Egypt

As we all have been taught, Egypt is the land where civilization began, a land of indescribable wealth and one of the oldest contiguous cultures still existing. Egypt was already over 2500 years old during their golden age, a time of pyramid and empire building. Egypt figures prominently in the religious and cultural makeup of a vast majority of the world’s population based on Hebrew, Christian, and Islamic formative involvement there over the centuries. Empires, however, rise and fall and Egypt was no exception.

Greece, led by Alexander the Great in 332 B.C., conquered an already divided Egypt. Since then, a series of conquests including a period of Roman domination, then Islamic rule whose language and customs formed the economic and cultural backbone of Egypt to this day. This period was followed by a takeover by the slave class of Mamelukes, and then an extended reign by Ottoman Turks, punctuated by a brief but culture changing occupation by Napoleon in 1798 which set the stage for the formation of a revitalized Egypt (Isseroff, n.d.).

Napoleon employed scientists to survey and catalogue the hitherto unknown lands, character, and culture of the Egyptian people, which among other things, led to the discovery of the Rosetta Stone and the deciphering of hieroglyphics. Conversely, Napoleon’s presence allowed the Egyptians and Ottomans to become educated in the particulars of European achievements, commerce and technologies. This was a major turning point in the direction that both Egypt and Turkey would take going into the future as they began to adopt major elements of the French culture (Isseroff, n.d.). When the French were defeated by the British in 1805, an Ottoman dynasty rose to power to bring Egypt into the modern era. This was a time of major modernization in Egypt. Muhammad Ali Pasha (1807–1848) was an Ottoman governor who was determined to make Egypt into a prosperous and powerful country. He worked to build up its population, its army, and its economy. Under his reign, modern medical practices were established which brought about a steady rise in the population. Dams were constructed to increase irrigation for the cultivation of new cash crops in the form of cotton and sugar. The country’s main ports were developed to handle the expanding import and export trade. He worked with Western advisors to establish processing facilities for importing finished goods to Western consumers (Mokyr, n.d.). The Pasha dynasty established railroad and communication networks and culminated in the construction of the Suez canal, vital to Western trade, which was ironically built jointly by the French and British who were the main beneficiaries of Egypt’s trade.

Having overspent on the development of their country and heavily in debt to British and French interests, and facing bankruptcy, Egypt was forced to allow concessions to the Western powers and became a British protectorate in 1922 (Isseroff, n.d.). Due to mounting riots and unrest, Britain granted Egypt their independence in 1923, but remained firmly entrenched to protect the canal and other commercial interests. “Other political forces emerging in this period included the communist party (1925) and the Muslim Brotherhood (1928), which eventually became a potent political and religious force” (U.S. Department of State, para. 3, 2009). The Oxford Encyclopedia of Economic History, with regard to European control of the Egyptian economy offers:

Apart from the large landowners, the top of Egypt's economy was in European hands, with control of the banks, insurance companies, cotton manufacturing and export firms, transportation, utilities, and the best professional posts. Some
technical, administrative, and commercial skills were supplied by other Middle
Eastern minorities (Jews, Syrians, Lebanese, etc.). That bourgeoisie blocked the
development of an indigenous economy until after World War II (Mokyr, n.d.,
para. 11).

Toward the end of WWII, the Arab League was formed to protect Middle East countries from the meddling of Western Powers and to stop the development of Palestine as a Jewish homeland by the dictates of the British Mandate (Isseroff, n.d.).

An ill prepared Egypt led by King Farouk joined other Arab states in a failed 1948 attack on the fledgling nation of Israel. One of the defeated Egyptian soldiers, Gamal Nasser, responding to the humiliating circumstances led a bloodless coup against the corrupt King and gained control of Egypt in 1953 declaring it a Republic. Nasser, despite 2 more failed attempts at the liberation of Palestine, and an unrealized non aligned effort to unite the Arab peoples of the Middle East, emerged as a charismatic and beloved leader.

When he was snubbed by The U.S. and the World Bank to help fund the Aswan High Dam project, he turned to the Soviet Union for alliances.

He nationalized the Suez Canal and, later, the banks, insurance companies, and other international businesses. Reforms transferred one-sixth of all land from large landowners to small farmers and many people benefited from rent reduction. The new Aswan High Dam of the early 1960s, built with Russian assistance and moneys, provided flood control, irrigation, and hydroelectric power, while
creating new environmental problems throughout the Nile Valley (Mokyr, n.d.,
para. 12).

Nasser also turned to the Soviets for aid in increasing their military might.
Despite the communist influence, Nasser insisted on keeping the government out of the way of business and to remain idealistically capitalistic in an attempt to lure investment in industry to bridge the ever widening gap between the rich and the poor. By 1960, however, it was becoming increasingly evident that the new nation’s 5 year economic plan was destined to fail. Nasser was forced to nationalize the banking system and private sector businesses to stabilize a state capitalist system. At his death in 1970, the state capitalist system was unable to be maintained (Aoude, 1994).

