مجموعة ١٠/١٧(١) "شؤون داخلية: الوضع السياسي؛ العلاقات مع الحكومة البريطانية" [و‎‎٣‎٥‎٧] (٩٨٢/٧١٨)

THIS POCDMENT IS THE PROPERTY OF HIS BRITANNIC MAJESTY’S GOYERNMENT
May 29, ^
SectioiI 3.
I 3, 193
\ll I— II II » —
No. 1.
EAS TERN (Iraq).
CONFIDENTIAL.
[E 3526/190/93]
Memorandum respecting British Commercial Interests in Iraq.—{Communicated
by His Majesty's Ambassador at Bagdad; Received May 29.)
PRIOR to the war Great Britain occupied a paramount position in the trade
of what is now Iraq. Of the total import trade of the country the United
[Kingdom’s share was between 45 and 50 per cent., and that of India about 25 per
cent.; while the United Kingdom was also the principal customer, taking some
35 per cent, of the exports. Trade was for the most part in the hands of old and
well-established British firms, such as Lynch Brothers, Gray, Mackenzie and Co.,
and Frank C. Strick and Co., though in the period immediately preceding the war
two or three German firms had made their appearance in Basra and Bagdad and
showed signs of becoming serious competitors. The bulk of the shipping serving
the port of Basra was under the British flag, and river transport, providing the
quickest and most economical means of communication between Basra and
Bagdad, was carried on by the Euphrates and Tigris Steam Navigation Company,
a British firm. Individual British traders (British Indians engaged in retail
trade) were few in number, and their influence on the current of trade was
negligible.
The early post-war period was a time of dislocation of trade in abnormal
conditions, which may, indeed, be said to have prevailed, with a gradual but
insufficiently marked tendency towards rectification, up to the year 1926. In that
year a collapse occurred, and many unsound businesses were eliminated; in the two
succeeding years long overdue adjustments of the country’s economy came about,
and from 1929 onwards a process of consolidation has been in progress, which has
enabled Iraq to face the universal economic depression and the fall in the world
prices of agricultural produce, her principal source of income, without recourse to
measures in restriction of imports, and without disastrous results. In the three
years ending with the financial year 1932-33, Iraq’s total trade, exclusive of
transit trade, has amounted annually to approximately £8,500,000. In these years
the visible adverse balance of trade has varied considerably, but this variation
can be traced to special circumstances. When allowance is made for these the
normal visible adverse balance can be placed at £1,500,000 annually, the normal
visible balance in favour of the United Kingdom being about £850,000.
The United Kingdom’s share of the import trade, though showing a distinct
falling-off as compared with pre-war years, has remained remarkably steady
throughout the post-war period, averaging 35 per cent., with a maximum
percentage of 39- 2 in 1920-21, and a minimum of 26-33 in 1925-26. Her share
of the export trade was not equally consistent, owing to special and non-recurring
conditions, which obtruded themselves from time to time. Normally, it would
stand, in the post-war period, at 20 per cent, of the total. In 1932-33, the latest
year for which statistics are available, the United Kingdom provided 34-92 per
cent, of Iraq’s imports, while taking 37-36 per cent, of her exports. The latter
figure was, however, unnaturally swollen by the export of ^£5004)00 worth of gold,
more than half the total value of Iraq’s exports to the United Kingdom. Imports
from the United Kingdom in that year amounted in value to £2,179,000.
These figures and percentages, satisfactory as they are in themselves and in
comparison with similar percentages in respect of the external tiacle witn me
United Kingdom of adjacent foreign countries, do not by any means fully
represent the importance of British interests, other than political, m Iraq m
general. These other interests are in the main of post-war growth.
His Majesty’s Government are themselves directly concerned with the port
of Basra and the Iraq Railway Administration In the case of the port, then
interest, though gradually decreasing, will not be finally extinguished fo i„ ano e , r
nineteen years. The Iraqi railways are actually the property of His Majesty s
Government, whose ownership thereof will eventually be transferred to a lai way
corporation controlled by a board of British and Iraqi directors, m retur fo
[106 ff—31 B