This dissertatton has been microfilmed exacUy as received 6 5 -1 3 ,8 8 5 CHALLAH, Muwaffak Chafik, 1931- ECONOMIC DEVELOPMENT AND PLANNING IN SYRIA, 1950-1962. The University of Oklahoma, Ph.D., 1965 Economics, history University Microfilms, Inc., Ann Arbor, Michigan THE UNIVERSITY OP OKLAHOMA GRADUATE COLLEGE ECONOMIC DEVELOPMENT AND PLANNING IN SYRIA, 1950-1962 A DISSERTATION SUBMITTED TO THE GRADUATE FACULTY In partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY BY MUWAFFAK CHAFIK CHALLAH Norman, Oklahoma 1965 ECONOMIC DEVELOPMENT AND PLANNING IN SYRIA, 1950-1962 APPROVED BY _ Q _ ç _ / /yO'^'~vL^ DISSERTATION COMMITTEE To The Memory of My Brother Parouk This Study Is Affectionately Dedicated ACKNOWLEDGMENT It is difficult in a brief acknowledgment to do jus­ tice to all those who have been of assistance in the prepara­ tion of this study. The writer wishes to express his grati­ tude and appreciation to Professor Alexander J. Kondonassis at the University of Oklahoma, who patiently supervised this study, for his sustained encouragement and valuable guidance. Gratitude is expressed to Professors Paul D. Dickens, James M. Murphy, W. Nelson Peach, and James E. Hibdon, who as members of the dissertation committee, have been so kind as to go over this work so thoroughly and to offer valuable advice and constructive suggestions. Deep gratitude is felt toward the many friends in Syria who have been so helpful in ray endeavor. Among them is Dr. Mohammad Imadi, Assistant Secretary General of the Ministry of Planning, whose cooperation and advice have been extremely helpful. Personal acknowledgment is due to Abdullah El-Attrash of the Ministry of Planning, for his assistance in furnishing certain of the original sources used in prepara­ tion of this study. I am deeply indebted to my parents for their magnan­ imity, understanding, and encouragement, without which this iv study would have been Impossible to make. My wife deserves special acknowledgment for her pa­ tience and constant encouragement. TABLE OP CONTENTS Page LIST OF TAB LES......................................... vlli Chapter I. INTRODUCTION 09000000 Objectives Method Sources II. A DECADE OF ECONOMIC GROWTH ........... 7 Area and Population Natural Resources Agriculture Industry Transportation National Income Money and Banking Trade and the Balance of Payments Entrepreneurship Conclusion III. THE HISTORY OF PLANNING IN SYRIA ........ 66 The Early Phase of Studies and Recommendations: 1947-1955 Alexander Glbb's Report The International Bank Mission's Report Planning from 1955 to 1958 The Seven-Year Plan, 1955-1961 Financing the Seven-Year Plan Implementation of the Seven-Year Plan Planning In the Unification Era: 1958-196I The Syro-Sovlet Economic and Technical Aid Agreement The Ten-Year Economic Development Plan Sources of Financing the Ten-Year Plan Comprehensive Planning and the Five-Year Economic and Social Development Plan Conclusion vl Chapter Page IV. THE FIVE-YEAR ECONOMIC AND SOCIAL DEVELOPMENT PLAN ................................ 105 Objectives of the Plan The Investment Program of the Plan Sources of Financing the Plan Functional Classification of Expenditures Agriculture Industry- Transport and Communications Education Public Services Expected Effects on Production, Employment and Income Production Goals Employment Goals Income Goals Conclusion V. EVALUATION OF THE FIVE-YEAR PLAN: REVIEW OF THE FIRST TWO YEARS I96O/I96I - I96I/1962 . ____ . 139 The First Year Plan, 1960/1961 The Investment Program Financing the First Year Plan Execution of the First Year Projects Performance of the Public Sector Performance of the Private Sector The Second Year Plan, 196I/1962 The Investment Program Sources of Financing the Second Year Plan Execution of the Second Year Plan Performance of the Public Sector Foreign Loans and Credits Evaluation of the Five-Year Plan on the Basis of Two Years of Experience The Rationale of Planning Economic Growth in Syria During Two Years of Planning VI. SUMMARY AND CONCLUSIONS..........................199 APPENDIX............. 215 BIBLIOGRAPHY............. 253 vii LIST OF TABLES Table Page 1 . Estimates of Population, Rate of Increase and Density In Syria, I95O-196O 9 2 . Classification of Area Land Use In Syria, 1950 and i960 . ............................ 10 3. Area and Production of Main Crops In Syria, 1950-1960 .......... ......................... 14 4 . Crop Yields In Syria and Other Selected Countries, i 9 6 0 .................... 15 5. Length and Rates of Plow of Rivers In Syria . 21 6. Production of the Main Industries In Syria In 1952 and i960 . ............................ 25 7. Index Numbers of the Production of Major Mechanized Industries In Syria, 1954-1960 . 