Preferred Citation: Vitalis, Robert. When Capitalists Collide: Business Conflict and the End of Empire in Egypt.

Berkeley: University of California Press, c1995 1995. http: ark.cdlib.or! ark: 1"#"# ft$f59p1%%

When Capitalists Collide

Business Conflict and the End of Empire in Egypt Robert Vitalis
UNIVERSITY OF CALIFORNIA PRESS

Berkeley Los Angeles London

1995 The Rege ts o! the U i"ersit# o! Cali!or ia

for Betty and &ony

Preferred Citation: Vitalis, Robert. When Capitalists Collide: Business Conflict and the End of Empire in Egypt. Berkeley: University of California Press, c1995 1995. http: ark.cdlib.or! ark: 1"#"# ft$f59p1%%

for Betty and &ony

Preface
'hat do capitalists do and (hat sho)ld they do* &hese +)estions are critical to co,parative political econo,y of develop,ent and, even ,ore so, to the lives of ,illions in -sia, -frica, and .atin -,erica. &he ans(ers to these +)estions are a (indo( to the core ass),ptions and val)es that )nderpinned the ins)r!ent ,ove,ent in /orth -,erican social sciences and to the c)rrents0fro, dependencia to dependent develop,ent, fro, str)ct)ral theories of the state to instit)tionalist analysis of bar!ainin!, fro, class conflict to elite pacts0that are the le!acy of the anti1i,perialist

intellect)al pro2ect of the 193#s. &he pre,ise behind this book is that o)r ans(ers need rethinkin!, as others in the field see, to reco!ni4e 5 Canack 19%67 Block 19%$7 8vans and 9tephens 19%%7 :a!!ard 19%97 :a(es and .i) 199";. <et, (hile the ins)r!ent ,o,ent contin)es to fade into the past and a !eneration of radical intellect)als ,at)res, ideas abo)t capitalists see, partic)larly resistant to chan!e. &he proble, of national capitalists and capitalis,s has never been si,ply a +)estion for intellect)als to ar!)e abo)t, and adoptin! the conventional ass),ptions has at ti,es spelled real disaster. =n 19%", = had the opport)nity to ,eet the -r!entinean econo,ist Carlos Vilas, (ho (as then an adviser to /icara!)a>s revol)tionary !overn,ent. ?ver dinner, Vilas described the thinkin! that led to the 9andinistas> land1refor, pro2ect and, in partic)lar, the idea that the e@propriations served the ob2ective interests of the co)ntry>s ind)strial bo)r!eoisie. Vilas and ,any others believed that once the estates (ere confiscated, a patriotic national1capital fraction (o)ld be inspired to )ndertake ne( lon! ter,1invest,ents in prod)ction. B)t /icara!)an investors vie(ed ,atters differently fro, the revol)tion>s theorists, and the o)tco,e, fa,iliar eno)!h to those (ho kno( /icara!)an history or for that ,atter the 8!yptian case and the early history of the A)ly 195B Revol)tion, (as a costly conflict bet(een investors and the state and a takeover in sta!es of the econo,y>s co,,andin! hei!hts 5Vilas 19%37 Colb)rn 19%3;. When Capitalists Collide is a st)dy of the politics of invest,ent conflict. =n the 19"#s and 196#s, representatives of so,e of the (orld>s lar!est and ,ost po(erf)l fir,s in ind)stry>s leadin! sectors (ere dra(n to 8!ypt and, to!ether (ith local investors, en!a!ed in a lon!, protracted and costly co,petition for the contractin! and concession ri!hts to b)ild po(er plants and develop the co)ntry>s che,ical ind)stry. &he ,assive archival record that e@ists of these pro2ects, an artifact of 8!ypt>s e+)ally protracted process of decoloni4ation, provides a rare, deep, s)stained and detailed vie( of the ob2ectives, capacities and political strate!ies of both the international fir,s and, even ,ore val)ably, of 8!ypt>s local bi!1b)siness rivals. &he archives s)pply the ,ost strikin! confir,ation to date of 8vans>s proposal in Dependent Development that, in foc)sin! Con the po(er of the ,)ltinationals,D (e have i!nored the Cpo(er, the bar!ainin! levera!e, alliancesD and other strate!ies Cof local capitalD 519$9: 61;. = trace the levera!e1enhancin! alliance strate!ies of a Cb)siness !ro)pD headed by -h,ad E-bb)d, (ho in ,ost 8!yptian historians> eyes serves as the avatar of a collaboratin! co,prador class fraction. = sho( ho( he and other Cforei!ners and their co,prador allies,D as Per)vian specialist Favid Becker 519%": ""1; ,i!ht (ell have described the,, s)ccessf)lly ,er!ed their interests in forei!n1backed vent)res (ith their interest in local acc),)lation. -nd p)shin! the pre,ises of the dependent1develop,ent debate, = ar!)e that the politics of invest,ent in 8!ypt (as )lti,ately less a str)!!le bet(een forei!n and local capital than a conflict a,on! local investors for access to reso)rces and control over the rents represented by ind)stry b)ildin!.

- ,ore thoro)!hly revisionist or CpostcolonialD acco)nt of the political econo,y of invest,ent conflict is lon! overd)e. 'hile = (as livin! in 8!ypt in the early 19%#s, there (ere fe( si!ns that the left had chan!ed its ideas abo)t the nat)re of the bo)r!eoisie in thirty years. &h)s, the response to a ne( capitalist cohort>s rise o)t of the shado(s of -rab socialis, (as to tear a pa!e fro, the historical tracts, )pdatin! the caricat)re of the co,prador class as a parasitic bo)r!eoisie (hose ob2ectives (ere alle!edly to sh)n prod)ctive invest,ent, consort (ith the -,erican ,ission and )nder,ine the pro2ect of a ,ythical, patriotic national1capital fraction. ?ne investor, EUth,an -h,ad EUth,an, a confidant of 9adat>s (hose constr)ction fir,>s lo!o see,ed to fra,e virt)ally every lar!e1scale 8!yptian skyscraper, road(ay and factory site in the late 19$#s, follo(ed in the footsteps of E-bb)d to beco,e the sy,bol of a ne( parasitic class 5'aterb)ry 19%"7 19%9 and 199"7 9ado(ski 1991;. Gore than once in ,y conversations (ith intellect)als they insisted that EUth,an (as actin! as a front ,an for =sraeli interests in 8!yptH By the late 19%#s, the ,ore 4ealo)s of the Rea!an1era political appointees and a ne( !eneration of develop,ent technicians (ho arrived in Cairo (ith de 9oto>s The Other Path519%9; packed in their ba!s (ere dra(in! concl)sions abo)t EUth,an and his cohort that betrayed a ro,anticis,, in this case abo)t entreprene)rs, that (as hardly less ,isty1eyed than the left>s sa!a of national capital. Ior -,ericans, the proble, (ith EUth,an (as his too co4y relationship to the bloated 8!yptian state and the rent seekin! that ostensibly had co,e to stifle and replace the private initiative of an earlier free1enterprise era7 for the left, the state and, in partic)lar, the p)blic1enterprise sector protected the nation fro, a coll)sive antinational alliance of forei!n and local capital. <et, as this book details, it (as local investors> access to these t(o forces0 the state and forei!n capital0that ,ade possible in the first half of the t(entieth cent)ry the creation of the private enterprises and national ind)stries0airlines, shippin! lines, che,ical plants, a!roind)stries, spinnin! ,ills0that for, the core of 8!ypt>s e,battled p)blic sector today. -nd the patterns of coll)sion and conflict that characteri4e present1day relations bet(een 8!yptian capitalists and their a,bivalent allies (ithin the state and the international b)siness co,,)nity )nderlie each s)ccessive phase in the Cdiscontin)o)s evol)tionD of capitalist instit)tions and prod)ction relations in 8!ypt 5Bianchi 19%5: 15";. &he fears of forei!n do,ination that retain so ,)ch po(er in conte,porary 8!yptian pop)lar c)lt)re today are perhaps )nderstandable !iven the relatively end)rin! conse+)ences of an ori!inal ,assive transfer of reso)rces en!ineered by British colonial officials in the late 1%##s and delivered to the !iants of 8)ropean finance and their local, predo,inantly non18!yptian partners.[1] B)t in the early decades of the t(entieth cent)ry the reso)rces of the state0s)bsidies, ta@ e@e,ptions, property, la(, coercive force0(ere increasin!ly capt)red by a ne(, risin! cohort of 8!yptian investors co,petin! for control over prod)ction and distrib)tion of !oods and services.

Ior a !eneration prior to the national revol)tion of 1919, local forei!n and ethnic1,inority investors served as 2)nior partners for do,inant sectors in the advanced econo,ies of Britain and, to a lesser e@tent, Irance and Bel!i),. &hese 2oint vent)res (ere one of the ,ain so)rces of acc),)lation for do,estic b)siness interests, per,ittin! the, !rad)ally to e@pand their field of activities. - li,ited ind)striali4ation pro!ra, advocated by leadin! b)siness elites in 8!ypt at the end of 'orld 'ar = rested on a ne( ro)nd of collaboration bet(een local and forei!n interests. 'ho (o)ld finance infrastr)ct)re develop,ent, incl)din! electrification* :o( (o)ld 8!yptians obtain ,achinery and other capital !oods* 'here (o)ld the local capitalists find the en!ineerin! services and technolo!y for vent)res like the proposed che,ical ind)stry* =nd)strial policy in the Cliberal eraD 519BBJ195B; (as synony,o)s (ith po(er politics. &he state played a specific role in the e@pansion of the co)ntry>s capitalist sectors. Britain>s )nilateral !rant of 8!yptian CindependenceD in 19BB and introd)ction of a constit)tion in 19B" res)lted in the fract)rin! of the state e@ec)tive. =n the place of a sin!le a!ency r)lin! 8!ypt three e@ec)tive a!encies0the British residency, the palace and the cabinet0contested for control and red)ced the state>s capacity to coordinate policy. -t the sa,e ti,e the ad,inistrative a!encies of the state be!an a ne( period of !ro(th ,arked by the hastened pace of 8!yptiani4ation of the b)rea)cracy. 8!yptiani4ation had t(o facets. -s is co,,only reco!ni4ed, the b)rea)cracy (as rapidly politici4ed. Ior the first ti,e, party politics intr)ded on the civil service, prod)cin! !reat t)rnovers of personnel (ith every chan!e in !overn,ent. Perhaps less reco!ni4ed, the b)rea)cracy (as also rapidly Ccoloni4edD by fa,ily and other net(orks that had established ties to investors or so)!ht to for!e the,. &his partic)lar ro)te fro, !overn,ent office to co,pany boardroo, (as (ell ,arked. British officials char!ed (ith the p)blic tr)st in the 1%$#s and 1%%#s pioneered this ro)te to private (ealth in 8!ypt>s corporate sector. 'ith independence, the circles of p)blic1 private coll)sion (ere (idened to incl)de 8!yptians. &hese are i,portant factors in )nderstandin! the politics behind the co,petition for electrification contracts and related b)siness in state b)ildin! and infrastr)ct)re and ind)strial develop,ent that en!a!ed local investors and forei!n capital in 8!ypt in the 19B#s and beyond. &hese ind)strial sche,es (ere at the intersection of chan!es takin! place in society as (ell as in the state. =n partic)lar, the years i,,ediately after independence coincided (ith the efforts of 8!yptian nationals to 2oin the ranks of the b)siness co,,)nity, often thro)!h privile!ed access to the politicians in control of contracts or other s)bsidies. Conflicts in this period reflected the e,er!ence of ne( and co,petin! 8!yptian b)siness interests. &his early phase in the co)ntry>s on!oin! effort to develop ade+)ate ener!y reso)rces like(ise stood at the intersection of chan!es takin! place in both the do,estic and the international econo,y. &he a!!ressive pro,otion of pro2ects like the -s(an po(er sche,e reflected the da(nin! reco!nition that

8!ypt had entered the ind)strial era. 8lectricity (as needed to po(er cities and ind)stries. -t the sa,e ti,e, the pro,otion of 8!yptian develop,ent reflected the increasin! co,petition for ,arkets a,on! the (orld>s ,a2or heavy1electrical1e+)ip,ent ,an)fact)rers. Co,plicated intraind)stry arran!e,ents had closed off the prod)cers> ho,e ,arkets to one another and drove the, to redo)ble their efforts to sell abroad. =n this case sellin! abroad ,eant developin! 8!ypt>s po(er reso)rces. Battles (ere (a!ed by the international fir,s and their local b)siness allies for state sanction and reso)rces to electrify 8!ypt. 9tr)ct)ral political and econo,ic chan!es co,bined to create conditions that per,itted local 8!yptian b)siness interests to e@tend their activities into the creation of local ind)stry. &hese conditions incl)ded an increasin!ly co,petitive international ,arket7 the e,er!ence of ne(, leadin! ind)strial sectors in the advanced ind)strial nations7 and the relatively rapid decline of Britain>s hold on the levers of the 8!yptian state. &he bar!ainin! that took place bet(een 19BB and 195B res)lted in ne( national vent)res in shippin!, aviation, che,icals, ,inin!, food processin!, a!roind)stry, phar,ace)ticals, te@tiles and electrical !oods, a,on! other enterprises. Until no(, the politics )nderlyin! this for,ative era in 8!ypt>s ind)striali4ation have been )nderstood pri,arily as a conflict bet(een local and forei!n capital for do,inance in the co)ntry>s e@pandin! ind)strial sectors. = ar!)e that they are better )nderstood as 8!yptian investor coalitions co,petin! for leadin! positions in ne( vent)res and ne( sectors. =nvestors vie(ed the ,arket in 4ero1s), ter,s, leavin! little roo, for concord and coordination. Co,petition for the reso)rces necessary to b)ild ind)stry proved fierce. &his st)dy (ill e@plore the inti,ate connection bet(een rent seekin! and politics in colonial and postcolonial 8!ypt. Part = ar!)es for a ne( approach to )nderstandin! ho( capitalists or!ani4ed and acted in the local political econo,y. =n Chapter 1 = develop a criti+)e of conventional vie(s of the dile,,as facin! 8!ypt>s so1called e,er!in! national bo)r!eoisie and be!in to o)tline an alternative vie( of the capacities, ob2ectives and political strate!ies of 8!yptian investors. =n Chapter B, = trace the develop,ent of investor coalitions or b)siness !ro)ps, a basic instit)tion of the private ,arket1oriented econo,y created )nder colonialis,, foc)sin! in partic)lar on the 8!yptian capitalists (ho adopted this for, of or!ani4ation in the 19B#s. &he disc)ssion centers on the E-bb)d Pasha !ro)p, (hich event)ally spanned constr)ction, trade, bankin!, shippin!, )rban transport, real estate, te@tiles, a!roind)stry, to)ris, and che,ical ,an)fact)rin!. Part &(o of the st)dy ar!)es for a ne( )nderstandin! of the political econo,y in the decades after 'orld 'ar =, (hich has co,e to be seen as a period in (hich British po(er (as )sed to constr)ct a neocolonial econo,ic re!i,e. = ar!)e instead that this effort failed, and = analy4e the circ),stances that per,itted 8!yptian capitalists to )nder,ine the neocolonial pro2ect. Chapter " reco)nts the strate!ies e,ployed by rival 8!yptian investor coalitions in the electrification sche,es of the 19B#s and

19"#s. Chapter 6 foc)ses on the E-bb)d !ro)p>s atte,pt d)rin! 'orld 'ar == to beco,e the key force in 8!ypt>s ind)strial sector as a (hole. Part &hree ar!)es for a ne( concept)ali4ation of 8!yptian capitalists and their relations to the postcolonial state. =n Chapter 5, = analy4e the strate!ies e,ployed by capitalists to bl)nt ne( state re!)latory a!encies and rationales. &he vehicle for doin! so (as the co)ntry>s ,ain political party, the 'afd, (hich (as do,inated by a bloc of landlord1ind)strialists. =n Chapter 3, = look at the response of co,petin! investors to the escalatin! political crisis of the post(ar years, the co)p d>Ktat of A)ly 195B and the consolidation of ,ilitary a)thoritarian r)le. &he ori!ins of etatis, in 8!ypt are fo)nd in the years 1956J1955 as /asser and his allies be!an to en!ineer the do(nfall of the b)siness oli!archs (ho !overned the econo,y and the takeover of the invest,ent !ro)ps that they had b)ilt over the previo)s three decades. &here (ere only li,ited places for the old capitalists in the ne( order. =n the 193#s, the re!i,e b)ilt a stat)e to honor one 8!yptian b)siness,an: &alEat :arb, the fo)nder of the Gisr !ro)p (ho had died in 'orld 'ar == after drivin! his bank holdin! co,pany into receivership. &he ,ore s)ccessf)l of :arb>s co,petitors have not been accorded si,ilar honors. &he Gisr !ro)p>s ,ain rival, the invest,ent co,ple@ headed by -h,ad E-bb)d, is )nkno(n by ,ost, still reviled by a fe(. ?ne of the only si!ns of his i,pact on the t(entieth1cent)ry 8!yptian political econo,y is a set of d)sty, hard1to1read pla+)es listin! the na,es of his vario)s holdin!s in s)!ar, shippin!, constr)ction, hotels and che,icals. &hese are fastened to the (all of an office bloc in do(nto(n Cairo na,ed the =,,obilia B)ildin!. &he city>s lar!est co,,ercial real estate vent)re of the 19"#s is no( a slo(ly decayin! ,on),ent to E-bb)d>s b)siness e,pire. &his book co,pletes a research pro2ect started in the s),,er of 19%6, (hen = first looked at U.9. 9tate Fepart,ent records on 8!yptian ind)striali4ation pro2ects. &he pro,inence accorded E-bb)d and his role in the key political events of the 19"#s (as 2arrin! to so,eone (ho had absorbed the !ro(in! collection of histories and speciali4ed ,ono!raphs on 8!ypt>s political econo,y, in ter,s both of the conventional vie( of E-bb)d as a co,prador and of 8!yptian capitalists !enerally as a class or class se!,ent alle!edly incapable of pro,otin! its interests. Gy invest,ent of ti,e in the archives led ,e event)ally to t)rn a(ay fro, these ideas and concentrate on (hat capitalists (ere doin! in 8!ypt rather than e@plainin! (hat they ostensibly had failed to do. -nalysts conventionally e@ercise the privile!e of erasin! the,selves fro, the !enealo!ies of historio!raphy and theory that are called into +)estion by a ne( interpretation, for,)lation, ar!),ent or narrative. B)t, in this case, (ritin! When Capitalists Collide has been an e@ercise in tryin! to )nderstand ,y o(n intellect)al relationship to third (orldis, 5:arris 19%$;. -s s)ch, this book doc),ents one /orth -,erican st)dent>s t)rn a(ay fro, political econo,y conceived pri,arily as anti1i,perialist theory and history (ritten fro, a point balanced )nsteadily bet(een ob2ective la(s of ,aterial

develop,ent and solidarity (ith the nationalist pro2ect. 'orse, perhaps, here is another forei!ner, and a Lreek51-,erican; no less, e@ploitin! 8!ypt>s historical reso)rces for his o(n interests0in this case, invest,ent in an acade,ic enterprise (hose prod)ct is contained here. &he !ains re,ains to be deter,ined. Readers skeptical of ,y concl)sions (ill still find the ,ost detailed acco)nt to date of econo,ic intervention and interest conflict in the decades after independence: ho( British officials p)rs)ed their neocolonial pro2ect, ho( forei!n investors or!ani4ed, and ho( E-bb)d, :arb and other 8!yptian capitalists ,ana!ed to e@tract ,a@i,), advanta!e fro, the political, ,aterial and ideolo!ical reso)rces at their disposal. &hose (ho take the ar!),ents serio)sly (ill have to revise, alter and sharpen their criti+)es of locally do,iciled ,inority 5e.!., Lreek, Ae(ish, 9yrian, British; investors (ho sa( their o(n ind)striali4ation pro2ect and strate!ies adapted by a cohort of 8!yptian b)siness oli!archs (ho then eclipsed the C.evantinesD as a leadin! force in the rent seekin! that )nderpinned ind)stry b)ildin! in 8!ypt0if not rapidly or thoro)!hly eno)!h for so,e. -nd those (ho )nderstand the ob2ectives, bar!ainin! strate!ies and capacities of state b)ilders like /asser in dealin! (ith forei!n fir,s (ill appreciate the si,ilar dile,,as and opport)nities in the path of local 8!yptian investors, then and no(. - fe( ,ay, like ,yself, concl)de that the e@istin! canon )nreasonably deni!rates the prodi!io)s abilities of these pioneer 8!yptian capitalists (ho theorists s)ch as Irant4 Ianon likened to brothel o(ners (hen co,parin! the national bo)r!eoisie of the 9o)th to its 5,ythical; 'estern co)nterpart. ?ther critics of capitalis, sho)ld find that there is no lon!er a need to indict local investors in partic)lar for e@ercisin! the privile!es that are inherent in capitalist prod)ction relations. -t the sa,e ti,e, = have be!)n to appreciate ane( the capacities of other 8!yptians to challen!e these effects. -fter all, the or!ani4ation of prod)ction and distrib)tion of po(er and privile!e in 8!ypt today bear faint rese,blance to the political1econo,ic order so)!ht by :arb, E-bb)d and the other b)siness oli!archs. M M M

/),ero)s people and instit)tions are i,plicated in the (ritin! of When Capitalists Collide. Iirst and fore,ost, = need to thank those (ho facilitated ,y rent seekin!: the -,erican Research Center in 8!ypt, the Iriends of Carrol 'ilson at the Gassach)setts =nstit)te of &echnolo!y, the &r),an .ibrary, the Fepart,ent of Lovern,ent and the Center for Giddle 8ast 9t)dies at the University of &e@as at -)stin, the .BA 9chool of P)blic Policy, the 9ocial 9cience Research Co)ncil and Clark University. /),ero)s or!ani4ations in Cairo !enero)sly allo(ed ,e access to their records, incl)din! the /ational .ibrary, the /ational -rchives, the -,erican University in Cairo, the al- hram Center and al- hram al-!"tisadi# the al- $h%ar ne(spaper, the Center for Political 8cono,y, the 8n!ineerin! 9ociety and the Ginistries of =rri!ation 5'ater Research Center; and P)blic 'orks. -t the

Giddle 8ast Centre of 9t. -ntony>s Colle!e in ?@ford, 9ir Giles .a,pson>s )np)blished diaries (ere a !old ,ine on the political econo,y that = pl)ndered for days. 9econd, the intellect)al po(ers of a lon! list of collea!)es, co,rades and critics (ere e@ploited even ,ore sha,elessly. = a, happy to ackno(led!e the contrib)tions of .isa -nderson, .. Carl Bro(n, /athan Bro(n, Niren Cha)dhry, Aosh)a Cohen, Favid Libbs, Aoel Lordon, Feborah :arrold, Cle, :enry, Ai, :enson, 9teve :eyde,ann, Ca!lar Neyder, =ssa, al1Nhafa2i, Philip Nho)ry, -t)l Nohli, Vickie .an!ohr, -faf Garsot, Aoel Gi!dal, &i, Gitchell, Ro!er ?(en, 9evket Pa,)k, Garsha Pos)sney, Lretchen Ritter, 9a,er 9hehata, Garc 9teinber!, Bob &i!nor, Peter &r)bo(it4, Favid 'aldner, Labriel 'arb)r! and Aohn 'aterb)ry. Bob Bianchi and 'alid Na44iha started ,e on this pro2ect, and &o, Ier!)son ad,onished ,e to !et the doc),ents. -t the end of it, Aoel Beinin and 8llis Loldber! (ere instantly available by the =nternet to help see a better book thro)!h to co,pletion. &hird, ,y debt to Catherine Boone and Oachary .ock,an !re( intractable lon! a!o, and yet they allo( it to keep ,)ltiplyin!. &hey re,ain the ,ost tolerant critics of and )nceasin! infl)ences on virt)ally every pa!e of every draft of this st)dy. &he only (ay = can think to repay Oach in partic)lar is to try to be as !enero)s in the f)t)re as he has been (ith ,e and the do4ens of others of st)dents (ith (ho, he has shared his passion for 8!yptian history. Io)rth, Ga!!ie Bro(nin! has had nothin! to do (ith the (ritin! of this book, nor is she likely to read it, b)t she is nonetheless vital to a lar!er pro2ect of (hich the book is one s,all part, and = a, forever !ratef)l. Iinally, (itho)t Chet Baker, A)liana :atfield, A Gascis, .o) Reed, .)cinda 'illia,s and /eil <o)n! to listen to, (ritin! When Capitalists Collide (o)ld not have been as ,)ch f)n.

Note on Sources, Citations and Transliterations

= have adopted a co,posite syste, for citin! so)rces in this book. -rchival so)rces, (hich are ,ainly declassified files fro, U.9. and British !overn,ent a!encies, private papers, to!ether (ith intervie( transcripts, are cited in f)ll in all notes, follo(in! standard practice by historians. -ll other so)rces are cited both in the te@t and in the notes in the abbreviated a)thor1date for,at no( co,,on in the social sciences. -rabic (orks are cited accordin! to the a)thor>s f)ll na,e, as nor,ally fo)nd in -rabic references 5e.!., E-bd al1E-4i, Ra,adan rather than Ra,adan;. &he References incl)des a !eneral description of the archives cons)lted and the f)ll citations of all secondary (orks.

-ll -rabic so)rces are transliterated follo(in! the !nternational &ournal of 'iddle East (tudies b)t o,ittin! ,ost diacritics, ha,4a 5>; and ayn 5E; e@cepted. Place na,es and na,es of persons co,,only referenced in 8n!lish lan!)a!e te@ts are not transliterated 5e.!., Cairo and not al1Nahira, La,al -bdel /asser rather than Aa,al E-bd al1/asir;.

Notes
1. :ansen insists that CPrQadical stereotypes of class str)!!le, neocolonialis,, and dependency (ere not )sef)l for )nderstandin! develop,entsD in 8!ypt>s econo,y in the years after 19BB 51991: @iii;. B)t, s)rely, this is far too s(eepin! a 2)d!,ent. Liven his preference for the Cne(D political econo,y, it is s)rprisin! to find hi, )nconcerned (ith the historical ori!ins and conse+)ences of the partic)lar confi!)ration of property ri!hts and other instit)tions that shaped the inefficient invest,ent strate!ies and CfailedD develop,ent path of the 19B#sJ195#s.

1. Capitalists and Politics in Egypt

1. Di ided !ule" The Politics of #usiness$ %roup Conflict and Colla&oration
)or all the tal$ and all the pu%lic curiosity a%out the relations %et*een %usiness and politics# there is a remar$a%le dearth of studies on the su%+ect.,One *ould suppose that the role of %usiness# particularly %ig %usiness# in the political system *ould %e a matter of central concern to political scientists.

-or does anyone *rite a %oo$ on the ma$ing of the %ourgeoisie. rather they *rite %oo$s on /les %ourgeois con"u0rants1. !t is as though the %ourgeoisie *ere a given# and therefore acted upon others: upon the aristocracy# upon the state# upon the *or$ers. !t seems not to have origins# %ut to emerge full gro*n out of the head of 2eus., n analysis of the historical formation of this %ourgeoisie *ould inevita%ly place in dou%t the e3planatory coherence of the myth. nd so it has not %een done# or not %een done very much.

&his book atte,pts to (iden the in+)iry into b)siness and politics in ne(ly ind)striali4in! co)ntries beyond the +)estion of (hy capitalists there failed to Ccapt)re the stateD and beyond the rote responses that are !ro)nded in ideali4ed vie(s of collective action and class for,ation. &he first (ay this

book atte,pts to (iden the in+)iry is by foc)sin! ,ore closely than is co,,on in co,parative politics or political econo,y on investors as econo,ic and political a!ents and, in this case, on the specific instit)tions or arenas in postJ'orld 'ar = 8!ypt that shaped investors> strate!ies. &he period bet(een 19BB and 195B (as a key era in the Cdiscontin)o)s evol)tionD 5Bianchi 19%5; of 8!ypt>s capitalist class, yet little is kno(n abo)t the role capitalists played in the 8!yptian party syste,. &here are no st)dies of sectoral conflict for these years, and (hile the event is referenced in virt)ally every disc)ssion of the period, there is still no st)dy of the ,akin! of the fa,o)s 19"# tariff la(, to cite 2)st one possible e@a,ple. =n s),, there is ,)ch to learn abo)t ho( and (hy investors in 8!ypt or!ani4ed, coll)ded and clashed in the ,arket, the boardroo, and the pri,e ,inister>s cha,bers. &he !ains, in t)rn, are precio)s beca)se others both inside and o)tside the field of Giddle 8ast st)dies have had li,ited s)ccess so far in investi!atin! the act)al politics of invest,ent for any non1'estern case. Certainly it is rare, even in st)dies of the United 9tates, to find the kind of doc),entation that per,its the detailed acco)nt of co,petitive conflicts that for,s the core of this case st)dy of 8!ypt>s po(er and ,an)fact)rin! sectors. -nd, cr)cially in this case, conventions abo)t and ,odels of collective interest and a!ency that often fill in for detailed kno(led!e of invest,ent1related political processes t)rn o)t to bear little relation to the instit)tional )niverse of investors, fir,s and sectors. &he second (ay in (hich this book atte,pts to e@pand debate, therefore, is by proposin! an alternative to Cpolitical class analysisD 58vans and 9tephens 19%%: $B%; of interest conflict and ind)stry b)ildin! in the developin! (orld. &hose (ho (rite on 8!ypt or other cases often ,ake it see, that the paradi!,atic ,acrohistorical acco)nt of a native bo)r!eoisie in an invariably losin! confrontation (ith i,perialis, and its allies in the pri,ary e@port sector has a ,ore or less faithf)l correspondence to the (orld of capitalists in the periphery, b)t that (orld is a different and perhaps ,ore co,ple@ one than (e have i,a!ined. &he ,odel of interest a!!re!ation and conflict that = develop centers on rival coalitions of local investors, or (hat are often called b)siness !ro)ps. &hese are fa,ilies or other co,,)nally linked investors, typically, (ith holdin!s that span pri,ary, secondary and tertiary econo,ic sectors0that is, they are co,bination bi! landlords, bankers and ,an)fact)rers. -nd these !ro)ps are typically tied by bonds of ,)t)al dependence, consens)s and shared advanta!e (ith forei!n investors and !overnin! factions. Liven the relatively s,all n),ber of capitalists involved, the concentrated ,arket po(er represented by their holdin!s, their sector1spannin! leadership positions and their privile!ed access to state po(er, = refer to these or!ani4ed !ro)ps collectively as a %usiness oligarchy. B)t it is the conflict a,on! oli!archs that is central to )nderstandin! 8!ypt>s early ind)strial develop,ent.

Rival !ro)ps of investors and their intensely entreprene)rial leaders co,peted for the ri!hts and other state reso)rces necessary for the creation and protection of rents in the hi!hly oli!opolistic Cprivate ,arketD econo,y b)ilt by the colonial a)thorities. Fecoloni4ation (as in t)rn cr)cial for the 8!yptians> ability to !ain control of these rent circ)its and, th)s, for the initiation of a series of fierce and protracted distrib)tional conflicts that rocked the co)ntry>s ,ain ind)strial sectors over the ens)in! decades. -s a res)lt, the dyna,ics of ind)striali4ation at a key 2)nct)re in 8!ypt>s recent history are ,ore )sef)lly and convincin!ly )nderstood as the o)tco,e of the (ar of position a,on! these rival investor coalitions than as a representation of end)rin! str)ct)ral feat)res of a!rarian society and the do,inant hierarchies of the international capitalist syste,. P)t even ,ore plainly, the politics of b)siness and ind)stry b)ildin! in 8!ypt can no lon!er be red)ced to the idea of an overarchin! str)!!le bet(een i,perialis, and the nation, and = believe this ,)st be tr)e for other cases of late ind)striali4ation as (ell. Certainly, fro, the perspective of a s,all n),ber of real, rent1seekin! oli!archs p)rs)in! a strate!y of ,arket avoidance, the ind)strial polices of inter(ar 8!yptian !overn,ents (ere ,ore s)ccessf)l than others portray the, to be. -nd, in retrospect, capitalist instit)tion b)ildin! and the e@pansion of local ind)stries d)rin! the eras of effective British soverei!nty 51%%BJ19BB; and protracted decoloni4ation 519BBJ1956; look i,pressive (hen co,pared (ith develop,ent in other parts of the for,er ?tto,an 8,pire or in nonJGiddle 8astern territories that (ere then )nder so,e for, of colonial or se,icolonial r)le 5e.!. C)ba, the Philippines, =ndonesia;. Ior instance, local capital in 8!ypt appears to have evinced a !reater de!ree of internal social and econo,ic differentiation than did the b)siness co,,)nity in -natolia &)rkey d)rin! the sa,e period 5Pa,)k 19%%7 Nasaba 19%%7 Neyder 19%$ and 19%%;. &hose feat)res of social and econo,ic transfor,ation critical to identification of e,er!in! capitalist sectors in the 193#s and 19$#s in parts of postcolonial -frica as (ell as in neocolonial Central -,erica and 9o)th -sia (ere )n+)estionably evident in 8!ypt decades earlier 5-)bey 19397 9(ainson 19%#7 Robison 19%37 .)beck 19%$;. -s (ith these other cases, the analysis of capitalist develop,ent in 8!ypt is not !enerally rooted in s)ch co,parisons. =nstead, it is based on a historical1 co,parative paradi!, that is in essence a hi!hly styli4ed acco)nt of the capitalist develop,ent path. G)ch of (hat (e ostensibly kno( abo)t capitalists and politics in 8!ypt is ,ediated by a set of i,plicit and !enerally )ne@a,ined beliefs abo)t the bo)r!eoisie Cas a corporate political actor (ith a collective class interestD 5Blackbo)rn and 8ley 19%6: 53; and ho( it so,eho( for!ed stable he!e,onic syste,s r)le (hile creatin! the advanced ind)strial econo,ies of the United 9tates and 'estern 8)rope. -daptin! an ar!),ent developed by Blackbo)rn and 8ley, = describe the ,ore ri!oro)sly analytical 5or less tri),phantly nationalist; approach to 8!yptian political econo,y analysis as a kind of Ccolonial e@ceptionalis,.D M M M

Colonial E'ceptionalis( and the National #ourgeoisie

-s in other e@ceptionalist acco)nts, the story of the e,er!ence of the capitalist ,ode of prod)ction, the for,ation of classes, the creation of do,estic ind)stries and the instit)tionali4ation of de,ocratic political arran!e,ents in 8!ypt is told in ter,s of, and is ,eas)red a!ainst, a CclassicD co)rse thro)!h (hich capitalis, e,er!ed and the bo)r!eoisie tri),phed in Lreat Britain and Irance. =n Gar@ and 8n!el>s 51%%%; evocative acco)nt, the bo)r!eoisie, C(herever it has !ot the )pper hand, has p)t an end to all fe)dal, patriarchal, idyllic relations.R=n one (ord, it creates a (orld after its o(n i,a!e.D &he cr)cial difference, as for,)lated in one disc)ssion of the 8!yptian case, is that Cthe 8!yptian ind)strial bo)r!eoisie never !ained an )pper hand in the 8!yptian political econo,yD 5&i!nor 19%6: B63;. - ,o,ent>s reflection sho)ld lead one to see that the identical clai, has been p)t for(ard abo)t every co)ntry )nder!oin! late ind)striali4ation in the t(entieth cent)ry. &he e+)ally classic acco)nts of Ler,an e@ceptionalis, provide both the idea of the relatively (eak bo)r!eoisie and the narrative of bo)r!eois fail)re at the heart of ,)ch (ork in historical1co,parative political econo,y. &he incorporation of i,perialis, into the basic fra,e(ork coincided (ith its (idespread disse,ination and )se by historians fro, -l!eria to Oaire in e@plainin! ho( ne(ly independent or postcolonial societies 5sho)ld; ,ove thro)!h ti,e. - rich series of variations on this basic narrative (as invented, debated and refor,)lated bet(een the 193#s and 19%#s as theories of )nderdevelop,ent, dependency and dependent develop,ent 58vans and 9tephens 19%%;. &he ,arria!e of i,perialis, theory to e@ceptionalis,0hence, colonial e@ceptionalis,0prod)ced (hat are essentially historio!raphies of national1 class for,ation 5the rise of the national bo)r!eoisie in 8!ypt, Nenya, the Philippines, etc.;, incl)din! the no( fa,iliar refor,)lations of the relatively1 (eak1class proble,. &h)s, in addition to the classic e@ceptionalist constraint posed by fe)dalis, or fe)dali4ation, the national1bo)r!eois pro2ect faced additional obstacles in those instances (here i,perialis, did not si,ply destroy or so,eho( act to inhibit the evol)tion of indi!eno)s capitalist strata 5Phillips 19%97 Boone 199B;. 8@planations for (hy a relatively (eak bo)r!eoisie in a partic)lar co)ntry failed to carry o)t thoro)!h!oin! liberal and ind)strial revol)tions are varied, b)t in the 8!yptian case it is co,,on to foc)s on so1called divisions (ithin the bo)r!eoisie itself, conceived vario)sly in ter,s of identity 5Cforei!nD;, o)tlook 5Cco,pradorsD;, f)nction 5C,iddle,enD; or sectoral location 5Ca!roe@port,D the Cco,,ercial bo)r!eoisieD;. Gore !enerally, as in other e@ceptionalist cases, the analytic terrain of class and politics in 8!ypt is littered (ith research res)lts ostensibly sho(in! ho( and (hy the national ind)strial bo)r!eoisie co)ld or (o)ld not act in its o(n best collective interests or (hy its econo,ic and political po(er (as never !reat. B)t ,any of these ass),ptions have to be retho)!ht. =n the daily arenas of capitalist collective action0,arkets, !overn,ent a!encies, party head+)arters,

cabinet offices0the 8!yptian case provides scant evidence to s)pport these pessi,istic vie(s. &he centerpiece of both tri),phalist 5nationalist; and e@ceptionalist 5neo,ar@ist; acco)nts of 8!yptian econo,ic history is the story of Bank Gisr and the ind)strial invest,ent !ro)p led by its o)tspokenly nationalist chair,an, &alEat :arb. -s historians of the 8!yptian labor ,ove,ent Beinin and .ock,an 519%$: 1#J11; s),,ari4e the story, the Bank Gisr !ro)p Csy,boli4ed the or!ani4ational consolidation of an aspirin! 8!yptian ind)strial bo)r!eoisie,D (hich alle!edly Ctook on itself the task of creatin! a p)rely 8!yptian1o(ned ind)strial sector.D[1] =n broad o)tline, therefore, analyses of the 8!yptian case reflect the !eneral ter,s of debate in the 193#s and 19$#s abo)t local so1called indi!eno)s capital and (hether it co)ld develop ind)stry (itho)t reco)rse to forei!n collaboration. 'hat is )ni+)e abo)t 8!ypt is that the si4e of this see,in!ly national1oriented strat), (as so s,all. &he con)ndr), for ,ost historians is that the Gisr !ro)p, like other, less (ell1re!arded investor coalitions, also collaborated (ith forei!n capital in developin! 8!yptian ind)stries. &his invest,ent strate!y is interpreted as a fail)re, )lti,ately, to carry thro)!h (ith the independent, or national, ind)striali4ation pro2ect. &his fail)re is in t)rn conventionally0and, as = ar!)e, incred)lo)sly0e@plained as a series of forced co,pro,ises (ith forei!n capital and its local allies, a rel)ctant capit)lation to the s)perior po(er of this reactionary capital coalition. &hese co,pro,ises c)l,inate in the Gisr !ro)p>s Centry into 2oint vent)res (ith British corporations in the later 19"#s,D at (hich point Cthe Gisr !ro)p ceased to be Enational> in characterD 5Beinin and .ock,an 19%$: 1#J11;. &he ori!ins of the basic narrative can be traced to the radical oppositional c)rrents and disco)rses of the late 196#s and early 195#s, incl)din! the (ritin!s of Rashid al1Barra(i and G)ha,,ad Ga4a EUlaynsh 51965; and 9h)di E-tiya al19hafiEi 5195$;, a,on! others. By the early 193#s, d)rin! the era of -rab socialis, if not before, concepts s)ch as i,perialis,, fe)dalis,, co,prador and national bo)r!eoisie had beco,e r)lin! ideas in !overnin! and intellect)al circles inside 8!ypt. =n this period of prolific c)lt)ral prod)ction and debate, historians s)ch as Ra>)f E-bbas, E-bd al1E-4i, Ra,adan and their follo(ers elaborated and refined (hat re,ains )ntil today the basic or!ani4in! fra,e(ork for the history of the 8!yptian political econo,y in the t(entieth cent)ry.[)] Conscio)sly or not, t)rn1of1the1 cent)ry capitalists (ere constr)cted as a set of protoetatists (ho ostensibly prefi!)re and, by havin! failed, le!iti,ate (hat is vario)sly described as 8!ypt>s state socialist or state capitalist1acc),)lation ,odel )nder /asser. &he specific ar!),ents abo)t the rapid rise and fall of national capital in the !)ise of the Bank Gisr !ro)p (ere revisited in the 19$#s and 19%#s by /orth -,erican scholars (ho, in tande, (ith ins)r!ent intellect)als in other parts of history and the social sciences, pioneered a political1econo,y approach to Giddle 8astern social history. Favis>s 519$$; Ph.F. dissertation, CBank Gisr and the Political 8cono,y of =nd)striali4ation in 8!ypt, 19B#J1961,D (hich

(as p)blished )nder the title Challenging Colonialism 519%";, fra,ed the st)dy of the Gisr !ro)p as a criti+)e of Csi,ple dependency ,odelsD0that is, the rise and alle!ed decline of Bank Gisr attested to the possibility of an indi!eno)s or national ind)striali4ation pro2ect )nder certain conditions, even if in this case Bank Gisr failed to free 8!ypt fro, forei!n econo,ic control. -!ain, conscio)sly or not, the contrib)tion by a s,all !ro)p of -,erican scholars to 8!yptian social history at this 2)nct)re (as nothin! less than a defense of the /asserist acc),)lation ,odel, (hich by the 19$#s (as )nder challen!e, or so it see,ed, fro, a res)r!ent co,prador coalition of ,erchants and ,)ltinationals, s)pported no( by U.9. rather than British po(er. &h)s, the idea of an earlier, fleetin! ,o,ent for national capital in 8!ypt received ne( intellect)al b)ttressin! even as the sa,e kinds of ar!),ents had co,e )nder decisive criticis, in the latest ro)nd of neo,ar@ist political1econo,y st)dies of -frica and .atin -,erica. =n s)ccessive iterations of the dependency debate, prospects in at least so,e co)ntries and re!ions for reali4in! key parts of the national1bo)r!eois pro2ect 5e.!., s)stainin! the process of capitalist acc),)lation, e@pandin! a national ,an)fact)rin! base; (itho)t reco)rse to (idespread nationali4ation of capital (ere revised steadily )p(ard, and analysis foc)sed on the factors that ,ade dependent develop,ent possible 5e.!., a relatively1a)tono,o)s state;. &o ,ake the revisionist case starkly, local if dependent capital and its allies often evinced distinct capacities to do,esticate forei!n invest,ent and other(ise co)nterbalance the str)ct)ral advanta!es accr)in! to forei!n capital (ithin the e@istin! !lobal distrib)tion of prod)ctive forces. /onetheless, the contin)ed infl)ence of and nor,ative ass),ptions )nderpinnin! the ,ost recent (ave of e@ceptionalist acco)nts of Bank Gisr can be !a)!ed by the reaction to the research of the liberal historian of 8!yptian colonialis, Robert &i!nor. =n a series of articles that he be!an to p)blish in the ,id119$#s, &i!nor 519$3, 19$$a, 19%#a and 19%#b; so)!ht to doc),ent the specific contrib)tion of ethnic1,inority and resident1forei!n entreprene)rs0that is, non18!yptians0alon! (ith the 8!yptians (ho fo)nded the Gisr !ro)p to the creation of the co)ntry>s local ,an)fact)rin! sector. :e, too, fra,ed his (ork as a criti+)e of dependency theory tho)!h he (as ar!)in! (hat in essence had been reco!ni4ed by (riters s)ch as Iernando :enri+)e Cardoso and in co)ntries s)ch as -r!entina and Chile: that so1called forei!ners can also act like national capitalists 5Ca,,ack 19%%7 8vans and 9tephens 19%%;. <et, the res)lts of his research (ere received coldly by a yo)n!er cohort (orkin! e@plicitly (ithin a ,ar@ist fra,e(ork.[*] &he thr)st of &i!nor>s ar!),ent (as nonetheless correct, and = rely heavily on his on!oin! research, partic)larly in Chapter B, (here = sho( both ho( local ,inority investors evinced an independent interest in acc),)lation, even if in alliance (ith international investors, and ho( after 19BB 8!yptian capitalists ,ade rapid inroads into local finance, trade, ,an)fact)rin! and services by this sa,e ro)te. 9ince the 195#s, ho(ever, analysts have eval)ated the capacities of these early 8!yptian capitalists ,ore as history ,akers than as investors. :ere, &i!nor is )lti,ately no ,ore n)anced in his 2)d!,ent than his ,ar@ist1oriented critics. :e sees the history of the

political econo,y after 191% as an atte,pt by Ca dyna,ic and farsi!htedD !ro)p of ind)strialists to Ccreate a vibrant and a)tono,o)s 8!yptian capitalis,.D[+] Favis ar!)es alon! sli!htly ,ore traditional lines, e,phasi4in! the s)bset of self1identified 8!yptian 5national; capitalists. /onetheless, the lastin! insi!ht of Favis>s path1breakin! archival st)dy into the social ori!ins of the Gisr !ro)p>s fo)nders and of their fail)re, )lti,ately, Cto challen!e f)nda,entally forei!n capital>s do,ination of the 8!yptian econo,yD is fo)nd in the concl)sion, (here he ackno(led!es, in parentheses, that C4ar% and his colleagues pro%a%ly never thought in those terms any*ayD 5Favis 19%": 199, e,phasis ,ine;. &he story of Bank Gisr is the colonial1e@ceptionalist narrative in ,iniat)re. =t is the acco)nt of an alle!ed fail)re of a sin!le instit)tion representin! a class 5Cthe or!ani4ational consolidation of an aspirin! 8!yptian ind)strial bo)r!eoisieD; and rests on a set of )ne@a,ined ass),ptions abo)t ob2ectives that, Favis ad,its, the capitalists the,selves did not hold. &he rise and fall of Bank Gisr nevertheless is the core ,yth aro)nd (hich historians in the 195#s first be!an to (eave )sable if no( frayin! acco)nts of neocolonialis, in 8!ypt. M M M

Class Po,er and the Postcolonial State in Egypt

=f :arb and the other inter(ar 8!yptian investors did not think precisely like later anti1i,perialist theorists, then (hat ter,s did !)ide their actions* =s there a better (ay to concept)ali4e basic feat)res of capitalist collective action at a partic)lar 2)nct)re in 8!ypt>s recent past* &o ans(er these +)estions, (e need to ,ap the )niverse of investors and political action, be!innin! (ith basic instit)tions like the fir, 5Ier!)son 19%"7 Bo(,an 19%97 Plotke 199B;. Conflicts over ,arkets and over the p)blic reso)rces that s)stained local investors> ,arket po(er (ere pervasive in the inter(ar and postJ'orld 'ar == 8!yptian political econo,y, b)t these distrib)tive conflicts are little kno(n and little )nderstood, despite their central i,portance both to (here, (hen and ho( ind)stry (as b)ilt in 8!ypt and to the nat)re of party and elite political cleava!es ,ore !enerally. .ocal or 8!ypt1based capitalists (ere or!ani4ed in rival investor coalitions or b)siness !ro)ps, and these or!ani4ations (ere a,on! the ,ost po(erf)l private instit)tions !overnin! the 8!yptian political econo,y d)rin! the first half of the t(entieth cent)ry. =n retrospect, (hat is ,ost note(orthy abo)t the colonial enterprise in the 8!yptian case is its havin! facilitated the creation of archetypal, lar!e1scale, privately o(ned and controlled capitalist instit)tions. &he ,edi), of acc),)lation (as the boo,in! cotton e@port econo,y. .ocally based ,erchants and landlords 5investors; to!ether (ith representatives of 8)ropean banks and invest,ent tr)sts steered the econo,y and be!an a pro2ect of investin! in early i,port1s)bstit)tion ind)stries 5food processin!,

te@tiles, b)ildin! ,aterials;.

