Ismail's Reforms

Under Said Pasha, the Egyptian national debt began after he secured a loan of 2,640,000 from European sources. Slowly, the debt increased under his 9-year rule. Ismail the Magnificent succeeded Said after he passed away in 1863. Ismail had started his reign with a variety of reforms in many fronts, and had been thought by many to start a new era for Egypt . This was true in some ways. The administration was improved with help from English officials, the military reformed, and infrastructure improved. Yet, these reforms, including the various ambitious public works, built with famous contractors from Europe , required large sums of money to be kept alive. Heavy and often wasteful government spending drained the national treasury further. The people were taxed remorselessly, and the national debt steeped ever deeper, much of it held by Britain and by France , thus strengthening the former's hold on Egypt . Soon, it became evident that national bankruptcy was at hand. This was evident when Ismail was forced to sell his shares of the Suez Canal, all of his stakes, to Britain at 976,582 pounds, thus giving Britain major shareholder-ship and losing Egypt her stake in one of the world's busiest waterways.

Indeed, it was the various Khedives' inability to handle the country's economy and spending that led to the British and French interference in her affairs and eventually occupation by the British.

Economic Recovery

Egypt under the British slowly began to make an economic recovery. Lord Cromer, the British Agent in Egypt , an economist, whose words were power coming London , became the virtual ruler for 24 years. An autocrat respected by the British yet despised by the local Egyptians, Lord Cromer embarked on tough campaign to cut administrative spending and eventually, after initial years of continuing financial problems, his efforts were rewarded with budget surplus from 1889 onwards after balancing the books and clearing the old debts. Industry and the education for the people were not his piority, and he consequently spent the small surplus on agriculture and railroads. Administrative officials were all British, and likewise commerce was solely in British hands. After Cromer's leaving, more trams and trains sprung up around Cairo under Sir Eldon Gorst.

British Trade

British trade in Egypt had started long before the take-over in 1882, dating from the Napoleonic Wars when cotton was exported from Egypt to Britain and manufactured cotton goods in turn exported back to Egypt . This trade boomed during the American Civil War when British manufacturers ran out of cotton and turned to Egypt to supply these. By 1880, 80% of Egypt 's exports and 44% of her imports were contributed to trade with Britain . Egypt 's cotton industry under the British occupation continued to thrive, being part of an empire that then controlled 50% of the world's trade. However, the British occupation did too leave unpleasant marks on the Egyptian economy. Like most other colonies, Britain encouraged Egypt to grow only a single cash crop, in this case cotton, mainly to Britain 's advantage. This leaves Egypt dangerously reliant on cotton. An example of this was the crisis that came after World War I. The Egyptians, encouraged by the return of the cotton market, abandoned the food crops and grew cotton. Although many made money, the starvation soon set in, leading to friction between the occupiers and natives. Furthermore, the removal of tariffs once protecting the Egyptian craftsmen and workshops led to British goods flooding in to compete with the local economy. Many were merely primitive workshops and folded under competition from the industrialised British good. The Egyptian industry likewise did not grow under this policy that protected Egypt 's market for Britain 's own industries to exploit. Many thus found themselves unemployed, and Egypt 's industrial growth was thwarted.

Role in Trade Routes

Britain 's primary interest in Egypt , as well as France 's, was not Egypt 's economy, but the critical role Egypt played in the trade routes to British India , the ‘pearl on the British crown'. Egypt occupied a strategic location for maintaining the viability of the long trade route to India . As a result, since Napoleon's invasion of 1798, Egypt had always been a concern for the British. This became even more so after the Suez Canal, a 163km canal that cuts across Sinai connecting the Red Sea and the Mediterranean was built. A Frenchman, Ferdinand de Lesseps, had led the construction of the Suez Canal under the reign of Ismail, completing a task deemed impossible till its finish. Close to 1.5million Egyptians worked on the canal, and the cost of the canal was enormous in terms of human life: as many as 125,000 perished, most to cholera in the unhealthy conditions. The Suez Canal, drastically shortening the sea voyage to India and the Far East, meant immediately Egypt was to play a prominent role in securing this trade route. Egypt in the British occupation immediately became a communications centre and transportation hub for news coming from the Far East to Britain via the Suez Canal . In short terms, it became the transit stop between Britain and her Far East possessions. Though in this case it meant that Egypt was geared to become a hub capable of servicing a busy route, it also meant that the British looked to Egypt first as a hub and second as an investment opportunity.

Despite these, Egypt still had economic progresses under the British. Egypt , a country already well known in Europe for its exotic cultures and fantastic monuments, became one of the first African countries to exploit tourism as an industry. However, at the same time, this was to have heavy repercussions in the maintaining of her cultural heritage that will be discussed later. Her main economic value except for the Suez Canal was her cotton production, which remained the primary production for Egypt during the British occupation for industry did not made much headway as stated earlier.

During the World Wars

During the First World War, Egypt was able to supply the Allies with foodstuff and other materials that she could produce, and benefited from this trade. Also, its close proximity to the Ottoman Empire made Egypt a staging area against the Middle-Eastern Central power.

During World War II, the activity in Egypt increased. Egypt , now Britain 's major possession in the Middle East, was geared up to be able to stand as a military base on her own with little supplies sent from Britain . Thus, economic development in Egypt increased, and the British employed thousands of Egyptians. Technological and industrial advancements in mining, cement, oil refining and chemicals occurred in this period to increase the military capacity of the country. Egyptians also began to weave their own cloth instead of usual reliance on British industries. Indeed, the British spent 10 million pounds per year in Egypt . Furthermore, Egypt became the headquarters for the British military in the Middle East . The German army soon landed in Africa after Italian troops were embarrassingly defeated by the British based in Egypt . Egypt, soon seen as the gateway to the oil fields of Asia, soon became the center of a fierce battle between the German Afrika Korps under German Marshal Erwin Rommel, the ‘Desert Fox', and the British Eighth army, soon to come under British Marshal Bernard Montgomery.

Sources

1. http://ce.eng.usf.edu/pharos/cairo/history/khedive.html
2. http://www.touregypt.net/hbritish.htm
3. http://www.fact-index.com/h/hi/history_of_ottoman_egypt.html
4. http://www.fact-index.com/s/su/suez_canal.html
5. http://www.ejakeman.freeserve.co.uk/history/india.htm
6. Brian M.Fagan. Rape of the Nile. Wakefield, Rhode Island and London: Moyer Bell

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