Anwar Sadat succeeded Nasser and quickly opened up areas of free trade allowing foreign joint ventures with domestic capital and a number of Arab/European banks were opened. “Sadat introduced greater political freedom and a new economic policy, the most important aspect of which was the infitah or "open door." This relaxed government controls over the economy and encouraged private, including foreign, investment” (U.S. Department of State, Domestic Change para. 1, 2009). In an effort to reach out to the U.S. to renew trade and investment, Sadat expelled 15,000 soviet “advisors”. After a surprise attack by Israel, Sadat appealed to the U.S. to arbitrate which resulted in the withdrawal of Israeli forces to behind the lines they had won in a previous battle allowing Egypt to once again profit from the transport of goods through the Suez canal. It was at this point in his administration that he stopped meddling with the economy and turned to gaining back lands lost to Israel during Nasser’s reign (Aoude, 1994). The results of the semi-successful 1973 war against Israel helped solidify Sadat as an autonomous and influential Arab leader and brought about better relations with the U.S. (Sela, 1999).

Although Sadat sought for and attained a peace treaty with Israel brokered through the U.S., Sadat employed an Islamic fundamentalist group to further solidify his position and to exhibit strength against any future oppressive tactics by Israel. This relationship was not successful for Sadat, as the fundamentalists increased in number and popularity due to the unpopular partnering with the West and the peace treaty with Israel. Sadat was assassinated by a splinter group of the fundamentalists in 1981 (Aoude, 1994).

Although economic growth was demonstrated both during the Nasser and the Sadat eras, a rising gap between rich and poor and a growing number of poor and ultra poor people were creating unrest within Egyptian society. The population increase wiped out any gains made by increasing irrigation, and the land is being over farmed. This brings us to the present day administration of Mubarak who follows in the footsteps of Sadat by continuing the cultivation of alliances with the U.S., the abandonment of Soviet ties and capitalistic free market economic practices.

Mubarak’s long term of office has been marked by less repression as demonstrated by his two predecessors and an increase in efforts towards democratization, although constant and ongoing battles with the Islamic militants rages on (Ryan, 2001). Mubarak has also increased militarization to support his position. The armed forces are also heavily involved in state and civil infrastructure projects.

It is widely viewed that Mubarak’s son is being groomed to take his father’s place as leader within a few years. He is highly educated and has been heavily involved with banking and international financial institutions for years and has served on the President’s council. He is considered very presidential material (Egypt, 2009). Mubarak’s son, if elected, promises to further democratize and encourage global economic growth practices.

The current state of the economy has shown steady growth averaging about 5% GDP in all sectors including exportation, agriculture, manufacturing and tourism through the first seven years of the 21st century (The economy, 2008).
Issues remaining to be dealt with include the problem of food shortages and sharply rising costs which have resulted from increased importation, and the growing popularity of the Islamic militant party that the increasing number of poor people are looking to, to ease their frustrations about their plight.
The strategies and decision making of the Nasser, Sadat, and Mubarak administrations in the past 57 years since the formation of the Republic of Egypt reflect the reactionary “survivalist” nature of the regimes in preserving their own political standings within the country and the region.

The implications of this are important not only for understanding government stability and survival in Egypt and elsewhere in the Third World, but also for understanding the limiting effect survival strategies have on otherwise
ambitious plans for development and change. Lacking well-developed institutions
with which to affect their plans for economic and social change, leaders in the
Third World often focus on strategies aimed at a more immediate concern: their
own political survival (Ryan, p. 26, 2001).

The success of these strategies often erode any advances toward establishment of durable commercial enterprise, economy, and political environments that can sustain the country in the long term, and may even hinder the formation of liberalization and democratization in Other World countries (Ryan, 2001).

Egypt is indeed in a position that would enable it to achieve greatness again if it were to implement meaningful long term policies designed to sustain and encourage growth while continuing to develop their infrastructure invest heavily on their domestic problems.

References
Aoude, I. (1994, Winter94). From national bourgeois development to Infitah: Egypt 1952-1992. Arab Studies Quarterly, 16(1), 1. Retrieved February 27, 2009, from Academic Search Complete database.

Egypt. (2009, January). Political Risk Yearbook: Egypt Country Forecast, February 27, 2009, from Business Source Complete database.

Forbes, S. (2004, February 16). Mideast miracle?. Forbes, 173(3), 27-28. Retrieved February 28, 2009, from Academic Search Complete database.

Isseroff, A. (n.d.). History of Egypt. MidEastWeb GateWay. Retrieved February 26, 2009 from http://www.mideastweb.org/egypthistory.htm

Mokyr, J., ed. (n.d.). The Oxford Encyclopedia of Economic History. Egypt: Islam and modern periods. [Electronic version]. Accessed from http://0-ebooks.ohiolink.edu.olinkserver.franklin.edu/xtf-ebc/view?docId=tei/drs/t168/t168.xml&chunk.id=e0233&toc.depth=1&toc.id=e0233&brand=default&query=cambridge%20histories#1

Ryan, C. (2001, Fall2001). Political strategies and regime survival in Egypt. Journal of Third World Studies, 18(2), 25-46. Retrieved February 25, 2009, from Academic Search Complete database.

Sela, A. (1999, September). The 1973 Arab war coalition: Aims, coherence, and gain-distribution. Israel Affairs, 6(1), 36. Retrieved February 27, 2009, from Academic Search Complete database.

The economy. (2008, December). Country profile. Egypt, Retrieved February 26, 2009, from Business Source Complete database.

U.S. Department of State. (2009). Bureau of near eastern affairs. Egypt: European Influence. Accessed from http://www.state.gov/r/pa/ei/bgn/5309.htm#history