** 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 and 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

Egypt was one of the four original river valley civilizations abd arguvly the richest of the four because of the Nile. Agriculture generated civilization in the Nile Valley and was based on grain. No society had the ability to produce grain in comparable quantities. And the results were the wonders of ancient Egypt. It was agriculktural richness that attracted both Alexabder abd Caesar to Egypt. What is interesting is that agricultural technology did not change significantly during not only centuries, but melennia. Nor did Islanic Caliphte bring significant technological advances. The same was true of the Ottomans whiuch controlled or ibnflience Egypt for nearly four centurues, beginning (1517). They also introduced little technoloh=gical changes. The British never colonized Egypt. They established a protectiorte (1882). This was not the same as a colony. Egypt was governed by the Khedive. The British primarily controlled foreign affairs and securiuty at the time. Modern Egyptins are highly critical of the British, but much of the first moodern infrastructure in Egypt began to appear during the British period. British rule was light compared and short comapred to the Islamic Caliphate and Ottomans. Centuries of Islamic/Ottoman rule and brought virtually no real technogical change or effort to improive the productivity of the Egypt peasantry (fellahin), but it is the Brtish on whom Egyptiians blame most of their problems. The cebtrak one is that by resisting modernity and modern cience, these regimes did nothing to better tghe fellahin and this meabt tht there was no improvements in agriculture. In fact the Btitish left Egypt with improved infrastructure and the beginnng of a modern secular educationsl system. Theu also preevnted the rise of Islamic fundamebntaiism which has proved such a destructive foirce throughout the Arab and wider Muslim world. Of course, the true test is, haw Egypt been a success since the British left?


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 sufficient 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.


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"]


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