* Egypt economy







Egypt: Economy

Egyptian shepherd boy

Figure 1.--The Young Officers like Col. Nasser who seize control of Egypt in 1952 had fellaheen (peasant origins) like this boy. Thry had limited (secondary) educations. They had a fervent desire to midernize Egypt abd raise the Fellahin from abject poverty. Like much of the Arab world, they proceeded to make a series of decisions and commitments that not only would ensure perpetual povery, but turn Egypt from a breadbasket to a country fependent on food imports and foreign charity to feed its people. They were impressed with the NAZIs as War approached and were prepared to welcome Rommel and his Afrika Korps in Cairo. They had little regard for British parlimentary democracy or free market economics. After the War they were shocked that the Jews in Palestine stopped their invasion (1948). And after overthrowing King Faruk and seizing power saw the Soviet statist model as the way of rapidly modernizing the country and contining the expensiv assault on Israel. The result was a failed economy that still limits the ability of the country to enter the modern world and offer a decent life to the fellah. Islamic extremists are gaining increasing popularity, but unlike countries like Saudi Arabia and Iran, Egypt does not have vast oil income to finance economic failure.

The Egyptian economy has been based on agriculture and centered on the Nile. Agriculture generated on civilization in the Mile Valley and was based on grain. In modren times cotton became an agricultural mainstay. Land is very expensive because of the large population and limited area of arable land outside the Nile Valley. The country had a very high population growth rate--over 2 percent annually (2003). As a result, Egypt which used to be a major grain exporter, mow has to import food. The government has developed the petroleum, services, and construction sectors, but for the most part Egyptian industry is unproductive. The basic problenm is that most industries are government-owned are controlled. This is in part the consequences of Egypt's experiment with Arab socialism on which Nasser embarked. There have been efforts to liberalize the economy, but it has made only limited progress. Despite resources committed to indusry, at the expense of agriculture, the country indusrial sector is inefficent and uncompetive. Another major problem is the country's huge beaureacracy which consumes a large share of available resources. Egypt has obtained foreign aid from both the Soviet Union nd the United States. The Gulf states which and the United States rewarded Egypt for helping to form the First Gulf War coalition. There are also foreign exchange earnings from Suez Canal traffic, tourism, and the remittances of Egyptians working abroad. Despite this Egypt has made little progress in developing a modern economy. Despite bering the largest Arab nstion and a substantial educational system, Egypt produces few scientific papers and achieves no medical advancment. Nor is their an industrial sector capable of competing on the international market.

Histotrical Eras


Ancient Egypt

The Egyptian economy has been based on agriculture and centered on the Nile. Agriculture generated civilization in the Nile Valley and was based on grain. Egypt, like all the great early civilizations, was an agricultural society. The wealth of Egypt and the richness of the civilization which it spawned was based fundamentally on agriculture. Egyptian agriculture was organized around the annual Nile flood. For 3 months out of the year the fields along the Nile were flooded and fertilized by rich silt brought by the flow of the river. The Nile water, rich silt, and semi-troical climate resulted in highly productive harvests that served as the basis for Egyptian civilization over several millenia. The average Egyptian lived and worked in his village and knew little of the wider world. Egypt was a closed society in which a son followed his father's calling. Generations of of Egypt's toiling masses over millenia worked in the fields. Even in the New Kingdom the only opportunities offring advancement outside of the laboring caste was the army. Egyptian peasants were iliterate and attended no schools. The whole family toiled in the field. The younger children were assigned tasks such as protecting the crop from birds or gleaning the stubble aftr harvest. Some Egyptians owned their own land, many toiled as tennants on the estates of the great temples or nobility. Officials would assess the yield for taxation. Later after the harvest officals would arrive to collect the tax as a share of the harvest to fill the state graneries.

Roman Empire

Egypt with the Roman Empire was an important soure of grain.

