'IRAQ AND THE PERSIAN GULF' [‎313v] (629/862)

488 CURRENCY, FINANCE, COMMERCE, AND OIL
Invisible Exports
The widening gap between the value of visible imports and exports
shown by these figures would have been most serious but for several
factors. The ordinary invisible exports were not large. They com
prised disbursements by the British Government on the Royal Air
Force stationed in Iraq, profits from the transit trade, expenditure
by foreign countries on diplomatic and consular representatives,
money spent by pilgrims, tourists, and visitors, by officials of the oil
companies, and by foreign charitable, educational, and archaeological
institutions. Against these must be counted the invisible imports—
similar remittances to countries outside Iraq, such as the cost of Iraqi
representatives abroad. The balance in favour of Iraq was never
large. But the largest ‘invisible export’ is derived from royalties and
concession rents on oil, which are not shown in the figures given
above, but form a very important source of revenue (pp. 483, 498).
Moreover, in the import figures above is included a considerable sum
spent on the machinery and steel required for capital works such as
railways and irrigation, as well as for the I.P.C. which assists revenue
under other heads.
Since 1938 conditions have been affected by the European crisis,
the war, and perhaps by political and economic uncertainty regarding
the future. As might be expected, there was a rise in the value of
exports up to I.D. 4,181,570 in 1941 and a fall in imports to
I.D. 6,966,320. Later figures must be abnormal, but are not yet
available.
Transit Trade
Before 1914 it was estimated that transit trade with Persia repre
sented half Iraq’s foreign trade. For a short period after the war
Iraq had almost a monopoly of this, because of the Russian revolution
and the virtual closing of the Russo-Persian frontier to trade. But by
1929 the decline of this transit trade with Persia was already marked.
Soviet Russia, through political channels and with State subsidies,
was already a serious competitor. To meet the situation Iraq reduced
transit and port dues and increased railway and other transport
facilities. On the other hand, Persian nationalism began to encourage
direct trade rather than transit trade through Iraq. The result of all
these factors has been a steady fall in the transit of goods through
Iraq to her neighbours, which would have been even greater but for
growth in the direction of Syria, which has been encouraged by the
development of better communications.