T. Cliff

The Problem of the Middle East

Part III
The Economic Structure of the Arab East

<p. 116>

Chapter XIII
The Economy of Iraq

Iraq is very different from the rest of the Arab countries that we have discussed. While all these others are feudal agrarian countries which are in the process of transition to capitalism, Iraq is on the one hand in a process of transition from a nomadic to a settled society, and on the other in a process of capitalist construction. In the very same country there are both the gigantic ultra-modern oil enterprises and also hundreds of thousands of Bedouins who live from sheep and goat raising. The settlement of the nomadic Bedouins and the construction of a feudal order in the place of the patriarchal tribal order takes place under the pressure of declining world capitalism which drains the sap from all the feudal surroundings.

The process of agricultural settlement takes place at a time when world agriculture is in a serious crisis, which puts impassable barriers in the way of agricultural expansion and development, and conserves the backward feudal modes of production which prevail in most of the world. Nomadic tribes are incapable of forming the basis of a state or a nation, as the latter demands a fixed territory and the separation of jurisdiction, the police and the army from the people. The settlement of the nomadic tribes, however, takes place at a time of national and political struggle of the Arab people, among them the inhabitants of Iraq, against imperialism. At the same time the existing state is a framework which influences the settlement of the Bedouins. All these processes take place with a framework determined by mighty foreign capital and the mechanised army with its air power and tanks.

The population of Iraq is distributed as follows (according to an estimate of E. Dowson, An Inquiry into Land Tenure and Related Questions, England 1932):–





Wholly Bedouin



Settled Bedouin tribes



Settled village inhabitants



Urban inhabitants






Among urban inhabitants Dowson included only the inhabitants of the three big towns, Baghdad, Mosul and Basra. If the inhabitants of all the towns of over 20,000 people were included the urban population would make up 22 per cent, and the settled village population 22 per cent of the total population. (According to an estimate of Sa’id Himadeh, in The Economic Organisation of Iraq, Beirut 1938, Arabic)

The wholly nomadic and semi-nomadic tribes make up 56 per cent of the population. But they are more and more being forced to give up their nomadic life. The main cause for this is the impoverishment of their sources of livelihood. Thus the rearing of camels became unprofitable when motor cars and lorries took their place as means of transport. Their earnings from sheep raising also declined with the heavy fall in the price of sheep and wool during the world crisis of 1929 and after. Their third source of income, the collection of tolls from passers-by, and robbery, has also nearly vanished with the government’s taking over the full inspection of the main routes by using its most effective weapon – the aeroplane.

From the stage of complete nomadism the tribes are passing over to semi-nomadism i.e. they settle and cultivate the land – growing mainly wheat or barley – for a part of the year, in spring time moving with their flocks far westward of the Euphrates. The next stage is full settlement.

The situation seems like a bad dream with no awakening to relieve it, if we consider present-day, semi- or three-quarters-Bedouin Iraq. The country which was one of the oldest cradles of culture – the Samarians, Chaldeans, Assyrians and Persians – and a centre of the flowering of others – of the Greeks, and more particularly of the Arabs. The question of how the desert managed to swallow up the cultivated land has <p. 117> great importance not only for an understanding of the past, but also to shed light on the present and its problems.

The chapter Feudalism in the Arab East has already given the – reasons for the decline of economy and culture in the Arab East in general. But it has not been explained why in Iraq, whose natural richness is the greatest of all the Arab countries, the decline took on such a cataclysmic form – far more so than in the other Arab countries. Various factors, which cannot here be discussed in full, played their part in this decline: the country was invaded by tribes from the north and south (indeed the Mongolian invasion was one of the main causes of its decline in the 13th century); it was dependent on commercial bonds with Europe which had been broken in the 13th, 14th and later centuries, etc. But there is one focal cause which we shall deal with more fully here, as it has an effect still pressing today: the fact that Iraq is dependent for life or death upon a well-ordered system of irrigation, any hindrance to this injuring the very foundation of the economy and society of Iraq.

But the question may well be asked why Egypt, which is dependent on the Nile, and where everything too is dependent on a well-ordered system of irrigation, nevertheless never reached such a stage of decline that agriculture was ousted by nomads. The answer to this is that Egypt is not dependent to the same extent as Iraq, as the Nile saturates the land before the beginning of winter, and it is possible to plant in well-watered land and reap in spring. On the other hand the Tigris and Euphrates flood in spring, with the melting of the snow on the Asia Minor mountains, and a little while before the very hot season. The floodwaters can therefore not be made use of for agriculture in Iraq except insofar as it is possible to collect them in pools to use at a later period. Otherwise it is possible to make use of the water of the Tigris and the Euphrates only right on the banks of the rivers. And so damage done to the irrigation system in Iraq had much more drastic results than in Egypt.

