ or 121,000 family units of that the ratio of earners to dependants was about genuine refugees but only 109,000 family units of 1 to 3 in the settled Arab population. refugees in need of relief. Of the employable males, 7 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 figures are available for in camps, is based on the assumption that suffi­ the proportion of employable males among those cient calories will be provided to permit heavy eligible for relief, estimates range from 14 to 45 labour. and refugee leaders, include a certain number of older 1This and subsequent estimates, except where otherwise children and adults over 50, as well as some persons listed indicated, are based upon figures provided by UNRPR and as dependants. the three operating agencies and checked by field visits "Under-estimated by omission -of part-time family to camps and other refugee concentrations. workers. National Income of Palestine, 1944 by P. J. 2These estimates, based on samples taken in various Loftus, Government statistician. No. 5 of 1946. Govern­ camps and upon opinions given by the operating agencies ment Printer, Palestine. 24 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

3. Occztpation The low proportion of agriculturalists in this Very little information is available as to the sample may well be unusual in that the refugee occupational capacities of the relief recipients. A families came from villages near Lydda. census of population which included an investiga­ 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 num­ changes have taken place in the economy of Pales­ ber of skilled and semi-skilled workmen,5 the tine since that time, which make it difficult to probable distribution of whom, by detailed occupa­ estimate the present situation. A survey of the tions, can be roughly estimated from the first table occupations of skilled tradesmen conducted in given above. It may also be noted that, according 1943 4 among 14,631 non-Jewish workers showed toP.]. Loftus,6 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 supplied for construc­ Per cent tion work by the Fellaheen in the off season. Mechanics and fitters...... 17 Carpenters ...... 13 Shoemakers ...... 8 4. Rural-urban distribution 7 Weavers ...... 8 Blacksmiths ...... S Tailors ...... S Per cent Tinsmiths ...... 3 :Masons ...... 3 Rural settled Arab population (1944)...... 64 Urban settled Arab population...... 36 62 A survey conducted in June 1949 among 22,692 refugees in the Gaza area, which is well known to 5. Age groups shelter mainly agriculturalists, gave the following Per cent percentage distribution by occupational categories: Under 1 ...... S Per cent 1-lS .... 0...... 0. 0...... 4S 16-SO ...... 0...... 0.. 0. 0...... 40 Professional and proprietary...... 16 Over SO ...... 10 Clerical and supervisory...... 1 Skilled and semi-skilled...... 18 Unskilled ...... 6S 6. Number of dependants 8 100

Another survey, taken by the League of Red Per cent Cross Societies in the Zerqa camp in May 1949, Children (0-lS) ...... SO analysed the occupations of 1,000 families. The Aged (over 50)...... 10 results were as follows : Ill and infirm...... 5 Nursing and pregnant women...... 12 Per cent Government service and trade...... 13 Agriculture ...... 28 7. Religion Building ...... 11 Craftsmen ...... 7 Street vendors ...... 9 Per cent Food salesmen ...... 9 1fotor trade • ...... 8 1foslem ...... 93" Public services ...... 10 Christian ...... S Other . . • . • ...... S Jewish ...... 2 100 "National Income of Palestine, 1944, by P. ]. Loftus, Government Statistician. No. S of 1946. Government 'Sm<•ey of Skilled Tradesmen, 1943, compiled by the Printer, Palestine. Department of Statistics on behalf of the Controller of 7 Census of Palestine 1931 gives 6S per cent rural, 3S Manpower No. S.2 of 194S. Government Printer, Pales­ per cent urban for settled non-Jewish population, and tine. 68 per cent rural and 32 per cent urban for total non­ "SHrz•ey of Skilled Tradesmen, 1943, compiled by the Jewish population. Department of Statistics on behalf of the Controller of •A number of these dependants are employable, includ­ l\[anpower No. S.2 of 194S. Government Printer, Pales­ ing some children under lS, and persons over SO. tine. "UNRPR report, 30 September 1949. Appendix lA 25

(C) Illustrative Outline of Works Projects

(This is a brief summary omitting calculations afforestation. But the survey has been joint and technical detail contained in two extensive throughout, and the two types of projects have 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 engineering and agricultural consultants first of the Economic Survey Mission.) visited 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 ing consultants to the Mission has been to examine were interested, and to make further suggestions. schemes which can provide early employment for After general tours of the principal areas con­ 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 1. PuRPOSE 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 projects 4. CRITERIA OF SELECTION which might relieve the present situation of 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 viz., the provision of short-term engineering or criteria set out below, make an estimate of the agricultural projects which would provide oppor­ funds required and ascertain approximately the tunities for refugee employment and contribute to amount and duration of employment which can the welfare of the different countries, without con­ reasonably be expected. The projects were thus flicting with any long-term projects formed by approached with the object of ascertaining those individual States as the basis for a more complete categories of schemes which could be utilized. The economic development. Special criteria applied in references to specific projects made in this present selecting type projects were: appendix do not therefore indicate that these are (a) The presence of a high labour factor in the the only ones either examined or contemplated, cost of the scheme, and the 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 early commencement; 2. SCOPE (c) The susceptibility of the projects to a uni­ fied development, i.e., the likelihood of constitut­ The survey made by the consultants has been ing satellite and contributory projects round a restricted in scope in two ways: nuclear development ; (a) Since the prime object is the finding of (d) The place which the short-term works temporary work for Palestinian Arab refugees, 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 5. 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 affected and cannot await long-term decisions, attention has restricted by certain major factors in the two been concentrated on short-term projects. great basic natural resources-soil and water. There has been a natural division of the task The former, except in the saline areas, is, in gen­ of examination : the engineering consultants have 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 moisture 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 Economic Survey Mission for the Middle East-Part I

no country in the Near East ~as sufficientl:y t~ken, racing with at least a single row of stones, and in in the past (except perhaps m remote antlqmty), really steep country stone walls will be required; nor is taking at present, adequate f:Ueasures for such terracing is expensive but well justified conserving either of its great baste resources. because of the greater productive capacity of the Consequently the soil is being eroded; water, treated land. As the effects 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 development scheme. Moreover, terrac­ for the purpose to which it is best suited, and the ing has the additional advantage that it can be financial returns which are being obtained from it commenced early. are insufficient. It is evident that two directions in which refu­ gee labour can be employed in a manner which (b) Afforestation will also give very material aid to the economy of Very little practical action has been taken in the the countries concerned are : conservation of the Near Eastern countries to extend the area under soil and the natural moisture in it, and the better forest, although the importance of afforestation is utilization of existing water resources. Schemes now gradually becoming recognized. Afforesta­ of this type have the great advantage that labour tion can be carried out either by direct sowing of forms an extremely high percentage of the total seeds (which results in large areas being treated cost involved. Such schemes 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 production is thus a princi­ employed in quantity and at the same time pro­ pal limiting factor in the rate of this type of affor­ mote the economic development of the Near East­ estation. It is considered that schemes should ern countries by striking at the root of their include the "Gradoni" system of tree-planting, greatest problems are: which is simple and effective, and offers good (a) The 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 planting of fruit trees, more particularly the undertaken with the advice and guidance of forest­ latter; ry specialists, and the new plantations must be (b) The afforestation of land not suited to rigidly closed to grazing, and in particular be pro­ other purposes, partly as an erosion control meas­ tected against the inroads of man for fuel and ure and partly to contribute additional fuel and goats for fodder. timber supplies; (c) The development of good roads to open up the area so as to allow materials for the construc­ (c) Roads tion of irrigation and similar works to pass in, Adequate highway communications are unques­ and agricultural products, particularly fruits and tionably necessary for full economic development vegetables, to pass out; in any country, the more so in an agricultural (d) The construction of irrigation projects and country, since produce must move freely to the water conservation works on a moderate scale. markets. Road making is clearly a suitable work Certain other projects not falling into these four project, for the labour forms a high element in its categories have been specially selected, either be­ total cost. It can be begun quickly and the mate­ cause they are well advanced and it would be rials are generally present in all 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 tive power. essarily bring 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) Terracing of the areas traversed by the highways proposed Terracing is not an innovation in Near Eastern in plans drawn up by countries visited, such de­ countries; indeed, in many places it is already velopment has not yet reached the stage which practised. The work 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 justification since lack of them strangles the planted with fruit trees will, however, require ter- flow of normal traffic; Appendix IA 27

( ii) New roads required for the unified devel­ with horticultural crops it is highly productive. opments discussed in the next paragraph. Agriculturally, the present Arab area is prob­ ably not the best land in Palestine. It consists of (d) Utilization of water resources a collection of hills, some eroded down to rock skeleton and others carrying shallow patches of Schemes considered for the utilization of water soil which, somewhat surprisingly, produce cereal resources fall in general into two types, of which crops. The rainfall is in the main adequate in the the second is based on a special concept, regarded hills, though in Jericho in the Jordan V alley it is as fundamental. only six inches and is replaced by artificial irriga- - The first type of project consists in the con­ tion. The region is predominantly fruit-growing. struction, at various points, of irrigation and water Approximately half the refugees at present find supply works already planned or commenced. shelter in Jordan and Arab Palestine, and in addi­ Projects of this nature include canals and drain­ tion the refugee population in the latter so closely age works in the Lebanon and in Syria. Such approaches the number of local inhabitants that it projects in the main involve construction works, may be necessary for some to find work east of the but are also for the most part already planned so Jordan river. It is necessary, therefore, to rec­ that they can be embarked on without undue de­ ommend extensive work projects in both areas. lay. In many cases incomplete works already The types of such projects recommended are as exist. follows: The conception of the second type of project stems from the view that such engineering devel­ opments as highway construction or dam building (i) Unified developments cannot be economically justified in isolation. High­ A specific area selected for such development is, ways must be 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 necessary roads in the area, to to develop certain comparatively small areas inten­ provide water for perennial 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 centrally located 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 construc­ roads are recommended for improvement under tions, terracing, afforestation, etc. this scheme; and surveys should be undertaken at once and completed within three months for the (e) Other 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 provide for the maximum employment of hand advantage that plans can be prepared in a short labour, and that it can be raised as required. More time and that the work has a significant effect on intensive geological surveys can proceed parallel the general economy of the Near East and may be to construction, which should be well advanced of outstanding long-term importance. Work on a before the high flow begins in December 1950. harbour has also been recommended for somewhat There is a suitable storage area in the wider part similar reasons. of the wadi above the dam site. At the same time a headworks structure, already envisaged by the 7. TYPES OF PROJECTS RECOMMENDED, BY Jordan Government as part of a scheme for com­ CouNTRIES pleting headworks on several wadis-a s~heme which it is now recommended should be revised­ (a) Jordan 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 afforestation of the area. even in the best areas. An important physical The experience gained in planning this first uni­ feature of the country is the series of deep wadis fied development will be invaluable in developing running into the valley floor of the Jordan, which several other wad is both in Jordan and Arab 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 Nations Economic Survey Mission fo:r; the Middle East-Part I

Works Departments to absorb these heavy addi­ (b) Lebanon tional work loads, and to some extent the rate of progress will depend on the expansion which can Lebanon is a mountainous country in which be achieved by these Departments. only a quarter of the land is cultivable, and most of this is already utilized. Taking into account the high existing utilization of the cultivable area, the (ii) Highway development importance of agriculture to the country and the possibility of further fruit-growing, it will be seen Considerable highway development can be un­ that it is vital to protect the soil against erosion dertaken in Jordan and Arab Palestine, provided and that an important means of increasing agri­ the Public Works 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 development by (iii) Other irrigation projects providing low-cost hydro-electric power). 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 irrigation water for this tract wish to concentrate on employment of refugees of land can better be obtained by conserving the on projects closely identified 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. (iv) Airport improvement The following schemes for the employment of refugee labour are therefore visualized; these are This work is also considered as a short-term all of the irrigation/water supply type. Harbour project and it is believed that improvements to and railway improvements, which 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 the South Beqaa (v) Afforestation Here detailed plans are almost completed and There are 2 million nursery seedlings available construction problems are simple; there is good in Jordan for afforestation purposes, and it is land well situated for irrigation, and this project proposed that this should proceed, but, at the out­ should be made an early priority. set, be concentrated in the catchment area of the Zerqa basin. At the same time there should be an (ii) Aklwr Plain irrigation extension of the present area under forests in Arab Palestine and restoration of several of the existing It is planned that this area in North West forest reserves. A scheme has been drawn up and Lebanon will utilize water from each of the four is proposed covering fourteen such areas. rivers which cross it. This can also be made an early priority, for construction work is simple and consists mainly of concrete lined canals. (vi) Terracing It is proposed that terracing in Jordan should (iii) Completion of TyrjSaida irrigation project commence as part of the unified 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 strip of good practical examples of terracing. The area is land adjacent to the sea coast in the Tyr/Saida essentially a fruit-growing one. It is proposed, area. The main source of water supply is the N ahr therefore, that extensive terracing should be car­ el Litani. Mainly secondary canals remain to be ried out in Arab Palestine, continuing the policy built. of the former government, a work which will pro­ vide ample scope for the useful employment of (iv) Clzeld:ajTripoli project refugee labour. Such work can make a valuable contribution in the preparation of land for new This is a more costly project involving tunnel orchards and in the improvement of land already construction to utilize an underground source of under fruit. The only limiting factor is the maxi­ 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 superyised, which is said to be about 16,000 la­ Tripoli area. The project is partly planned and bourers a day. is recommended to be proceeded with. Appendix lA 3((l 29

( v) Minor water supply projects ment which will greatly assist the linking of sev­ eral important towns. In addition labour might be employed on a development of water supply systems for numer­ · (iv) Irrigation and drainage ous villages in Lebanon. The consultants consider that the reclamation (c) Syria of the Madkh swamp, which is partly completed, 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 rainfall and agricultural zones. In the mountain ( v) General public works regions on the shores of the Mediterranean the A number of public works have been examined rainfall is high, and there is a further zone of and it is considered that a considerable portion of cultivable rain-fed land beginning at J ebel Druze refugee labour can be employed on the improve­ and the N auran, becoming very narrow or disap­ ment of the Mezze Airport, the construction of pearing entirely east of the Anti-Lebanon, and Latakia harbour (which should, however, first be reappearing as a b~oad band in the Al~ppo ar~a. further studied), and the works for the Aleppo Further east is a thtrd zone where there 1s no ram­ water supply. fall and which is suitable for grazing only. To the north of this belt lies the Jezireh, where the (d) Gaza Strip rainfall is higher and cultivation is possible. There are many areas of hilly country with steep Of the former Gaza district of Palestine, an slopes. area of only about 50,000 acres now remains in Bearing in mind these considerations, the size Arab control in the form of a long narrow coastal of the country, and the fairly well advanced devel­ strip, a few kilometres wide, extending from a opment projects of the Syrian Government, the little north of Gaza to the Egyptian border. With­ consultants visualized works projects of the fol­ in it some 200,000 refugees and the 70,000 normal lowing types in Syria for the employment of inhabitants are concentrated. A small proportion refugees: of the area is irrigated by wells from which are 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 terracing already exists but area producing cereals as a winter crop. what has been accomplished is only a fraction of It is dear 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 use~ number of refugees concentrated there. Two types both for forest purposes and for growmg frmt of projects are however considered advisable: trees, particularly olives and figs. · ( i) Sand fixation of the dunes by the planting (ii) Afforestation 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 Forestry De­ Hermon, the Anti-Lebanon and part of the moun­ partment, which in 1947 brought into effect a tains of the Latakia area are unsuitable for culti­ ten-year programme for fixing 1,000 hectares of vation for field or orchard crops, but would sand dunes per year. This project should be re­ become, in time, a source of much economic value vived, as it will confer an important long-term to the country if entirely planted under forest benefit on the agriculture and people of the tract. trees. Of the terracing programme above, 50,000 ( ii) Certain minor engineering works can be hectares are intended for afforestation. This undertaken, viz., asphalting of roads and the pos­ should be done both by planting seedlings and sible installation of drainage systems in Gaza. sowing seeds. The utilization of the former From the foregoing summary it will be seen method will be limited by the capacity of Syrian that useful projects, meeting the criteria set out nurseries, and it is recommended that these be above, can be 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 constructio11 lined above (all of which must be regarded as type Work is ready to start in Syria on a good many schemes susceptible to expansion or repetition) short-term projects of road construction, and the and of the estimated probable 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 30 Final Report-United Nations Economic Survey Mission for the Middle East-Part I be brought into operation, that a number of other tion of certain projects. It is strongly recom­ factors are involved. mended in this connexion that terracing and afforestation be considered as one, and in conjunc­ Apart from the* general * organization * required tion with the conservation of water resources. The to supervise and carry on the whole programme best course will probably be, therefore, for the for the Arab refugees taken together, chang~s will Governments concerned to set up a soil conserva­ be required in the organization of the services of tion or land use division, either independent or the Governments, to ensure adequate local execu- under the appropriate existing Ministry.

(D) Terms of Reference of the Economic Survey Mission

The Conciliation Commission for Palestine, de­ In collaboration with the Governments con­ siring further to implement paragraphs 10 and 11 cerned: of General Assembly resolution 194 (Ill) of 11 (a) Explore the measures which can be taken December 1948, and to obtain information which by the Governments concerned without outside will serve as the basis for recommendations for financial assistance to achieve the objectives of further action by the General Assembly, Member paragraph 1 above; States, appropriate specialized agencies, and in­ (b) On the basis of existing plans and surveys, terested organizations, and examine proposals submitted by the Governments Having noted the declarations of representatives concerned for economic development and settle­ of Israel and the Arab States with respect to ment projects requiring outside assistance which repatriation, resettlement and compensation of would make possible absorption of the refugees refugees: into the economy of the area on a self-sustained 1. Pursuant to the authorization granted to it basis in a minimum time with a minimum expend­ under paragraph 12 of the foregoing resolution iture; hereby establishes, 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 refugees not employed on the hostilities, and to make recommendations to the development and settlement projects of paragraph Commission for an integrated programme: (b) ; (a) To enable the Governments concerned to (d) Examine such other development and set­ further such measures and development pro­ tlement projects requiring outside assistance grammes as are required to overcome economic which, though not associated directly with the dislocations created by the hostilities; employment and settlement of refugees, would (b) To facilitate the repatriation, resettlement serve to achieve the objective of paragraph 1; and economic and social rehabilitation of the refu­ (e) Estimate the number of refugees who can­ gees and the payment of compensation pursuant not be supported directly or indirectly through to the provisions of paragraph eleven of the Gen...: the employment envisaged u.nder parag~aphs ( ~)­ eral Assembly's resolution of 11 December 1948, (d), together with the estlmated penod dunng in order to reintegrate the refugees into the eco­ which direct relief will be required and the cost nomic life of the area on a self-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. age to property, with special reference to the rela­ 2. Instructs the Economic Survey Mission to tionship of such compensation to the proposed include in its recommendations an operational plan settlement projects; for carrying out the recommended programmes (g) Study the problem of rehabi.litation ?f together with the estimated costs and methods of re!~­ gees; including matters concer~mg t~eir ctvll financing. status, health, education and socml services; 3. Authorizes the Mission, pursuant to para­ graph 14 of the General Assembly's resolution of (h) Propose an organizational struct?n: to 11 December 1948, to invite the assistance of achieve the objectives of paragraph. 1 w1thm a those Governments, specialized agencies and inter­ United Nations framework; to co-ordmate, super­ national organizations which may be able to facili­ vise and facilitate measures for relief, resettlement, tate its work. economic development at;d rel~t~~ requir~men~s The Conciliation Commission recommends that such as community service facihtles, bearmg m the Survey Mission approach its task along the mind the interests of all Governments concerned. following lines; 1 September 1949 Appendix IB 31

B. Resolution 302 (IV) adopted by the General Assembly at its 273rd plenary meeting on 8 December 1949

The General Assembly, 6. Considers that, subject to the provisions of paragraph 9 (d) of the present resolution, the Recalling its resolutions 212 (Ill) of 19 No­ equivalent of approximately $33,700,000 will be vember 1948 and 194 (Ill) of 1LDecember 1948, required for direct relief and works programmes affirming in particular the provisions of paragraph for the period 1 January to 31 December 1950 of 11 of the latter resolution, which the equivalent of $20,200,000 is required Having examined with appreciation the first for direct relief and $13,500,000 for works pro­ interim report of the United Nations Economic grammes; that the equivalent of approximately Survey Mission for the Middle East (A/1106) $21,200,000 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 expenses; and that Add. 1), direct relief should be terminated not later than 31 1. Expresses its appreciation to the Govern­ December 1950 unless otherwise determined by ments which have generously responded to the the General Assembly at its fifth regular session; appeal embodied in its resolution 212 (Ill), and 7. Establishes the "United Nations Relief and to the appeal of the Secretary-General, to con­ Works Agency for Palestine Refugees in the Near tribute in kind or in funds to the alleviation of the East": conditions of starvation and distress amongst the (a) To carry out in collaboration with local Palestine refugees ; governments the direct relief and works pro­ 2. Expresses also its gratitude to the Interna­ grammes as recommended by the Economic Sur­ tional Committee of the Red Cross, to the League vey Mission; of Red Cross Societies and to the American (b) To consult with the interested Near East­ Friends Service Committee for the contribution ern 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 great difficulties, the tional assistance for relief and works projects is responsibility they voluntarily assumed for the no longer available; distribution of relief supplies and the general care 8. Establishes an Advisory Commission con­ of the refugees ; and welcomes the assurance they sisting of representatives of France, Turkey, the have given the Secretary-General that they will United Kingdom 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 power to add not more than three additional mem­ acceptable basis ; bers 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 Emergency Fund for the important in the Near East in the execution of the pro­ contribution which it has made towards the United gramme; the Director and the Advisory Commis­ Nations programme of assistance; and commends sion shall consult with each Near Eastern Govern­ those specialized 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 Secretary-General to appoint tions Educational, Scientific and Cultural Organ­ the Director of the United Nations Relief and ization and the International Refugee Organiza­ Works Agency for Palestine Refugees in the Near tion; East in consultation with the Governments repre­ 4. Expresses its thanks to the numerous reli­ sented on the Advisory Commission; gious, charitable and humanitarian organizations (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. Recognizes that, without prejudice to the responsible to the General Assembly for the opera­ provisions of paragraph 11 of General Assembly tion of the programme ; resolution 194 (III) of 11 December 1948, con­ (b) The Director shall select and appoint his tinued assistance for the relief of the Palestine staff in accordance with general arrangements refugees is necessary to prevent conditions of made in agreement with the Secretary-General, starvation and distress among them and to further including such of the staff rules and regulations of conditions of peace and stability, and that con­ the United Nations as the Director and the Secre­ structive measures should be undertaken at an tary-General shall agree are applicable, and to the early date with a view to the termination of inter­ extent possible utilize the facilities and assistance national assistance for relief; of the Secretary-General; 32 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

(c) The Director shall, in consultation with the gramme subject to mutually satisfactory conditions Secretary-General and the Advisory Committee on for repayment ; Administrative and Budgetary ,Questions, estab­ 16. Authorizes the Secretary-General to con­ lish financial regulations for the United Nations tinue the Special Fund established under General Relief and Works 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 estab­ 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 Nations Relief and Works graph 6 require revision; Agency for Palestine Refugees in the Near East 10. Requests the Director to convene the Ad­ the privileges, immunities, exemptions and facil­ visory Commission at the earliest practicable date ities which have been granted to the United Na­ for the purpose of developing plans for the organ­ tions Relief for Palestine Refugees, together with ization 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. Continues the United Nations Relief for tions; Palestine Refugees as established under General 18. Urges the United Nations International Assembly resolution 212 (Ill) until 1 Apri11950, Children's Emergency Fund, the International or until such date thereafter as the transfer re­ Refugee Organization, the World Health Organ­ ferred to in paragraph 12 is effected, and requests ization, the United Nations Educational, Scientific the Secretary-General in consultation with the and Cultural Organization, the Food and Agri­ operating agencies to continue the endeavour to culture Organization and other appropriate agen­ reduce the numbers of rations by progressive cies and private groups and organizations, in stages in the light of the findings and recommen­ consultation with the Director of the United Na­ dations of the Economic Survey Mission; tions Relief and Works Agency for Palestine 12. Instructs the Secretary-General to transfer Refugees in the Near East, to furnish assistance to the United Nations Relief and Works Agency within the framework of the programme ; for Palestine Refugees in the Near East the assets 19. Requests the Director of the United Na­ and liabilities of the United Nations Relief for tions Relief and Works Agency for Palestine Palestine Refugees by 1 April 1950, or at such Refugees in the Near East : date as may be agreed by him and the Director of (a) To appoint a representative to attend the the United Nations Relief and Works Agency for meeting of the Technical Assistance Board as Palestine Refugees in the Near East; observer so that the technical assistance activities 13. Urges all 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 co-ordinated with the technical assistance pro­ supplies and funds required is obtained for each grammes of the United Nations and specialized period of the programme as set out in paragraph agencies referred to in Economic and Social Coun­ 6; contributions in funds may be made in cur­ cil resolution 222 (IX) A of 15 August 1949; rencies other than the United States dollar in so (b) To place at the disposal of the Technical far as the programme can be carried out in such Assistance Board full information concerning any currencies; technical assistance work which may be done by 14. Atttlwri:::es the Secretary-General, in con­ the United Nations Relief and Works Agency for sultation with the Advisory Committee on Ad­ Palestine Refugees in the Near East, in order ministrative and Budgetary Questions, to advance that it may be included in the reports submitted funds deemed to be available for this purpose and by the Technical Assistance Board to the Techni­ not exceeding $5,000,000 from the Working Cap­ cal Assistance Committee of the Economic and ital Fund to finance operations pursuant to the Social Council ; present resolution, such sum to be repaid not later 20. Directs the United Nations Relief and than 31 December 1950 from the voluntary gov­ Work Agency for Palestine Refugees in the Near ernmental contributions requested under para­ East to consult with the United Nations Con­ graph 13 above; ciliation Commission for Palestine in the best 15. Autlzori:::es the Secretary-General, in con­ interests of their respective tasks, with particular sultation with the Advisory Committee on Admin­ reference to paragraph 11 of General Assembly istrative and Budgetary Questions, to negotiate resolution 194 (Ill) of 11 December 1948; with the International Refugee Organization for 21. Requests 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 $2,800,000 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. Instructs 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 11

