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The Suez Canal: Waterway to history
Published in Al-Ahram Weekly on 05 - 08 - 2015

On 17 November 1869, the Suez Canal was opened amid special celebrations in the recently built port city of Port Said, with L'Aigle, the yacht of the French empress Eugènie, being officially designated to lead the fleet of the first 68 ships to navigate the canal. The splendid ceremony was attended by leading European dignitaries, illustrious authors and artists, religious leaders and representatives of the Egyptian people of all denominations. The latter were embanked in tents all along the course of the canal.
For the Khedive Ismail, the ruler of Egypt and the Sudan at the time, the canal's inauguration was an occasion for showcasing that his country could become a “part of Europe.” The celebratory event was a catalyst for Ismail's commissioning the building of the Opera House in Cairo, which opened with Italian composer Giuseppe Verdi's opera Rigoletto on 6 November 1869, 11 days before the Suez Canal's inauguration.
French sculptor Auguste Bartholdi had also designed a colossal statue of an Egyptian fellaha, or peasant woman, that would double as a lighthouse at the entrance to the Suez Canal and an enormous monument. Bartholdi named the statue “Egypt Brings Light to Asia.”
The project was abandoned, however, because of financial difficulties encountered by Ismail at the time of the opening of the canal, and Bartholdi took his project to America where it eventually became the Statue of Liberty in New York.
The Khedive Ismail had bestowed upon L'Aigle the special privilege of leading the naval procession in acknowledgement of the central role that France and the French engineer Ferdinand de Lesseps had played in making the Suez Canal project a reality. On 19 November, the fleet of ships sailed on its scheduled course. It reached Lake Timsah on the same day and then continued on its journey to the Bitter Lakes. The convoy finally reached Suez on 20 November.
The celebrations were almost marred, however, when to the dismay of the khedive and his French guests the British ship HMS Newport took the helm and sailed ahead of the fleet. During the night before the inauguration, the Newport's captain, George S Nares, had stealthily navigated his ship in the dark. Winding his way among the ships parked in the mooring spot, he had positioned the Newport infront of L'Aigle. The British government officially reprimanded Nares, but the ploy was seen by the British as promoting their presence at the important event and showcasing the skill of the British navy.
The incident of the Newport may also be seen as a metaphor for the 19th-century politics that surrounded the construction of the Suez Canal. Executed by France at the height of its imperial rivalries with Great Britain, the plan for building the canal had initially met with strong opposition from the British government. Britain's then prime minister Lord Palmerston tried to dissuade de Lesseps from the idea. He informed de Lesseps that the canal was a “physical impossibility” which would, if realised, injure British maritime supremacy. Its very proposal, Palmerston asserted, meant “French interference in the East.”
But the construction went on regardless, constituting the triumphant realisation of intermittent attempts throughout Egypt's history to shorten the trade route from the Mediterranean to Southeast Asia and Africa. During the French Expedition of 1798 to Egypt, for example, Napoleon Bonaparte had commissioned his cartographers to retrace a canal built by the Persian king Darius I on the east side of Lake Timsah and ending at the north of the Great Bitter Lake. But Bonaparte's engineer, J M Le Pêre, reported a 29 foot difference in sea levels between the Mediterranean and the Red Sea, causing the plan to be abandoned.
In 1846-47, the difference in sea levels was disproved by the Societé d'études pour le Canal de Suez, which had been formed by the Saint Simonians, a political and social movement in France which advocated progress through industrialisation and scientific discovery. The construction of canals in both Panama and Suez was part of the Saint Simonist programme for the “world's rejuvenation”. An expert commission formed by the Saint Simonians favoured the construction of a canal running from Suez to Alexandria by way of Cairo.
Ferdinand de Lesseps had been French assistant-consul at Alexandria and he had known Egypt's then ruler, the Khedive Said, as a child. De Lesseps adopted the Saint Simonian plan for a canal and gave it new momentum. (A similar attempt by De Lesseps to construct the Panama Canal did not meet with the same success as that encountered in Suez.) In 1854, de Lesseps obtained the first concession to create the Suez Canal Company, or the “Companie Universelle de Canal Maritime de Suez”. This was followed by a second concession in 1856 for the construction of a freshwater canal extending from the Nile near Cairo to Lake Timsah.
CONSTRUCTION BEGINS: The Suez Canal Company was formed in 1858 and digging began at Port Said on 25 April 1859.
The original public listing opened on 5 November 1858 at 500 French francs per share. The capital of the company was 200 million francs issued in 400,000 shares, and the listing opened even before the Ottoman sultan, the country's nominal ruler at the time, had approved the terms of concession (approval was given in 1866). In the span of less than one month 314,494 shares were offered. Of these, 200,000 were subscribed in France, and over 96,000 were taken by the Ottoman Empire, with the Khedive Said buying the remaining 85,506 shares constituting 44 per cent of the total.