#usiness Pri ilege

Until the ,ilitary co)p of 195B, British and 8!yptian !overnin! a)thorities to!ether (ith the co)ntry>s leadin! local investors shared and reprod)ced a co,,on vie( of the instit)tional hierarchies ostensibly )nderpinnin! Call private enterprise ,arket1oriented societiesD or (hat .indblo, describes as Cthe privile!ed position of b)siness. =n the eyes of !overn,ent officials, therefore, b)siness,en do not appear si,ply as the representatives of a special interest, as representatives of interest !ro)ps do.R'hen a !overn,ent official asks hi,self (hether b)siness needs a ta@ red)ction, he kno(s he is askin! a +)estion abo)t the (elfare of the (hole society and not si,ply abo)t a favor to a se!,ent of the pop)lationD 519$$: 1$#, 1$5;. =n other (ords, the po(er of capitalists as a class in the decades before the 195B Revol)tion had little to do (ith a bo)r!eoisie>s 5in;ability to act cohesively in order to Ccapt)re the state.D[-] <et, .indblo,>s ar!),ent abo)t b)siness privile!e, like those e@plications of -ntonio Lra,sci>s concept of he!e,ony, (hich it rese,bles, is centrally concerned (ith the conte,porary f)nctionin! of advanced capitalist de,ocracies, syste,s (here a stable, hi!hly nonde,ocratic relationship of shared a)thority bet(een corporate capitalists and !overn,ent officials is not an iss)e aro)nd (hich political forces str)!!le.[.] 8!ypt, in contrast, (itnessed a conflict after 195B precisely aro)nd the iss)e of b)siness privile!e, or the distrib)tion of C,a2or leadership roles in the politico1econo,ic order.R-t least hypothetically, !overn,ent al(ays has the option, if dissatisfied (ith b)siness perfor,ance, of ref)sin! f)rther privile!e and si,ply ter,inatin! private enterprise in a fir,, ind)stry or the entire syste,. 9hort of takin! that co)rse, ho(ever, !overn,ent has to ,eet b)siness needs as a condition of ind)cin! perfor,anceD 5.indblo, 19$$: 1$9;. &his ChypotheticalD case is a fair prKcis of the act)al direction taken by the /asser re!i,e, be!innin! in 1956J1955, (hen the ne( !overnin! elites be!an to challen!e the central instit)tions of the private ,arket1based econo,y. P)t another (ay, the post1195B state (as either )n(illin! or )nable to s)pply the necessary incentives that investors had co,e to re+)ire if they (ere to act as capitalists: concessions, s)bsidies, protection, self1 re!)lation, ,onopoly rents, a ti!htly controlled if not co,pletely hostile environ,ent for (orkers, and re!)lar access to the top leadership of the state.

/ocal Capital
&he idea of b)siness privile!e helps )s to ,ake sense of the ,arked disparities in the capacities of different social !ro)ps and instit)tions in 8!ypt to affect o)tco,es in vario)s arenas of the political econo,y. Certainly, the pattern of access to those (ho !overned in the decades after 1%%B (as not rando,, and the distrib)tion of these capacities bore ,ore

than a chance rese,blance to other, relatively ,ore entrenched ,arket1 capitalist syste,s. &hose (ho !overned the ,arket (ere privile!ed. &here re,ains the +)estion of ho( to ,ake sense of the instit)tions that !overned the ,arket, or, as it is so,eti,es posed, (ho controlled the 8!yptian political econo,y in the decades prior to the 195B Revol)tion* 'aterb)ry 519%"; )sef)lly s),,ari4es c)rrent thinkin! on this ,atter as follo(s: C&he lar!ely )nre!)lated econo,y (as in the hands of 8)ropean bankers, ins)rance co,panies, and )tility concerns (ith a .evanto1Ae(ish bo)r!eoisie that handled internal co,,erce and so,e forei!n trade.R:arb and his allies Pi.e., the Cindi!eno)s (in!D of the bo)r!eoisieQ co)ld scarcely ,ake a dent in this e3ogenous capitalist monolith# and 8!ypt>s lando(ners had little desire to do soD 519%": B"BJB"", e,phasis ,ine;.[0] 9ince ,y o(n ar!),ent can be )nderstood as t)rnin! this fa,iliar pict)re on its head, ar!)in! that by 195B :arb>s CalliesD 5that is, local 8!yptian and non18!yptian capitalists; (ere ,ore or less effectively in control of the day1 to1day ad,inistration of ,ost key sectors of the econo,y 5(ith finance and petrole), the ,ost i,portant e@ceptions;, it is necessary to clarify at the o)tset so,e basic analytical cate!ories and ass),ptions. Iirst, there are no convincin! analytical !ro)nds for conceivin! of the str)ct)re of o(nership and control in the 8!yptian econo,y 5or any other e@istin! ,arket1based econo,y for that ,atter; as a ,onolith. 9econd, and a!ain for the p)rpose of )nderstandin! the loc)s of control in partic)lar fir,s and sectors as (ell as 2)d!in! the potential for e@panded do,estic acc),)lation 5t(o of the ,ost basic concerns in the st)dy of peripheral capitalist political econo,ies;, )se of the ter, e3ogenous in !enerali4in! abo)t both the individ)al identities of capitalists and the corporate identities of fir,s in 8!ypt is e@tre,ely ,isleadin!. -nd tho)!h analysts often distin!)ish bet(een indi!eno)s and forei!n (in!s of the bo)r!eoisie 5e.!., E-bd al1E-4i, Ra,adan 19$17 'aterb)ry 19%"7 &i!nor 19%6;, it is i,portant to keep in ,ind that thro)!ho)t the entire period st)died here investors the,selves never see,ed to have or!ani4ed in 8!ypt alon! these lines.[1] Fra(in! on !enerally accepted )sa!e in the international political1econo,y literat)re, = )se the ter, foreigncapital to refer e@cl)sively to invest,ent ori!inatin! o)tside 8!ypt>s borders by investors (hose relevant hori4ons are not pri,arily the 8!yptian ,arket 5e.!., 9ir 8rnest Cassel or the .ondon1 based directors of =,perial Che,ical =nd)stries;. 5ocal capital by contrast refers to invest,ent ori!inatin! inside 8!ypt by investors (hose relevant hori4ons are pri,arily the 8!yptian ,arket. &he conception of an e@o!eno)s capitalist ,onolith obsc)res even this ele,ental distinction in analy4in! the loc)s of control in a partic)lar econo,ic sector. -s in -r!entina and Bra4il a,on! other co)ntries, local capitalists in 8!ypt carried ,any different kinds of passports 5or e+)ivalents; and, as individ)als, clai,ed a variety of national identities. &h)s, the fo)nders, top shareholders and ,ana!ers of vario)s !innin! factories, e@port a!encies, constr)ction fir,s, land1recla,ation co,panies and spinnin! ,ills, circa

19"#, incl)ded 8)ropean nationals and their descendants or other so1called forei!ners 5e.!., -r,enians, 9yrians; (ho had settled in the 8!yptian re!ion of the ?tto,an 8,pire in the ,id11%##s alon! (ith ,ore recent and shorter1ter, residents7 even older, 8!ypt1born Ae(ish fa,ilies (hose ,e,bers nonetheless held British or other 8)ropean passports7 and those (hose identity and (orld1vie( (ere basically 8!yptian. &he sociolo!y is ,ade only ,ore co,ple@ by the fact that both the narro(ly le!al and the ,ore broadly c)lt)ral bases of 8!yptian national identity (ere chan!in! d)rin! the first half of the t(entieth cent)ry 5NrS,er 19%"7 9ha,ir 19%$;. &he !ro)nds for distin!)ishin! analytically bet(een forei!n and local capital are (ell kno(n. -r!),ents abo)t the distinct capacity of forei!n 5or ,)ltinational or transnational; capital to shape, distort, block the process of do,estic acc),)lation and escape effective re!)lation by local political a)thorities are central to the infl)ential, lar!ely ,ar@ist1inspired research pro2ects on i,perialis, 5(orld syste,s theory, )nderdevelop,ent theory, etc.;. - central thesis )nderpinnin! the vario)s revisionist, late i,perialis, or posti,perialis, positions of the 19$#s and 19%#s 5e.!., 8vans 19$97 Becker et al. 19%$; is that the partic)lar and, fro, the point of vie( of national ind)stry1b)ildin! efforts, ne!ative effects of forei!n capital are better )nderstood as variable and contin!ent rather than as )nifor, and necessary across eras, re!ions and localities. =n the 8!yptian case, ,any of the pioneerin! forei!n1o(ned enterprises of the late 1%##s and early 19##s 5e.!., the s)!ar ,onopoly; (ere !rad)ally do,esticated in the decades after 'orld 'ar = thro)!h a co,bination of ,arket press)res and political action, tho)!h the process (as an )neven one (hose i,pact varied across econo,ic sectors. ?n the one hand, as &i!nor 519%9; sho(s, the activities of the t(o Ganchester1based te@tile prod)cers operatin! in 8!ypt bet(een the 19"#s and the 195#s bore little rese,blance to the activities of s)ch soverei!nty1fla)ntin! ,arket !iants as Foheny in preJ'orld 'ar = Ge@ico, the L)!!enhei,s in inter(ar Chile or, fro, a later period in Chilean history, =&&. ?n the other hand, the ,)ltinational1do,inated 8!yptian petrole), sector see,s to have proved ,)ch less v)lnerable to re!)lation by !overn,ent a!encies or to the rent1 seekin! strate!ies of local investors. =n Chapters "J5, = look specifically at the electric1po(er and che,icals 5nitrate; ind)stries. .ocal capital (as a key factor in p)shin! for and shapin! the co)rse of (hat, borro(in! fro, Richard 9klar 5in Becker et al. 19%$;, = call the domiciling of the political econo,y, by (hich = ,ean a shift in the loc)s of control of specific enterprises, of econo,ic policy,akin! !enerally and of the econo,ic s)rpl)s to those (hose lives, fort)nes and fa,ilies depended on calc)lations abo)t the f)t)re of the 8!yptian econo,y. &he iss)e of the national and ethnic identities of do,estic investors (as lar!ely irrelevant in this re!ard7 leadin! ,e,bers of the so1called .evanto1Ae(ish bo)r!eois faction and key parts of the Lreek settler colony 5a,on! others; had no less interest in p)rs)in!, and ,a@i,i4in! control over, the rents fro, ind)stry b)ildin! than their ,ore indi!eno)s 8!yptian cohorts.

=n ,akin! this clai,, = do not (ant to be read as defendin! colonialis,, privile!in! forei!ners> contrib)tions or, ,ost cr)cially, dis,issin! the ,any real and pernicio)s effects of an era in (hich Lreek and other i,,i!rant capitalists flo)rished. Ior instance, entrenched patterns of discri,ination in favor of one>s o(n co,,)nal !ro)ps 5e.!., Lreeks hirin! Lreeks; no do)bt li,ited opport)nities for 8!yptian technical and ,ana!erial cadres, a point that (as )nderscored by the Gisr !ro)p>s celebrated policy of hirin! 8!yptians (herever possible. Gany 8!yptian ,en and (o,en e@perienced in their enco)nters (ith forei!ners other for,s of indi!nity and in2)stice that ,ay see, to be erased in the co)rse of the follo(in! analysis. = hope that readers (ill recall the different (ays that po(er (as ,ade ,aterial inside the te@tile ,ills and on the streets of Cairo even as = develop a revisionist ar!),ent here abo)t those (ho ca,e to r)n the factories and to profit fro, b)ildin! the city.

State Po,er
&he lar!est a!ric)lt)ral and ind)strial vent)res )ndertaken by private investors in 8!ypt in the late nineteenth cent)ry and early t(entieth cent)ry all relied on direct and indirect state s)pport, incl)din! the transfer of state reso)rces. .ocal coalitions of investors or b)siness !ro)ps played a role in s)ch vent)res fro, the start, and, as (ill be sho(n in detail in the chapters that follo(, they steadily e@tended their infl)ence and control, often thro)!h privile!ed access to state po(er. =n other (ords, the 8!yptian case confor,s to a fa,iliar pattern of political intervention in s)pport of private acc),)lation, profit and prod)ctive invest,ent. Private investors follo(ed an e+)ally fa,iliar path in p)rs)it of these ob2ectives. Co,petitors pro,oted their partic)lar interests thro)!h reasoned appeal to a)thority, patient c)ltivation of infl)ence and, on ,ore than one occasion, by a)dacio)s political ,ane)ver. <et the red)ction of broad class interests to partic)laristic de,ands is fre+)ently portrayed as part of a strate!y of political do,ination i,posed on society by a)tono,o)s state officials and desi!ned to divert or contain class forces. =nfor,al ,odes of politics persist beca)se the state s)ccessf)lly ne)trali4es for,al political associations and channels of interest artic)lation. =,portantly, so,e also see deep c)lt)ral roots in the e@ceedin!ly elaborate net(ork of patron1client ties e@tendin! fro, the shado(y corridors of e@ec)tive po(er to the s)n1drenched villa!es alon! the /ile. &he costs of )nchecked a)thority stiflin! (eakly artic)lated econo,ic interests and initiatives (ere seen in the past and are seen in the present as )nderdevelop,ent and the c)ltivation of a nonprod)ctive, CparasiticD capitalist class. =n private ,arket syste,s, ho(ever, patrona!e is neither easily nor convincin!ly red)ced to an instr),ent )sed by !overnin! officials to control capitalist clients. Patrona!e is in ,any instances and respects a ,arket relationship, a synony, for literally doin! b)siness (ith the state. &he state is an i,,ense econo,ic cons),er, even (here its role in direct prod)ction is li,ited. =n ,arket syste,s, !overn,ent a!encies p)rchase !oods and

services 5for instance, constr)ction services; thro)!h contracts and concessions. =n a si,ilar (ay, conventional vie(s of clientelis, as a str)ct)red, vertical and )ne+)al hierarchy bet(een state and society fail to acco)nt for the privile!ed position of investors in the political econo,y. =n a brilliant acco)nt of the colonial and postcolonial political econo,y of 9ene!al, Boone 5199B; describes ho( the 9ene!alese state )sed clientelist ,echanis,s to ste, the rise of an indi!eno)s capitalist acc),)latin! class. Robison 519%3 and 19%%; sho(s ho( apparently si,ilar clientelist arran!e,ents fostered the !ro(th of a privile!ed local ,an)fact)rin! sector in =ndonesia.[2] &hese cases see, to s)!!est broader forces shapin! relations bet(een b)rea)crats and b)siness interests, ho(ever one chooses to describe the channels thro)!h (hich b)siness,en artic)late de,ands and b)rea)crats dispense lar!esse. ?ne i,portant and obvio)s distinction is in the type of develop,ent strate!y )nderpinnin! b)siness1!overn,ent relations 5:a!!ard 19%3;. -t the risk of oversi,plifyin!, is the leadership of the state co,,itted to stren!thenin! capital or )nder,inin! it* =f it is co,,itted to stren!thenin! capital, then ho(ever conflict1ridden and )neven the process, state officials, ho(ever rel)ctantly, find the,selves s)rrenderin! e@cl)sive a)thority over broad stretches of the political1econo,ic terrain 5:a,ilton 19%B;. &he !eneral co,,it,ent of 8!ypt>s core !overnin! instit)tions and a!encies 0the ,onarchy, the cabinet, the ,inisterial officials and the British residency e,bassy0to private enterprise and a ,arket syste, is hardly disp)table. &he already1e@istin! social coalition on (hich s)ch a syste, (as b)ilt0a ,er!ed class of landlord1capitalists0steered a virt)ally )nre!)lated co,,ercial, a!roe@port econo,y thro)!h the last decades of the nineteenth cent)ry. =n the decade after the crash of 19#$, British and 8!yptian !overnin! officials cooperated (ith the leadership of the b)siness co,,)nity in o)tlinin! a strate!y for econo,ic diversification, incl)din! develop,ent of a do,estic ,an)fact)rin! sector s)bordinate to the do,inant e@port sector. - pro2ect of li,ited local ind)stry b)ildin! in cooperation (ith forei!n capital re,ained the basic develop,ent ,odel for appro@i,ately the ne@t fo)r decades, )ntil the ,id1195#s, (hen the /asser re!i,e be!an to )nder,ine both the privately steered and state1s)pported, li,ited =9 5=,port 9)bstit)tion; ,odel and, ,ore f)nda,entally, the local capitalists that !overned the econo,y. &h)s the ,any conflicts abo)t ind)strial develop,ent that en!a!ed state officials, forei!n capitalists and do,estic investors in the 19B#s, 19"#s and 196#s ,)st be )nderstood in li!ht of the )nderlyin! basic consens)s abo)t ,eans and ends. M M M

/ocal #usiness %roups and the Politics of Co(petition

&ho)!h the o(nership str)ct)re of the do,estic econo,y ,ay have

appeared at ti,es both as e@o!eno)s and as a ,onolith0and intellect)als in the 195#s and 193#s in partic)lar ,ade it appear so in a series of infl)ential te@ts on the political econo,y08!yptian investors vie(ed capital0that is, the,selves, their allies and their co,petitors0differently. Ior instance, the divisions a,on! the vario)s .ondon1, Paris1, Br)ssels1 and Berlin1based bankin! ho)ses and invest,ent consortia co,petin! for profitable o)tlets or ne( ,arkets o)tside 8)rope (ere of cr)cial i,portance to Cairo1 and -le@andria1based fir,s. .ocal Ae(ish and Lreek capitalists evolved specific instit)tions to offset the bar!ainin! po(er of, for e@a,ple, CrKdit .yonnais.[13] =n the 19B#s and 19"#s 8!yptian nationals follo(ed variants of this sa,e strate!y, res)ltin! in a rapid and steady indi!eni4ation of possibilities for profit and acc),)lation. Gy acco)nt of ho( 8!yptian investors e,er!ed by 195# as the ,ost po(erf)l ,e,bers of the local b)siness co,,)nity be!ins (ith the ass),ption that investors are divided on the policies that ,ost directly concern the,. Political o)tco,es ,ore often than not reflect the persistence of conflict a,on! co,petitors rather than so,e vast concert by a class or its so1called fractions. = a, statin! this point starkly to distin!)ish it fro, alternative vie(s of a bo)r!eoisie p)rs)in! 5and, in the ,ost )nrealistic acco)nts, attainin!; po(er or do,ination thro)!h instit)tions that represent the !eneral interests of the class as a (hole or its collective interests. = a!ree (ith Bertra,sen, &ho,sen and &orfin! 51991: 11"; that the (ell1 (orn distinction bet(een the !eneral and the partic)lar interests of capital is a ,yth. Certainly, st)dents of 8!ypt have never defined e@actly the fre+)ently invoked collective interests that all capitalists are or sho)ld be p)rs)in! thro)!h their classlike instit)tions. -s for the e+)ally (ell1(orn ideas of class fractions defined in ter,s of 5that is, (ith their interests read off of; their str)ct)ral location, Cthe str)ct)ral location of a!ents does not reveal anythin! abo)t their interest, identity and character as a political and social force beca)se classes as (ell as interests are constr)cted via partic)lar con2)nct)ral strate!ies. =n this (ay strate!y rather than interests or str)ct)ral location of a!ents beco,es the central e@planatory concept, since (e cannot talk abo)t interests or a!ents in the abstractD 5Bertra,sen, &ho,sen and &orfin! 1991: 11";. 'hether one a!rees (ith the !eneral thr)st of this clai,, there can be little do)bt that the 8!yptian e@ceptionalist historio!raphy ,isstates the e@tent to (hich political strate!ies a,on! investors reflected their Crelatively distinct locationsD in prod)ction and distrib)tion. =n 8!ypt, as in a n),ber of other co)ntries )nder!oin! a process of late capitalist develop,ent, the leaders of the b)siness co,,)nity (ere a set of individ)als, fa,ilies and !ro)ps of fa,ilies (hose interests in virt)ally all cases enco,passed both ind)stry and trade a,on! other econo,ic sectors. /o (onder, therefore, that the Irench social historian Aac+)es Ber+)e once described 8!ypt>s risin! b)siness stars as C(o)ld1be ind)strialists P(hoQ still only e@pressed the,selves as trades,enD 519$B: ""%;. Gore i,portant, as Garkovits 519%5; discovered abo)t the b)siness co,,)nity in =ndia, circa 19"#, it (as i,possible to differentiate bet(een a co,,ercial class linked to i,perialis, and an ind)strial class opposed to it. /or (as it possible to ,ake

a clear distinction bet(een traders, financiers and ind)strialists, (ith C,ost bi! capitalists at least bein! the three at the sa,e ti,eD 5Garkovits 19%5: B6;. 9i,ilar ar!),ents are ,ade in the cases of Chile 5Oeitlin and Ratcliff 19%%;, Bra4il 5&opik 19%$; and Ge@ico 59ara!o4a 19%%;, a,on! others. =n the 8!yptian case, at least )ntil the 195#s, there is a bl)rrin! if not an obliteration of distinctive class1str)ct)ral identities or interests a,on! those (ho o(ned the co)ntry>s lar!est fir,s and far,s and (ho si,)ltaneo)sly sat as heads of the co)ntry>s ,ain ind)strial, a!ric)lt)ral and co,,ercial interest associations.

4n est(ent Coalitions and Collecti e 5ction

Iro, the 1%9#s )ntil the 195#s, the fa,ilies (hose fort)nes f)nded 8!ypt>s ind)stries (ere si,)ltaneo)sly the co)ntry>s bi!!est bankers, ,erchants and lando(ners. &he sociolo!y of this core se!,ent of the co)ntry>s aristocracy, (hich = refer to as the b)siness oli!archy, (as reprod)ced instit)tionally in a set of centrally controlled fir,s in different econo,ic sectors. Iollo(in! convention across ,any national settin!s, incl)din! 8!ypt, = (ill refer to this for, of capitalist coalition as a %usiness group.[11] =t is an e@ceedin!ly co,,on instit)tion in late1developin! capitalist econo,ies. .eff in fact considers it Cthe do,inant for, of private, do,estically1o(ned capitalis, in the .FCsD 519$9b: $B";. &he definin! characteristics of a b)siness !ro)p are relatively strai!htfor(ard: 51; the !ro)p enco,passes a diversity of fir,s across different econo,ic sectors7 5B; the o(nership1,ana!e,ent coalition incl)des several b)siness,en or notable fa,ilies, tho)!h a sin!le individ)al is often identified as the !ro)p>s leader7 5"; the !ro)p>s core leadership is bo)nd by personal, fa,ily, ethnic or other co,,)nal ties that provide the basis for coordinatin! its operations.[1)] &hese feat)res are ro)tinely e,phasi4ed in the vario)s e@istin! descriptions of b)siness !ro)ps in 8!ypt, tho)!h there has been little concern to develop a political analysis of the !ro)p as a capitalist instit)tion.[1*] &he !ro)ps (ere a chief ,eans by (hich local capitalists ca,e to define, and to or!ani4e collectively in p)rs)it of, their fre+)ently conflictin! interests. &he vario)s constellations of local investors0e.!., the Gisr !ro)p, the E-bb)d !ro)p0(ere probably the ,ost i,portant instit)tions (ithin the b)siness co,,)nity. -s = (ill sho(, they possessed advanta!es and pressed the, over other social sectors to obtain financial reso)rces, access to decision ,akers, and infor,ation that ,ade it possible to red)ce the costs of collective action. Gost disc)ssions of 8!yptian b)siness,en ,isconstr)e (hat is, in reality, one of the ,ost i,portant feat)res of interest artic)lation in capitalist syste,s: so1called individ)al capitalist fir,s ,ay re!)larly and effectively act on their o(n, essentially bypassin! the proble,s inherent in collective action 5?lson 19$17 Ier!)son 19%";. /onetheless, lar!e fir,s 5e.!., corporations; or, in the case of !ro)ps, co,binations of fir,s (ill tend to

represent capitalists, not a capitalist. =n 8!ypt, as in other private ,arket1 oriented syste,s, representatives of these instit)tions obtained re!)lar access to !overnin! officials, invested reso)rces in elections as (ell as in alternatives to the, and shaped p)blic disco)rse. &(o feat)res of the b)siness !ro)p (ill prove partic)larly i,portant in developin! an acco)nt of the politics of local investor coalitions. &he first is the ,arked concentration of econo,ic po(er, or oli!opoly, that is virt)ally synony,o)s (ith this for, of capitalist enterprise, and the second is the conspic)o)sness of the ties bet(een !ro)ps and partic)lar state a!encies, !overnin! officials or factions.[1+] .ike capitalists else(here, 8!ypt>s investor coalitions reco!ni4ed that their s)rvival in the ,arket depended on the capacity to red)ce, avert or eli,inate co,petition. 8ntreprene)rs atte,pt to sec)re this ob2ective by t(o often related ro)tes: by concentratin! reso)rces or by sec)rin! favorable !overn,ent policies. 8!yptian b)siness !ro)ps s)ccessf)lly p)rs)ed both strate!ies at once. Garkets in 8!ypt (ere hi!hly nonco,petitive 5el1Lritly 196$;.Lovern,ent1 sanctioned oli!opolies in partic)lar sectors resolved a partic)lar kind of collective1action proble,. C&o an e@tent, the coordination of b)siness strate!ies thro)!h interest associations or thro)!h econo,ic concentration see,s to be f)nctionally e+)ivalentD 59ch,itter and 9treeck n.d.: 1$;. &his concentration of reso)rces (as !enerally sanctioned by the state and b)ttressed by the political alliances that b)siness,en for!ed (ith b)rea)crats and politicians. -dditionally, the ,)ltisectoral invest,ent strate!ies devised by 8!yptian !ro)ps led to coordinated and centrali4ed decisions for holdin!s in different econo,ic sectors. =n other (ords, the loc)s of po(er and decision (as not the vario)s fir,s b)t the !ro)p itself. &he central arenas of interest conflict and of capitalist collective action (ere neither li,ited to nor, in the 8!yptian case, do,inated by or!ani4ations s)ch as the Iederation of =nd)stries, (here, a,on! other sites, analysts have tended to sit)ate their ar!),ents abo)t an ind)strial bo)r!eoisie>s failed desi!ns to capt)re the state. = do not ,ean to s)!!est that peak associations played no role in policy,akin! in the period. Rather, )ntil no(, analysts have !enerally failed to pay eno)!h attention to the partic)lar instit)tional do,ain of the b)siness !ro)p7 they have defined the associational )niverse of investors in an overly restrictive (ay.[1-] =n effect, both the nat)re of post119B# 8!yptian ind)strial policy and the arenas ,ost centrally concerned (ith ind)strial policy,akin! have been ,isidentified. Rival coalitions of landlord1capitalists fo)!ht over credits, s)bsidies, licenses, 2oint1vent)re deals, cons)ltancies, contracts, s)bcontracts and, thro)!h s)ch instr),ents, control over ,arkets, ind)stries and entire econo,ic sectors0that is, investors or!ani4ed to capt)re shares of the state>s reso)rces. 8@pansion of local ,an)fact)rin! capacity (as one conse+)ence of these efforts.[1.]

6onopoly !ents and !ent See7ing

&he ,ost basic reso)rce perhaps (as the direct transfer of p)blic f)nds into the coffers of private capitalists, b)t investors often seek ,)ch ,ore than s)bsidies fro, the state 59ti!ler 19%3;. &his process had a loose relationship at best to the (orkin! of any invisible hand and yet (as intrinsic to the develop,ent of capitalis, in 8!ypt. =nvestors did indeed co,pete (ith each other for ri!hts to these transfers, and the reso)rces devoted to doin! so provide a ro)!h ,eas)re of their perceived reven)e1 or profit1enhancin! val)e in co,parison (ith, say, e@pandin! prod)ction or i,provin! efficiency. &he ret)rns to s)ch political invest,ents are no( conventionally described as rent. =n classical econo,ic te@ts rent is a ret)rn to a factor of prod)ction in scarce or inelastic s)pply 5&ollison 19%B;. 9a,)els and Gerc)ro offer a ,ore conte,porary and broader )nderstandin! of the concept Cas inco,e received over and above the a,o)nt that (o)ld be received )nder a different instit)tional, or ri!hts, arran!e,entD 519%6: 55;. By this definition, rent 5or +)asi1rent or ,onopoly rent; can also enco,pass a ret)rn to invest,ent in price1fi@in! arran!e,ents or other ,eas)res that restrict co,petition or ,arket entry. Rent seekin! is thereby the atte,pt by investors to escape co,petition, an activity that is often described in other ter,s 5e.!., carteli4ation and ,onopoli4ation; 5Colander 19%67 'allerstein 19%%;. Politics is a ,ain ,eans by (hich investors seek rents. By politics = ,ean strate!ic action taken o)tside of the prod)ction site or process in order to shape the ,arket or the behavior of co,petitors. &his action ,ay or ,ay not entail appeal to a)thorities 5Bo(les and Lintis 199#7 Bo(,an 19%9;. Cartels can be for,ed (itho)t !overn,ent intervention. Co,petitors can be pers)aded to ,er!e their operations. B)t in practice investors t)rn to the state to create ,onopoly rents. Iro, the point of vie( of nineteenth1cent)ry investors, colonialis, in 8!ypt (as a rent1seekin! pro2ect on a vast scale, be!innin! (ith the b)ildin! of the 9)e4 Canal and eclipsin! the (ildest drea,s of 8!yptian entreprene)rs today. &he series of co,,ercial conventions and treaties that Lreat Britain and other 8)ropean po(ers enforced in the -rab provinces of the ?tto,an 8,pire, kno(n as the Capit)lations, (ere nothin! less than barriers to entry into the tradin! sector. .ord Cro,er, (ho !overned 8!ypt after the occ)pation in 1%%B, oversa( the transfer of tho)sands of acres of 8!yptian far,land to his brother>s b)siness partner, 9ir 8rnest Cassel. .ittle (onder, then, that the Irench state protested Britain>s !rip over 8!yptian finances in the 1%9#s or that British tradin! fir,s and contractors feared the conse+)ences of 8!yptian independence in the 19B#s. -nd the neocolonial strate!y that postJ'orld 'ar = British !overn,ents be!an to p)rs)e in 8!ypt and selected other parts of the e,pire in s)pport of local ,an)fact)rin! ind)stry ,eant nothin! less than ,illions in ne( rents for the

lar!est and, in !lobal ter,s, the increasin!ly )nco,petitive te@tile, cable, steel, che,ical and t)rbine ,an)fact)rers in .ondon, Ganchester and Bir,in!ha, 5:)bbard 19"5, 9hi,i4) 19%3, Cain and :opkins 199";. Iollo(in! independence in 19BB, a pioneerin! cohort of 8!yptian investors en!a!ed in a sin!le1,inded p)rs)it of the rents that had dra(n forei!n capital and forei!ners to 8!ypt. &he electric1po(er ind)stry is a case in point. 'hile ,ainstrea, econo,ic theory vie(s the prod)ction and distrib)tion of po(er as a nat)ral ,onopoly, the proble, of (ho collects the rents0private o(ners or the national treas)ry0t)rns on politics, as 8!yptian investors (ere (ell a(are.[10] =n si,ilar fashion, investors co,peted for the (indfalls that (o)ld accr)e to o(ners of a ne( national ,onopoly like the proposed fertili4er1,an)fact)rin! ind)stry, (hich (as )nder(ritten by the far,ers (ho (ere to be CprotectedD fro, chronic overprod)ction and declinin! prices in the (orld ,arket.

8ligarchic De(ocracy
&he basic instit)tional arenas for ,)ch of this rent seekin! (ere the 8!yptian ,onarchy, the cabinet and the parlia,ent0that is, the for,al !overnin! instit)tions in the liberal re!i,e established by the 19B" constit)tion. &he constit)tion in t)rn de,arcated a f)nda,ental chan!e in the ter,s of the protracted conflict bet(een the i,perial po(er and representatives of the cross1class national ,ove,ent 5al-hara$a al*ataniyya; that er)pted at the end of 'orld 'ar =. =n 1916, the British state had finally for,ali4ed its thirty1year occ)pation of the ?tto,an province by declarin! 8!ypt a protectorate. B)t a co)ntry(ide revolt in 1919 tipped the scales a!ainst )ltrai,perialist c)rrents in the British state and society, and paved the (ay for the for,al !rant of independence to 8!ypt in 19BB. &he ,echanis,s by (hich the British state so)!ht to preserve its privile!es in a no,inally independent territory are fa,iliar fro, the history of U.9. i,perialis, in Central -,erica and the Caribbean d)rin! this sa,e era. Iirst a,on! these ,echanis,s (as the specification of do,ains (here local a)thority (as si,ply not reco!ni4ed. =n 8!ypt>s case these incl)ded e@ternal defense, policies that affected the 8)ropean resident ,inority co,,)nity, a)thority over the private 9)e4 Canal Co,pany and the Canal Oone in !eneral 5i,perial co,,)nications;, and policies in the 9)dan 5officially an -n!lo18!yptian condo,ini),;. 9econd, British po(er (as b)ttressed by instit)tions that had been established in earlier decades, incl)din! a (ealth of le!islation, the set of e@tensive e@traterritorial privile!es e,bodied in the 2)dicial re!i,e and ad,inistrative oversi!ht of the ar,y and ,ost parts of the civilian b)rea)cracy. &hird, the str)ct)re of de,ocracy itself (as a f)rther check on the co)ntry>s leadin! electoral force, the 'afd party. Under the constit)tion, the ne( kin!, fro, the &)rkish1speakin! dynasty that had !overned 8!ypt in the na,e of the ?tto,an soverei!n, possessed e@tensive po(ers over the parlia,ent and cabinet. Iinally, British a)thorities at ti,es intervened directly in the for,ation of vario)s postindependence !overn,ents.

Uns)rprisin!ly, the ,ost ,ilitant and indeed so,e of the ,ost pop)lar of the national ,ove,ent>s leaders at ti,es derided independence and the constit)tion as little ,ore than colonialis, )nder a ne( !)ise, and ,)ch s)bse+)ent nationalist and ,aterialist analysis has like(ise tended to e,phasi4e contin)ity over chan!e in 8!ypt>s relationship to e,pire 5hence Cneocolonialis,D;. &he ar!),ent in this book by contrast is that, ho(ever constrained, independence and the constit)tional re!i,e (ere i,portant to 8!yptian politicians and investors. Certainly, the contest to (rest effective control of the a!encies and prero!atives of state po(er (as dra(n o)t over decades0fro, the refor,ation of the c)sto,s re!i,e 519"#;, the treaty ne!otiations that !ained 8!ypt a seat at the .ea!)e of /ations 519"3;, the endin! of the Capit)lations 519"$;, the transfer of the British ,ilitary base in Cairo 5196$; and the closin! of the Gi@ed Co)rts 51969; to the final evac)ation of forei!n troops fro, the 9)e4 Canal Oone 51956J1953;. -nd s)ccess (as obvio)sly )neven across these different do,ains. By the ti,e the last British soldier left 8!yptian soil, the ,onarchy, the constit)tion and 8!ypt>s e@tre,ely CthinD 5:eld 199B; version of de,ocratic r)le had all been dis,antled. B)t disenchant,ent (ith de,ocracy in 8!ypt (as in no s,all part d)e to the s)ccessf)l, virt)ally sin!le1,inded foc)s on the part of 8!yptian oli!archs (ith the state as a fiscal instit)tion and (ith the rents to be obtained via privile!ed access to state po(er. &he fra!ility of this partic)lar Cliberal e@peri,entD 5Garsot 19$$7 Ga!hrao)i 1991; (as ,ade i,,ediately apparent in the ,ost si!nificant early challen!e to the consolidation of de,ocracy: the resi!nation of the co)ntry>s first pop)larly elected !overn,ent in /ove,ber 19B6 after only eleven ,onths in office0a resi!nation that (as forced by British officials 5Lordon 199B: 13;. &hereafter, periods of at least for,ally de,ocratic r)le )nder the 19B" constit)tion alternated (ith periods of ,ore1nearly a)thoritarian r)le. F)rin! the ne@t t(enty years the 'afd party held office only after elections in 19"3J19"$ and by appoint,ent in 196BJ1966, (hen the British state fo)nd it necessary to trade the benefits of r)le by palace1based C,inority1 partyD coalitions for an 8!yptian !overn,ent that co)ld le!iti,ately clai, a ,eas)re of ,ass s)pport. &he end)rin! basis of the 'afd party>s appeal a,on! those citi4ens (ho co)ld be ,obili4ed to cast their ballots or, at other ,o,ents, to take to the streets (as its ori!ins as a Cdele!ationD of nationalist politicians and factions 5*afd ,eans dele!ation in -rabic; that had hoped to press the case for 8!yptian independence at the Paris peace conference in 1919 5Vatikiotis P1939Q 1991: B3BJB$B;. .ed by the dele!ation>s ori!inal chair,an, nationalist hero and pop)larly proclai,ed Cfather of the nation,D 9aEd Oa!hl)l, the 'afd 5or Oa!hl)lists as the party ,e,bers (ere so,eti,es called; s(ept the 19B6 parlia,entary elections, and Oa!hl)l (as na,ed pri,e ,inister. &he ori!inal ca,pai!n platfor, (as a si,ple one: those 8!yptian political factions that cooperated in the transition to independence 5and, by i,plication, the kin!; had co,pro,ised the principal of an i,,ediate and co,plete dis,antlin! of the occ)pation.

=n 19B6 and in all s)bse+)ent contests thro)!h the last elections in 195#, the CofficialD 5that is, le!ally reco!ni4ed and electorally oriented; opposition to the 'afd co,prised either preJ'orld 'ar = nationalist factions1t)rned1 parties that Oa!hl)l had incl)ded in the ori!inal 'afd dele!ation or else factions that s)bse+)ently for,ed inside and then split (ith the party in the 19B#s and 19"#s. &hese rival parties ran!ed fro, an individ)al and his follo(ers to lar!er patrona!e net(orks to for,al, d)es1payin! political or!ani4ations (ith branches in cities and the co)ntryside. :o(ever, the 'afd>s close identification (ith the independence str)!!le, the apparently vast reservoir of s)pport that co)ld be ,obili4ed by its s)perior or!ani4ation and, in partic)lar, its ties to the e,er!in! trade1)nion ,ove,ent, st)dent !ro)ps, and other or!ani4ations ,ade it )nbeatable at the polls.[11] -s a res)lt, the 'afd>s rivals (ere dra(n both to allyin! (ith the palace and to ta,perin! (ith election la(s and )lti,ately the constit)tion as ,eans to !ainin! po(er 5Feeb 19$9;. - rec)rrin! proble, in analyses of this electoral re!i,e is that acco)nts do not stray far fro, the ter,s that 'afd ideolo!)es (ere likely to )se the,selves to ,obili4e the faithf)l. -!ainst the party>s o(n s)pposedly )nco,pro,isin! nationalist co,,it,ents, its opponents, ho(ever i,peccable their o(n credentials ,ay have see,ed in the events leadin! to independence, are portrayed as too ea!er to trade a(ay the nation>s soverei!n ri!hts for the trappin!s of r)le. =n this specific sense the palace and ,inority1party leaders are often depicted as )lti,ately servin! forei!n interests or representin! those social forces ,ost closely tied to the stat)s +)o. = do not ,ean to deni!rate the specific political and or!ani4ational skills that at a partic)lar 2)nct)re per,itted the Oa!hl)lists rather than so,e other faction to harness the force of pop)lar protest a!ainst colonialis,, b)t (e have no !ood reason to believe that the basic perspective and ob2ectives of the 'afd>s leaders differed fro, those of their electoral rivals. Gore to the point, it is diffic)lt to distin!)ish the behavior of the 'afd in office fro, that of non1'afdist elites 5or fro, that of postcolonial re!i,es ,ore !enerally;. &o !ive one e@a,ple, =s,aEil 9id+i, a participant in the ori!inal 'afd dele!ation and a rival of Oa!hl)l>s (ho 2oined the transitional 5non1'afd; !overn,ent in 19BB as finance ,inister, be!an pressin! for 8!yptiani4ation of the co,,andin! hei!hts of the state ad,inistration and private econo,y, a pro2ect that he advanced ,)ch ,ore effectively in the 19"#s, (hen he !overned 8!ypt as a virt)al dictator 5Loldber! 19%3: $";. B)t Oa!hl)l and his allies p)rs)ed the e@act sa,e co)rse d)rin! their brief ti,e in po(er in the 19B#s, enrichin! so,e investors in the process and leadin! others to invest in alternatives to the 'afd, as = (ill doc),ent. Reco!nition of this ,)ndane b)t critical facet of postcolonial !overnance is to be fo)nd in the idea that the 'afd>s nationalist %ona fides (ere co,pro,ised (hen, after restoration of the constit)tion in 19"5, the party took po(er only to si!n a treaty of alliance (ith Britain in 19"3. A)d!ed a!ainst the party>s ,ost ,ilitant p)blic oratory and especially the idea of f)ll, co,plete, and real independence, Oa!hl)l>s s)ccessors are often conde,ned today as havin! presided over the 'afd>s decay and the

consolidation of a neocolonial re!i,e in 8!ypt. = (ill spend ,)ch ti,e in s)cceedin! chapters challen!in! this partic)lar vie( of the tra2ectory of the political econo,y. =t is i,portant to note here, ho(ever, that thro)!h its actions the 'afd (as ,ore nearly finally f)lfillin! its destiny and satisfyin! the pent1)p de,ands of party leaders and allied investors for control of and access to ad,inistrative appoint,ents and reso)rces. &he di,ension of e,er!in! postcolonial politics that = a, pri,arily concerned (ith here is !iven passin! and (holly inade+)ate reco!nition at best in the anecdotal references to patrona!e and corr)ption in postJ'orld 'ar = 8!ypt. -s (e (ill see, tho)!h, the ,ode of !overnance 5Boone 199B; (as +)ite lo!ically linked to (hat has lon! been a central concern of political econo,y: (here, (hen and ho( ind)stry is b)ilt in the periphery. M M M

Su((ary
&he vario)s co,ponents of the ar!),ent can be bro)!ht to!ether. Previo)s analyses of these for,ative decades in the develop,ent of 8!ypt have ,isinterpreted the basic iss)es that confronted and divided those (ho !overned the econo,y. 'o)ld1be ind)strialists did not (a!e pitched battles a!ainst t(o tho)sand bi! lando(nin! fa,ilies. /or did a national bo)r!eoisie ever cha,pion a heroic b)t doo,ed str)!!le a!ainst forei!n capital and the forei!ners> po(erf)l and n),ero)s do,estic allies. - pro2ect of econo,ic diversification via invest,ent in ,an)fact)rin! ind)stry (as hardly an end)rin! or deeply divisive iss)e at the end of 'orld 'ar =7 it had already been ha,,ered o)t relatively easily by 8!ypt>s lar!est lando(ners, bankers, colonial officials and representatives of forei!n capital. &he ,ost basic and end)rin! conflict (ithin the b)siness co,,)nity after 19B# !re( o)t of the fierce str)!!le of co,petin! coalitions for do,inance over these ne(, albeit li,ited opport)nities for profit and acc),)lation. 9tate s)pport (as critical in !ainin! access to and 5often; ass)rin! the s)ccess of these vent)res. -ll the coalitions or !ro)ps therefore relied on, (ere linked to, collaborated (ith and ca,e into conflict (ith different political1b)rea)cratic principals, instit)tions and factions. <et, these conflicts, ho(ever ac)te or hostile, (ere constrained by a develop,ent ,odel that privile!ed ,arkets and private enterprise. &he ,ost po(erf)l !overnin! officials accepted this ,odel or at least acco,,odated the,selves to it. B)siness had )ninterr)pted access to state officials. Relations bet(een class and state (ere, indeed, ,arked by Can e@tre,e de!ree of ,)t)al ad2)st,ent and political pl)ralis,D 5.indblo, 19$$: 1$9;. &he central b)siness1state conflict centered on (hich b)siness !ro)ps tied to (hich b)rea)cratic factions (o)ld !ain control of 5(o)ld privati4e; p)blic reso)rces in b)ildin! 8!yptian oli!archic capitalis,. &he vario)s local coalitions of Lreek, Ae(ish and other ,inority investors ,ay have i,a!ined a contin)ed e@pansion of their holdin!s )nder the protection of a colonial

ad,inistration, b)t in the decades after 1919, as an 8!yptian political elite !rad)ally b)t steadily (rested control of the ad,inistration of the state, 8!yptian nationals rapidly ca,e to ,onopoli4e access to these reso)rces. &he 8!yptian develop,ent ,odel (as predicated on cooperation bet(een forei!n capital and local investors in o(nin! and ,ana!in! 8!ypt>s privately controlled infrastr)ct)re and early i,port1s)bstit)tion sectors, a pattern co,,on to n),ero)s developin! capitalist econo,ies in this period, incl)din! those of Bra4il, Chile, 9o)th Norea and =ndia. Iro, the point of vie( of 8!yptian b)siness !ro)ps, 2oint vent)res (ere so)rces of profit and acc),)lation at least partially o)tside the state, (hich stren!thened their bar!ainin! po(er and red)ced the risk of b)rea)cratic ,anip)lation. Collaboration (ith forei!n capital (as also a basic ,eans for local capitalists to stren!then their position a!ainst their local ,arket rivals as (ell as their political anta!onists. =n other (ords, b)siness and politics in this key period in 8!yptian history prove to have been ,ore co,plicated than capitalists linin! )p in a t)!1of1 (ar over econo,ic develop,ent, one side p)llin! the econo,y to(ard independent ind)striali4ation, the other strainin! to keep the econo,y locked in the !rips of forei!n capital. Nitchin! 519%5; ar!)es forcef)lly for a si,ilar vie( in the ,idst of the CNenyan debateD over the nat)re and i,pact of collaboration bet(een forei!n and local capital. :is ar!),ent is (orth reprod)cin! at len!th 519%5: "1, e,phasis in ori!inal;: &he point, then, is that on %oth sides in the Nenya debate a !reat deal of d)bio)s inference fro, hi!hly partial infor,ation is bein! di!nified as theory5ies; of the state and ,ade to stand in place of the sort of kno(led!e of political processes and str)!!le (hich acade,ics do not have and cannot get. Gy o(n !)ess, for (hat it is (orth, is that every b)siness,an in Nenya and every state official fro, a lo(er1,iddle level )p(ard co)ld be cate!ori4ed as a Cnational bo)r!eoisD fro, so,e points of vie(, and (ith reference to so,e of his her activities and aspirations, and as a Cco,pradorD fro, others. &hey enter into con2)nct)ral alliances aro)nd partic)lar str)!!les and iss)es (hich co)ld be cate!ori4ed as in the interests of transnational capital so,eti,es in so,e respects, and as hostile to those interests and nationalist in thr)st at other ti,es and in other respects. 9)ch alliances at ti,es !ive parts of the state apparat)sRone coloration and at ti,es another. 9i,ilarly Ctransnational capitalD 5or partic)lar representatives of partic)lar parts of it; is in there too, ,akin! alliances, tryin! to )se people (ho are tryin! to )se it, at ti,es s)cceedin!, at ti,es failin! (holly or partly. =n short, it is all very co,ple@ and shiftin!, and a !reat deal of it social scientists never see and can not see. :is C!)essD in fact is an )ncannily acc)rate description of the invest,ent strate!ies of 8!yptian b)siness !ro)ps and the str)!!les over the develop,ent of ind)stry in inter(ar 8!ypt. Usin! declassified diplo,atic

archives and other pri,ary so)rces, = have reconstr)cted the private politics behind the ,a2or p)blic pro2ects of the pre1195B era. &he re,ainin! chapters of this book analy4e the develop,ent of 8!yptian b)siness !ro)ps, the arenas in (hich they co,peted and their i,pact on the political econo,y. Nitchin!>s pessi,is, abo)t infor,ation !atherin!, therefore, re+)ires so,e te,perin!. &here are ,ethods that per,it social scientists to overco,e, at least in so,e places and at so,e points, obstacles that hide the Cco,ple@ and shiftin!D patterns of coll)sion and conflict a,on! capitalists.