Financial Survey

General Summary should of course note the exception of Israel where the contributions of world Jewry precariously The six countries surveyed by the Mission­ support a standard of life far above that attainable i.e., Egypt, Iraq, Israel, Jordan, Lebanon and from local production. Elsewhere in the Middle Syria-are all very young States in terms of au­ East, however, most of the population-perhaps tonomous government and administration. Egypt, as much as 90 per cent-lives virtually on the the oldest of the group, has had no ~ore. than margin of subsistence. Conspicuous examples of twenty-seven years of self-government smce tts re­ extravagant spending may of course be found emergence as a sovereign State in 1922. Iraq in the cities. But while such maldistribution of achieved its independence upon termination of the income obstructs economic progress in a variety British Mandate in 1932. Syria and Lebanon, after of ways, it is secondary to the basic problem in having been joined under a French mandate, be­ each country of grossly inadequate output in re­ came distinct sovereign States in 1946, although lation to the total population. This is the central continuing to maintain a customs union. In that fact of economic life in the Middle East. same year of 1946, Jordan also became independent while Israel did not come into existence until 1948. Estimated annual income per capita: In view of the relatively limited experience of these States in managing their economic and financial affairs, the progress already achieved Country U.S. $equivalent in certain instances is noteworthy. Nevertheless, Afghanistan ...... 50 in most of the countries surveyed by the Mission, Egypt ...... 100 the statistical and other economic data required to Ethiopia ...... 40 make a thorough appraisal of economic and finan­ Iran ...... 85 Israel ...... 395 cial conditions are not yet available. Lack of Lebanon ...... 125 factual information on the national income, budg­ Saudi Arabia ...... 40 ets, balance of payments, etc., of the Middle East Syria ...... 100 economies has prevented a detailed study of each Turkey ...... 125 country's economic position. Severe limitations of time have further closely restricted the survey From this fact of poverty, which everywhere undertaken by the Mission. springs to the eye, there inevitably follows a But from even this brief study, we believe that familiar chain of economic and institutional prob­ certain broad conclusions may justifiably be drawn lems that have so far defied effective solution. as to the general nature of the Middle East eco­ Under such conditions of intense pressure of nomic problem and the obstacles to its solution. hungry populations upon closely limited resources, First, it is only too clear that the Middle East consumption naturally tends to absorb 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 approximate degree of its }mpoverishment. 7'h.e output and resource utilization. A Lebanese repre­ FAO has ventured, on the basts of unstated stattstt­ sentative in the United Nations Economic and cal techniques, comparative estimates of income in Social Council has cogently described the problem : various Middle Eastern countries.1 These estimates are undoubtedly subject to a "The Middle East provides an excellent example considerable margin of error, which would. render of what is described as a hand-to-mouth economy. it hazardous to attempt any close companson of Gentlemen, it is literally hand-to-mouth. This one national standard of life with another. But we being the case, the Middle East can never provide hardly need wait upon P.recise. stu?!e.s of national internally the capital with which to develop invest­ income or even of calonc avatlabtltttes for proof ment goods as all its energy is spent on. the pro­ of the pervasive incidence of crushing poverty duction of consumption goods. Yet agam, when throughout nearly all the Middle East area. One such production is considered on a per capita basis it is revealed that the productivity per 1"Rcvicw 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 34 Appendix 11 35 truly a VICious circle. To increase its consump­ import savings or increased export earnings. tion goods it needs to increase its investment Moreover, in all the countries concerned, the ex­ goods, but to increase its investment goods it change mechanism itself-ranging from the rigidly need to increase its consumption goods. . . . The controlled system operated by Israel to the floating process will inevitably be lengthy, strenuous and rates permitted by Syria and Lebanon-operates painful." as a major deterrent to any significant influx of This basic problem of capital accumulation is private capital from abroad. rendered all the more acute by the present inability In general, therefore, the Middle Eastern econ­ of most of the Middle East Governments to omies find themselves on dead centre and, in mobilize, through public loans, even such savings their efforts to move on to a dynamic phase of as now materialize. Private savings 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 ventures or some form of usury, or run to Syria affords a striking example of the broad seed in the form of gold hoards. range of these developmental problems. Here one Nor have the several Middle Eastern Govern­ finds in no more than rudimentary form the basic ments succeeded in devoting any significant share monetary institutions upon which any develop­ of their budgetary revenues to basic developmental mental programme must rely. Such savings as may activities. Expenditure requirements, frequently be eked out of an oppressively low national income inflated or misdirected, are currently being fi­ yield only a trickle of deposit funds to the Banque nanced from an exceedingly narrow tax base which de Syrie and the few other institutions that now exempts the broad area of non-monetary income handle the banking requirements of Syria. Far and covers only a relatively minor portion of mone­ more significant as a medium of savings are tary income. Existing fiscal techniques, which private hoards of sovereigns and other gold coins, have not succeeded in tapping the incomes of the which further serve as an accepted standard of wealthy, are grossly inadequate to finance any value and often as a means of exchange. The large-scale programme of economic development. availability of loan funds for productive enterprise Such paucity of internal financial resources is is further sharply restricted by the competition of parallelled by even more acute shortages of foreign high-profit commercial ventures, which can appar­ exchange for financing capital imports. At present, ently afford interest charges of 20 per cent or more. the exchange receipts of nearly all of the Middle Such shortages of credit facilities bear heavily Eastern economies are devoted almost entirely to upon the agricultural community and also check financing consumption imports. This is not in­ the growth of infant industries. tended to imply that, in certain countries, consider­ On the budgetary side, the Syrian Government able amounts of exchange could not, under is currently allocating only a negligible proportion favourable circumstances, be diverted to capital of its public revenues for developmental purposes. purposes by cutting down upon luxuries im­ Broad possibilities undoubtedly exist for economies ported for the 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 progressive taxation. But progress in this nomic welfare would encounter no less opposition direction will probably tend to proceed concur­ from powerful private interests than that con­ rently with, rather than to lead, economic develop­ fronting reform of the tax structure. And in the ment. Similarly, mobilization of private savings cases of Lebanon and Syria, governmental efforts by governmental loan offerings for capital in­ to impose controls upon the exchange markets vestment will remain out of the question until the might well result in a drying up of the substantial current value of savings is very substantially en­ hard currency earnings which now depend upon larged and prevailing rates of interest reduced to unrestricted trading. Egypt and Iraq might, by a more reasonable levels. Meanwhile, the Syrian further tightening of exchange and trade controls, Government can do much to prepare for the attempt to divert to capital account a considerable basic budgetary reforms 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 as to the inconvertibility. Finally, the balance of payments nature of its actual budgetary operations. of most Middle Eastern countries is acutely vul­ On the exchange side, the Syrian authorities nerable to the frequently extensive variations in have no detailed knowledge of their balance of domestic output and to fluctuations in foreign payments position. The current rate of imports market demand for their closely limited range appears to depend mainly on three key exports, of exports. wheat, wool and cotton, together with miscellane­ These exchange difficulties have in turn dis­ ous receipts 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 receipts to capital require- 36 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 explain such final abandonment of earlier Government's credit position is weak. Scarce ex­ control efforts in terms of the impossibility of change resources are allowed to go to waste on effective administration and the risk of losing luxury imports. To compensate for these failings, brokerage transactions dependent upon a free the Government has been forced to draw heavily exchange market. However, this policy amounts upon its capital assets. to a confession of inability to secure more ex­ If Iraq is 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 higher percentage of its operating expenses Pipeline Company. from a broadened and more productive tax base. Moreover, the availability of Trans-Arabian The growth of deposit banking and other institu­ Pipeline dollar receipts for developmental purposes _ tional expressions of a monetary economy should is further restricted by the Government's current be encouraged. Public confidence in the govern­ efforts to strengthen the gold reserve backing of mental financial position should be strengthened the currency which is at the moment based pri­ by reform of present budgetary techniques. Lux­ marily upon franc balances accumulated 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 Iraqi resources have been well surveyed and, seem a wise one. The sooner adequate reserve with the important exception of basic agricultural backing is provided, the sooner will Syria 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 programme will ever gain Syria's long-term development possibilities are momentum without the initial stimulus of foreign impressive. Her boundaries include 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 requirements for capital imports through the ear­ promising resources lays upon the Syrian Govern­ marking of oil royalties for this purpose. In this ment the imperative duty of exploiting such pos­ connexion, the degree of convertibility into local sibilities to the fullest on behalf of the Syrian currencies of its sterling receipts from oil royalties people. will unquestionably prove of crucial importance. Iraq possesses a potential of economic develop­ Jordan is by far the least developed of any of ment holding greater promise than that of any the Middle East economies surveyed by the Mis­ other country surveyed by the Mission. Alone sion. All of the shortcomings of the Syrian and among the Middle East countries, Iraq has both Iraqi economies with respect to income, savings, undeveloped resources in the form of water and exchange earnings and developmental progress potentially fertile land, and substantial exchange apply with much greater force to Jordan. For earnings from oil royalties accruing directly to years the country has relied upon British sub­ Government account, with which capital develop­ sidies for coverage of a major proportion of its 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 as one with into the rehabilitatjon of the Tigris-Euphrates Arab Palestine. Into this new geographical unit valley. of Jordan-Arab Palestine there have fled refugees Until now, however, the financial resources numbering from one-third to one-half of a total available to the State not only from oil royalties population now swelled to nearly a million. In but also from wartime-accumulated sterling bal­ other Middle East countries, this refugee problem ances, have been very largely devoted to financing can be dissociated from long-term development consumption imports and the ordinary operating considerations. Not so in Jordan, whose Govern­ expenses of the State. Such dissipation of irre­ ment appears to contemplate the settlement not placeable capital assets upon current consumption only of the refugees it is harbouring today, but demands is largely explainable in the terms of the even of more, provided the necessary means can be same basic difficulties that retard progress else­ supplied from abroad. where in the Middle East. Thus the Iraqui econ­ During the past year, the annual British subsidy omy has as yet been unable to develop any sub­ has been supplemented not only by United Nations stantial flow of monetary savings. Even the use of relief assistance but also, and perhaps most im- Appendix II 37 portant of all, by the redemption against sterling foreign investors from assisting Lebanese de­ of Palestine Currency Board notes brought 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 develop­ approximately £ 12 million, is rapidly approaching ment, namely, the inadequacy of savings and the exhaustion. Unless additional exchange resources difficulty of mobilizing such savings as there are. can be found, Jordan will face the inevitable neces­ While these obstacles continue to impede the de­ sity of severe import cuts with consequent deepen­ velopment of the Egyptian economy, there has, ing of its present poverty, and a possible heavy nevertheless, appeared in Egypt an impressive toll 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 advantageously study. survival which may lead into progressive economic Thus, Egypt has succeeded in developing a gov­ development. ernmental bond market, in converting much of 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 intro­ for its population. Although agriculture is a basic ducing income tax legislation. This institutional source of income as in the other Middle East econ­ progress on the financial side has been facilitated omies, Lebanon's relatively advantageous position by a concurrent growth of national output and has been primarily achieved through the extensive has in turn contributed to the rise in the national service transactions which Lebanese merchants m come. undertake on behalf of foreign markets. Tran­ But such striking developmental gains have ap­ shipments through the well-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 commodity arbitrage, etc., all despite major increases of national output during contribute to comparatively substantial earnings of the past century, the "marginal" group in the hard, as well as soft, currencies. Egyptian population, i.e., those affiicted 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 modern 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 appalling growth of debilitating diseases, such as restricted. But here again one encounters the bilharzia and malaria. familiar difficulty that the State cannot yet com­ 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 ingrained in an economy which has so far On the exchange side, the Lebanese Govern­ offered but little choice to the individual. ment abandoned even earlier than Syria all quan­ Israel. The case of Israel is sui generis. There titative controls over exchange and import trans­ 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 Trat;s­ the financial side, Israel possesses a reasonably Arabian Pipeline, which, currently at least, are m­ well-equipped and excellently managed banking adequate to finance any substantial development system, a remarkably high rate of sav~ngs, an~ a programs, such as that required to utilize the smoothly operating budgetary mechamsm, wh1ch promising developmental possibilities of the Litani 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 authorized the Banque as well as current operating expenses. In the ab­ de Syrie et du Liban to utilize part of the dollar sence of this vitally important machinery for receipts accruing to governmental account for mobilizing national economic resources, Israel strengthening the gold reserve. It is to be hoped could not possibly have sustained its effort of the that this policy 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 38 Final Report-United Nations Economic Survey Mission for the Middle East-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 budgetary policies, etc., are all initially, heavy demands on both dot;Jestic ot:tput rooted in the basic fact of their poverty and can and foreign exchange resources, whtle contnbut­ never be entirely overcome so long as this poverty ing little or nothing to either. remains. This is a vicious circle common to all un­ Thus, the Israeli balance of payments is ~ur­ developed States; because they are poor they can­ rently maintained only precariously in equilibrium not attract foreign investment and because they by foreign contributions, investments, and other cannot attract foreign 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 receipts side, the contri­ the vicious circle through foreign assistance in the butions by world Jewry, evidence a pronounced form of grants, or loans on especially favourable tendency to decline while foreign exchange re­ terms, for the initial financing of carefully se­ quirements for support and absorption of incom­ lected development projects. A dynamic process of ing immigrants continue to mount. Even if the development will not be generated, however, un­ contributions of world Jewry do not further de­ less the Governments receiving foreign aid arouse cline, the arrival of 150,000 immigrants during their peoples to work and hope for a better future. 1950 might well open up an exchange deficit ap­ Governments must seek to enlighten the public as proximating 25 per cent of total exchange require­ to its stake in economic development and thereby ments. To a very considerable extent, this pros­ deliberately expose themselves to the political de­ pective gap in the Israeli exchange accounts for mands from which effective reform action will 1950 could be as satisfactorily closed by partial then spring. With such a revival of national effort release of its frozen sterling balances of 25 to 30 and rising national income, it may then prove pos­ million pounds as by larger dollar receipts. But sible gradually to remove the present institutional whether the British Government will find it pos­ obstacles to progress. But effective and lasting sible, particularly in view of the pressing repay­ financial reforms can only stem from a truly na­ ment demands of its other creditors, to release tional realization of their necessity and purpose. sterling on the scale required by Israel remains a The institutional problem naturally varies from matter for negotiation between the two Govern­ country to country, and only a detailed study of ments concerned. each case in the light of specific plans for devel­ opment could show in precise detail the policies The exchange outlook for 1951 is even more and administrative reforms required. It is pos­ grave. Although the Israeli authorities express sible, however, to indicate the general lines along strong hope that rising exports and a growing in­ which all these countries could mobilize more flux of commercial investment will prevent a fully their own resources in support of economic further broadening of the exchange gap, foreign development. investors have so far evidenced but little interest, First, the diversion of some portion of currently while Israel's export potential remains highly un­ certain. earned foreign exchange from expenditure on luxury consumption to capital imports. General financial outlook. With the exception Second, preparation of exchange stabilization of Iraq and possibly Egypt, the prospect of early plans with a view to reducing risks to foreign in­ improvement in 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 raise a larger proportion of revenue promising the possibilities of reso,urce develop­ from the higher income groups. ment that engineering surveys may reveal, it is Fourth, the establishment of development budg­ 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 high prior­ But so long as the Middle Eastern countries re­ ity charge upon the national revenues and receipts. main economically prostrate, the risks confronting Fifth, improvement of budgetary procedures, potential foreign investors are likely to outweigh including the adoption of cash accounting, and the prospective returns. We believe it improbable, the prompt publication of results. therefore, that private investment from abroad None of these changes can come quickly, nor will supply the generating power required to ini­ can they be expected to yield dramatic returns. tiate the developmental process. In this connexion, They will inevitably encounter determined political one often encounters the belief that undeveloped and social opposition which will subject govern­ countries such as those in the Middle East could mental leadership to a searching test. Neverthe­ attract investment capital simply by undertaking less, beginnings in these directions are within the a thorough financial house-cleaning. But it is per­ competence of all the countries concerned. They haps insufficiently appreciated that the major de- are a prerequisite of economic progress. Appendix 11

Having rapidly reviewed the whole field in the Syria foregoing sections, we will now go, in some detail, into certain financial problems confronting the Syria has a customs union with Lebanon. The individual countries, taken one by one. These system is frequently criticized. But on balance, problems have an important bearing upon devel­ official opinion in both countries appears to be in opment prospects. favour of maintaining it, while recognizing that Grants cannot supply all the funds which the reconciliation of the divergent development plans countries believe they could usefully employ for of the two countries may sometimes be difficult. development purposes. If the Governments decide Public Finance. Like Iraq, Jordan and Lebanon, to proceed with their plans, they may one day Syria's traditional policy is to achieve a budget be seeking foreign loans on commercial terms. But surplus wherewith to feed a reserve fund out of the extent to which loans can be found abroad for which emergency expenditure may be met. As in development projects, however well prepared and the other countries named, money is still too dear justified economically these may be, will be largely for the State to be able to borrow from the public. determined by the borrowing countries' capacity Definitive budget accounts are published after both to service loans in hard exchange and to meet audit by the Court of Accounts and Approval by local-currency expenditure on these projects out Parliament, which normally involves a delay of of their own resources. It is here that the develop­ several years, the most recent now available being ment problem links up with that of public finance those for 1945, when the reserve fund stood at £ S49 million. No provisional returns are made throughout this area. When considering the draw­ public, useful and illuminating as these would be. backs of prevalent fiscal systems, except in Israel Estimates are published, and always forecast ex­ and to some extent Egypt, it may be tempting to penditure and receipts in equilibrium : at £ S 125.8 condemn these systems root and branch. Certainly, million for 1947, £S127.9 million for 1948, and changes making for a more equitable distribution £S130.7 million for 1949. In 1945, the last year of charges could and should be introduced. It for which accounts have been published, actual would be well, however, to proceed with caution in expenditure on the ordinary budget amounted ~o this matter. Hasty reforms might result in a dan­ £S99 million, and actual receipts to £S119 mtl­ gerous falling off of receipts at a critical juncture. lion, leaving an accounting surpl~s of £ S20 mil~ion. There is virtue in a tax that is understood, easy to It is estimated that in 1946 thts surplus declmed collect and difficult to evade. The French saying to roughly £S13 mi11ion, and in 1947 to perh~ps that a good tax is an old tax deserves to be pon­ £ S6 million; that a deficit will probably matena1- dered. The whole question should be gone into ize for 1948; but that 1949 will produce a surplus, exhaustively, and innovations tried out in prac­ once more. It will be remembered that expendi­ tice, as far as possible, before reliance is pl~ced ture not provided for in the budget is currently upon income-tax as the main source of recetpts, being met out of t~e res~rve fund, as to ~he amount capable of taking the traditional place of customs of which, at any gtven ttme, no concluswns should duties and taxes on consumption. The same may be drawn from these figures. It should also be be said of other administrative reforms which are realized that extra-budgetary expenditure so being urged upon Governments: not too much at financed is just as inflationary from the monetary a time; and remember that changes are not al­ point of view as Government borrowings from ways necessarily for the better. the Battque de Syrie, although far less harmful Moreover, when assessing the probable results from a psychological point of view. of development works in this area, it should not There is a dual system of accounts: (a) on an be 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 Accounts but not su~­ increased spending habits, rather than a solid im­ mitted to Parliament) ; and (b) on a cash basts, provement in the standard of living, might re­ comprising the budget period (the calendar year) sult, swelling imports and impeding exports by plus a complementary perio? of four m~nths (or making for higher production costs. A some.what more if prolonged by Parhament), audtted, and precarious equilibrium, such as has been achteved submitted to Parliament. in countries like Syria and Lebanon, might be Military expenditure is normally i~cluded . i.n compromised by this process if care were not the ordinary budget. But an extraordmary m!lt­ taken to control it. Much will depend on the qual­ tary budget, with expenditure totalling £?90 ity and continuing availability of the advice Gov­ million, rendered necessary by the recent fightmg, ernments receive in this connexion. was laid before Parliament in August 1949, and The following studies are based on published is to be included in the ordinary budget for 1950, documents, supplemented by consultation with re­ in deference to the principle of budget unity. The sponsible officials in the capitals which it has been greater part of the expenditure thus provided for possible to visit for the purpose: i.e., Damascus, has already been paid out, and has been met from Amman, Beirut and Tel Aviv. cash balances and advances by the Banque de 40 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

Syrie. Its inflationary impact has been consider­ The State possesses large landed estates, chiefly ably alleviated, however, by the fact that the agricultural, most of which it farms out under greater part of the outlay has been spent, not on various systems of tenure, with promise of sale the local market, but abroad via French francs, after a stipulated period of tenancy. and pounds sterling supplied from the reserves Foreign Exchange Regime. As in Lebanon, the of the .Banque de Syrie. Definitive cover for the legal parity of the U.S. dollar is £S2.185. But ex­ whole amount has not yet been found. change-control restrictions designed to support Charges in addition to those figuring in the or­ this rate have gradually been relaxed; until two dinary budget 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 Ofiice; of the themselves with exchange, to pay for the goods Agricultural Dank and of the Foreign Exchange they purchase abroad, on the open market, Office. Further, there are "annexed budgets" for through authorized dealers. Allotments through the Arab Academy, the Service of Antiquities and official 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 noteworthy 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 ( £ 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 recognizances of debt being eligible In these circumstances, the activities of the Ex­ for inclusion in the cover for the note issue. change Office have greatly fallen off, now being Aside from its borrowings from the Banque de practically restricted to operations effected for the Syrie, the State has no debts, foreign or domestic, State's account at the legal parity of £S2.185, out other than its obligation to pay pensions (figuring of resources made up by receipts from foreign oil in the budget) to retired officials. It is planned to companies, whose local 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 exchange The municipalities' budgets are published in the as it may need on the open market, through the Statistical .Bulletin. Receipts are provided from Exchange Office, which is at present in course of local surcharges on ordinary State taxes, as in transformation into a Stabilization Fund, devised France. No State 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. guarantee on loans from the Bank of Issue Transactions involving movements of capital (Banque de Syrie). still require special permit, and must take place The Syrian State's budget estimates balanced through authorized dealers. It is recognized that at £Sl25.8 million in 1947, the last year for which these restrictions are not in fact operative at the figures for the municipalities are available; these moment. The purposes for which exchange is pur­ then amounting to £ S21.7 million on the revenue chased are not strictly scrutinized. The view ap­ side, and £S18.7 million for expenditure. Neglect­ pears to be that if a flight of capital were taking ing the relatively small fraction of receipts repre­ place on a dangerous scale, this would soon be sented by income from public property, and also apparent. Repressive action might then be called the fact that actual receipts are usually rather in for; but unless and until such a problem arises, it excess of estimates, the Syrian people thus appear seems preferable not to incur the expense of set­ to have contributed £S147.5 million for public ting up the complicated organization that would purposes in 1947, or less than £S50 per caput of be required in this connexion. population. State receipts for 1949 are estimated At present, residents in Syria are not required as £Sl30.7 million, or about 4 per cent more than to report their exchange holdings, nor are there for 1947. If it is assumed that municipal receipts any restrictions on sales 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 £ S50, or between $15 est on foreign investments in Syria. Purchases of and $16 per caput 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 currcn~y. 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 have stimulated export. and thus to haYc heavy one, even when considered in relation to a made for an approach to cqttilihrittm in foreign national income estimated by FAO at only $100 trade. Imports arc still heavily· in excess of ex­ per caput. ports, but this difference is entirely compensate

does to exchange stability, has its serious draw­ to avoid the Syrian tariff: a further argument, in backs in that it obstructs the mobilization of wealth some eyes, for lowering the rates of numerous for productive purposes. duties. It should be remembered, however, that when State of Business, and Prospects. Deflationary oil begins to flow through the Trans-Arabian Pipe­ pressure is at work on prices in Syria. Wheat de­ line, dollars in respect of transit and guard fees serves special mention. A drop, said to amount to will accrue to the Syrian Government at a rate 60 per cent from the wartime peak, has occurred which it would be rash to attempt to estimate at in adjustment to present world prices; but the the present time. new price still permits the producer to cover his Foreign Trade. Returns for the Syro-Lebanese expenses. Moreover, this decline seems to have customs union from 1938 to 1948 inclusive will be provided a healthy stimulus to export. Less severe found attached. price declines are occurring in other fields, tend­ The key for the distribution of customs receipts: ing to create some unemployment and wage-rate 56 to Syria, 44 to Lebanon, is regarded as unfair cuts. But the present situation is not viewed with alarm by the authorities. by each country. But no attempt to work out a more acceptable method of calculation, or indeed to Taking a longer view, there are difficult prob­ ascertain precisely the facts of the case, has so far lems to be tackled before more opportunities for succeeded. This would be no easy undertaking, in gainful employment can be given to a population the circumstances, it must be admitted. whose current standard of living represents an 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. Syria, indeed, is an exporter of would be required in order to increase the cul­ primary produce, especially wheat. Syrian raw tivated area. There is no lack of land which might cotton also commands a good price on the mar­ be made fertile, of water for the purpose; or of ket; an increase in it has done something towards rain-fed areas which only require mechanization. offsetting this year's decrease in receipts from The question is: where to find money for capital sales of wheat, due to readjustment of prices. Ex­ outlay? It has been seen that interest rates range ports for 1949 promise to reach a satisfactory high, and that there is an inveterate habit of salt­ total. Skins and hides contribute, and to a lesser ing away profits by hoarding gold, not a few extent cotton goods and worked leather. people apparently managing to run their business A rough and ready calculation, believed in on the margin between the high rates paid for Syria not to be far from the mark, sets the two borrowed money and the return obtained from it. countries' imports at SO per cent of the total each, In these circumstances, chances of tempting and Syria's exports at 75 per cent as against Syrians to invest in agricultural development Lebanon's 25 per cent. Lebanon has attempted to projects must look remote. further the setting up of some industries since the Given Syria's potentialities, and an exchange war, but Syria has gone much farther in this di­ position that has improved and may well improve rection, and is on the whole better equipped for still further when dollars from the Trans-Arabian the purpose, although some enterprises have not Petroleum Company start coming in, foreign turned out to be justified economically, and indeed capital might in favourable circumstances seek are considered as failures, not meriting the pro­ employment here. Money wages in industry are tection that has been granted to them. low, it is true, but so is the individual worker's In one important branch, i.e., cement, new output. Strikers in the Aleppo cotton mills have works now being set up at Aleppo are expected been demanding that no individual worker should shortly to start producing at a rate of 200 tons be required to tend more than one loom, as against daily, which added to an even quantity produced three at present (and an average of forty in the at Damascus should supply Syria's normal needs U.S.A.). In terms of production costs, factory at the present rate. The price at works is £S110 labour is dear in Syria. Also, the workers, or­ the ton, and delivered in the country is £S119 the ganized in unions, can press their demands in an ton. This position compares favourably with that effective manner. These demands might be ex­ ruling in Jordan, for instance. pected to become even more insistent were there Cotton goods are exported, in some coarser to be a substantial influx of foreign capital, with grades, mainly to Iraq; but fine qualities have to resultant threats to the present precarious balance be imported. Syria produces only a very small between wages and prices, and an equally fragile quantity of raw silk, importing the bulk of the equilibrium in the balance of payment. thread it spins. Given these conditions, new industry requires It is believed in Syria that smuggling, inevitable, tariff protection, in order to make a beginning, given the country's long and open frontiers, mainly at a rate which in its turn makes for excessive brings in manufactured goods 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 Ghab marshes o_n the ground that they permit export at competi­ ( Orontes valley) and an electric-power station tive rates is hardly convincing in Syria's case. on the Y armuk. Even these plans are in an early Development plans appear to be limited at pres- stage of preparation.

