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Economic development to 1980


Perhaps the greatest assets of the Ba'th regime were the ambitious plans for reconstruction and development laid down by its leaders. The struggle for power during 1958-68 had left little time for constructive work, and the Ba'th Party sought not only to transform the economic system from free enterprise to collectivism but also to assert the country's economic independence. The immediate objectives were to increase production and to raise the standard of living, but the ultimate objective was to establish a socialist society in which all citizens would enjoy the benefits of progress and prosperity.

The five-year economic plans of 1965-70 and 1971-75 concentrated on raising the level of production in both agriculture and industry and aimed at reducing dependence on oil revenues as the primary source for development. But agriculture lagged far behind target, and industrial development was slow. In the third five-year plan (1976-80), greater emphasis on agricultural production was noticeable, and industrial production slowed.

The nationalization of the oil industry was considered by the Ba'th leaders to be their greatest achievement. Between 1969 and 1972 several agreements with foreign powers--the Soviet Union and others--were concluded to provide the Iraq National Oil Company (INOC) with the capital and technical skills to exploit the oil fields. In 1972 the operation of the North Rumaylah field, rich in oil, started, and an Iraqi Oil Tankers Company was established to deliver oil to several foreign countries. Also in 1972 the Iraq Petroleum Company (IPC) was nationalized (with compensation), and a national company, the Iraqi Company for Oil Operations, was established to operate the fields. In 1973, when the fourth Arab-Israeli War broke out, Iraq nationalized U.S. and Dutch companies, and in 1975 it nationalized the remaining foreign interests in the Basra Petroleum Company.

The initial step in agrarian reform had been taken with the Agrarian Reform Law of 1958, which provided for the distribution to peasants of lands in excess of a certain maximum ownership. A decade later, less than half of the land had been distributed. In 1969 a revised Agrarian Reform Law relieved the peasants from payments for their land by abolishing compensation to landowners, and a year later a new Agrarian Reform Law was designed to improve the conditions of the peasantry, increase agricultural production, and correlate development in rural and urban areas. The results were disappointing, however, because of the difficulty of persuading the peasants to stay on their farms and their inability to improve the quality of agricultural production.

The Ba'th regime also completed work on irrigation projects that had already been under way and began new projects in areas where water was likely to be scarce in the summer. In the five-year plan of 1976-80, funds were allocated to complete dams on the Euphrates, Tigris, Diyala, and Upper Zab rivers and the lake known as al-Tharthar (in northern Iraq). Recognizing that a rapid transition to full socialism was neither possible nor in the country's best interest, the Ba'th provided for a private, though relatively small, sector for private investors, and a third, mixed sector was created in which private and public enterprises could cooperate.


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