Notes
1. &his ar!),ent is no( standard in the literat)re on the 8!yptian political econo,y. 9ee, for e@a,ple, :)ssein 519$$;, Feeb 519$9;, Favis 519%"; and Bianchi 519%9;. B. Partic)larly )sef)l overvie(s are fo)nd in E-bd al1E-4i, Ra,adan 519$1;, Lran 519$%; and E-si, al1Fis)+i 519%1;. ". 9ee for instance Oachary .ock,an>s revie( of &i!nor 519%6; in the 'iddle East &ournal# "9 519%5;. &ho)!h &i!nor (as p)blishin! e@tensively on the sa,e topic in the late 19$#s, Favis 519%"; fails to disc)ss or even cite any of this (ork. 6. Ior this readin!, see &i!nor 519%6: BJ5, B51JB5B;. Iollo(in! the +)ote abo)t 8!yptian leaders tryin! to Ccreate a vibrant and a)tono,o)s 8!yptian capitalis,D 5B;, he ar!)es that it Chad never been the intention of the 8!yptian elite to detach the,selves fro, ,etropolitan capitalD 51B;. = a!ree (ith the latter state,ent, b)t it is then hard to )nderstand (hat is ,eant by Ca)tono,o)s 8!yptian capitalis,.D &he overstate,ent itself is a hall,ark of e@ceptionalist narratives. 5. Contrast (ith 'aterb)ry 519%"; and Richards and 'aterb)ry 5199#;. 3. Pr4e(orski defines he!e,ony as pop)lar Cconsent to e@ploitationD restin! on a (idespread )nderstandin! and acceptance of the Cdevelop,ent and e@pansion of the partic)lar !ro)pRas bein! the ,otor force of a )niversal e@pansion, of a develop,ent of all the Enational> ener!iesD 519%#: B6;. $. -s fra,ed, the 8!yptian case (o)ld th)s see, to pose a challen!e to a central thr)st of the revisionist, dependent1develop,ent literat)re and its criti+)e of the idea of ,onolithic and )nalterable str)ct)res of ,etropolitan econo,ic do,ination. Gy alternative readin! dra(s heavily on the dependent1develop,ent canon. 9ee Cardoso and Ialetto 519$9; and, for a retrospective acco)nt, 8vans and 9tephens 519%%;.

%. &o ,ake the point another (ay, in ter,s of )nderstandin! capitalists and politics in 8!ypt, distin!)ishin! bet(een forei!n and indi!eno)s C(in!sD is akin to distin!)ishin! bet(een left1 and ri!ht1handed (in!s. &here (ere pres),ably ,any ,ore of one type of capitalist than another. 'hat is cr)cial is specifyin! ho(, (hy and for (ho, it ,atters. 9. &o be fair, Robison is clear abo)t the li,itations to an analysis foc)sed narro(ly on clientelist arran!e,ents. =t tells )s little abo)t the social coalitions )nderpinned by this partic)lar ,ode of do,ination. Both Boone and Robison ar!)e for a broader foc)s on class for,ation. 9ee as (ell Iatton 519%%;. 1#. =n the 8!yptian case, this kind of bar!ainin! perspective vis1T1vis forei!n capital or states is ,ore often applied to p)blic a!encies seen to be actin! in the national interest. 11. = have dra(n e@tensively on 9trachan 519$3; and .eff 519$%, 19$9a and 19$9b;. .eff>s (ork provides n),ero)s references to st)dies of !ro)ps in Pakistan, =ndia, /i!eria, 8l 9alvador, Ge@ico, Bra4il, Vene4)ela, Colo,bia and else(here. = a, indebted to Aohn 'aterb)ry for first brin!in! this literat)re to ,y attention. 1B. 9trachan 519$3: B; and .eff 519$%: 33"J336;. /ote, ho(ever, that 9trachan, (ho ,apped the basic conto)rs of the b)siness co,,)nity in late19o,o4a /icara!)a, stressed the diffic)lty in definin! the !ro)p precisely eno)!h to identify it 5and distin!)ish it fro, other or!ani4ational arran!e,ents; and !enerally eno)!h to per,it co,parison. 9ee his Chapter B, CFefinition and Fescription.D 1". Foc),entation on 8!yptian b)siness !ro)ps can be fo)nd in =ssa 519$#;, Nalkas 519$9;, Favis 519%"; and NrS,er 519%9;. 16. &hese partic)lar feat)res are repeatedly hi!hli!hted in a ran!e of st)dies on this for, of capitalist or!ani4ation. Usef)l so)rces incl)de 9trachan 519$3;, .eff 519$%;, 8vans 519$9;, Garkovits 519%5;, Robison 519%3;, Oeitlin and Ratcliff 519%%; and 9ara!o4a 519%%;. 15. Ior e@a,ple, the Iederation of =nd)stries and other ,)ltisector associations tend to be described as press)re !ro)ps, (ith little if any consideration !iven to other ,ore co,,on lo!ics )nderpinnin! these capitalist instit)tions0e.!., or!ani4in! ,arkets, e@chan!in! infor,ation. =n !eneral the (hole area of disc)ssion is )ndertheori4ed, (hile the e@istin! historical acco)nts rest on e@ceedin!ly thin e,pirical evidence. &he basic so)rces are revie(ed in the t(o best st)dies on this s)b2ect, by G)stafa Na,il al19ayyid 519%"; and Bianchi 519%9;. &he far richer literat)re on the history of labor )nions and (orkers> federations ,akes ,y point that ,)ch ,ore obvio)s. 9ee, in partic)lar, Loldber! 519%3;, Beinin and .ock,an 519%$; and Pos)sney 51991;.

13. -s described in another conte@t: C'hat then is the political task (hich confronts the ,a2or indi!eno)s capitalist* Pri,arily it is to sec)re a !)aranteed position in the con!lo,erate of capitalist factions operatin! in =ndonesia. Liven the increasin! internationali4ation of capitalRits f)t)re is as a ,ore or less developed co,ponent of co,ple@ international corporate and financial str)ct)resD 5Robison 19%3: "36;. 1$. = a, !ratef)l to 8llis Loldber! for pressin! ,e on the concept of rent and for s)!!estin! its partic)lar relevance to the sectoral conflicts that are detailed here. :is close readin! of this chapter (as instr),ental in developin! the ar!),ents in this section and the one that follo(s. 1%. 'hile this is ho( the broad dyna,ics of the liberal re!i,e are conventionally interpreted, and = don>t challen!e this fra,e(ork here, there is !ood reason to believe that this convention (ill re+)ire revision once s)b2ected to the kind of critical scr)tiny that = have !iven to the or!ani4ation of b)siness interests. -nd o)r )nderstandin! of ,any aspects of the liberal re!i,e 5e.!., le!islative practices; is e@ceedin!ly thin.

). The 8rigins of the 95&&ud %roup and 4ts !i als

PPQolitical parties as s)ch have no decisive infl)ence, since all a)thority is in fact vested in a s,all !ro)p of fa,ilies.R&here are, f)rther,ore, (ealthy persons like -h,ad -bbo)d Pasha (ho tho)!h )naffiliated (ith any party e@ercise a considerable infl)ence on 8!yptian policy.

&here is no sin!le path (hich local investors have follo(ed in b)ildin! capitalist ind)stry in late1colonial and postcolonial societies. Certain paths see, (ell (orn ho(ever. =n pioneerin! ne( vent)res and chartin! ne( ind)strial sectors, do,estic b)siness,en often have 2oined forces (ith forei!n capitalists0international financiers, banks, ,an)fact)rin! corporations, and en!ineerin! fir,s0as (ell as (ith local co,petitors. 9i,ilarly, they have looked to the a!encies of the state for reso)rces, s)bsidies, protection and related ,eans of )nder(ritin! risk and !)aranteein! profit. =n this chapter, = hi!hli!ht so,e of the basic land,arks of this partic)lar develop,ent path in 8!ypt by analy4in! those (ho traveled it in the decades after 'orld 'ar =. &he econo,ic dislocation of the (ar years0shorta!es, acrea!e restrictions, the loss of e@port ,arkets0revealed (eaknesses in the a!roe@port1based econo,y and reinforced those ,e,bers of the b)siness co,,)nity callin! for diversification 5Ber+)e 19$B7 &i!nor 19$3, 19%#a and 19%67 Feeb 19$3 and 19$9;. -t the sa,e ti,e, the (ar f)eled resent,ent a!ainst the British occ)pation and cataly4ed a broad1based ,ove,ent of resistance. Gany

8!yptians recall the revol)tion of Garch 1919 as the nation>s finest ho)r. =n its (ake, Lreat Britain retreated fro, its plan to incorporate 8!ypt into the e,pire and, by !rantin! a for, of li,ited independence in 19BB, took the first tentative step to(ard cedin! state po(er to 8!yptian instit)tions and officials. &he f)ll i,pact of these years on the evol)tion of the political econo,y ,)st be assessed both in ter,s of the develop,ent of ne( vent)res and sectors and also in ter,s of the rise of ne( centers of po(er (ithin the do,estic b)siness co,,)nity. 8!yptians so)!ht to 2oin the ranks of the co)ntry>s capitalists. &he political chan!es )shered in by the (ar proved i,,ensely helpf)l to 8!yptian capitalists (ho co)ld finally be!in to overco,e the si!nificant entry barriers erected in the ,id11%##s. Iro, the perspective of these aspirin! econo,ic elites, ,an)fact)rin! (as one potential area of invest,ent. &he do,inant sectors of the econo,y, s)ch as finance, cotton e@port, transport and constr)ction, (ere e+)ally invitin! aven)es for the p)rs)it of profit and po(er. &he rise of the bankin! !ro)p aro)nd &alEat :arb, the co,,ercial co,ple@ steered by the <ahya fa,ily and the constr)ction e,pire b)ilt by -h,ad E-bb)d si!nified a shift both in the (ei!ht of local econo,ic forces and in the sectoral co,position of invest,ent activity by local b)siness !ro)ps. Politics played an i,portant role in the )nfoldin! of these t(inned processes, b)t little is kno(n abo)t the strate!ies e,ployed by 8!yptian investors or abo)t the conflicts that en!a!ed these ne( key interests alon! (ith the rest of the local b)siness co,,)nity. Certainly these iss)es have never been red)cible to so,e )ne+)ivocal anta!onis, to(ard forei!n capital on the part of local investors or, the opposite, a co,p)lsion to serve these sa,e forei!n fir,s. &he activities of the E-bb)d !ro)p, a closely controlled b)t disparate set of enterprises steered by an 8!yptian contractor, G)ha,,ad -h,ad E-bb)d, afford a )ni+)e vanta!e point for st)dyin! b)siness and politics in postJ 'orld 'ar = 8!ypt. E-bb)d>s le!acy is both fascinatin! and controversial. Unlike the other 8!yptian capitalists (ho attained !reat (ealth and po(er in this era, E-bb)d la)nched his 8!yptian b)siness career relatively late, havin! obtained his first contracts aro)nd 19B6. By co,parison, the <ahya !ro)p dates back to the 1%3#s. :arb, (ho (o)ld !o on to fo)nd Bank Gisr, 2oined one of the first 8!yptian b)siness !ro)ps in 19#5. =n other (ords, it (as E-bb)d>s star that rose s(iftest. &he conflicts that acco,panied this ,eteoric ascent in 8!yptian b)siness and politics are )ndo)btedly factors in the conventional portrayals of E-bb)d in ,)ch of the colonial1e@ceptionalist historio!raphy as the bUte noire of the bo)r!eoisie. :e is represented as a core part of the reactionary social coalition that alle!edly bro)!ht abo)t the end of an a)tono,o)s ind)striali4ation pro2ect be!)n (ith the fo)ndin! of the Gisr !ro)p in 19B#. =n this (ay, the econo,y itself is seen as the second face of a fatef)lly co,pro,ised pro2ect on the part of the national political elite to sec)re co,plete independence for the co)ntry. &hese t(o nationalist pro2ects are portrayed as risin! and fallin! 5and risin! a!ain after 195B; in tande,.

&his chapter ar!)es for a so,e(hat different tra2ectory for the political econo,y. Coalitions of local investors and allied interests0b)siness !ro)ps0 had e,er!ed in 8!ypt decades before the fo)ndin! of Bank Gisr. &he invest,ent activities of 8!ypt>s first b)siness !ro)ps incl)ded ,an)fact)rin! and non,an)fact)rin! ind)strial vent)res. Gany of these efforts involved cooperative links (ith international interests. &he Gisr !ro)p, the E-bb)d !ro)p and other coalitions e,er!in! after 19BB contin)ed this pattern of selective collaboration (ith forei!n capital. -t the sa,e ti,e, they created ne( ind)stries in 8!ypt and advanced local control 5the 8!yptiani4ation; of e@istin! sectors. &hey co,peted (ith one another for control of these vent)res. &he chapter be!ins by analy4in! the ori!ins of 8!ypt>s first local b)siness !ro)ps and the role that these b)siness,en envisioned for forei!n capital and for ,an)fact)rin! ind)stry in the evolvin! political econo,y. &hro)!h their plans for li,ited diversification, these investors charted a co)rse for ne( sets of 8!yptian co,petitors. &he contin)ities are plainly evident in the record of the E-bb)d !ro)p. &he disc)ssion th)s t)rns to the rise of E-bb)d Pasha and the E-bb)d !ro)p of co,panies. = revie( the ori!ins of his b)siness career in the 8!yptian constr)ction sector and the diversification of his holdin!s d)rin! the inter(ar period, 19B6J19"9. F)rin! this period of sharp co,petition for li,ited p)blic reso)rces E-bb)d consolidated his position as a ,a2or ne( force in the local political econo,y. &he chapter concl)des (ith a disc)ssion of the instit)tional bases of po(er of the E-bb)d !ro)p and its co,petitors in the inter(ar ,arket. &he ,ain ar!),ent can be s),,ari4ed as follo(s. Until no(, o)r vie(s of E-bb)d and his rivals have had little basis in the act)al instit)tions, interests and activities of these local investors. =n partic)lar, the tendency to disco)nt investors as a political force ste,s fro, a false and indefensible ass),ption: that these inter(ar capitalists or so,e s)bset of the, tried to ind)striali4e and transfor, 8!ypt b)t failed. -nalysts differ ,ainly in identifyin! (ho 5or (hat class se!,ents; p)rs)ed these ob2ectives and (ho 5or (hat social forces; stood in their (ay. &he concl)sion is nonetheless the sa,e. Capitalists did not have the political reso)rces necessary to pro,ote their interests. &his concl)sion is not s)rprisin!, !iven ho( bo)ndless (e i,a!ine those interests to have been. M M M

!eplanting Egyptian 4ndustry" The Cotton$E'port Econo(y and the E(ergence of Do(estic #usiness %roups
Iollo(in! the collapse of G)ha,,ad E-li>s syste, of state ,onopolies and ,an)fact)rin! vent)res in the 1%6#s, the (ei!ht of econo,ic activity in 8!ypt shifted to(ard co,,ercial a!ric)lt)re, (here the local dynastic state1 in1for,ation 58!ypt (as still officially a province of the ?tto,an 8,pire; had overseen innovations in s)pport of prod)ction of a hi!h1val)e e@port crop0 cotton. Iro, the ,id11%##s on, fort)nes rose and fell in 8!ypt on the stren!th of the prices co,,anded by its pri4ed, lon!1staple fiber in the

(orld ,arket.[1] &he British occ)pation in 1%%B led to a series of ad,inistrative, econo,ic and fiscal refor,s that deepened co,,erciali4ation of land, cotton1e@port prod)ction and capital acc),)lation. &(o points need to be stressed abo)t the sociolo!y of those (ho appropriated the s)rpl)s in this econo,y. Iirst, it is conventional to stress the do,inance of Cforei!nD capital in this period by concentratin! on the national ori!ins or co,,)nal identities of individ)al o(ners, co,pany directors and ,ana!ers operatin! in vario)s sectors. B)t (hen forei!n capital is defined in this (ay, the Irench1based co,,ercial !iant, CrKdit .yonnais, is indistin!)ishable fro, the locally or!ani4ed A. /. Gosseri Iils et Co,pa!nie, a co,,ercial bank fo)nded by a fa,ily resident in 8!ypt since the ,id11$##s. &he Gosseri fir, and its o(ners are an instit)tional e@pression of local capital in nineteenth1cent)ry 8!ypt.[)] &he identities of these local investors (ere )ndo)btedly co,ple@. Ior e@a,ple, the Gosseris (ere le!ally forei!ners rather than 8!yptian s)b2ects. &ho)!h born and raised in 8!ypt, at so,e point in the nineteenth cent)ry ,e,bers of this fa,ily obtained =talian passports, (hich !ained the, co,petitive advanta!es )nder the ter,s of the international co,,ercial re!i,e in force in 8!ypt and other parts of the ?tto,an 8,pire 5the Capit)lations;. &heir co,,)nal identity, ,ean(hile, (as Ae(ish. &he vice1 presidency of the or!ani4ed Cairo Ae(ish co,,)nity (as a hereditary position held by the Gosseris for decades. 59ha,ir 19%$7 NrS,er 19%9: 61J 6"; &he e,phasis on nationality or co,,)nal identity has tended to obsc)re the role played by these local capitalists in the develop,ent of ind)stry as a s)bsidiary sector of the a!roe@port econo,y. &he second and related point concerns the )sef)lness in distin!)ishin! bet(een a class of lar!e lando(ners, on the one hand, and an )rban bo)r!eoisie, on the other, in narratin! the history of the co)ntry>s local ,an)fact)rin! sector. &here are, of co)rse, (ell1established !ro)nds for doin! so in the 8!yptian case, (hether these !ro)nds are ,ar@ist ideas abo)t ,odes of prod)ction or the collective sociolo!ical profile of 8!ypt>s early1t(entieth1cent)ry national !overnin! elite. /onetheless, virt)ally all lar!e1scale ind)stries of local ori!in (ere steered by fa,ilies (ith vested interests in the a!rarian str)ct)re. Iort)nes acc),)lated d)rin! the boo, of the 1%3#s (ere )sed to b)y land. R)ral rents f)nded co,,erce and, later, ind)stry. =n other (ords, it (as a ,er!ed set of leadin! landlord1capitalists that s)pported i,port1s)bstit)tion ,an)fact)rin! invest,ent. -t least t(o distinct coalitions of local investors e,er!ed in the prospero)s postocc)pation decade of the 1%9#s. &he first incl)ded local Ae(ish fa,ilies, 9)arVs, Cattao)i, Genasce and Rolo, closely linked by ,arria!e and by invest,ent activity.[*] = (ill refer to this coalition as the 9)arVs !ro)p beca)se Raphael 9)arVs 51%63J19#B; fronted for these fa,ilies in a series of spectac)lar, t)rn1of1the1cent)ry 2oint vent)res (ith Irench and British financial syndicates. &he holdin!s of these fa,ilies incl)ded ,assive private a!ric)lt)ral estates, r)ral land1develop,ent vent)res, )rban real estate, n),ero)s private and 2oint1stock banks, p)blic transport, )rban services,

and te@tiles. - second !ro)p involved leadin! ,e,bers of -le@andria>s lar!e Lreek co,,)nity, the 9alva!os, 9inadino, Oervo)dakis, Chore,is and Benakis fa,ilies.[+] &he diverse activities of the 9alva!o !ro)p, as it (as referred to in the 8!yptian press, ca,e to enco,pass cotton e@port and finance, private estates, r)ral1develop,ent co,panies, )rban real estate and co,,ercial vent)res 5e.!., (areho)ses;, p)blic )tilities, transport, ins)rance, te@tile ,an)fact)rin!, petrole), ,arketin!, and, event)ally, che,icals and ,etall)r!y 5 $h%ar al-6a*m# 1" /ove,ber 196%;. &heir econo,ic roles proved no less co,ple@ than the other co,ponents of these local investors> identities. &i!nor 519%6: $BJ$"; incl)des GikKs 9alva!os a,on! 8!ypt>s Cforei!n ind)strialistsD and hi!hli!hts his role as a fo)nder of the -ssociation of =nd)stries in 19BB. -t the ti,e, 9alva!os served as chair,an of the boards of Iilat)re /ationale d>8!ypte, then the co)ntry>s lar!est te@tile enterprise, the -le@andria and Ra,leh Rail(ay Co,pany and the -le@andria 'ater Co,pany. -t the sa,e ti,e, ho(ever, 9alva!os sat on the steerin! co,,ittee of the -le@andria Leneral Prod)ce -ssociation, an instit)tion co,prisin! Clar!e e@port ho)ses, bankers and ,erchantsD that privately re!)lated the cotton trade 5&i!nor 19%6: 5%7 Papasian 19B3: "##7 Pilavachi, 19"B;. Nitroeff ar!)es that it is ,isleadin! to label bankers and e@porters like 9alva!os Cind)strialistsD 519%9: %BJ%", 1BB;. Gean(hile, the 9alva!os fa,ily o(ned an estate totalin! B,### faddans, (hich +)alifies the, for incl)sion in the lists of 8!ypt>s top lando(ners. .ocalcapitalists like 9alva!os, 9)arVs and their allies cooperated closely (ith forei!n capitalists in ,any of the bi!!est vent)res of the period. &he 9)arVs !ro)p b)ilt their 8!yptian co,,ercial e,pire thro)!h alliances (ith co,petin! 8)ropean financial po(ers. &hese alliances can be seen in the period of e@pansion of the !ro)p>s holdin!s bet(een 1%%# and 19#$. =n the first ,a2or 2oint vent)re, the 9)arVs !ro)p and a consorti), of Irench banks fo)nded the CrKdit Ioncier 8!yptien 51%%#;, (hich proceeded to do,inate ,ort!a!e bankin! in 8!ypt 5Cro)chley 19"3: "67 ?(en 1939: B$$7 Collins 19%6: 6"J657 &i!nor 19%9: %3;. &he po(er e@ercised by Raphael 9)arVs and his allies on the local board proved a central concern of the Irench e,bassy, increasin!ly so as local investors !rad)ally !ained control of a ,a2ority of the internationally traded shares 5&i!nor 19%9: %3J%$;.

:Pri ati;ation<
&he 9)arVs !ro)p benefited enor,o)sly fro, a ,assive transfer of o(nership ri!hts carried o)t by the Cro,er re!i,e 51%%"J19#$;, (hich paved the (ay for these investors> e@pansion into ne( econo,ic sectors. Ior instance, in 1%%% they received a concession fro, the !overn,ent that ceded to the, the state1o(ned &)ra1:el(an rail(ay, so)th of Cairo, and !ranted the, per,ission to e@tend the line north into the city center at Bab al1.)+ 5NrS,er 19%9: 617 Nalkas 19$9: B"#7 'ri!ht and Cart(ri!ht 19#9: 1%";. &his vent)re led to a series of f)rther transport enterprises, incl)din! the private financin! in 1%95 of the last se!,ents of the rail(ay line r)nnin!

fro, Cairo to -s(an in cooperation (ith the Ler,an 2oint1stock bank, Berlin :andels Lesellschaft. ?nce it (as b)ilt, the 9)arVs !ro)p leased the line back to the 8!yptian 9tate Rail(ays 5NrS,er 19%9: 617 Nalkas 19$9: B"17 Platt and :efny 195%: ""%;H =n the late 1%9#s, investors scra,bled to obtain the ri!hts to r)n li!ht rail(ay lines in the Felta. &he 9)arVs !ro)p (on the concession for the three eastern !overnorates of 9har+iyya, Fhakhaliyya and Wal)biyya. Co,petitors incl)ded a British financial syndicate and a Bel!ian holdin! co,pany kno(n as the 8,pain !ro)p, (hich b)ilt and ,ana!ed rail(ays and tra,(ays across 8)rope, -sia and -frica. =n 19## the 9)arVs !ro)p sold their concession to the British interests and 2oined the board of the co,petin!, .ondon1based 8!yptian Felta .i!ht Rail(ays .td. 5'ri!ht and Cart(ri!ht 19#9: 1%"J1%37 NrS,er 19%9: 617 Nalkas 19$9: 1$6;. &he transport ,arkets of Cairo and the Felta (ere th)s effectively divided bet(een t(o forces. &he 9)arVs1British 2oint vent)re ran li!ht rail lines in ,ost of the Felta as (ell as the Cairo1:el(an line. =ndependently, the 9)arVs !ro)p ran the donkey carts that crossed the G)s+i +)arter and that (ere kno(n collo+)ially as Csi(aris.D &he 8,pain !ro)p operated a li!ht rail(ay in the eastern Felta connectin! Gans)ra to the coastal to(ns of F),yat, east of -le@andria, and al1Gan4ala, near Port 9aid. Gore si!nificantly, the Bel!ians also b)ilt and operated electric tra,(ay lines in Cairo. &hese transport vent)res (ere only one co,ponent of lar!er, privately directed )rban1develop,ent sche,es that chan!ed the conto)rs of Cairo. &he 9)arVs !ro)p and their British partners created a second fir,, the 8!yptian Felta .and and =nvest,ent Co,pany 519#6;, (hich developed the s)b)rb of GaEadi alon! its Cairo1:el(an line. 'hile b)ildin! the rail lines, the 9)arVs !ro)p also developed p)blic1)tility co,panies in &anta, the third lar!est city in 8!ypt, and Gans)ra, another ,arket city serviced by the Felta rail syste,. &hey event)ally took over the Cairo (ater(orks as (ell. &hese vario)s )rban real estate vent)res paled, ho(ever, beside the develop,ent sche,e pro,oted by 8,pain and allied 8)ropean financiers. &he Br)ssels1based investors constr)cted an entire ne( co,,)nity in the desert northeast of Cairo0:eliopolis0linked by the ne( tra,(ay line. &he pop)lation reached B6,### by 19B%, and 8,pain>s vario)s co,panies controlled transport, po(er, )tilities, and ei!hteen tho)sand faddans (orth of co,,ercial and private real estate by ,id1cent)ry. =n 19#3 the 8,pain !ro)p set )p a holdin! co,pany, the Cairo 8lectric Rail(ays and :eliopolis ?asis Co,pany, (hich, in t)rn, held controllin! shares in vario)s related co,panies0for instance, the 9ociKtK 8!yptienne d>8lectricitK 519B9;, (hich b)ilt and operated the ori!inal 9h)bra po(er station 5.evi 195B: "16;. &he close control e@ercised by the Bel!ian ad,inistration left little roo, for local capital to operate, in contrast to the sit)ation in forei!n1financed develop,ent pro2ects associated (ith the 9)arVs !ro)p. =n the inter(ar period, the Bel!ians (o)ld fi!ht hard to prevent 8!yptian investors fro, breakin! the ,onopoly on the Cairo transportation and po(er ,arkets. -t best, local capital acted on the periphery of the 8,pain !ro)p>s )rban

fiefdo,, at least )ntil the end of 'orld 'ar ==. &he pri,e e@a,ple is the set of constr)ction, )rban real estate and land1develop,ent vent)res involvin! the local 5Bel!ian; contractor .eon Rolin and t(o 9yrian b)siness fa,ilies0 the 8ids, (ho (ere Bel!ian protK!Ks, and the 9hako)rs 5&i!nor 19%#a: 6B", 6B97 'ri!ht and Cart(ri!ht 19#9: 115J13, "1BJ1", "9$7 Philipp 19%57 Papasian 19B3;. &heir interlockin! fir,s incl)ded the 8!yptian 8nterprise and Fevelop,ent Co,pany 519#6;, the Cairo 9)b)rban B)ildin! .and Co,pany 519#3;, the No)bbeh Lardens B)ildin! .and Co,pany 519#$;, the Lharbieh .and Co,pany 519#5; and .a 9ociKtK -!ricole de Nafr al Fa((ar 519#$;. &he tre,endo)s e@pansion of -le@andria in the 1%%#s and 1%9#s proceeded in si,ilar directions: the bankers and e@porters financed )rban transport, land develop,ent and, lastly, ,an)fact)rin! ind)stry. Fevelop,ent took place in an )nre!)lated environ,ent overseen by a b)siness1do,inated ,)nicipal !overn,ent (hose a)tono,y (as sanctioned by stat)te 5el 9aaty and :irabayashi 1959: B1%;. &he 9alva!os and allied fa,ilies played pro,inent roles, to!ether (ith 8)ropean1based capitalists, in ,any ne( vent)res, incl)din! the 8!yptian 9alt and 9oda Co,pany 51%99;, (hich (as a state1sanctioned ,onopoly, and the Iilat)re /ationale d>8!ypte 51%99, reor!ani4ed 1911;, the first te@tile fir, to obtain even ,ini,al !overn,ent s)pport 5?(en 1933 and 1939: BBBJBB"7 &i!nor 19%9; 9alva!os also held a lar!e stake in the locally controlled 9ociKtK -nony,e d) BKhKra 51%%#, reconstit)ted 1%96;, (hich, s)pported by !overn,ent dred!in! contracts, !re( into one of the lar!est co,panies developin! the far, land of the Felta 5Baer 193B: 3%J39, 1B6J1B$7 ?(en 1939: B1B, B%17 Nitroeff 19%9: %B;.

The Cassel$Suar=s %roup >oint ?entures

'hile the r)lin! a)thorities th)s enco)ra!ed and facilitated capital invest,ent and private control of )rban develop,ent, this ne( division of labor received its f)llest e@pression in the sale to 9)arVs and vario)s partners of pri,e a!ric)lt)ral lands in the Felta and Upper 8!ypt, alon! (ith the state1o(ned s)!ar ,ills. &he 9)arVs !ro)p, (hich in the 1%%#s operated the refinery in al1:a(a,diyya, 2oined (ith Irench investors in a second enterprise in Upper 8!ypt 5?(en 1939: B$$7 Nalkas 19$9: 1397 &i!nor 19%6: "6;. &he 9)arVs !ro)p ori!inally held the controllin! 533.3 percent; share in the 2oint vent)re, b)t consolidation and e@pansion of these vario)s s)!ar1,an)fact)rin! operations involved ne( capital shares traded on the Paris bo)rse. &he ,er!er in 1%9$ led to the creation of the 9ociKtK LKnKrale des 9)creries et de la Raffinerie d>8!ypte, the lar!est ind)strial fir, in 8!ypt. &he !iant refinery operation absorbed all of the state>s o(n ,an)fact)rin! facilities by 19#B 5Cro)chley 19"3: 1167 ?(en 1939: B937 Collins 19%6: $#7 &i!nor 19%9: %$J%%7 NrS,er 19%9: 6#;. /ot s)rprisin!ly, the 9)arVs !ro)p devoted considerable ti,e, ener!y and capital to land develop,ent in Upper 8!ypt, (here ,ost of the cane (as !ro(n. ?nce a!ain, they 2oined forces (ith forei!n financial capital in a vent)re sanctioned by the !overnin! a)thorities and restin! basically on the s)bsidi4ed transfer of three h)ndred tho)sand faddans of state1o(ned lands.

&he )nprecedented !ivea(ay a,o)nted to a +)id pro +)o for the assistance that 8rnest Cassel, one of the ,ost po(erf)l international financiers of the era, provided the !overn,ent 5i.e., .ord Cro,er; in the constr)ction of the -s(an Fa, 51%9%J19#B;. Cro,er, (ho backed the da, pro2ect as a chief ,eans to develop 8!ypt>s irri!ation syste,, co)ld not obtain the release of the f)nds fro, the ,)ltinational co,,ission in char!e of the 8!yptian treas)ry. Cassel, (hose closest b)siness associate (as Cro,er>s brother, .ord Revelstoke, the director of Barin! Brothers, arran!ed private financin! for the da,. :e (as a,ply re(arded.[-] =n 1%9%, Cassel, the 9)arVs !ro)p and the Irench partners in the s)!ar1 ,an)fact)rin! vent)re for,ed the Faira 9anieh Co,pany. &he state sold the, (hat re,ained of the for,er Nhedive =s,aEil>s properties, ,)ch of it in Giddle and Upper 8!ypt. -s Collins notes, C&he false clai, (as ,ade that the Faira 9aniyya (as losin! ,oney and sho)ld therefore be sold off as the best ,eans of ste,,in! a fiscal he,orrha!e that ,i!ht event)ally drain the 8!yptian !overn,ent treas)ryD 519%6: "51;. &he co,pany p)rchased the land for X8 3.6 ,illion and bet(een 19## and 19#3 sold three h)ndred tho)sand faddans for X8 1" ,illion. &he investors> share in the profits totaled, ,ini,ally, X8 " ,illion 5Baer 193B7 ?(en 1939: B3%JB397 Collins 19%6: "6$J"5";. &he board of this l)crative vent)re co,prised a re,arkable alliance, incl)din! Cassel>s b)siness partner, Carl Geyer7 Paris bankers7 the recently retired financial adviser to the 8!yptian !overn,ent, 8l(in Pal,er7 ,e,bers of the 9)arVs !ro)p7 and one of the ,ost po(erf)l 8!yptian lando(ners of Ginya province, E-li 9haEra(i 5British Cha,ber of Co,,erce 19#5: 11, 5#;. &he lines of co,petition and cooperation !re( increasin!ly dense and co,ple@. Cassel and his partners !ained an i,portant interest in the 9ociKtK LKnKrale des 9)creries et de la Raffinerie d>8!ypte in 19#B by financin! the fir,>s p)rchase of the state>s refineries, and they played a ,a2or role in the reor!ani4ation of the co,pany (hen bankr)ptcy threatened in 19#5. &he ne( ,ana!e,ent tea, incl)ded the Bel!ian e@pert, :enri /a)s, (ho in later decades beca,e a leadin! spokesperson for local ind)stry. =n addition, Victor :arari, a Iinance Ginistry official, (ent to (ork for Cassel and his allies in 19#5 in the s)!ar co,pany and the closely linked 9ociKtK -nony,e d) 'adi No, ?,bo 5est. 19#6;, an enor,o)s a!ric)lt)ral co,pany in -s(an province. -t the sa,e ti,e, a Irench19)arVs 2oint vent)re, the CrKdit Ioncier 8!yptien, took over the Faira 9anieh Co,pany, in a ,ove apparently intended to pree,pt Cassel>s entry into 8!yptian ,ort!a!e bankin! 5?(en 1939: B917 &i!nor 19%6: "6 and 1933: "39J"$"7 Ber+)e 19$B: B63JB6$7 &hane 19%3;. 8@istin! st)dies only hint, in a fr)stratin!ly va!)e (ay, at the conflicts (hich )nderlay this tre,endo)s e@tension of private (ealth and po(er. &hro)!h s)ch fa,iliar instit)tions as officially sanctioned private ,onopoly over p)blic service, s)bsidies, appropriation of state reso)rces, and direct path(ays fro, !overn,ent ,inistry to co,pany board, investors b)ilt capitalist enterprises in 8!ypt. .ocal investor coalitions like the 9)arVs !ro)p played central roles in virt)ally every ,a2or financial, co,,ercial and ind)strial enterprise of the era. &hey all b)t obliterated the lines

distin!)ishin! p)blic and private, forei!n and local, thro)!h s)ch operations as the /ational Bank of 8!ypt, fo)nded in 1%9% by Cassel, 9)arVs and the -le@andria1based 9alva!o !ro)p 5Cro)chley 19"3: "B7 British Cha,ber of Co,,erce 19#5: B67 Nalkas 19$9: B$3;. &i!nor tellin!ly s),,ari4es develop,ents in this post11%%B period by notin! Ca ,arked for!in! of interests bet(een the ad,inistration and the financial co,,)nityD 51933: "39;.

#usiness %roups and 4ndustry

&he develop,ents ,apped here are i,portant for three reasons. Iirst, they hi!hli!ht basic instit)tional feat)res of the b)siness co,,)nity in 8!ypt, incl)din! ,echanis,s )nderpinnin! its privile!ed position. 'hatever the ,otivations of individ)al British ad,inistrators, or the po(er of the .ondon and Paris bondholders, or Cro,er>s e@pectations abo)t the press)res that ,i!ht be e@erted by the .ancashire te@tile lobby, the post11%%B !overn,ents needed the cooperation of the b)siness co,,)nity to reali4e all their basic econo,ic ob2ectives. Cro,er, the r)ler of 8!ypt fro, 1%%" to 19#$, transferred assets and a)thority in ,any do,ains fro, p)blic to private hands. &he b)siness co,,)nity en2oyed ,ini,al state interference: the constr)ction ind)stry (as )nre!)lated, the cotton e@porters s)pervised their o(n affairs, (hile the private Nhedivial -!ric)lt)ral 9ociety served in place of a !overn,ental ,inistry of a!ric)lt)re )ntil 191#0this in a co)ntry (here e@port a!ric)lt)re (as the basis of national (ealth. &he b)siness !ro)p0individ)als and fa,ilies or!ani4ed as coherent coalitions of investors0e,er!ed as an i,portant for, of a)tono,o)s capitalist or!ani4ation d)rin! the period 1%%#J19##, coincidin! (ith the consolidation of local capital !enerally as a political1econo,ic force in 8!ypt. Gy basic portrait and periodi4ation depart fro, conventional acco)nts, (hich have been concerned above all (ith the forei!n co,,)nal or ethnic identities of these early investors and co,pany directors. &hese acco)nts either collapse the distinction bet(een local and forei!n capital in this period or else portray these local capitalists as co,pradors, servin! the interests of forei!n capital. &he second reason for ,appin! these early, pre1'orld 'ar = instit)tional develop,ents is to clarify the specific role played by these b)siness !ro)ps in vario)s econo,ic sectors, especially their early invest,ent activity in ind)stry. Cro,er>s infa,o)s ref)sal to accord protection to the first t(o ,odern te@tile vent)res started in 8!ypt in 1%99 is !enerally seen as an e@pression of the stren!th of the social forces opposin! local ind)strial develop,ent, artic)lated and led by the top ad,inistration of the state. &he local b)siness co,,)nity had s)pposedly not yet sho(n ,eanin!f)l si!ns of an ability to e@press co,,on interests and to act in defense of the national econo,y. .ocal 5CnationalD; capital, e+)ated narro(ly (ith ind)strial interests, only be!ins to e,er!e in 191$, 19BB, 19"3 or even 195B, accordin! to vario)s interpretations.

&he depth of opposition to Cro,er>s policies belies the ar!),ents abo)t the delayed birth of local capital. -s ?(en pointedly notes abo)t Cro,er>s actions a!ainst the te@tile fir,s, they (ere Ccritici4ed by al,ost all sections of 8!yptian PsicQ opinion,D attacked by the ,ain ne(spaper of the b)siness co,,)nity, 5a Bourse Egyptienne# and initially str)ck do(n by the Gi@ed Co)rts. ?nce Cro,er orchestrated the reversal of the 2)diciary>s decision, the action C(as attacked as detri,ental to the co)ntry>s interests even by the Egyptian 7a8ette# nor,ally the ,ost sta)nch s)pporter of the ?cc)pation.D =t (o)ld see, that, in fact, the or!ani4ed voice of local 5tho)!h over(hel,in!ly non18!yptian; b)siness co)ld be plainly and lo)dly discerned. Criticis, of the British attit)de to the develop,ent of local ind)stry contin)ed )nabated for the re,ainder of the period )p to 1916. Cr)cially, by the end of his r)le, Cro,er fo)nd it necessary to p)sh aside his o(n cherished principles of free trade lon! eno)!h to intervene on behalf of the totterin! s)!ar1refineries 2oint vent)re 5?(en 1939: "6"J"66;. Cro,er>s s)ccessors contin)ed in this sa,e direction. &he crash of the 8!yptian ,arket in 19#$ cataly4ed a n),ber of i,portant develop,ents as !overn,ent officials, lando(ners and leadin! local b)siness,en responded to the crisis. &he 9)arVs !ro)p !ained vital e@e,ptions for their nascent te@tile1,an)fact)rin! 2oint vent)re, (hile the !overn,ent created the Ginistry of -!ric)lt)re bet(een 191# and 191B in response to pl),,etin! e@port prices and a disastro)s cotton harvest. B)siness,en en!a!ed in ne( for,s of collective action, fo)ndin! at least t(o ne( interest associations in this period: the Property ?(ners -ssociation 51911; and the 8!yptian Cha,ber of Co,,erce in Cairo 5191";. Ge,bers of the 9)arVs !ro)p played pro,inent roles in both 5?(en 1939: BB", "63J "6%7 Ber+)e 19$B: B6"7 Feeb 19$%: 1$J1%7 &i!nor 19%6: 3#J31;. Iinally, the econo,ic crisis !ave i,pet)s to a ,ore forcef)l and s)stained artic)lation of the need for econo,ic diversification, incl)din! the e@pansion of local ind)stry. &he ,ost po(erf)l constit)ents of the nascent ind)strial lobby in 8!ypt (ere si,)ltaneo)sly the co)ntry>s richest bankers, lar!est e@porters of cotton, ,ain investors and directors in n),ero)s forei!n1backed vent)res and, thro)!h the e@tensive net(ork of interlockin! transport, irri!ation, and land1 develop,ent co,panies, so,e of the lar!est lando(ners as (ell. &hey s)ccessf)lly inte!rated these diverse interests, and, not s)rprisin!ly, the s)bsidiaryrole envisioned for ind)stry in 8!ypt co,ple,ented rather than )nder,ined their invest,ents in the a!roe@port econo,y. &he ,)ltisectoral invest,ent ,odel that they pioneered re,ained the basic instit)tional for, of the lar!est 8!yptian capitalists for at least the ne@t half cent)ry. &hese po(erf)l coalitions, and th)s the b)siness co,,)nity as a (hole, even had the capacity to (eather the stor, of 8!yptian nationalis, (hich s(ept the co)ntry in the years leadin! )p to the 1919 revol)tion. &he third reason for ,appin! these investor coalitions caref)lly is to clarify the role they played in c)ltivatin! or acco,,odatin! 8!yptian1G)sli, econo,ic elites and pro,otin! the fort)nes of risin! ne( 8!yptian b)siness stars. ?ne e@a,ple is the ascent of the <ahya fa,ily, lando(ners and ,erchants pro,inent both in -le@andrian private 5b)siness; and p)blic

5,)nicipal1co)ncil; spheres, as (ell as in the e,er!in! 8!yptian nationalist ,ove,ent.[.] -,in <ahya sat on the land,ark 1913 Co,,ission on Co,,erce and =nd)stry 5the 9id+i co,,ission;. 9o did :arb, the fastest risin! of the 8!yptian b)siness,en and lando(ners associated (ith the 9)arVs !ro)p fro, 19#5 on.[0] ?thers incl)ded fa,ilies like 9)ltan, 9haEra(i, 9iy)fi and .)tfi.[1] -ll had ties to local or forei!n capital and, (ith the e@ception of .)tfi, (o)ld 2oin (ith :arb, as (ell as (ith key ,e,bers of the 9)arVs !ro)p, in the historic fo)ndin! of Bank Gisr in 19B#. :arb (as thro)!ho)t the 191#s and 19B#s probably the ,ost effective p)blicist a,on! 8!yptians of the ind)stry1b)ildin! strate!y advocated by Cforei!nersD like 9)arVs, Cattao)i, 9alva!os, /a)s, Rolo and Barker, the backbone of the local b)siness co,,)nity. M M M

6anufacturing" The Nonre olution

Before t)rnin! to the post119BB period and the rise of the E-bb)d !ro)p, (e ,)st be clear abo)t the nat)re and ti,in! of the ind)stry1b)ildin! pro2ect associated, perhaps too pro,inently, (ith the political and econo,ic fer,ent of the years s)rro)ndin! 8!yptian independence. &hese li,ited initiatives at econo,ic diversification (ere steered by b)siness,en (ho re,ained thoro)!hly inte!rated into international circ)its of capital. <et, they are ro)tinely described as a strate!y ai,ed Cat sti,)latin! ind)strial !ro(th independent of 8)ropean capital and interventionD 5NrS,er 19%9: 96, e,phasis ,ine;. :istorians )se three key events to anchor this interpretation and to pinpoint the birth of a national ind)strial bo)r!eoisie. &he first is the creation of the Co,,ission on Co,,erce and =nd)stry, (hich iss)ed its p)blic report in 191%. &he second event is the creation of Bank Gisr in 19B#, a co,,ercial bank o(ned e@cl)sively by 8!yptian citi4ens. &he third land,ark is the for,ation of the -ssociation of =nd)stries in 19BB 5=ssa(i P193$Q 19$5: 65BJ63#;. &he basic proble, (ith this pro2ection back into the past of post1195B anticapitalist disco)rses is that no one has convincin!ly sho(n that b)siness,en ever or!ani4ed and acted on the basis of the !oal of a)tono,o)s ind)striali4ation. &his (as certainly not the pro2ect artic)lated by the 9id+i co,,ission. =t (as not the invest,ent ,odel p)rs)ed by the local capitalists and lando(ners (ho steered Bank Gisr 5or any other b)siness !ro)ps for that ,atter;. -nd it (as never advocated by the leadership of the -ssociation of =nd)stries. =t is (orth(hile lookin! briefly at these three i,portant instit)tions, then, to see ho( investors act)ally defined the place of ind)stry and forei!n capital in the evolvin! political econo,y and operationali4ed this pro2ect.