Islamic Caliphate

Egypt was one of the four original river valley civilizations. Its primary source of welth was the phenomenal agricultural productivity of the lands irrigated by the Nile. This cotinuedd during the Roman and Islamic eras. The wealth generated by the grin and other Nile River Valley crops made Egypt and important market for the produce of other ares within the Meditrranean world as well as Africa to the south and and Indis which could be accessed by caravan routes to India. There were several important urban centers during Pharonic times. Modern Cairo was the site of ancient national capitals and remnants can be seen parts of Old Cairo. During the Roman era Alexandria was the most important city. Modern Cairo began its growth during the Islamic Caliphate. What is now Cairo was an area associated with ancient Egypt with the Giza pyramid complex and the ancient city of Memphis located nearby as ell as the productive Nile Delta. Modern Cairo was founded by the Fatimid dynasty (969 AD). Cairo has since been the center Egypt's cultural, economic, and political life. Cairo's markets were fabeled throughout the Islamic world. The bst known market is th Musky Market.

Mamelukes


Ottoman Empire


The Khedivate


British Protectorate (1882-1922)

Assessing economic trends during the British protectorate is difficult. A major problem is that some authors write from an ideological perspective, primarily interested in depicting the evils of colonialism rather than actually assessing economic trends. We are not yet sure just what the British impact here was, but have begun to collect information. One siimple fact should be born in mind here. While colonialism is commonly depicted as a evil system, in many cases for good reason, quite a number of countries deteriorated in economic terms after the European powers departed. Thus readers should be careful in accepting the claims of ideologically oriented authors. The principal British interest in Egypt was of course the Suez Canal which connected the country with its promsry colony--India. One source suggests that the British chaged high tolls and refused to share the revenue with the Egyptian Government. This may well be true. We are not yet sure. It is also true, however, that Egyptian businessmen and workers benefited from the support activities associated with runnng the Canal and the increased commerce the Canal brought to Egypt. One highly critical author complains that the British heavily taxed the Egyptian. We are not yet able to assess this. He also writes, "... the only things that the British improved in Egypt were the health care, education, and improved farming methods". Now the use of the term "only" seems strange as these are all very important areas. And there was another important achievement--infrastructure. And the improvements in these different areas could only be achieved through highertaxes. Thus we are unable to determine if the British taxes were opressive or Egyptians objected to paying taves to even find basic civic spending. Improving farming methods would seem especially important in an agricultural country like Egypt. Much of the country's modern infrastructure (roads, bridiges, and railroads) were built during the British protectorate. We are not yet sure just how to assess Egypt's economic progress during the Protectorate. It must be remembered, however, that the British, unlike the regime in India, did not take over the Egyptian civil administration. Thus any fair economic assessment must take into account both the British policies and the policies of the Egyptian Government. Here it is not enough tp point to Egyptian poverty. Egypt and the rest of the Middle East were very poor when the British establoshed the Protectorate (1882). What is important is the degree to which Egypt changed during the Protectorate which ended after World War I (1922).

Monarchy


Republic

In modren times cotton became an agricultural mainstay. Land is very expensive because of the large population and limited area of arable land outside the Nile Valley. The country had a very high population growth rate--over 2 percent annually (2003). As a result, Egypt which used to be a major grain exporter, mow has to import food. The government has developed the petroleum, services, and construction sectors, but for the most part Egyptian industry is unproductive. The basic problem is that most industries are government-owned are controlled. This is in part the consequences of Egypt's experiment with Arab socialism on which Nasser embarked. There have been efforts to liberalize the economy, but it has made only limited progress. Despite resources committed to indusry, at the expense of agriculture, the country indusrial sector is inefficent and uncompetive. Another major problem is the country's huge beaureacracy which consumes a large share of available resources. Egypt has obtained foreign aid from both the Soviet Union nd the United States. The Gulf states which and the United States rewarded Egypt for helping to form the First Gulf War coalition. There are also foreign exchange earnings from Suez Canal traffic, tourism, and the remittances of Egyptians working abroad. Despite this Egypt has made little progress in developing a modern economy. Despite bering the largest Arab nstion and a substantial educational system, Egypt produces few scientific papers and achieves no medical advancment. Nor is their an industrial sector capable of competing on the international market. There are signs of a modern economy. A reader tells us, "I was in Egypt in November 2010. I saw a 'hyper mall' on the outskirts of Alexandria which was huge."