Today too, the central problem of the development of Iraq is the problem of irrigation. Until today only a small part of the land of Iraq is cultivated, and only a small part irrigated as compared with Egypt, as can be seen from the following table (sq. kms):–






Arable area



Cultivated area



Irrigable area



Irrigated area



Thus while the irrigable land in Iraq is larger than in Egypt by about 50 per cent, the irrigated area does not amount to a third; while in Egypt 68 per cent of the irrigable lands are irrigated, in Iraq only 14 per cent are. And so whereas Egypt has 17 million inhabitants, the population of Iraq does not reach 4 million.

It has been estimated that £37 million has been invested in the irrigation network in Egypt, and its upkeep demands, besides some millions of pounds every year for repairs (the average for 1936-39 was £4.8 million a year), also the work of hundreds of thousands of fellaheen to watch over it, repair the dykes etc.

Iraq has been unlucky. Today world capitalism is not vitally in need of the cotton or the rice which may be grown there, and so the investment of millions of pounds is not profitable for international capital. Whereas English, French and Belgian capitalists were ready to give tremendous loans to Egypt – naturally for decent interest – for the development of her irrigation system, Iraq does not win such attention.

Inner accumulation, the other source of capital essential for the development of irrigation, is also very poor. Firstly the population of Iraq is very sparse; secondly a considerable portion of it is Bedouin, and the standard of production therefore very low (thus even though more than half the cultivated land in Iraq is irrigated, the average yield of wheat per dunam for the years 1925-28 was only 45 kgs as against a yield of 80–100 kgs in, for example, Syria, which too has quite a low yield, and of barley 45 kgs as against 100–110 kgs in Syria); thirdly, before a system of irrigation is developed not only is there no prospect of the wide and flourishing settlement of the Bedouins, but there is also no prospect of raising the standard of production and income of the agricultural population which must bear the expense of the construction of the <p. 118> irrigation network; fourthly the bulk of the income from the exploitation of the natural resources of the country – petroleum – passes into the hands of foreign capitalists, and only crumbs from it remain in the country; and fifthly the state apparatus (bureaucracy, police force and army) takes a very large portion of the state income, and only a very small portion is left for irrigation. Thus during the years 1936/7–1940/1 and average of 246 thousand dinars [1] was budgeted annually for agriculture and irrigation out of a total expenditure of 8,258 thousand, i.e. less than 3 per cent. (How much of the budget for agriculture and irrigation fell into the pockets of various high officials is unknown.)

This parasitic state is not a reflection in the main on the internal relation of forces, i.e. the function of the growth of the forces of production and sharpening of the class struggle which raises the state as a factor which stands apart from and above society but at the same time serves the interests of the exploiting classes against the exploited and is therefore found in a certain proportion to the dimensions of the national wealth, as was the case with the rise out of patriarchal society in general. No, the Iraqi state is mainly a reflection of external, large, concentrated imperialist pressure on a backward, primitive country which is in the stage of transition to the construction of the very skeleton of a state apparatus whose burden is in disproportion to the internal development of the forces of production.

It is evident that those who are compelled to bear this burden of contradictions are the toiling masses.

Further illustration is given here of the depth of the theory of combined development. The settlement of nomadic tribes under conditions of over-ripe and decadent world capitalism is made by skipping over various stages of development, synthesizing ultra-modern and primitive forms, and throwing the double yoke of the past and present on the masses of people.

This is clearly brought out by the character of the class relations created immediately with the settlement of the nomads. In general the settlement of nomads made on the cradle of human history was a very slow process accompanied by a very tardy development of class differentiation. For a long time patriarchal relations prevailed between the tribal chief and his tribesmen who were settled. This is not the case in Iraq where with the very beginning of settlement very deep class differentiation is begot between the tribal chief who becomes a feudal lord and the tribesmen who become serfs.

The depth of class differentiation in Iraq between cultivators and estate owners is clearly shown in the distribution of landed property, and in the distribution of products between land cultivator and landowner.

No cadastre [property survey] whatever has been made in Iraq, and the figures for distribution of landed property are very incomplete, but from the little data there is, it is clear that the concentration of land ownership is even greater here than in Syria or Palestine. There are feudal lords whose estates stretch over an area of tens of thousands of hectares. The district of Muntafik which covers an area of 6,260 square kilometres belongs in the main to one family.

The conditions of land tenure vary much. If the land is wholly private property and watered by the rain, the landlord takes a fifth of the yield, and the sirkal (the foreman on behalf of the landlord over a number of fellaheen) a tenth, the government a fifth, and the fellah a half (of which, of course, a not insubstantial portion goes into the pockets of the usurer.) If the watering is done by flooding, the landlord takes a fifth, the sirkal a fifth, the government a fifth and the fellah two fifths. If the watering is done by machinery, the landlord takes two fifths, the sirkal two fifths, the government a tenth and the fellah a tenth. Thus the higher the quality of the watering the smaller the portion of the tenant in the fruits of his labour.