Visible trade of the Syro-Lebanese customs union, 1938 to 1948

(Values in Syrian or Lebanese pounds) (000 omitted)

Year Imports Exports Balance Quantities Values Quantities Values Quantities Values 1938 ...... 2,848 107 2,668 66 179 40 1939 ...... 2,692 113 2,481 75 211 38 1940 ...... 1,283 83 1,090 46 192 37 1941 ...... 311 77 67 48 244 29 1942 ...... 579 174 99 91 479 83 1943 ...... 1,083 246 707 168 375 78 1944 ...... 441 98 121 46 320 51 1945 ...... 522 135 146 45 376 89 1946 ...... 394 268 107 86 286 182 1947 ...... 413 361 150 87 263 284 1948 ...... 804 491 125 79 678 411

Iraq kilometres. The rate of natural increase may be about 1 per cent per annum. Both birth and death A visit to Baghdad could not be arranged for rates, a!-1-d especially infant mortality, are believed the purposes of this study, which therefore had to to be htgh. Of all the countries in this area, Iraq be based on published material, unsupplemented seems to be the one whose natural conditions and by fuller and more recent information such as resources hold o~t the greatest promise, provided was made available in the capitals of other the loss of cultivable land caused by ages of countries. neglect can be made good. But at present the Iraq attained full national status in 1932, being standard. of living of its people is exceedingly the second of the countries now under review to low, nat10nal income per caput being estimated achieve it. Its currency unit, the Iraqi dinar, is by FAO at $85, as against $100 for Syria and linked to th~ pound, and of the same official parity. $125 for Lebanon. At least 60 per cent of the The foreign exchange receipts, amounting to some national income is estimated to be derived from 9 per cent of its budget in 1946-1947, which the agriculture. The peasant is burdened by taxes and State derives from the companies exploiting an inequitable profit-sharing system. Iraq's rich oil deposits, are in sterling. Pending 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, including developmeQt Board, meeting in London ; and note circulation schemes only, financed chiefly by oil royalties. In is covered by sterling securities. addition, there are several State-owned enter­ Petroleum production is capable of being greatly prises, e.g., the railways, having independent expanded; prospective reserves ensure Iraq a place budgets of their own. The aggregate expenditure of increasing importance among the oil countries of these 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 only partially exploited, and the alluvial soil of as to the extent to which the State may be called the Mesopotamian plain is fertile. If the country upo~ to make good their losses. Estimates require can adequately utilize and control its immense parhamentary approval, and accounts are audited 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 quantities 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 including 1946-1947 (the tion than the present. This was found by the first financial year ending on March 31 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 Nations Economic Survey Mission for the Middle East-Part I

Ordinary Extraordinary Combined Increase or Increase or increase or Year Receipts Expenditure decrease Receipts Expenditure decrease decrease (Millions of Iraqi dinars) 1938-39 ······················ 5.8 5.7 +O.l 2.0 2.4 -0.4 -0.3 1942-43 ······················ 11.6 10.6 +1.0 2.2 1.0 +1.2 +2.2 1943-44 ······················ 14.4 13.8 +0.6 3.7 1.6 +2.1 +2.7 1944-45 ······················ 18.9 19.0• -0.1 -0.1 1945-46 ······················ 17.3 19.8• -2.5 2.9 1.5 +1.4 +1.1 1946-47 ...... 22.7 22.4• +0.3 2.3 3.1 -0.8 -0.5 1947-484 ...... 21.6 23.1• 1948-494 ····················· 25.0 25.o• 2.2 2.8 -0.6 -0.6 bJncluding emergency expenditure (cost of living allow­ "In 1944-1945 extraordinary receipts and expenditure ance) of about 4 millions per annum. (about 2.9 and 2.0 millions respectively) were merged with •Including emergency expenditure of about ID 6 million. the ordinary budget accounts. 4Estimates.

Receipts appear to be derived 60 per cent from than on a c.i.f. basis). However, when all allow­ taxation, chiefly indirect, and the balance from ances for this practice have been made, there other sources, the most important of which is oil. remains a large import balance, which is covered Taxes are estimated to absorb 22 per cent of the chiefly by receipts from 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, the U.K., U.S.A., Japan and Ger­ Serious strain was imposed upon Iraq by the Pal­ many accounted for 50 per cent of 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 altogether, The difficulty of budgeting in these circumstances their places being taken by India and other Middle 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 are in process of recovering their earlier internal loan authorized in 1947. The chief lenders positions. Transit trade with Iran was formerly were the banks. Also, advance payments· on oil half as large as Iraq's whole foreign trade; but royalties have been obtained. Negotiations are in it has decreased sharply of late. progress for loans from the International Bank for According to the Iraq Statistical Abstract, 1947, Reconstruction and Development and other sources. foreign trade 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 scale from its own public, the rates of interest obtainable on Year Imports Exports Balance private loans being so high as to attract all avail­ Local Re-exports Total able capital. The end of hostilities has doubtless brought 1938 ...... 9.4 3.5 0.2 3.7 - 5.7 some relief. A relatively light charge is incumbent 1941 ...... 6.9 3.9 0.3 4.2 - 2.7 upon Iraq in respect of Palestinian Arab refugees, 1943 ...... 15.7 9.1 0.3 9.4 - 6.3 1946 ...... 28.0 12.7 0.4 13.1 -14.7 whose numbers appear not to be in excess of 0.9 14.7 4,000. The long-range view is brightened by the 1947 ...... 39.9" 13.8 -25.2 prospect of increasing oil royalties. However, the •c.i.f. valuation. sums devoted to development in the extraordinary budget are as yet inconsiderable in relation to the Balance of Paymc11ts. For several years before task of equipping 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 exports (not including oil) is normally A calculation has been made for 1947, but is with­ less than one-half of imports, but this difference held, apparently for security reasons. appears to be partly accounted for by over-valua­ The three pre-war years showed import sur­ tion of imports (at internal wholesale prices rather pluses amounting to roughly ID 2.9 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 export trade, been rectified. tr~nsport fees, British military expenditure, pil­ Problems and Prospects. Broadly speaking, it gnm traffic and tourist expenditure, and above all may be said that oil developments in Iraq· are in by oil royalties, which rose from ID 900,000 in the hands of the companies. Agriculture, on the 1936-1937 to ID 1,968,000 in 1938-1939. But a other hand, provides the livelihood of the great current account deficit still persisted: ID 2.3 mil­ mass of the population; and here the Iraqi Gov­ lion in 1937-1938 and ID 1.4 million in 1938-1939. ernment is responsible for devising and carrying It was covered by investments of the Iraq Petro­ out an appropriate policy, capable of raising a leum Company, a governmental loan of 1 million standard of living which is deplorably low. So far, pounds sterling negotiated in the U.K. and draw­ few minerals other than oil have been discovered in ings upon short-term assets in London. Iraq, apart from some indications of copper in the The balance of payments for 1946 may be north-east part of the country. Industry cannot summarized in Iraqi dinars 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 Credits Debits Item (000' s omitted) area under cultivation, and by cultivating a larger area per caput, e.g., by mechanization. At present, A. Goods and services : only one-fifth of Iraq's territory is cultivable, and (1) Merchandise• ...... 15,171 24,878 (2) Interest and dividends ...... 424 1,048 of this only a small part is cropped in any one year. (3) Other services ...... 14,521 6,403 The Irrigation Development Commission, work­ Deficit on current account. .. - 2,213 ing from 1946 to 1949 under the presidency of B. Gold movements : Mr. F. F. Haigh, made a general survey and Gold coins and bullion ...... 1,593 3,181• prepared detailed plans for many projects in the Deficit on current account ...... - 3,801 first stage of development. These projects are set C. Capital items : Amortization of State debts ...... 18 forth in appendix IV. Hydro-electric power may Advances by oil companies, and be developed by some of them, the estimated total repayment of previous advances 500 116 cost being over ID 90 million. Long-term investments ...... 50 148 If these works could be finished, an appreciable Decrease in Iraqi balances abroad ; decrease in foreign dinar bal- betterment of the Iraqi people's lot would doubt­ ances 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 transactions...... 3,365 464 quire many years. Increases in Iraq's exchange Balance on capital transactions...... + 2,901 Errors and omissions...... + 900 receipts might expedite the process. J3ut in any case, questions would arise as regards Iraq's •Adjusted for over-valuation of imports and with allow­ capacity to produce its own currency to meet the 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 otherwise, 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 oil-companies' the sterling area. local expenditure. There is nevertheless a deficit The Hashemite Kingdom of Jordan on current account, and adverse gold movements, and Arab Palestine 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 problem. It dominates Iraq's sterling balances in May 1949 is believed to the scene at every turn. No 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 pressure. 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 in every way as time failure and a rise in world prices reversed 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 Nations Economic Survey Mission for the Middle East-Part I them on a relief basis, let alone the capital outlay Jordan's ordinary budget (estimates for the that would be necessary to enable them to earn a year to 31 March 1950) balances at roughly livelihood. It is calculated that absorption would £ P2.3 millions. The last year for which closed cost £P700 for each family of five persons. accounts (audited by a department of the Finance Incidentally, this works out at about $400 per Ministry) are available is 1947-1948. It produced caput, as against the Israeli estimate of $2,500: a a surplus of £PSOO,OOO. The ordinary budget for difference, however, which is understandable given 1948-1949 is said to have ended with a surplus the respective backgrounds. Thus, for example, also, though a smaller one. The actual Treasury 50,000 Jordan-Arab Palestine families, a minimum position, within the narrow limits of its applica­ number to be considered, whether or not refugees tion, is described as not causing anxiety at present. go elsewhere, would require about £P35 million, But in order to give a more comprehensive view to which it is said that a further sum of say of the country's financial position, even if the £PS million would have to be added for hospitals, refugee problem is left aside, it must be added schools and other public services. that since Jordan forces have been occupying Arab Opinions differ as to how many refugees the Palestine, there has been a separate budget for Jordan-Arab Palestine area could take, given the that area, which balances for this current year at necessary outlay on development. But there seems £Pl.l million (estimates), and that the U.K. is to be a general willingness to try to absorb all subsidizing the Arab Legion (except for the Ha­ those who cannot go elsewhere. This is an impor­ shemite regiment, provided for in the budget) tant factor in the whole refugee situation, whatever at an annual rate of £P2.5 or £P3 millions. Thus reserves may have to be made as to the possibility out of total state expenditure of about £ P6 mil­ of securing funds for the purpose. lions, the U.K. seems still to be contributing over There is insistence in Jordan on the wasteful­ 40 per cent. ness of spending at the present rate on mere relief, The Government treats its budget surpluses as thus leaving the future as black as before, when an emergency fund out of which, inter alia, it a relatively modest outlay on definitive settlement buys crops which farmers are otherwise unable might mean some real progress, and gradually to market, selling them as occasion offers. No reduce the need for relief. It is argued that if an accounts of these transactions are published. initial sum of say from £ P6 million to £ PlO mil­ lion could be provided as a grant, much might be Balance of Payments. When it comes to at­ done towards supplying a production basis for tempting to cast a balance of payments, Jordan's later borrowing on commercial terms, which it dependence on the U.K. becomes even more strik­ is realized is out of the question as things stand ing than appears from the budget. As against some at present. An interest-free loan of one million £ P9 millions imports for which foreign exchange pounds sterling recently granted by the U.K. is is being provided by the Jordan authorities, there not large enough to enable a serious beginning to seems, according to official estimates, to be a small be made in this direction. But its importance is by fraction of £Pl million only representing exports. no means underrated in Jordan, in the present Together with expenses of foreign legations and situation, when there is urgent need for spending other minor items, exchange incomings may per­ more than can be supplied by the budget for such haps amount to something in the neighborhood purposes as public health, schools and irrigation. of £Pl.4 millions to be added to say £3 millions It is claimed, however, that the present budget contributed by the U.K. for the army, leaving marks some improvement over previous years, in about £ P4.5 millions, which during the past year this respect. has been made up by depletion of sterling balances, Jordan's Finances. Jordan's finances are being latterly swollen by large amounts of Palestinian managed largely without reference to the refugees. currency imported by refugees, backed 100 per It must be admitted that it would be hopeless to cent by sterling. attempt to budget on the assumption that Jordan There seems to be little prospect of this position would have to support the refugees by its own being rapidly changed for the better by improved unaided efforts. There is, however, outside the administrative methods. Whatever can be done budget, a Jordan refugee fund, fed by a special gradually in that direction will require a solution stamp-tax, occasional contributions from other of the refugee problem, and also increased edu­ Moslem States, and a vote of £ P70,000 in Jordan's cational opportunities, and will hardly affect the current budget itself. Altogether, it is estimated immediate position. As things stand at present, not that Jordan's refugee expenditure is running at only can Jordan make no appreciable financial an ammal rate between £ P 170,000 and £ P200,000. contribution towards tackling its refugee problem, This, of course, is an insignificant amount in com­ but it needs help on a relatively large scale to parison with the U.N. contributions from other become self-supporting, on the lowest level, and sources. But it should be recognized that the dis­ will go on needing it for a long time even if the ruptive impact of the influx of refugees cannot financial burden represented by the refugees is be measured in terms of state expenditure. carried by others. Appendix II 47

Demands for allotments of import exchange to discern in what respect complete liberty would are being pressed, which, if yielded to, would not be preferable to, or at least less wasteful than, increase imports from the present level of £ P9 the present state of affairs. millions yearly to £P12 millions, while it is wished ProSifJects. In a situation such as Jordan's, the to reduce the figure first to £ P8 millions, and then official mind, harassed as it is by problems pressing gradually to £ P6 millions. As indicated above, in from all sides on so small a community, readily current levels of imports are being largely financed turns to broader horizons. There is a tendency to by depletion of sterling balances acquired against assert that no radical improvement can be brought redemption of Palestinian currency brought in about unless Jordan forms part of a union comJ by the refugees. Imports thus financed have been prising Syria and Iraq, and eventually Lebanon primarily of the consumers' goods variety and, as well. This aspiration raises political issues fallJ although temporarily alleviating inflationary pres­ ing outside the scope of th~ present inquiry, which sure, have contributed little or nothing to the must take for granted the frontiers that exist production capacity of Jordan. The important capi­ to-day. tal assets represented by the sterling balances ac­ If consideration be limited to economic factors quired by redemption of Palestinian currency has and to Jordan and Arab Palestine alone, it will be thus been largely wasted. Despite the approaching seen that development designed to make the state exhaustion of Jordan's sterling balances available viable should proceed on four lines: for financing import surpluses, there appears to ( 1) Expansion of agricultural production to be continuing pressure for even more liberal alloca­ absorb refugees, give a higher standard of living tions of exchange. It is not generally realized that to the local population and provide certain cash the Palestine Arabs, instead of paying Jordan for crop exports. This in turn involves the setting up its produce in exchange thereby making for a of processing industries. balanced foreign trade, as formerly, have increased (2) Such development of minor local indus­ the number of mouths that must be fed inside tries as seems 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 cessive in the light of what the country can reason­ try possesses, a development with which trans­ ably afford, burdened as it is by the adverse factors portation is closely 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 dustry is desirable in order to give work to the productive population. population of Amman, which has risen from 25,- Before passing on, it will be recalled that ter­ 000 before World War II to about 100,000 to-day, mination of the British 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, equal 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 position largely determines Jordan's economic porter of these. But a cereal economy can be policy. It is indeed clear that, dependent as it is adversely affected by climatic conditions and the for its living on the U.K., Jordan must conform, alternation 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 by sub­ such that the question arises whether it is neces­ stituting fruit growing-olives, grapes, etc.-on sary or desirable that this struggling little country a considerable scale, for cereal cultivation, particu­ should attempt to impose regulations which are not larly on land which is in any case obviously mar­ and cannot be enforced. The aim is to curb imports ginal for ordinary crop production. The soundness and stimulate exports. But this system subsidizes of such a policy is illustrated by what has already imports by allotting exchange at cheaper than com­ been accomplished in this direction in north Jordan 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 already too long to be effectively patrolled, and the "fisc" depending on it for their existence. never sees the resultant exchange. It is difficult The development of fruit growing and intensive 48 Final Report-:-United Nations Economic Survey Mission for the Middle East-Part I

cultivation of vegetables and fruits in the Jordan on locomotives and workshops would greatly im­ Valley can be made possible by a number of prove the railways. schemes already in plan for the better utilization The crucial point, however, is the siting of a of the country's waters. With these must be port. At the moment, the cost of transport via coupled the expansion of governmental horticul­ Beirut is a heavy handicap. There is support in tural stations and nurseries and the development Jordan for substituting a North-South axis (Am­ of processing industries, which (like better road man-Aqaba, in Jordan territory) for the East­ facilities) are necessary in order to utilize the West one (Aqaba-Beirut) upon which the country products of a more developed agriculture. now depends. Although the distance between capi­ Among such industries, vegetable canning ·is tal and port is roughly the same in both cases, considered a promising investment. At the present it is evident that what would be spent on the time transportation difficulties result in the loss of Amman-Aqaba haul (in addition to port dues and large quantities of perishable 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 sugar industry line. Fish-canning could be developed at Aqaba. might be developed in the Jordan Valley and that The difficulty is that the railway from Amman is there is room for expansion in the utilization of built only as far as a point some SO miles north dairy products. The parts of Palestine which have of Aqaba and that this last section would be costly not been occupied by Israel are on the whole poor to build and to double by a modern road because and barren, but vines and olives grow there. In­ of mountainous country and bad climatic condi­ dustries must, therefore, be developed to utilize tions. However, a road to Aqaba is included in their product, particularly since these fruits are the road development scheme of the Jordan Gov­ 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. pete internationally, but grapes can also be turned An important source of raw materials for Jordan into non-alcoholic grape juice, for which there is may be her minerals; and it is clear that a very a market. For olive oil 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 mineral, how­ use of the product of the olive tree could be found ever, is already well known. Within 18 kms. of by the modernization and expansion of the existing the capital, and also on the railway further south, soap industry at Nablus. Here comparatively good there are vast deposits of phosphate which are grade soap is already produced. With 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 limiting factor is the high cost of transport. expanded. It is said that with an outlay of from £P150,000 In the second field, that of the development of to £ P200,000, super-phosphate could be produced local industries with a view to reducing imports, locally, thereby largely solving the transport prob­ the most important item is unquestionably cement. lem. The other raw material within reach of the None is made in Jordan at present; it has to be Jordan Government is potash. It may be recalled imported from such far away countries as Czecho­ that an Anglo-Palestine Company was operating slovakia or Yugoslavia via Beirut. At Amman it two potash plants on the Dead Sea before the is sold at an official price of £ P22 per ton, mostly recent troubles: 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 £ P40 per ton. Suitable to the rail-head at Jerusalem. The southern plant stone is available near Amman and some progress is on the Israeli territory, and is intact, but is not has been made towards setting up a company. This working because there is, at present, no way of should have an important effect in reducing moving the product out. The northern plant lies on Jordan's imports. It may also be possible to Arab territory; but it was completely wrecked develop brick-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 clearly be developed. Plans exist for needed to manufacture a valuable product, but the improvement of a road net-work throughout there appear to be no plans at present for repairing the country designed to draw off the products of the damage. agriculture and provide access to industrial sites (in particular to minerals), and to open up the Lebanon remarkable antiquities of the country in order to Need for Development. Lebanon's population develop tourism. Comparatively minor expenditure is increasing rapidly. Estimates vary: according Appendix II 49 to some, the present figure of about 1,200,000 will a fact from which it would not be safe to draw be doubled in ten years; others say twenty years. conclusions as to the country's financial policy. There is unemployment already. The trend threat­ The note circulation stands at about £Ll70 mil­ ens to deteriorate dangerously unless increased lion, having declined slightly over the past year. opportunities for earning a livelihood are pro­ Provisional estimates indicate that upwards of vided in time, which will require outlay on a rela­ £ L93 million in budget receipts were collected tively large scale. This would be the case even in 1948. It appears that the fiscal effort demanded if all 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 situa­ 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 programme, thus recognizing the impor­ tempting for a Government to try to collect a tance of this problem. share of 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 away. Lebanon a long-term loan abroad, and then to service it. has attracted this business from other centres But the extent to which such prospects can be where skills, economic information and experience counted upon is uncertain. It appears urgent to may not be equal to those possessed in Beirut, but consider what the country could do, by its own which would undoubtedly recover the trade if efforts, to improve its chances of successfully ad­ Lebanon attempted to apply exchange control.. dressing itself to the market. It is doubtless wise to permit these profits to Lebanon's financial capacity is remarkable, rela­ be made, and to regard the fact that the State tively, although it has not operated hitherto so cannot directly tap them as a lesser evil. But the much to the advantage of the State as to that of Government, without harming invisible trade, private individuals. The Lebanese 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 greatly help towards the development cies besides their own, and the movement of goods projects needed 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 purchases of exchange. resources, partly out of current receipts, partly While an official parity of 218.50 Lebanese piastres by borrowing internally, and (2) prepare to devote (2.185 Lebanese pounds) to the U.S. dollar has its future hard-currency earnings to servicing 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 problem in order and now stands at about $1.00 = 320 Lebanese of urgency, and one which it lies within the power piastres. of Lebanon 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 coun­ tive shares of the two partners in visible trade with try's needs, or that the State's finances are being the rest of the world. There 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 capita! taxation. No balance of payments estimate having from abroad. an official or even semi-official 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 reluctance· the Ban!? 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 export values, huge as it is, constitutes "a does not seem to be an impossible development, minor factor in the balance of accounts, which here. What is needed is to make the facts 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-United Nations Economic Survey Mission 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 m?st effective way of dealing with this prob­ to reach a reasonable standard of living themselves. lem m1ght be to work gradually and unobtrusively The Lebanese Budget. This is subject to ap­ towards an appropriate establishment, the number proval by Parliament, as are also yearly statements of posts in which would be determined having a showing how the budget has been executed. The strict regard to requirements, and to exercise a system, however, works very slowly. At present, vigilant control to ensure that, as present officials the most recent year for which "definitive 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 approval. The accounts are not au­ The same remarks probably apply to the muni­ dited outside the Finance Ministry, although there cipal budgets, equally if not more, given that is a Bill before Parliament providing for an inde­ they get less publicity than the State budget. pendent audit authority. It is difficult, indeed Fiscal Policy. It appears difficult at present to impossible, to form any opinion on the current estimate the fiscal burden per caput o£ the Leban­ trend from the estimates, because (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 £Ll13 million to be collected, and (b) recourse has frequently for public expenditure. It would be prudent to been had to additional credits voted at odd 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 in the State budget at all, charges on the State; subject to these reserves, and their accounts are not published, although the the per caput charge would appear to amount to State is liable for any losses they may incur and at least £ L94, 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 capacity of side the budget, and have so far not been published. the various classes of tax-payers. Urban 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 property, and eign capital to regard Lebanon as a good risk luxury expenditure, e. g., automobiles. On the if the principle of budget unity were applied and other hand, duties on mass consumption goods returns on a cash basis were made available with appear to be heavy. the least possible delay. It would probably be well, Without advocating hasty measures aimed at during an initial period, to prepare estimates of bringing about radical changes in a minimum of cash receipts and expenditures and to publish the time, or discouraging initiative, and while making corresponding results, on a quarterly or even a allowances for the fact that Lebanon has a cus­ 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 in a fuller Improvement of the budget mechanism might measure to the cost of running the Government. advantageously be accomplished by a revision of Some Lebanese economists advocate a fiscal re­ the purposes to which expenditure is devoted. 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 absorhed by national defence, gendarmerie, are better understood, easier to collect and harder police and security, taken together. Further, it to evade, at least during a transitional period. appears that the number of public employees has The Banque du Liban, which possesses the 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 population, it of all State balances. This question needs con­ seems prohable that numbers could he 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-currency steps can, and indeed must, be taken by Lebanon loans for development purposes might be serviced, itself. An attempt has been made above to outline are scanty for the time being, but may increase if the problem. The essential points are that Lebanon and when the flow of oil through the Trans­ cannot hope to borrow abroad for development Arabian Petroleum Company's pipelines begins. projects unless: The present position seems to be that the Lebanese ( 1) It can prove its ability to provide the requi­ Government has bought gold with dollars it has site local currency out of its own resources; so far received from the Trans-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 country's needs; Banque du Liban towards building up a backing ( 3) Its State financial 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 = £L 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 might be done in order to which goes to Syria) since the company started improve conditions in Lebanon. It would be pru­ operations in 1947. As from the time when oil dent, however, not 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. $240,000, and these receipts might increase con­ siderably with a greater flow of oil. Egypt It is stated that if delimitation and affranchise­ Egypt is distinguished, in this area, for the ment of the land required could be promptly promptness with which information on public finished, construction could be completed and the finance and economic matters is made available. line put into operation by the end of 1950. If the The National Bank publishes a quarterly bulletin company decided to build a refinery at Saida, a giving not its own position at the end of the pre­ further source of dollar receipts would be opened ceding month only, but the essential data on the up. ·· execution of the budget, note circulation, bank de­ The Iraq Petroleum Company cannot be looked posits, prices and foreign trade. A statistical year­ to by Lebanon for hard-currency earnings. The book, being on a very comprehensive scale, appears fees it pays are in sterling, and are earmarked long after the end of the relevant period; the last to buy imports from the sterling zone. Formerly, volume now out is that for 1943-1944, but a its requirements in Lebanese currency provided fairly complete Annuaire de Poche is available sterling which was available for other purposes, down to and including 1947, and the National but receipts from this source have have been spent, Bank's publication suffices for main purposes. and now that the refinery at Tripoli has been com­ Egypt's financial and economic position is briefly pleted, it appears that local sales of petroleum commented upon in the following notes, mainly products will produce all the Lebanese currency for the sake of comparison with the other countries this company needs. dealt with. There are doubtless other quarters from which Public Finance. Recent returns of budget ex­ dollars may accrue to the Lebanese State, but penditure and receipts, which include those of the they are uncertain and, at the best, unlikely to Railway, the Post, Telegraph and Telephone, and make a significant addition to what is received State enterprises, appear in the Bank Bulletin, from the 'trans-Arabian Petroleum Company. these are communicated by the Ministry of Fi­ And receipts are, to a great extent, dependent on nance, quarterly, and now available up to die the new pipeline being set to work, which, even close of the financial year 1948-1949 (ending assuming that the Lebanese authorities show the February 28, 1949). Moreover, the Audit De­ greatest desire to carry out their part of the opera­ partment (an independent body) works faster tion, and that no delays are caused outside Leba­ than in many other countries : the findings of its non's borders, can take place only towards the report on results for the financial year 1947-1948 end of 1950. were included in the Bank Bulletin for the first Co1tclusion. There seems to be about one year quarter 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 running at roughly £E 48 million, while to explore the possibilities of obtaining a produced deficits ( £E 3.6 million for 1938-1939, loan from some institution which has to consider and £E 2.5 million for 1939-1940). Since then repayment prospects. There is much to do, in this revenue each year has exceeded expenditure, and interval, in order that Lebanon should be able to a reserve fund has been built up, which is officially make the most of its opportunity; and the necessary stated to have totalled £E 76 million at the close 52 Final Report-United Nations Economic Survey Mission for the Middle East-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 £E 12.7 million for half times, the relation between money and whole­ 1948-1949, revenue for that year having risen to sale prices having, however, shown no great £E 170 million. At this rate, the burden repre­ change since 1945. sented by the State budget alone, without the The National Bank's Bulletin published in July, municipalities, amounts to over £E 9 per caput, 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 FAO at roughly $100. is summarized as follows, reserves being ~ade 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 is free, amounted to £E 77 mil­ Millions of Egyptian pounds lion on July 2, 1949, and fell off considerably after 1945 1946 1947 that because of traders' anxiety to place orders Sterling area ...... • . • . . . . . +53.3 + 8.4 +12.2 before sterling prices rose following devaluation, Non-sterling area ...... - 8.8 -27.8 -43.9 but stand at about £ E 70 at present. Those on +44.5 -19.4 -31.7 No. 2 Account ( £E 256.3 million at July 2, Of which known increases 1949) are blocked, subject to periodic releases, ( +) or decreases (-) 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 put Allowing for some capital expenditure resulting before the alternative to follow suit or not, a few in increase of capital assets abroad 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 Miflions of Egyptian pounds at the same rate would have been a free-currency. 1945 1946 1947 This would have brought Egypt into conflict A. Known capital items: with the regulations of the I.M.F. as well as Government investments •. 3.5 3.8 1.0 with the Anglo-Financial Agreement. Moreover, Redemptions of public debt held abroad ...... 0.4 0.8 12.3 Egypt's foreign currency resources are mainly Acquisition of gold for in sterling ..." LM.F.•.••...•...... 1.4 Indeed, the National Bank's position at Sep­ tember 30, 1949, shows that, as cover for a note Total ·········· 3.9 6.0 13.3 circulation of £E 151 million, this institution Millions of Egyptian pounds then published gold holdings valued at £E 6.3 1945 1946 1947 million (practically unchanged since 1939), the balance, £E 144.6 million consisting of Egyptian B. Balance of payments: +44.5 -19.4 -31.7 and British Government treasury bills and securi­ Net balance of payments ties. (A + B) ...... +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 practice, circumstances make for greater elasticity tween trends in the two cases would be difficult to in Egypt. It is not without significance that trav­ illustrate from published material, but are no ellers are allowed to bring in and take out less remarkable for that. £ E 20, and that the Egyptian pound note has Problems and Prospects. Egypt's great prob­ strengthened of late, in relation to sterling, on lems are maldistribution of wealth, population 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 £E31 million in ever, that the relation between cotton prices and 1939 to £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 peak prices reached in 1948, appears to taken place in the interval, circulation per caput be more favourable now than it was just before appears to have risen since 1939 from under £E2 the outbreak of World War II. to over £ 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 possibilities 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 housing must then be provided would appear to be made for a possible increase of dry farming, as 165,000. The Minister of Labour and Social well as other. improvements, and for such indus­ Welfare states that 50,000 new housing units will trialization as the country's circumstances permit, be completed by then. In addition, the housing there remains the limiting factor of the narrow­ programme demands 12,000 units for earlier im­ ness of Egypt's own market, due mainly to mal­ migrants who have been in Israel five years or distribution of wealth.1 more and are living in excessively congested In the presence of this position, the Egyptian quarters. Construction of these 12,000 additional Government has appropriated, since 1946, a total units will release some 3,000 rooms for the use of of £E 35.6 million for a five-year plan consisting new immigrants. of a long list of public works projects. The On the basis of past experience, Israeli officials National Bank Bulletin published in July 1949 estimate the per capita cost of immigrant absorp­ (Vol. II, No. 2), in commenting on this plan, tion into the economy at $2,500. Although stated states that actual expenditure on it had so far in dollars, this figure does not represent the dollar amounted to £E 12.5 million only out of the outlay superimposed on the existing balance of £E 35.6 million appropriated, difficulty having payments for each new immigrant. 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's main trouble lay in meeting the local investment in new enterprise for immigrant em­ currency requirements of development projects. ployment, as well as tools and equipment for If a foreign loan were needed to buy equipment labourers and farmers in addition to the immi­ abroad prospects would be influenced by Egypt's grants' own contribution, if any, to his resettle­ ability to produce hard currency for service. This ment. In fact, of £I 86 million estimated invest­ does not seem to be large, judging by the balance­ ment for the current year, 45 per cent is being of-payment estimates referred 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 according to $2,500 per caput might give rise to erroneous the latest figures available at the moment ( 1943- conclusions as to hard-currency requirements for 1944). Foreign debts, all in sterling, amounted to the absorption of new immigrants in 1950. How­ £E 90 million, and domestic to £E 93.4 million. ever, the financing of immigrant absorption does Since then, foreign debt does not appear to have confront Israel with a formidable problem. increased. Additions to the domestic debt have No official estimates were available showing taken place ; but even if it were assumed that its how it is expected to finance this operation, the total had doubled since 1943-1944, the figure relative magnitude of which may be measured by would not be alarming. what is disclosed of the State's present expendi­ ture. This falls into three categories: Israel (a) Ordinary budget, balancing at $112 million The Main Problem. Israel's present population (£I 40 million); numbers approximately 1,150,000 souls, of whom (b) Security budget, undisclosed; some 150,000 are Arabs and 1,000,000 Jews. (c) Development budget, said to amount to About one-third of the latter have entered the roughly $154 million (£I 55 million). country since the end of World War II. On 1 No­ No figures for the security .budget were sup­ vember 1949, there were 90,000 accumulated in plied. However, it was stated that the recent hos­ immigrant camps. 24,000 new-comers are ex­ tilities cost the country "over £I 100 million", pected during November and December. With and that not more than 25 per cent of this ex­ 41,000 leaving the camps during these two months, penditure was met out of ordinary budget receipts. there should remain a net accumulation of 73,000 This might mean some £I 75 million from extra­ on 1 January 1950. 26,000 new immigrants are budgetary sources, including some £I 25 million expected between January 1st and April 1st of stated to have been provided by world Jewry. 1950, and 105,000 between April 1st and Novem­ Military expenditure is said to have decreased since ber 1st, making a total estimated immigration for the armistice, but to remain a heavy load, even the first ten months of 1950 of 131,000. When now. Supposing, in order to make a rough guess at this figure is added to the 73,000 estimated for Israel's task, that the security budget may amount January 1st, the total number of immigrants to to about one-half of the ordinary budget, we arrive be absorbed by 1 November 1950 amounts to at an over-all budget figure of $322 million, as 204,000. Allowing for those who settle themselves follows:

1A valuable study on these problems by Charles Issawi: bank Memorial Fund Quarterly, Vol. XXVII, No. 1 "Populatio1~ and Wealth in Egypt" appeared in the Mil- (January 1949). 54 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

Millions of crucial aspects of Israel's exchange position ts dollars undertaken in the appended study. (a) Ordinary budget ...... 112 The preceding comments on the prospective (b) Security budget (about one-half 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 neighbours 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 Without 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 are : 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 public, and by gifts from abroad, without causing actions are free, and for which many Israelis disastrous inflation. There remains the over-all 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 considerably 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 inflationary pressure, the Govern­ immigrants. ment has launched a deflationary 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 decline 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 (£I 50 million), as compared to $112 March to 397. Money wage rates of industrial million (£I 40 million) for the current year, workers have been reduced by an average of 10 representing a net increase of $28 million ( £I 10 per cent; and over-all wages by 7 0 per cent; million). On the receipts side, there is in prospect ( 3) In appraising these spectacular results, it a falling off of exchange availabilities of over should be borne in mind that in so rigorously con­ $20 million. The uncovered exchange gap may trolled an economy, the significance of a decrease amount to approximately 40-55 million dollars in the price index is not what it would be in a equivalent in 1950. A detailed examination of this market economy. Thus an enforced reduction in aspect of the question is appended. 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) There is not full employment in Israel terprises in the country. So far, however, the at present; jobs are rationed like everything else; results have been disappointing, primarily owing, and immigration is constantly adding to the supply on the economic side, to a serious discrepancy of labour. Production per man-hour is not im­ 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 infla­ excessively high to the foreign investor. tionary pressure. The note circulation has risen A second possibility of closing the gap would from £I 28 million to £I 48 million during the lie in a further compression of domestic comump­ 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 pressure of money in circula­ tend to discount the possibilities of additional tion on prices. The Government's greatest asset in taxation, they express hope that savings may be this connexion is its people's firm confidence in further expanded, citing in this connexion the the currency ; Jewish people's habit of saving methodically for (6) Israel has already contracted a $100 million investment. Thus, banking officials estimate ac­ loan from the Export-Import Bank. Assuming cumulated savings per capita at roughly £I 50 that this total is allocated, service will reach sub­ for 700,000 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 ment-absorption purposes without contracting from primitive regions, and especially their chil­ to pay more dollar debt service than it can man­ dren, will be absorbed rapidly. Standards of ur­ age. Its chief prospective market for its present banism and public service are high, given the main export, citrus fruit, is the United Kingdom. difficulties, and realization is improving 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 eyes fixed on are withheld), is apt to provoke wonderment at Israel, and will doubtless make great efforts 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 three-quar­ be measured in figures, and these forces sometimes ters of total contributions now come from the decide issues in apparent defiance of reason. Israel dollar area. The USSR and its satellites, where has accomplished astonishing things already. It the bulk of Jews surviving outside the U.S.A. would be as rash to predict that it will not succeed live, permitted some transfers 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 potently than in that of other countries, work out legal means to enable aid to reach the following deserve mention: Israel. A relatively large proportion of expenditure Finally, 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 so critical a time t~ already found a place in the country as well as spur on well-wishers 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 regards its chances of survival as better in any pursuit to which a planned economy will an atmosphere of peril than they would be if pros­ 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 shortage and an austerity diet, the 1. Summary 'and conclusions people in general look strong and well; the mor­ tality rate is very low. The attached memorandum endeavours to pull There is a spirit of national-racial solidarity, a together some of the material that has been made willingness to make sacrifices in the common in­ available to the Mission upon the balance of pay­ terest, a faith in Israel's ability to overcome all ments position of Israel in 1949 and upon the obstacles, the like of which it would be hard to prospects for 1950. With respect to the 1949 find elsewhere. position, most of the basic data supplied by the In the eyes of its leaders, Israel is running along Israeli authorities regarding civilian imports ex­ a one-way road carrying heavy traffic, on which ports, rates o~ contribution by world Jewry, re­ it cannot turn back, or even slow down, without lease of sterlmg balances etc., are ,based upon disaster; a road leading to the absorption of all published data. Although any forecast for 1950 Jews who, for whatever reason, find life in their must necessarily be based upon a number of more present abodes intolerable. The idea that any or less arbitrary assumptions, the assumptions selection should be made among those wishing to chosen are believed to be on balance optimistic come is utterly rejected. "When one's relatives and to understate rather than to exaggerate the are faced with misery or destitution, one does not exchange difficulties likely to be encountered by stop to consider whether one can afford to take Israel in 1950. The broad conclusions reached are in all or any of them. One shares what one has as follows: with them." In varying forms, this sentiment is A. Israel is currently dependent to the extent expressed at every turn. There is, however, recog­ of more than 75 per cent upon extraordinary ex­ nition in some quarters that the rate of influx of ternal aid-cash contributions, donations in kind, immigrants must not be allowed to cause an Export-Import Bank financing, and release of economic breakdown. sterling balances-for covering its balance of Immigrants have reached Israel from almost all payment requirements. over the world. But although the present inflow B. Even in the absence of further immigration, comes chiefly from Arabia and North Africa, the this exchange situation could not be expected sub­ Israeli way of life has already been set along stantially to improve during 1950. Western lines, largely by Jews from Central C. The actual prospect of an immigration of at Europe with some experience of, and admiration least 150,000 during 1950 threatens to open up for, the U.S.A. There is every prospect that this an exchange gap of £I 15 to 20 million or about pattern will prevail, and that the immigrants 40 to 55 million dollars 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 contributions 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 in 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 £I 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 importsa 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 Millions of repayment demands of its other creditors, to re­ CategO'r'y Israeli pounds lease sterling on the scale required by Israel 1. Imports for current requirements: (a) Food ...... 10.111 remains a matter for negotiation between the two (b) Industrial raw materials ...... 16.638 Governments concerned. (c) Agricultural raw materials ... . 3.389 (d) Fuel ...... 1.879 (e) Other ...... 12.523 44.540 2. Historical dependence of Palestine 2. Capital imports : upon foreign aid (a) Industrial equipment ...... 3.780 (b) Agricultural equipment ...... 3.696 The central fact in the present economic posi­ (c) Other equipment ...... 614 tion and prospects of Israel is that the area now (d) Building materials ...... 3.290 occupied by the Jewish St~te would probably re­ (e) Transport ...... _3_.2_6_9--,;-;-o14;c-.-;-;64""9 main heavily dependent upon a continuing flow Total ...... ii 59.189 of foreign aid for some years to come, even if •Excludes unclassified items amounting to about (a) no further immigration were accepted, and ii 600.000. (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 imports by by political rather than commercial considerations, countries of origin and by the local expenditures of the British mili­ .M illions of tary forces. Even in 1939, less than 40 per cent of C 01mtrie s of O'r'igin Israeli pounds Palestinian exchange expenditures of about 1. IVestem Hemisphere £ P 14 million were covered by current earnings (a) U.S...... 16.3 on export or service account. The residual sum of (b) Other Western Hemisphere.... 6.2 22.5 about £ P 8.7 million, or more than 60 per cent, 2. Europe (a) UK ...... 5.9 was almost entirely supplied by forei~n donations, (b) Other Europe ...... 21.3 27.2 investments, and other capital transfers. During 3. Asia ...... 2.5 the war and immediate post-war years, moreover, 4. Africa ...... 4.6 the economy of Palestine became geared to an 5. Australia ...... •. 1.9 even more seriously adverse balance on current 6. Other ...... 1.1 account. And since the emergence in May 1948 Total ...... £I 59.8 Appendix II 57

It would seem probable, however, that such import arrivals in the early months of 1949 prob­ unusually heavy recourse to Western Hemisphere ably correspond to exchange commitments made markets is not entirely attributable to rigid im­ in the closing months of 1948, or even earlier. port requirements that could not be, at least par­ This time Jag 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. extensive range of import requirements for which But since, in the case of Israel, the rate of ex­ sterling would provide virtually as effective a pur­ change commitments has sharply varied during chasing power as dollars. With a resumption of the past eighteen months, a balance of payments normal commercial relationships with the Arab estimate for 1949 cannot rely upon recorded im­ countries, this range would be further substantially port arrivals without seriously misleading results. enlarged. Such substitutability, potential as well Thus, the Israeli authorities report exchange as actual, of sterling for dollars should be borne allocations during the first nine months of 1949, in mind when considering the prospective ex­ of nearly £I 32 million, or an annual rate of about change requirements of Israel, during 1950 and £I 42.5 million. This compares with actual import subsequent years. arrivals, similarly financed, during the same Of total import arrivals during the first nine period, of £I 44 million ( £I 58.6 million annu­ months of 1949, approximately £I 44 million, or ally), a strikingly severe cutback of £I 16 million an annual rate of £I 58.6 million were financed annually, or nearly 30 per cent, in the rate of ,by exchange allocations granted by the Israeli ex­ exchange allocations. Since the Israeli Government change control authorities. Although deliveries is reportedly not accumulating reserves, this cut­ of capital equipment financed by the Export-Im­ back presumably reflects developing exchange port Bank did not exceed an estimated £I 800,000 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 £I 6 million, this re­ annual figure to about £I 6 million. duction in exchange allocations will be cushioned The residual £I 15 million of total import by rising deliveries of basic capital imports, values, an annual rate of £I 20 million, were financed by the Export-Import Bank loan. The provided by commodity imports requiring no ex­ Export-Import Bank loan is providing, in effect, change payment. Thus, in addition to donations a partial replacement of declining contributions in kind and the personal belongings brought in from world Jewry. But since Export-Import Bank by immigrants, the Government has permitted funds may not be freely allocated to exchange foreign investors to transfer capital to Israel in requirements in general but must instead be re­ the form of commodity imports for resale on local served for specified projects, the Israeli Govern­ markets. ment has apparently no alternative but to cut back In terms of modes of financing, therefore, the imports requiring payment in free exchange by import trade-of Israel during the first nine months about £I 10 million, 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 first nine months of Jan.-Sept. 1949 1949. Here is a highly significant reflection of the Millions of austerity programme which is rendered all the Israeli pounds C ategqry of financing more severe by the continuing growth of the popu­ 1. From the exchange receipts of lation and resultant compression of the individual the Israeli Government...... 44.0 2. Donations, etc., in kind ...... 15.0 share of the national income. 3. Export-Import Bank loan .... . 0.8 To recapitulate, it is estimated that, for balance of payments purposes, the debits on import account 59.8 during the calendar year 1949 may be estimated roughly as follows : For the purposes of calculating a balance of payments for Israel during 1949, the estimates Estimated debits on import account 1949 presented above of import arrivals in the form of donations and investments in kind and ship­ Jan.-Sept. Jan.-Dec. ments financed by Export-Import Bank funds, Category of financing Millions of Israeli pounds may be utilized without serious distortions of the current exchange position of Israel. With respect 1. Exchange commitments 31.9 42.5 2. Donations, etc., in kind...... 15.0 20.0 to these import arrivals financed out of the ex­ 3. Export-Import Bank loan...... 8 6.0 change resources of the Israeli Government, how­ ever, one encounters the familiar technical problem 47.7 68.5 that import arrivals, so financed, do not reflect the current rate of exchange commitments but 2. Invisible Payments. Invisible payments re­ rather commitments made months before. Thus, ported by the Israeli authorities amount to £I 8.2 58 Final Report-United Nations Economic Survey Mission 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 £I 10.9 million for the breakdown are, first, the comparative impoverish­ entire calendar year. Of this total, freight pay­ ment of the immigrants now flowing into Israel, ments and remittances reportedly constitute a and, secondly, the failure to attract any substantial major fraction. Service payments on previous volume of commercial investment from abroad, investments amounted to no more than £I 500,- despite the Governmental concessions, noted 000 during January-September 1949. In 1953, above, of capital imports in kind for purposes of however, service charges on the Export-Import resale on local markets. Of total capital transfers Bank loan of $100 million at 3 per cent, repayable in kind of £I 3.8 million during January-Septem­ in twenty-four annual instalments, will cause this ber, Israeli officials admit that the major propor­ particular charge upon the balance of payments to tion is comprised of so-called "sentimental" rather rise by approximately $11 million or nearly £I 4 than commercial investment. At the present million. moment, the early purely commercial venture B. Receipts 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 £I 8.3 million, less than 14 per situation is unlikely to improve so long as Israeli cent of import values during 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 Instit~ttions 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 Jewry January-September 1949 to the various national institutions and funds, such Millions of as the United Jewish Appeal. Here one may note Categqry of export Israeli pounds two sharply divergent trends. On the one hand, Citrus ...... • ...... 5.1 total contributions by world Jewry for assistance Diamonds ...... 1.4 to Jews outside of as well as within Israel evidence Fruit juices ...... 8 an abrupt falling off. On the other hand, with Other ...... 1.0 the transfer of refugee Jews in Europe to Israel, 8.3 the percentage share of Israel in the total of For purposes of balance of payments calcula­ Jewish contributions is rising. tions, however, it is preferable to employ the On balance, however, the trend of donations slightly lower figure of £I 7.7 million in actual actually received by Israel, as distinct from allo­ exchange receipts 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 £I 36 million, mately £I 5.7 million during January-September, an annual rate of roughly £I 40 million. In strik­ an annual rate of £I 7.6 million. The exchange ing contrast, donations during January-September assets of arriving immigrants reportedly provided 1949 amount to only somewhat more than £I 20 only a negligible share of this total. million, an annual rate of approximately £ ~ 27 3. Imports without Payment. Corresponding to million. This sharp decline in the rate of contnbu­ imports without payment running at about £I 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 during 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 Kingdom. Thus, for the down: ten months' period January-October, the U.K. has Imports without payment released sterling in the equivalent of about £I 8 January-September 1949 million, of which £I 6.5 million were spent or committed during the first nine months of the Millions of ----=-C::,=at.eoory Isradi f>o,.nds year. Residual sterling balances of Israel are vari­ Gifts ...... 1.6 ously estimated between £I 25 and 30 million. Personal assets of immigrants. . 3.7 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 !, :! Appendix II tc : 59

Anglo-Palestine Bank of Israel recorded nearly tions. On the contrary, internal political pressures £I 24 million of such sterling assets as backing may well force a relaxation of the present aus­ of the note issue. The Israeli authorities clearly terity programme with consequent heavier de­ intend, however, to substitute domestic obligations mands upon the exchange resources of Israel. as fully as possible for such idle exchange assets, While additional consumption imports might be in the conviction that popular confidence in the financed by cutting back the investment pro­ currency is so strong as to require relatively little gramme, such action would, of course, only delay 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 most dangerous element in the of the major balance of payment items may be balance of payments outlook of Israel is the con­ summarized in tabular form as follows : tinuing inflow of immigrants. In many Jewish quarters there apparently exists an absolute con­ viction that Israel can absorb no less than 1 million Estimated Balance of Payments of Israel further immigrants, thereby doubling its present for 1949 population, within the brief space of four years. But in recent months, the present Government has Jan.·Sept. Jan.·Dec. apparently concluded that immigration during Millions of Israeli Pounds 1950 and 1951 cannot safely exceed more than 150,000 annually. In view of the severe political Payments: pressures upon these officials to permit an unre­ Imports: stricted influx, however, the figure of 150,000 im­ (a) Exchange commitments 31.9 42.0 migrants annually may well prove a relatively op­ (b) Donations, etc., in kind 15.0 20.0 timistic forecast of the burden of additional popu­ (c) Export-Import Bank: actual shipments ..... 0.8 6.0 lation to be suddenly thrust upon an economy already strained to the utmost. 47.7 68.0 With respect to the prospective cost of immi­ Invisibles 8.2 ················· -- --10.9 grant absorption, Israeli officials repeatedly cite Total ··········· 55.9 -78.9 an estimate of $2,500 per caput, allegedly based Receipts: upon the cost experience of earlier years. If by absorption, the Israeli Government means Exports ...... 7.7 10.3 Tourism, etc...... 5.7 7.6 that immigrants when fully "absorbed" should Donations, etc., in kind ...... 15.0 20.0 contribute to exchange earnings, directly or in­ National institutions & funds 20.2 27.0 directly, as much as they increase import require­ Release of sterling balances .. 6.5 8.0 ments, more precisely, that the entire economy, Export-Import Bank loan ... .8 6.0 including the new population, should earn as much Total ··········· 55.9 78.9 exchange as it spends, the capital investment re­ quired to render the new immigrants self-support­ Of total payments requirements currently ap­ ing in this sense would probably far exceed the proximately £I 79 million annually, receipts from $2,500 estimate. Thus, as 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 per earning no more than 23 per cent of its current cent. The residual balance of more than £I 61 exchange outlay. million, or 77 per cent, is only precariously But even if the $2,500 estimate is accepted, one financed by foreign contributions and other capi­ immediately encounters the further difficulty that tal inflows. In terms of the national income, such no breakdown of this figure between foreign ex­ capital transfers probably account for more than change and local currency costs is available. There 25 per cent of the total flow of goods and services is here involved, of course, the delicate issue of currently available to Israel. the value of Arab property expropriated by Israel. Moreover, Israeli officials are reluctant to provide even a rough estimate of the time period over Balance of Payments Prospects for 1950 which such immigrant cost outlays must be ef­ and 1951 fected. While it would seem obvious that, given an influx of say, 150,000 immigrants in 1950, the Unfortunately, there is little if any prospect Israeli Government could not possibly spend at a of an early improvement in this dangerously un­ rate of $2,500 per immigrant in a single year, balanced exchange position. Even in the absence even if it possessed the cash required, there is nev­ of further immigration, it is doubtful that any ertheless no basis for choosing between the rela­ significant economies could be effected· in the con­ tively more reasonable time periods of 3, 5, 10 or sumers' goods import programme, which has been even 15 years required for full absorption. And it already compressed to severely austere propor- is obvious that as the time period lengthens, the 60 Final Report-United Nations Economic Survey Mission for the Middle East-Part I entire absorption operation becomes progressively Under favourable harvesting and marketing less economic, i.e., the carrying cost of providing conditions, export yields from citrus and other for the current exchange requirements of the im­ shipments might expand export earnings during migrants will constitute an increasing share of the 1950 to, say, £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 side 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 capi­ with an ominous decline in the rate of donations tal imports required to ensure their ultimate self­ 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 t!re!y and attention focused instead upon the more with exchange requirements for essential imports hm1ted but somewhat less hopeless task of csti­ of roughly £I 52 million, and for services of mati?g t~c prospe~tive cost of providing the 150,- about £I 11 million, or a total of £I 63 million, 000 tmmtg:ants w1th reasonably adequate housing, against exchange availabilities that will probably State servtces, and more or less productive em­ ployment. fail to exceed £I 48 million. This would suggest a minimum exchange gap of about £I 15 million, On this basis, the Israeli Ministry of Finance or somewhat more than $40 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 in kind will be the contributions of world Jewry, the deficit to increased by roughly £I 10 million in tile event be actually incurred in 1950 may very we!~ ~p­ of 150,000 immigrant arrivals. This estimate im­ proach £I 18-20 million, or about $50-55 mtlhon plies an i?crease of ;oughly 24 per cent in cash­ equivalent. financed Imports, pnmarily of consumers' goods as compared with a population increase of 15 pc; It is of considerable significance that this pros­ cent, and a p;obably lesser percentage increase in pective deficit in 1950 is not necessarily a do~lar t~e gross n~twnal product available for consmnp­ gap, as distinct from shortages of other cu~renc1es. h~n: Pen?mg further investigation, the £I 10 As noted in an earlier connexion, extenstve pos­ mtlhon. estu_nate would appear to be a reasonable sibilities unquestionably exist for diverting pur­ approximation. chases hitherto made in hard-currency markets to What~ver additional capital requirements may the sterling and other soft currency areas. Thu_s, be occaswned by the annual 150,000 immigrants it is entirely possible that most of ~h.e gap now. m should be more that~ taken care of by E~port­ prospect might be closed by addtttonal sterlmg Import Bank financmg already provided. As a becoming available to Israel. very rough guess, the Israelis might succeed in \Vhen and if consideration may be given . to puttin~ to us~ in 1950 as much as $35-40 million extraordinary means of financing t~is prospective of cap1tal eqwpment so financed, leaving a residu­ deficit in Israel's exchange accounts m 1950, there­ a! ?f $45-50 million available for 1951~1952. In­ fore, the problem of the appropriate rate o~ release ylstble ou!lays during 1950 should not markedly of the £I 25-28 million in frozen sterlmg bal­ mcre~se,. 1f at all, nor is there in firm prospect ances currently held by Israel will unquestionably any stgmficant rise in invisible receipts. become of crucial significance. APPENDIX lll