The Sid@i Co((ission on Co((erce and 4ndustry

=n 1913, the 8!yptian cabinet asse,bled a nine1person ,i@ed co,,ittee of b)siness,en and !overn,ent officials to assess the i,pact of the (ar on the

do,estic political econo,y and to ,ake policy reco,,endations for the post(ar era. &he co,,ittee (as chaired by =s,aEil 9id+i, a risin! star in the ad,inistration (hose career had been ,o,entarily stalled by p)blic scandal. &he appoint,ent helped to ass)re hi, a lon! and l)crative p)blic life as the sin!le ,ost closely b)siness1identified 8!yptian politician of the 19B#s and 19"#s. Iive leadin! b)siness,en served (ith 9id+i: <)s)f Cattao)i and his protK!K, &alEat :arb7 -,in <ahya, the -le@andrian cotton e@porter7 :enri /a)s, the Bel!ian en!ineer (ho resc)ed the Cassel19)arVs !ro)p s)!ar1 processin! 2oint vent)re7 and I. Bo)r!eois, a representative of the Irench international invest,ent tr)st that o(ned the !as concessions for 8!ypt. &(o British technicians (orkin! for the 8!yptian !overn,ent and the Irench co,,ercial attachK ro)nded o)t the co,,ission 5&i!nor 19$$a: 13B and 19%6: 53;. &heir reco,,endations, incl)ded in the co,,ission>s len!thy 5191%; report, reflected ,any of the prevailin! critical vie(s on the econo,y and ar!),ents abo)t diversification, and can be read as a virt)al prKcis of the invest,ent strate!ies and political initiatives p)rs)ed by leadin! local capitalists in the ne@t t(o decades.[2] &he co,,ission o)tlined three basic ob2ectives: 51; the gradual e@pansion of the roles of 8!yptian labor, ,ana!erial staff and capital in the local econo,y7 5B; the cooperation of forei!n and local capital in a limited i,port1s)bstit)tion diversification effort tied to processin! of a!ric)lt)ral ra( ,aterials7 and 5"; a coordinated response to si!ns of social )nrest d)rin! a period ,arked by an )ps)r!e in labor ,ilitancy. &hey )r!ed that capital be channeled into factories for paper !oods, te@tiles, bricks, !lass, processed foods and leather !oods, as a (ay to absorb a part of the !ro(in! pop)lation. &he co,,ission ,ean(hile o,itted any disc)ssion of startin! heavy1!oods ind)stries0,achinery, a!ric)lt)ral e+)ip,ent, etc. &hese ind)stries (ere not part of the a!enda. =n the one case (here creation of a technolo!ically advanced ,an)fact)rin! vent)re (as advocated0na,ely, the call to set )p a do,estic nitrate plant0the initiative ca,e fro, !overnin! officials. Nitchener (as already involved in direct ne!otiations (ith Ler,an ,an)fact)rin! and en!ineerin! fir,s in 191B.[13] &here (as nothin! a,bi!)o)s or ,ysterio)s abo)t the call for forei!n capital to participate in e@pandin! 8!ypt>s ,an)fact)rin! sector. Iirst, forei!n capitalists and representatives of forei!n ind)strial po(ers served on the co,,ission. 9econd, local b)siness !ro)ps (ere already p)rs)in! this strate!y. &hird, even the li,ited ind)strial diversification envisioned by the co,,ission re+)ired increased involve,ent (ith ,etropolitan interests0for instance, in developin! the necessary po(er reso)rces, obtainin! ,achinery and technolo!y, and sec)rin! financin! for the ,ost a,bitio)s pro2ects. =f a Cco,,on the,eD of this report and related initiatives (as Cthe loosenin! of the bonds of control e@ercised by ,etropolitan interestsD 5&i!nor 19%6: 55;, then it is i,portant to re,e,ber that local capitalists so)!ht to do so even as they increased their involve,ent (ith forei!n capital. &he pro!ra, artic)lated by the 9id+i co,,ission reflected the o)tco,e of so,e three decades of chan!e in the do,estic and international ,arket, as (ell as the invest,ent opport)nities ,ade possible by these chan!es. =n

partic)lar, the !ro(th of en!ineerin! and heavy1,an)fact)rin! ind)stry in the advanced ind)strial econo,ies of Britain, Irance, Ler,any and the United 9tates afforded opport)nities for co,ple,entary e@pansion of ,an)fact)rin! and non,an)fact)rin! ind)strial invest,ents in co)ntries like 8!ypt. .ocal b)siness !ro)ps, thro)!h their ,)ltisectoral invest,ent strate!ies and stron! international connections, narro(ed the scope of conflict over co,petin! sectoral priorities. Fespite the clai,s in e@ceptionalist acco)nts, this li,ited ind)striali4ation pro2ect posed little threat to (hat is often envisioned as a for,idable opposin! bloc of forei!n ,erchants and ,an)fact)rers. Gany forei!n co,,ercial interests (o)ld profit handso,ely fro, a li,ited de!ree of local ind)stry b)ildin!, na,ely those representin! advanced ,an)fact)rin! and en!ineerin! sectors, heavy1e+)ip,ent prod)cers, contractors, electrical1s)pply fir,s and those bankin! interests allied to heavy ind)stry. -nd no one has yet provided evidence that the 9id+i co,,ission and the early invest,ent initiatives that follo(ed faced any kind of serio)s, s)stained and syste,atic opposition by either do,estic or forei!n rivals. Gostly these efforts (ere i!nored or else treated patroni4in!ly. &his beni!n ne!lect (o)ld only chan!e (ith the !rad)al reali4ation that British fir,s (ere losin! their lon!standin! co,parative advanta!e0political and econo,ic0in the 8!yptian ,arket.

The #an7 6isr %roup

-ll the points ,ade above are reflected and reinforced in the invest,ent activities of the Gisr !ro)p, the set of b)siness,en and landlords led by :arb (ho fo)nded Bank Gisr in 19B#. &his ne( b)siness !ro)p linked its fort)nes to the conservative (in! of the national ,ove,ent, !ained privile!ed access to the post119BB 8!yptian state, and )sed its political infl)ence to establish the !ro)p as a serio)s co,petitor in vario)s econo,ic sectors. &he bank>s ,ana!in! director and vice1chair,an (ere a)thors of the 191% co,,ission report, and, not s)rprisin!ly, they adhered closely to the a!enda set by the 9id+i co,,ission. Ior instance, in his p)blic prono)nce,ents, :arb ri!htly e@tolled the bank>s preferential hirin! policy and its principle of sellin! the bank>s shares only to 8!yptian nationals. =n the privacy of the boardroo,, :arb and his allies ,apped an orthodo@ ,)ltisectoral invest,ent strate!y that incl)ded selective cooperation (ith forei!n capital. &he history of :arb and the bank constit)te the core of the 8!yptian colonial1e@ceptionalist narrative. Beinin and .ock,an 519%$; capt)re the essence of this narrative in their description of the investors> atte,pt to create a Cco,pletely independent national ind)strial bo)r!eoisie.D 'hat ostensibly ,ost distin!)ishes the, fro, other investors is their opposition Cto collaboration (ith forei!n and mutamassir Pliterally, 8!yptiani4edQ capitalD 519%$: 11;. /onetheless, e,pirical proble,s abo)nd in this vie(. -fter all, <)s)f Cattao)i, :arb>s e,ployer, ,entor and the ori!inal vice1 chair,an of the bank, alon! (ith another ,e,ber of the ten1person board of directors, Aoseph Cic)rel, (ere the,selves t(o of the ,ost pro,inent

C8!yptiani4edD leaders of the b)siness co,,)nity. -s = sho(ed above, :arb and the other key fi!)res in the Gisr !ro)p had lon!standin! ties (ith forei!n capitalists and fir,s that they never abandoned. =nstead, :arb e@panded his forei!n connections. By 19B6, he had 2oined the board of the CrKdit Ioncier 8!yptien, the 2oint vent)re (ith Irench finance (hich (as the earliest and ,ost i,portant sy,bol of forei!n involve,ent of the a!roe@port econo,y. :arb and his partners in the Gisr !ro)p (o)ld 2oin the boards of other fir,s as (ell as e@plore and initiate their first instit)tionali4ed cooperative vent)res (ith forei!n capital in the period 19B6J19B9. Unfort)nately, analysts have contin)ed to e,ploy a naive and senti,ental ,odel of Bank Gisr, elaboratin! the factors that )lti,ately led the Gisr !ro)p to collaborate (ith forei!n capital, (hile ,o)rnin! the loss of the bank>s independence and the Cp)rity of the ethos (ith (hich it (as born.D[11] &he ob2ectives that :arb and other b)siness leaders p)blicly artic)lated before, d)rin! and after the 1919 revol)tion0e@pansion of ind)stry, diversification of the econo,y and enhanced local control0(ere at best broad, abstract and partially conflictin! ideals that capitalists contin)o)sly had to reconcile and operationali4e thro)!h their private invest,ent strate!ies. .ocal b)siness,en )nderstood this, and the versions of nationalis, that different 8!yptian investors cha,pioned proved fle@ible eno)!h to acco,,odate shiftin! and pra!,atic assess,ents of interest. &he p)blic e@pressions of econo,ic nationalis, associated so pro,inently (ith the Gisr !ro)p>s chair,an, :arb, proved e+)ally )sef)l to :arb>s local 8!yptian rivals, especially in tryin! to obtain political s)pport for their vario)s enterprises. &here (ere no obvio)s penalties involved in doin! so as lon! as econo,ic nationalis, (as the disc)rsive ,onopoly of capitalists or intellect)als (ho did not challen!e the le!iti,acy of the prevailin! private enterpriseJoriented econo,ic order. :arb, alon! (ith <ahya, E-bb)d and others, re,ained free to p)rs)e strate!ies of selective cooperation (ith forei!n capital. B)siness nationalis, stren!thened the co,petitive positions of local capital08!yptian and non18!yptian both0vis1T1vis potential forei!n partners, even (hile 8!yptian nationals co)ld )se it to advanta!e in ne)trali4in! so,e of the (ell1kno(n co,petitive advanta!es that had accr)ed to local forei!ners. =n s),, :arb>s p)blic1relations ca,pai!ns benefited, if )ne+)ally, a diverse ran!e of local investors 5?(en 19%1b;.

The 5ssociation of 4ndustries

.ocal investors fo)nded the -ssociation of =nd)stries in 19BB, = (o)ld ar!)e, in order to better ,onitor sector(ide develop,ents and to contin)e to sec)re a de!ree of cooperation a,on! a !ro(in! n),ber of co,petin! fir,s. ?ther instit)tions also played a role in controllin! the level of b)siness conflict. &he cross1sectoral holdin!s by !ro)ps (as one. &he +)asi1p)blic /ational Bank of 8!ypt, on (hose board sat representatives of the ,ain b)siness !ro)ps, (as another. -ll other thin!s bein! e+)al, ho(ever,

diversification ,ade it diffic)lt to contin)e to rely e@cl)sively on these narro(ly based instit)tional for,s of cooperation. &he for,s of econo,ic nationalist disco)rse favored by so,e of the fo)nders and spokes,en of the association have been reprod)ced too )nreflectively in those acco)nts that describe its p)rpose Cpri,arily to represent the forei!n residential b)siness co,,)nityRthreatened by a rene(ed infl)@ of 8)ropean ,an)fact)rersD 5&i!nor 19%6: $BJ$";. =f tr)e, then (hat (o)ld have co,pelled non,an)fact)rin! fir,s s)ch as the 8,pain !ro)p>s !iant po(er and transport co,pany to 2oin s)ch an or!ani4ation* Gany if not ,ost of the association>s ori!inal ,e,bers (ere not ,an)fact)rers. &he sectors (ith the lar!est n),ber of fir,s and the first to or!ani4e their o(n sections (ithin the association (ere shippers and contractors, neither of (hich !ained fro, red)cin! the vol),e or increasin! the costs of i,ports. 9hippin! and contractin! fir,s (ere, ho(ever, affected as ,)ch as te@tile ,an)fact)rers and the tra,(ays by a steep rise in labor ,ilitancy. 'orkers (ho had been ,obili4ed in the nation(ide de,onstrations in the sprin! of 1919 re,ained active in the streets and on the shop floors. =nd)strial fir,s in fact faced an )nprecedented level of strike activity bet(een 191%J19B1, a C,)shroo,in!D of )nion or!ani4in!, the birth of a precocio)s labor federation and the creation of the co)ntry>s first socialist party 5Feeb 19$3: $67 Beinin and .ock,an 19%$: %"J15%7 Bianchi 19%9: 3%J39;. <et this ,ost basic di,ension of ind)strial policy has been !iven little (ei!ht in e@plainin! the ori!ins of an association 5rena,ed the Iederation of =nd)stries in 19"#; that aided e,ployers in the stron! front they ,aintained for t(enty years a!ainst )nion and (elfare le!islation. 9ince ,ost of the ori!inal ,e,bers of the association carried forei!n passports, analysts have fo)nd it i,portant to stress that the interests of the Gisr !ro)p>s fo)nders only partially overlapped those of the association as a (hole. &his is e+)ally tr)e for every other ,e,ber fir, in the association. 'itho)t clarifyin! (hen and ho( this ,attered in the specific arenas in (hich the association acted, this clai, conveys no )sef)l infor,ation. =t is asserted only beca)se :arb>s rise by 19B5 to a leadership position (ithin the association itself so clearly contradicts core beliefs abo)t the Gisr !ro)p>s alle!ed ori!inal raison d>Utre or the deep !)lf bet(een 8!yptian and non1 8!yptian identities that is f)nda,ental to e@ceptionalist acco)nts of capitalists and politics. &here is little solid infor,ation behind disc)ssions of the -ssociation of =nd)stries in the secondary literat)re. &he standard description of this instit)tion as a po(erf)l and effective press)re !ro)p tends to rest ,ore on repeated assertion than ri!oro)s de,onstration. 'hile collective representation to the state in the na,e of the association>s ,e,bership (as one of its f)nctions and do)btless took place, this f)nction sho)ld not be e@a!!erated. - ,)ltisector association had little need to lobby in an )nre!)lated econo,y, tho)!h it co)ld serve as a ,echanis, for self1 re!)lation by investors. -ss),e that b)siness leaders (anted to preserve the oli!opolistic str)ct)re of the local ,arket that British r)le had helped to

instit)tionali4e. &he association co)ld help in red)cin! the infor,ation and enforce,ent costs associated (ith the oli!archs> preferences for price fi@in!, carteli4ation and labor control 5Bianchi 19%9: 39;.

!ethin7ing the Nationalist 6odel of the Egyptian #usiness Co((unity

&hese i,portant initiatives bet(een 1913 and 19BB reflect develop,ents in the political econo,y datin! back to the 1%9#s. - n),ber of fa,ilies linked to!ether in investor coalitions or b)siness !ro)ps e,er!ed as central )nits of acc),)lation in the do,estic political econo,y. &hese !ro)ps and their allies held leadership positions in every econo,ic sector: a!ric)lt)re, )rban real estate, ,ort!a!e bankin!, cotton e@port, constr)ction, po(er and transport. &hese sa,e investors took the lead in pro,otin! the develop,ent of local ,an)fact)rin! as a s)bsidiary invest,ent sector. &he o)tlines of this li,ited diversification strate!y e,er!ed bet(een 19#$ and 191B, havin! (eathered fitf)l opposition fro, the British a)thorities in control of the state and havin! received a)thoritative endorse,ent in the co,,ission report of 191%. =t re,ained the basic strate!y )nderpinnin! p)blic and private invest,ent in ,an)fact)rin! ind)stry )ntil the 195#s. &he above s),,ary overt)rns all the key pre,ises of the 8!yptian e@ceptionalist narrative. =nd)striali4ation, as envisioned by the investors (ho steered the 8!yptian econo,y, (as not an o)tco,e of the 1919 revolt. &his li,ited ind)striali4ation pro2ect did not fail. /or did landlords, Cco,,ercial capitalists,D C,etropolitan interestsD and, in partic)lar, b)siness nationalists like :arb challen!e it. &o the contrary, :arb played a key role in artic)latin! basic ob2ectives of the b)siness co,,)nity in nationalist ter,s. =t is therefore not s)rprisin! to find that, d)rin! his ,ost o)tspokenly nationalist period, forei!ners in 8!ypt contin)ed to c)ltivate :arb, enco)ra!ed his invest,ent activities and even 2oined hi, in his Bank Gisr vent)re in 19B#. Rather than :arb and the Gisr !ro)p ceasin! to pose a threat to do,inant forces in the local econo,y in the 19"#s as they increased their involve,ent (ith forei!n investors, he and the other 8!yptian b)siness nationalists only be!an to pose a threat at that ti,e, as these ne( !ro)ps de,onstrated increasin! infl)ence over ,arkets and politics. &he basic ob2ective of the Gisr !ro)p and all other post119BB 8!yptian investors (as profit or, even ,ore preferable, rent. C'e are so acc)sto,ed to associate the be!innin!s of the Gisr enterprises (ith the pro!ress of nationalis,, and indeed (ith the pro!ress of the nation, that it is so,e(hat pi+)ant to set the, a!ainst their di,inished conte@tD 5Ber+)e 19$B: ""$;. Rent seekin! yields a far less e@alted i,a!e than conventional portraits of bankers seekin! to challen!e 8)ropean econo,ic he!e,ony. =t does, ho(ever, resolve ,any of the conventional parado@es, incl)din! ine@plicable co,ple@ities in the personalities of b)siness,en like :arb (ho, (hile ChostileD to forei!n capital, served on the boards of the bi!!est forei!n1 o(ned fir,s in 8!ypt7 as (ell as an Cind)striali4ationD drive that led ind)strialists to plo( their profits into the cotton1e@port sector.

9ince, as these investors reali4ed, it is intensely diffic)lt to ,obili4e p)blic s)pport for the ob2ective of private enrich,ent, 8!yptian b)siness !ro)ps vie(ed and pro,oted all their vent)res as contrib)tions to stren!thenin! the national econo,y. /ationalis, (as especially i,portant (hen ,arket co,petitors needed or (ere forced to take their private conflicts to the p)blic. -tte,pts to b)ild political coalitions in s)pport of vario)s co,,ercial vent)res co)ld not, after all, be based on the narro( clai,s of profits that (ere to be a,assed in the co)rse of b)ildin! da,s, p),pin! stations, factories and po(er plants. =nstead, investors appealed to the national interest, challen!ed the C8!yptian1nessD of partic)lar co,petitors, protested the )nd)e interference of the British residency, hinted at forei!n conspiracies that threatened 8!yptian soverei!nty, etc. B)siness nationalis, stren!thened the co,petitive positions of these ne( investors (ho (ere operatin! (ithin a partially transfor,ed do,estic order and a chan!in! international1sectoral division of labor. &he ne( 8!yptian investors adopted the ,)ltisectoral invest,ent strate!ies of the earlier b)siness !ro)ps and rapidly advanced to co,,andin! positions (ithin the evolvin! political econo,y. 8!yptian coalitions like the E-bb)d, Gisr and <ahya !ro)ps !ained access to state reso)rces, took over l)crative concessions, enterprises and ,arkets, and e@panded the local ,an)fact)rin! sector of the econo,y. &here is little ,ystery, variance or inconsistency in the actions of local investors before and after the 1919 )prisin!. ?n!oin! relations (ith forei!n fir,s, state a!ents and local rivals (ere based on costs, benefits, risks and rates of ret)rn. M M M

The !ise of the 95&&ud %roup

=n 19B6, the Llas!o(1trained 8!yptian en!ineer G)ha,,ad -h,ad E-bb)d started a private contractin! co,pany that in the space of t(o decades evolved into a spra(lin! b)siness e,pire. By the 196#s, E-bb)d (as re!)larly bein! referred to in the press and si,ilar acco)nts as 8!ypt>s ,ost Cs)ccessf)lD or ,ost Cpo(erf)lD b)siness,an and the co)ntry>s leadin! Cind)strialist.D -t its hei!ht, the E-bb)d !ro)p operated in constr)ction, te@tiles, trade, fertili4er ,an)fact)re, s)!ar processin!, )rban and r)ral real estate, to)ris,, bankin!, transport, shippin! and ins)rance. E-bb)d o(ned a vast estate in -r,ant, in Upper 8!ypt. =n addition, he (as the sin!le lar!est shareholder in the !iant Bank Gisr con!lo,erate, and he s)ccessf)lly fo)!ht his (ay onto the board of the rival !ro)p>s bank1holdin! co,pany by 195#. -t the sa,e ti,e, he beca,e the first 8!yptian b)siness,an to !ain a seat on the board of the 9)e4 Canal Co,pany. =n the after,ath of the ,ilitary co)p d>Ktat of A)ly 195B, E-bb)d had ,ade plans to e@tend his invest,ents in i,port1s)bstit)tion ,an)fact)rin! sectors 5che,icals, paper ,an)fact)re; and ,inin! 5oil;7 instead, the series of nationali4ations bet(een 1955 and 193" ended E-bb)d>s role in 8!ypt>s econo,ic life. :is fa,ily had to flee the co)ntry. &he pheno,enal rise in this )pstart 8!yptian capitalist>s fort)nes inevitably

spa(ned anta!onis,s, not least a,on! his local co,petitors, and for ,ost of his career E-bb)d stood s+)arely o)tside of the b)siness establish,ent. &he co,position of the steerin! co,,ittee of the Iederation of =nd)stries is a case in point. Fespite E-bb)d>s pro,inence in the lar!est affiliated body, the Cha,ber of P)blic 'orks Contractors, and his !ro(in! (ei!ht in ind)stry !enerally, he (as kept off the board )ntil the 195#s. :o(ever, his 8!yptian rivals, :arb and <ahya, as (ell as 9id+i, the politician and tireless spokes,an for the private sector, (ere all pro,inently identified (ith the peak association soon after its fo)ndin!. Ior his part, E-bb)d did little to narro( the !ap that divided hi,0socially and c)lt)rally0fro, 8)ropeani4ed bo)r!eois circles, on the one hand, and fro, 8!yptian1=sla,ic bo)r!eois net(orks, on the other hand. =nstead, E-bb)d fla)nted his s)ccess, p)blici4ed his (heelin! and dealin!, spent his profits liberally on ,ansions, speed boats, plantations, parties and so2o)rns to 8)rope. :e re!)larly boasted of and e@ploited his po(er and infl)ence (ith both the 8!yptian palace and the British Parlia,ent. :e provided ne(spapers (ith !ood copy and an occasional scandal. 8stablished Cairene and -le@andrian society either la)!hed or blanched at s)ch blatant stat)s seekin!. -t the sa,e ti,e, he (as ,arried to a 9cottish national, had a hi!hly 'esterni4ed life style and played little part in 8!ypt>s -rab1=sla,ic c)lt)ral life. =n the (ake of the 1919 revol)tion, his ,any professional and personal connections (ith the British co,,)nity in 8!ypt (ere hardly (elco,ed by the ,ore )nco,pro,isin! sections of the independence ,ove,ent. :is invest,ent in b)siness nationalis,0evinced, for instance, by his s)pport for Oa!hl)l, his deno)nce,ent of the Capit)lations, his philanthropy and his involve,ent in the fo)ndin! of the /ational 5-hli; Cl)b 0did little to enhance his rep)tation. =ntellect)als today still speak dispara!in!ly of hi, as an -n!lophile 5=s,aEil 9abri E-bdallah, intervie(, Cairo, 6 A)ne 19%5;. 'hile these factors contrib)ted to the controversy s)rro)ndin! E-bb)d, his s)ccess as a capitalist (as the pri,ary ca)se of his notoriety. Behind his ,eteoric rise lay a !ro)nd deeply stre(n (ith co,,ercial rivalries and divisive political1econo,ic conflicts. Co,petition (as sharp for the contracts, concessions and s)bsidies )pon (hich E-bb)d and all other local investors depended. E-bb)d>s acc),)lation strate!y straddled ,arkets and politics. :is p)rs)it of profits via p)blic1(orks pro2ects led predictably to hi!hly politici4ed for,s of co,petition, incl)din! co,ple@ and shiftin! alliances (ith 8!yptian politicians and party factions, ,)ltinational ,ana!ers and forei!n po(ers.

:Co(prador< 5ccu(ulation
&he constr)ction ind)stry is a (ell1kno(n career path for ,any capitalists. Constr)ction is a vital part of any national econo,y. P)blic (orks and other lar!e pro2ects cons),e a lar!e part of scarce reso)rces in developin! co)ntries, and the ind)stry is a critical co,ponent of any develop,ent effort. -t the sa,e ti,e, the characteristics of prod)ction in the ind)stry that set it apart fro, ,ass1prod)ction ,an)fact)rin! ind)stry contin)e to

ass)re relatively lo( costs for ne( entrants.[1)] =n essence, a b)ildin! or p)blic1(orks contractor is an entreprene)r (ho or!ani4es and asse,bles the vario)s forces of prod)ction0capital, technolo!y and the hi!hly co,ple@ ,i@ of labor skills0needed for b)ildin! a partic)lar str)ct)re. &he constr)ction sector is (ell kno(n in 8!ypt historically as a so)rce for capital acc),)lation and, at a certain point, as the ref)!e for an eviscerated class follo(in! the /asser re!i,e>s assa)lt on local capital in the 195#sJ 193#s. &he ind)stry harbored re,nants of 8!ypt>s old bo)r!eoisie (hile enrichin! a ne( cohort of capitalists in the b)ildin! boo, that acco,panied the liberali4ation of the econo,y in the 19$#sJ19%#s. 'aterb)ry describes the ,ost recent cohort of 8!yptian contractors as C,asters of the p)blic private sy,biosisD 519%": 1%1J1%";, tho)!h this characteri4ation is hardly a pec)liarity of the 19$#s or of 8!yptian political c)lt)re !enerally. =n analy4in! the co)rse of Bra4il>s ar%atura 5openin!;, 8vans fo)nd that the constr)ction sector (as the sin!le ,ost i,portant redo)bt for local Bra4ilian capital d)rin! a period of increased penetration by ,)ltinationals and si!nificant denationali4ation in ,an)fact)rin! 519$9: 16"J15%;. &he constr)ction ind)stry is a pri,ary instit)tion for a hi!hly politici4ed for, of acc),)lation in ,any late1developin! capitalist econo,ies, (ith e@a,ples ran!in! fro, the EUth,an !ro)p in 8!ypt to the 9)to(o !ro)p in =ndonesia. - key ,echanis, is the politically ,ediated ,arket in (hich the fir,s and their investors operate. 9tate a!encies are ,a2or clients for the ind)stry. =n ,any cases, p)blic1sector de,and acco)nts for as ,)ch as 5# percent of the constr)ction sector>s o)tp)t. Constr)ction (as probably 8!ypt>s lar!est )rban ind)stry 5?(en 19$B, :anna 19%6;. Until 19BB, 8)ropean capital and local entreprene)rs of forei!n ori!in virt)ally ,onopoli4ed the ind)stry thro)!h their access to finance, their s)perior technical capacity and their close ties to colonial state elites. -h,ad E-bb)d represented one of the first 8!yptians to co,pete s)ccessf)lly in this sector, be!innin! (ith contracts for canal dred!in! and, soon after, !overn,ent orders for heavy ,achinery, ind)strial ra( ,aterials and electrical e+)ip,ent fro, abroad. Until E-bb)d la)nched his canal1dred!in! vent)re, the -le@andria1based 9alva!os !ro)p had ,onopoli4ed the field. 9i,ilarly, in the ,arket for !overn,ent e+)ip,ent contracts, he co,peted directly (ith local capitalists like the 9)arVs !ro)p and the ,erchandisin! s)bsidiaries of British corporations, ,ost notably, the -ssociation of British Gan)fact)rers 5?(en 1939: B$$7 al'usa**ar 1% A)ly 195B7 Time 1# -)!)st 195";. .ike other investors, E-bb)d needed political s)pport in order to prosper. Lreat Britain>s +)alified !rant of independence to 8!ypt in 19BB i,proved the prospects for (o)ld1be indi!eno)s capitalists by enhancin! their access to scarce state reso)rces. =n other (ords, the coll)sive p)blic1private circles that steered the political econo,y since the British occ)pation in 1%%B (ere (idened to acco,,odate ,iddle1class 8!yptians.[1*] =n 19B6, E-bb)d obtained his first contracts fro, officials in the Ginistry of P)blic 'orks and the 8!yptian 9tate Rail(ays. &he boost to his b)siness career (as provided by the 'afd party 5al-

'usa**ar 1% A)ly 195B;. E-bb)d s)pported the party, and the party patrons, in t)rn, took care of s)pporters. E-bb)d ran as a 'afdist in the 19B3 parlia,entary elections and served as a dep)ty for al1&afih. =n the follo(in! year, he be!an p)blishin! a short1lived daily ne(spaper, al-9ashaf# on behalf of the party and its head, Oa!hl)l. &he ne(spaper vent)re (as likely backed (ith f)nds fro, the British ind)strial financier F)dley Focker, (ho had be!)n to collaborate (ith E-bb)d in pro,otin! an electrification sche,e in 8!ypt 5Favenport1:ines 19%6b: B#%;.

The /ogic of Colla&oration

&here is little ,ystery in (hy E-bb)d or any other aspirin! 8!yptian capitalist chose to cooperate (ith forei!n fir,s in s)pplyin! the state (ith capital !oods and services. Ie( endeavors offered better ret)rns to a capital1poor investor. &he interestin! +)estion is (hy (o)ld forei!n fir,s choose to cooperate (ith an )nkno(n like hi,* 'hat reso)rces did a b)siness,an like E-bb)d brin! to the bar!ainin! table* - political connection of so,e type (as essential, obvio)sly, (hich e@plains E-bb)d>s invest,ent in the 'afd party. :is val)e hin!ed initially on his ability to obtain contracts (ith attractive ter,s for his principals and, in the case of p)blic1(orks pro2ects, to or!ani4e the s)bcontractin!. ?ne of Focker>s representatives (as +)ite e@plicit in appraisin! E-bb)d>s val)e to electrical1e+)ip,ent, railroad1car and steel prod)cers. =n a Aan)ary 19B3 ,eetin! at the Iorei!n ?ffice, he described the fail)re to sec)re any 8!yptian b)siness )ntil appointin! the little1kno(n a!ent, E-bb)d, (ho ,ana!ed to obtain 1.B ,illion sterlin! in orders. E-bb)d>s s)ccess, in t)rn, (as attrib)ted to the close links he had for!ed (ith the )ndersecretary at the Ginistry of Co,,)nications.[1+] -nalysts tend to foc)s on the ,ore pedestrian ele,ents of s)ch arran!e,ents. Undo)btedly, favors s)ch as kickbacks to individ)al b)rea)crats (ere co,,on. Capitalists al(ays see,ed to have a directorship or t(o in their co,panies reserved for retired officials. British ad,inistrators 5e.!., -)ckland Colvin, 8l(in Pal,er, 'illia, 'illcocks; pioneered this partic)lar career path in 8!ypt in the 1%9#s. &he 'afd bosses or patrons probably also sec)red a ,eas)re of instit)tional s)pport and ,aterial aid for the party thro)!h their clients. <et the relationship in this case (ent beyond rent seekin! on the part of b)rea)crats. By arran!in! to cooperate (ith international ,an)fact)rin! !iants like Getropolitan Vickers, E-bb)d positioned hi,self strate!ically in ,)ltiple ,arkets. :e played an i,portant inter,ediary role in the s)pply of physical !oods, obvio)sly. -t the sa,e ti,e, he infl)enced the distrib)tion of e+)ally scarce, tho)!h less tan!ible, political reso)rces. =n the eyes of 8!ypt>s !overnin! a)thorities, E-bb)d>s b)siness connections (ere access points to British society and r)lin! circles independent of the British residency and the Iorei!n ?ffice.[1-] 9)ch ties (ere clearly val)ed by 8!yptian politicians. &heir i,portance e@plains E-bb)d>s participation in the dele!ation that acco,panied the 8!yptian pri,e ,inister, E-bd al1Nhala+ &har(at, d)rin! the ill1fated ro)nd of treaty talks (ith -)sten Cha,berlain in -)!)st 19B$ 5Vitalis 199#;. =t (as the first of his ,any ,issions in .ondon d)rin! the

inter(ar period on behalf of vario)s 8!yptian political factions. E-bb)d had +)ickly !ained privile!ed access to the residency itself thro)!h his partnership (ith British capital. Liven the central role (hich this instit)tion contin)ed to play in the do,estic political econo,y, local b)siness,en and politicians nat)rally believed it to be another potentially )sef)l point of levera!e. &he archives of the Iorei!n ?ffice contain records of co)ntless atte,pts by E-bb)d to shape policies on his o(n and his allies> behalf thro)!h the residency. =n an early e@a,ple, E-bb)d had one of his British partners ,ake the case for reinstatin! an official at the Ginistry of Co,,)nications and sackin! the head of the 8!yptian 9tate Rail(ays. &he British corporate capitalist based his ar!),ent on the serio)s threat to his co,pany>s interests, (hich, in this case, neatly coincided (ith the preferences of the 'afd party>s leadership.[1.] E-bb)d>s political invest,ents s)pported his initial b)siness endeavors as an inter,ediary in the delivery of !oods and services to the state. :is co,,ercial s)ccess0,eas)red by hi!h ret)rns and a rapidly e@pandin! client list0stren!thened his position (ith political a)thorities (ho, often !r)d!in!ly, fo)nd it necessary to deal (ith hi,. 'hile his assi,ilation of British c)sto,s and tastes ,ay have ,ade relations (ith the residency easier, his b)siness activities !ained hi, access. &he benefits that accr)ed thro)!h his initial collaboration (ith the e@port ar, of British heavy ind)stry incl)ded a rapidly and steadily increasin! stock of reso)rces0!oods, ,oney and infor,ation0val)ed by political leaders. &he access and infl)ence that he obtained in ret)rn stren!thened his position in the local ,arket. -s the archival record ,akes clear, E-bb)d bar!ained steadily and hard to e@tend his independent control over the constr)ction pro2ects and other vent)res (ith (hich he (as associated. 8!yptian aristocrats ,ay (ell have been conte,pt)o)s of E-bb)d>s Copport)nis,.D &he British aristocrats rationali4ed the increasin!ly bra4en political interventions and co,,ercial co)ps of the 8!yptian capitalist by resort to racis,, paternalis, and the consolin! fiction that, above all, E-bb)d (as a loyal ally. Vie(ed fro, behind the desk of the 8!yptian pri,e ,inister or the British hi!h co,,issioner, E-bb)d and his b)siness rivals no do)bt looked to be dependent on the state>s s)pport and, hence, prone to its dictates. /onetheless, the po(er of investors derived fro, their privile!ed position (ithin the liberal ,arket econo,y that the colonial state had b)ilt and post119BB 8!yptian !overn,ents preserved. &o be s)re, political a)thorities0fro, .ord Nillearn to Nin! I)>ad0(ere vested (ith for,idable prero!atives that capitalists, landlords and all other social sectors had to acco,,odate7 b)t the li,its to the reach of the state (ithin the prevailin! econo,ic re!i,e (ere clearly discernible. &h)s, as = (ill detail in Chapter ", Ca)tono,o)sD British diplo,ats and 8!yptian officials failed in their concerted efforts in the 19"#s to sabota!e E-bb)d>s operations.

The E'pansion of the 95&&ud %roup

=f E-bb)d>s b)siness benefited initially fro, his invest,ents in the 'afd party and pl)ralis,, his career skyrocketed after he shifted his invest,ents in s)pport of the ,onarchy and a)thoritarianis,. &he political reali!n,ent took place follo(in! the death of Oa!hl)l in -)!)st 19B$. E-bb)d backed the losin! faction in the contest for control of the party, (eakenin! his position vis1T1vis rival b)siness1political factions. :e reaped h)!e (indfalls fro, the s(itch in party tarb)shes, ho(ever, landin! l)crative orders for forei!n ,an)fact)rers and fat co,,issions for hi,self. By the early 19"#s, he (as linked in one (ay or another (ith virt)ally every lar!e p)blic1(orks pro2ect sponsored by the 8!yptian state. =n less than a decade, E-bb)d had established hi,self as a ,a2or force in the inter(ar political econo,y. &he contractin! vent)res provided the capital for e@pansion into ne( sectors in the 19"#s. :e and his coinvestors received the concession for a b)s service in Cairo and !ained control of the Nhedival Gail .ine, the old .ondon1 re!istered stea,ship service (hich had thrived on concessions fro, the colonial a)thorities. =n 19"%, E-bb)d took over operations in another heavily state1s)bsidi4ed sector, the s)!ar ind)stry, (hich for decades had been the sinec)re of the 9)arVs !ro)p and its Irench partners. -t the sa,e ti,e, he and his o(n partners !ained control of the 8!yptian Co,,ercial Bank and the Lreek1o(ned alcohol distilleries in &)ra. E-bb)d also invested heavily in the rival 8!yptian1controlled Bank Gisr and, for a brief period, in a petrole),1s)pply co,pany (hich he needed for his fleet of b)ses. Fespite his best efforts, ho(ever, he failed to p)sh thro)!h the !ro)p>s ,ost a,bitio)s ind)strial pro2ect: to electrify the -s(an Fa, and )se the ener!y to prod)ce nitrate fertili4ers, one of 8!ypt>s chief i,ports.

Conflicts o er 4ndustry
=n 19B$, E-bb)d 2oined forces (ith an international consorti), seekin! ne( e@port ,arkets in the intensely co,petitive, inter(ar heavy1electrical1!oods ind)stry. &he !ro)p )pdated a plan first proposed on the eve of 'orld 'ar = to develop an indi!eno)s nitrate ind)stry by relyin! on cheap po(er fro, the /ile. &hey envisioned it as the first sta!e in a lar!er sche,e for electrification of the entire co)ntry. E-bb)d (orked tirelessly to b)ild a do,estic coalition in s)pport of the -s(an pro2ect, vyin! (ith his rivals for the scarce p)blic reso)rces needed for the po(er plant and factory. &he decade before 'orld 'ar == (as torn by increasin!ly intense and prolon!ed conflicts of interest a,on! co,petitors, both across and (ithin sectors. &he o)tco,es deter,ined (here and (hen local b)siness !ro)ps b)ilt ind)stry. 'hen (ar er)pted in 19"9, 8!ypt still had neither a hydroelectric plant nor a fertili4er ind)stry in -s(an. = (ill take )p the -s(an case in detail in Chapter " in order to analy4e the political capacities and strate!ies of the rival coalitions that (ere locked in a battle for control of these ne( so)rces of s)bsidi4ed profit. -t the sa,e ti,e, the analysis (ill allo( )s to see so,e of the )nderlyin! (eaknesses in

the ad,inistrative capacities of the inter(ar 8!yptian state. &o p)t the proble, bl)ntly, there (ere fe( ,echanis,s in place to resolve the conflicts that acco,panied the develop,ent initiatives of E-bb)d, his allies and his rivals in the 19B#s and 19"#s. &he dia!nosis of the proble, is confir,ed by the efforts to restr)ct)re the relationship bet(een p)blic a)thorities and private interests, be!innin! in 'orld 'ar ==, and the contests over the constr)ction of a ne( re!)latory re!i,e. M M M

Su((ary" #usiness %roups, Po,er, 4ndustry and the State in 4nter,ar Egypt
&his chapter disc)ssed so,e basic factors )nderlyin! the ori!ins and rapid e@pansion of the ,)ltisectoral E-bb)d !ro)p. =n partic)lar, it sho(ed ho( E-bb)d>s strate!y of selective cooperation (ith forei!n capital follo(ed alon! the lines of the pro2ect of li,ited ind)strial e@pansion artic)lated by the leadership of the local b)siness co,,)nity in the 191% 9id+i co,,ission report. &he report (as itself a for,ali4ation and e@tension of the ,)ltisectoral invest,ent strate!ies p)rs)ed for at least a !eneration by local investors. 9i,ilarly, in his reliance on and appropriation of state reso)rces, E-bb)d a!ain contin)ed alon! the best1kno(n and least1risky ro)te to private profit, po(er and privile!e. =t sho)ld not be s)rprisin!, therefore, to find that other 8!yptian capitalists a,on! E-bb)d>s cohort p)rs)ed si,ilar strate!ies, ,ost obvio)sly, those like -,in <ahya and :arb (ho act)ally helped to for,)late the 9id+i co,,ission proposals. =n other (ords, the invest,ent strate!y of the E-bb)d !ro)p (as indistin!)ishable fro, its better1 kno(n 8!yptian co,petitors alon! three di,ensions: reliance on p)blic reso)rces7 cooperation (ith forei!n capital7 and holdin!s in ,)ltiple econo,ic sectors. &hese (ere the basic, definin! feat)res of local capitalist or!ani4ation in 8!ypt bet(een 1%%# and 193#. &he best e@a,ple is provided by E-bb)d>s ,ost relentless co,petitor, the Gisr !ro)p, led by :arb. &he Gisr !ro)p>s reliance on state b)siness and s)bsidies in its initial 19B# co,,ercial1 bankin! vent)re and all s)bse+)ent enterprises is (ell doc),ented. &he !ro)p>s lar!est sectoral invest,ents d)rin! the first years of operation (ere in cotton tradin! and te@tile ,an)fact)re. =ts co,,it,ent to e@pandin! do,estic ind)stry (as )ndeniable, b)t so (as its co,,it,ent to stren!thenin! 8!ypt>s ties to the (orld cotton ,arket. &h)s the directors ,arked the bank>s tenth anniversary in 19"# by 2oinin! (ith forei!n capital in a ,a2or cotton1e@port vent)re. -ny ,ini,ally ob2ective readin! of the archival record of the Gisr !ro)p>s activities d)rin! the 19B#s (o)ld have to deal (ith the co,ple@ities i,,ediately introd)ced to notions of the !ro)p>s interests or ob2ectives by this ,)ltisectoral invest,ent strate!y. &he essential feat)res of the Gisr !ro)p>s strate!y (ere fir,ly in place prior to its e@pansion, in the follo(in! decade, into ins)rance, shippin!,

constr)ction, ,inin!, che,icals, transportation and to)ris,. &he strate!y o)tlined in the !ro)p>s heralded B## pa!e report, The Creation of Domestic !ndustries# iss)ed in 19B9, (as essentially a restate,ent of the 191% 9id+i report 5&i!nor 19$$a: 1$#7 ?(en 19%1b: 3;. &he bank endorsed the develop,ent of hydroelectric po(er, ne( transport enterprises, rail(ay electrification and fertili4er ,an)fact)rin!0all vent)res that re+)ired the cooperation of forei!n capital. &he Gisr !ro)p and E-bb)d (ere co,petin! to develop these ne( local ind)stries. &his chapter revisited the idea that a partic)lar section of the b)siness co,,)nity d)rin! this period (as !)ided by ideas of a co,pletely independent, national ind)strial econo,y or, 2)st as va!)ely, by the ob2ective of ind)striali4ation.[10] &he ,odest e@pansion in 8!ypt>s ,an)fact)rin! capacity obvio)sly fell far short of s)ch e@alted ends. &he political capacities and strate!ies of investors are often ass),ed to have played a basic role. B)t these are +)estionable ass),ptions. = have ar!)ed that the coalitions of local capitalists (ho o(ned 5or, in the case of 2oint vent)res, shared o(nership in; ,ost 8!yptian ind)stries treated ,an)fact)rin! ,onopolies, at best, as one possible area of invest,ent. 8!ypt>s earliest b)siness !ro)ps did not !ive )p their holdin!s in the a!roe@port sector. .ater coalitions of 8!yptian capitalists0the <ahya, Gisr and E-bb)d !ro)ps0obvio)sly did not fore!o invest,ents in these do,inant sectors either. =n E-bb)d>s case0and = s)spect the sa,e is tr)e in ,any other cases0he )sed his profits fro, ind)stry to beco,e a landlord. &he tendency to conceive of the inter(ar political econo,y, above all else, as a str)!!le for econo,ic transfor,ation ,akes it hard to )nderstand the li,ited ob2ectives act)ally so)!ht by inter(ar 8!yptian investors and the factors that helped to shape the,. Ior instance, as Cla(son 519%1; proposes and as the e,pirical record bears o)t, the develop,ent of 8!yptian ind)stry reflected chan!es takin! place in the ind)strial str)ct)res of advanced capitalist econo,ies. C&he !ro(th of 8!yptian ind)stry, (hile aided by the local nationalist ,ove,ent and by state assistance, depended pri,arily on forei!n capital beca)se only it co)ld provide the e@tra forei!n e@chan!e necessary for the i,port of ,achinery re+)ired to establish ind)stryD 5Cla(son 19%1: %9;. &his ar!),ent tends to )nderesti,ate the capacity to do,esticate these forei!n 2oint vent)res. 9till, in e@ceptionalist histories, the bo)r!eoisie is invariably constr)cted as a !ro)p literally p)rs)in! Ca (orld after its o(n i,a!e,D as Gar@ once p)t it, rather than as an inadvertent a!ency of chan!e. =n this latter sense, Cthe bo)r!eoisieD in post11%%B 8!ypt ,i!ht ,ore appropriately be rendered as the co,ple@ effects of a specific confi!)ration of i,perialis,, the colonial and postcolonial state, and lar!e fort)nes a,assed in land and cotton sales. &he bo)r!eoisie in 8!ypt is ,ost often portrayed as a collective actor (ith an apparently li,ited capacity to act in p)rs)it of its virt)ally li,itless ob2ectives. B)t = have proposed that (e red)ce these ob2ectives to h),an scale, takin! as a !)ide the call in the 191% 9id+i co,,ission report for a li,ited e@pansion of local ,an)fact)rin! capacity. &his (as hardly the openin! broadside of a !ro)p of politically e,battled visionaries. =t (as an accord a,on! representatives of the ,ost po(erf)l econo,ic interests in

the co)ntry, and its ter,s contin)ed to !)ide ind)strial policy thro)!ho)t the inter(ar period. &he idea of an accord does not i,ply that o)tco,es (ere predeter,ined or that the interests of all parties (ere f)lly har,oni4ed and acco,,odated or that conflicts (ere to be avoided. &i!nor>s short disc)ssion of the ne!otiations leadin! )p to the 19"# tariff refor,s provides re,arkable evidence of the ,echanis,s that )nderlay these accords. :e reco)nts ho( the ad,inistrative head of the Iederation of =nd)stries atte,pted to achieve a consens)s (ith a!ric)lt)ral interests on tariffs. Gore i,portant, he +)otes in passin! the observation that the co)ntry>s ,ain a!ric)lt)ral1interest associations si,ply Chad not or!ani4ed aro)nd this iss)eD 5&i!nor 19%6: 11#J111;. /),ero)s conflicts of interest (ere played o)t in the co)rse of b)ildin! inter(ar ind)stry7 in partic)lar, there (ere the rec)rrin! conflicts over control of state1s)bsidi4ed vent)res. -nd (ith the advent of the depression, sectoral conflicts clearly intensified over priorities and access to the state>s ,ea!er stock of reso)rces, as = (ill sho(. /onetheless, conflicts (ere ,ana!eable even d)rin! the depression, and perhaps the best indication of the overall lack of discord is the resiliency of the liberal econo,ic re!i,e itself. 8!ypt (eathered the depression at the hands of a dictatorial pri,e ,inister (ho steadfastly avoided any si!nificant chan!e in the re!)latory instr),ents of the state or, ,ore cr)cially, encroach,ents on the privile!ed preserves of private investors. &his is note(orthy (hen co,pared (ith, for instance, the etatist co)rse set by &)rkish leaders in the sa,e period 5Neyder 19%$;. By the ti,e of 'orld 'ar ==, even British officials (o)ld find it re,arkable that vast stretches of the econo,ic terrain, like the electric1 po(er ind)stry and the reso)rces it !enerated, contin)ed to be in private hands. &he leaders of the local, predo,inantly forei!n b)siness co,,)nity had artic)lated a pro2ect of li,ited e@pansion of 8!ypt>s ,an)fact)rin! capacity, and they p)rs)ed this !oal as only one of ,any invest,ent possibilities. &he li,ited ob2ectives accorded (ith their broad holdin!s across 8!ypt>s a!roe@port econo,y. &he sa,e invest,ent ,odel and priorities (ere adopted by 8!yptian investors like the Gisr and E-bb)d !ro)ps in the 19B#s. =t is ,isleadin! to portray these i,portant b)t nonetheless li,ited initiatives by E-bb)d, :arb, /a)s or any other local capitalist in ,ore e@alted ter,s. =n i,a!inin! that inter(ar 8!yptian investors act)ally acted in p)rs)it of s)ch !oals as challen!in! colonialis, or seekin! a)tono,o)s 8!yptian capitalis,, there is the co,fort in kno(in! (hat the o)tco,e had to be.

Notes
1. &he history of this period and especially the i,pact of capitalist inte!ration has been e@tensively analy4ed. Be!in (ith .andes 5P195%Q 19$9;, =ssa(i 51931;, ?(en 51939;, Ber+)e 519$B;, E-li Barakat 519$$;, Cla(son 519%1;, Richards 519%B; and Garsot 519%6;.

