Natural resource abundance and scarcity have long been associated with the history and politics of the modern Middle East, particularly in the twentieth century. The intensive construction of large-scale infrastructural projects around oil and water played a decisive role in shaping political possibilities for state building, political community, and forms of empire in the region. Deployed by Western firms and their host governments as projects of economic development, such projects were also radical experiments, organising humans and nature in novel and unexpected ways. They helped mobilise a set of unusual yet remarkable actor-technologies, including economic development contracts, formulas for calculating profits and productivity, forms of economic appraisal, and other tools to quantify and qualify human-nature relations.
While there is widespread awareness of the importance of water in the history of the modern Middle East, we know surprisingly little about how its social and technical properties have shaped that history, particularly the decision-making process of infrastructural appraisals.
This blog post shares one such case, the Dez Dam in Khuzestan province, southwest Iran, where the workings of cost-benefit analysis first played a pivotal role in the region. Calculating the economic costs and social benefits of dammed, hydroelectric energy from the Dez River versus oil-based thermal energy helped transfer the powers of water management from local and state actors to an American development firm (the Development and Resources Corporation, DRC) chaired by David E. Lilienthal. Lilienthal was the former head of the famed integrated river basin development scheme, the Tennessee Valley Authority. Such powers were also transferred to international regimes of economic and scientific governance, such as the World Bank.
In the case of the Dez Multipurpose Project, the calculative work of cost-benefit analysis played a crucial role. It mobilised development experts, agricultural scientists, water technologists, engineers, and Iranian state officials in an enormous economic endeavour of harnessing nature to achieve food security for the nation.
Though plagued by inadequate data, there were three aims of the project: electrification of the towns from hydroelectric power, irrigation of potentially productive land along the Karun and Dez Rivers, and regulation of Dez river flow to diminish serious flood damage, especially between Ahwaz and the Persian Gulf.
In his 1966 appraisal of this project, John A. King, director of the World Bank’s Economic Development Institute, identified several problems to achieve the overall aim of improving “the quality of economic management in government in the less developed countries”. King highlighted the case of the Dez Dam project, which was granted an initial $42 million US dollars of funding out of a total estimated cost of $82 million. As if predestined to fail, King underlined the plethora of obstacles exhibited by this example and “inherent in any attempt to forecast in quantitative terms investment cost, operating cost, revenues and the return on projects in underdeveloped countries”.
Another Bank representative expressed scepticism: “Iran should learn how to crawl before it tries to walk” because the “return on investment shown for the project is not too favourable, and the risks are great”. Problems of organisation, policy, and the uncertainties attached to the irrigation program rendered the Dez project so risky that other regions of Khuzestan were deemed more favourable.
However, DRC representatives countered that the economic feasibility of the Dez Dam was “guaranteed by its power and flood control benefits.” This would “offset” some of the risks of the irrigation program, it said. The “greatest advantage” of the multipurpose water control program was that power potential could be considered as a “paying partner … yield[ing] quite a substantial margin” to support other aims. Lilienthal argued that it will bring the combined benefit of renewable sources of electrical energy and grassroots democracy for a profit to the global south.
Katayoun Shafiee is an Associate Professor in the History Department at the University of Warwick, United Kingdom. This blog post is based on her second book manuscript about the risky measures of economic science, governance, and infrastructure transforming Iranian riverine environments in the 20th century.