If the land belongs to the government but the right of disposal to the whole tribe – although it is registered only under the name of the sheikh – the sheikh takes a tenth, the government a third, and the fellah 17/30. On government lands the right of whose disposal belongs to the sheikh, the latter takes a sixth, the government a third, and the fellah a half; if the sheikh also pays the expenses of the seeds, he takes a third, the government a third and the fellah a third. If the land belongs to the sheikh he takes two fifths, the government a fifth and the fellah two fifths. In the last four cases the sirkal’s portion is collected in general from what the fellah receives <p. 119> From this it is clear firstly that only a minor portion of the gross, and a much lesser of the net yield, remains in the hands of the fellah, and secondly, that the more absolute the ownership of the sheikh over the land, the worse the position of the cultivator.

The money equivalent of the net yield which remained in the hands of the fellah after payment to the government, landlord (or sheikh) and sirkal was, according to 1930 prices, between 6 and 8½ dinars. According to other estimates based on 1933 prices, the value of the average fellah’s portion is 6½ dinars in the districts of the north, 9½ dinars in the central districts and 9–12 dinars in the south. (In comparison with this, a calculation made for some districts puts the average income of the sheikhs at two thousand pounds per year and that of the more notable among them at tens of thousands per year.) We must not forget that a not insubstantial portion of the fellah’s income goes into the pockets of the usurer. While the debt burden of the fellah to the usurer was estimated in 1930 at £30 per family, that of the Iraqi family amounts to £45 per year, while the average annual income is much lower than that of the Palestinian fellah.

In the face of the sparseness of the population and the lack of working hands, the problem of eviction does not confront the fellah. On the contrary the landlord is anxious to chain his tenants to the land. This he achieves either by giving the tenant advances, which increase his dependence on the landlord, or by giving loans for very high interest. The law also comes to the aid of the landlord by laying down that a tenant may not work for a new landlord until he has paid his debt to the former one. The prevalent agrarian relations are therefore very close in practice, if not in theory, to the absolute serfdom of the peasantry.

As we have seen, in the urban population in towns of more than 20 thousand inhabitants amounted, according to an estimate for June 1941, to about a fifth of the population. This is not a low percentage in comparison with other countries of the Arab East. Thus in Syria and Lebanon, for instance, the urban population amounted to about a quarter of the total in 1942. If, however, we included only the biggest towns – those containing more than 100,000 inhabitants – we should see that urbanisation is much more backward in Iraq than in Syria and Lebanon, for whereas about a fifth of Syrian and Lebanese inhabitants belong to this category, only about a tenth of Iraq’s population does. And what is even more cardinal as regards Iraqi towns is that they are much more backward and primitive than the towns of the other countries of the Arab East. This will be brought out clearly by a few facts. Hardly an industry worthy of the name exists in Iraq. There are almost only primitive handicrafts. While the number of handicraft and industrial workers amounts to 150–180 thousand, i.e. about the same number as in Syria and Lebanon, those who work in modern industry (most of them somewhat mechanised handicraft works) do not account for more than 3–4 thousand, as against about 20 thousand in Syria and Lebanon. The scope of these ‘modern’ enterprises will become clear from the following table:–

Industries of Several Branches Benefiting
under the Encouragement of Industries Law 1938/39



No. of


No. of

Average No. of Workers
per Enterprise





















Leather & Tanning




Bricks & Tiles




This table does not include some branches for which the statistics are very incomplete (such as spinning and weaving, cotton ginning and pressing, printing). But from what has been given it is possible manifestly to see how very tiny modern industry in Iraq is. The average number of workers in the enterprises included in the table is 52. The number of enterprises employing more than a hundred workers is very small indeed; there are two cotton ginning factories, three cigarette factories, a few brick and tile factories – and with that the list ends.

The backwardness of handicraft and industrial production in Iraq express- <p. 120> es itself in the fact that its output is much smaller than that of Syria and Lebanon which themselves are not remarkable for any industrial superiority. The Iraqi production of matches is 8.9 per cent of Syria’s and Lebanon’s production, cigarettes – 17.9 per cent, flour – 4.3 per cent, leather and tanning – 0.2 per cent, shoes – 2.9 per cent.

If we took into account also those relatively important industries which exist in Syria and Lebanon but not, or barely, in Iraq, (such as cement, silk, weaving, knitting etc.) the backwardness of the Iraqi economy, even as compared with that of other countries of the Arab East, would be thrown into yet greater relief.

So far petroleum, which occupies a special position in Iraq’s economy, has not been discussed here as it is a foreign body inside the economy of the country. The number of workers in the oil companies is 4–5 thousand. The output of crude oil amounted in 1939 to 3.8 million tons and its value was £12–15 millions. There is no question but that the future will see an abundant increase in the output of oil. But even the present output constitutes a very great part of the total production of Iraq, which amounted to less than £40 million in 1939.

It is quite evident that the expropriation of the foreign oil companies is a necessary condition for quickly accumulating means in Iraq and seriously developing industry and the irrigation network. Thus a close bond exists between the struggle against the nomadic economic and social relations, against serfdom and against feudal relations, and the struggle against foreign capital, the feudal lords, moneylenders, state bureaucracy and Bedouin sheikhs. This can be done only through the rise of a revolutionary wave which will embrace all the countries of the Arab East and whose centres will be Cairo and Alexandria.


1. Iraqi dinar = £1

Last updated on 28.5.2011