B. Cro)chley 519"3; ,ade s)re to distin!)ish the roles of Cforei!nD and ClocalD capital in the econo,y. &i!nor 519%6; has helped to revive this distinction. -t the sa,e ti,e, his (ork challen!es Cro)chley>s overly broad !enerali4ations abo)t the loc)s of CcontrolD in fir,s operatin! in 8!ypt, based on a!!re!ate statistics on shares held locally and abroad. 9ee &i!nor 519%9;. ". = have adopted the 8)ropeani4ed spellin!s )sed in NrS,er 519%9;, (hich is by far the ,ost val)able so)rce on the 8!yptian Ae(ish co,,)nity. 9ee in partic)lar her disc)ssion of the CCattao)iJ9)arVsJde GenasceJRolo !ro)pD 561J6";. =n addition see Fe L)erville 519#5;, 'ri!ht and Cart(ri!ht 519#9: "B1J"BB, "3B, 66%J65#, 636;, .anda) 51939: 1#J11, 16, 5", 1"$J16%;, Nalkas 519$9;, -nis G)stafa Na,il 519%1; and 9ha,ir 519%$;. 6. = have )sed the spellin!s fo)nd in Nitroeff 519%9;. Nalkas 519$9: 1%3J 1%$; !raphs the ,arria!e links a,on! these fa,ilies as (ell as so,e of their early financial vent)res. &hese established ,erchant fa,ilies arrived fro, vario)s Gediterranean ports, be!innin! in the early 1%##s, tho)!h they (ere all ori!inally fro, the island of Chios. &he follo(in! additional so)rces have )sef)l infor,ation on Lreek b)siness,en: 'ri!ht and Cart(ri!ht 519#9;, .andes 5P195%Q 19$9; and ?(en 51939;. 5. Re,arkably little has been (ritten abo)t Cassel, !enerally, and (ith re!ard to his role in the post11%%B 8!yptian political econo,y. Ior Cassel>s b)siness activities in 8!ypt and else(here in the Giddle 8ast, see &hane 519%3;, the best !eneral acco)nt of Cassel available. ?n Cassel>s involve,ent in the ori!inal -s(an pro2ect see Giddle,as 5193": 166J163;7 &i!nor 51933: BBB;7 and &hane 519%6: 3#6J316;. Ior Cassel>s relations (ith Barin! Brothers, see Oie!ler 519%%: B$3, B%9;. 3. -h,ad <ahya 5b. 1%6#; took over his father>s cotton1e@portin! b)siness, served as both an elected and appointed official of the -le@andria G)nicipal Co)ncil and by the early 19##s (as one of the bi!!est lando(ners in the -le@andria area. :e (as pro,inent in the early !rad)alist (in! of the national ,ove,ent. :is son, -,in <ahya 51%33J19"3;, b)ilt a b)siness !ro)p aro)nd the cotton1e@port ho)se (hich he incorporated )nder the na,e the 8!yptian Prod)ce and &radin! Co,pany 51919;. -,in>s brother, E-bd al1Iattah <ahya, served as pri,e ,inister in 19"6. ?n -,in>s death, the b)siness !ro)p (as taken over by his son, E-li -,in <ahya. 'ri!ht and Cart(ri!ht 519#9: 6"9;7 Ber+)e 519$B: "53;7 &i!nor 519$3: 51;. -lso see Nalkas 519$9: 195J193; for hints of an early conflict bet(een -,in <ahya and the 9alva!os. By the 19"#s, <ahya had 2oined descendants of the 9alva!os and 9)arVs !ro)ps on the boards of ,a2or ind)strial fir,s. $. &he 9)arVs !ro)p hired :arb a(ay fro, the state in 19#5 and e,ployed hi, in the ,ana!e,ent of the No, ?,bo co,pany. :e ,oved to another 9)arVs !ro)p vent)re, the 9ociKtK IonciVre d>8!ypte, as ,ana!in! director in 19#%. :e re,ained a close ally )ntil the end of his career in 19"9. By the early 19B#s, he had 2oined the board of directors of CrKdit Ioncier, as (ell as other 9)arVs !ro)pJforei!n capital 2oint vent)res. =n the years prior to his

fo)ndin! Bank Gisr, he (as also a p)blicist for the forei!n1do,inated land co,panies and lar!e 8!yptian lando(ners, as (ell as the e,er!in! (in! of the nationalist ,ove,ent associated (ith the &arida !ro)p. Favis 519%";7 &i!nor 519$3 and 19$$a;7 Feeb 519$3;. %. :arb ,ana!ed the private estate of EU,ar 9)ltan, son of a po(erf)l 8!yptian notable and a financial force in the nationalist ,ove,ent. 9)ltan has also been described as a protK!K of the British ad,inistration. &he 9iy)fi fa,ily (ere 8!yptian ,erchants and b)siness partners of Bel!ian1allied capitalists like 8id. .)tfi EU,ar had b)siness links (ith 8id as (ell. :is chief clai, to fa,e, ho(ever, (as his role in or!ani4in! labor and far,ers 5cooperatives; on be1half of the nationalist ,ove,ent. Favis 519%": 9$J9%, 1#6;7 'ri!ht andCart(ri!ht 519#9: "$5;7 &i!nor 51933: "#6 and 19$3: 55;7 Ber+)e 519$B:B6";. 9. &he report (as first presented in /ove,ber 191$. = a, referencin! it here accordin! to its official p)blication date. 9ee Co,,ission d) Co,,erce et de l>=nd)strie 5191%;. Ior s),,aries, see =ssa(i 5P193$Q 19$5: 65"J63#;7 &i!nor 519%6: 55J5%;7 and Nalkas 519$9: 6"J53;. Ior sa,ples of then1 c)rrent econo,ic criti+)es see &i!nor 519$3;7 Feeb 519$3;7 and ?(en 51939;. 1#. 9ee I? 161 3%#, file on the C-s(an Po(er 9che,e.D 11. &i!nor 519$$a: 1%1;. Ior instance, &i!nor e@plains the e,pirical p)44les in ter,s of :arb>s Ceni!,atic and co,ple@D character, a ,i@t)re Cof the old and the ne(D 519$3: 56;, colored ori!inally by a Csi,plisticD and Cnaive senti,entality and bo)ndless opti,is,D (hich !rad)ally !ave (ay to a ,ore realistic attit)de to(ard forei!n capital as the bank Cevolved and ,at)redD 519$$a: 131, 133, 1%#;. Favis relies on a str)ct)ral e@planation to sho( (hy the Cnationalist ele,ents in the Gisr !ro)pD (ere forced Cto co,e to ter,s d)rin! the 19"#s (ith forei!n capitalD and (ith the C8)rophile se!,ent of the 8!yptian bo)r!eoisieD 519%": 9;. 1B. =n contrast to the standardi4ed ,ass prod)ction associated (ith ,odern 5Iordist; ,an)fact)rin! ind)stry, the constr)ction ind)stry speciali4es in c)sto,i4ed prod)cts asse,bled on1site rather than in a central location. &he typical prod)ct is lar!e and e@pensive7 and for all b)t the lar!est fir,s, costs and other variables associated (ith prod)ction en!ender si!nificant risks. =t is a partic)larly labor1intensive ind)stry that has only had li,ited s)ccess in rationali4in! the prod)ction process. Ior details, see :illebrandt 519$6;7 Bo(ley 51933;7 and :aber 519"1;. 1". -s .andes 5P195%Q 19$9; and n),ero)s other so)rces ,ake clear, the ,arket for contracts and concessions )nder Nhedive =s,aEil (as relatively free(heelin!. 'hen the British occ)pied and coloni4ed strate!ic parts of the state, they e@ercised a ,onopoly over the state>s reso)rces ti!hter than that of any ?tto,an s)ltan, creatin! in effect a protected tro)!h for feedin! British enterprise 5and their local allies;. U.N. fir,s reco!ni4ed this

advanta!e e@plicitly, hence their fancif)l de,ands after 19BB that the 8!yptians be press)red to !)arantee that a fi@ed percenta!e of the p)blic1 (orks b)d!et (o)ld be t)rned over as contracts to British ,an)fact)rers and en!ineerin! fir,s. 9ee the letter dated " Garch 19B6 fro, :annon, secretary of the Cind)strial !ro)pD (ithin the :o)se of Co,,ons, to the Pri,e Ginister, contained in I?"$1 1##3#, 8B##" B##" 13. 16. I?"$1 115%%, A95 61 13, ,in)te by G)rray reportin! conversation (ith 9ir 8d,)nd 'yldbore 9,ith, % Aan)ary 19B3. 15. = a, indebted to &e@as /e( Fealer Creek,ore Iath (hose )nderstandin! of the relations bet(een the Bro(n Brothers and .yndon Aohnson helped ,e in thinkin! abo)t (hat b)siness,en and politicians offer one another. 13. I?"$1 115%%, A95 61 13, ,in)te by G)rray, % Aan)ary 19B3. 1$. CPLQro)ps be!an to or!ani4e and to artic)late vie(s of a chan!ed 8!yptian econo,y.R&he ne( econo,ic ideas represented a va!)e strate!y of econo,ic develop,entR8ven the fo)nders of Bank Gisr reali4ed that their vision of an ind)striali4ed and ,ore a)tono,o)s 8!yptian econo,y depended on pro2ectin! their ,essa!e into the far corners of the co)ntryD 5&i!nor 19%6: 56J55;.

). The !ise and Aall of the Neocolonial 8rder

*. Shifting /ines of Po,er" Egyptian #usiness %roups and the Electrification Sche(es of the 12)3s and 12*3s
=n 19B$, the 8!yptian contractor -h,ad E-bb)d and his rivals initiated a fierce contest for the ri!ht to develop 8!ypt>s hydropo(er reso)rces and the co)ntry>s first i,port1s)bstit)tion nitrate ind)stry, in cooperation (ith so,e of the (orld>s leadin! international ,an)fact)rin! and en!ineerin! fir,s. &he -s(an pro2ect (as the ,ost a,bitio)s and costly ind)strial1 develop,ent sche,e proposed d)rin! the inter(ar period. Ior rent seekers both abroad and inside 8!ypt, the sche,e represented a h)!e so)rce of reven)es in the for, of sales of ,achines, e+)ip,ent and en!ineerin! e@pertise7 scores of contracts and s)bcontracts7 spinoffs7 and, of co)rse, the creation of a ne( ,onopoly. =nvestors therefore fo)!ht for the privile!e of b)ildin! the po(er pro2ect7 alternative preferences (ere po(erf)lly artic)lated and defended. =,porters

tried to protect their ,arkets. 8n!ineers ar!)ed abo)t the pro2ect>s desi!n. Politicians ,obili4ed constit)encies aro)nd this iss)e. &he intensity of the conflict reflected the relative i,,ensity of the stakes. 8@pectation of the payoff ,ay also e@plain the apparent (illin!ness of investors to absorb the costs associated (ith the lon! delays in i,ple,entin! the pro2ect. Fevelop,ent of an inte!rated po(er net(ork (as set back by decades. Beca)se of this fail)re to develop a sec)re so)rce of nitrates, far,ers, the cotton sector and, th)s, the econo,y as a (hole paid dearly (hen fertili4er i,ports (ere c)t off by the (ar bet(een 19"9 and 1965. -nd any linka!e effects fro, early develop,ent of a basic ind)stry i,portant to a!ric)lt)ral prod)ction (ere fore!one. =n short, the case offers an e@tended vie( of instit)tions that shaped the 8!yptian e@peri,ent (ith capitalis,. =f the -s(an pro2ect e@e,plifies the kind of ind)strial policy artic)lated and p)rs)ed by 8!yptian investors like :arb, E-bb)d, and <ahya 5in fact, it see,s to have defined the li,it of (hat these local capitalists tho)!ht (as achievable;, then it is diffic)lt to ar!)e that the necessity or desirability of s)pportin! s)ch invest,ent !enerated divisive and profo)nd cleava!es inside the circles that !overned the inter(ar political econo,y. &he leadership of every r)lin! faction0fro, the 'afd, to the .iberal Constit)tionalist party, (hich is )s)ally portrayed as the voice of 8!ypt>s bi! lando(ners, to the palace>s o(n CreactionaryD Union party0cha,pioned one or another version of the -s(an pro2ect. P)t another (ay, they !enerally backed the creation of ne( opport)nities to enrich the,selves, their b)siness allies and related constit)encies. -t the sa,e ti,e, 'hitehall and its f)nctionaries in Cairo also de,onstrated in !eneral a (illin!ness to s)pport the -s(an plan and other proposed ne( 8!yptian ind)strial sinec)res 5te@tiles, transportation, po(er, che,icals;. ?thers have noted as ,)ch, tho)!h they tend to interpret this e,er!in! policy stance e@cl)sively as a f)nction of 8!yptian nationalis,. =nstead, = broaden the foc)s, describin! the Iorei!n ?ffice>s la!!ed response to shifts in the fort)nes and invest,ent strate!ies of core ,an)fact)rin! sectors inside 8n!land 5a pheno,enon that had little if anythin! to do (ith 8!yptian nationalis,H;. =n other (ords, British policy in 8!ypt reflected a risin! concern (ith Britain>s steep do,estic econo,ic decline. E-bb)d and the local rival b)siness !ro)ps (ere key inter,ediaries in the international co,petition to develop 8!ypt>s electric1po(er ind)stry. 'itho)t the participation of forei!n investors, there (as no possibility of electrifyin! the -s(an Fa, in the 19B#sJ19"#s 5or apparently in the 193#sJ199#s, for that ,atter;. <et, (itho)t the reso)rces possessed by local !ro)ps0 infor,ation, access, net(orks0forei!n fir,s (ere )nlikely to obtain the sales of their ,an)fact)red !oods and e@pertise. .ocal b)siness !ro)ps or!ani4ed politically to sec)re these a(ards and, in doin! so, atte,pted to advance their o(n positions (ithin these vent)res and sectors. 'hile b)siness,en needed the !overn,ent>s sanction, post119BB 8!yptian !overn,ents needed local and forei!n investors in order to f)lfill0if not define0virt)ally any and all develop,ental initiatives0in this case, e@pansion of the co)ntry>s po(er reso)rces for irri!ation, recla,ation and b)ildin! ,an)fact)rin! ind)stry.

&he position of local investors in these international arran!e,ents reflected a relationship rooted in the broad elite consens)s abo)t the nat)ralness of the ,arket and the private1enterprise econo,ic syste,. &here (as, of co)rse, a !reat deal of bar!ainin! and conflict a,on! the partners. Ior instance, forei!n investors !enerally so)!ht to ,a@i,i4e their share of the ret)rns in, and control of, any enterprise (ith (hich they (ere associated. -t the sa,e ti,e, !overn,ent a!encies so)!ht to overco,e the reso)rce disadvanta!es hinderin! their ability to ,onitor private econo,ic activity and to enforce so,e ,ini,al level of a)thority. &hese proble,s ,)ltiplied for any partic)lar a)thority, (hether it (as a British a,bassador or an 8!yptian finance ,inister, as econo,ic policy,akin! !re( ,ore fra!,ented after 19BB and the private pattern of prod)ction and distrib)tion !re( ,ore co,ple@. &he ,)ltiple and overlappin! sectoral conflicts involved in this atte,pt to develop 8!ypt>s po(er and che,ical ind)stries have not been ade+)ately defined and analy4ed in the e@istin!, fra!,entary acco)nts of the -s(an pro2ect. &he orthodo@ nationalist interpretation, (hich dates to the 195#s, ar!)es that forei!n interests and the British state blocked 8!yptian !overn,ents fro, carryin! o)t the electrification sche,e in keepin! (ith their alle!ed lon!standin! opposition to any efforts at local ind)striali4ation 5E-bd al1E-4i4 -h,ad 1955;. - revisionist vie(, e,er!in! in the 19$#s, challen!es the clai, that forei!n capital (as behind the fail)re. C&he forei!n b)siness fir,s (ere prepared to carry o)t the pro!ra, in the 19"#sD 5&i!nor 19%#a: 115;. =n this vie(, the delays (ere d)e to the instability of inter(ar 8!yptian cabinets and the intense partisanship of the ti,e 5'aterb)ry 19$9: 16$;. -ny disp)te abo)t ca)sality in this instance0(hy so,ethin! did not happen0is )nresolvable, b)t, this lo!ic aside, neither version offers a satisfactory acco)nt of the ob2ectives and actions of investors in these co,petitive conflicts. Iorei!n sectors and fir,s in fact adopted a variety of positions to(ard the -s(an plan. Bi! en!ineerin! fir,s and electrical1e+)ip,ent ,an)fact)rers !enerally s)pported the pro2ect. &he de!ree of s)pport evinced at any point by any co,petitor (as, ho(ever, shaped by its representatives> vie(s of the likelihood of act)ally !ainin! the contract. &o si,plify, as -ssociated 8lectric =nd)stries> 5-8=; co,petitive position !re( stron!er, 8n!lish 8lectric Co,pany 588C; co)ld conceivably try to )nderbid it. -lternatively, 88C>s a!ents co)ld pro,ote a different pro2ect or a different decision1,akin! coalition. &hey in fact tried both of these alternatives, actions that for at least so,e observers ,)st have appeared very ,)ch like an atte,pt to )nder,ine localind)stry1b)ildin! efforts. &he positions taken by the vario)s co,petin! fir,s in the che,ical sector 5and their local a!ents or allies; (ere ,)ch ,ore co,ple@. &o si,plify the,, = (ill describe three different orientations. -t least one set of interests, headed by the Chilean /itrate 8@port -ssociation, actively and )na,bi!)o)sly opposed 8!yptian atte,pts to b)ild a do,estic nitrate ind)stry since it ,eant the loss of a critical ,arket. - second set of ,an)fact)rin! interests, headed by =,perial Che,ical =nd)stries, evinced e+)ivocal s)pport, as the second1best sol)tion to the threat of losin! the

8!yptian ,arket. -nd a third set of fir,s s)ch as -,erican Cyana,id that had no 8!yptian ,arket share to lose (ere relatively ,ore open to cooperation in b)ildin! 8!yptian ind)stry. &he i,pact of these conflictin! sectoral forces cannot be assessed separately fro, local investors> atte,pts to for!e coalitions in s)pport of their rival clai,s over p)blic reso)rces. -s the confi!)ration of interests and their strate!ies in this partic)lar arena be!an to take shape, circa 19B$J19B9, the local investor E-bb)d represented 8!ypt>s best chance for developin! an indi!eno)s nitrate ind)stry. :is partners in the sche,e incl)ded the en!ineerin! s)bsidiary of a U.9. fir, that did not participate in the international cartel and (hose basic ob2ective (as to capt)re the ret)rns fro, the transfer of technolo!y rather than protect an e@port position. &here appeared to be no effective ,echanis,s for, or !overnin! a!encies capable of, e@ercisin! broad s)pervisory control over the develop,ent pro2ect or ,ediatin! the ,any conflicts a,on! co,petitors. British officials perfor,ed so,ethin! rese,blin! this f)nction )ntil 1919, )sin! their prero!atives to restrict co,petition in the ,arkets for p)blic !oods and services. P)rchases by state a!encies (ere for a !eneration the preserve of a handf)l of ,a2or British ,an)fact)rers. -s late as the 195#s, British diplo,ats (ere still tryin! to find (ays to re1create these kinds of arran!e,ents. /onetheless, after 19B1 a)thority in econo,ic ,atters tended to fract)re, and policy,akin! (as, not s)rprisin!ly, less coherent. British Crefor,sD had left 8!yptian instit)tions (ith e@tre,ely enfeebled ad,inistrative and re!)latory po(ers. -s a res)lt the co,petition for the -s(an pro2ect ca,e to rese,ble a lon!, costly and )nresolved spoils (ar. &he inter(ar years ,i!ht be tho)!ht of as a period of protracted decoloni4ation and fitf)l efforts at state b)ildin!. =nvest,ent conflicts over opport)nities to appropriate p)blic reso)rces and b)ild local ind)stry necessarily intersected (ith the decisive ,o,ents in the co)ntry>s political develop,ent: the schis,s (ithin the 'afd, the str)!!les bet(een palace and party, the infa,o)s cycles of British intervention in do,estic politics and, hence, the 2a!!ed co)rse steered by !overnin! elites. M M M

The 4nternational Po,er Sector after World War 4

&he international po(er ind)stry co,prised a relatively s,all set of ,an)fact)rin!, financin! and en!ineerin!1services fir,s that controlled the prod)ction of electric ,achinery and the !eneration of electric po(er in ,ost of the ,arkets of the (orld. :eavy1electrical1,achinery ,an)fact)rers (ere the core of the ind)stry, prod)cin! the t)rbines, !enerators and other e+)ip,ent )sed in the prod)ction and trans,ission of electric po(er. Virt)ally all the international po(er !ro)ps had interlockin! en!ineerin!1 services ar,s0the electricity1s)pply and tra,(ay co,panies0that (ere the

,ain so)rces of de,and for the co,panies> prod)cts 5:annah 19$%7 /e(far,er 19%#7 :)!hes 19%";. Ior instance, the 8,pain fa,ily, (hose role in Cairo>s early po(er and transport sectors (as disc)ssed in Chapter B, had (elded to!ether a ,assive Iranco1Bel!ian tr)st. =t prod)ced steel, electro,echanical e+)ip,ent and other heavy ,achinery. By the 19B#s, the !ro)p had interests in forty1t(o electric1rail(ay and tra,(ay operations in fo)rteen co)ntries, alon! (ith t(enty1five electricity1s)pply co,panies in fo)r co)ntries. Cairo (as only one of its ,arkets 5B8-G- 19B$;. Profit ,ar!ins on heavy1e+)ip,ent sales (ere s,all, yet these capital !oods (ere the ,ainstay of the international po(er ind)stry. 8@port ,arkets in developin! co)ntries !re( increasin!ly i,portant to e+)ip,ent ,an)fact)rers in the face of li,ited do,estic de,and and the co,bination of hi!h tariffs and the privately ne!otiated a!ree,ents that closed off the ho,e ,arkets of rival prod)cers. Prod)cers vyin! for orders in international ,arkets faced stiffenin! co,petition, partic)larly fro, U.9. ,an)fact)rers like the Leneral 8lectric Co,pany, (hich e,er!ed as the ,ost dyna,ic force in the international ind)stry by the end of the Iirst 'orld 'ar 5Aones and Garriott 19$#: "", 16"7 F),,elo( 1969: %B7 /e(far,er 19%#: 5%J597 B8-G- 19B$: 5$, 35J33;. British investors (ere dra(n to the 8!yptian ,arket in the 19B#s by the need to revive a fla!!in! national ind)stry. E-bb)d>s partner in the -s(an b)siness, F)dley Focker, a fo)nder of the British Iederation of =nd)stries, played a ,a2or role in reor!ani4in! the co)ntry>s po(er sector. By the early 19B#s, he had decided that only international co,binations co)ld save British ind)stry 5and earn hi, s)fficiently lar!e co,,issions;. Focker>s ne( interest in international po(er pro2ects led hi, to 8!ypt. E-bb)d represented the 8!yptian side of a C,)ltinationalD net(ork, fronted by Focker and co,prisin! U.9., U.N. and Bel!ian1based investors 5Favenport1:ines 19%6b: 1$9J1%1, B#17 Aones and Garriott 19$#: 9$J11B7 B8-G- 19B$: 35J33;. &he !ro)p ,ade )se of a specific corporate identity: the Getropolitan Vickers 8lectrical Co,pany 5Getrovick;, a fir, that Focker secretly sold to U.9. Leneral 8lectric in 19B$. &he Focker !ro)p>s ,ain co,petitor for the electrification (ork (as another U.N.1based ,an)fact)rer, the 88C. &he 88C had been fo)nded in 1919, (ith a capital of five ,illion sterlin!. =t (as the lar!est fir, in the ind)stry, b)t it had little or no access to forei!n technolo!y, capital or ,ana!e,ent e@pertise. :eavy losses in 19B$, the year it be!an biddin! for electrification contracts in 8!ypt, portended serio)s proble,s. =t (as clear that the co,pany>s earnin! capacity co)ld not ,eet its heavy fi@ed char!es. 88C (as on the ver!e of collapse by 19"#, (hen -,erican interests a!ain stepped in to salva!e a rival British !iant. &he -,erican investors held a ,a2ority of the ordinary shares, b)t their control (as not disclosed in part beca)se of the controversy raised by L.8.>s takeover of -8= 5Aones and Garriott 19$#: 1B%J 16B7 the Times B3 Iebr)ary 19"#7 Favenport1:ines 19%6b: B#9;. =n 8!ypt, the overta@ed, )nderstaffed ad,inistrative a!encies of the state, s)ch as the B)ildin!s Fepart,ent or the Gechanical and 8lectrical

Fepart,ent of the Ginistry of P)blic 'orks, )ndertook a heroic effort to !ain so,e overall coordinative control of develop,ents in the po(er sector. &hey faced for,idable odds ho(ever. British advisers in 8!yptian ,inistries served as cond)its directly to and fro, the residency. Gany of the b)siness,en and politicians appointed to cabinet posts, le!islative co,,ittees and cons)ltative co)ncils had personal stakes in the o)tco,es of these pro2ects. 9i,ilarly, the o)tside cons)ltants bro)!ht in at the state>s e@pense (ere all linked to the vario)s forei!n co,petitors. M M M

The !i al Proposals and 4ncipient #locs

&ho)!h it is tr)e that en!ineers had lon! been intri!)ed (ith harnessin! the Cfoa,in! torrents roarin! fro, the sl)ice(aysD 5-ddison 1959: 1#3; of the -s(an Fa, and British officials in 'orld 'ar = had ,ade plans to )se the po(er for prod)cin! artificial nitrates, (hat !ave additional i,pet)s to the revived interest in electrification and fertili4er ,an)fact)rin! (as a do(nt)rn in the econo,y in 19B3 and a dra,atically risin! bill for fertili4ers. Certainly these factors had helped foc)s the attention of le!islators and cabinet ,inisters on the f)t)re of the econo,y 5Egyptian 7a8ette B1 Garch 19B$7 the Times B# -pril 19B$7 Faninos 19BB7 Fepart,ent of ?verseas &rade 19B%: 6#7 F)rrah 19"9: 1"7 Cha,ber of Fep)ties 196%: 6;. 8n!ineerin! circles be!an to ar!)e the relative ,erits of )sin! the po(er locally in -s(an, (here there (as little e@istin! de,and, or trans,ittin! the po(er north to Cairo and the Felta. Iorei!n investors never considered the latter idea feasible, and EUth,an G)harra,, the 'afd party official (ho (as ,inister of p)blic (orks bet(een 19B3 and 19B%, +)ickly ,ana!ed to +)ash it. :is role provides so,e insi!ht into the nat)re of the co,,ercial rivalries !enerated by the electrification b)siness. G)harra, (orked (ith a set of forei!n en!ineerin! cons)ltants, bankers and ,an)fact)rin! fir,s pro,otin! a radically different set of proposals, centerin! on the electrification of the 8!yptian Felta, the fan1shaped e@panse stretchin! /orth fro, Cairo to the Gediterranean. Vario)s plans for !overn,ent1o(ned p),pin! stations, the electrification of the rail(ays rin!in! Cairo and the develop,ent of ne( po(er so)rces for 8!ypt>s t(o lar!est cities coalesced into a lar!e1scale alternative to -s(an as the location for a po(er station. =n its ,ost e@pansive version, the rival Felta 9che,e centered on constr)ction of a lar!e stea,1driven plant to be constr)cted near -le@andria. G)harra, and his allies (ere tryin! to shift the foc)s of debate fro, -s(an to the Felta.[1] Both these alternatives represented a potential threat to the 8,pain !ro)p, the Bel!ian )tility tr)st that s)pplied Cairo (ith ,)ch of its electric po(er. &he 8,pain !ro)p and its local allies so)!ht, therefore, to b)ild a ne( a ne( Cs)perD po(er station in 9h)bra, a northern +)arter of Cairo. 'hile ar!)in! that it (as needed to i,prove tra,(ay service and ,eet the increasin! cons),er de,and for po(er, these investors (ere tryin! to prevent other forei!n fir,s fro, disr)ptin! its ,onopoly position in the po(er sector and

to constrain choices abo)t the lon!1ran!e co)rse of electrification. &able 1 s),,ari4es the relationships bet(een local capitalists and international fir,s and the pro2ects (ith (hich they (ere pri,arily associated in the late 19B#s. &he !eneral !oal of international co,petitors see,ed to be to capt)re as lar!e a share as possible of the 8!yptian ,arket. &he vario)s pro2ects (ere instr),ents to(ard this end. &he -s(an pro2ect (as the ,ost a,bitio)s and, hence, the potentially ,ost l)crative for ,an)fact)rers and service fir,s. B)t Focker and E-bb)d faced an )phill battle in !ainin! approval of the ,)lti,illion1po)nd pro2ect. for,idable set of sectoral rivals (as arrayed a!ainst the,. M M M

The 12)0B12*) 5s,an !ound" #uilding 5uthoritarianis(

=n retrospect, the conflicts over these state1,ediated opport)nities for acc),)lation are )ns)rprisin!, !iven the fa,iliar proble,s of, on the one hand, b)ildin! s)pport for postindependence parlia,entary parties and !overn,ents and, on the other hand, the li,ited access to capital and related barriers that confronted (o)ld1be 8!yptian investors. =f the 'afd, a ,ass party closely identified (ith the nationalist ,ove,ent, re+)ired patrona!e reso)rces in order to !overn, the proble, (as ,ore ac)te for the vario)s ,inority parties that vied (ith the 'afd since these s,all cli+)es of aristocrats, landlords and b)siness,en had no other possible basis for attractin! backers or voters. Ber+)e capt)red a key aspect of the relation bet(een investors and politics d)rin! the period: C=t (as no secret to anyone at the ti,e that certain interests (ere opposed to the de,ocratic prospects (hich the 'afd appeared to offer, and that the fate of !overn,ents (as closely linked to that of bi! b)siness )ndertakin!s. B)t these connections beca,e ,ore fla!rant as 8!yptians !ained ,ore )nderstandin! of their position and beca,e ,ore capable of ass),in! responsibilityD 519$B: 6B6;.

1. 8!yptian 8lectrification 9che,es, 19B9 ProCect Felta 9che,e /ocal 4n estors Aoreign Partners Gisr Lro)p V.B. Lrey 9h)bra 9che,e Gisr Lro)p Lan4 Fan)bi)s 9ie,ens 8n!lish 8lectric Co. 8,pain Lro)p

ProCect -s(an 9che,e

/ocal 4n estors Aoreign Partners E-bb)d F)dley docker

&he distrib)tional conflicts !re( increasin!ly r)thless (ith the onset of the depression in 19B9. -n a)thoritarian !overn,ent took po(er to steer the political econo,y thro)!h the crisis. .ed by =s,aEil 9id+i, the sin!le ,ost closely b)siness1identified politician of the inter(ar years, the re!i,e (as fatally (eakened by disp)tes a,on! co,petitors. 9id+i (as forced fro, office in 9epte,ber 19"" as the o)tco,e of a Ccorr)pt str)!!le for the contracts of the 8!yptian !overn,entD that historians have !enerally i!nored.[)] &he -s(an sche,e and its indefati!able pro,oter, E-bb)d, played a central role. &he political arena (as a lo!ical place for ,arket rivals to t)rn to in order to enhance their co,parative advanta!e in the co,petition for the electrification b)siness. =n Chapter B = )nderscored E-bb)d>s early association (ith the 'afd party, a political co,,it,ent that he deepened in 19B$ by fo)ndin! a ne( pro1'afd (eekly, al-9ashaf# 2)st as p)blic and private circles be!an serio)sly to debate the electrification iss)e. E-bb)d looks to have invested (isely. :is friend and ally, E-bd al1Nhala+ &har(at, took over in -pril 19B$ as pri,e ,inister in the coalition !overn,ent (ith the 'afd. &har(at backed the E-bb)d1Focker !ro)p in the -s(an b)siness, and in -)!)st his cabinet voted to proceed (ith the hydropo(er sche,e. &he sa,e ,onth E-bb)d 2oined &har(at in .ondon as a representative of the COa!hl)list ,a2orityD for the ro)nd of treaty talks (ith the Cha,berlain !overn,ent. B)t &har(at>s hopes for a treaty and E-bb)d>s for a contract (ere dashed follo(in! the ne(s of Oa!hl)l>s s)dden death in late -)!)st.[*] E-bb)d opposed the choice of G)stafa al1/ahhas to s)cceed Oa!hl)l, and his relations (ith the 'afd +)ickly so)red. =n Aan)ary 19B%, the party disavo(ed E-bb)d>s ne(spaper and deno)nced the British1identified, protreaty investor as Ca stran!er in the ho)se and a spy in the ca,p.D 'hile E-bb)d contin)ed to profess hi,self a Oa!hl)list, control of the party had shifted in a ,anner threatenin! to hi, and led hi, to 2oin forces (ith those seekin! to )nder,ine the 'afd.[+] Cataly4ed by the for,ation of the first G)stafa /ahhas1led !overn,ent in Garch 19B%, E-bb)d be!an investin! in an alternative to the 'afd party and its fir, hold over the electoral arena. &he strate!y, (hich he shared (ith the British residency, centered on for!in! a !overnin! coalition bet(een s)pporters of the for,er pre,ier &har(at and a dissident faction of the .iberal Constit)tionalist party led by 9id+i. &he a,bitio)s contractor ca,pai!ned a!ainst the 'afd at ho,e and abroad, preparin! the !ro)nd for a possible palace co)p, a co)rse (hich he co)nseled .ondon b)siness and political circles to s)pport. Ior instance, in Gay 19B%, ,e,bers of the :o)se of Co,,ons hosted a dinner for E-bb)d. :e took the opport)nity to (arn the policy,akers of /ahhas>s )pco,in! trip to .ondon, (hich he said (as planned in order to Cintri!)eD (ith British socialists. E-bb)d called for the

do(nfall of the /ahhas !overn,ent as +)ickly as possible, in the interests of British trade and British !ood(ill. :e ass)red his dinin! co,panions that the only thin! needed (as Can inti,ation to that effect conveyed to the Nin!.D =t C(o)ld !ive secret satisfaction thro)!ho)t 8!ypt.D[-] E-bb)d clearly sa( these efforts in s)pport of 8!ypt>s incipient a)thoritarian order as a ,eans of advancin! his econo,ic ob2ectives0in partic)lar, the -s(an pro2ect. :e ,ade the linka!e e@plicit (hen he and Focker, the head of the ,)ltinational -s(an consorti),, atte,pted to b)y the Egyptian 7a8ette# the lar!est 8n!lish1lan!)a!e daily in the co)ntry, b)t British officials in .ondon and Cairo +)ickly ,obili4ed to block the sale in order to prevent control of the paper fro, fallin! into his hands or those of any other CnativeR(ith or (itho)t British backin!.D[.] 'hen the kin! installed the aristocratic G)ha,,ad Gah,)d as pre,ier in A)ne 19B%, E-bb)d 2oined (ith other se!,ents of the b)siness co,,)nity in celebratin! the C,ove,ent a!ainst parlia,entary decadenceD s(eepin! Cnearly all Gediterranean co)ntriesD 5the Times B# ?ctober 19B%; and battled (ith Gakra, EUbayd, secretary !eneral of the 'afd, on the letters pa!e of the Times thro)!ho)t ?ctober 19B%. E-bb)d appla)ded the e@traconstit)tional chan!e in !overn,ent, deno)ncin! /ahhas and his allies 5chief a,on! the,, Gakra,; as a self1a!!randi4in! Ccli+)e.D Gakra, re,inded E-bb)d that the(ay to !et rid of s)ch a cli+)e (as thro)!h elections, not s)spensionof the constit)tion. &he e@ec)tive co,,ittee of the 'afd party ended the e@chan!e by anno)ncin! the official e@p)lsion of E-bb)d fro, the party 5the Times BB ?ctober, 19B%;. =n 8!ypt>s case, the C,ove,ent a!ainst parlia,entary decadenceD (as a fl)id alliance of palace stal(arts, dissident 'afdists, .iberal Constit)tionalists, and a set of political independents (ith close ties tob)siness 5the Times 1" ?ctober and 3 /ove,ber 19B%7 Ber+)e 19$B: 6#5J6#37 E-bd al1E-4i, Ra,adan 19%": 97 E-si, al1Fis)+i 19$3: 136J135;. =n ret)rn for their s)pport, Gah,)d offered an a,bitio)s pro!ra, of infrastr)ct)re develop,ent, incl)din! irri!ation (orks, hospitals and other sho(case sche,es in the co)ntryside, ne( roads and brid!es, a prototype (orkers> ho)sin! pro2ect, the e@pansion of the harbor at -le@andria, the electrification of the state rail(ays and, of co)rse, the constr)ction of a po(er station at -s(an. Rival investors positioned the,selves to co,pete in and shape the o)tco,e of this hi!hly p)blici4ed ne( ro)nd of state b)ildin!.

The Escalation of the Po,er Conflict

&he clash of co,petin! interests and a!endas in the po(er sector is easy to trace thro)!h a series of political interventions that took place d)rin! the Gah,)d ad,inistration. Neep in ,ind that the preferences of vario)s factions for one or another of the proposed electrification pro2ects0-s(an, the Felta and Cairo0differed and that the alternatives (ere seen in 4ero1 s), ter,s7 ,ovin! one pro!ra, )p on the a!enda ,oved the others do(n, or so it appeared to the b)siness interests and their cabinet and

parlia,entary allies. &he first of t(o st)nnin! blo(s delivered to the Focker1E-bb)d pro!ra, ca,e in the for, of a decision by a special cabinet s)bco,,ittee appointed in Aan)ary 19B9 to revie( the hydropo(er iss)e. &he ,e,bers voted to b)ry the po(er1plant proposal, ar!)in! that it threatened the str)ct)ral inte!rity of the da, 5the Times $ Fece,ber 19B% and 1 Iebr)ary 19B97 Engineering % Iebr)ary 19B%: 1$3J1$%7 Cha,ber of Fep)ties 196%7 'isr (ina:iya Aan)ary 19B9;. =n doin! so, ho(ever, they (ere reinterpretin! the findin! of the !overn,ent>s o(n international advisory co,,ission, (hich had e@a,ined the plan and developed proposals to i,prove the desi!n of the hydropo(er plant. &he s)bco,,ittee (as headed by E-bd al1:a,id 9)lay,an, the ,inister of co,,)nications and the !overn,ent>s sta)nchest advocate of the :el(an electrification sche,e. &he second ,e,ber, E-li Gahir, served on Bank Gisr>s board of directors i,,ediately before ass),in! the finance post in the Gah,)d !overn,ent. &he p)blic1(orks ,inister, =brahi, Iah,i Norayyi,, (as E-bb)d>s one ally on the co,,ittee.[0] &he action of the s)bco,,ittee s)ccessf)lly shifted the a!enda a(ay fro, -s(an to the Felta, and fro, the Ginistry of P)blic 'orks to the Ginistry of Co,,)nications, (here a pet pro2ect for electrification of the Cairo1:el(an rail(ay (as bein! heavily pro,oted. &ho)!h the ,inister, 9)lay,an Pasha, (as opposed to the,, E-bb)d and Focker had bid for this (ork as (ell, hopin! to link it to the lar!er and ,ore l)crative -s(an electrification sche,e. -nd they had at least one key ally in 9)lay,an>s ,inistry. &ho)!h fe( see,ed to reali4e it, the ,inistry>s o(n chief cons)ltant on the rail(ay1 electrification pro2ect (as a British en!ineer and Conservative party GP (hose fir, had n),ero)s b)siness dealin!s (ith Focker 5Favenport1:ines 19%6b: 5#J5B, 11#, 1B#J1BB, B#97 :annah 19$%: BB%JBB9;. Uns)rprisin!ly, the cons)ltant passed over the lo(er bid tendered by the rival investors in the 88C 5the Times 1B Garch 19B9;. -nd he co)ld not be s(ayed by their cl),sy atte,pt at a bribe. =nstead, he reco,,ended the hi!her bid s)b,itted )nder E-bb)d>s na,e.[1] &he co,petin! investors (ere ne@t forced to try to block the a(ard of the contract to E-bb)d. &hey be!an (ith a press ca,pai!n acc)sin! hi, of e@ertin! )nd)e infl)ence on 8!yptian officials. =n response, E-bb)d so)!ht to ,obili4e a s)fficient co)nter(ei!ht to a bloc that incl)ded the Gisr !ro)p, (hose chair,an, :arb, (as b)sy dealin! (ith both Ler,an en!ineerin! fir,s and representatives of the Bel!ian tr)st that ,onopoli4ed Cairo>s po(er ind)stry.[2] E-bb)d>s ,ain (eapon a!ainst this array of investors (as his .ondon partners and the infl)ence that they in t)rn co)ld ,obili4e (ithin the Conservative party !overn,ent. .ord -tholl, a ,e,ber of the :o)se of .ords and an investor in the -s(an sche,e, lobbied both the 8!yptian kin! and the British resident in Cairo on behalf of the rail(ay contract, and E-bb)d p)shed Focker to brin! 'hitehall into line.[13] &he ne@t blo( to E-bb)d et al. (as delivered in the for, of a ne( advisory co)ncil to the Ginistry of Co,,)nication7 its reco,,endation to cancel the ad2)dication of the rail(ay contract and start the process over a!ain (as the

precise co)rse bein! )r!ed on Gah,)d by the Gisr !ro)p and its forei!n partners. =n fact, allies of the ,ain interested fir,s constit)ted the entire ,e,bership of the ne( co)ncilH &he first appointee (as <)s)f -slan Cattao)i, :arb>s ,entor and a fo)ndin! director of Bank Gisr7 the second (as G)ha,,ad 9hafi+ Pasha, the en!ineer and for,er ,inister (ho served as a director of 9ie,ens ?rient7 the third ,e,ber, Gah,)d 9h)kri Pasha, a financier and confidant of the kin!, served on the board of the local Ban+)e Bel!e et =nternationale en 8!ypte.[11] -ll the interested parties see,ed to share a +)ite precise )nderstandin! of the short1 and ,edi),1ter, i,plications of this ,ove, be!innin! (ith the elevation of the Bel!ian1backed 9h)bra po(er1station sche,e to the top of the a!enda and endin! (ith the setback to E-bb)d and Focker>s co,petitive position in the lar!er and ,ore l)crative hydropo(er ,arket. -t this point the Gisr !ro)p p)blished its heralded, B##1pa!e report on national ind)stry b)ildin! 5Bank Gisr 19B9;, endorsin! the develop,ent of hydroelectric po(er and fertili4er ,an)fact)rin!, ,arkets in (hich their Ler,an partners (ere pri,arily interested 5&i!nor 19$$a: 1$#7 ?(en 19%1b: 3;. Proof of this clai, is fo)nd in the tactics e,ployed by E-bb)d, his partners and their allies to salva!e the deal, (ith the British !overn,ent, thro)!h .ord .loyd, s)ddenly de,andin! that the 8!yptian !overn,ent postpone action on the 9h)bra pro2ect )ntil the other electrification +)estions (ere settled. E-bb)d>s ,ain ally in the !overn,ent, the ,inister of p)blic (orks, s)pplied the pri,e ,inister (ith a convenient and possibly viable rationale, anno)ncin! late in Gay 19B9 that the !overn,ent intended to b)ild a p)blicly o(ned po(er station at 9h)bra and (o)ld call for tenders so,eti,e in the fall.[1)] &his interpretation !ains f)rther credence fro, the decisions taken once Gah,)d>s !overn,ent fell five ,onths later, after it lost the s)pport of the ne( Ra,say GacFonald 5.abor party; !overn,ent in .ondon. GacFonald (as insistin! on a less blatantly neocolonial policy, be!innin! (ith the recall of the hi!hly interventionist hi!h co,,issioner, .ord .loyd, and the holdin! of ne( elections in 8!ypt 5the Times "1 Fece,ber 19B97 Garsot 19$$: 1B9;. 8lections bro)!ht the 'afd party to po(er a!ain, briefly, in Aan)ary 19"#. &he /ahhas !overn,ent +)ietly opened ne!otiations (ith the Bel!ian investors, abandonin! the idea of p)blic o(nership, and 8,pain and the Gisr !ro)p re!istered a ne( 2oint1vent)re constr)ction co,pany in Garch 19"# to b)ild the 9h)bra po(er station.[1*] =n 19B$ E-bb)d shifted his s)pport fro, a pop)list1tin!ed party to an a)tocratic pre,ier, hopin! that the Gah,)d !overn,ent (o)ld a(ard hi, the contract to b)ild a po(er plant at -s(an. :e fo)nd his ob2ectives th(arted and his a!enda for -s(an set back, ho(ever, by the concerted actions of a for,idable set of rivals. 'ith the help of the Gisr !ro)p and other allies, Bel!ian investors protected their ,onopoly position in the )rban po(er ind)stry. &here (as little likelihood of E-bb)d>s i,provin! his position )nder the co)ntry>s de,ocratic interre!n), bet(een Aan)ary and A)ne 19"#. :is po(erf)l patron in the British residency (as !one, and his

ene,ies in the 'afd party occ)pied key ,inistries. E-bb)d cast his vote for a)thoritarianis,, lendin! his s)pport to 9id+i, the dictatorial pre,ier (ho took office in A)ne 19"# at the kin!>s behest. =t had to have been a choice ,ade (arily. E-bb)d possessed doc),ents fro, his Bel!ian co,petitors that ackno(led!ed 9id+i>s inval)able behind1the1scenes role in the 9h)bra b)siness, confir,ed by his f)rtive b)t decisive orchestration of a final a!ree,ent (ithin (eeks of his takin! po(er. &ho)!h E-bb)d prospered d)rin! 9id+i>s ten)re, his s)ccessf)l e@pansion into ne( sectors depended on constant political ,ane)ver. =n the ne@t section, = e@a,ine the conflicts of interest (hich )nderlay the b)siness co,,)nity>s relations (ith the 9id+i re!i,e, foc)sin! partic)larly on the -s(an conflict and the re!i,e chan!e of the 19"#s.

