By Taha Abdel-Alim Since history has an uncanny way of repeating itself, it is perhaps useful to examine Egypt's past attempts at industrialisation to see if there are any similarities with today's situation. Egypt experienced three major drives for industrialisation throughout the past two centuries, all of which have been impressive but somewhat fell short of expectations. Under Mohamed Ali (1805-1848), the government sponsored development and industrialisation until foreign intervention forced it to embrace an open door policy. With the expansion of commercial agriculture, foreign trade doubled and the local market flourished. In Khedive Ismail's time, new manufacturing industries appeared and financial resources became plentiful. This could have led the country down the path of industrial capitalism, except that British authorities discouraged manufacturing in general and the textiles industry in particular. Mohamed Ali's policy of state monopoly deprived the crafts sector of any chance for capital accumulation and almost smothered that sector. As for foreign capitalists who made their fortune in trade and banking, they confined themselves to foreign trade and had no inclination to venture into industry. Major landowners who made their money producing and exporting cotton took either no or at most only a belated interest in industry. And Mohamed Ali's expansionist foreign policy collided with European imperialist ambitions with catastrophic consequences for the country. The second attempt at capitalist industrialisation was spearheaded by Banque Misr and its founder, Talaat Harb. What made this attempt possible was the 1919 Revolution which changed economic policy, albeit partially, in industry's favour. This attempt at industrialisation disintegrated when Banque Misr fell on hard times on the eve of World War II. The National Bank of Egypt (owned and run by the British) refused to bail out Banque Misr unless the latter renounced its interest in manufacturing. For the second time, domestic conditions and Egypt's foreign policy put an end to Egypt's national capitalist industrialisation. The royal family, major landowner and foreign capitalists all got the government to pass a law forcing Banque Misr to abandon its role in stimulating local industry. Not all Egyptian landowners, investors, and industrialists shared the same vision of the country's industrial future. The near feudal characteristics of the economy and the restraints of foreign occupation all collaborated to curb the financial and marketing prospects of local industry. Taha Abdel-Alim An expert at Al-Ahram Centre for Political and Strategic Studies.