Britain, the United States, Austria, Russia and Italy abstained from investing in the canal at the time. The concession stipulated that the canal would pass into the hands of the Egyptian government after 99 years on 17 November 1968. Its digging and construction continued at a great cost to human lives. The earlier concession of 1856 had determined that four-fifths of the labourers working on the Suez Canal would be Egyptians, who would be housed and fed at stipulated rates. Thousands of rural labourers, or fellaheen, were forcibly recruited to the Suez Canal region by what was known as the “corvée system”. Some assessments place the number of labourers mobilised for the canal at one million men and boys out of Egypt's then-population of four million.
The workers laboured with primitive tools under harsh conditions. Thousands perished, having little fresh water to drink, insufficient food and unsanitary conditions.
An outbreak of cholera in 1865 did not leave a sufficient number of labourers to bury their colleagues who had perished in the epidemic. In a diplomatic move against France, Britain condemned the corvée system of levying workers by force, calling it “slave labour,” and the question of forced labour also became a legal contention between Egypt and France.
The Khedive Ismail, who succeeded Said in 1863, considered it to be contrary to Egypt's interests. In July 1863, Ismail's prime minister Nubar Pasha went to Constantinople with the proposal that the number of labourers working on the canal be reduced and that the Suez Canal Company hand back the additional lands granted it by Said in the concession of 1856. If these demands were not met, Nubar threatened that work would be suspended by force.
The sultan approved the Egyptian request. The issue was contested by France and submitted to the arbitration of the emperor Napoleon III who decreed that the Egyptian government should pay the Suez Canal Company eight million francs in indemnities for having abolished the forced labour system. A sum of 46 million francs was also to be paid to France in compensation for land returned to Egypt.
With the abolition of forced labour, work on the canal resumed with mechanical tools and modern engineering methods greatly speeding up the pace of work. When the canal was completed in 1869, its final cost stood at 432,807,882 French francs. This was more than double the estimate made by the International Technical Commission of 1856. In 1870, a total of 500 vessels passed through the canal, with expenses by far exceeding revenues. However, the successive widening of the canal was undertaken to facilitate traffic, and revenues started to mount. The impact of the Suez Canal on world transport and trade was dramatic because of the shortening of the maritime route to Asia.
In 1882, the British army occupied Egypt in response to a request from Ismail's successor the Khedive Tewfik to quell the nationalist army revolt led by the Egyptian commander Ahmed Orabi Pasha. With its occupation of Egypt Britain gained de facto control of the Suez Canal. The British government had already invested 400,000 pounds sterling in shares in the canal, bought from the Khedive Ismail in 1875.
On 29 October 1888, Britain, Germany, Austria, Spain, Italy, France, the Netherlands, Russia and Turkey signed the Suez Canal Convention within the context of the Convention of Constantinople. The convention stipulated that the canal should “always be free and open, in time of war as in time of peace, to every vessel of commerce or of war, without distinction of flag.” Britain, however, formulated a reservation that the convention's provisions would apply to it insofar as they were compatible with the “present transitory and exceptional condition of Egypt” and as long as they did not impede the liberty of action of the British government during its occupation of Egypt.
In 1904, the Anglo-French Agreement was convened, with Britain announcing its adherence to the stipulations of the Constantinople Convention. In 1909, the Suez Canal Company requested a prolongation of its concession, due to expire in 1968, from the Egyptian government, but the Egyptian parliament unanimously refused the request. With the advent of the First World War in 1914, the management and defence of the Suez Canal were handed over to the British military authorities. The canal was regarded as a strategic frontier to be guarded by both the British and French armies and navies. It remained open to allied and neutral shipping throughout the First World War.
In 1926, Egypt's King Fouad inaugurated the city of Port Fouad with the aim of accommodating all the personnel working for the Suez Canal Company. By 1946 the British government held seven-sixteenths of Suez Canal Company shares. The Company's administration was predominantly French, with 21 French directors, ten British and one Dutch. British shipping at the time accounted for 57 per cent of total traffic in the canal, followed by Dutch shipping, which accounted for 10 per cent of the traffic, then German, at 9.6 per cent after the First World War, and France at six per cent.
Egypt officially gained its independence in 1922, but Britain's military occupation of the Suez Canal continued. In 1936, the Anglo-Egyptian Treaty gave Britain control of the canal, and on 14 November that year the Suez Canal Zone was created. After the Second World War, British presence continued in the Suez Canal Zone, with some 80,000 troops stationed there. In 1951, Egypt repudiated the Anglo-Egyptian Treaty, and an agreement was reached three years later, in October 1954, that Britain should remove its troops from the canal.