26 8. Capital of Industrial Joint-Stock Companies According to Type of Industry In Syria, i960 . 28 9. Classification of the Labor Force In Syria According to Sex and Economic Sectors, i960 . 30 10. Industrial Origin of Net Domestic Product of Syria, 1953-1960 36 11. Percentage Distribution of Net Domestic Product In Syria, 1953, 1957 and i 9 6 0 ............. .. 37 12. Estimates of Population, National Income and Per Capita Income In Syria, 1950-1960 38 13. Composition of Gross Domestic Fixed Capital Formation In Syria by Type of Capital Good, 1 9 5 4 - 1 9 5 8 ................................. 39 14 . National Income, Gross Investment and the Rate of Investment In Syria, 1950-1958..... 4o vlll Table Page 15. Gross Domestic Fixed Capital Formation in Syria by Type of Purchase, 1954-1958 .......... 4i 16. Indexes of Wholesale Prices and Cost of Living in Damascus, Syria, I 9 5 1 - 1 9 5 9 ............... 42 17. Number and Value of Loans Advanced by the Syrian Agricultural Bank, 1952-1960 ...... 46 18. Distribution of Commercial Banks Loans According to Economic Sectors in Syria, 1 9 5 4 - 1 9 6 0 ......... 48 19. Deposits at the Commercial Banks in Syria, 1 9 5 4 - 1 9 6 2 ...................................... 50 20. Imports, Exports, and Balance of Trade of Syria, 1951-1960 .............................. 52 21. Imports of Syria, 1952, 1957, and i 9 6 0 ............ 54 22. Exports of Syria, 1952, 1957, and i 9 6 0 ............ 55 23. Indexes of Quantum, Prices and Terms of Trade of Syria, 1953-1960 56 24. Estimates of Syria's Balance of Payments, 1 9 5 7 - 1 9 6 0 ............... 57 25. Proposed Government Expenditure on Development by I.B.R.D. Mission for 1955-1960 70 26. Expected Financial Sources of the Mission Plan, 1 9 5 5 - 1 9 6 0 ................................ 74 27. Actual Expenditure on Projects Financed Outside the General Budget, 1945-1955 76 28. Classified Expenditure of the Seven-Year Plan, 1 9 5 5 - 1 9 6 1 ................................ 81 29. New Public Projects Embodied in the Seven- Year P l a n ........... 84 30. Expenditures on Previously Planned Projects Appropriated in the Seven-Year P l a n ............ 86 31. Loans and Advances to Government Agencies Under the Seven-Year P l a n ...................... 87 ix Table Page 32. Government Sources of Financing the Seven- Year Plan ..... .......................... 89 33. Summary of Expenditure on the Seven-Year Plan During 1955 and 1956 .......................... 90 34. Actual Expenditure on Projects of the Seven- Year Plan During 1955 and 1956 ................ 91 35. Proposed Expenditure of the Ten-Year Plan, 1958-1967 ................................... 98 36. Sources of Financing the Ten-Year Plan .......... 100 37. Investment Program of the Five-Year Plan, 1960-1965 ................................... 109 38. Estimated Sources of Financing the Five-Year Plan, 1960-1965 .............................. 111 39. Estimated Sources of Foreign Exchange During 1960-1965 .................. ................ 113 4o. Classified Expenditures on Agricultural Projects Under the Five-Year Plan ...................... 117 41. Estimated Annual Expenditures on Irrigation Projects of the Five-Year Plan ................ 119 42. Planned Investments in Industrial Projects Under the Five-Year Plan ...................... 125 43. Transport and Communications Projects of the Five-Year Plan ............................... 127 44. Annual Allocation of Government Expenditure Under the Five-Year P l a n ............ ......... 130 45. Production Goals of the Five-Year Plan .......... 131 46. Employment Goals of the Five-Year Plan .......... 132 47 î— Estimated Growth of National Income Under the Five-Year Plan ............................ 135 48. Projected Growth of Population Income, Savings and Consumption Under the Five-Year Plam .... 136 49. The First Year Investment Program of the Five-Year Plan, 196O/196I ............ .... l42 X Table Page 50. Estimated Sources of Financing the Public Sector Projects During 196O/196I ............ 143 51. Implementation of Development Projects by Sectors in 196O/1961 ........................ 52. Investment Program of the Public Sector in the Second Year Plan, 1961/1962 ................ 157 53 . Estimated Sources of Financing the Public Sector Projects During 196I/1962 ............ 158 54. Means of Financing the Development Budget During 1961/1962 ............................ 159 55. Implementation of Development Projects by Public Sector in 1961/1962 .............. 56. Estimated and Realized Sources of Financing the Public Sector Projects, 196I/1962 .......... 163 57. Public Sector Execution of the First Two Years of the Five-Year Plan ................ 171 58. Growth of National Income Components, 1959-1962 . 189 xL ECONOMIC DEVELOPMENT AND,PLANNING t IN SYRIA,