Sectors

Egypt has the second most important economy in the Arab world measured in value. The most important is Saudi Arabia. The Egyptian populstion, however, is much larger, meaning the per capita income is much lower. The difference of course is that Egypt does not have a large mineral/oil sector. The Egyptian economy for millennia has been based on agriculture. The Fertile Cresent (Mesopotamia and Egypt) in fact gave first to agriculture whiuch led to civilization itself. The Nile River provided perfect conditiins for agriculture. Agriculture continues to be of some importance, but is not longer central to the Egyptian economy and Egypt is no longer even self suffici ent in food production. The modern Egyptian economy is dominated by the service sector. It is the largest sector, half of the entire economy. It is also the fastest growing sector. Tourism, trade, banking, and the Suez Canal (shipping services) are the primary componnents. Tourism and to a lesser extent the Suez Canal were adversely affected by Islamic violence (1990s). The Luxor attack in which Islamic militants murdered 58 foreigners (1997). The massacre of course had the desired affect, foreigners were reluctant to visit. One estimate suggests that foreign tourism declined by 50 percent. This meant a lost of income of $3.7 bullion (1998). The Government promoted domestic tourism which has has some succeess, but of course does not generate foreign exchange earnings. And has continued to improve. The Suez Canal earnings have vbeen slower to recover. Industry is the second-largest economic sector in Egypt, and accounted for over 30 percent of GDP (1999). Nearly 15 percent of the labor force is emoloyed in the industrial sector. This is concentrated in Lower Egypt (Cairo and the Nile Delta). The sector is limited by thr failure of Egypt and other Arab states to develop a modern scientific and technologial capability. Major industries include petroleum and construction. Egypt has a mineral resource, primarily oil. It is small in comparison to the Saudi and Irqqi resource, but important to Egypt. As Egypt's domestic demand for energy grows, the smaller the contributiin to export eranings. The construction industry is one of Egyot's fastest-growing sectors. The Government finances various t infrastructure and modernization projects. In recent years, moving away from socialist statist polices and pursuing privitization has contributed to growth in the industrial sector. Egypt is a rare country where agriculture is important despite only a small part of the country is arable--about 3 percent of the land area. This means of course primarily the Nile River catchment area. The importance of the sector has been declining, falling to less than 20 prcent of GDP (2000). It contiunues, however, to be a major employer--about 40 percent of the work force, but steadily declining.

Fellahin

No discussion of the Egyptian economy is complete without a discussion of the Fellahin (peasantry). The Fellah (فلاح‎ ) / Fellahin (فلاحين‎ ) is the Middle Eastern/ North Africa farmer or agricultural laborer. The term is based on the Arabic word for ploughman or tiller. The Fellahin have existed since the dawn of civilzation. The term is much more recent. It began to be used during the Ottoman period and later to refer to villagers and farmers. [Mahdi, Würth, and Lackner, p. 209.] Fellahin were different from the effendi or large landowners. [Tyler, p. 13.] The Fellahin have been variously describe. The primary sence is tenant farmers [Gilsenan, p. 13.] Some authors expand the term to encompases smallholders or low-income people living in rural village. This often meant villages that owned the land communally. [Sufian, p. 57.] The term Fellahin is most commonly used in connection with Egypt because the country for most of its history was bread basket of the Mediterranean world. The Egyptian agricultural bounty harvests provided the wealth that built the Pyramids and wonders of ancint Europe. The harvsts is what has attravted invaders like the Assyrians, Persians, and Romans over time. That bounty of course was based on the Nile and its annual floods. And it was work of the Fellahin since time immemorial that produced it. There is a misconception which Hollywood has helped perpetuate that the ancient Egyptian econmy and archiecural marvels was based on slavery. It was not. It was based on the Fellahin. Thy were not slaves but like medieval serfs a near slave condition. The Fellahin had very limited rights and were able retain only a fraction of the value of the grain and other agricultural products they harvested. It was a system that emerged throughout the Middle East that nable rulers to extract the maximum value of the harvest without the costs and potential civil disorders associated with slavery. Due to a continuity in beliefs and lifestyle largely based on the continued use of ancient agricultural methods. The fellahin have been described by many Egyptian authors as the 'true' Egyptians. [Pateman, p. 54.] The standard dress for the Fellah was a simple cotton robe called galabieh (jellabiya). The word Galabieh appeared (18th century), derived from the Egyptian Arabic word gallabīyah (جلابية). While the term was relatively new, the garment dates back centuries.