Research and Technical Survey Requirements in the Middle East Countries

The pre-requisite for executing any develop­ technicians on the subjects in which they are quali­ ment scheme is technical survey, whether of the 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 based, the technique of carrying it the "how" and "why" of utilization of such men out, or the resultant effect on the 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 buildings, study of a country; in some there is no need for since the general public tends to confuse such de­ investigation of geology or geography, for these sign with the work of the constructing engineer or are already well known; in others no data exist contractor (the same Arabic word is often used even on the basic climatic conditions. The coun­ for both). Inadequate salaries paid to technicians tries of the Middle East, in the main, fall into the in government service also result in the moving of latter class. able and ambitious men from their own field to Advance technical survey is therefore particu­ general 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 survey the practicability of the promotion. scheme itself may be doubtful; and even if, by the It is clear, therefore, that although more use employment of suitable executants, the construc­ can be made of local ability, most of the techni­ tion and similar work are adequately completed so cians to survey, plan and design the development that the project per se is not a failure, there is yet schemes essential for the Middle East will have no guarantee that it has been taken in its proper to come from abroad. Not only will 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 all. Technically vide greater practical experience, but decisions of unsurveyed 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 fruits to those properly cultivated in an the project is certified by an outside agency. orchard. The 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 is required. Unfortunately, the major heads : Middle East countries (excepting Israel) have a ( 1) Study of the basic elements soil and water, serious lack of this type of trained specialist, not and their products, the basic industry of agricul­ only on the higher but on the technical foreman ture in its broad sense ; level. To say this is not to minimize the efforts (2) Examination of the second primary source made by all these States-where this dearth of -mineral wealth; h;chnicians is clearly recognized-to train their ( 3) Survey of industrial development; promising young men both at home and abroad ( 4) Technical advice on transportation; over the last decade or more. Secondment to West­ ( 5) Study of economic and administrative im­ ern countries, and more particularly to the United plications of development ; Kingdom and the United States, is now a well­ (6) Advice on the social effect of development. established part of higher education policy. Much has been done by the universities in Egypt and ( 1) The great natural assets of the Middle Beirut, the colleges in Baghdad, and higher teach­ East are its soil, so frequently fertile yet so fre­ ing institutions elsewhere. But the supply is piti­ quently wasted, and the water, scanty in quantity, fully inadequate to the demand; it is much less 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 prod­ countries; yet the requirements, owing to the lack ucts the cultivation of which is the basic industry of previous surveys and the need for development, of the entire region. The first priority in technical are infinitely greater. Moreover, there is often a survey must always be given to that which leads lamentable failure 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 Nations Economic Survey Mission for the Middle East-Part I quired in some or all of the Middle East coun­ underground resources. In this field, five types tries, for some or all of the development projects of survey are necessary: in the land, water, and agricultural fields, may be First, while certain Middle East countries pos­ divided into four. sess a mete?r.ological organization, this ~s, _in many (a) The primary surveys are those of the land cases, condtttoned by the needs of avtatwn and itself. full studies of the meteorology and climatid 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 particular, the moisture which falls upon the earth partially complete in every country but adequate are known, the country's water resources cannot in almost none. It should be remembered that the be developed without full investigation of the sur­ 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 hut (as with climate) over a period, 'Secondly, it is necessary to know the kinds of by properly qualified hydraulic engineers. Some soil; surveys by qualified soil chemists arc an es­ scheme may have to be started either on the sential preliminary to both irrigation and agricul­ inadequate data already existing or on the re­ tural ~evelopment. On such surveys it is possible sults of tests taken over a short period; but, in to dec~de, f~r exan;ple, the relation of irrigation general, such recordings must be carried on over to dramage m the hght of the danger of salting­ a period of years, and technical assistance may be up; and on the chemical composition of the soil concentrated on the setting-up of an organization the choice of crop frequently depends. to do this. At the same time special attention must Thi~dly, attention must be paid to the waste of be paid to floods, for the control of these and the sot! by water and wind erosion, which is so the elimination of the destruction which they cause '":idespread-and, in many places, so chronic a will be one of the major objects of many devel­ dtsease of the lands of the Middle East. Hence opments. many areas must be examined by erosion control Thirdly, it is fairly obvious that the design of experts, and the implications of schemes from the construction works, themselves involving vast ex­ erosion point ?f view must be carefully consid­ penditures and even the possibility, in the event of ered. Su~h sml conservation survey is integrally failure, of major disasters, must be very carefully related wtth forestry and is often best carried out made in advance by the best available technicians. by experts in both subjects. In particular, in addition to the general engineer­ ing aspects, the closest attention must be paid to it is necessary, before embarking on Finally~ geologic enquiry into the nature of the founda­ l~rge agncultural development schemes, to con­ tions of dams and the possibility of seepage from stder the present utilization of the land and to map out, with the assistance of data of the second the storage reservoirs. Fourthly, before water development schemes and third studies above, the present and future are undertaken the utilization of the controlled or ~ses h;> wh_ich the land can be put. At the same stored water m'ust be considered by competent ir­ ttme, 1t wtll be necessary to examine the land rigation engineers; and assessment must ~e made, from the aspect of land tenure, a type of ~ega! by them in conjunction with agricultunsts, not survey whtch ts perhal?s better carried out by lo­ only of the canal network which will carry the cal rather than by foretgn 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 proce~d freely ~nd unhampered and its fruits made avatlable to nch and poor alike. time, as irrigation is technically surveyed, so also must drainage schemes be surveyed, for the latter . In car~ying out such surveys and in the plan­ arc essential corollaries of the former. nmg whtch result~ from the new knowledge of Finally, another aspect of the utilization of t~1e geology, chemtstry, conservation and utiliza­ water resources-the development of hydro-elec­ tion of the l~nd, attention .should be paid to the tric power-must be considered as yart o! ~n­ need for advtce on the settmg-up of co-ordinated gineering planning, and hydr~-electnc spectal~sts departments of land use, whose function it will be must survey not only the techmcal aspects ?f e_lec­ to survey and develop this basic asset. tricity generation but also the methods of dtstnbu­ (b) The second great natural asset-and that tion and the demand. The development of thermal 'Yhtch, in tl~e Middle East, plays the part of its production of electricity must be considered at ltfe blood-ts water, whether in the form of rain­ the same time. . fall, of st~eams fed by more copious precipitation (c) Of major importance is the work ~f agn­ at one pomt and flowing to give life to arid areas cultural specialists; and just as the techmcal a~­ elsewhere, or of concealed and as yet untapped sessmcnt of the water resources and thetr Appendix II 63 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 forgotten. It is probable that the Middle cultural production, to stimulate which is the main East could again become a producer of consid­ object of the joint development of land and water erable quantities of ores and chemicals. Therefore, resources. an early 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 types of examination. Following this, specialist mining en­ crops which are most suitable either for the irri­ gineers should examine the possibilities of the ex­ gated or non-irrigated lands; they must estimate ploitation of specific minerals, bearing in mind the fertilizer requirements; advise on crop rotation; power which may be developed as a result of the test and suggest the specific strains which are best researches of the water engineers, and the trans­ cultivated and aid the production and distribution portation facilities of the country. In one field of improved seed; design better methods of culti­ alone has the mineral wealth of the Middle East vation; and advise on an extension 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, since 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 diseases-which have for so long penalized the ing, or at least in the purchasing power, of a com­ eastern farmer. Hence research must be under­ munity, which may result from 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 sumption goods. insect pests. Yet it will be necessary for a higher proportion Further, the methods of distributing crops must of imports, for some time to come, to consist of be surveyed from the point of view of agricultural capital goods for development purposes. The in­ economics, and it may be desirable for study to creased purchasing power resulting from develop­ be undertaken of the possibility of co-operative ment and expenditure thereon must, however, be 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 equip­ Middle East countries should be developed; and ment of the agricultural research stations neces­ for this purpose technical surveys covering the sary to cover the climatic and other conditions of available raw material, the labour possibilities, the area. power, transportation, and the potential market must be made by specialists in industrial planning. (d) Special technical survey is needed in the The erection of factories, and probably the early Middle East on the possibility of developing fish­ management, will require planning and super­ eries. More important work (though also more vision by industrial experts from abroad. In par­ widely begun) is in the field of forestry. Forestry, ticular, specialists will be required to plan those in its soil conservation aspect, has been mentioned processing industries which can convert, to a con­ above; but much can be done by qualified forestry venient transportable and exportable form, the specialists in making technical surveys of the ac­ products of an intensified agriculture. Technical tual utilization of the forest production, the proper surveys might, for example, be directed towards control and regeneration of the forests regarded sugar refining, cotton ginning, and textile produc­ as timber producers, and even on the setting-up tion; the wine, spirit and fruit juice industries; of the trained forestry organization, in itself a the extraction of vegetable oils; canning and specialized accomplishment. packing industries; the processing of dairy prod­ (2) While a geological survey has been briefly ucts ; and the like. Other specialized surveys may mentioned as a forerunner of large construction be made by chemical engineers with a view to the works, and the work of the soil chemist has been utilization, for chemical manufacture (and par­ seen to be a necessary preliminary to irrigation ticularly the production of fertilizers) of the and agricultural planning, nothing has been said of the other great primary resource-the mineral countries' minerals. wealth of the region. It is known that many areas ( 4) The development of the economy of the of the Middle East 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 Nations Economic Survey Mission for the Middle East-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 censuses of 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 transportation facilities are either per­ portance are such economic statistics as the na­ fectly planned for its present needs, or at all tional income calculation, the balance of pay­ likely to meet the demands of its economic devel­ 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 sistance is also necessary. will strangle development at birth; and inadequate facilities for 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 countries. It is 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 stage 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 facilities, 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 Jag 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 general In the field of finance, budgeting, the financial co-ordination of development will be a failgre, 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 main 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 official posed on a country by an outside agency, but can can base their judgments and assess the justifica­ only be aided and guided by it, presupposes the tion and priority of development schemes. existence of a governmental machine competent Statistical data in the l\fiddle 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 assi~t 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 taxation systems, to ensure that tics of population, mortality, morbidity, labour taxes arc 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 its true It will be seen that none of these technical sur­ aim of eliminating human suffering and raising veys, the need for which has been sketched above, the living standards of the great mass of the pov­ can either be made or achieve any result, in vacuo. erty-stricken people of the Middle East, if it is The soil chemist's labours are of little value unless not accompanied by widespread social reforms. they are used by the agriculturist; and the agricul­ Hence technical advice will be required in the turist in turn may plan crops without result un­ fields of labour and social affairs, of medicine less his work is linked with that of the irrigation and the like. Widespread public health measures expert. The economist may analyse a problem must be taken-and these will entail detailed tech­ with the utmost acuteness, but unless his labours nical surveys by high ranking experts, and pro­ are given a local habitation and a name by the longed research into the main endemic diseases. technical specialists, they will remain an academic The level of education in the Middle East coun­ exercise. Thus, not one or a few, but the majority tries is generally low, and great developments will of such surveys must take place together and at take place which must be properly advised. In the same time. National development boards and particular, educational research has scarcely been any international technical agency which is set turned, in most countries, towards the specific ap­ up, in conjunction with the specialized agencies titudes of the local child, and too often the educa­ of the United Nations and other bodies of a sim­ tional system is an inadequate imitation of a ilar type, should therefore at an early date develop European one. Even in the fields of police and a full prospectus of research priorities. APPENDIX IV

Annotated List of Certain Development Projects in the Middle East

In the following pages an attempt is made to In the case of two countries, viz., Egypt and set out, in tabular for~h' smlnc of tltlcddcvclol pmcntt I sracl, the treatment is not in such detail nor based ro. ects which have ~ 1 t er Jccn no c on t.lC spo on such direct sources as with others. It has not ~r Jin discussion w1~h Government offic1als by been possible to discuss development plans in members of the Misswn or. arc covered by docu­ detail with the Egyptian Government and mate­ ments in its possession. To mcludc all the scl1~mcs rial. for this section ha~ been drawd only from which have ever been adumbra~cd for t~1c l\1J~dlc available sources. No pilot schemes are included East countries would be a VI.rtually m1possihlc in the Mission's report for either of the two coun­ and, in the circumstances, frmtlcss task. Some tries for reasons explained in the main body of have been conclusively abandoned; ot.hc~s arc mere the report. For these reasons, therefore, the sec­ tentative suggestions; a1~d many arc mch~atcd only tions of this appendix on Egypt and Israel have by name in comprehensive general stud1c~. Some been included more for the sake of completeness schemes of the last type may never b~ realized m~d in giving a conspectus of the whole region and to almost no informati~n on thc1~1 exists. Nor! 111 indicate where the schemes of various countries many cases, is it possible or dcsirah~c tC? cntc.r 111to overlap or require co-operation, than as a working details, even on a major scheme wluch 1s s~n?usly list. contemplated, owing to the lack of prchmmary Attention is specially directed to column 5, "fur­ surveys. d . . . ther surveys necessary". This column at times, In general the schemes se1 cctc 111 t 1us appcm 1IX by its \'cry incompleteness, is significant. It tries cover the ~ore important or probable develop­ to show on the basis of the best available informa­ ment plans for the Middle East countries. ?el~c­ tion the preliminary work which must yet be done tion has been made on a number of cntena. before the schemes concerned can begin. Even for· Schemes which have already been begun, hut arc the construction of this column information has not completed, are included, and so also arc the been found to he scanty; and while it is known principal projects p~anncd hy Governments for that, for most projects, further technical data are early execution. MaJor schemes recommended ~s required, sometimes it is not even possible to indi­ foundation stones of the development structure m cate the stage reached in meeting this need. various general re~orts are mentioned, ~nd certain The abbreviations used arc thought to be self­ others have been mcludcd where specific recom­ explanatory, e.g., ?\I. means million, m. means mendations have been made by the :\[ission or metre etc. Costing has normally been given in !he some technical body in an earlier survey. local currencies, of which types and conversiOn Thus, though the appendix is far from being rates arc: comprehensive in its trca.tment, schemes inc.ludcd do give a reasonaJ;ly satisfactory ger~cral picture .£El (one Egyptian pound) equals $2.87; of the lines on wh1ch development m1ght proceed .-£11 (one Israeli pound) equals $2.87; in the countries under review. Particular atten­ ID 1 (one Iraqi dinar) equals $2.80; tion has been paid to plans related to agriculture, £ Pl (one Palestinian pound) equals $2.80; the primary industry of the whole area, and to the .-£ Ll (one Lebanese pound) equals free market conservation of the two natural resources of land and \vatcr. rate, approximately .12 cents; It must be emphasized that the list is not ex­ £ S 1 (one Syrian pound) equals free market haustive and that many of the estimates of time rate, approximately 30 cents. required and finances arc necessarily tentatiw. It is hoped that this appendix will at o!1ce indi­ The tables do not pretend to a high degree of cate the scope of the l\lission's observations ~nd accuracy: there arc certainly omissi<;ns an~l there provide a useful check list for future planmng are doubtless errors. work.

66 7r,.zc: EGYPT Estimated time to Name When actual complete work Estimated cost Serial of Purpose and short descrip· work started (yrs. from No. scheme tion of scheme Origin and Present stage Further surveys required or starting starting date) Amount Date Comments (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Nile N.B. No precise esti­ \Vaters There are three main P I a n s for all the The schemes not yet mates of cost or time Project interdependent schemes, schemes already exist. begun are more or less actually exist. The fig­ lor rather series of The result of a detailed ready for the detailed ures in columns (7) and 1.1 Equa­ schemes, for the control ex a m i n a t i o n by the engineering a n d c o n­ (8) have therefore been torial Iand utilization of the Egyptian Ministry of tracting stages. compiled on the basis of Nile Nile waters. The three Public Works was set unofficial estimates. Proj­ schemes together pro­ out in vol. VII of the The Sudan will also ects vide water for 1 to !Y, Nile Basin by Hurst, contribute to the Equa­ M. acres of agricultural Black and Simaika October 5 £E3.1M. May torial Nile and Lake l.la land in Egypt alone. ( 1946). In the spring of 1949. (+£7.5M. 1949 Tana projects, and oth­ Owen Uganda, the Sudan, and 1948, technical experts from er countries also share. Falls later Ethiopia will also from Uganda, the Su­ Uganda) The Egyptian Govern­ Dam benefit. Of the three dan, and Egypt agreed Soon. 4 £El.75M. May ment have voted£ E4.5M. l.lb schemes ( 1.1, 1.2, 1.3) that all these schemes 1949 for the Owen Falls Dam, Lake 1.1 is divided into four should be executed for i.e., more than the esti­ Kyoga major projects. the common benefit of mate in column (8). The Regula- their three territories. U g an d a Government tor These great plans are This was· endorsed by will spend £7.5M. on l.lc the largest single con- the Egyptian Govern­ this. Lake tribution ever made to ment in February 1949. Soon. 5 £Ell M. Mav ~ Albert the development of A detailed agreement be­ 1949 "' Dam Egyptian agriculture. It tween U.K. and the ~ l.ld . is believed they represent ~.... Egyptian Government ~ J ongle1 the ultimate exploitation was reached on the Cut J of the Nile waters. They Owen Falls Dam in May Soon. 20 £E32M. May 1.2 Lake Tana may not be fully effec­ 1949. International ne­ 1949 ~ Project j tive for twenty years. gotiations are in prog­ 1.3 Main ress on all other schemes. Nile Soon. 10 £E18M. May Project 1949 2 Quena To provide extra and Basin controlled w a t e r for Soon. 4 £E10.5M. May The t o t a 1 Egyptian Pump 250,000 acres of land 1949 Government share of the Irrigation now watered only by cost may be of the order Scheme flood. Large increases of £E57M. (and are anticipated in the later production of wheat, bar- Stage 1, Qena Basin, Apparently ready for Soon. 5 Possibly May The Egyptian Govern­ Aswan ley, millet, and green fad- provides for installation detailed engineering and £E6M. 1949 ment has e s t i m a t e d Basin) der. Jute may also be in a 125,000 acre area, of execution. £E8M., of which £E5M. grown to meet Egypt's 500 pumping units to be is external expenditure. needs. served by a power sta­ tion at Qena. Stage 2, N.B. Low period Nile Aswan Basin, provides Presumably 5 water supplies at the mo­ for further 500 units when the ment do not permit con­ serving 125,000 acres, dam elec­ version of all basin irri­ powered by the Aswan trification gation (1 M. acres) to Dam. Pumping units approaches pumps. Moreover, until will draw from tube completion. the great u p s t r e a m wells and tap under­ works are complete, the ground waters. basins must remain as safety valves in years of 0'1 high flood. oo..l g;l_ ~-·I Egypt (continued) 01 CO

Estimated time to Name JVhen actual complete work Estimated cost Serial of Purpose and short descrip­ work started (yrs. from No. scheme tion of scheme Origin and present stage Further surt•eys required or starting starling date) Amount Date c..·omments (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) ....~ 3 Aswan To utilize the fall of Estimates have been In hand. Now com­ Up to 10. £EI5M. May Egyptian Ministry of .....~= Dam water at Aswan Dam presented by consulting mencing. (may be 1949 Public Works' first esti­ Electri­ (built 1902) for produc­ engineers, and tenders ~ exces­ mate was £E11M. Brit­ ~ fication tion of hydroelectric have been accepted for sive). ish, French and Amer­ "C Scheme power to allow nation­ work and machinery. ican consulting engineers 0..., wide industrial develop- e s t i mat e d £E9M. to The two ment. In 1947 Egypt's fEll M. T follow- electric power produc- illg schemes tion was 600M. kwh. ...~ (4and5) The Aswan project ~ are connected should give 1500 1\f. kw h. p,. with 3 abot•e ~ 4 Iron In 1937 iron ore de­ In February 1949 an The stage reached is Not known; Not Not Not Not known...... Ore posits estimated at 1,000 international commission not clear, but further in­ but must known. known. known. 0 M. tons of high-grade visited Egypt to study dustrial engineering sur­ follow CD= ore were found near As­ this plan. (Some opin­ vey will no doubt be re­ scheme 3. t:r::l wan. It is thought this ion f a v o u r s ordinary quired as 3 approaches ~ might be smelted by blast furnaces, with the completion. 0 electric power from the works on or near the 0= proposed Aswan genera­ coast.) s... tors. One plan envisages ~ a steel works with an Cll output of 91,500 tons per r::: annum. ~ 5 Ferti­ Utilization of Aswan This scheme has been Presumably further After 5 £E6M. May '< lizer power for production of considered f o r m a n y industrial engineering comple­ 1949 Factory s=.... nitrogenous fertilizers years. An international survey will be necessary tion of CD at Aswan (estimated capacity of commission was asked as 3 approaches comple­ scheme 3. CD.... works 435,000 tons per in 1947 to report on the tion. 0 annum of calcium ni­ possibilities. The Gov­ = trate). ernment appears to have er..., decided in principle that Like the factory at the scheme be realized, ... Suez (below), the but no plans have been ~=­ scheme is designed to im­ elaborated. prove the productivity of ....s= existing cultivated areas p,. (as are schemes for con­ .....p,. version of basin irriga­ ~ tion to perennial) ; the t:r::l Ill Nile water schemes are (JJ intended to increase the area under cultization. t 6 Nitro­ Ill A scheme for large­ Already begun. Now in hand. ~ genous s c a I e manufacture of Already 2-3 Not The Export-Import Ferti­ fertilizer. This pI ant begun. avail­ Bank has granted a loan ~ lizer should go a long way able. of $7M. for this project. Factory towards making Egypt at independent of imports Suez of fertilizers. C e r e a 1 yields are said to have ) fallen in recent years ·' owing to lack of these. (/ Pre-war imports of fer­ tilizers were y.!M. tons super-phosphates and ni­ trates on the average per annum.

7 Rural A scheme for wide­ Already begun. This Now in progress: pre­ Already 10 £E21M. May A sum of £E3.25M. \Vater spread improvement of scheme may be executed sumably each section of begun. 1949 was allocated in 1946. Sup­ water supplies in Egypt. in s t a g e s . A contract the scheme will be sur­ plies Large schemes in the was recently placed for veyed in detail as it Delta are complemented completion of one of five comes up. by well boring and pow­ large waterworks, with er pumps elsewhere-- its network of mains, in 2,000 pumps eventually the Delta. being needed, plus 12,- 000 wells equipped with hand pumps. This project will have an important effect on the health of the rural population, and will less­ en the risk of cholera epidemics such as that which occurred in 1947. The percentage of rural ~ population supplied with 'd pure drinking water is g said to have risen in the ~ last two or three years >4... from 25 per cent to 40 per cent. < 8 Minor The stage reached is Presumably further Not Not Not Irrigation not known, but in gen­ detailed surveys will be known. known. known. Schemes: eral these schemes are necessary before the con- under consideration only. tracting stage is reached. 8.1 Coastal The sinking of wells Wells in coastal areas of the Western Desert.

8.2 Western Irrigation of areas in Desert the Western Desert by Irrigation canals cut from the Nile.

8.3 Kharga Tapping and control and of artesian and sub-arte- Dakhla sian water in these oases, Oases which have a total area roughly equal to the cui- tivated area of Egypt.

8.4 Farafra As above. and Baharia Oases 1$ f"'"") a... r -l "(;:)_-'/;: Egypt (continllecl) 0

Estimated time to ,V a me ll'h"" actual comf'kte work Estimated eo.rt Srria/ of Purtou and shnrt dacrit· u-ork started (yrs. from .Vo. ,,;..;me tion of s'hcmt~ Oriuin and f'rcscnl stage Furthrr surt•cys required or starling starling datd Amount Dale Comments "'j (1) (Z) (3) (4) (5) (6) (7) (8) (9) (10) ..... 9 Housing ...... "'= ~ 9.1 \\'orkers' To build a workers' About 600 completed In hand. End of Not £E4)1:21L June ~ city at 1947. known. to date. 1949 '"C city of 6650 houses at a by June 1949; 1,000 esti­ 0 Embabeh Cairo suburb. mated by October 1949. '"I

9.2 ~[ajor To construct 40,000 ~!inistry of Social Af­ ~[ore detailed survey ::-l"ot known. 10 £E16~L 19-19 It is not clear wheth­ Housing town and 100,000 coun­ fairs has drawn up a 10- of programme, especially er this is an annual or a Schemes try houses annually. ycar plan. with regard to avail­ t o t a 1 figure. Expendi­ ~..... Houses in towns would ability of labour and ma­ tures might be financed ~ -Q.. be allocated to families terials, and the control by a Government loan. with incomes below £E9 of luxury. per month. ~.... 0 This is the programme - 10 Public To construct one 500- Already Kot Annual Health bed hospital in each of ~Iinistry of Public begun known. budget "'= Health. It is in opera­ t?=j Facilities province HQ; a 100-bed 1947-48. of !l!in­ (":> hospital in each district tion, and excellent hos­ istrv 0 pitals have already been is £E12!1!. HQ; and a rural health 0 centre ior each 15,000 built. Eighty H c a It h = Centers were construct­ s.... persons ( 1.200 vi !la g c (":> health centres). ed by the end of 1948, and thirty were in prog­ 00 ress in 1949. = ~ 11 School Large programme of In progress. In hand. ::-l"ow begun 5-10 £ElO~L ~ buildings building new schools. ( contin- ;::::: uous)...... "' "'0 Note. In 1946 the Egyptian Government approved a In 19~6 ££22 million was allocated out of General = five-year plan, which includes some but by no means all of Rcsen·e as follows: 0" the above projects. This is a development plan consisting '"I of classes of desirable work, with some named projects, (1) Roads ...... £E 4,000,000 ...::r for which fu:1ds are regularly provided in the Egyptian (2) Reclamation of swamps ...... 2,000,000 ~ Budget. The plan originally included the Aswan electri­ (3) Cairo main drainage ...... 2,000,000 ;::::: fication project (sec above); establishment of an Industrial (4) Schools and hospitals ...... 1,500,000 ..... ( 5) Irrigation and drainage ...... 6,000,000 Q.. Bank; electrification of some railway lines; and general Q.. improvement oi transportation, many health measures, new (6) Pure drinking water supplies ...... 3,250,000 schools. etc. It was prepared in 1945 and approved in (7) Agriculture ...... 1,700,000 (1)- 19-16. Certain sections are executed each year, but details (8) Other projects, etc...... 2,000,000 t?=j are not available. The Palestinian campaign, the cholera m epidemic, and the establishment of large separate projects Subsequent additional funds voted have been ££7.8 mil­ "' have probably led to some modification of the plan. lion (general reserve) in 1947; £E4 million in 1946; T ££5.2 million in 1948; with reductions in 1948 of ££3.6 mil­ ~ \Vork was started in 1946, and was estimated to last for lion. These items are all from General Reserve; current :::1."' five years. The cost was estimated at £E96 million, of revenue allocations in 1947/48 were ££8.5 million (not which £E46 million was out of General Reserve and £E10 fully utilized), 1948/49 £E9.4 million; and in 1949/50 million in each of 5 years from current revenue. £E12.4 million. - 7/; 7' /.'"" c·, ~·.r ,. t <) IRAQ

Estimated tdme to Name TV hen actual complete work EsPimated cost Serial of Purpose and short descrip­ •work started (yrs. from No. scheme tion of scheme Origin and present stage Further surveys required or starting starting date) Amount Date Comments

(1) (2) (3) ( 4) (5) (6) (7) (8) (9) (10) Habban­ To control the floods Fully described in de­ This work is in prog­ 1948 2 ID2M. 1949 (Another ID1.375 M. iyah (and also store the wa­ tail in the reports of the ress, but there are fin­ may be needed for later Scheme ters) of the Euphrates Haigh Commission. ancial delays which may stage). by diverting high water \Vork has now begun, have to be resolved. into Habbaniyah Lake. Messrs. Balfour, Beatty \Vark will be in two and Co. being contrac­ stages, with a barrage in tors. The inlet and outlet the later s tag e. The channels are under con­ scheme will store water struction, but the bar­ for irrigation of over rage has not yet been one million acres and built. control t h e frequently destructive Euphrates floods. Flood control in Iraq is a first necessity in any development pro­ gramme; apart from the damage to crops which will be prevented, flood control is an essential ~ preliminary to the im­ '0 portant irrigation a n d drainage schemes further g_ downstream, Damage to .... crops and property in a M bad year may cost sev­ eral millions of ID, and < in addition large gov­ ernment expenditure is incurred a n nu a 11 y at present in relief and stop­ gap measures. 2. Wadi Tharthar

2.1 Stage 1 A project to draw off Fully outlined in the Now in hand. The Soon. 5 ID7M. 1949 the surplus waters of the reports of the Haigh source of finance is not Tigris by a channel into Commission. The Brit­ yet finally determined. the vast Wadi Tharthar ish consulting engineers depression no r t h of to the Iraq Government Baghdad, thus control­ are now drawing up ling the disastrous Tig­ specifications. ris floods. The depres­ sion will be adequate to control al!l}ost any con­ ceivable high water peak.