Sid@iDs #usiness Coalition

9e!,ents of the do,estic b)siness co,,)nity and forei!n capital had been active in cha,pionin! an alternative a)thoritarian coalition centerin! on the ,onarchy since at least the sprin! of 19B%. 9id+i proceeded alon! lines si,ilar to Gah,)d>s, appealin! to the sa,e social coalition. &hro)!h the 19B#s, 9id+i had for!ed close ties to the b)siness co,,)nity, thro)!h both his leadership position in the ne( ind)strial peak association, the 8!yptian -ssociation of =nd)stries 5after 19"# the Iederation of =nd)stries;, and his n),ero)s co,pany directorships. =n the t(o years before ass),in! po(er, 9id+i had 2oined the boards of fir,s associated (ith the E-bb)d, 8,pain, 9alva!os and 9)arVs !ro)ps. =nvestors looked to 9id+i !enerally to deal (ith the co)ntry>s deepenin! econo,ic crisis. -t the sa,e ti,e they anticipated ,ore i,,ediate and tan!ible benefits. &he ne( pri,e ,inister be!an asse,blin! an e@tensive patrona!e net(ork, centered in his ne( People>s party 5hi8% al-sha:%;, (hich the British strai!htfor(ardly described as a ,eans for 9id+i to distrib)te favors in ret)rn for s)pport. ?ne of 9id+i>s cabinet ,inisters, E-bd al1Iattah <ahya 5the <ahya !ro)p;, served as vice1president. E-bb)d>s interests (ere represented conspic)o)sly by -h,ad R)shdi, his e,ployee and adviser, (ho served as the party>s secretary !eneral 5Feeb 19$9: B$%JB%17 Favis 19%": 1557 &i!nor 19%6: 1"3J1"$;. E-bb)d>s ties to British capitalists (ere a val)able political reso)rce. Perhaps the clearest e@a,ple of their val)e is fo)nd in his interventions in .ondon on 9id+i>s behalf. &he British .abor !overn,ent initially hesitated to s)pport 9id+i, in keepin! (ith the liberal and so1called anti1interventionist line it had first artic)lated in 19B9. E-bb)d>s British b)siness partners and their allies in the Conservative party had opposed this co)rse fro, the o)tset. Ior instance, the F)ke of -tholl, Focker>s b)siness partner, conde,ned the .abor party !overn,ent in the :o)se of .ords for the Cincalc)lable har,D inflicted )pon British econo,ic interests, !ivin! the loss of the -s(an hydropo(er contract as his e@a,ple 54ouse of 5ords De%ates $5, Col),n 11$3, 11 Fece,ber 19B9;. .ord .loyd, another Focker ally, bla,ed .abor

for the increase in co,,)nist activity Cri!ht )p to the !ates of the .evant,D strikin! Cha,,er1blo( after ha,,er1blo(D a!ainst British interests and leadin! to Cthe betrayal of o)r !reat strate!ic and co,,ercial position in 8!yptD 5the Times 6 Iebr)ary 19"#;. &hro)!ho)t the s),,er and fall of 19"#, as the opposition press)red the GacFonald !overn,ent, E-bb)d acted as 9id+i>s representative in the ne!otiations to restr)ct)re the 8!yptian political re!i,e. -ltho)!h 9id+i had been (arned p)blicly in A)ly a!ainst alterin! the electoral syste,, nonetheless by ?ctober he ,ana!ed to )nveil a ne( constit)tion Cas reactionary in for, as in s)bstanceD 5Ber+)e 19$B: 66B;. E-bb)d had ,ade clear that the !oal (as to prevent the 'afd>s ret)rn to po(er, (hich (o)ld spell Cthe r)in of 8!ypt.D :is ne,esis fro, the 'afd, Gakra, EUbayd, (as in .ondon at the sa,e ti,e, lobbyin! the .abor party to (ithhold s)pport for 9id+i.[1+] E-bb)d obtained instant (indfalls fro, his personal invest,ent in the ne( re!i,e. Ior e@a,ple, 9id+i>s ne( ,inister of p)blic (orks, Norayyi,, the en!ineer (ho once (orked for E-bb)d and had proved a loyal ally in earlier !overn,ents, en!ineered a s(itch in the contract for hei!htenin! the -s(an Fa, and t)rned over the half1co,pleted (ork to E-bb)d and his partners 5Giddle,as 193": "#5J"#37 Egyptian 7a8ette BB 9epte,ber 19"#7 Favenport1:ines 19%6a: 3$#;. Under Norayyi,, the ,inistry f)nctioned as a re!)lar so)rce of contracts and, hence, capital for E-bb)d. &his connection no do)bt contrib)ted to the ,eteoric rise of E-bb)d, (ho +)ickly ca,e to be seen by the residency as one of the C,ost infl)ential ,en in 8!ypt.D[1-] -ltho)!h 9id+i attended to the needs of a!ric)lt)ral and ind)strial investors as d)tif)lly as he ans(ered the persistent challen!es of the opposition, nonetheless there (ere strict li,its on the re!i,e>s capacity to acco,,odate co,petin! de,ands, !iven the prevailin! econo,ic conditions, and conflicts over these scarce reso)rces !re( intense. Ior instance, in 19"1, E-bb)d and his partners so)!ht a !overn,ent concession to be!in a b)s service in Cairo, (hich threatened the 8,pain !ro)p>s ,onopoly over the )rban transit ,arket. 'ith the help of 9id+i and allied cabinet ,inisters, the Bel!ians obtained a ,a2or interest in the vent)re and forced E-bb)d to pool the b)s co,pany>s receipts (ith the tra,(ay>s 5Vitalis 199#: B9%J"##;. -s Ber+)e shre(dly observed, local investors Conly (ithstood the diffic)lties of the ti,e by an assid)o)s levera!e of po(erD 519$B: 66%;. E-bb)d>s p)rs)it of the -s(an contract in 19"BJ19"" reveals the tensions and cross1press)res !enerated by 9id+i>s appeal to the b)siness co,,)nity for s)pport. E-bb)d backed 9id+i, e@pectin! to obtain the ,)lti,illion1po)nd po(er pro2ect, b)t instead fo)nd his path blocked by his b)siness rivals, abetted by the pre,ier and his cabinet ,inisters. &o re,ain co,petitive in the ,arket for the state>s reso)rces, E-bb)d (as driven to revise his political invest,ent strate!y once ,ore. :e abandoned 9id+i and ne@t t)rned to the palace, backin! the kin! in his efforts to debilitate and event)ally brin! do(n the 9id+i !overn,ent.

The Split &et,een Sid@i and 95&&ud

&he conflicts s)rro)ndin! the po(er pro2ects !re( ,ore intense as the 8!yptian econo,y contin)ed to deteriorate. &his (as hardly a coincidence. &he depression prod)ced its o(n set of cross1press)res on the state, ,ost basically by ,)ltiplyin! and intensifyin! the rival clai,s on its reso)rces. 'hen the 9id+i re!i,e decided in 19"1 to press ahead (ith the develop,ent of a local nitrate ind)stry, it (as infl)enced by the need to cope (ith the deepenin! crisis in the a!roe@port sector. &he s)pport of cotton prod)cers in this case did little to ass)re the pro2ect>s co,pletion or, of co)rse, reconcile the co,petin! capitalists. &he priority s)ddenly accorded the -s(an sche,e created ne( diffic)lties for its indefati!able pro,oter, E-bb)d, and his allies. &hese investors banked on the !overn,ent>s a(ardin! a concession to the, to operate the po(er plant. &he ,onopoly rents in s)pplyin! po(er (o)ld ,)ltiply the ret)rns fro, the sale of t)rbines and !enerators. Iro, the perspective of the rival po(er !ro)ps, b)ildin! the nitrate plant (as, at best, another, ,ore ro)nd1abo)t ro)te to sellin! !oods and services, one that re+)ired the, to brin! an additional set of interests into the ne!otiations. &here (as !ood reason to believe that che,ical prod)cers (o)ld prove to be diffic)lt as partners. &he shift in the foc)s of ne!otiations also enco)ra!ed an e,er!in! etatist c)rrent (ithin the p)blic1(orks ad,inistration and other a!encies that pressed for p)blic o(nership of any )ndertakin! at the da, site. :ydra)lic (orks (ere, of co)rse, already )nder strict !overn,ent control, and since the constr)ction and operation of the po(er plant (o)ld affect irri!ation needs, stron! instit)tional precedents and press)res (ere at (ork in this case. &he etatist c)rrent (as also fed by a strain of nationalist anti,onopolis, that had been pra!,atically and, therefore, fitf)lly advanced by local capitalists, incl)din! 9id+i, for the previo)s t(o decades. 8!yptian technocrats (ere e,po(ered to revise the pro2ect>s scope, and they apparently planned for !overn,ent o(nership of both the po(er plant and the nitrate factory, altho)!h they had to retreat on the second point.[1.] &hro)!h the !ood offices of cabinet ,e,bers and other key political allies, the rival investors ,ane)vered to infl)ence the o)tco,e of the ad,inistrative process and, )lti,ately, !ain the contracts to b)ild and r)n the plants. &he inter,inisterial strife that ca,e to pla!)e 9id+i>s ad,inistration reflected the intensifyin! (ars for access to state reso)rces. =n early 19"B, both U.9. and British diplo,ats predicted0(ron!ly, it t)rns o)t0that the -s(an contract (o)ld inevitably !o to E-bb)d, tho)!h an )pdated dispatch fro, Cairo (arned Cto e@pect a do!fi!ht.D &his prediction (as ri!ht on tar!et.[10] &here is no clearer e@a,ple of the co,ple@ities )nderlyin! relations bet(een 8!yptian b)siness !ro)ps and political a)thorities, and of the tensions that (ere en!endered by these collaborative arran!e,ents, than the effort by

the Iorei!n ?ffice and the 8!yptian pre,ier in 19"B to reverse E-bb)d>s fort)nes. British a)thorities had, in fact, taken the first tentative steps in this direction in 19"1, follo(in! the 8!yptian investor>s latest foray to .ondon on 9id+i>s behalf. &he re!i,e had been in the ,idst of a ri!!ed election ca,pai!n, d)rin! Gay, (hich (as acco,panied by bloodshed. British b)siness and political circles (ere alar,ed by the intensifyin! a!itation a!ainst the re!i,e and its backers in .ondon, incl)din! calls to boycott British !oods. E-bb)d so)!ht to reass)re his infl)ential b)siness partners and thereby shore )p s)pport for 9id+i. 'hitehall be!an ob2ectin! to E-bb)d>s interventions and so)!ht to co)nter the,. &o p)t it bl)ntly, the i,perial a)thorities !re( indi!nant (hen the 8!yptian capitalist ,oved o)tside a caref)lly circ),scribed orbit. Policy,akers be!an ,akin! an ill)sory distinction bet(een E-bb)d>s co,,ercial pro(ess, (hich they (anted to c)ltivate, and his political activities, (hich they (anted to rein in. &hey only rel)ctantly let !o of the ill)sion that the t(o co)ld be separated (hen E-bb)d defected fro, the 9id+i coalition.[11] Iorei!n ?ffice archives track the do(n(ard spiral of relations bet(een 9id+i and E-bb)d thro)!h the s),,er and fall of 19"B. Ior instance, .ondon alle!ed that E-bb)d be!an to pay a Daily Telegraph reporter a re!)lar s)bsidy in ret)rn for a strea, of anti19id+i articles that be!an appearin! in -)!)st, as 9id+i prepared for a ro)nd of treaty talks (ith the British forei!n ,inister, Aohn 9i,on. &he b)siness,an (as also b)sy stren!thenin! his ties to Nin! I)>ad and the kin!>s ,ain political !o1bet(een, Oaki al1E=brashi. -nd, as conventional acco)nts all a!ree, at abo)t this ti,e officials inside the palace la)nched an offensive desi!ned to (eaken 9id+i and his !overn,ent.[12] E-bb)d>s political activities, (hich increasin!ly incensed British b)rea)crats in .ondon, coincided (ith a rene(ed effort to p)sh thro)!h the -s(an pro2ect. &he 8!yptian ,inister of p)blic (orks, Norayyi,, arrived in 8n!land in -)!)st for cons)ltations (ith prospective en!ineerin! fir,s. E-bb)d and Norayyi, cond)cted b)siness to!ether fro, a s)ite of roo,s in a .ondon hotel. Back in Cairo, the 88C>s chief a!ent concerted (ith opposition 'afd party officials on a press ca,pai!n. Iro, -)!)st 19"B on, it beco,es pro!ressively ,ore diffic)lt to disentan!le the actions of investors fro, those ,ane)verin! for control of the state or to disc)ss the fate of the -s(an pro2ect separately fro, the fate of the 9id+i re!i,e.[)3] Ney constit)encies of the re!i,e (ere tro)bled by, a,on! other thin!s, 9id+i>s fail)re to restore political order, and they had be!)n to (ithdra( their s)pport. 9id+i (as pressin! for the treaty talks (ith 9i,on, (hich (ere sched)led for 9epte,ber 19"B in Leneva, as a (ay of shorin! )p the re!i,e. B)siness and political rivals alike (ere intent on e@ploitin! 9id+i>s ne( v)lnerability. Ior instance, attacks on 9id+i>s favoritis, and alle!ations of corr)ption (ere co,,on. =n -)!)st opponents critici4ed the !overn,ent for approvin! Norayyi,>s 2)nket to .ondon. 'hile he p)blicly defended his ,inister>s probity, in private 9id+i blasted Norayyi, for coll)din! (ith

E-bb)d. Norayyi, co)ntered by acc)sin! 9id+i of sche,in! (ith E-bb)d>s rivals. =n 9epte,ber 19"B, 9id+i escalated the ca,pai!n and deliberately be!an to sabota!e E-bb)d>s b)siness ties to forei!n en!ineerin! fir,s 55a ;0forme $ and 13 Garch 19"67 al- hram 16 Garch 19"67 Vitalis 1996;. &his (idenin! rift bet(een the pre,ier and his one1ti,e close ally (as enco)ra!ed directly by :afi4 E-fifi, the 8!yptian a,bassador in .ondon, and indirectly by the Iorei!n ?ffice, (hich probably prod)ced the da,nin! report on E-bb)d>s contacts (ith the Daily Telegraph. E-fifi acted at least partly o)t of personal hostility to E-bb)d, (hile 'hitehall (anted to p)t a stop to his political activities.[)1] Ior 9id+i and E-bb)d, by contrast, the disp)te (as basically abo)t the price of cooperation. /onetheless, the !a,e yielded a set of )nifor,ly )ndesirable payoffs. By the end of 19"B, 9id+i faced a revolt in his cabinet, enco)ra!ed by palace1based politicians and tri!!ered by the pre,ier>s efforts to keep E-bb)d fro, obtainin! the contract for the po(er pro2ect.

The Aall of the Sid@i %o ern(ent

&he on!oin! disp)tes over distrib)tion of reso)rces (ere a si!nificant and )ntil no( )nkno(n di,ension of the crises (hich overtook 9id+i>s a)thoritarian ad,inistration in its last year in office. &hey help )s to )nderstand the reasons for the defection of key ,e,bers of the re!i,e>s ori!inal coalition. =n a sho(do(n (ith palace circles, 9id+i, (ho apparently still had the backin! of the for,er colonial po(er, reconstr)cted his cabinet on 6 Aan)ary 19"", droppin! three ,e,bers (hile shiftin! Norayyi, fro, his key post at p)blic (orks. /onetheless, it (as a fatally (eakened ad,inistration that r)led 8!ypt for the ne@t nine ,onths, as 9id+i>s health deteriorated and the shaky fo)ndation of his !overn,ent finally collapsed. &his first cabinet crisis is conventionally traced to the CBadari affair,D a story involvin! char!es of tort)re by r)ral police forces that (as !iven (ide p)blicity in late Fece,ber 19"B 5Vatikiotis P1939Q 1991: B%67 the Times B$ and "1 Fece,ber 19"B;. /onetheless, British diplo,atic dispatches fro, Cairo had disclosed the precise coordinates of the fa)lt line in the cabinet (eeks earlier, as 9id+i, (ho is )s)ally recalled as an )nceasin! pro,oter of 8!ypt>s ind)strial develop,ent, bra4enly blocked his ,inister of p)blic (orks fro, !oin! ahead (ith the tenders for the -s(an po(er1fertili4er sche,e. -t the sa,e ti,e, 9id+i intervened personally to prevent E-bb)d fro, sharin! in the contract for another ,assive pro2ect (hen the 8!yptian !overn,ent invited a handf)l of fir,s to tender for the Aabal -)liya> da, in northern 9)dan. &hese interventions led to the virt)al revolt of t(o of 9id+i>s ,inisters, E-bd al1Iattah <ahya 5forei!n affairs; and Norayyi, 5the Times 1 /ove,ber 19"B7 al- hram " /ove,ber 19"B;.[))] =n his report to .ondon on the )nfoldin! crisis, the British hi!h co,,issioner Percy .oraine noted that the defection of <ahya (as based on repeated char!es of corr)ption leveled at both 9id+i and the ,inister of co,,)nication, tho)!h <ahya>s loyalty to the ,onarch ,)st obvio)sly have

played a part. Garsot cites the sa,e Iorei!n ?ffice doc),ent b)t ass),es that it refers to Cr),orsRchar!in! 9id+i and the ,e,bers of his fa,ily (ith financial irre!)laritiesR,ostly in connection (ith a pro2ect involvin! the Corniche at -le@andriaD 519$$: 131;. &he hi!h econo,ic and political stakes involved (ith the -s(an and Aabal -)liya> sche,es d(arfed those of the relatively s,all1scale road1b)ildin! pro2ect alon! the -le@andria coast line, and there is little evidence that (hat later beca,e kno(n p)blicly as the CCorniche scandalD (as a si!nificant iss)e in 19"B 5-e* 6or$ Times 5 Aan)ary 19""7 Vitalis 1996;. 9id+i>s deft ad,inistrative ,ane)ver effectively sealed the fate of the Focker1E-bb)d proposal to b)ild and operate a po(er plant and fertili4er factory at -s(an, endin! (hat = have called the 19B$J19"B bar!ainin! ro)nd. &he ne( 19"" b)d!et did not incl)de provisions for the ind)strial pro2ect. -s the Daily Telegraph vie(ed it, -s(an and other (orks s)ch as the -le@andria harbor e@pansion and the stren!thenin! of the =sna, -sy)t and Felta barra!es (ere bein! sacrificed to Aabal -)liya>. &he Cairo opposition daily al-Balagh +)oted the dispatch, (hile dis,issin! the i,portance of the hydroelectric pro2ect and foc)sin! on 8!ypt>s servit)de to British interests 5s),,ary in Egyptian 7a8ette " Iebr)ary 19"";. &he state>s finances (ere of co)rse terribly strained by the econo,ic crisis 5the Times % -)!)st 19"B7 -e* 6or$ Times % Aan)ary 19"";. Fe,ands had contin)ed to ,)ltiply (hile reven)es sta!nated. -nd, in the (ake of 9id+i>s ,ane)ver, vario)s opponents0a,on! c)ltivators, the irri!ation b)rea)cracy and co,petin! sectoral interests0rene(ed their efforts to b)ry the sche,e once and for all. &h)s, (hen the finance ,inistry>s chief British adviser stepped for(ard in Fece,ber to critici4e the proposed i,port1s)bstit)tion vent)re, he ar!)ed that it (as )necono,ical, relyin! on data provided by =. L. Iarben=nd)strie 5=L Iarben;, the !iant Ler,an prod)cer that do,inated (orld trade in nitrate fertili4ers.[)*] E-bb)d>s prospects see,ed no less di, than those of the po(er pro2ect. :e held 9id+i responsible for interferin! in his b)s vent)re as (ell as in his bids for the -s(an and Aabal -)liya> b)siness. &he loss of a key ally in the Ginistry of P)blic 'orks (as another )ndeniable setback, one appla)ded by his co,petitors. -t the sa,e ti,e, British diplo,ats in .ondon be!an their o(n ca,pai!n a!ainst hi,. =nsiders 2)d!ed that the loss of political s)pport spelled the end of E-bb)d>s hold over the p)blic1(orks ,arket. Uns)rprisin!ly, his political identification shifted once ,ore, and in 19"" E-bb)d e,er!ed as the steadfast ally of Nin! I)>ad. F)rin! the first si@ ,onths of that year an ailin! 9id+i fo)!ht tenacio)sly (ith a broad array of opposition forces, (hich by the sprin! had co,e to incl)de the palace as represented by the kin!>s shre(d attendant, Oaki al1E=brashi. &ho)!h it is less (ell kno(n, E-bb)d cooperated (ith E=brashi in his ca,pai!n to )nder,ine the ad,inistration of the state0for instance, in seekin! to block and then to overt)rn the Aabal -)liya> contract that 9id+i had steered to E-bb)d>s co,petitors. British doc),ents fro, the period record E-bb)d>s earnest atte,pts to lay the !ro)nd(ork for a Ckin!ly

a)tocracyD in 8!ypt, incl)din!, accordin! to the interior ,inistry>s chief British adviser, the farfetched idea that E-bb)d (o)ld replace 9id+i as pri,e ,inisterH[)+] -ltho)!h 9id+i e@pended vast reso)rces in his effort to co)nter these intri!)es and keep his re!i,e alive0co,in! close to killin! hi,self in the process0the e,battled pre,ier finally resi!ned on B1 9epte,ber 19"" 5the Times 1, 3, $, 9 and BB 9epte,ber 19""7 E-bd al1E-4i, Ra,adan 19%": $5BJ3"7 Feeb 19$9: B697 Vitalis 199#: "#$J"1B;.

The !oots of EgyptDs De(ocratic Transition

&he fall of the 9id+i !overn,ent both (as hastened by and (as a contrib)tin! factor in the !rad)al (ithdra(al of British s)pport for 8!yptian a)thoritarianis,, or (hat officials at the ti,e referred to as the policy of nonintervention )nder .oraine, the British hi!h co,,issioner. .oraine>s replace,ent, Giles .a,pson 5later, .ord Nillearn;, arrived in Cairo in Gay 19"", and for the ne@t t(elve years desperately so)!ht to ste, the loss of British i,perial prero!atives by ,akin! and )n,akin! 8!yptian !overn,ents. ?ne lon!1ti,e British official in 8!ypt later rationali4ed the interventionist episodes of the ,id119"#s as si,ply part of a re!)lar cycle in postindependence 8!yptian politics 5'arb)r! 19%5: 151;. =n this vie(, 9id+i>s do(nfall had tipped the 5arbitrarily deter,ined; balance of internal political po(er threatenin!ly in the kin!>s favor. &h)s, bet(een 19"" and 19"5, .a,pson (o)ld rel)ctantly co,e to s)pport the 8!yptian opposition>s de,and for restoration of the constit)tion, ne( national elections and the 'afd party>s ret)rn to po(er in Gay 19"3. &he on!oin! conflicts over reso)rces (ere cr)cial to the )nfoldin! of the post19id+i Ctransition to de,ocracy.D .a,pson and his staff vie(ed the conflict bet(een 9id+i and the palace precisely as a (ar over contracts. &hey (ere also (orried that E-bb)d>s infl)ence inside the ne( E-bd al1Iattah <ahya !overn,ent 59epte,ber 19""J/ove,ber 19"6; (o)ld lead a ne( ro)nd of disp)tes over Aabal -)liya>, -s(an and other pro2ects. =ndeed, (ithin the ,onth, E-bb)d and the ,inister of co,,)nications (ere pro,otin! a ne( and controversial sche,e to (iden the harbor at -le@andria, (here the contractor had invested in a shippin! line and dockyard. &hro)!h the early part of 19"6, in fact, E-bb)d repeatedly and bra4enly clashed (ith the Gisr !ro)p, infl)ential se!,ents of the state b)rea)cracy, ,a2or forei!n fir,s and investors, and the Iorei!n ?ffice itself, contrib)tin! to the decision by British policy,akers to en!ineer the do(nfall of <ahya>s !overn,ent.[)-] -s the Iorei!n ?ffice archives ,ake clear, a specific tar!et of the 19"6 intervention (as the for,idable po(er of the E=brashi1E-bb)d co,bination0a detail that has been obsc)red in the passin! references to the e@cesses of palace r)le and the <ahya !overn,ent>s intransi!ent nationalis,. Concretely, these e@cesses consisted of the atte,pted hi2ackin! of the state ad,inistration and, in partic)lar, its vital distrib)tive ,echanis,s0the contract and s)bsidy syste,, etc. 5Garsot 19$$: 1$17 Feeb 19$9: B5B.

-t the sa,e ti,e, E-bb)d played a key and hi!hly visible role once the <ahya !overn,ent s)ddenly be!an to pro,ote refor, of the Gi@ed Co)rts 5Cobsolete international servit)desD;, partic)larly in .ondon, (here he lobbied British b)siness,en and politicians on the re!i,e>s behalf thro)!ho)t the s),,er 5the Times "# A)ne 19"6;. 'hen E-bb)d ret)rned to .ondon in the fall of 19"6 to press his b)siness allies to back the besie!ed 8!yptian !overn,ent, the Iorei!n ?ffice bla,ed E-bb)d personally for forcin! the, to intervene, leadin! to <ahya>s resi!nation on 3 /ove,ber 5E-bd al1E-4i, Ra,adan 19%": $3$J$3%7 Vitalis 1996;.

The #alance Sheet

E-bb)d had invested heavily in 8!yptian a)thoritarianis,. =n ret)rn, he obtained enor,o)s orders for forei!n partners, control of s)bcontracts and th)s reso)rces in the local political econo,y, as (ell as a fort)ne in co,,issions, (hich he )sed to b)y the co)ntry>s ,ost fa,o)s shippin! line and to la)nch a ne( b)s co,pany. /onetheless, the t(istin! political path that he traveled bet(een 19B$ and 19"60fro, 'afd party GP to 9id+i>s chief p)blicist in .ondon and then to palace loyalist0e@acted a heavy toll. Perhaps the ,ost costly aspect of this partic)lar invest,ent strate!y (as the escalatin! and see,in!ly )navoidable clash (ith the British residency and Iorei!n ?ffice. 9oon after the G)ha,,ad &a(fi+ /asi, !overn,ent 5/ove,ber 19"6JAan)ary 19"3; took office, E=brashi and E-bb)d res),ed (hat the British called their intri!)es, leadin! to another f)ll1scale confrontation by the sprin! of 19"5. E-bb)d>s ties to British ,an)fact)rers and en!ineerin! fir,s si,ply did not ins)late hi, s)fficiently fro, political co)nter1press)res. &ho)!h he had obtained X8 %55 tho)sand in orders for his British partners in 19"6, the Fepart,ent of ?verseas &rade branded hi, a ,enace to British co,,erce and so)!ht to )nder,ine his operations. &h)s the residency ref)sed to assist his .iverpool1re!istered shippin! vent)re, dis,issed the CBritishD identity of his b)s co,pany acc)rately as ,ore or less a faYade and intervened (ith the 8!yptian a)thorities a!ainst E-bb)d>s co,pany in a (ar over a ne( set of b)s ro)tes 5Vitalis 199#: B9%J"##;. Iinally, E-bb)d fo)nd British and 8!yptian officials cooperatin! to e@cl)de hi, fro, ne!otiations over the -s(an po(er pro2ect (hen they (ere revived in 19"5. =n the co,ple@ )nfoldin! of the reali!n,ent in post19id+i 8!yptian politics, the British event)ally stood aside to per,it the restoration of the constit)tion. /asi,>s re,arkably s)bservient and, not least for this reason, )npop)lar ad,inistration (as replaced in Aan)ary 19"3 by a transitional !overn,ent headed by another of the kin!>s confidant>s (ho r)led for five ,onths (hile treaty ne!otiations (ith the British !overn,ent be!an and 8!yptian parties prepared for ne( elections. &hro)!ho)t, E-bb)d and other notables so)!ht to forestall the ret)rn of de,ocracy0or at least the ret)rn of the 'afd. Iollo(in! the forei!n e@ile of E-bb)d>s close palace ally E=brashi, E-bb)d invested heavily in a f)tile atte,pt

by his erst(hile ene,y 9id+i, of all people, to lead a ne( palace1,inority party coalition !overn,ent. B)t the kin! died in -pril, the a)thoritarian re!i,e (as b)ried by the avalanche of pop)lar s)pport for the 'afd party in the Gay 19"3 elections, and the party>s head, /ahhas, finally re!ained the pri,e ,inister>s office. =n retrospect, it appears that E-bb)d Pasha>s rise as a local econo,ic force rested as ,)ch on his close association (ith the 9id+i re!i,e as on his ties to British ,an)fact)rers and financiers. :is o(n reco!nition of this basic factor behind his s)ccess can be !a)!ed by the reso)rces he invested in opposin! the 'afd. -s = have s)!!ested, an e+)ally basic factor !)idin! this fatef)l, proa)thoritarian political t)rn (as his interest in the ,assive -s(an po(er pro2ect, (hich he and a for,idable array of co,petitors envisioned as the cornerstone of a b)r!eonin! and potentially l)crative p)blic co,,it,ent to the develop,ent of the 8!yptian ind)strial sector. &o p)t it si,ply, once the /ahhas faction took control of the party in 19B$, E-bb)d believed that he stood a better chance of !ainin! the contract if the 'afd and its o(n b)siness allies did not control the ad,inistration of the state. -lon! (ith the 'afd, the British residency and Iorei!n ?ffice e,er!ed as a force that ca,e to oppose E-bb)d at a critical 2)nct)re, as he t)rned to )se the capital he had acc),)lated as a co,,ission a!ent and p)blic1(orks contractor to e@pand into ne( sectors of the econo,y. &his conflict (as d)e ori!inally to the (idenin! diver!ence in political preferences be!innin! in 19"B, a proble, that E-bb)d ,ade threatenin! by his re!)lar access to investors and, thro)!h the,, the 8n!lish press and Parlia,ent. &he decision to )nder,ine a val)ed 8!yptian partner of British b)siness circles (as do)btlessly ,ade easier by the si,)ltaneo)s, rapid e@pansion of invest,ent ties to E-bb)d>s ,ain co,petitors, the Gisr !ro)p. - Times dispatch on " -pril 19"5, reportin! on an )pco,in! 8!yptian trade ,ission to .ondon, provides a concise s),,ary of the )nfoldin! reali!n,ent of political1econo,ic blocs in inter(ar 8!ypt. -s the Iorei!n ?ffice ,ade clear, the visit (as desi!ned to help ce,ent -n!lo18!yptian econo,ic ties, yet E-bb)d, the one 8!yptian investor ,ost closely identified (ith British capital, had been pointedly e@cl)ded. =nstead, E-fifi, one of his chief political ene,ies, led the dele!ation. &he for,er a,bassador to .ondon had been appointed ,ana!in! director of the Gisr !ro)p>s ne( ins)rance 2oint vent)re, and :arb, the Gisr !ro)p>s heralded chair,an, 2oined his ne(est b)siness partner in the hi!hly sy,bolic pil!ri,a!e to 8n!land. M M M

The 12*-B12*2 5s,an !ound" Aailure of the EEC #loc

=n the second, protracted ro)nd of ne!otiations to obtain the -s(an pro2ect bet(een 19"5 and 19"9, the relative positions of the rival invest,ent blocs (ere basically reversed. &he bloc ori!inally b)ilt aro)nd Focker>s ,)ltinational po(er consorti), and associated locally (ith E-bb)d paid

heavy political costs for its a!!ressive p)rs)it of the electrification b)siness. Focker had finally (ithdra(n fro, the sche,e, b)t his s)ccessors at the electrical1,an)fact)rin! con!lo,erate he helped to create, -8=, fo)nd the,selves at a serio)s disadvanta!e in the chan!ed political circ),stances of the ,id119"#s and driven to search for an alternative to the E-bb)d !ro)p. =n contrast, the co,petin! 88C bloc reaped the political (indfall. &he co,pany>s local representative prepared the !ro)nd for a rene(ed p)sh on the pro2ect virt)ally fro, the day the /asi, !overn,ent took office. 9i!nificantly, the 88C bloc pressed for and event)ally obtained the active involve,ent of the British Iorei!n ?ffice and residency e,bassy in the ne( bar!ainin! ro)nd. By 19"%, the intervention of the British state in s)pport of the -s(an sche,e had been recast in ter,s of sec)rin! a vital strate!ic interest, in anticipation of the prod)ction and s)pply proble,s that (o)ld invariably acco,pany a (ar (ith Ler,any.

The Diplo(acy of Neocolonialis(

Fespite the threat to (ell1established co,petin! sectoral interests, s)ch as British shippers and investors in Chile>s nitrate ind)stry, by 19"B 8n!land>s Fepart,ent of ?verseas &rade had )ne+)ivocally endorsed the proposed 8!yptian i,port1s)bstit)tion fertili4er ind)stry. &he British state fra,ed its s)pport as an alle!edly lon!1held C!eneral ,a@i,D of the !overn,ent not Cto atte,pt to fr)strate the develop,ent of local ind)stries in forei!n co)ntries.D[).] =n doin! so, policy,akers (ere ad2)stin! i,perial policy in response to the f)nda,ental shift )nder(ay in the str)ct)re of the !lobal econo,y, as (ell as ali!nin! (ith (hat, borro(in! fro, Ier!)son 519%";, ,i!ht be labeled Britain>s o(n nascent internationally oriented ,an)fact)rin! bloc, the heavy1electrical1,achinery prod)cers chief a,on! the,. &he depression had hastened the decline in the fort)nes of this hard1 hit sector, and, as a res)lt, e@ec)tives of lar!e and teeterin! fir,s like 88C and -8= redo)bled their efforts to e@ploit ne( ,arkets, fro, 8!ypt to the 9oviet Union. &he depression )ndo)btedly intensified interest inside 8!ypt in b)ildin! a do,estic fertili4er ind)stry in order to sec)re the s)pply of an increasin!ly vital a!ric)lt)ral inp)t. /itrate i,ports had started to !ro( enor,o)sly in the 19B#s, as c)ltivators so)!ht to co)nter the adverse i,pact of their croppin! patterns and irri!ation techni+)es on soil fertility. -s an indicator of the i,portance of this f)nda,ental chan!e in a!ric)lt)ral prod)ction, Richards records a 6## percent rise in total fertili4er i,ports over the period 19B#J19"$ 519%#: 33;. Bet(een 19B9 and 19"B, i,ports fro, 8!ypt>s ,ain s)ppliers fell by al,ost 6# percent, even (hile prices (ere droppin!. &he lack of forei!n e@chan!e drove 8!yptian investors to concl)de a series of co,plicated cotton1for1fertili4er barter arran!e,ents (ith Ler,an che,ical prod)cers in 19"1 and a!ain in 19"6. 8!ypt had e,er!ed as one of the ,ost i,portant ne( e@port ,arkets for an

international ind)stry that entered the depression already s)fferin! the effects of e@cess capacity, declinin! prices and risin! tariffs 59tockin! and 'atkins 19637 U.9. &ariff Co,,ission 19"$: 1B, 1137 GonteZn 19%B7 ?>Brien 19%9;. 8!ypt (as the seventh lar!est i,porter of che,ical nitro!en 5nat)ral and synthetic; in 19B9, rankin! behind the United 9tates, 9pain, Irance, Aapan, the /etherlands and Bel!i),. By 19"6 it had cli,bed to fo)rth. =t (as the third lar!est c)sto,er for e,battled, Chilean1based ,iners and e@porters of nat)ral sodi), nitrate, (hose1once do,inant position in the (orld ,arket had been eclipsed by synthetic prod)cers, like the U.N.>s =,perial Che,ical =nd)stries 5=C=; and the Ler,an !iant =L Iarben. &he collapse of a!ric)lt)ral ,arkets in 19B9 bro)!ht abo)t a crisis for the ind)stry and sp)rred the efforts by =C= and =L Iarben to or!ani4e an international cartel for control of prod)ction, prices and ,arkets. &h)s, the prices (hich 8!ypt paid for fertili4ers fro, 19B9 )ntil 'orld 'ar == (ere !enerally fi@ed by the cartel>s ,e,bers, tho)!h disp)tes (ith the Chilean prod)cers led to breakdo(ns of the cartel and severe price (ars bet(een the, and the synthetic prod)cers in 19"1J19"B and a!ain in 19"6 5Reader 19$#, B: 16%J15#7 U.9. &ariff Co,,ission 19"$: %BJ%3;. =n addition, the cartel apportioned the 8!yptian ,arket a,on! the vario)s prod)cers. 8@a,inin! 8!ypt>s i,port fi!)res for 19"B, = fo)nd that the proportions of the synthetic ,arket to Ler,an [ /or(e!ian 5=L IarbenJcontrolled; [ U9 i,porters e+)aled %# percent, (hile UN [ F)tch totals e+)aled B# percent0 that is, the e@act +)otas set by the cartel. 'hile = do not have specific data linkin! =C= to the F)tch ind)stry, British, =talian and Bel!ian capital acco)nted for 5# percent of the total capital of the ,a2or prod)cin! plants there. &hese plants incl)ded holdin!s by Banca Co,,erciale, Royal F)tch 9hell, and Ban+)e de Br)@elles, accordin! to the U.9. &ariff Co,,ission 519"$: 139J1$#;. U.9. interests did not participate directly in the cartel, b)t the C!rand allianceD bet(een =C= and F)pont and a series of specific a!ree,ents ne!otiated (ith =L Iarben )ndo)btedly sec)red the cooperation of ,a2or /orth -,erican prod)cers 59tockin! and 'atkins 1963: 169J1567 Reader 19$#, B: 61"J615, 6B%J66"7 &aylor and 9)dnik 19%6: 9BJ1#5, 133;. &he cartel helped =L Iarben and the other ,e,bers of the Ler,an fertili4er syndicate i,prove their position in the 8!yptian ,arket at a critical ti,e. &ho)!h 8!ypt did not rank as a ,a2or i,porter of Ler,an sodi), nitrate before or!ani4ation of the cartel, d)rin! 19"#J19"6 it ranked second after Irance. -t the sa,e ti,e it beca,e the sin!le lar!est p)rchaser of nitro!en fertili4ers fro, Ler,any. 9i,ilarly, it !)aranteed 5Ler,an1controlled; /or(e!ian prod)cers their second lar!est ,arket for calci), nitrate 5U.9. &ariff Co,,ission 19"$: 161J16B, 13$;. &h)s a second set of co,petin! sectoral interests (as !rad)ally and )navoidably dra(n into the -s(an b)siness. &he Chilean /itrate 8@port -ssociation had no choice b)t to oppose the plans for an i,port1s)bstit)tion ind)stry since 8!ypt (as one of the only lar!e ,arkets left to this

belea!)ered ,inin! ind)stry. &he lar!e, technolo!ically advanced che,ical fir,s like =C= and =L Iarben (ere better able to adapt to the )nderlyin! (eaknesses in the nitrate ,arket, leadin! the, !rad)ally to ass),e a ,ore fle@ible position on the +)estion of s)pportin! local ind)stry. &h)s, accordin! to a 19B9 co,,)nication bet(een =C= and =L Iarben, (ritten (hen the first cartel a!ree,ent (as bein! ne!otiated: C=t is certain that as soon as the e,pire ,arkets sho( a de,and s)fficiently lar!e to 2)stify the creation of a ho,e nitro!en ind)stry,RPiQt (ill be created, if not by )s then by others. =t is to the 2oint interest of both parties that (e sho)ld participate in s)ch plants, rather that they sho)ld be p)t )p by third partiesD 5Reader 19$#, vol. B: 116;. =n broad ter,s, =C=, (hich represented another basic advanced ind)strial sector, (as also shiftin! to(ard a ,ore Cinternationally1orientedD invest,ent strate!y in the inter(ar period, tho)!h perhaps (ith less enth)sias, than the heavy1electrical1,achinery prod)cers. &he record of the 19"5J19"9 -s(an bar!ainin! ro)nd sho(s =C=>s ,ana!ers actin! accordin! to a distinct set of preferences: first, that the 8!yptians not b)ild a do,estic ind)stry, and a distant second, that =C= )ndertake the pro2ect 5econo,ical or not; rather than face the loss of the l)crative 8!yptian ,arket to a co,petin! prod)cer. &he a,bivalence )nderlyin! =C=>s CcooperationD created an i,portant co,plication for (hat = have labeled the do,inant 88C bloc. Fespite the si!nificant ,o,ent), to see the pro2ect thro)!h before the o)tbreak of the (ar, =C=>s ,ana!ers (ere never co,pelled to ad2)st their preferences and to lobby on behalf of the sche,e. &o the contrary, they re,ained opposed to it and consistently co)nseled 8!yptian officials to abandon the fertili4er1factory pro2ect. /ationalis, 5British not 8!yptian; (as th)s a factor shapin! the Iorei!n ?ffice>s increasin!ly partisan s)pport of the 88C bloc in the 19"5J19"9 -s(an ro)nd, b)t this defensive ideolo!ical post)re (as itself a reflection of the deepenin! proble,s in Britain>s ind)strial econo,y. /ot only had forei!n and, in partic)lar, U.9. capital been ,akin! deeper inroads into the e,pire>s once vast econo,ic preserves0oil, en!ineerin!, electric po(er, finance, co,,)nications, ,inin!, etc.0b)t -,erican investors (ere also b)yin! )p strate!ic British ind)stries. &he heavy1electric1e+)ip,ent sector is a spectac)lar case in point. Focker>s role in dis!)isin! -,erican control of -8= had ca)sed a political )proar in .ondon. Recall that -8= (as an -,erican1created and 1controlled holdin! co,pany 5altho)!h L.8. e@ec)tives red)ced their ,a2ority holdin! to appro@i,ately 6# percent in 19"5;, (hich in t)rn controlled t(o separate 5noninte!rated; ,an)fact)rin! fir,s, Getrovick and British &ho,son :o)ston Co,pany 5B&:;. Both of these s)bsidiaries (ere co,petin! for the -s(an contract. B&: s)pplied the en!ineerin! e@pertise and e@pected to b)ild the t)rbines and !enerators for a consorti), that (as fronted by a s,aller British electrical fir,, Cro,pton Parkinson, (hich held shares in a ne(ly fo)nded co,pany deliberately na,ed CBritishD /itro!en 8n!ineerin! 5B/8;. B/8 (as a 2oint vent)re (ith Che,ical Constr)ction Corporation, (hich in t)rn (as a U.9. s)bsidiary of -,erican Cyana,id Corporation. B/8 (as to desi!n and r)n the nitrate factory. Fiplo,atic s)pport in 8!ypt see,ed to hin!e on the

Iorei!n ?ffice>s assess,ent of the CrealD national co,ponent in these ne(, lar!e international vent)res.[)0] &he ,ana!ers of the ailin! British1based electrical1,an)fact)rin! fir,s (ere desperate to e@ploit any possible ,ar!inal advanta!e in the co,petition for the -s(an contract. &h)s, in 19"5, -8=>s leadership scra,bled to create a credible British faYade for a consorti), that had also co,e to incl)de -,erican Cyana,id Corporation, a ,a2or U.9. nitrate prod)cer, and the corporation>s British principals pressed the residency for s)pport on the )ntr)e and )nconvincin! !ro)nds that it (as free of any -,erican Ctaint.D[)1] &heir co,petitors (ere ,ore s)ccessf)l, tho)!h no less scr)p)lo)s. &he chair,an of the board of 88C and its ,ana!in! director, .ord /elson, traveled to 8!ypt in Aan)ary 19"5, (here he enco)ra!ed /asi,>s cabinet to re2ect -8=>s sche,e as C-,erican (ith an 8n!lish veneer.D[)2] &his clai, (as tr)e b)t disin!en)o)s, co,in! fro, a corporate e@ec)tive hand1picked by -,erican interests to head 88C follo(in! the secret bailo)t of the financially strapped electrical !iant. &he 88C e@ec)tives indeed appear to have sec)red (hat Aones and Garriott called the Cfiction of British controlD 519$#: 1"6;. Gakers of forei!n policy endorsed the 88C>s bid on nationalist !ro)nds and lent the !ro)p privile!ed s)pport in Cairo7 this s)pport incl)ded close, +)iet and effective coordination (ith the 8!yptian state>s re,ainin! senior 5British; ,inisterial advisers. &he 88C directors praised the financial adviser, a one1ti,e opponent of the pro2ect, (ho (as kept officially apprised of CF?& attit)des.D &he chief irri!ation official servin! on E-bd al1'ahhab>s technical co,,ittee provided details of the co,,ittee>s deliberations to the residency and, no do)bt, to his friend, V. B. Lrey, the 88C representative in Cairo. -t one point Lrey called hi, the Cvital co!D in the ne!otiations.[*3] &he records of the Iorei!n ?ffice also confir, Aones and Garriott>s concl)sion that =C= had cooperated (ith -,erican investors in the bailo)t of the 88C 519$#: 1B%J16"; and helped to s)pply the 8n!lish CveneerD in this partic)lar case. &he proble,, as 88C representatives frankly ad,itted, (as that =C= belon!ed to Ca syndicate (hich controlled the policy of the 88C,D and =C= so)!ht to CdivertD the 8!yptians Cfro, their -s(an da, sche,e.D[*1]

The >une 12*- Declaration

&he 88C>s concerted, si@1,onth1lon! ca,pai!n res)lted in a favorable decision by /asi,>s cabinet in A)ne 19"5, a date that conventionally serves as a bench,ark in the history of the develop,ent pro2ect. /asi,>s cabinet officially endorsed the b)ildin! of the po(er plantJfertili4er factory co,ple@, (hile decidin! to bypass the )s)al syste, of open tender for the contract. =nstead, the !overn,ent ranked the co,petin! pro2ect proposals and a)thori4ed the finance ,inister, E-bd al1'ahhab, to be!in ne!otiations (ith the 88C and =C=. &his last point, (hich dre( i,,ediate protests fro, dis!r)ntled co,petitors like E-bb)d, re,ained the s)b2ect of contin)in!

political controversy for years. Ior instance, British policy,akers abandoned all pretense of ne)trality and insisted that the cla)se co,,itted the 8!yptians to si!n (ith these specific fir,s. -nd the 19"3J19"$ 'afd ad,inistration )sed this sa,e a!ree,ent in atte,ptin! to deflect criticis, for its decision to res),e ne!otiations (ith the 88C1=C= consorti),. &he residency>s files identify E-bd al1'ahhab as the architect of the policy, and the actions of this hi!hly re!arded official in the finance ,inistry re+)ire so,e e@plication. &ho)!h he is no( conventionally depicted as a nationalist and a technocrat, his opponents at the ti,e attacked hi, for allo(in! the creation of a ne( private forei!n concession rather than appointin! 8!yptian en!ineers to r)n the po(er plant 5the Times " A)ne 19"57 Cha,ber of Fep)ties 196%: 57 E-bd al1E-4i4 -h,ad 1955: 59J3B;. 8lse(here, of co)rse, p)blic o(nership of po(er reso)rces (as beco,in! increasin!ly co,,on. -nother, even ,ore (idespread criticis, centered on the ,inister>s re,arkable decision to ins)late the co,panies fro, the co,petitive press)res of an open tender, partic)larly (hen =C=>s rel)ctance to carry o)t the pro2ect (as (ell kno(n.[*)] &he !overn,ent te,porarily forestalled a p)blic vettin! of the technical criticis,s, b)t it (o)ld later provide po(erf)l a,,)nition for the 88C =C=>s co,,ercial rivals. &he Iorei!n ?ffice e@plained these choices as the res)lt lar!ely of E-bd al1 'ahhab>s deter,ination to stop the E-bb)d !ro)p fro, obtainin! the contract. &he e@planation (as certainly pla)sible, !iven the depth of anta!onis, to E-bb)d and his palace allies, and it (as an ob2ective that British policy,akers !enerally shared. Ior this reason, they enco)ra!ed the ca,pai!n and, )ns)rprisin!ly in this case, evinced little concern for the s)dden and obvio)s depart)re fro, lon!1standin! proced)res in the a(ard of a ,a2or contract. /onetheless, E-bd al1'ahhab and his British allies fo)nd it diffic)lt to e@plain (hy the p)blic interest (o)ld not be better served by 2)d!in! the co,petin! fir,s> proposals on their technical ,erits. &he pro,otion of the 88C>s -s(an sche,e sheds ne( li!ht on E-bd al1 'ahhab>s brand of b)siness nationalis, and ,)st be vie(ed as part of a broader effort in s)pport of a neo1-n!lo18!yptian private invest,ent bloc. -s an official at the finance ,inistry, E-bd al1'ahhab had played a pivotal role, since at least 19"B, in the 2oint vent)res that the Gisr !ro)p had for,ed (ith British investors, (hile as ,inister he sponsored the 19"5 Gisr !ro)pJled trade ,ission to .ondon. &he effort c)l,inated in the ,assive te@tile 2oint vent)re that Bank Gisr ne!otiated in 19"$J19"%, a!ain (ith the close participation of E-bd al1'ahhab, (ho resi!ned his !overn,ent post in Gay 19"3 and 2oined the boards of several of the !ro)p>s enterprises 5Favis 19%": 15#J15"7 &i!nor 19%9: 6#J617 Feeb 19$9: B"B;. &he contents of his o(n !ro(in! invest,ent portfolio ,ay also help e@plain (hy E-bd al1'ahhab did not press)re =C= to )ndertake the nitrate vent)re. &he technical co,,ission that he headed in 19"5 had also p)t for(ard the alternative for the first ti,e of )sin! electric po(er to ,ine and process the re!ion>s iron1ore deposits 5Egyptian 7a8ette 11 /ove,ber 19"$7 the Times B5 Iebr)ary 19"%;. :e retired the follo(in! year to beco,e the first

chair,an of a ne( -n!lo18!yptian 2oint vent)re holdin! the concession for ,ineral ri!hts in -s(an.[**] &he 88C bloc>s drive to !ain the contract lost ,o,ent), (ith the chan!e in !overn,ent in Aan)ary 19"3. E-li Gahir, the palace loyalist appointed to oversee the Gay elections, is alle!ed to have )sed his po(er to sidetrack E-bd al1'ahhab>s initiative. &he forei!n investors bla,ed the setback on the )nd)e infl)ence of E-bb)d and his allies, altho)!h one of Gahir>s o(n advisers (as heavily critici4in! the plan, and his ob2ections h)rt the 88C>s ca)se. 8ven the hi!h co,,issioner, .a,pson, fo)nd the ob2ections convincin! and held back his s)pport at a critical ,o,ent. E-bb)d !ained little by the delay, ho(ever, partic)larly (hen (ei!hed a!ainst his o(n di, f)t)re prospects. :is ostensible partners in the -s(an b)siness increasin!ly vie(ed hi, as a liability. /ational elections ret)rned the 'afd to po(er, and as E-bb)d )ndo)btedly kne(, one of the party>s top leaders (as a paid cons)ltant to the 88C. -t the sa,e ti,e, .ondon policy,akers (ere directin! .a,pson to see the inco,in! pri,e ,inister, /ahhas, as soon as possible and to press hi, for a favorable decision on the 88C sche,e.[*+]