Child Labor

Until recently the Egyptian population was primarily rural. And the primary activity in which children were involved with was rural farm work. This was the case in ancint Egypt and contunued to be the case int mofern times when the British arrived (late-19th century). Early photographic images of Egypt mostly show children working. Europeans began setting up photographic studios in Egypt (1870s). Thus we have wondurful images of what life was like in Egyot durig the lte-19th cetyry. Thus before the Industrial Revolution almost all boys worked. Egypt traded in Nubian (African) slaves. Egypt played a role in Arab African slavce trade. And slavery was practiced until the arrival of the British who finally ended the slave trade. Egypt changed substantially in the 20th century. There was a huge shift of population grom rural villages to urban areas, especially Cairo which is now one of the earth's major urban centers. Unlike rural aeas, there are far fewer work opprtunities for children. And the country since independence has built a modern eucation system which means that most younger children are no longer involved with work. Unfortunaly the economy is not generating needed jobs for the children coming out of chools. Nor are the schools including the universities adeqately preparing youths for the job market, especilly with needed technival skills. And in acountry with high unemployment, extrme poverty, and low wages. Yjre is asignifican problem with child labor. One press report indicates, "According to Major General Abu Bakr Al-Gendy, head of the Egyptian Central Agency for Public Mobilization and Statistics, the volume of child labor in Egypt is as high as 1,594,000. Labor includes work at levels classified between light and dangerous. There are 17 million children in Egypt between the ages of 5 and 17. Children between the ages of 15 and 17 make up 46% of the total child labor market, with 4.87% of them giving their earnings to their parents. Al-Gendy noted the percentage of girls in the child labor force reached 21%. 7.42% of child labor is concentrated in Upper Egypt’s countryside, while 8.4% is in Lower Egypt’s countryside. The concentration of working children, ages 12 to 14, increased by 8.3%, with 12 year olds as the smallest concentration at 23%. 120,000 children between the ages of 5-17 age group did not go to school, of which 5.5% were male and 5.49% were female. 487,000 children, 79% of which were male, left school to work. The survey indicates that the agriculture sector accounted for the largest share of child labor, at 62%." ["Child labor"]

Sources

Suffuan, Sandra Marlene. Healing the Land and the Nation: Malaria and the Zionist Project in Palestine, 1920–1947 (University of Chicago Press, 2007).

Gilsenan, Michael. Lords of the Lebanese Marches: Violence and Narrative in an Arab Society (I.B.Tauris, 2003.

Mahdi, Kamil A., Anna Würth, and Helen Lackner. Yemen Into the Twenty-First Century: Continuity and Change. (Garnet & Ithaca Press: 2007).

Pateman, Robert & Salwa El-Hamamsy. Egypt (New York: Marshall Cavendish Benchmark, 2003).

Tyler, Earwick P.N. State Lands and Rural Development in Mandatory Palestine, 1920–1948 (Sussex Academic Press, 2001).

"Child labor in Egypt on the rise," بالعربيه Al Bawaba Business (July 18, 2011).







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Created: 1:36 AM 8/7/2010
Last updated: 12:46 AM 10/22/2020