2.2 Stage 2 Use of Wadi Thar­ Outlined by the Haigh Not yet planned in ID4.5M. 1949 Estimate. thar storage waters for Commission. such detail as stage 1, irrigation, involving fur­ and will presumably re­ ther channels back to the quire detailed engineer­ river, etc. ing plans if decided on. Both these schemes are Other schemes may be -l on a major scale. a higher priority than 1-' this stage 2. ,~"'/ I I / / i ~ ' I Iraq (continued) ' ... - . ' ~ :" ~' Estimated t>imeto Name JV/un actual complete work Estimated cost Serial of Purpou afld shorl descrip­ work started (;yrs. from No. sclume tio" of sclume Origifl and prese"t stage Furtlur surveys required or starting starting date) Amount Date Comments ~ (1) (2) (J) (4) (5) (6) (7) (8) (9) (10) ..... 3 Diyala A dam on the Diyala The Haigh Commis­ Completion of geologi­ Haigh 3 ID2.5M. 1949 Sources of finance are =~ sion made a first survey cal survey and consult­ Dam River for water storage Commission under exploration. l:d ("Gibral­ for irrigation, and flood in much detail. Geologi­ ing engineers' detailed recom­ ~ tar" site). control. This should pro­ cal surveys are now in plans and specifications. mended "C 0 vide water for irriga­ pro~ress, and the con­ 1951 but tion of over one million sultmg engineers are re­ develop­ :l acres, and supplement porting. ment might the flood control of the be even 6 'Wadi Tharthar scheme. earlier, as =.... . This is also an impor­ it leads to ~ tant project. early irri­ ~ gation de­ ~ velopment ll)...... by the 0 Diyala Canal. m= tr:l (") 4 Bekhme A project exists for a This project has been It is not clear whether Notknown. 5 ID9M. 1949 0 Dam dam on the Greater Zab s t u d i e d both by the this dam will be pro­ River in the Bekhme Haigh Commission and ceeded with, and further =0 Gorge, intended for stor­ the consulting engineers. detailed surveys, espe­ s..... age of water for irriga­ cially of the geology of (") tion and to some extent two alternative sites, fJ:J flood control. will be required. = ~ 5 Dam on A s c h e m e has also This has been consid­ Further detailed sur­ Notknown. - IDJM. 1949 '< the Lesser been mooted for a flood ered by the Haigh Com­ veys will be necessary. Zab control, storage, etc. dam mission. Other schemes are ap­ a::..... on the Lesser Zab River. parently taking priority. i£..... It would provide water 0 for the irngation of over one million acres. = ..,~ 6 Develop­ An irrigation project Planned in detail by Source of finance will Not begun. 4 ID1.4 M. 1949 ment of for use of water from 1 the Haigh Commission. have to be explored, and ;. the Hilla above. This canal scheme final contracting specifi­ Cl> Canal will extend the existing cations made. System a::... irrigated ara by 160,000 Q... acres and provide for Q... another 150,000 acres Cl) within the existing area. - ~ Ill 7 General Plans exist for ex- Preliminary plans have Detailed plans require Not begun. With- ID3.3 M. 1949 m Irrigation tending the existing ir- been made by the Haigh to be worked out. in 10 and Canal rigated area widely. Commission. T ~ Schemes ll) N.B. Larger irriga­ :l tion long-term schemes ~ in the Haigh Report en­ visage doubling the irri­ gated area of Iraq. These are estimated to cost ID35 M. 8 Land Drain- Drainage of irrigated Included in general The trial project will Not known. 10 ID3M. 1949 age Pro- land parallel to irriga­ outline in the schemes of have to be carried out gramme tion, an essential step. the Haigh Commission. first, and detailed plans Approval of Iraq Gov­ then prepared. N.B. Larger drainage ernment is awaited for a long-term schemes in trial drainage project, the Haigh Report might as a result of which de­ cost ID24 M. In addi­ tailed plans for the main tion, as mentioned above, project can be drawn up. there may be hydro-elec­ tric power and naviga­ tion betterment schemes­ costing several million dinars.

9 ~[echaniza­ A project to mechan­ An Iraq Government Finance will have to Some 10 ID3.4 M. 1949 tion of ize agriculture in an project. A law has been be sought, and in estab­ mechaniza­ Agri­ area of over 1 million passed controlling all lishing the project spe­ tion of agri­ culture acres to increase the out­ import, sales and dis­ cial attention must be culture has put of the existing cul­ tribution of agricultural given to the need for a been pro­ tivated land. machinery. servicing organization. ceeding for some years, but this specific scheme has not yet been started. "t:l> 10 Jebal Possible development Only a suggestion and A detailed survey of "t:l Sinjar of a rain-fed area west not yet fully explored. the area, its soil, climate Develop­ of the Jebel Sinjar, a A large area might be and agricultural poten­ ~ developed. tial will be required. At­ ~..... ment mountain range which >'I divides Iraq's Jezireh tention must be paid to from Syria's. There are existing grazing rights. already roads in the < area, which is well with­ in the rainfall belt. 11 Afforesta­ Schemes exist for the A Forest Law and Further detailed sur­ Workbegun - Not known tion improvement of Iraq's Policy have been passed, vey of forest area, train­ forests, and protection and the Chief Forestry ing of staff, and estab­ of an area of a b o u t Officer has drawn up lishment of protected 23,000 km.• of existing plans. areas will be required. complete or partial for­ ests. 12 Road De­ velopment Pro­ gramme

12.1 Stage 1 Baghdad-Basra road,l Soon. 10 ID14.5 M. Spring Roads Engineer's esti­ via Kut and Amara. Of this, 1949 mate. stage 1, 12.2 Stage 2 Reconstruction of ex- An outline programme Detailed plans and en­ ID4M. isting roads, particularly ronly has been drawn up gineering will now be Baghdad-K.irkuk, and by the Chief Roads En­ required. The work will Kirkuk-Mosul. gineer to the Iraq Gov- have to be carried out by ernment. proper contractors with competent supervision. 12.3 Stage 3 Construction of- roadsj to Holy Cities (Nejf and Kerbela). -l ~ (i r,: ~ ~?. !' Iraq (continued)

Estimated ~ time to l"lam~ IVhen actual eo m /'fete U'Clf'k Estimated cost s.-..ial of Purpose a"d short dcscrip. . U'Clf'k started (yrs. from lw~ a. scheme lion o/ scheme Origin and tr~st>nt stage Further surreys rtquorcd or starting starti"il date) Amcu"t Date Comme,.ts (1) (Z) (3) (4) (5) (6) (7) (B) (9) (10) 13 Railway Further financing is ~ Develop­ required, as the railway a· ment funds, partly accrued i:o) from World War II, -~ may not cover all the ~ '"0 need. 0 13.1 Tigris To link the two main Almost completed. 1948 '"1 Bridge parts of the railway sys­ tem, Baghdad-Basra (on the west side of the Tig- ~.... ris) and Baghdad-Kir- ~ kuk (on the cast side). Q., 13.2 Erbil A iO-milc extension of \Vork well advanced. 1948 IDIOM. .!\fay Out of this ID4.5 M. '.2! Extension the line from Kirkuk to 1949 had already been spent ....i:o) Erbil in northern Iraq, in May 1949. o· including a bridge over Cl> the Lesser Zab Hh·er. = t:j 13.3 Baghdad Construction of a new \York well ad\·anccd; 1948 ~ Station railway station and lay- may be held up for lack 0 out at Baghdad. of funds. 0= IH Purchase Purchase of new roll­ Not known. s.... of Rolling ing stock in the U.K. ~ UJ Stock c 13.5 Long term Large internal expan­ Scheme of commission These schemes require £34M. 1949 Of this £15 M. on of experts to consider ~ Plans sion and lines to Turkey detailed expert consid­ equipment from abroad. '< and Syria. these plans was not pro­ eration, particularly in ceeded with. conjunction with road and water facilities. ~ Cl>"' 14 :\[ineral There arc good in­ First surveys have Detailed surveys and o· Develop- dications of certain min­ been made by the Iraq drilling arc necessary, as = ment erals in the northern Government geologist. well as a study of mar­ 0' mountains, which may keting, economic and '"1 justify large scale de­ transportation problems. .... velopment. ::r ~ IS Airfields Construction of a new Plans for a new air­ An examination of the The airfield at Baghdad. field at Baghdad were economic need specifica­ ....~ scheme Q., prepared for the Iraqi tions, and consideration appears Q., Government by Sir Alex­ of Basrah airport, which dormant. (i"' ander Gibb and Partner carries a heavy inter­ (ancillary development t:j national traffic, seems i:o) of the full new railway required. 00' layout may reduce the utility of the existing airport). The airport i:o)t was, however, recently ::1 reconstructed. N ate. Only the more readily separable and earlier Flood control and storage ...... ID 22.375 M. - schemes devised by the Commission which worked in Iraq, Irrigation development ...... ID 35.26 M. under Mr. F. F. Haigh, have been shown in this appendix. Drainage • • ...... ID 23.88 M. The total cost of all the schemes outlined in the Com­ Power ...... ID 6.35 M. mission's reports, to control floods, rai~e the irrigated Navigation ...... ID 3.65 M. area from 7 Jv[. acres to 16 M. acres, provide power, and This m~ spread over_~~~~-a~_ fifty_Y~!"s. ___ improv--=-:~ver navigation~ will be ID 91.515 M.,~: ~ ------~""" Appendix IV lo 1 75

ISRAEL

In summarized form, the principal development (4) Glass (expansion of annual production from projects in Israel are understood to be as follows: 720,000 m2 of sheet glass to 2 M. m2) .. . 1,000 (5) Paper, packaging, printing ...... 2,000 (6) Chemicals (expansion of factories produc­ I. IRRIGATION PROJECTS ing pharmaceuticals and chemicals, with 1. The major plan for development of the water particular reference to the manufacture resources of Palestine is described in the report of sulphuric acid and superphosphates) 4,500 (7) Food (food processing, beverage and to­ "Proposals for Irrigation and Hydroelectric De­ bacco industries, including particularly velopment in Palestine", by J ames B. Hays, June citrus concentrates) ...... •...... 11,500 1948. In this report the development of the water (8) Miscellaneous (includes electrical equip­ ment, optical, dental and surgical sup­ resources in Palestine is planned for execution in plies, household appliances, precision eight stages. These stages, which include the instruments) ...... 3,500 Mediterranean-Dead Sea power canal, are too well known to necessitate detailing here; most, how­ ToTAL 70,500 ever, involve international co-operation in one form or another. The project for a power canal is Ill. OTHER DEVELOPMENTS not excluded from governmental calculation; but, The following are the principal further develop­ for the moment, attention seems to be chiefly con­ ment programmes envisaged : centrated on those parts of the plan which, to­ gether with other projects, are included in the list Cost ;,. thousands in 2 below. The total construction cost of the of dollars Hays plan was originally estimated at $251,198,000. 2. The following immediate projects are either Telecommunications programme, 1st stage ... 12,000 Motor transport (truck and bus services: under consideration or begun : large nutlilbers of new buses are arriving and more will be needed) ...... 20,000 Estimated cost in thousands of Railroad (includes Tel Aviv-Hedera line: Israeli pounds there is also the possibility of a Negeb ex­ tension, and reconstruction of the Jerusalem (1) The proposed Yarkon reservoir ...... 700 line) ...... 9,000 (2) Project for utilisation of Yarkon water Harbour works (project costed at $20 M. at to the south ...... 9,000 Tel Aviv is not proceeding but works will (3) The Beisan project...... 3,600 be undertaken at Haifa, of which the cost (4) Western Galilee water supply project. .. 1,000 may be up to 50 M.) ...... •... 20,000 (5) Gishon reservoir project ...... 800 Ship acquisition ...... •..... 5,000 (6) Reclamation of the Na'aman River and Air transport ...... Not known utilisation of the Halazon flood waters 1,000 (7) Jordan Valley water supply project for ToTAL 66,000 settlements ...... 300 (8) The Harod Valley water supply project 400 In addition, schemes exist for the following : (9) Conservation of winter floods from wadis 1. Revival of the Palestine Potash Company; along the coastal plain ...... 2,000 at present the northern works is destroyed and the TOTAL 18,800 site in Jordanian territory. The southern works lacks easy access but a road may be constructed. 2. Large increases in the capacity of the existing II. INDUSTRIAL PROGRAMME thermal electric plants. Israel is encouraging industry, and the main in­ 3. Afforestation (a four-year programme cover­ vestments envisaged in Jewish industry in the five ing 800,000 dunums, together with the lining of years commencing 1946 were: highways with trees). The eventual aim is to plant Thousands 2 million dunums. Industry of dollars 5. Road construction, including an arterial high­ (1) Metal (mainly light metal-working indus- way eventually stretching from Tel Aviv to Haifa, tries) ...... 16,000 and access to the N egeb. (2) Textile (importation of machinery and de­ 6. An extensive housing programme and hotel velopment of a new form of nylon) ..... 26,000 and industrial construction. The need for housing (3) Building materials and woodworking (in­ cludes expansion of Nesher cement works immigrants makes the housing programme of ma­ and completion of Shimshon works) .... 6,000 jor importance: 50,000 units is the target for 1950. oo..l ltJJ. -3 JORDAN (AND ARAB PALESTINE) Q\

Estimated Umeto Name IV hen actual complete work Estimated cost Serial of Purpose and short descrip­ u•ork started -(yrs. from No. scheme tion of scheme Origin and present stage Further sur-l.'eys required or starting starting date) Amol4nt Date Comments ~ (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) .... I Yarmuk A project to draw the This scheme was fully (a) Consideration of Not 5 Survey Nov. =11:> Canaliza­ waters of the Yarmuk dealt with in the report international w at e r certain. report 1949 -~ tion down the Jordan Valley in 1938 of M. G. Ioni­ rights concessions, etc., £P20,000. Cl> Project by a canal parallel to des; it has been further a problem of magnitude 't:l the main river. This developed s i n c c that in this scheme; 0 would allow turning the date. A survey by con­ (b) Consideration of Jordan Valley to a fruit sulting engineers has land tenure difficulties ; and vegetable economy just been finished. (c) Detailed pre-con­ £PIS M. May An estimate for the as has been suggested. struction survey. (less 1949 whole Jordan-Yarmuk ....~ As originally conceived, £P.SM scheme. Cl> this scheme included the if no ~ diversion of the Yarmuk Lake winter floods into Lake Tiberias ...... ~ Tiberias for use in the diversion) 0 summer. A smaller ver­ ; sion of the scheme is possible. tlj 8

2 Jordan A general scheme ex­ This plan is similar to As above. Not £P5.5 l\f. Nov. ....~ Canaliza­ ists to conduct water that in stage 7 of the certain. Further 1949 c:> tion from the Jordan on to Hays plan. technical U'J Scheme the land on the Palestine 5tudy ..,~ bank by a low storage would cost dam 15 km. south of £P50,000. ~ Beisan, and an irrigation canal parallel to the riv­ e: tr>.... er. This might be com­ m.... bined with the dams on 0 Wadi Qilt (see also 3 below) Wadi Faria, = Wadi Auja. S'.., g. 3 Unified The engineering con­ Proposed by the Mis­ Further examination Suggested 2 £Pl.455 M. Nov. On the basis of £P355,- s:: Develop· sultants to the Mission sion as a short-term of geology and topog­ for 1950. 1949 000 dam. Headworks 0...... ment propose that the Wadi works project for Arab raphy will be necessary, and first canal, iPI00,- 0... Schemes Zerqa area be developed refugees. and these surveys could 000; check dams, £P50,- Cl>- as a unit, by building a be complete in three 000; roads £P700,000; tlj storage dam on the wadi, months. Stream flow is village, £P250,000. 11:> check dams on gullies, not well known so that 00 afforestation, terracing, the dam should be built planting of fruit trees, to a minimum height in T"C house building, etc. The such a manner that it 11:> neighbouring road net­ can be raised. This final :l work would be im­ elevation will require ~ proved. A suitable dam several years of record site ex i s t s , and the for its determination. scheme appears most A competent geologist feasible. s h o u 1 d be employed throughout construction. A head works structure //,2 -/J and canal network will be required when the wadi enters the Jordan Valley. It is b e I i e v e d the scheme would double the water available for irri­ gation as compared to present low flow con­ ditions, in addition to developing the whole area.

This scheme will serve Suggestion only. Utilization of Wadi £P360,000 Nov. Dam, £P300,000; as a test for the develop­ Zerqa experience and (Wadi Qilt 1949 headworks, £P40,000; ment of other wadis, e.g., detailed surveys. only), cost canal, £P20,000. Wadi Qilt. not known for other wadis. A survey might cost £P20,000.

4 Sheraa A dry-farming project Detailed plans have The suitability of the Vvas 3 £P.675M. May Cost includes housing, Project in the Sheraa area, said been drawn up by the area is not yet complete­ planned 1949 implements and animals. to be suitable for 7,000 Jordan Government's ly established according to start "d> persons (270,000 du­ Department of L a n d to some authorities, and soon. "d nums). Surveys. a further examination of ~ the land, the grazing t:S ~.... rights of the Howeitat ~ tribe and the economics of extensive cultivation may be necessary. <

5 Azraq A minor irrigation F u 11 y planned, but For the larger scheme Soon. 4 The larger May A smaller sum was Scheme scheme in the Azraq only the initial survey topographical, soil and scheme 1949 estimated for the minor area utilizing springs. has been made. underground water sur­ may cost scheme only. Pumps will be used and veys will be necessary. approxi­ the area covered will be mately 5,520 dunums. There are £P1M. possibilities however of agricultural development and afforestation over 100,000 dunums.

6 Jordan A project to build This group of works T h e s e schemes are Begun. 4 £P410,000 May Development including Valley headworks for the better was planned by the J or­ planned but their pro­ Headworks (the Wadi 1949 expropriation might cost wadi c o n t r o I of irrigation dan Lands Department. gress must now be con­ are now in a! Arab £P2 M. if these schemes schemes. from the waters of wadis The headworks on the sidered in relation to construction cost were made full scale. on the east side of the Wadi at Arab (north­ the unified development on the Wadi £P34,000). Jordan River. ernmost) are finished. projects of the type in Ziqlib. (3) above. No plans apparently exist for storing and conserving s u r p I u s water. -.:1 -.:1 -l lr1LJ r­ Jordan (and Arab Palestine) (continued) CO ii/ I- :J Estimated time to Name IV he" actual complete work F..dimated cost Serial of Purpose and short descrip­ u•ork started (yrs. from No. scheme tion of scheme Origin and prese11t stage Furthe-r s"n'eys required or starting starti11g date) Amount Date Comments ~ (I) (2) (3) (4) (5) (6) (7) (8) (9) (10) ... 7 Pump Ir­ Irrigation by pumps of Under consideration. It is possible that the Possibly e.= rigation an area on the left bank Wadi Qilt may be found £P31,000 ::= (the Zors) of the ] ordan near the to be a better source of for works. ~ Allenby Bridge. This water. £P93,000 "C may provide water for if full de­ 0 4,600 dunums. The relation of this velopment. :4. scheme to the Yarmuk water project is not 6 clear. The land is State ...... = domain. It will require ~ to be cleared of scrub ~ and levelled. Bunds must be built and the bank ....~ will require erosion pro­ ... 0 tection. Cll= t:j ~ 0 8 Musa Bey A scheme sponsored Bore holes have been It is possible that the Begun. AI ami by an Arab relief or­ sunk and one has pro­ Wadi Qilt may be found =0 Scheme ganization and in par­ duced a good water to have a better source ...s ticular by Musa Bey supply. of water. ~ Alami, for irrigation by Ul pumps and wells of land on the right bank of ] or­ = clan near the Allenby j Bridge. This is intended to settle refugees on a a= voluntary basis. Cll...... rJl =0 9.1 Road The roads of ] ordan The ] ordan Govern­ The u s u a I detailed Soon. (a) 1949 Construction cost esti­ 0'..., Devel­ are, in the main, poor. ment plan is drawn up road engineering survey £P3.75 M. mate is £P4,000 per km. opment The Government has de­ and includes (a) for will be required as con­ Survey The annual maintenance ;. veloped plans of which ] ordan, a north-south struction proceeds. may cost charge may be about ~ the aim for ] ordan is to road in the ] ordan Val­ £P25,000. £P50,000. a= service agricultural areas ley (agricultural) and a ... ~ which cannot get their road from Madaba to .....~ products to market (and 1Ia'an (agricultural and ~ which may be devel­ tourism). These will be t:j oped) and to open up complemented by a se­ $:.) tourist sites (as the ries of transverse roads, rJl tourist industry may also including one to Azraq; be developed). The pro­ (b) in Arab Palestine (b) Be­ 1949 Based as above main­ t$:.) posals for Arab Pal­ many new links to join tween tenance may, however, estine are intended to the severed parts of the £P.5and be £P25,000 annually. :l replace communication communications system, £Pl.O M. 1-4 lines which have been are envisaged. depending cut. on extent of scheme. Survey may cost £P3,000. ------~,..-~------~------9.2 Aqaba (a) To rejoin the These are included in If Aqaba port is de- Not ? 1 (a) June Estimates vary. Roads Naqb Ashtar-Aqaba the Jordan Government's veloped (a) will be es- known. fP46,000- road especially in the road scheme noted above, sential. The line of (b) fP100,000, interrupted stretch in but to some extend de­ is served by the railway, (b) 11'/-iS the Wadi Yutm, and pend on the development but this route also is fP34,000- (b) to make the Naqb of the port of Aqaba. considered desirable by fPSO,OOO. Ashtar-Amman road a the Jordan Government. fair weather route. Detailed survey is now required and an eco- nomic examination in conjunction with the Aqaba development. 10 Royal This line (Dera'a­ (a) Is a suggestion Examination of the (a) Not Hashemite Amman-Ma'an-Naqb only. possibility of (a) and known. Railway Ashtar) is of 105 cm. planning of (c) by a of the gauge, and its Haifa competent technical ex­ Jordan connexion is cut both by pert are required. In the Israeli frontier and general, expert assistance the blowing of a bridge may be needed. in the Yarmuk Gorge. As a result some rolling (b) Is under negotia­ In hand. (b)£P75,000 1947 For three locomotives stock is cut off. Much of tion with a British com­ but more may be pur­ the present rolling stock pany. chased. At present lo­ and locomotives are ob­ comotives are hired at solescent, yet Jordan de­ a cost of about fPlO,OOO pends for its Beirut im­ per annum. ports on this channel to a considerable degree. (c) Has been consid­ (c)fP75,000 1949 Estimate only. Repairs are done in ered, and a site may be > Syria. It has been sug­ available. '"0 '"0 gested (a) that track ('!) from unused lines in t:S Palestine be utilized as ~.... permanent way spares; ~ (b) that new locomo­ tives be purchased; (c) < that a railway workshop be set up in Jordan. N.B. A scheme exists A tentative scheme Further survey will be Not 1949 for the restoration of the only. necessary. known. Ma'an Medina railway. Whole About one-third of this M a' an length (Ma'an to Mud­ Medina awwana) is in Jordan. scheme is estimated to cost £P4,SM.

11 Port of To develop Aqaba, 240 A tentative idea which An economic study of No concrete ?1 fPlO,OOO. June Dredging. Aqaba miles from Amman, as is now being discussed justification and a tech­ position 1949 Jordan's port. It is esti­ by Jordanian Ministers nical harbour survey yet. A study Breakwater cost is not mated that this will re­ and businessmen. The should be undertaken. might determined. duce freight charges as scheme for developing Detailed study has been cost against import via Bei­ Aqaba dates back to its given to some aspects of fPS,OOO. rut, even on goods hav­ use by Feisal and Law­ the problem by a con­ ing to traverse the Suez rence as a base in World sulting engineer on be­ Canal, and that in any War I, and by the Brit­ half of the Jordan Phos­ case most of the ex­ ish on a small scale in phate Co. in 1947. Road penditure will be within World War 11. Since development must pro­ Jordan. then the proposal to ship ceed parallel to the port phosphates via Aqaba work, and locomotives has directed attention capable of the Ma'an­ again to the port and Naqb Ashtar haul must caused studies to be be placed on the railway. -1 made. \0 Jordan (and Arab Palestine) (continued) 00 lv{- 7 0 Estimated time to Name When actual complete U'ork Estimated cost. Serial of Purpose and short descrip· u•ork started (yrs. from No. scheme tion of sch•me Origin and present stage Further surveys rl'qrcired or starting starting date) Amou11t Date Comments (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) ~ 12 Amman This airport is not Recommended by the Technical survey and £P200,000. 1949 Estimate. s· Air­ suitable for large planes, engineering consultants costing of this improve­ ~ port and its improvement to to the Mission. ment will be necessary. a Class D international There is no real eco­ -l:C Cl> standard has been rec­ nomic value at the mo­ "0 ommended. ment in making the air­ 0..., port up to a high .... standard. 6 13 Terrac­ The Jordan Govern­ Projects have been ex­ Survey of the area to Soon. 2 ... ing ment has in mind vari­ amined and suggested by be treated and its de­ 1t= ous terracing schemes the agricultural consult­ termination. ~ both in Jordan and Arab ants to the Mission cov­ (a) Nov. Mission estimate. ~ Palestine, particularly in ering an area of (a) £P 1.6 M. 1949 ~ the Ajlun, Nablus, Tulk­ 105,000 dunums in Jor­ ...... arm, Jenin, and Ramal­ dan and (b) 320,000 0 lah areas. This is in­ dunums in Arab Pales­ (b) Nov. Mission estimate. ~ tended for the develop­ tine (for fruit). £P5M. 1949 tfj ment of fruit growing. ~ 0 14 Affores­ (a) A project exists Projects have been ex­ Further survey and Soon. 2 (a) Nov. Mission estimate. =0 tation for planting out 2,000,000 amined and costed by especially encouragement £P64,000. 1949 ...e seedlings in Jordan. The the agricultural consult­ of seedling production. ~ work is limited by nur­ ants to the Mission. en sery production. 20,000 :::: dunums may be re­ afforested. ~ "< (b) Sowing of seed in s:: an area of 25,000 dunums (b) Nov. Mission estimate...... and planting on 15,000 £P150,000. 1949 "'..... dunums in Arab Pales­ 0 tine. = (;"..., 15 Agri­ In order fully to ex­ In plan only. Apparently design is Not known. Soon £P7,000 1949 First y e a r 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. £P36,000 ...s:: cultivation in the Jordan (Jiftlik). ~ Valley, the Jordan Gov­ ~ ernment proposes certain ('!>- developments in its Ag­ £P2,500 tfj ~ ricultural Department, ( Khadouri). a> e.g., resumption of J er­ icho horticultural station, Khadouri Agricultural £P27,000. ~t School, establishment of (Qabatiya). !l an olive and vine cul­ ture station at Qabatiya, ~ and a horticultural sta­ Olive tion at Jiftlik, citrus and planting vegetable nurseries, and scheme large olive planting £P920,000. schemes in Arab Pales­ tine_ ete_ --ro- vt~·eiop­ sa,e1na-a1 e cnvtsag"'e""a.----· ment of to develop or initiate in­ Agricul­ dustries to utilize the tural products of an intensi- Processing fied agriculture. / ! / '•:-,· ,'/'7 \ Industries 16.1 Soap Nablus has long been Investigation has been Further survey on a In plan ?2 £P500,000. 1949 Factory the centre of an industry made into this question. technical level will be only. at manufacturing soap from It may be that the capa­ necessary as follows: Nab! us olive oil, of which there city of the factory is set ( 1) costing and planning is an export. The indus­ rather high: for such a of a suitable factory ; try is suitable for de­ production over 5,000 (2) research into meth­ velopment by the erec­ tons of olive oil is re­ ods of improving the tion of a modern factory, quired, and the present quality, appearance, and since the oil is a leading annual production is es­ foaming powers of the local product. Such a timated at 7,000-10,000 soap; (3) examination factory, it is thought, tons, of which 4,000 is of sources of caustic might employ 500 per­ for food consumption. soda and the possibility sons and by modern However, it is intended of local production ; ( 4) methods produce 7,000 to extend olive cultiva­ research into export mar­ tons of soap per annum. tion. kets. Capital and tech­ nical management will be needed.