The 12*.$12*0 Wafd %o ern(ent and the 5s,an ProCect

&he pop)larly elected 'afd !overn,ent )nfort)nately proved no ,ore s)ccessf)l than its predecessors at resolvin! the conflicts that s)rro)nded develop,ent plans for -s(an. &o the contrary, these co,,ercial tan!les threatened to topple the !overn,ent in Garch 19"$ and contrib)ted to another in the series of historic splits (ithin the 'afd, leadin! to the for,ation of a dissident 9aEdist party 5na,ed for the 'afd>s fo)nder, 9aEd Oa!hl)l; by Aan)ary 19"%. Fespite the stron! press)re by the s)pporters of the 88C1backed sche,e, the 88C coalition failed to obtain the contract. &his setback co)ld (ell have been overdeter,ined by the circ),stances s)rro)ndin! the 'afd>s ret)rn to po(er. &he party leadership si!ned a historic treaty of alliance (ith Lreat Britain in -)!)st 19"3, (hich b)rdened 8!ypt (ith increased defense1 constr)ction o)tlays (hile per,ittin! British troops to re,ain on 8!yptian territory. =n the treaty>s (ake, the pro188C bloc (o)ld face stiffened resistance to p)blic f)ndin! of the proposed pro2ect.[*-] &he political costs of the treaty (ere probably of even !reater conse+)ence ho(ever. &ho)!h the /ahhas !overn,ent rallied parlia,ent and the 'afd>s hard core behind it, ,any 8!yptians conde,ned the treaty, believin! that the party had fatef)lly co,pro,ised the lon!standin! !oal of co,plete independence. /ahhas faced !ro(in! divisions inside the party leadership and ,o)ntin! losses in the party>s once1solid pop)lar base, (hich the opposition factions so)!ht to e@ploit. 9id+i, the for,er pre,ier and E-bb)d>s ne( b)siness partner, e,er!ed as leader of an opposition bloc that also incl)ded E-bb)d>s palace ally, E=brashi. Uns)rprisin!ly, the b)siness,an>s na,e (as pro,inently linked to the opposition, b)t E-bb)d, (ho had slo(ly be!)n to repair his relations (ith the

British e,bassy, tried to deny a role in the anti1'afd bloc. &his denial (as scarcely believable, 2)d!in! fro, the acco)nts of British diplo,ats, partic)larly once the opposition be!an to foc)s its attack on the !overn,ent>s -s(an policy and the decision to res),e e@cl)sive ne!otiations (ith the 88C.[*.] &hat opposition to the policy inside the 'afd>s leadership (as led by -h,ad Gahir, (ho the British so)rces identified as one of E-bb)d>s closest friends and b)siness partners 5and )lti,ately the fo)nder of the breaka(ay 9aEdist party;, reinforced the perception of hopelessly entan!led political and co,,ercial factors at (ork in the !overn,ent>s event)al fall. &he circ),stances (ere hardly a)spicio)s for the 88C and its local allies. -ltho)!h the 'afd leadership elected to res),e ne!otiations (ith the consorti), led by the 88C and favored by the British e,bassy, rather than holdin! an open tender, the electrical1,an)fact)rin! fir, still had no s)re (ay of sec)rin! the cooperation of the che,ical ind)stry in the pro2ect. &he threat of co,petition (as the one real possibility for infl)encin! =C= to b)ild a local nitrate plant in 8!ypt, yet the !overn,ent, a!ain (ith British backin!, ,oved precisely in the opposite direction, ,arshalin! its for,idable po(ers to ,ake s)re that E-bb)d and allied co,petitors (ere e@cl)ded fro, this partic)lar arena. -nd as the 'afd leadership ,)st have e@pected, the ne( ro)nd of ne!otiations (ith the 88C left the, v)lnerable to attack fro, a broad array of opponents, all of (ho, co)ld rally )nder the banner of nationalis, 5(ith so,e le!iti,ate 2)stification, it t)rns o)t; in assailin! the !overn,ent>s policy. /ahhas>s o(n cabinet and party (ere both divided over the iss)e, and the attacks in the press and other p)blic ven)es !re( increasin!ly po(erf)l thro)!h 19"$, partic)larly once acco)nts of the internal splits be!an to appear, to!ether (ith revelations of Ginister EUth,an G)harra,>s personal connections to the 88C. &he ,ost o)tspoken in this re!ard (as al-Balagh# a lon!1ti,e pro1'afd or!an (hose editor, E-bd al1Wadir :a,4a, be!an (ritin! a!ainst the 'afd follo(in! the -)!)st 19"3 treaty. Both the British a,bassador and the 88C>s local representatives sa( the hand of E-bb)d and 9id+i behind the press ca,pai!n.[*0] =n response to its critics, the !overn,ent ar!)ed that it had little choice b)t to honor the co,,it,ent of its predecessors, set do(n in the A)ne 19"5 letter fro, the 8!yptian !overn,ent to the 88C, (hile pointin! o)t that it had (on ne( concessions fro, the co,panies that preserved vital 8!yptian national interests. E-bd al1E-4i, Ra,adan 519%"; relies on the sa,e ar!),ents in defendin! the 'afd>s policy, altho)!h both clai,s (ere disin!en)o)s at best, and the !overn,ent>s p)blic positions are clearly contradicted by the archival acco)nt. /ahhas>s i,,ediate predecessor as pri,e ,inister had already e@plained privately ho( the 8!yptians (ere free to break off ne!otiations (ith the 88C at any point, a co)rse (hich a s)ccessor, palace1backed ad,inistration p)blicly and )nhesitatin!ly adopted a fe( years later.[*1] &he 'afd !overn,ent>s feeble defense of its actions si,ply reinforces ,y

do)bts abo)t the coherence of its -s(an policy. /ahhas and his closest allies in the party and cabinet, in partic)lar his ,inister of finance, Gakra, EUbayd, (ho played a co,,andin! role in the -s(an b)siness, (ere en!a!ed in a co,plicated, ,)ltisided bar!ain. Un(illin! either to open the door to E-bb)d or to close the door on the 88C, partic)larly !iven the insistent press)re of the British !overn,ent>s representatives, the 'afd>s leadership si,ply let the -s(an ne!otiations han!. -t the sa,e ti,e, they be!an to enco)ra!e the set of forei!n and local investors pro,otin! alternatives to the fertili4er1factory pro2ect. &hese alternatives incl)ded b)ildin! a do,estic steel ind)stry at -s(an or, as a Ler,an consorti), led by the notorio)s ?tto 'olff !ro)p proposed, ,inin! iron ore in the re!ion for ship,ent back to Ler,any. =t t)rns o)t that a third local investor coalition, the <ahya !ro)p, reaped the !reatest (indfalls fro, the bar!ain, event)ally e,er!in! as a !)idin! force behind the pro,otion of this ne( ind)strial sector. -t the sa,e ti,e, <ahya and his partners (ere abo)t to start prod)ction at the co)ntry>s first s)perphosphate plant at Nafr al1Oayat, o)tside of Cairo. =n effect, these investors s)ccessf)lly checked the advance of the 88C in favor of their o(n rival clai,s to the state>s reso)rces. 'ithin a year, the <ahya !ro)p be!an s)ccessf)lly to pro,ote the idea of b)ildin! a coal1po(ered nitrate factory in the 8!yptian Felta. Gean(hile, the 88C>s efforts to b)ild a hydropo(er ind)stry in 8!ypt ran o)t of stea, 5the Times B5 Iebr)ary 19"%7 al-Balagh 16 9epte,ber 19"$;.

The Ca&inet Crisis of 6arch 12*0

&he battle for the -s(an concession reached a cli,a@ in Garch 19"$, (hen Pri,e Ginister /ahhas narro(ly averted0or, ,ore acc)rately, delayed0a split in his cabinet and party over the privile!ed position see,in!ly bein! accorded the 88C and its allies. /ahhas>s foes had chosen the eve of the pri,e ,inister>s sched)led depart)re for the Gontre)@ talks, (here 8!yptians (ere finally to ne!otiate the end of the forei!n1i,posed and bitterly resented Capit)lations, to try and force the !overn,ent to reopen the -s(an sche,e to international tender. Under orders fro, the U.N. Fepart,ent of ?verseas &rade, the British a,bassador and his staff had 2oined (ith 88C e@ec)tives and their local partners in a concerted ca,pai!n to press)re the /ahhas !overn,ent to concl)de a contract. =n response, E-bb)d and his coinvestors str)ck back in the press and other ven)es, seekin! to ,obili4e opposition thro)!h ti,e1 tested appeals to 8!yptian nationalis, by char!in! the 'afd (ith failin! to look after the co)ntry>s precio)s reso)rces. &he 'afd>s finance ,inister, Gakra, EUbayd, ,ana!ed to o)t,ane)ver the pro1E-bb)d factions inside vario)s advisory co,,ittees. &hen, in a lon! and tense cabinet session on "1 Garch 19"$, three of /ahhas>s ,inisters, led by the o)tspoken 'afd party e@ec)tive ,e,ber and ,inister of co,,)nications, Gah,)d Iah,i al1 /)+rashi, threatened to resi!n )nless the -s(an pro2ect (as opened to p)blic ad2)dication. /ahhas finally diff)sed the crisis by a!reein! to create yet t(o ne( international advisory co,,ittees to revie( the 88C1desi!ned

electrification sche,e and deter,ine (hether it (as feasible to open all or parts of it to p)blic tender (itho)t co,pro,isin! proprietary technolo!y.[*2] &here is little ,ystery in this bald po(er play inside the cabinet. =ts p)rpose (as to )nder,ine the 88C>s backers inside the cabinet, and the anti188C bloc chose a partic)larly strate!ic ,o,ent to p)sh on this front. -s Gakra, EUbayd confided to .a,pson, /ahhas (as forced to co,pro,ise rather than Cprecipitate an internal political crisisD on the eve of the Gontre)@ talks 59illearn Diaries 1 -pril 19"$;. Liven both the sy,bolic and ,aterial i,portance attached to abolishin! the Capit)lations, /ahhas si,ply co)ld not afford to break )p the !overn,ent. Ior the sa,e reason, fe( if any of the key fi!)res in the diverse opposition bloc of b)siness investors and 'afd dissidents 5in the case of -h,ad Gahir, the ,a2ority leader in the Cha,ber of Fep)ties, the distinctiveness of the t(o cate!ories collapses;, for,er 'afdists and pro,onarchists, (o)ld have (anted the !overn,ent to fall at that precise point. &his re,arkable intr)sion of co,petitive conflicts into the cabinet>s cha,bers has !one )nnoticed in ,ost acco)nts, tho)!h it (as directly responsible for the p)r!e of the cabinet dissidents three ,onths later, (hich in t)rn led to another of the historic splits (ithin the leadership ranks of the 'afd. /ahhas had noted as ,)ch, ass)rin! the British a,bassador, .a,pson, that he (o)ld p)r!e the cabinet once he ret)rned fro, Gontre)@, C(ith the Capit)lations iss)e safely in his pocketD 59illearn Diaries 1 -pril 19"$;. Io)r ,onths later, after cons)ltin! (ith British officials, /ahhas s),,arily fired fo)r of his ,inisters, incl)din! /)+rashi, and then atte,pted to (ithstand the backlash as the erst(hile officials t)rned to the pa!es of the opposition press for reven!e. Gean(hile, Gakra, EUbayd and other party leaders contin)ed to (ork closely (ith both the 88C e@ec)tives and the British a,bassador to try to ste, the da,a!e 59illearn Diaries 1 -pril, "1 Gay and B$ A)ly 19"$7 Egyptian 7a8ette 6 , 1", 1$J1% and B1 -)!)st 19"$7 al- hram 11J1B, 16J15, 1$J1% and B# -)!)st 19"$7 ;u8 al6usuf 695, "# -)!)st 19"$;. .a,pson and the co,pany officials helped to (rite the letter that EUbayd Gakra, event)ally sent to the co,paniesH &he British e,bassy helped the co,panies draft their reply. &he inter,ediary in these e@chan!es (as -,in EUth,an, a risin! star in the 'afd and a b)siness,an (ho served as .a,pson>s )nerrin! so)rce on 'afd party politics.[+3] E-bb)d and his coinvestors, (ho, .a,pson and others bla,ed for orchestratin! the ca,pai!n, in this case s)cceeded in shapin! their co,,ercial a!enda to confor, to 8!yptian nationalist disco)rse,linkin! the 88C, the 'afd, forei!n e@ploitation and corr)ption in a partic)larly co,pellin! (ay. /ahhas and his closest collea!)es fo)nd the,selves increasin!ly on the defensive, forced to rationali4e thep)blic1(orks ,inister>s personal b)siness ties to the 88C as (ell as the !overn,ent>s contin)ed ref)sal to consider co,petin! bids for the (ork. &he e,battled leadership of co)rse also atte,pted to )se the disco)rse of

nationalis,, tho)!h their appeals ran! hollo(. &h)s, the sta)nchly pro1'afd editors of al-'isri asked (hether Gakra, EUbayd deserved Cto be bla,ed beca)se he did not leave the sche,e in forei!n hands, and the (hole co)ntry at the ,ercy of forei!n contractors*D 5translated in Egyptian 7a8ette 1$ -)!)st 19"$7 al-Balagh 3 9epte,ber 19"$7 ;u8 al-6usuf 69$, 1B 9epte,ber 19"$;. E-bd al1E-4i, Ra,adan 519%": $"J1B#; )sed the sa,e ar!),ent in his defense of the 'afd. Ior this reason, a rare atte,pt to deconstr)ct these conventional and rote nationalist appeals see,s partic)larly co,pellin! no(. -s an )nna,ed ,inister in /asi,>s 19"6J"3 cabinet analy4ed the disp)te, in an intervie(, Cthe disc)ssion is ,erely the res)lt of trade co,petition bet(een the co,paniesRand every line (ritten on this s)b2ect, on the prete@t of attackin! the present !overn,ent, is to ,ake propa!anda in favor of the co,panies co,petin! a!ainst the co,pany chosenD 5al-'u"attam B1 9epte,ber 19"$;. = believe that the pri,e ,inister>s inner circle finally ca,e to see the co,,it,ent to the 88C sche,e as a political handicap and tried, too late, to distance the,selves fro, the -s(an pro2ect. &he political controversy cataly4ed by the dis,issal of the cabinet ,inisters in -)!)st stren!thened the opposition, (hich adopted an increasin!ly a!!ressive and confrontational stance a!ainst the !overn,ent. &he 88C>s initiative abr)ptly !ro)nd to a halt. =n .ondon, officials of the Fepart,ent of ?verseas &rade (anted the e,bassy to ,ake ne( entreaties, b)t in an e@ceedin!ly pessi,istic dispatch, in /ove,ber 19"$, .a,pson advised a!ainst intervention since it (as clear that the 'afd !overn,ent (as teeterin!. ?ne ,onth later, a ne(ly e,po(ered, ei!hteen1year1old Nin! Iar)+ dis,issed /ahhas>s !overn,ent on the prete@t of brin!in! !ood !overn,ent to 8!ypt. Iar)+>s advisers prepared for another ro)nd of ri!!ed elections that ens)red a parlia,entary ,a2ority for a !overn,ent of ,inority1party politicians. &he post1'afd cabinets )nder G)ha,,ad Gah,)d 5Fece,ber 19"$J-)!)st 19"9; and E-li Gahir 5-)!)st 19"9JA)ne 196#;, (hich !overned thro)!h the o)tbreak of the (ar in 9epte,ber 19"9, opted politely b)t )n,istakably to i!nore f)rther initiatives by the 88C and its allies.[+1] ?f co)rse, this response (as co,pletely rational, partic)larly if these !overn,ents accorded so,e si!nificant priority to the develop,ent of an 8!yptian fertili4er ind)stry, since the 88C tea, conspic)o)sly lacked the capacity to deliver the !oods. -s the si!ns of (ar loo,ed on the hori4on, and concerns for f)t)re s)pplies of nitrates !re( ,ore politically pressin!, the 8!yptian !overn,ent t)rned to s)pport the <ahya !ro)p>s ne(, -,erican1 and :)n!arian1backed vent)re to b)ild a fertili4er factory in the Felta, and E-bb)d predictably so)!ht to stop the,. M M M

Su((ary" 4n est(ent %roups and Sectors in the 4nter,ar Political Econo(y

&he record of protracted conflicts in the t(o nascent 8!yptian ind)strial sectors has helped )s see the e,er!ence of the 8!yptian (in! of the ind)strial bo)r!eoisie in a strikin!ly ne( li!ht. F)rin! the decade bet(een 19B$ and 19"3, correspondin! ro)!hly to the t(o -s(an bar!ainin! ro)nds, the investor coalition kno(n as the Gisr !ro)p consolidated its position as a pivotal force in the do,estic political econo,y. =n archetypal fashion, the investors> strate!y foc)sed on b)ildin! a diversified set of state1s)bsidi4ed enterprises. -nd the !ro)p>s e@pansion t)rns o)t to have relied in i,portant part on the cooperation of local political factions, forei!n capitalists as (ell as British policy,akers. =n e@cavatin! the record of the -s(an pro2ect, = obtained a fairly !ood cast of the conto)rs of this broad, loose b)t nonetheless allied set of ,)ltinational fir,s, e,bassy officials, b)rea)crats and party factions in (hat = labeled a neo1-n!lo18!yptian invest,ent bloc 5after the trade dele!ation led by :arb and E-fifi;. =t is hardly spec)lative to s)!!est that this alliance contained the core of s)pport for 5if not the lo!ic of; the controversial -n!lo1 8!yptian treaty of alliance si!ned by the /ahhas !overn,ent in -)!)st 19"3. :arb and his coinvestors had, in a sense, replaced the 9)arVs !ro)p as a linchpin of the postcolonial political econo,y, a fact reco!ni4ed and reinforced by the efforts of British officials 5and for,er officials; to ne!otiate 5and cash in on; s)ccessf)l 2oint1vent)re arran!e,ents (ith British shippers, ins)rers and ,an)fact)rers. &his process is doc),ented +)ite caref)lly in &i!nor 519%9;. &he Gisr !ro)p>s s)ccess (as fittin!, and its (illin!ness to ass),e the role perhaps less s)rprisin! than e@ceptionalist historio!raphy has s)pposed, !iven that :arb entered b)siness )nder the 9)arVs>s (in!s and b)ilt his bankin! !ro)p based on bl)eprints dra(n 2ointly (ith the,. &his chapter has helped )s to appreciate the contin)ity )nderlyin! the acc),)lation ,odel p)rs)ed by a ne( !eneration of inter(ar 8!yptian investors. &he key here of co)rse re,ained the private appropriation of p)blic reso)rces in the for, of concessions, s)bsidies, capital, etc., and the carvin! o)t 5or redivision; of ne( and virt)ally )nre!)lated CprivateD ,onopoly and oli!opoly sectors. &his basic strand of contin)ity in b)siness1!ro)p for,ation bet(een ro)!hly 1%9#J191# and 19B#J196#, (hich = )nderscored in Chapter B, can be )sef)lly e@tended and +)alified here by considerin! one of the ,ost salient discontin)ities revealed in the inter(ar records. =n the 1%%#s, British officials in 8!ypt literally took over e@cl)sive control of the 8!yptian state and reshaped basic instit)tions of the political econo,y to ,eet the needs of City ,oney ,ana!ers, .iverpool shippers and Ganchester te@tile fir,s. .ocal capital served as 2)nior partners in this classic late1colonial pro2ect. By the 19"#s, ho(ever, British officials had been red)ced to fi!htin! a lar!ely f)tile, rear!)ard action for a !ro)p of e,battled fir,s and sectors. -s the record of the -s(an ne!otiations ,akes clear, in the 19"#s do,estic 8!yptian

investors s)ch as E-bb)d !re( increasin!ly threatenin! to British interests, not least beca)se they (ere dee,ed vital to preservin! (hat re,ained of a d(indlin! set of colonial1like privile!es. &he t(o sides of the British state>s relationship to 8!yptian capitalists are ill)strated in the intense ca,pai!n a!ainst E-bb)d and the e+)ally intense co)rtin! of the Gisr !ro)p. &he Gisr !ro)p faced a concerted challen!e for the privile!e of b)ildin! 8!yptian ind)stry. -s the record of the -s(an pro2ect sho(s, d)rin! the key decade bet(een 19B$ and 19"3 E-bb)d for,ed the hi!hly visible a@is of a second, broad and loosely ali!ned political1invest,ent bloc, co,prisin! a !enerally different and identifiable set of forei!n capitalists 5Focker -8= L.8. as opposed to /elson 88C 'estin!ho)se;, b)rea)cratic factions 5Norayyi, vers)s E-bd al1'ahhab; and political factions 59id+i, the palace and the 'afd dissidents as opposed to the 'afd leadership and E-fifi;7 this bloc fo)nd itself increasin!ly on the defensive thro)!h the 19"#s. =f invest,ent blocs in 8!ypt co,peted for the po(er to create, shape and )lti,ately capt)re ne( state1,ediated opport)nities for private acc),)lation, by the close of the decade E-bb)d and his allies appear to have lost the contest. /ot only had they failed to obtain the contract for electrifyin! the da, and b)ildin! the co)ntry>s first nitrate plant, b)t s)pport for the -s(an pro2ect itself (as eroded in the co)rse of the t(o bar!ainin! ro)nds. -s = have sho(n, bet(een 19"$ and 19"9, investors both introd)ced a co,petin! a!enda for hydropo(er develop,ent 5,ineral processin! and steel ,an)fact)rin!; and s)ccessf)lly pro,oted an alternative i,port1 s)bstit)tion nitrate pro2ect 5the Felta 9che,e;. E-bb)d>s invest,ent in the a)thoritarian re!i,e proved enor,o)sly costly. &he close political identification (ith Nin! I)>ad provided his co,petitors (ith a po(erf)l co)nteror!ani4in! principle. &hro)!h the 19"#s, the overlappin! str)!!les over access to reso)rces, acc),)lation of (ealth and control of state po(er (ere often seen and p)rs)ed +)ite specifically as an atte,pt to (eaken or )nder,ine E-bb)d personally0an anti1E-bb)d ca,pai!n. &his atte,pt is (ell doc),ented in private papers and archival records for a (ide spectr), of or!ani4ations, a!encies and factions, incl)din! rival investor !ro)ps, of co)rse, and the British residency, b)t also the British e@patriate co,,)nity ,ore !enerally, b)rea)crats like E-bd al1 'ahhab and the 'afd>s leadership. &he costs for E-bb)d ,anifested the,selves even ,ore plainly, as ,any of these sa,e forces tried to stop the E-bb)d !ro)p fro, e@pandin! its econo,ic holdin!s. &he -s(an pro2ect is the ,ost i,portant case obvio)sly, b)t si,ilar str)!!les took place in other state1sanctioned oli!opolies, incl)din! )rban transport, shippin! and the b)ildin! of p)blic (orks. &hese local b)siness rivals, their (o)ld1be forei!n partners, their political allies as (ell as their political foes, all acted as if each ne( pro2ect or sectoral conflict of interest threatened to )nder,ine a bloc>s position or po(er. =n other (ords, these co,petitive conflicts (ere vie(ed in so,ethin! like 4ero1s), ter,s, (ith investors resortin! to politics constantly in order to avoid or escape the ,arket. &here (as nothin! partic)larly 8!yptian

abo)t this tendency to(ard ,arket avoidance on the part of investors like :arb, E-bb)d and the rest of their inter(ar cohort. &he forei!n fir,s ,ost directly involved in the ,)ltisector conflicts of interest en!endered by the proposed -s(an pro2ect relied on precisely the sa,e strate!y. -fter all, both the nitrate and heavy1electrical1e+)ip,ent prod)cers participated in for,al international cartels. =f the 8!yptians had act)ally si!ned a final contract (ith the 88C, the price of their -s(an t)rbines and !enerators (o)ld have been based on the decisions ,ade at an ann)al ,eetin! in Leneva. Gore cr)cially, the nitrate prod)cers> cartel e@isted in lar!e part in order to prevent co)ntries like 8!ypt fro, developin! local ind)stries of their o(n. &he Chilean e@porters 5representin! an -,erican1do,inated processin! ind)stry;, (ho (ere the (eakest party in the cartel, e@erted e@traordinary ener!y to diss)ade the 8!yptians fro, !oin! thro)!h (ith the pro2ect 5(ith shippers havin! a direct stake in the 9antia!o1-le@andria circ)it enlisted in the effort as (ell;. &he contin)o)s e@pansion of nitrate capacity in the post(ar (orld econo,y s)!!ests that 8!yptians (ere hardly helpless in the face of this press)re ho(ever. &he probability of i,ple,entin! the nitrate pro2ect depended in i,portant part on s)ccessf)lly e@ploitin! the e@istin! tensions (ithin the cartel, as (ell as the cleava!es bet(een cartel ,e,bers and non,e,bers. =nstead, the cartel leader, =C=, reaped the (indfall fro, the deep and intensifyin! divisions a,on! 8!ypt>s leadin! b)siness !ro)ps and their alliesH &hose invested in the 88C>s pro2ect, (hich rested ten)o)sly on the possible cooperation of =C=, needed the threat of co,petition as a f)lcr), to ,ove the British che,ical !iant closer to its second1best preference0that is, to b)ild the plant rather than have the cartel lose the ,arket. <et the (ar a!ainst the E-bb)d !ro)p reco)nted in this chapter hardly see,ed the (ay to force =C=>s hand. &he blatant interventions by their representatives a!ainst the pro2ect in 19"6J19"57 the 88C>s repeated ad,ission that it had no infl)ence on the che,ical fir, 5the sit)ation (as, if anythin!, the reverse;7 the co,plete absence of =C= directors in the record of co,pany1 !overn,ent1e,bassy ne!otiations fro, 19"3 on7 and the search for alternative rationales for prod)cin! electricity at -s(an in the latter part of the decade all s)!!est that the collective interest of =C= and the other ,e,bers of the nitrate cartel (ere in the end (ell served by the co,petition a,on! E-bb)d and his rivals. 9)pposedly for(ard1lookin! state a!ents and a!encies 5or, in the ,ost red)ctionist version, the state; are )ni+)ely positioned to resolve precisely this kind of i,passe. 8vans 519$9; (orked o)t the lo!ic ,ost f)lly for the case of post11936 Bra4il, (hile others have confir,ed ho(, in n),ero)s settin!s, local capitalists !rad)ally if so,eti,es rel)ctantly reconcile the,selves to a enlar!ed re!)latory re!i,e 5the relative a)tono,y of the state; as a trade1off for enhancin! their bar!ainin! capacity (ith forei!n fir,s and sectors. &he (orld(ide econo,ic crisis of 19B9J19"" is often pointed to as the catalyst for this partial reorderin! of class1state relations 5e.!., :a,ilton 19%B;.

&his chapter raises basic +)estions abo)t the !enerali4ability of s)ch ar!),ents, partic)larly in li!ht of the conventional and e@pansive clai,s of a Cdeep1rooted tradition of state a)tono,y in 8!yptD and, th)s, of a basic dile,,a facin! the !ro)p of 8!yptian investors, Che,,ed in by a state and re!i,e it co)ld never f)lly penetrate, no less control,D as 'aterb)ry 519%": B""; posed the dile,,a. Concept)ally, it is )nclear (hat Cstate a)tono,yD refers to in a case and era ,arked by a lar!ely )nre!)lated econo,y in the hands of a b)siness1lando(nin! oli!archy, (here a labor ,ove,ent (as barely !iven roo, to or!ani4e. 8,pirically, as = have tried to sho(, in the protracted bar!ainin! ro)nds over the lar!est ind)striali4ation sche,e of the era the hi!hest p)blic officials0British and 8!yptian alike0sho(ed little capacity or (illin!ness to artic)late a position separate fro, that of so,e set of investors, ,)ch less an ability to resolve these co,petitive conflicts of interest in line (ith their stated preferences. =t ,i!ht 2)st as easily be clai,ed that in this case the inter(ar state or re!i,e t)rned o)t to have been he,,ed in by a diverse set of local and forei!n investors it co)ld never f)lly penetrate, no less control. &he conflicts a,on! rival coalitions of investors 5b)siness !ro)ps; and a,on! the broader confi!)ration of allied political factions and forei!n fir,s for (hich the !ro)ps served as an identifiable core 5invest,ent blocs; (ere a definin! feat)re of the inter(ar 8!yptian political econo,y. 'hile investors evinced tendencies to cooperate in or!ani4in! partic)lar sectors0for instance, via the for,al carteli4ation of the ,arket for finished te@tiles by the <ahya and Gisr !ro)ps 5and their forei!n 2oint1vent)re partners;0s)ch tendencies e@isted side by side (ith the po(erf)l co,petitive cross1 press)res described in this chapter. =n !eneral, = have described this conflict as a co,petition to ,a@i,i4e access to p)blic reso)rces and control over state1,ediated opport)nities for private acc),)lation. =n practice, it (as a battle to carve o)t ne( sinec)res 5Gisr -ir(orks, the (o)ld1be -s(an fertili4er and po(er ind)stries; and, perhaps ,ore fre+)ently, to recarve e@istin! ones 5te@tiles, the b)s and tra, lines, shippin!, the s)!ar1processin! ind)stry;. &he 8!yptian investors (ith the deepest roots in the pre119BB econo,y0:arb, the lando(ners (ho helped hi, to fo)nd the Gisr !ro)p, and the <ahya fa,ily0(ere ar!)ably the ,ost s)ccessf)l and invested in sec)rin! places a,on!, and in i,portant instances (restin! shares fro,, the econo,y>s e@istin! forei!n and local capitalist factions 58,pain, 9)arVs, 9alva!os, etc.;. =t is therefore )ns)rprisin! that they (o)ld have fo)!ht so hard a!ainst the efforts of the )pstart E-bb)d.

Notes
1. 9ee I?161 3%# 65, reportin! conversation bet(een :artopp and E-bb)d7 and I?161 3%# 56, C?)tline of events (hich have led )p to the present e@a,ination by the 8!yptian !overn,ent of sche,es for the )tili4ation of the -ss)an Fa, for po(er p)rposes.D

B. &he +)otation is fro, the British hi!h co,,issioner. 9ee I?161 69%, B1% 5 "6, draft tele!ra, fro, .a,pson to 9i,on, 1% Garch 19"6. ". &he description and acco)nt of E-bb)d>s role are fo)nd in I?"$1 1B"59, AB"65 % 13, 9elby to G)rray, BB -)!)st 19B$. 6. 9ee I?"$1 1"1B$, A196 1% 13, .loyd to I?, 5 Aan)ary 19B%, ,e,orand), on the 8!yptian press d)rin! the period BB Fece,ber 19B$J6 Aan)ary 19B%7 for E-bb)d>s pessi,istic vie( of the post1Oa!hl)l political scene and early evidence of his intentions to (ork to(ard chan!in! it, see I?"$1 1"115, A""3 6 13, I? ,in)te 59te(ard;, B5 Aan)ary 19B%, enclosin! letter fro, E-bb)d to Lrant7 for a retrospective vie( of these events, colored by the rene(al of E-bb)d>s ties to the party in the 196#s, see $h%ar al6a*m 5 /ove,ber 1969. 5. I?"$1 1"16#, A16B6 B6# 13, .loyd to I?, B1 -pril 19B%. I?"$1 1"1B#, A15$5 6 13, Patrick :annon to -)sten Cha,berlain, 1# Gay 19B%. 3. Fetails on E-bb)d>s offer are fo)nd in I?"$1 1"16#, A5$% B6# 13, I? ,in)te 5G)rray;, 1" Iebr)ary 19B%. &he British !overn,ent>s position on the sale is fo)nd in A6%$ B6# 13, I? ,in)te 5&yrrell;, " Iebr)ary 19B%, (hich incl)des the reference to CnativeD control. Ior details on the syndicate (hich Focker or!ani4ed, see files A6%$ A5$% B6# 13, as (ell as Favenport1 :ines 519%6b: B#%;. &he a)thor>s ass),ption that Focker finally ac+)ired control of the 7a8ette is incorrect ho(ever. &he ne(spaper event)ally passed into the hands of ?s(ald Iinney, the cotton ,erchant, investor, and o(ner of the 7a8ette<s ,ain co,petitor, the Egyptian 'ail. &he Iorei!n ?ffice records of the on!oin! ne!otiations for the paper are incl)ded in I?"$1 1"%36, A$5 A53# A$$1 A"56B $5 13. $. I?161 5$$, 8,bassy Cairo Iile 5B9 5pp. "%BJend;, -ss)an Fa,, 1915J 19B9, 5B9 65B, Res),K of -ss)an :ei!htenin! Co,,ission 19B%. %. &he basic evidence on the atte,pted bribe is fo)nd in a letter fro, 'atlin!ton of the 88C to Fa(son, (hich at one point ,entions Cpractical s)!!estions (hich ,i!ht be to o)r ,)t)al advanta!e.D 9ee I?"$1 1"%$$, A1#$3 1#53 13, .loyd to I?, B# -pril 19B97 A1"91 1#53 13, .loyd to I?, 5 Gay 19B97 Favenport1:ines 19%6: B1#. ?fficials of the 88C told the head of the Fepart,ent of ?verseas &rade 5F?&; that the doc),ent (as a for!ery. -nother e@planation ,ay be that 88C (as seekin! a (ay to infor, the cons)ltant, Fa(son, that the -,erican1o(ned )tilities tr)st on (hose board he sat (as in the ,idst of secretly or!ani4in! the bailo)t of 88C. 9. :arb (as re!istered as a fo)ndin! shareholder in the ne(ly for,ed 8!yptian branch of 9ie,ens. 9ee al-Wa"a<i: al-'isriya 19 Aan)ary 19B%. :arb>s ties to the Fe)tsche ?rient Bank dated back to the pre(ar years, and he had facilitated the re1establish,ent of the Fe)tsche ?rient bank branch in Cairo in the ,id119B#s. Favis 19%": $#J$1, $5J$3. British so)rces noted

a Cco1relation of interestsD bet(een the t(o Ler,an fir,s> 8!yptian operations. AB"%B B9$ 13. I?"$1 1##B9, 8""61 1BB 13, -llenby to I?, 6 -pril 19B6, and G)lock to F?&, 5 -pril 19B6. 1#. 9ee I?"$1 1"%$$, A11B9 A113$ A11$6 1#53 13. -s the latter file records, the British pri,e ,inister, forei!n ,inister, and president of the Board of &rade ,et to disc)ss the +)estion on the ni!ht of 1 Gay 19B9. &he ne@t day the chair,an of Getrovick, 9ir Philip /ash, (as sho(n a proposed dispatch to .loyd to press)re the 8!yptian !overn,ent on their behalf. 11. 9ee I?"$1 1"%$$, A1"91 1#53 13, .loyd to I?, 5 Gay 19B97 A16$3 1#53 13, .loyd to I?, 15 Gay 19B9, and I?"$1 1"%$#, AB"%B B9$ 13, enclosin! ,e,o by .arkins, % -)!)st 19B9. 1B. A166% 1#53 13, .loyd to I?, B" Gay 19B97 and A13#" 1#53 13, &)rner to F?&, B6 Gay 19B9. 1". I?"$1 16363, A19$% $5B 13, enclosin! letter fro, E-bb)d to &)rner, B$ Gay 19"#, and doc),ents entitled Cnotes fro, 8!yptD and C9ociKtK 8!yptienne de 8lectricitK,D both dated B5 Garch 19"#7 Cle,ent .evy, The (toc$ E3change 6ear-Boo$ of Egypt# 196" edition, p. 3957 ,in)tes of Gisr Bank board ,eetin!s sho( the bank had a!reed in principle as early as 19B% to cooperate (ith the 8,pain !ro)p in ind)strial vent)res. &his infor,ation (as s)pplied by :el,)t Iischer, a Ler,an researcher in a personal co,,)nication, )ndated b)t (ritten in 19%$. 16. Ior E-bb)d>s role in ne!otiatin! the overt)rn of the constit)tion, see I? "$1 16313, ABB"5 6 13, Cairo Chancery to 8!yptian Fepart,ent, B9 A)ne 19"#7 AB"3# 6 13, E-bb)d to 9elby, 1# A)ly 19"#7 AB"$1 6 13, I? ,in)te 59elby;, 15 A)ly 19"#7 and A"13$ 6 13, tele!ra, fro, Gr. :oare 5Cairo;, BB 9epte,ber 19"#. 15. I? "$1 163"", A""B" 9" 13, :oare, B$ 9epte,ber 19"#7 A"B91 9" 13, :oare, 6 ?ctober 19"#7 A"659 9" 13, :oare, 11 ?ctober 19"#7 A"55% 9" 13, I? ,in)te 5Gack; B9 ?ctober 19"#. Ior E-bb)d>s position !enerally, see I?161 $33 %#1 5 "1, ,in)te by Giller to the :i!h Co,,issioner, 11 /ove,ber 19"1. 13. &he first evidence = fo)nd of this develop,ent (ithin !overn,ent circles to r)n the po(er plant as a p)blic enterprise dates to the 19"# 'afd !overn,ent, (hich, accordin! to Bel!ian investors, had ref)sed Con principal to !rant concessions for the )tili4ation of the da,s to private interests.D 9ee I?"$1 A19$% $5B 13, Cnotes fro, 8!yptD and C9ociKtK 8!yptienne de 8lectricitK,D both dated B5 Garch 19"#7 and A$5B $5B 13, F?&, " Garch 19"#. ?n the hydra)lic ad,inistration !enerally, see &i!nor 51933;. Ior 9id+i>s pra!,atic anti,onopolis,, see I? "$1 156B#, A13#3 "5$ 13, .oraine to I?, $ Gay 19"17 I? 161 $39, 51B 1 "1 E-bb)d to &)rner, 5 Gay 19"1, enclosin! letters e@chan!ed (ith 9id+i. Ior early so)rces of this

anti,onopolist attit)de, see &i!nor 519%6;. 1$. I?"$1 13113, A1B% 1B% 13, &)rner to F?&, 1" Aan)ary 19"B7 A165$ 1B% 13, &)rner to Iarrer, 3 Gay 19"B7 and RL59, 19"#J19"9, %%".311" 59, Aardine to 9tate, 9 Iebr)ary 19"B. 1%. ?n the elections and .ondon>s efforts to da,a!e E-bb)d>s infl)ence (ith his ally, 9id+i, see I?161 $33, %#1 " "1, Vansittart to .oraine, "# Gay 19"17 %#1 B "1, &)rner to G)rray 5I?;, B1 Gay 19"17 %#1 5 "1, ,in)te, Giller to the hi!h co,,issioner, 11 /ove,ber 19"17 for an acco)nt of the intervention on E-bb)d>s behalf by .ord Balfo)r, the British steel ,aker, incl)din! .ondon>s dero!atory and har,f)l response, see I?161 $33, %#1 5 "1, Peterson to .oraine, B$ /ove,ber 19"1. 19. ?n E-bb)d and his Cincreased infl)ence (ith palace circles,D see I?"$1 B#913, A19%9 %15 13, .a,pson to I?, 13 -pril 19"$, 8!yptian Personalities Report, entry for E-bb)d. B#. Fetails on E-bb)d and Norayyi, appeared in 19"6, in the co)rse of a libel s)it, (hich (as itself a by1prod)ct of these on!oin! co,,ercial and political conflicts. 9ee 5a ;0forme 15 Garch 19"67 al- hram 1" Garch 19"67 I?"$1 1%#16, A"B19 33# 13, Peterson to I?, BB Fece,ber 19"6, reportin! on proceedin!s of the Cairo assi4e co)rt in libel action bro)!ht by E-bb)d a!ainst al-(iyasa on 15 Fece,ber 19"67 also see the disc)ssion of the libel s)it bro)!ht by Norayyi, a!ainst the Times in AB%"1 33# 13, Peterson to I?, BB /ove,ber 19"6. Fetails on G)harra,>s activities (ith the 88C representative e,er!ed ,)ch later, be!innin! (ith a series of p)rloined letters p)blished by opponents of the 'afd. 9ee, for instance, :ochstein to Lrey, 1 -)!)st 19"B, reprod)ced in al-Balagh $ 9epte,ber 19"$7 and :ochstein to Lrey, 5 -)!)st 19"B, in al-Balagh % 9epte,ber 19"$. B1. ?n the i,pact of the Daily Telegraph iss)e, see I?161 $59, B56 1 "", CGin)tes of Iirst Geetin! :eld at the Residency, 3:"# p,, 1# Aan)ary 19"".D &he hi!h co,,issioner, Percy .oraine, do)bted the clai, that E-bb)d (as bribin! correspondents, b)t the Iorei!n ?ffice insisted on its acc)racy. 9ee I?"$1 1$#19, A1B$ 1B$ 13, I? ,in)te, 13 Aan)ary 19"", and A"#" 1B$ 13, .oraine to Peterson, B% Aan)ary 19"", and, especially, note by Gack. Ior E-fifi>s vie( and his role in discreditin! E-bb)d, see I?"$1 1311#, A""3B 16 13, .oraine to I?, 1# Fece,ber 19"B. ?n the ori!ins of this hi!hly personal anta!onis,, see, for instance, CUne C)rie)se PolK,i+)e,D 5a ;0forme 15 Garch 19"67 and I?161 $33, %#1 5 "1, ,in)te 5Giller;, 11 /ove,ber 19"1. &he t(o re,ained i,placable foes for decades. Gona E-bb)d1:)sha,4a confir,ed the life1lon! rivalry bet(een her father and E-fifi, intervie(, .ondon, -)!)st 19%3. BB. Ior details on 9id+i>s ,ane)vers, see I?"$1 13113, A""9% 1B% 13, enclosin! a letter fro, .arkins 5no. 11#%;, 1$ /ove,ber 19"B7 and A""1$ 1B% 13, .arkins to F?&, B" /ove,ber 19"B. Ior the Aabal -)liya> disp)te in partic)lar, see U9RL 59, 19"#J"9, %%".311" $B, Aardine to

9ecretary of 9tate, 19 /ove,ber 19"B7 I?"$1 1$##B, AB351 1# 13, .oraine to I?, 1 /ove,ber 19""7 I?"$1 139$$, 8$61B 1# 13, enclosin! F?& ,in)te B5BBB "1 9 1$6, dated 3 Fece,ber 19""7 and I?161 69%, B1% " "6, .arkins to 9elo)s, 16 Garch 19"6. B". I?"$1 13113, A""9% 1B% 13, .arkins to F?&, $ Fece,ber 19"B7 I?"$1 1$##", A15 15 13, 9elo)s to F?&, 11 Iebr)ary 19"B7 A5#$ 15 13, E-bb)d to .arkins, BB Aan)ary 19""7 and AB"66 15 13, ,e,o by .arkins, C:ydroelectric 9che,e for Leneration of Po(er by Geans of the -s(an Fa,.D B6. I?161 $59 PResidency file B56 on E-bb)d for 19""Q, B56 B "", Neo(n1 Boyd to 9,art, 1 -pril 19""7 I?"$1 1$##B, A1531 1# 13, Ca,pbell to I?, B3 A)ne 19""7 U9RL 59, 19"#J"9, %%".311" Lebel -(lia1, Aardine to 9tate, 15 A)ne 19"". B5. 9t. -ntony>s Colle!e, ?@ford, Giddle 8ast -rchives, Fiaries of 9ir Giles .a,pson, .ord Nillearn Phereafter 9illearn Diaries=# 1" -pril 19"67 I?161 69%, B1% 5 "6, draft tele!ra, fro, .a,pson to 9i,on, 1% Garch 19"67 B1% 6 "6, ,in)te sheet by 9elo)s, C-bbo)d and Co,pany vers)s Fenta,aro and Co,pany,D 1" Garch 19"67 I?"$1 1$##9, AB"B9 B5 13, Ca,pbell to I?, B5 9epte,ber 19""7 AB"6" B5 13, Ca,pbell to I?, B$ 9epte,ber 19""7 1$993, A33$ $1 13, .a,pson to I?, 9 Garch 19"67 1$9$%, A1BB% 9 13, :eathcote19,ith to Cairo, $ Gay 19"67 and 1%#19, A1$$B 1$$B 13, ,e,o by &ho,pson7 U9RL 59, 19"#J"9, %%".## $$$, Rives Childs to 9tate, B" 9epte,ber 19"". B3. 9ee I?"$1 1$##", A5#$ 15 13, Iarrer to Cairo, B" Iebr)ary 19"B. B$. I?"$1 19#%3, A"6% "6% 13, enclosin! letter fro, 9i,pson to /asi, Pasha, "1 Fece,ber 19"5. B%. I?"$1 19#%3, A16%6 "6% 13, .a,pson to I?, 5 -pril 19"5, reportin! intervie( bet(een 9elo)s and :orsfall, " -pril 19"5. B9. I?"$1 19#%3, A3#B "6% 13, F?&, record of intervie( (ith /elson and Rice, 16 Iebr)ary 19"5. "#. 9ee I?"$1 19#%3, A1695 "6% 13, Nelly to I?, 11 -pril 19"57 A159% "6% 13, record of intervie( (ith /elson, Rice, Cro(e and Iarrer, 1$ -pril 19"57 and A9$% "6% 13, F?&, 1B Garch 19"5 5Lrey +)ote;. -lso see A1BB9 "6% 13, F?&, B$ Garch 19"5, (hich incl)des copies of cables bet(een the fir,s and their Cairo representatives. "1. =C=>s partners incl)ded Chase /ational Bank 5/e( <ork; and U.9. 'estin!ho)se. Ior =C=>s links to the 88C, see I?"$1 1$9%6, AB9%6 "1 13, 9elo)s to F?&, 1" /ove,ber 19"67 the CsyndicateD +)ote is fo)nd in

I?"$1 19#%3, A159% "6% 13, record of intervie( (ith /elson, Rice, Cro(e and Iarrer, 1$ -pril 19"57 the CdiversionD +)ote is fo)nd in A16%6 "6% 13, .a,pson to I?, 5 -pril 19"5, reportin! intervie( bet(een 9elo)s and :orsefall, the 88C director, " -pril 19"5. "B. I?"$1 19#%3, ABB9# "6% 13, enclosin! letter fro, E-bd al1'ahhab to 88C, 5 A)ne 19"57 A91$1 "6% 13, .a,pson to I?, B9 /ove,ber 19"5, and A%%%9 "6% 13, F?&, 5 Fece,ber 19"57 U9RL 59, 19"#J"9, %%".359 Iertili4ers 1, Gerria, to 9tate, 5 9epte,ber 19"5. "". I?"$1 B""5%, A"6" B%5 13, enclosin! letter fro, Aacob Galler Pthe British investor in the iron1ore depositsQ to 9ir 8rnest Roney PGaller>s attorneyQ, B6 Aan)ary 19"9. "6. ?n the delays and dissent in the 88C sche,e, see Cha,ber of Fep)ties 5196%: 5J3;7 I?"$1 B#1"9, A"3B% 665 13, enclosin! letter fro, Lrey P88C, CairoQ to /elson P88C, .ondonQ, 1$ -pril 19"37 A"691 665 13, .a,pson to I?, B3 -pril 19"37 A"559 665 13, .a,pson to I?, BB -pril 19"37 and A"319 665 13, .a,pson to I?, B% -pril 19"37 9illearn Diaries B" -pril 19"3. Ior the 88C>s atte,pt to dis!)ise a lon!1r)nnin! connection to EUth,an G)harra,, see I?"$1 B#166, A61#6 155" 13, .a,pson to I?, % Gay 19"37 I?"$1 B#1"9, A6%65 665 13, enclosin! 9elo)s to F?&, 1B Gay 19"37 and A6B31 665 13, Iarrer to Pink, 1B Gay 19"3. "5. I?"$1 B#1"9, A$616 665 13, ,e,orand), by .a,pson, 1 9epte,ber 19"3. "3. Ior E-bb)d>s opposition to 'afd, see I?"$1 B#119, A$$#% B 13, I? ,in)te 5Pink;, 1$ 9epte,ber 19"37 for the co,position of the opposition bloc, see I?"$1 B#1B#, A%B11 B 13, Nelly to :o)ston1Bos(ell, 1" ?ctober 19"37 and for an e@a,ple of British ass),ptions abo)t E-bb)d>s political activities, see I?"$1 B#915, A%11 3B" 13, .a,pson to 8den, 15 Iebr)ary19"$. "$. 9ee, for instance, I?"$1 B#915, A%11 3B" 13, .a,pson to 8den, 15 Iebr)ary 19"$. "%. Ior E-li Gahir>s re2ection of the 88C>s clai,s to so,e e@cl)sive ri!ht )nder the A)ne 19"5 letter, see I?"$1 B#1"9, A"559 665 13, .a,pson to I?, BB -pril 19"3. Gakra, also ,isled the 8!yptian p)blic on the ,atter of concessions. 'hile the ter,s of the ori!inal proposal envisioned a 51 percent 58!yptian private and p)blic;J69 percent 5forei!n; split in share capital, the initiative for a chan!e ca,e fro, the forei!n bankers, before the 'afd took office. 9ee A6#"5 665 13, enclosin! ,e,orand), by 'atson 5financial adviser to the 8!yptian !overn,ent;, B5 -pril 19"3. -nd, despite the !overn,ent>s p)blic clai,, forei!ners (ere e@pected to hold shares in the vent)re as (ell as finance the debent)re. 9ee I?"$1 B#915, A11%3 3B" 13, ,e,o fro, 9elo)s, 5 Garch 19"$, reco)ntin! conversation

(ith /elson 588C chair,an; on his ne!otiations (ith Gakra,. Co,pare (ith 8!yptian !overn,ent doc),ent e@cerpted in al- hram 15 -)!)st 19"$, titled CGe,orand), fro, the Ginister of P)blic 'orks to CabinetD 5n.d.;. "9. al-Balagh 3 9epte,ber 19"$7 'a+alla ghurfa al-!s$andariya 9, -pril 19"$7 Cha,ber of Fep)ties 5196%: 3;7 I?"$1 B#915, A3B" 3B" 13, draft tele!ra, to .a,pson, 11 Iebr)ary 19"$7 A%11 3B" 13, .a,pson to 8den, 15 Iebr)ary 19"$7 A1365 3B" 13, .a,pson to I?, 5 -pril 19"$ and incl)din! letter fro, Gakra, EUbayd, 1 -pril 19"$. 6#. Ior details see I?"$1 B#915, A1%91 3B" 13, .a,pson to F?&, $ -pril 19"$. &he e,bassy and co,panies also concerted on the or!ani4ation of the ne( advisory co,,ittees. Ior details of the process, see A1935 AB""B 3B" 13. 61. ?n the entreaties to Gah,)d in 19"%, see I?"$1 B199", A6## $% 13, enclosin! record of conversations bet(een .a,pson and Gah,)d, 15 Aan)ary 19"%7 A559 $% 13, letter fro, Lrey to 9elo)s, "1 Aan)ary 19"%7 9illearn Diaries 1$, B6 and B5 Garch 19"%. Ior the 19"9 ro)nd, see, for e@a,ple, I?"$1 B""5%, A16"" B%5 13, .a,pson to I?, 5 -pril 19"97 AB3$5 B%5 13, .a,pson to I?, B3 A)ne 19"97 and the 9illearn Diaries B3 and "# Gay, B6 and B3 A)ne, and " and BB A)ly 19"9.