On 13 June 1956 the Suez Canal Zone was returned to Egypt. Full British withdrawal from the Zone took place on 18 July 1956. In the ensuing three decades, the Suez Canal continued to occupy a central position politically as well as militarily by virtue of its place as Egypt's strategic eastern frontier and because of its economic significance to both Egypt and the world as a whole.
NATIONALISING THE CANAL: The nationalist policies adopted by former Egyptian president Gamal Abdel-Nasser after the Revolution of 1952, coupled with foreign policy orientations towards the Eastern bloc, escalated tensions between Egypt, on the one hand, and Britain, France and the US, on the other.
In July 1956, Nasser announced the nationalisation of the Suez Canal in response to the United States' and Britain's refusal to help fund the Aswan High Dam project. Egypt offered to pay “fair and adequate” compensation to the shareholders of the Suez Canal Company, based on the value of the shares in the stock market on the day prior to nationalisation.
In an attempt to de-escalate the tensions, the US proposed the formation of a Suez Canal Users' Association (SCUA), by which an international consortium of the world's 18 leading maritime nations would manage the canal. Equal stakes would be given to Egypt, Britain and France, but the three countries refused the American mediation efforts. In a move to pressure Nasser to reopen the Suez Canal, on 31 October Britain and France bombed the Sinai and the Suez Canal cities of Ismailiya and Port Said. The Egyptian army retaliated by sinking 40 ships.
On 5 November 1956, Anglo-French forces landed at Port Said. The former Soviet Union threatened nuclear retaliation, and on 6 November US president Dwight D Eisenhower placed pressure on Britain and France to accept a UN ceasefire. The US voted for UN resolutions publicly condemning the Tripartite Aggression on Egypt and approving the creation of a UN peacekeeping force. The then head of the Canadian delegation to the UN and later Canadian prime minister Lester B Pearson later received the Nobel Peace Prize for his role in helping resolve the Suez Crisis and in proposing and sponsoring the creation of a UN peacekeeping force in Sinai and the Suez Canal.
Under increasing pressure from the international community, Britain and France agreed to a ceasefire. By 23 December 1956, British and French troops had totally withdrawn from the canal. The Suez Crisis signalled the emergence of a new balance of power in the region in the wake of the Second World War. The US and Soviet Union rose to prominence, while the influence of the old European colonial powers waned. The Suez Crisis in particular was seen as dealing the final blow to the status of the British Empire. British prime minister Anthony Eden's resignation in January 1957 was regarded as a tacit acknowledgement of Britain's failure to manage the Suez crisis to its advantage.
The Suez Crisis also confirmed Nasser's emerging status as a nationalist, both at home and in the Third World at large, where he was hailed as a hero in countries battling colonial influence in Africa and Asia. The Suez Canal then remained closed until April 1957, when it was cleared of war debris with UN assistance. The UN peacekeeping force (UNEF) continued to maintain the neutrality of the Suez Canal and the Sinai Peninsula until the outbreak of tensions between Egypt and Israel preceding the Six Day War in 1967.
In the ensuing two decades, and with the outbreak of two wars between Egypt and Israel in June 1967 and October 1973, the Suez Canal was closed twice. During the Six Day War in 1967, Egypt closed the Suez Canal to shipping and the waterway was blocked on either side by mines and scuttled ships. The Sinai and the east bank of the Suez Canal, occupied by Israeli troops after 1967, then remained under Israeli control until the War of Attrition waged by Egypt against Israel started in March 1969 and entailed large-scale shelling along the Suez Canal, in addition to aerial attacks and commando raids. It continued until the conclusion of a US-brokered ceasefire in August 1970 which also included a cessation of hostilities between Israel and Jordan.
On 6 October 1973, the Egyptian army crossed the Suez Canal. In a sudden noon attack, a barrage of bridges, speed-boats and water-cannons reached across to the Bar Lev line erected by Israeli troops along the canal's east bank. The water cannons blasted passages across the length of the 160 km line, and five Egyptian infantry divisions took control of the east bank. By 8 October, Egyptian troops had regained the entire east bank of the canal to a depth of approximately 15 km.
The October War changed the political balance of power between Egypt and Israel, paving the way for the Camp David negotiations of 1978 and the subsequent Peace Treaty concluded between the two countries in 1979. On 5 June 1975, the Suez Canal was officially reopened after intensive clearing operations had been undertaken with international cooperation at a cost $10 million. The Suez Canal was transferred from Egyptian military to civilian control and has since been under the management of the Suez Canal Company.
Since its reopening in 1975, international shipping has continued along the course of the canal. In April 2015, the Suez Canal's revenues stood at $422 million, making it the highest source of revenue within the Egyptian state budget, followed by tourism and remittances from expatriate labour.


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