16.2 Sugar A project for a factory It is stated that an The following further In plan 2 or £P4 M. 1949 An estimate only, Factory in the Jordan Valley to American company has study is required: ( 1) only. more. which appears to include treat sugar-cane and made a general survey technical survey in detail some land and irrigation provide a constant mar­ of the possibility of and examination by an costs and wages. "t:!> ket for cultivation in an growing and treating expert of the existing "0 irrigated area of 30,000- the cane. plans; (2) a study of the g 40,000 dunums. Jordan possible utilization of ~ at present imports large by-products from the .... quantities of sugar at economic aspect. ~ considerable cost. The factory capacity is esti­ < mated at 15,000 tons per annum, which would al­ low a surplus for a fruit preserving industry. By­ products would assist the economy in various ways, e.g., molasses in animal husbandry, cane residue as fuel, alcohol for industrial use.

16.3 Fruit Consideration is being Not planned in any Full survey is required Suggestion Process­ given to the setting up detail. Some work, e.g., with a detailed expan- only. ing of such industries in con­ production of samneh sion plan. junction with the devel­ (melted butter) and opment of intensive ag­ olive oil is already car­ riculture. ried on as local or household industry.

16.4 Grape To set up a small This is a suggestion Technical survey will Suggestion Very £P10,000. 1949 Juice grape juice factory on only. be needed as production only. short. Produc­ the Palestine side of the should be on a modern tion Jordan. There is ample system for economy. raw material and a mar­ ket for the product. ~ '""' lJ' er-·? Jordan (and Arab Palestine) (continued) I ) / ~ Estimated time to Name IV hen actual complete work Estimated cost Serial of Purpose and short descriP· work slm"tcd ()•rs, from No. scheme tion of scheme Origin and present stage Further surt•cys rcql4ircd or starling starting date) Amount Date Comments (1) (2) (3) ( 4) (5) (6) (7) (8) (9) (10) s·""j 17 Aqaba To develop these to Fisheries are already in A study of the fishing Operating. I>) Fisheries meet rising internal de­ operation as a private en­ projects and the shark­ mand and possible export terprise. During World oil possibility should be -!:d to neighbouring coun­ \Var II the Palestine made. Further shipping ~ "C tries. Government operated and refrigerated lorries 0 Shark fishing for pro­ fisheries at Aqaba, and may be necessary. duction of Vitamin A some of their installa­ may be feasible. tions have been taken over by the private com­ ~.... panies...... ~ ~ .....~.... 18 Phosphate To expand the mining The Jordan Phosphate Detailed transport, etc. 0 Extraction of phosphate, of which Co. already mines phos­ surveys were made for Cll vast deposits of high phate on a small scale. the Jordan Company by = ~ quality exist at Roseifa, There are two schemes: a British consulting en­ ~ north of Amman, and AI (a) junction of the J or­ gineer in 1947. These (a) (a) Nomi­ 1948 0 Hassa on the Amman­ clan Company with an should be brought up to Unknown nal capital =0 ;\!a'an railroad. Italian company(already date. A chemical en­ owing to of the ....8 achieved), to undertake gineer should examine various Italian­ (") large-scale extraction of further the super-phos­ delays. Jordan raw phosphate. This phate scheme. Joint en scheme involves shipment Company = to Beirut (where at one is £PI.SM. ~ time a super-phosphate paid up ~ factory was envisaged) £P660,000. s:: or via Aqaba to the East, rn.... if markets can be found ....Cll in India, etc.•; (b )a later (b) 0 project to overcome the Unknown. = high cost of transport S"' to Beirut suggests that '"I super-phosphate be man­ ..... ufactured by the sul­ ~=­ phuric acid process in Jordan. s::.... >l.o >l.o ~- ~ 19 Under general consid­ I>) Mineral There are indications A detailed geological Marble 00 Develop­ in Jordan of many min­ eration only, save that survey of the country is now ment erals, including man­ marble of a decorative of importance. being type is now being ganese, gypsum, and exploited. I>)t marble. These might be worked. ::1. exploited. - 20 Cement Cement is of much im­ Two companies have After rectification of Not Not £P.5 M. 1949 An estimate only. ! • Factory portance in Jordan, part­ been formed, one in J or­ any financial and similar known. known. ,• ) ~ : ly owing to the present clan, one in Arab Pales­ difficulties the following building boom and partly tine. A works (sug­ are the needs : (1) tech­ for the needs of irriga­ gested capacity 150 tons nical planning of the fac­ tion development. It is daily) is contemplated, tory; (2) choice of site wholly imported and is but the site is not de­ adjacent to transport expensive, mainly owing cided on, nor are the and raw materials; (3) to transport costs. A companies at the moment capitalization ; ( 4) ar­ scheme exists for the amalgamated. Existing rangements to import construction of a cement capital is not all readily any necessary coal. works. available. In addition, develop­ ment may be necessary in the fields of housing, electric power, and water supply. Surveys in these three fields might cost £P10,000, £P20,000 and £P10,000 respectively.

• In 1947 it was estimated that 300,000 tons raw phos­ would require more rolling stock on the railways. The phate per annum could be produced at Roseifa if £P700,000 southern (Aqaba) route was at one time considered for were spent on development, and 900 tons per annum at AI a ropeway. Homa if £P3 M. were spent. Export under scheme (a)

"C> "Cg ~..... :.< ~

CO tl:l /Jo-2 1 LEBANON CO....

Estimated ttme to Name W he,. tion and for the utilization of the found in various general sultants to the :.'\fission for survey costs. Apart J:d Drainage water which is one of plans for Lebanese de­ recommend continued de­ from the schemes below, Cl> Schemes Lebanon's chief natural velopment, in particular tailed surveys of schemes the Lebanese Govern­ '"C 0 assets. It is clear that in the Gibb Report (re­ of this type. ment estimate a credit '1 the maximum use must port on Economic De­ need of over £L5 M. for be made of water re­ velopment of the Le­ projects in the irrigation­ sources for irrigation, banon, by Sir Ale-xander drainage category. domestic purposes, and Gibb and Partners). ...~.... . the development of elec­ tric power. The propor­ 2. tion of the cultivated land which is irrigated ~...... is not high, and must be 0 raised to allow more in­ ::: tensive cultivation of the "' tlj limited existing area. (') Among the schemes in 0 progress or contemplated =0 are 1.1 to 1.5 below. s..... (') 1.1 Lake This scheme contem­ This was recommend­ Apparently fully plan­ Already Shortly. £L3 M. 1949 Estimated by the Le­ Yammou· plates utilizing the water ed, inter alia, in the Gibb ned, but further study of begun. banese Government for en neh of a lake above the Report. The tunnel is the effect on the water completion. ='1 Beqaa Valley by tunnel­ operating, and some regime of the country ;;j ling and irrigation works are built. may be necessary. ~ works. ss:.... 1.2 South A scheme in two stages \York on the drainage Studies for drainage Stage 1 3-5 in £L4M. Recent w"' Beqaa for drainage of the rich ts well advanced, e.g., are complete, and de­ begun. all. o· but frequently flooded rh·er channelization, gen­ tailed plans, which are Stage 2, ::= lands of the South eral drainage. Irriga­ about half complete for shortly. 0' Beqaa, followed by ir­ tion work is apparently irrigation, can be fin­ .., rigation development, not begun. ished in three months. ... which will utilize river Subsoil water and water =­Cl> flow and subsoil water. rights must be included in the examination. ~..... Q., 1.3 Qasmiyeh A project to irrigate A long - standing Studies are complete, Begun. Shortly. To com­ 1949 Estimate of engineer­ Q., Irrigation the coastal plain from scheme endorsed by the and the remaining works plete, ing consultants : Leban­ -Cl> Saida (Sidon) to 10 km. Gibb Report, this proj­ are mainly secondary £L3 !If. ese Government have a J::j south of Sour (Tyre), P> ect is well advanced. canals and distributaries. proposed credit of £L1.5 (IJ about 4,500 hectares in Construction of some M. all, with water from tunnels and aqueducts is T artesian wells at Ras al finished. '"d Ain and from the Nahr P> al Litani (called near ::1 the mouth, the Qasmi­ yeh). 3,000 hectares de­ '""" pend on the latter. The area is fertile and emi­ nently suited to such cash crops as bananas. 1.4 Akkar A scheme in two stages ·work has already be­ Stage 1 has been Begun. 3-5 £L7.6 M. 1949 /3~ ., ' Plain Ir­ for spring irrigation of gun on stage 1 ; canals studied in detail. Stage -....,/ rigation over 10,000 hectares and from the Bared already 2 will require some fur- summer irrigation of irrigate part of the ther study of stream 5,000 hectares of this Plain. flow, undergroundwater, North Lebanon plain and water rights before from the waters of four it is carried out. rivers: Nahr al Bared, Nahr al Arka, Nahr at Kabir, Nahr at Ostouene. The first stage utilizes the Bared and Arka.

1.5 Tripoli- A project for the utili- Not begun. Plans for the irriga- Not Possiblv £L1.5 M. 1949 Estimate covers part Chekka zation of an underground tion portion of the known. 1-2 years. of the scheme. Project source of water supply scheme are not fully es­ by construction of a tun- tablished and will de- nel, giving first domestic pend on the amount of water to the Tripoli area water development by and then irrigation on the tunnel. the coast south of Trip- oli to a point 4 km. south of Chekka.

"'C:l> 2 Electric Such development is Outlined in the Gibb To be "'C:l Power very necessary, bearing Report. deter­ g Develop- in mind the need to aid mined. Q.. ment agricultural and indus- ~· trial expansion. <

2.1 Lake A project for the in­ The original scheme A detailed survey of Not begun. 3-5 Yammou­ stallation of a hydro­ proposed using the fall generating equipment is neh electric station utilizing after the Y ammouneh required. the fall of water from water project is com­ the Y ammouneh tunnel. plete. The head will be 220 metres.

2.2 Nahr al The scheme is for the Recommended in the Not begun. 3-5 Bared construction of a small Gibb Report but not be­ barrage on the lower gun. part of this river to hold 1 M.m/3 at a height of 235 m., with a canal to a point above the 90 m. level and a power sta­ tion. Estimated capacity will be 7,000 kw. and firm output 3,000 kw.

CO "' eo / ;2) -). j Lebanon (continued) 0\

Estimated time to Name WI Ibrahim to be far advanced. station 3 3 and installation of sta­ l:d tion 2 on the Ibrahim. is ad­ ('!> Station 3 will have a vanced. "'C head of 66 m., maximum ...0 output of 3,000 kw., and firm output of 1,500 kw. T Station 2 requires a bar­ d t:l rage with a storage ca­ ...... pacity of 5M.m/3, and a ('!> canal 12 km. long. It ~ would give firm output of 11,750 kw. and a max­ ...... ~ imum of 23,500 kw. 0 t:l 00 2.4 Lit ani Projects exist for the A detailed hydrolog­ A thorough hydro­ Not Not £L750,000 1949 Estimate of the cost of trj (") River development of the Lit­ ical study of the Litani electric study s h o u I d known. known. study only, by the con­ 0 Scheme ani for hydro-electric has been published have a high priority. It sultant engineers to the t:l purposes. This is the ( E tud c Hydrologiqt~-e, should deal w i t h the Mission. 0 most important source of Abd al AI) and there river as a whole, since s..... the future electrical sup­ is a general feeling that full development of the (") ply of the Lebanon. The the scheme must be pro­ Litani is of great im­ (/). Litani drops 850 m. in ceeded with. portance to the cotmtry 1:l I 00 km. between the ~ Beqaa and the sea, and '< of this 650 m. is con­ centrated in a 40 km. ~..... stretch. Despite major 00"'..... geologic faults, there are 0 numerous possibilities be­ low the Beqaa plain for = dam construction and ...er water storage, and the ..... available power, after :::;" allowing for all losses, ('!> is estimated at 750 m. ~ kwh. per annum. Only ..... a part of the available ~ ...... ~ flow can be used for ('!> irrigation on the coastal trj plain. It has been sug­ ll> gested that with interna­ 1J> tional co-operation some T of the flow, after hydro­ 1-d electric utilization, might ll> provide additional in­ :l come to the Lebanon by ~ being diverted to the Jordan Valley (giving another 550 m. fall to Dead Sea level). 3 :Minor Studies are under way Plans and surveys are Completion of detailed Some £L30M. 1949 An estimate of total Drainage for the general improve­ available for some 800 surveys for schemes, a!- schemes cost. The Lebanese Gov­ /-i')-3J and ment of domestic water km. of pipeline for vil­ location of priorities, and may ernment now considering \Vater supply systems for nu­ lage water supply sys­ ascertaining of availabil- be under a I o w e r estimate for Supply merous cities, towns, and tems. ity of equipment, e.g., way. credits of £16.8 M. Schemes villages of the Lebanon. pipes. Sources of supply will £L50,000 1949 For survey only, esti­ be rivers, springs, wells, m a t e d by engineering and cisterns. consultants to Mission.

4 Affores­ Lebanon is suffer­ No precise scheme ex­ Further survey a n d Part Un­ Possibly 1948 tation ing from the effects ists but the Forestry De­ determination of areas begun. known about of erosion, and should p a r t m e n t has made to be afforested, training £75 per be restored to its previ­ studies and devised some of supervisors, solution hectare. ous position as a great schemes. Some Gradoni of the goat problem, and forest area and timber terracing and sowing of a proper forest policy producer. A start could cedars by plane has been are all necessary. be made with the 8,000 carried out. hectares of the Mount Kneisse area.

5 Khalde Construction of a first Work started in 1948. In p r o g r e s s. This 1948 4-5 £L30M. 194S Airport class international air­ 0 n e main runway is scheme may not be of upwards. port south of Beirut, to partly completed. This the same economic im­ receive aircraft of the runway may be finished portance as water main airlines. by February 1950. The schemes, but it would be airport will then still re­ wasteful not to complete quire lights, alternative it now. ~ runways, and buildings. '"0 Much levelling has been l't> done. =Q.. ~· 6 Beirut To enlarge B e i r u t A private development Further survey is nec­ Not begun. £L70M. 1949 Harbour P o r t , w h i c h handled scheme of the company essary, especially of the < 763,000 ton s imports, which operates the port. economic justification in and 96,000 tons exports, view of plans for other in 1948. It is proposed Middle East ports. to enlarge the port area substantially by the ex­ tension of t he m a i n breakwater and the ad­ dition of a new eastern jetty. Beirut traffic to­ day is large, and the 1948 import figure was 80 per cent more than that for 1947. This may however be due to the closing of the H a i f a route to the Arab coun­ tries, especially Jordan.

7 Road The r o a d system of Under way. Special Already in £L6.5 M. 1949 Lebanese Government Develop­ the Lebanon is g o o d , projects concern the en­ progress estimate for special proj­ ment though it is not perfectly trances to Beirut a n d (e.g., ex­ ects only. a I i g n e d for economic Tripoli, boulevards, etc. tensive n e e d s . A modest pro­ works on gramme of maintenance, Beirut­ improvement and exten­ Damascus CO sion is contemplated. road). -l CO /JJj .. J_~- Lebanon (continued) CO

Estimated time to ~\~a me IV hen adual complete u•ork Estimated cost Serial of Purpose and short descrip­ tvork started (srs. from ------~vo. scheme tio" of scheme Origin and present stage Further surz.'eys required or starting starting dale) Amo~ been drawn up. recommend a general in­ ment to assist in preserving trj its economic balance, dustrial survey. provided markets can be 8 found. ....~ 10 Super­ A factory in Beirut to This was projected by The project appears to Apparently 3 £L6M. (') the I t a I i a n Company Phos­ produce 300,000 tons of be in abeyance and trans- in abeyance en phate super-phosphate annual­ which came to an agree­ portation c o s t s render at the ::: Factory ly. ment with t h e Jordan taking out of raw phos- moment. Phosphate Co. phate from Jordan, at ~ least 1:ia Beirut, a mat- '-< ter for considerable ex- ...... ~ amination from the eco- rn nomic angle. (I;...... 0 11 Govern­ Various projects exist A programme is under Not known. £L19 M. 1949 =..... ment for the construction of a consideration by the Gov­ 0 Build­ presidential palace, law ernment. ...., ings courts, schools, govern­ ;. ment centres in holiday ~ resorts, new Ministry offices, a modern prison, ...... ~ etc. Q.. e:: ~ N ate: In addition, schemes exist for the extension of the existing thermal plants at Beirut and for the inter-connexion of all stations on a grid system. trj 1:0 T"' ~ ::1. 1-4 SYRIA J /3 __. .~. __ ,s..' ·•.. • '- < \.1 J Estimated time to Name Whi!n actual complete work Estimated cost Serial ut Purpose and short descrip­ work started (yrs. from No. scheme tion of scheme Origin and Present stage Further surveys required or starting starting date) Amount Date Comments (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Jezireh Develop­ ment

1.1 Expan­ Development, partly The area was ex­ Investigation of such Could start 4 £S40M. 1948 Expenditure would of sion by mechanical cultiva­ ploited for some cereal matters as land tenure, at any course be reduced in of Culti­ tion, of 1 to 1.75 M. growing during the war. soil surveys, r a i n fa 11 time. proportion to the area vation acre s non-cultivated Since then development tests, and the like. developed. cultivable rain-fed land has been advocated in in the Syrian Jezireh. various reports. A def­ inite or immediate plan does not apparently ex­ ist.

1.2 Road There a r e no r e a 1 Not begun or planned Detailed engineering Not known. 5 £S23 M. 1947 Based on an estimate Develop­ roads in this area, and in detail. planning of roads, tak- of £530,000 per km. for ment in road construction must ing the economic justi- construction, plus recon­ "0> the proceed parallel w i t h fication into account. ditioning, etc. Mainten­ "0 Jezireh agricultural de v e 1 o p­ ance may be £5500 per ::s~ ment. Probably r o a d s km. per annum. ~ from Raqqa to Tel Abi­ ~- ad, Hassetche to Ras-al­ Ain, Qamlichiye to Tel Kotchek, and Mayadine < to Abu Kemal would be necessary ( 600 kms.) .

2 Irriga- tion and Drainage Schemes

2.1 Khabur Irrigation of an area Originally planned by Further study of re­ 1947-48 on Sor £S3.5M. 1949 River up to 83,000 acres with the French Mandatory maining canal areas and present longer Irriga­ the waters of the Kha­ Authority b e f o r e ·the soil survey. These sur­ scheme. tion bur River, an east bank war. The scheme is cov­ veys may c o s t up to tributary of the Euphra­ ered in the Gibb Report £S50,000. tes. This is planned in (Economic Development eight steps of which one of Syria, by Sir Alex­ was completed for As­ ander Gibb and Part­ syrian resettlement be­ ners). Some work is fore the war. The proj­ already done. ect connects with scheme 1, as the irrigable area is partly in the J ezireh. ~ I,., l. ) '7 Syria (continued) 1.0 , .7 • ' - ••• I 0

Estimated time to Name IV hen actual complete work Estimated cost No. of Purpose and short descriP· work started (yrs. from ------­ S N'ial se he me lion of scheme Origi" and present stage F14rther sun:eys required or startitJ.g starting date) Amount Date Comments ~ (1) (2) {3) ( 4) (5) (6) (7) (8) (9) (10) .... ll> 2.2 Eu- To irrigate substantial Two schemes exist-a May have reached a Not First £S40M. 1949 Includes construction ...... = stage when contracting known. phrates areas on the banks of large-scale project pro­ scheme (larger of canals, v i 11 a g e s , ~ River the Euphrates by the use viding for irrigation of could begin. But further 3. scheme). pumps, etc. (an esti­ ~ 'd of large pumps. land to suit the needs surveys of all the Eu- mate). 0 of 200,000 persons in the phrates schemes are rec­ 1"1 Deirez-Zor/Abu Kemal ommended, by the engi- 2.2a Pump area; and a scheme on neering consultants to Second £S20 M. 1947 With 2.2b. Irriga­ a smaller scale. The first the Mission, at a cost scheme 1 tion, is pI a n n e d in detail. of £S 500,000. 6...... = T h o u g h n o t begun, ~ Deir-ez­ ~ Zor/Abu works could be started Kemal early. ~ ...ll> 0

2.2b Eu- Irrigation of v a 11 e y Recommended in Gibb Not Not £520 M. With2.2a. "'= ~ phrates lands from a weir in the Report as follows : stage known. known. <:':> Valley­ Halabiyah Gorge. 1, detailed investigation 0 Hala­ for s i t e of derivation 0 biyah weir; stage 2, execution = Weir of weir and first stages s.... of irrigation; stage 3; <:':> extension of irrigation en system. -= ~ ~ ;:::: French engineers have 2.3 Orontes A project to drain the An agricultural study Possibly 6 Over 1949 ....m Valley G h a b marshes in the completed a detailed sur­ and a soil survey have soon. £S4.5 M. "'... Schemes Orontes Valley and in­ vey as recommended by still to be made. 0 stitute controlled irriga­ the Gibb Report, cover­ = tion. The project should ing the engineering as­ 0' 2.3a Ghab produce a large area of pects. The Syrian Gov­ £S100,000 Nov. Survey only. 1"1 Drainage new land for cultivation ernment intends to pro­ 1949 ... and grazing. ceed with this scheme ::r mainly for cotton grow­ ~ ing. ;::::... ~ ...... ~ ~ 2.3b Canals A considerable area­ General plans only ex­ Further survey must Not ~ Not iS4.5 M. 1949 ll> from possibly 40,000 hectares ist. be made in detail. known. known. the -might be irrigated by "' Orontes new canals f r o m t h e £S50,000 Nov. Survey only. 0 r o n t e s upstream of 1949 Acharnee. ~ ::t....

2.4 Yarmuk Irrigation f r o m the More or less complet­ Outstanding w o r k Almost £5340,000. Nov. For completion. (Mzerib) Yarmuk to deal with ed, but there may be fur­ should be surveyed and corn­ 1949 Scheme 3,000 hectares. ther works to be carried completed. plete. £510,000. Nov. For remaining techni­ out. 1949 cal surveys. ·)j . 2.5 Minor 1 Gib b Report recom- No surveys have been Not begun. Not r£S1 M. Cost of survey might l ._!,)- J ( Drainage/ mended a detailed sur- made but detailed tech- known. be £S20,000. Irriga- vey of all three projects, nical survey will now be tion and the proceeding with required. Schemes 2.5b thereafter. All these schemes are 2.5a Awai principally drainage River projects.

Swamps known. Figure is cost of survey. Cost of survey 2.5c Barada might be £S20,000. River £S1 M.

2.6 Qouaik A project for drawing About 60 per cent of Further technical Now in Less £S2 M. Nov. Marshes off water to irrigate the canal construction study of the later stages progress. than ( comple- 1949 (Madkh some 15,000 hectares, for this project is al- will be required. 2 tion of Swamp) and limitation of the ready completed. years present swamp area etc. for stage) pres- £SS M. ent (later Cost of technical sur- stage. stages). vey is £550,000.

3 Electric ] Power Further survey of all Not Stage 1 Possibly A survey may cost '"0~ Projects these schemes in techni- started. S-6. about £S200,000. @ . . . cal detail will now be re- £S100 M. e: 3.1 Euphrates ConstructiOn of a bar- Str Alexander G 1 b b quired. >< Barrage rage on the Euphrates and Partners have sur- ~ (Yusef at Yusef Pasha, to pro- veyed the site and pre-l -

Estimaied time to ~ l\~ame When actual complete work Estimated cost SN"ial of Purpose aud short descrip· work started (yrs. from No. scheme tioH of scheme Origit~ and preset't stage Further surt.·c:ys required or starting starting date) Amount Date Comments ~ (1) (2) (3) ( 4) (5) (6) (7) (8) (9) (10) ..... 4 Aleppo To provide domestic General plans and es­ Contract and detailed Possibly 4 (for £S12 M. Nov. Aqueduct as stated. e.= Water water for Alcppo, and timates were made in the specifications for the in six whole 1949 l:d Supply also irrigate 20,000 acres Gibb R e p o r t , and a aqueduct should now be months. ~cheme, Cl> "C in the area. The scheme French firm of engineers prepared. possi- 0 includes a lift from the h a s prepared detailed blv less ..."f Euphrates, an aqueduct, specifications. The Sy­ for £S28 M. 1949 Whole water supply purification plant, etc. rian Government desires acque- scheme. to proceed with the con­ duct as b struction of the gravity plan- =...... Cl> section of Euphrates­ ned). ~ Aleppo aqueduct (73 km.). ~ Ill...... 0 t/J Possibly 1949 A general estimate. = 5 General Domestic water sui?­ All these p 1a n s are A detailed survey will tlj \Vater plies throughout Syna recommended in t h e have to be made and about 1':) Supply are unsatisfactory. Cer­ Gibb Report; many mi­ plans drawn up. £S30 M. 0 Schemes tain areas suffer from nor schemes are adum­ £SIOO,OOO Nov. Cost of survey. = p e r en n i a I shortages, brated, and could be de­ 1949 s.... e.g., t h e ] ebel Druze, veloped. Cl> Hauran, etc. Increases of present supply, exten­ en sion of the distribution = system, or investigations j for a new supply have been suggested for a::.... Horns, Hama, Latakia, 00 and Damascus. Develop­ ....00 ment of supplies in rural 0 areas will be necessary. 0'= "1 ;. 6 Terrac­ Terracing for the util­ T h i s programme is E x a c t definition of Soon. 2 £S24.7M. Nov. Consultants' estimate. Cl> ing ization of poor land for recommended by t h e area to be terraced. 1949 olive and vine growing agricultural consultants a::.... is v e r y necessary. A to the Mission, as an ~ programme of terracing Arab refugee works ~...... 850,000 dunums is envis­ project. Cl> aged. tlj Ill ....t/J Afforest­ 7 Large areas of Syria, T h i s programme is Further planning will Soon. 2 £S82,000. Nov. Consultants' estimate. Ill~ ation unsuitable for cultivation recommended by t h e be necessary, and a full- 1949 ::1 or fruit growing, should er forest programme, to- agricultural consultants ~ be planted under forest to the Mission, as an gether with education of trees. Planting of seed­ Arab refugee w o r k s public opinion, will be lings is restricted by project. required. lack of nurseries, but the sowing of seed on 20,000 dunums is envisaged. 8 Railway T h e present railway Recommended in t h e Extensive technical £S2.5M. Nov. Estimated cost Develop­ system does not serve Gibb Report as set out surveys a n d alignment 1949 of surveys. ment the country we 11. Da­ herewith. will be required for all mascus a n d the south railway projects.

