Mohamed Ali’s era
Question 1: what are the main economic changes during Mohamed
Ali’s era??
I.
Mohamed Ali constructed a wide irrigation system and introduced
radical changes in agricultural good specially (cotton & sugar
cane).
II.
Mohamed Ali established a modern and diversified industrial
modern and diver.
III.
There was a great improvement in transport and communication
facilities, both internal and external; the first real way was opened
in 1853.
IV.
During the era of Mohamed Ali, all resources were owned and
controlled by the state.
V.
After 1849 : the collapse of Mohamed Ali is industrial policies and
programs because there was a rapid increase in the external debts
because of :
The expansion of irrigation system & transportation needed a
lot of money.
Large expenses of rulers at that time.
VI.
Exporting cotton was the engine of growth for Egypt. The Egyptian
economy depended mainly on the export the long staple cotton as
an agricultural product
VII.
Egypt is integrated into the world economy as an agricultural unit.
(The world knows Egypt as a cotton producer).
VIII.
During close to a century of free trade the Egyptian cotton
economy was developed to a high level of perfection.
IX.
The inflows of foreign capital and financial, commercial and
technical expertise were absorbed >>> in agriculture, trade, finance
and infrastructure.
X.
The British have been strongly criticized for their free trade, no
industrialization policy.
Question 2: the new phase of industrialization in Egypt started
during the inter war years. Comment?
a) The economy needed to be diversified to reduce the
vulnerability to fluctuation in external markets. (Dependence on
single crop).
b) The interruption of communications during world war (1) 1918,
had led to a stock piling of cotton & to decrease imports (the
traders couldn’t export cotton due to the lack of
communication).
c) After world war (1) 1918, communication was reopened Egypt
sold the cotton in form of products at higher prices.
-
This accumulation saving was drained off by the formation of
Misr bank in1920.
d) In 1930, Egypt reformed the tariff system
Raw materials & fuel were taxed at lower rates.
Manufactured goods such as: textiles & foot wear were
taxed at higher rates.
Sugar industry was favored through a variable tariff that
kept domestic prices at a high level independently of
fluctuations in the world market price.
e) The government started supporting industries through
subsidies, cheap loans & other measures.
f) The low profitability of agricultural investments helped to shift
economy’s domestic capital to manufacturing.
g) During 2
nd
world war in 1940: Egypt was cut off from foreign
supplies which encouraged the growth of many economic
activities and the emergence of new industries.
(Ex) repair and metal manufacturing.