J} : "'~" . h a v e no through rail connexion with Aleppo and the north. (The on­ ly method is to travel by the 105 cm. Damascus­ Beirut line and change to the standard gauge line at Rayak in the Lebanese Beqaa.) The links between the west, and Iraq and eastern Sy­ ria, pass through Tur­ key. Suggestions have been made for a direct I i n k w i t h Baghdad, along the line Damascus­ Ho m s-Palmyra-A b u K em a !-Baghdad. The Jezireh must be served by a line further north (Aieppo-Raqqa-Deir ez Zor). 8.1 Damas- A 200 km. line from The Gibb Report rec­ Detailed investigation Not begun. Not £S28 M. 1947 cus- Damascus to Horns. ommends investigation as above. known. > Horns ~ and execution at an ear­ ~ ly stage. ~ 8.2 Aleppo- If development of La­ As above. As above. Not begun. Not £S34 M. 1947 =~..... Latakia takia port is decided on, known. :-1 a 220 km. line to Lata­ kia. ~ 8.3 Aleppo- 200 km. line to Raqqa The Gibb Report rec­ As above. Not begun. Not £S31 M. 1947 Includes a Euphrates Raqqa on the Euphrates. ommends investigation known. bridge costing £S5 M. at an early but comple­ tion at a later stage. 8.4 Raqqa­ To open up Jezireh, a This is recommended As above. Not begun. Not £S44 M. 1947 Hasset­ line of 310 km. for later survey and still known. che- later completion by the Tel Gibb Report. Kotchek 8.5 Raqqa- To open up Jezireh Suggested for I ate As above. £S41 M. 1947 Deir and Euphrates Valley, a survey and execution in ez-Zor 290 km. line. the Gibb Report. 9 Port Development of Lata­ This project was rec­ Tenders must be call­ Less £S8.5 M. Nov. Stage proposed by Develop­ kia as Syria's deep-wa­ ommended in the Gibb ed for based on prelimi­ than2 1949 Mission. ment ter port. (Tartus and Report and this firm has nary plans. While this for stage Banias are also possibil­ made some studies at is happening, a study to pro- ities.) Syria has no first Latakia. This scheme clarify the economic jus­ posed by class deep-water port may go forward. Plans tification of the improve­ Mission; within the State. Plans now e x i s t for better ments should proceed. possibly for improvement include warehouses, a n d other (Pipeline developments '4inall a main breakwater 1,500 facilities. The engineer­ may result in the expan­ now. m. long to enclose the ing consultants to the sion of Tartus and Ba­ roadstead, a subsidiary Mission propose build­ nias.) About 10 £S28 M. 1949 Full scheme. breakwater, quays, etc. ing part of the break­ months \0 water as a works if begun ~ scheme. now ''' \0 , .... ,!If Syria (continued) 10:.

EstimaJed time to Name I¥hen actual complete work Estimated cost Serial of Purpose and short descrip­ work started (yrs. from No. .scheme tion of scheme Origin and present stage Further surt'CYS required or starting starting date) Amount Date Comments "':j (1) (2) (3) ( 4) (5) (6) (1) (8) (9) (10) s· 10 Road The Syrian road sys­ T h i s development is A detailed engineering Soon. 2 (on £S35-40 M. 1948 Technical survey may a. Develop­ tem is adequate, but re­ recommended in t h e survey will now be nec- short- The cost £SZOO,OOO ~ ment quires improvement of Gibb Report, and certain essary. term short (1) 't:l surfacing, in easing roads were suggested by schemes). term 0 c u r v e s, and widening. the engineering consult­ schemes '"I An addition of about ants to the Mission as out of 1,100 km. is, however, works projects for Arab this may T contemplated. refugees. cost Nov. ~ £S20.8 M. 1949 ...... (1) ~ ~ ....~..... 11 Airports (a) The airport at This is recommended Contracting specifica- Soon. Within £Sl.8 M. Nov. Consultants' estimate. 0 tion and commencement 1949 (Larger estimates for Mezze, near Damascus, as a refugee works proj­ two m is well situated and al­ ect by the engineering of work. years. more extensive schemes = exist.) ~ ready carries much in­ consultants to the Mis­ (1) ternational traffic. It re­ sion. 0 q u i re s improvement, 0 however, and schemes = are in hand to lengthen s..... the runways and t a x i (1) en tracks. c: ~ '< a=..... (b) Internal airports Landing grounds exist More detailed techni- £S50,000 Nov. Estimated cost of a m CIJ..... are required at least at but much improvement ea! study is now re- 1949 reconnaisance report. 0 six points. is needed. quired. =.... 0 '"I s:- (1) 12 Telecom­ (a) Installation of the A contract has been 1948-1949 £SIO M. May The Gibb Report en­ mumca­ automatic telephone sys­ given and the Damascus (about). 1949 visaged an expenditure a=..... tions tem at Damascus, Alep­ exchange is complete. of £S32 M. in all. ~ Develop­ po, Horns, H a m a and ...... ~ ment. Latakia plus a network CP of circuits. ~ ~ (b) Construction of CIJ t w o broadcasting sta­ tions. T ~ ::!. ~

13 Indus­ S y r i an industry is The engineering con- An industrial survey £5200,000 Nov. Survey only. trial growing, and the expan­ sultants to the Mission should now be under­ 1949 Develop­ sion of cement and cot­ suggest an industrial taken. ment. ton works seems desira­ survey. ble. 14 Public An ex t e n s i v e pro­ Several plans exist. Detailed p 1 a n s a n d £S70M. 1947 -~>, ,.. ,,,.- I Build­ gramme of public build­ costing should proceed. I ings ing appears justified in Syria. Plans or require­ ments include: a pres­ idential palace, a Prime Minister's residence, three :Ministries, a Par­ liament library, courts, official buildings of vari­ ous kind s, hospitals, schools and colleges.

> NoTE "0 "0 ('!) t:S It will be remembered that in additon to the partial duplication of the now closed Haifa line) ~.... above projects many developments are occur­ and the M.E. Pipelines Ltd. line from Abadan ~ ring in the sphere of utilization of oil resources, and Kuwait to Tartus, together with refinery ~ which is controlled by private companies. The con­ developments, are all either just completed, in struction of pipelines is a development of a special hand, or likely to begin soon. These lines may sort in that it affects several countries at once. make a substantial difference to the economy of The Tapline from Saudi Arabia to Lebanon, the countries through which they pass, as well as the I.P.C. 30 inch line from Kirkuk to Banias in increasing the oil royalties of the producer States. Syria, the duplicate I.P.C. line to Tripoli (and

\0 1:11 APPENDIX V

Description and Preliminary Estimates

Pilot Demonstration Projects

Members of the Economic Survey Mission have of their waters which will fall to Jordan may take conferred with government officials in Jordan, time to decide. Arab Palestine, Lebanon, Syria, Iraq, Egypt and There are no such difficulties, however, with Israel, and the technical staff has inspected sites the waters of the wad is as they belong to Jordan for development in all of these countries with the alone and, even if the major irrigation scheme exception of Iraq and Egypt. As a result, areas from the Jordan and Yarmouk 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 programmes are already under way, obtained by storage of the winter floods much of and plans are either completed or are being made which now pours down them from their catchment by the respective Governments for further expan­ areas to the Jordan River unutilized. sion of their programmes. The type of project Irrigation is done at present almost entirely selected in the other countries varies, yet there are from the series of 9 or 10 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 population. Zerqa is one. The drainage basin of the Wadi Each deals with an area as a whole, will require Zerqa is the largest of all the wadis east of the the effort of many people, and will serve in the Jordan River. 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 varying nature of the projects south, is about 2,100 square kilometres or 810 each country or area is discussed 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 largely of barren hills, with steep denuded time required for completion of each of the pilot slopes. Only small areas on the valley floor are at demonstration projects. present irrigated and about 30,000 dunums in the Jordan Valley itself are irrigated annually by the Jordan uncontrolled flow of this wadi. Although water is 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 greatest land flows and permit the use of that water during the asset in Jordan for development under irrigation dry season for irrigation and water supply. So at farming. Rough estimates have led to the belief present a great part of the annual flow finds its that some 375,000 dunums1 of land in the valley way to the Jordan River and thence to the Dead are irrigable. Of this total 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 completely as a unit, that is, to construct the neces­ seem to be known. Only a small proportion of the sary roads into the area ; to provide water for land is intensively cropped, and it is probable that perennial irrigation 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 principal 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 possibility of developing planting of fruit trees where this seems to be the Valley to the full extent which the combined feasible. A central village is also to be included waters of the Rivers Jordan and Yarmouk and as part of the development in order to provide the several wadis \Vill allow. Surveys to determine adequate housing facilities for construction work­ these possibilities have already been carried out. ers and in the future to partially satisfy the per­ Other neighbouring States have rights in the manent housing requirements in the area. waters of these rivers and agreement on the share In order to conserve the waters of the \Vadi Zerqa a dam will have to be constructed, probably 'A dunum is one-fourth of an acre in area. immediately upstream from the Sueleh-J crash

96 Appendix V JS~ 91

road-crossing. One year of stream flow records is is a waste of opportunity in the use of an asset a.vailable2 and maps to a scale of 1 :50,000 cover such as Jordan does not possess elsewhere. The the entire area. As seen from the J erash road the valley lies some hundreds of fe~t below sea level wadi flows in a deep valle;:. An appa~ently sound and its agricultural produc~ ;s ready for the dam site is located approxtmately 1 ktlometre up­ market well in advance of stmtlar produce from stream from the highway bridge. Rock outcrop the surrounding areas. It can thus seize the ad­ (apparently of hard sandstone) w~s observed on vantage of high prices which an early market the right bank and rock outcroppmgs ~oul~ also usually possesses. be seen on the opposite bank. No geologtcal mfor­ It is proposed, therefore, if a major irrigation mation on the dam site is available at present, and scheme should materialize, and even if only the additional topography for the si.te and res~rvoir waters of the wadis should be fully developed, to would have to be obtained. In vtew of the made­ convert to the maximum degree possible the pres­ quate information available ~bout th~ ~tream flow ent cereal-growing economy in the valley to one and the silt content of Wadt Zerqa, tt ts proposed of intensive cultivation of much more profitable that the dam be constructed initially to a minimum crops which may be ( 1) industrial, such as sugar­ height with adequate provision for a .future in­ cane and cotton, or ( 2) food crops, su~h as. ve~e­ crease in height. The final top elevatwn of the tables and fruits or ( 3) forage crops tf datrymg dam can only be determined after a record of should prove a profitable introduction, or ( 4) several years of stream flow and silting has been more probably all these aspects combined. obtained. From the information now available a It is only by research and experiment that a dam approximately 35 metres high should provide sufficient capacity for the initial operation of the final decision can be taken as to the most profitable project for a period of about ten years. It seems lines on which to develop the agriculture of the quite possible that in the future the dam may Jordan V alley and to. utilize the valua~le waters have to be raised by as much as 10 metres. of these wadis and nvers to the maxtmum ad­ The dam should be of the rock-fill type with an vantage and efficiency. impervious random-rubble masonry upstream face, The present Wadi Zerqa project is of great im­ backed by a layer of hand-laid rock-fill, while the portance to the future of this area. It has bee? lower portion of the dam may be dumped rock. conceived with the threefold purpose of expen­ A competent geologist should be employed dur­ ment, demonstration and development. Th~ ~rst ing the construction of the dam and the construc­ aspect wil.l determine h

Zerqa. For such work very littl~ expenditure ;-vill supplies for homes in all the cities, towns and vil­ be involved. Special buildings w1l_l not ?e req~1red lages-power to incre~se pumped water ~upply as accommodation can be prov1ded m ~ encho. for irrigation and provtde .for the preservah~n. of The specialist agronomical staff ~t the W ad1 Ze~qa food thus enlarging agncultural opportumtres, station can conveniently supervtse the field tna~s and finally power for industrial expansion to pro­ which would be the responsibility of the agn­ vide more jobs for more people. cultural staff appointed for the development of The Litani River is in fact the key to the future the area. of Lebanon. Some 80 per cent of its total drain­ The desirability of adding to present knowledge age area of 2 168 square kilometres is above the of the agricultural possibilities of t~e area before 800 metre co~tour. The average annual rainfall determining the final system of agnculture t~ be in the basin is about 690 millimetres or 27 inches. adopted will not hold up development meantlJ?e. In its lower course, after it leaves the Beqaa Plain, As already indicated, sufficiet;tt. ~~owledge extsts the Litani River drops from an elevation of ~SO of fruit and vegetable posstbthttes to w~r~ant metres to sea-level in a distance of about 100 kilo­ development on those lines, as soon as at; trn~a­ metres. The steepest drop of about 650 met.res tion supply becomes available .. The final mtenstty occurs in a river distance of only about 40 ktlo­ of cultivation to be adopted will depend, how.ever, metres. both on the quantity of irrigation water avatlable On the lower reaches of the river below the and the actual crops to be grown. In view of ~he Beqaa Plain, there are numerous possibilities ~or close proximity of the area to Jericho the growi!1g construction of dams, although there are maJor of forage crops for dairy .ammals, cou~led w1th geologic faults in the area. It seems entirely feas­ fruit and vegetable productiOn, may readily prove ible that sufficient storage could be developed to be very profitable. below the Beqaa Plain to regulate the flow of the The extent to which the catchment area of the river. This is important. It means tl~at, depen~­ Wadi Qilt requires treatment against soil erosion ing upon a more complete study, ~here JS the possJ­ and silt deposit has to be determined by survey. bility that between the Beqaa Plam an.d the c<;>astal The locality is particularly devoid of trees an~ strip the stored water would be su~ctent to ms.tal vegetation. A policy of afforestation and of sml in the neighbourhood of 200,000 ktlowatts, whrch coverage and fixation will be adopted in so far as could produce 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 Beqaa Apart from the educational merit of this project and the hend where the river turns sharply west as an object lesson of how other similar natural resources should be utilized and developed, its from a general southerly di:ection, appro::-imately execution will provide for the permanent settle­ 150 000 kilowatts of capacity could be mstalled ment of a number of homeless people, since the that might reasonably produce an estima~e.d 550 million kilowatt hours per year. In addttwn to land to be developed is State domain. \Vhether this area can ever be developed satisfactorily or the generating of ele~tric power the wa~er in stor­ economically by other means is open to doubt. age would be far m excess of posstble water Irrigation is essential. The possibilities of develop­ requirements for the irrigable area along the coast from Tyr to Saida. ing sub-surface water supplies, which are under examination at present, do not appear to be excep­ The hydro-electric projects could be loca~ed tionally good, whilst the difficulty and cost of within easy transmission distance from the maJor irrigation by pumping from the River Jordan cities of Lebanon. The straight line distance (from would be great. From the point of view of alterna­ the nearest dam site) to Beirut is only between tives, therefore, the present project has much to 40 and SO kilometres. Hence, the importance of commend it as the best method of developing this the Litani; its full development could provide area for habitation and cultivation. electric power for 250,000 customers, rou.ghly four Through such a unified development programme times the present number, each const.Immg 2,000 the watershed of the \Vadi Qilt would serve as a kilowatt hours per year or approxunately fi':e pilot demonstration project for the further de­ times the present residential c

a complete study of this river. The study should flood and mtmmum flow records, would be es­ deal with the watershed as a whole, in order that sential. The determination of the design flood its full potential may be achieved. If the river is should also be carefully computed, for upon it and developed piecemeal without first planning it as the plan of reservoir operation would depend the a whole, 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 investigations, sites for dams would be determined sites, volume of storage and the capacity of gen­ to fulfil the storage requirements. Preliminary erating units for electricity. The economics of designs for dams would be 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 capacity at and utilization as well as revenues to be derived each site and the reservoir pool levels with both from that source. Finally, it would outline the head water and tail water elevations, would be recommended suggestions for construction with determined. From the preliminary designs, quan­ schedules defining each stage. Such an over-all tities of materials required for the construction of study with specific determination of structures, the project would be computed and a preliminary economics and finance, would clearly define the study 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 backwater 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 V alley is predom­ a study of the reservoir rim to determine the need inantly limestone. Through geologic periods of for sub-surface treatment. Also, any adjustment hundreds of years, it is soluble. There are also in existing highways and relocation of population major geologic faults in the Valley structure which would be determined through this reservoir in­ have resulted from earthquakes in the past. Pres­ vestigation. ent day experience in engineering and geology has successfully overcome these obstacles through new equipment, and techniques in foundation explora­ 5. Silt investigations tion and treatment. In the Tennessee Valley, for An estimate of the rate of silting based on an example, extremely difficult limestone conditions investigation carried out during periods of high were overcome in building the large TVA dams. stream flow would be undertaken. Terracing, Geologists experienced in investigating founda­ check dams, afforestation and other measures tions for 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 carried out by such experienced allowance would be made in the storage recom­ personnel should include a regional investigation mended to care for the effect of siltation. embracing the entire watershed 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, geologists should investi­ to the individual dam sites the number and loca­ gate the possibilities for power tunnel location, as tion of the units of the system would be defined well as the location for the 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 project would be included. These schedules would become an integral part of 2. Hydrology a11d meteorology the unified development report.

A complete review of the basic hydraulic and 7. Estimate of cost meteorologic data, including rainfall and run-off records, storm records, average flow records, Estimates of cost for each dam would be m- Appendix V 101 eluded, giving in detail the cost of land and land Syria acquisition, highway location, the dam, diversion and spillway tunnels, water conductors, power In the development of Syria's two basic re­ facilities and the total cost. These estimates would sources-land and water-the Ghab Valley is giv­ be based on the preliminary designs and actual en high priority. It is one of the country's greatest quantities of materials and equipment thereby potential assets. Located near the centres of large required. population its development could well be the first step in an extensive programme for the economic development of Syria. It is for this reason that 8. Power this area was selected as a pilot resources develop­ Operation of the reservoirs of the system would ment project. be studied and integrated to produce the greatest possible power production. The plan of reservoir THE GHAB V ALLEY PROJECT operation would be outlined in the report. The estimated effect of each reservoir on the potential The Ghab Valley is a large swampy depression system output would thus be determined and de­ in northwest Syria. It starts with the outflow of fined in the report. An analysis of the capacity the River Orontes 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 upstream from Djisr ech Choghour. The Power utilization and marketing studies would length of the valley between these two points is also be conducted, together with a possible rate about 68 kilometres, while the length of the Oron­ structure and an analysis of revenues to be derived tes channel is about 125 kilometres between the from the various rates of classifications. same points. In this valley located within easy access of the more densely populated areas of Djisr ech Chog­ 9. Economics of project hour, Horns, Hama and Latakia, are available some 34,000 hectares of rich lands awaiting recla­ A complete study of the economics of each mation and development. The Ghab V alley is lo­ project of the system would be 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 re­ various stages of construction. For the purpose of sources would be near centres of surplus popula­ the economic studies, the entire cost of the devel­ tion which could assist in cultivation and thus opment would be studied from the point of view directly benefit as the result of such a project. of its contribution first to power supply, second to irrigation and water supply. The benefits would In some remote period a volcanic flow filled up be weighed against the cost of each project and the channel of the Orontes River below Karkour. a determination of its economic feasibility made. Subsequently a great lake was formed. Then with the passing of time sedimentation from the Oron­ The determination of the location of individual tes and erosion from the adjacent mountains filled dams, volume of storage, capacity of generating the lake. The river then created a channel to units, and the plan of reservoir operation are all Djisr ech Choghour and thence followed its an­ basic factors influencing the economics of the cient route through Derkouche and Antioch to the system as a whole. Therefore, the recommenda­ Mediterranean. When the river resumed its flow tion that the entire watershed be studied as a its gradient was flat and as a result it did not whole and a plan for its integrated development create a channel with a capacity adequate for the be evolved. The study and development of such a discharge of the flood waters. Thus the plain plan dealing with a resource of such importance between Sedjar and Karkour became inundated should only be the responsibility of qualified per­ and the fertile lands of the valley floor became a sonnel experienced in dealing with problems of swamp. this magnitude and complexity. The first step in the development of the area would relate to drainage. The entire area has an 10. Engineering for an entire river system annual rainfall of from 600 to 1,000 mms. 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 present in a swampy condition, its watershed requires the special ability of many either part or all of the year, would be, when technicians. It requires the effort of a co-ordinated drained, expected to produce crops. After com­ team of specialists, including geologists, hydraulic, pletion of this first stage and prior to the start of civil, mechanical, electrical and architectural engi­ the second would come research in agriculture, neers, economists, cost estimators, construction water requirements and a comprehensive study of engineers and specialists in the financing of such stream flow and flood control, including a deter­ projects. It is probable that at least a year would mination of the effects of drainage of the Ghab on be required for the complete study. the floods of the Lower Orontes. 102 Final Report-United Nations Economic Survey Mission for the Middle East-Part I

It is proposed to develop this valley completely trot, irrigation and hydro-electric power facilities, as a unit. This will require construction of the an expanded agriculture in the Ghab V alley is necessary roads into the area, the provision of possible. drainage works and canals, construction of a dam, Agriculturally, this area, after reclamation, if studies indicate it essential, to provide a reser­ should 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 ing periods of low flow, and if possible provide an tion in the neighbouring district ; additional source for the generation of hydro­ (b) For the production of raw materials which electric power. A central village is also to be Syria requires for the development of its indus­ included as part of the development in order to tries. provide adequate housing facilities for construc­ After drainage and under irrigation the land tion workers and in the future to partially satisfy should be highly productive and should be suited the permanent housing requirements in the area. to a system of farming by small holdings. Under Through the years a number of comprehensive such a system and providing 8 to 10 hectares of engineering studies have been made of this area by land per holding, the area of 34,000 hectares French engineers and others. The main elements (85,000 acres) should suffice for the settlement of each plan involved first drainage, then flood of some 4,000 families or 20,000 persons. control and irrigation. It will be necessary to determine by experiment The proposals for reclamation included a canal the crops best suited and most profitable under system for draining the swampy area below the conditions which prevail. Possibilities may Acharne, a tunnel at Kfeir for assisting in the well prove to be long staple cotton, sugar-cane disposal of flood waters and regulating works from and oilseeds, all of which are needed for the de­ the Orontes River to the tunnel. To assist in the velopment and expansion of Syria's industries. control of floods the plan included a dam at Fruit growing is unlikely to be a major activity. Acharne to form a reservoir with sufficient capac­ The place of mixed-farming in the economy of ity to store excessive flood waters and then release the area requires consideration. as required for summer irrigation and the possible generation of hydro-electric power. This 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 result 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 provided. Before the start of construction a complete re­ Syria does not at present possess a suitably quali­ view of all past studies should be made, supple­ fied agronomist to conduct these investigations. mented where necessary by new investigations, It is recommended that a first-class agronomist be surveys and designs, and should include a study recruited from abroad for general agronomical of the economics of pumping versus gravity flow research in Syria and a man of lower grade who for irrigation. This pilot demonstration project will also have to be obtained from an outside would then 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 unified development of Through such a unified development programme the valley as a whole and secondly, the imple­ 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 engineering works stration project for the further development of including drainage, highways, housing, flood con- the basic natural resources of that country. Appendix V 103

Preliminary estimate of cost and time required Resource development pilot demonstration projects in the Middle East

TABLE A

Esl!imated cost in U.S. dollars• Agricultural programme- erosion con· Engineering Agricultural troland af· investigation Country Project research forestation atul planning Construction Total Jordan ...... Wadi Zerqa 210,000 420,000b 50,000 4,150,000 4,830,000 Arab Palestine ...... Wadi Qilt 17,000 56,000 28,000 980,000 1,081,000 Lebanon ...... Litani River develop- ment study 250,000 250,000 Syria ...... Ghab Valley 60,000 400,000 250,000 15,750,000 16,460,000 Total estimated cost. .... 287,000 876,000 578,000 20,880,000 22,621,000'

TABLE B

Est. time reqd. Estimated annual finances required in U.S. dollars• for completion--,,.------:::------"(y!.::e.::ar"i's'"-)------::------;- Country Project (years) 2 3 4 5 Jordan ...... •..Wadi Zerqa 2,254,000 2,219,000 119,000 119,000 119,000 Arab Palestine ...... Wida Qilt 1,026,000 17,000 16,000 11,000 11,000 Lebanon ...... Litani River development study 1 250,000 Syria ...... Ghab Valley 5 4,000,000 3,750,000 2,910,000 2,900,000 2,900,000 Total estimated cost. .... 7,530,000 5,986,000 3,045,000 3,030,000 3,030,000

(a) For simplification U.S. currency used as basis of planned for the Wadi Zerqa project and need not be estimate. duplicated. (b) Includes cartographical and agricultural survey of (e) Estimate of construction cost unknown until engi­ drainage area with soil erosion and re-afforestation pro­ neering study has been completed. gramme extending over 5 years. (f) A schedule of financing is not included in the Eco­ (c) It is estimated that the engineering development nomic Survey Mission's report. It should be noted, how­ programme would be completed within two years. ever, that the interim report included work on the Wadi (d) It is estimated the engineering development will be Zerqa and the Wadi Qilt as part of the proposed work completed within one year and the agricultural research in relief programme. Funds available through that pro­ three years. The cost of agricultural research for this gramme would provide for completion of Wadi Qilt con­ project is based on the assumption that similar work is struction and two-thirds of Wadi Zerqa construction. SALES AGENTS OF THE UNITED NATIONS PUBLICATIONS

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