+. War ,ithin :the War<" #usiness$%roup Conflict in Egypt, 12*2B12+F)rin! 'orld 'ar ==, 8!ypt>s b)siness oli!archs escalated their private (ar over ,arkets, contracts, concessions, s)bsidies and related state1,ediated opport)nities for acc),)lation. &his conflict a,on! the Gisr, <ahya and E-bb)d !ro)ps for do,inance over 8!ypt>s e@pandin! ind)strial sector conver!ed (ith the contin)in! constit)tional str)!!le bet(een Nin! Iar)+ and the 'afd party, and (ith the Ch)rchill !overn,ent>s atte,pts to redefine and sec)re the for,er colonial po(er>s national interest in 8!ypt. Usin! the on!oin! conflict over the -s(an pro2ect as an e@a,ple, = (ill detail the role played by these local investors in the precipito)s collapse of the British neocolonial pro2ect. F)rin! the 19B#s and 19"#s, an 8!yptian national political elite and closely linked !ro)ps of 8!yptian landlords and capitalists ca,e to e@ercise !ro(in! infl)ence over the levers of state po(er and the private econo,y. -s (e have seen, they (ere the pri,ary beneficiaries of a contested and protracted tho)!h nonetheless s)bstantive transfer of po(er. &his ar!),ent dra(s heavily on the ,ore recent debate abo)t the postcolonial state in -frica 5Boone 199B and 1996;. &he i,portance of this transfer of po(er can be 2)d!ed by the British state>s need to ne!otiate (hat a,o)nted to a neocolonial pact (ith these forces, sy,boli4ed by the 19"3 treaty. =n this chapter, (e (ill see ho( these sa,e do,estic elites )sed the (ar 5or the (ar per,itted the,; to )nder,ine these arran!e,ents, in part, by t)rnin!

to -,erican capital. British b)rea)crats a,on! others liked to dra( a si,ple analo!y bet(een the t(o periods (hen they and the leaders of the 'afd party fo)nd !ro)nds or necessity for cooperation0in 19"3J19"$ and a!ain in 196BJ1966. =n the !rand, -n!locentric acco)nts of -n!lo18!yptian relations these are t(o bri!ht ,o,ents in the hi!hly pra!,atic diplo,acy of a he!e,ony in decline, desi!ned to help ste, that decline. By contrast, in e@ceptionalist acco)nts these are t(o for,ative ,o,ents in a neocolonial pro2ect that allo(ed British states,en and capitalists to ,aintain if not ti!hten their !rip over 8!ypt )ntil the ,id1195#s. =n both these versions of the (arti,e -n!lo1 8!yptian pro%lemati"ue# tho)!h, 8!yptian investors play the sa,e )nchan!in! and s)pportive role in sec)rin! British econo,ic ob2ectives thro)!h the (ar and beyond. =n fact, British econo,ic interests in 8!ypt (ere steadily )nder,ined d)rin! 'orld 'ar ==. British policy,akers had reali4ed as ,)ch, (hich = ar!)e is a key to )nderstandin! both their abandon,ent of the 'afd a!ain in late 1966 and their increasin!ly desperate search for instit)tions and doctrines that (o)ld preserve the post(ar 8!yptian ,arket7 their desperation led, for instance, to the s)dden and re,arkable portraits of Nin! Iar)+ as a force for Cserio)s social refor, in 8!yptD 5.o)is 19%6: B"B;. &he analysis be!ins by tryin! to acco)nt for a basic and yet )nfa,iliar difference in the 19"3J19"$ and 196BJ1966 'afd !overn,ents: the identities of the investors (ho backed and benefited fro, the,. &alEat :arb and friends for,ed a core part of the bloc behind the 'afd !overn,ent that in 19"3 concl)ded a historic pact (ith the e@1colonial po(er, b)t at least t(o specific conflicts )nfolded (ithin this ne( order. &he first involved factions (ithin the bloc itself0na,ely, the Gisr and <ahya !ro)ps0and is ill)strated ,ost po(erf)lly in the overthro( of :arb as chair,an of the bank in 19"9. &he second conflict is e+)ally i,plicated in the <ahya !ro)p>s tri),ph, (hich (as a f)rther setback to the co,petitive position of E-bb)d, (ho (as representative of a !ro)p of fir,s and investors that (ere ali!ned a!ainst the -n!lo18!yptian bloc and that since 19"5 had been essentially e@cl)ded fro, feedin! at the state>s reso)rce tro)!h. <et, by 1966 -,erican intelli!ence a!ents (ere follo(in! the footsteps of the British in describin! E-bb)d as one of the ,ost po(erf)l and infl)ential ,en in 8!ypt. &he key factor in e@plainin! E-bb)d>s renaissance is the pra!,atic alliance he ne!otiated in 196B (ith the leaders of the 'afd, fo)rteen years after they had e@pelled hi, fro, the party. &his political reali!n,ent, sanctioned and )nder(ritten for e+)ally pra!,atic reasons by Ch)rchill>s (ar cabinet, b)ttressed the E-bb)d !ro)p in the (ar of position (ith rival investors for control of post(ar ,arkets, sectors and reso)rces. -s the details of the 1966 -s(an bar!ainin! ro)nd reveal, these 8!yptian investors had all co,e to see -,erican capital as vital to their f)t)re0a shift that both foretold and assisted in the collapse of neocolonialis, in 8!ypt.

'e sho)ld not lose si!ht of the irony in the develop,ents to be traced belo(. &he ori!inal i,pet)s for the -s(an nitrate pro2ect (as provided by British colonial officials in 'orld 'ar = as a (ay to sec)re the strate!ic position of the e,pire. &he res)rrection of the pro2ect by local 8!yptian capital d)rin! 'orld 'ar == reveals ho( ten)o)s the British position in postcolonial ,arkets had !ro(n. M M M

The War of Position

-t least three ne( and distinct coalitions of 8!yptian investors had established the,selves in and shaped the leadin! sectors of the econo,y by the ,id119"#s. ?ne of the ,ost end)rin! and conse+)ential for, of b)siness1interest conflict t)rns o)t to be (hat = have called the (ar for co,petitive position a,on! these rivals. &his (ar, (hich steadily intensified d)rin! the 19"#s, is i,portant in e@plainin! E-bb)d>s a)dacio)s play bet(een 196B and 1966 to beco,e the co)ntry>s self1styled ind)strial c4ar. -s can be seen in &able B, the cross1ind)stry invest,ent strate!ies of the three ,ain 8!yptian b)siness !ro)ps reprod)ced a pattern of direct rivalry for access to and control of virt)ally every one of the co)ntry>s oli!opolistic sectors. &he only sectors not contested by at least t(o of these !ro)ps in the 19"#s0to)ris, and ins)rance0beca,e ne( arenas for co,petition soon after the (ar>s end. E-bb)d>s o(n efforts to enter or re,ain in ,any of these ,arkets0the po(er1sector conflicts of the late 19B#s and early 19"#s, the b)s1ro)te (ars of the ,id119"#s, the scandals over shippin! ro)tes and s)bsidies in the late 19"#s and, of co)rse, the -s(an fertili4er sche,e0(ere effectively )nder,ined by the Gisr and <ahya !ro)ps, to!ether (ith their political allies. E-bb)d responded by seekin! alternative invest,ent possibilities, leadin! in 19"%J19"9 to his takeover of the Co,,ercial Bank of 8!ypt as (ell as the 8!yptian s)!ar co,pany.

B. 8!yptian B)siness Lro)p :oldin!s by 9ector, Circa 19"9 %roup Sector Eahya 6isr 95&&ud

FEE" G H e'clusi ely group$o,nedI GG H Coint enture ,ith foreign capitalI J H atte(pting to enter sector Ginin! [[ [

%roup Sector &e@tiles Che,icals Constr)ction Cotton e@port /oncotton trade 9hippin! Urban transport Bankin! =ns)rance Real estate &o)ris, [ [ [ [ [ Eahya 6isr 95&&ud [[ [ [[ [ [ [[ [[ \ [[ [[ [[ [[ [[ [ [ [[ [[ [ \ \ [[

&he opposition to E-bb)d is itself evidence for (hat = a, callin! a bloc b)ilt aro)nd the b)siness e,pires of the Cairo1based Gisr !ro)p and the -le@andria1based <ahya !ro)p, rival investors (ho had nonetheless ne!otiated cooperative cartel1like arran!e,ents in vario)s econo,ic sectors. 9)ch arran!e,ents did not, ho(ever, prevent the o)tbreak in 19"9 of one of the ,ost divisive conflicts of the (arti,e 8!yptian political econo,y. -t stake (as the o(nership and control of the Gisr !ro)p>s factories, infor,ation net(orks and rent circ)its. Bet(een 19"9 and 196B, the <ahya !ro)p overthre( :arb, took control of Bank Gisr and laid the !ro)nd for a ne( phase of econo,ic e@pansion. F)rin! 196BJ1966, E-bb)d or!ani4ed a!ainst his rivals (ith the help of the 'afd.

Kafi; 95fifi" The Path fro( Doctor to Pirate

- re,arkable series of b)siness1!ro)p conflicts )nfolded in the ,onths 2)st prior to the o)tbreak of the (ar, in (hich it beca,e clear, once the d)st had settled, that the <ahya !ro)p had ,ade enor,o)s !ains. ?ne of the key fi!)res in these interlocked affairs (as :afi4 E-fifi, (ho coldly helped en!ineer the overthro( of his ori!inal patron, :arb, to advance his o(n fort)nes and those of an apparently ,ore attractive patron, E-li -,in <ahya.

E-fifi (as an a,bitio)s doctor t)rned politician (ho had bolted fro, the .iberal Constit)tionalist party to serve as the 9id+i !overn,ent>s representative in .ondon. F)rin! this period, he took the side of 9id+i and the Iorei!n ?ffice in the !ro(in! disp)te (ith E-bb)d and his palace allies, a stance that the Iorei!n ?ffice believed event)ally cost E-fifi his post. Upon his ret)rn to Cairo, E-fifi e,barked on a ne( career, thanks to :arb, (ho offered hi, the directorship of the Gisr !ro)p>s ne( -n!lo18!yptian ins)rance 2oint vent)re. =n his ne( !)ise as a corporate e@ec)tive, E-fifi +)ickly beca,e a pivotal fi!)re in the -n!lo18!yptian trade bloc that backed the 'afd>s ret)rn to po(er in 19"3J19"$, and he (as re(arded (ith an appoint,ent as 8!ypt>s first a,bassador to .ondon follo(in! the si!nin! of the &reaty of -lliance in Garch 19"$. -ccordin! to Favis, :arb convinced E-fifi to ret)rn to Cairo one year later, follo(in! the s)dden death of -h,ad E-bd al1'ahhab, the po(erf)l for,er finance ,inister and close ally of the Gisr !ro)p. =n -pril 19"%, E-fifi re2oined the board of Gisr =ns)rance, and took E-bd al1'ahhab>s place on the boards of fo)r other Bank Gisr s)bsidiaries as (ell 5Favis 19%": 13B;. :arb and his coinvestors )ndo)btedly t)rned to the (ell1connected E-fifi as a (ay of increasin! their political s)pport, !iven the !ro)p>s perilo)s finances and an increasin!ly desperate need for f)nds to prevent a collapse of the bank. &he Gisr !ro)p>s )ncertain f)t)re perhaps e@plains E-fifi>s apparent risk1 adverse invest,ent strate!y beca)se in the sa,e period, 19"%J19"9, he e@tended his s)pport to the Gisr !ro)p>s ind)strial co,petitor, the <ahya !ro)p. E-li -,in <ahya, the !randson of the fa,ily fir,>s fo)nder, s)cceeded his father -,in <ahya 5d. 19"3; as head of a !ro)p that had ridden the crest of econo,ic nationalis, after 1919 to beco,e a po(erf)l force in cotton e@port, shippin!, ins)rance, te@tiles 5via<ahya>s ties to Iilat)re /ationale;, ,inin!, food and che,icals. &he <ahya !ro)p>s involve,ent in ,inin!, food and che,icals (as thro)!h the 8!yptian 9alt and 9oda Co,pany, the .ondon1re!istered fir, that (as created to operate the state>s salt1,inin! operations at the t)rn of the cent)ry. &i!nor 519%9: %5; de,onstrates that control of the co,pany (as nonetheless in the hands of local capital by the 19"#s. &he sa,e !ro)p (as the sole do,estic prod)cer of phosphate fertili4ers and s)lf)ric acid )ntil the 196#s, thro)!h a che,ical plant at Nafr al1Oayat, near -le@andria 5est. 19"$;, held )nder a s)bsidiary, 9ociKtK Iinanciere et =nd)strielle d>8!ypte. <ahya and the fa,ily>s coinvestors, (hich incl)ded ,e,bers of the resident forei!n co,,)nity like -lfred .ian, 9ilvio Pinto and .adislas Pathy PPolna)erQ, enlisted E-fifi in their proposed -s(an ,inin! and Felta fertili4er 2oint vent)res, (hich, as (e have seen, e,er!ed on the eve of the (ar at the top of the !overn,ent>s develop,ent a!enda. =n addition, they (o)ld cooperate in brin!in! Coca1Cola to 8!ypt.

/ooting the Ships

E-bb)d !ained first1hand kno(led!e of the potency of this partnership bet(een a bitter personal adversary, E-fifi, and t(o sets of co,petitors, (hen he lost his bid in 19"9 to obtain a financial s)bsidy for his shippin! 2oint vent)re: the old =nchcape s)bsidiary, the Nhedival Gail .ine. E-bb)d bo)!ht the ships fro, the =nchcape interests, b)t he had to raise the capital for their transfer by ,ort!a!in! the, and (as heavily in debt to the /ational Bank of 8!ypt. -t the sa,e ti,e, the vent)re (as r)nnin! at a loss. :e nat)rally t)rned to the state to bail hi, o)t, clai,in! that his ships deserved the sa,e level of s)pport as the heavily !overn,ent1s)bsidi4ed co,panies that the <ahya and Gisr !ro)ps had la)nched (ith forei!n capital in the early 19"#s.[1] &ho)!h -h,ad Gahir, the ,inister of finance and one of E-bb)d>s closest allies, fo)!ht hard for the s)bsidy, Gahir>s ene,ies in the 'afd 2oined (ith E-bb)d>s b)siness rivals in attackin! both Gahir and the s)bsidy plan.[)] 9aba :abashi, the ,inister of co,,erce and ind)stry, spearheaded the opposition inside the cabinet, pittin! hi,self a!ainst his fello( 9aEdist party ,e,ber, Gahir. &he attack foc)sed ,ainly on the fir,>s historic links (ith .ord =nchcape, the lon!1dead British shippin! baron. B)t in atte,ptin! to discredit the nationalist %ona fides of E-bb)d>s shippin! co,pany, the opposition>s hand (as stren!thened by E-bb)d>s penchant for indiscretion, (hich in this case linked Gahir>s na,e too closely and pro,inently to the E-bb)d !ro)p. Gahir (as finally forced to retreat in the conflict (ith :abashi, allo(in! his opponents to b)ry the s)bsidy +)estion.[*] E-bb)d>s sinkin! fort)nes in the shippin! b)siness (ere salva!ed only by the be!innin! of the (ar, (hen he s)ccessf)lly leased his fleet to the British state 5after threatenin! to sell the, to =talian b)yers;. :abashi ,ean(hile rather +)ickly overca,e his ob2ection to forei!n invest,ent 5real and i,a!ined; in the local econo,y. =,,ediately )pon leavin! office, he and t(o of his collea!)es took )p positions on the boards of a n),ber of the <ahya !ro)p>s 2oint vent)res. Gahir, tho)!h, re,ained loyal to E-bb)d, a fact (hich ,ay have cost hi, his position in the cabinet for,ed by his brother in -)!)st 19"9. :e and his )ndersecretary of finance, -,in EUth,an, another partner in E-bb)d>s e@pandin! co,,ercial e,pire, atte,pted a last1,in)te intervention on behalf of E-bb)d>s -s(an sche,e, tho)!h by this ti,e the !overn,ent had lined )p solidly behind the rival pro2ect of the <ahya !ro)p.[+] ?nce a!ain, the b)siness conflict in 8!yptian political life that = have been hi!hli!htin! tends to co,plicate conventional acco)nts of another key period in 8!ypt>s history. -s is )s)ally noted, the ne( E-li Gahir !overn,ent and the British a)thorities (ere involved in a series of escalatin! confrontations, (hich led both to Gahir>s do(nfall by A)ne 196# and to the s)bse+)ent interpretations of his policy as one !)ided by an overarchin! and Clon! r)nD ob2ective of (eakenin! British Cinfl)enceD 5Gorsy 19%9: 33;. &he p)r!es at the Iinance Ginistry are conventionally interpreted in this li!ht. :o(ever, (hile Cpro1BritishD fi!)res like -h,ad Gahir, the for,er finance ,inister,

and his dep)ties lost their positions, e+)ally sta)nch pro1British fi!)res (ere appointed to these sa,e strate!ic sinec)res. &hey incl)ded :)sha,4a 9irri, (ho took over at Iinance, (here he helped the co)ntry>s leadin! spokes,an for -n!lo18!yptian co,,ercial cooperation, E-fifi, take over the co)ntry>s ,ost i,portant national econo,ic instit)tion, Bank Gisr.

The KiCac7ing of #an7 6isr

&here is no ,ore !raphic e@a,ple of the <ahya !ro)p>s ascent to the co,,andin! hei!hts than its assa)lt on :arb>s ,assive, teeterin! ,on),ent to econo,ic nationalis,, Bank Gisr. &he ,ana!e,ent>s +)estionable financial practices co,bined (ith a !eneral econo,ic do(nt)rn to (eaken the co,,ercial position of Bank Gisr in the late 19"#s. - r)n on the bank as the (ar broke o)t forced :arb to seek additional s)bsidies fro, E-li Gahir>s !overn,ent. &he pre,ier and his finance ,inister, 9irri, forced :arb off the board as the price for the !overn,ent>s s)pport. E-fifi took over as chair,an of the bank in 9epte,ber 19"9. 'hile nationalist historio!raphy has tended to fra,e the Bank Gisr crisis and :arb>s overthro( as an e@a,ple of forei!n capital>s contin)in! hostility to 8!yptian ind)stry, the e@plicitly revisionist acco)nts by Favis 519%"; and &i!nor 519%6; have effectively )nder,ined the vie( of the crisis as a British plot. Favis concl)des that rival investors and their political allies had taken advanta!e of the bank>s financial crisis. C-t the center of the conspiracy to o)st &alEat :arb (as Fr. :afi4 al1E-fifiD PsicQ. =n addition, both the pre,ier, E-li Gahir, and his finance ,inister, 9irri, also so)!ht :arb>s dis,issal, accordin! to Favis, beca)se Che (as closely associated (ith -h,ad E-bb)dD 5Favis 19%": 13B, 133;. &ho)!h 9irri !rad)ally ,oved closer to E-bb)d late in the 196#s, = have )ncovered no evidence linkin! hi, to E-bb)d at the ti,e of the Gisr crisis. Gore tellin!ly, no act served E-bb)d less than appoint,ent of his )ns(ervin! personal, political and co,,ercial rival, E-fifi. 'hile Favis places E-bb)d in the thick of the ,)ltisided conspiracy, this interpretation is incorrect. E-bb)d>s efforts to take control of the bank took place d)rin! 196BJ1966, in response to the s)ccessf)l co)p by E-fifi and the <ahya !ro)p. ?ne of the ,ost i,portant res)lts of the 19"9 leadership chan!e at Bank Gisr has been overlooked. -s the a)ditors (ere tryin! to ,ake so,e sense of the bank>s tan!led finances, E-fifi bro)!ht his partner and head of a ,a2or rival b)siness !ro)p, E-li -,in <ahya, onto the bank>s board. &hese investors in effect created a ne( instit)tion for private re!)lation of ,arkets thro)!h (hat at the ti,e (o)ld have been called a co,bination, a for, of co,,on control over other(ise independent fir,s. -t the sa,e ti,e, the ori!inal coalition of investors behind the fo)ndin! of the bank and its s)bsidiaries (as bein! forced to s)rrender its e@cl)sive ri!hts to appropriatin! and distrib)tin! the rents !enerated by Bank Gisr>s factories, fir,s and branches.

World War 44 and the !estructuring of the Postcolonial State and Econo(y
&he intensifyin! conflict a,on! these 8!yptian investors is an )nkno(n facet of the (ar years in 8!ypt. &he details of econo,ic policy,akin! and interest conflict !enerally have been i!nored in the -n!locentric narratives of British efforts to sec)re loyal !overn,ents in a co)ntry vital to -llied defense plans, as (ell as in the nationalist co)nter1narratives of the (ar as a neocolonialist pro2ect and catalyst of the )pheavals of the 195#s. &he intersectin! point of these alternative narratives is 6 Iebr)ary 196B, (hen, (ith the Ler,ans pressin! to(ard 8l -la,ein, British ar,or s)rro)nded the E-bdin Palace and British a,bassador .a,pson forced Nin! Iar)+ to appoint the 'afd party leader /ahhas as pri,e ,inister. 'ith British backin!, /ahhas and the 'afd re,ained in po(er )ntil ?ctober 1966. &he e@i!encies of the (ar (ere )ndo)btedly the ca)se of the repeated British violations of 8!yptian soverei!nty, the e@plosive increase in the n),bers of forei!n soldiers on 8!yptian soil and the b)rdenso,e ad,inistrative re!)lations i,posed on the co)ntry7 like(ise, they obvio)sly overrode concern for the inevitable backlash that (o)ld follo( this resort to colonial1like for,s of intervention and control. 8!yptian nationalists are also correct in ass),in! that British policy,akers hoped to e@ploit the position b)ilt )p d)rin! the (ar in order to stren!then econo,ic linka!es bet(een Lreat Britain and 8!ypt. B)t they erred, as did British policy,akers like .a,pson, in thinkin! that 8!yptian capitalists shared these ob2ectives. Gy acco)nt of b)siness and politics d)rin! the (ar years be!ins (ith the ad hoc creation of ne( for,s of state intervention in the econo,y, a !enerally )nre,arked1)pon side of the early years of the (ar, and the efforts by b)siness rivals to shape the e,er!ency re!)latory re!i,e in their interests. &he analysis foc)ses in partic)lar on the )nfoldin! conflicts over fertili4ers and the proposed i,port1s)bstit)tion nitrate ind)stry.

The Aertili;er Crisis

.andlords, peasants and cons),ers paid heavy costs for the years of incessant private conflicts and incoherent p)blic policies over the -s(an pro2ect, tho)!h so,e shippers and traders had reaped a handso,e (indfall. &he shorta!e of fertili4ers proved to be one of the ,ost critical (arti,e proble,s faced by the predo,inantly a!ric)lt)ral econo,y. 8!yptian prod)cers re+)ired ,ore fertili4ers than in nor,al years in order to ,eet the increased de,and for food and to co)nter the adverse effects on prod)ctivity ca)sed by acrea!e and other (ar1related restrictions. =nstead, fertili4er i,ports dropped precipito)sly belo( the pre(ar levels. =n 19"%, 8!ypt had i,ported 516 tho)sand tons of fertili4ers. &he fi!)re for 1961 by contrast (as only 5 tho)sand tons. -!ric)lt)ral econo,ist -lan Richards

ri!htly labels this !reater than 3## percent drop a Ccatastrophic declineD 519%B: 13%J1$";. &ho)!h deliveries be!an to increase in 196B, by the end of the (ar i,ports (ere still at less than half their pre1'orld 'ar == levels. &he (ar had co,pletely disr)pted 8!ypt>s nor,al channels of trade. Circ)its bet(een 8!ypt and Ler,any (ere co,pletely c)t off, and the -@is po(ers instit)ted a s)ccessf)l blockade of the -tlantic1Gediterranean shippin! ro)tes. -t the sa,e ti,e, the -llied po(ers diverted the b)lk of their s)pplies and relatively scarce shippin! space to cond)ctin! the (ar, (hich ,eant in !eneral a tre,endo)s decrease in the vol),e of i,ports reachin! 8!ypt. Iro, 1961 on, 8!ypt>s access to forei!n s)pplies (as essentially controlled by the -llied econo,ic a)thority in 8!ypt, the Giddle 8ast 9)pply Center 5G89C;, an instit)tion desi!ned to coordinate re!ion(ide ,ilitary and civilian s)pply re+)ire,ents. G89C (ielded tre,endo)s po(er over the local political econo,y, accordin! to one of its officials, pri,arily by its ability Cto brin! to bear 2)st the ri!ht a,o)nt of press)re on the 8!yptian !overn,ent to ind)ce it to fore!o (hat it (anted or to take action that it did not (ant to take, (itho)t provokin! a political e@plosion.D &o an i,portant e@tent, the drastic red)ction and, at ti,es, Cthe co,plete cessation of fertili4er i,portsD (ere Cbro)!ht abo)tD0that is, coordinated0by G89C 5.loyd 1953: %5, %$;. &he -llied a)thorities in partic)lar e@ploited 8!ypt>s dependence on fertili4er i,ports, holdin! back s)pplies )ntil the 8!yptian a)thorities t)rned over do,estic food crops0(heat, barley, rice and ,illet0to the British ar,y. &he steep rise in local fertili4er prices provided an early and obvio)s si!n of the i,pendin! s)pply proble,. Pro,inent lando(ners protested in parlia,ent a!ainst (hat they clai,ed (as a !overn,ent1sanctioned 2),p in prices of over $# percent bet(een ?ctober 19"9 and Iebr)ary 196#, and they acc)sed the Gahir re!i,e of helpin!the oli!opoly distrib)tors, the Royal -!ric)lt)ral 9ociety and the -!ric)lt)ral Credit Bank, to cash in on the (ar 5Egyptian 7a8ette B9 Iebr)ary 196#;. &he British e,bassy acco)nts report an even steeperprice rise of 1B# percent by Aan)ary 196#.[-] Gahir>s !overn,ent fo)nd itself co,pelled by circ),stances, as (ell as by the steady press)re of British a,bassador .a,pson, to reconsider the 88C>s -s(an sche,e as a sol)tion to the fertili4er crisis. -s it t)rns o)ts, ho(ever, the 88C>s rivals applied press)re even ,ore effectively than did .a,pson, (ho fo)nd .ondon s)ddenly deaf to his pleas on behalf of 8!ypt and the 88C.

Contesting National 4nterests

&ho)!h po(er, soverei!nty and the national interest are three sacred concepts in realist conceptions of international political econo,y, the po(er of the investors and their allies (ho fo)!ht for control over develop,ent of 8!ypt>s ne( fertili4er ind)stry in 'orld 'ar == e@posed both soverei!nty and national interest as, at best, )sef)l fictions.

&he co,petition to b)ild 8!ypt>s first i,port1s)bstit)tion nitrate factory had t)rned into a free1for1all on the eve of the (ar, a reflection of the tre,endo)s )ncertainty that !ripped investors and decision ,akers alike. E-li Gahir>s predecessor had ostensibly co,,itted the 8!yptian state 5-pril 19"9; to an a!ree,ent (ith :)n!arian and -,erican investors (ho (ere partners (ith the local <ahya !ro)p in the proposed Felta fertili4er sche,e. -,bassador .a,pson and his staff (ere intent on protectin! (hat the British Iorei!n ?ffice and the Fepart,ent of ?verseas &rade vie(ed as the 88C>s prero!atives in this sector, insistin! that the 8!yptians si!n a final a!ree,ent for the rival -s(an pro2ect. ?nly days before the !overn,ent fell, E-bb)d>s ally, the finance ,inister -h,ad Gahir, intervened to hold )p a possible a!ree,ent (ith the 88C. E-bb)d>s lon!1ti,e partners, the British &ho,son :o)ston Co,pany 5B&:, part of the -8= co,bination;, ,ade a ne(, eleventh1ho)r offer that the 8!yptians s)ddenly felt Cd)ty bo)ndD to e@a,ine.[.] .a,pson and his staff so)!ht to recover fro, this setback by be!innin! a ne( lobbyin! effort for the 88C0and their ostensible allies, the 8!yptian peasantry0virt)ally fro, the day the ne( E-li Gahir !overn,ent took office. E-li Gahir (as an advocate of a proposed ne( Ginistry of 9ocial -ffairs to i,prove the ,iserable conditions in the 8!yptian co)ntryside. ?ne of .a,pson>s advisers so)!ht to convince Gahir that if he really intended Cto do so,ethin! tan!ible for the fallah,D he sho)ld instead let the 88C b)ild the -s(an pro2ectH ?f co)rse, the 88C and its backers (isely chose not to rely on ,oral s)asion alone. &h)s, its bankers so)!ht to block the <ahya !ro)p and its forei!n partners in the Felta 9che,e fro, access to capital in .ondon, Paris and /e( <ork, a step (hich British officials both s)pported and believed )lti,ately to have s)cceeded.[0] = believe that the E-li Gahir !overn,ent looked f)tilely in the fall of 19"9 for a (ay to salva!e the fertili4er sche,e for the <ahya !ro)p, the investors (hose interests had been so (ell served by the recent palace1backed ad,inistrations, (hile tryin! to fend off the British press)re on behalf of the 88C. &h)s, (hen Gahir appointed a ne( cabinet co,,ittee on -s(an, the 88C representatives fo)nd its ,e,bers and, in partic)lar, 9irri, (ho helped en!ineer the <ahya !ro)p>s takeover of Bank Gisr, Cintolerable and diffic)lt to deal (ith, al(ays findin! so,e fresh e@c)se to postpone a decision.D[1] &he s)pport for <ahya (as constrained, ho(ever, as (ell as contin!ent on the <ahya !ro)p>s bein! able to Cdeliver the !oods,D (hich (as increasin!ly open to +)estion. &he !ro)p>s :)n!arian backers co)ld not obtain financin!, and the key U.9. fir,, -,erican Cyana,id, had pr)dently be!)n to revive its old association (ith the rival -s(an proposal pro,oted by E-bb)d and the -8= B&: consorti), 5(ho (ere the heirs of Focker>s ori!inal sche,e;. &(o broader considerations affected the Gahir !overn,ent>s decision ,akin! in this case: the contin)ed health of the a!roe@port sector and the fra!ile state of relations (ith the British a)thorities. Both factors (ere critical )lti,ately to Gahir>s s)rvival in office and help to

e@plain Gahir>s decision, finally, to co,e to ter,s (ith the 88C in late Fece,ber 19"9 5Cha,ber of Fep)ties 196%: $;, a decision ,ade less painf)l perhaps by a ne( packa!e of financial concessions offered by these British investors alon! (ith a co,,it,ent to at least partial prod)ction at the plant (ithin t(o years.[2] -nd the cabinet>s insistence on i,ple,entin! the sche,e via a locally incorporated enterprise, for (hich the 88C (o)ld act as contractors rather than concessionaires, ,eant that so,e set of 8!yptian investors (o)ld )lti,ately !ain a share in the ne( state1created ,onopoly. =f Gahir fo)nd his partic)laristic a!enda constrained by a broader set of instit)tional forces and relationships, than so did another local po(er holder, British a,bassador .a,pson, (ho had (orked so hard over the years on behalf of the 88C. Iollo(in! his ,eetin! (ith the 8!yptian pre,ier on B# Fece,ber 19"9, in (hich Gahir co,,itted to a co,pleted a!ree,ent (ithin three (eeks 5Gahir still had to sec)re parlia,entary approval;, .a,pson (ired the follo(in! ,essa!e to officials in .ondon: C&he -s(an sche,e is no( )nder the ,ost )r!ent consideration of the !overn,ent as a res)lt of contin)o)s press)re kept )p by this 8,bassy.R&he fact is that (e are pled!ed to !ive financial s)pport and = ,ost )r!ently tr)st that f)rther instr)ctions (ill not c)t across (hat has clearly been the policy of his ,a2esty>s !overn,ent )p til no(. &he 8,bassy is no( )navoidably in daily contact (ith the 8!yptian ,inisters on this s)b2ect.D[13] Fis,ayin!ly prescient, .a,pson soon learned that directors of the rival electrical ,an)fact)rer, B&:, had intervened directly (ith the secretary of the treas)ry to block the C)nfair s)pportD !iven to the 88C. 'ithin a (eek, &reas)ry had revie(ed and reversed its position, anno)ncin! that the British !overn,ent (o)ld not pay for the 8!yptian fertili4er sche,e nor allo( the diversion of vital ra( ,aterials that (ere needed for the (ar. &ho)!h 88C e@ec)tives tried to salva!e their position in .ondon, the effort failed.[11] -s .a,pson>s diaries reveal, he and the co,panies proposed to keep the ne(s of this setback fro, the 8!yptian !overn,ent for as lon! as possible. &h)s, (hile E-li Gahir and his collea!)es ne!otiated (ith a parlia,entary co,,ittee to sec)re approval for the e@pedited i,ple,entation of the fertili4er1factory pro2ect, the obvio)sly desperate 88C and its allies in the British !overn,ent looked for (ays to obtain the 8!yptians> si!nat)res on a contract for a pro2ect that they kne( (o)ld not be b)ilt in the foreseeable f)t)re 5Egyptian 7a8ette 6 and 1B Aan)ary 196#;. Percy :orsfall, the .a4ard Brothers banker, advocated o)tri!ht lyin! to the 8!yptians, b)t .a,pson, to his credit, advised a!ainst it 59illearn Diaries 5, 11, 1", 13, 1$ and B1 Garch 196#;. Gahir, (hose !overn,ent faced increasin! do,estic press)res on the econo,ic front in the sprin! of 196#, risked his already1fra!ile relations (ith the British a)thorities over the fertili4er1factory iss)e. &he pri,e ,inister apparently tho)!ht he co)ld infl)ence the 88C to deliver on at least part of the sche,e0a factory capable of prod)cin! one h)ndred tho)sand tons of fertili4er, one1third of the ori!inal pro2ected ann)al capacity0by threatenin! to t)rn to the co,petition. &h)s Gahir ,ade a sho( of invitin! the 88C>s

rivals to 8!ypt and )nderscored the ,essa!e by s)ddenly declarin! the old 19"5 co,,it,ent to e@cl)sive ne!otiations (ith the 88C n)ll and void 5alhram 1$ Garch 196#;. .a,pson and the 88C ans(ered by tryin! both to i,pose ri!id conditions on contacts bet(een the !overn,ent and the co,petitors, and to force the 8!yptians to )phold the old ter,s of the infa,o)s 19"5 a!ree,ent.[1)] 'hen the 8!yptians finally )nveiled their reasoned co,pro,ise proposal in -pril, the British p)rposely i!nored it, and in a tense confrontation .a,pson instead de,anded that they take back the le!al adviser>s C(retched letterD overt)rnin! the 19"5 accord. -t the sa,e ti,e, the a,bassador privately advised the 88C to take a hard line (ith the 8!yptians, advice (hich (as )ndo)btedly infl)enced by the a,bassador>s o(n increasin!ly hard line to(ard Gahir. &he British doc),entation on the 196# -s(an ne!otiations abr)ptly ceases after -pril7 these ne!otiations contrib)ted to and (ere then overtaken by the crisis that led to Gahir>s fall by A)ne. -s one British official later recalled, CLrave b)siness (as takin! place in 8!ypt and this partic)lar b)siness Pthe nitrate sche,eQ had to be i!nored for the ti,e bein!.D[1*] &his s),,ary of the aborted 19"9J196# bar!ainin! ro)nd s)!!ests that, in foc)sin! al,ost e@cl)sively on Gahir>s alle!ed pro1-@is sy,pathies 5and, th)s, privile!in! .a,pson>s o(n obsessions;, historians have possibly !iven )s an overly narro( and )lti,ately ,isleadin! acco)nt of -n!lo18!yptian relations d)rin! this early and critical phase of the (ar. Iirst, Gahir>s !overn,ent is often described as havin! co,plied f)lly (ith British a)thorities in vario)s policy do,ains, yet this (as clearly not the case (ith the proposed fertili4er factory. Gahir>s !overn,ent (as bro)!ht aro)nd to s)pport British preferences in this case0a!reein! to deal (ith the 88C0only rel)ctantly, and )nder press)re. -t the sa,e ti,e, the Gahir !overn,ent obvio)sly e@ercised its capacity to resist certain British de,ands0the b)rial of the 19"5 a!ree,ent is a case in point. 9econd, then, conventional acco)nts of (arti,e -n!lo18!yptianrelations rest on an e@ceedin!ly narro( definition of intervention and the real, enco,passed by politics. =n contin)in! to foc)s al,ost obsessively on the details of s)ch episodes as Gahir>s re,oval fro, office in A)ne 196# or the even ,ore 5,elo;dra,atic enco)nter bet(een Iar)+ and .a,pson in Iebr)ary 196B, (e lose si!ht of the fact that British ad,inistrators interfered daily in the political econo,y. 8,bassy and G89C officials oversa( an array of ne( controls over prod)ction, distrib)tion channels and prices. 8!yptian lando(ners and capitalists probably tended to disco)nt the profits and inflate the losses res)ltin! fro, (hat they 5and ,ost other sectors of society; vie(ed, +)ite acc)rately, as enhanced forei!n ,anip)lation, infl)ence and control. &he brief res)rrection of the nitrate1factory iss)e in early 1961 si,ply )nderscores the de!ree to (hich the local political econo,y (as in fact a captive of the !lobal conflict. ?n the one hand, local s)ppliesof nitrates contin)ed to decline. 8!ypt fertili4er stocks had fallen toei!hty tho)sand tons by early 1961, (hile prices had nearly do)bled a!ain, to X8 B1 per ton.[1+]

&hese conditions led the 9irri !overn,ent to be!in a centrali4ed rationin! and distrib)tion sche,e for s)pplies that (ere )lti,ately controlled by British b)siness,en and b)rea)crats. ?n the other hand, a revived proposal for carryin! o)t the -s(an pro2ect as an e,er!ency (ar ,eas)re ca,e directly fro, the G89C in Cairo.[1-] .ondon>s )nderstandable rel)ctance to accord 8!ypt>s needs for vital ra( ,aterials and ,achinery a top priority effectively ended ne!otiations over the -s(an pro2ect )ntil the British victory over the Ler,ans at 8l -la,ein. &he s),,er of 196B (as the ,ost critical period of the (ar in 8!ypt. Ro,,el la)nched his first attack in the desert (est of -le@andria, on 1 A)ly, and (hile his advance had been stalled by 1 9epte,ber, the decisive battle in the 8!yptian ca,pai!n (as fo)!ht on B /ove,ber. /ine ,onths earlier, the British had en!ineered the infa,o)s ret)rn of a CloyalD 'afd !overn,ent to po(er. British officials in Cairo be!an fi!htin! a different kind of (ar in 8!ypt in 196", (ith tre,endo)s i,plications for the 8!yptian political econo,y and, )lti,ately, for British po(er. -s the doc),ents on the revived -s(an ne!otiations in 196"J1966 clearly attest, -,bassador .a,pson led an )lti,ately f)tile effort to preserve the 8!yptian ,arket for British heavy ind)stry. -s a doc),ent fro, the Board of &rade>s files defined the proble,, C'e shall need an o)tlet for o)r heavy ind)stry after the (ar and 8!ypt (ill al(ays need these nitrates. &he sit)ation in that co)ntry has chan!ed beyond belief and = (onder if the ti,e has not co,e to try and re1establish the position the !ro)p had b)ilt )p for the,selves by >"5. =C= have said that they (o)ld have any a,o)nt of s)rpl)s plant on their hands after the (ar. =t (o)ld be a blessin! to !et rid of it at a reasonable price.D[1.] ?f co)rse, one of the ,ost visible kinds of chan!e (as the relative advance of a do,estic ,an)fact)rin! sector in tande, (ith the e,er!ence of local investors like the E-bb)d, <ahya and Gisr !ro)ps. F)rin! the latter part of 'orld 'ar ==, British state a!ents (ere dra(n into the increasin!ly bitter battles a,on! 8!yptian b)siness factions. .a,pson and his collea!)es so)!ht to e@ploit their e@traordinary political position to defend a!ainst (hat at the ti,e (as seen as the ,ost potent threat to lon!1 ter, British interests: U.9. capital. &h)s, even (ith Ro,,el threatenin! -le@andria and .a,pson facin! a decisive political battle (ith pro1-@is 8!yptian leaders, the Iorei!n ?ffice (as concerned that the a,bassador not allo( C-,ericans (ho ,i!ht co,e in the dis!)ise of British to step inD and take over the -s(an pro2ect.[10] M M M

The 12+)B12++ Wafd %o ern(ent and 95&&udDs #id to #eco(e Egypt 4nc.
- partic)lar confi!)ration of investors, state a!ents and political factions, (hich = called a neo1-n!lo18!yptian invest,ent bloc, had sec)red (hat

see,ed by the ,id119"#s to be a do,inant position over the invest,ent reso)rces of the 8!yptian state. &he core of this bloc (as the Gisr !ro)p, the leadership of the 'afd party and the British residency. -t the sa,e ti,e, the fort)nes of an alternative a)thoritarian coalition linkin! Nin! I)>ad, the palace and E-bb)d !rad)ally fell apart. Bet(een 19"9 and 1961, a set of rival investors (ho (ere led by the <ahya fa,ily and (ho )ndo)btedly incl)ded associates of the ne(kin! 5if not the kin! hi,self; s)ccessf)lly (rested control of Bank Gisr and, th)s, of the ,ost i,portant of the state1s)bsidi4ed and state1protected rent circ)its. &he first t(o sections of this chapter have in effect reco)nted the po(er play by this bloc of palace politicians and -le@andrian investors (ho had backed the ,inority !overn,ents ofE-li Gahir and 9irri. Bet(een 196B and 1966, this sa,e loosely ali!ned set of b)siness,en and palace notables for,ed the core of the opposition to the British1backed 'afd !overn,ent, and in so,e heroic1e@ceptionalist acco)nts they are identified0+)ite inappropriately0as representin! the ,ost pro!ressive factions of the national ind)strial bo)r!eoisie. &he follo(in! section analy4es the steadily escalatin! econo,ic conflicts that ,arked the second phase of the (ar, 196"J1965 and, in partic)lar, the re,arkable bid by E-bb)d to beco,e, in the only sli!htly hyperbolic (ords of one British official, Cthe ,ost po(erf)l fi!)re in 8!ypt, ,ore po(erf)l by far than the kin! or any !ro)p of 8!yptians, (hether political or financial.D[11] &he key to this effort (as a set of three separate alliances that E-bb)d be!an to for!e in 196B. &he first (as (ith the 'afd party, (hich had e@pelled the b)siness,an in 19B%. &he second (as (ith the British e,bassy, (here he had been declared persona non grata for ,ost of the 19"#s. -nd the third (as (ith -,erican capital, ,)ch to the consternation of the British state.

95&&ud #uys the Wafd

'hile the bar!ain that bro)!ht the 'afd back to po(er is (ell kno(n, the accord bet(een the party and the E-bb)d !ro)p re+)ires so,e preli,inary analysis. &he British and the 'afd (ere p)shed into each other>s ar,s by the force of circ),stance. &he British confronted a !ro(in! threat to the -llied strate!ic position by the /a4i offensive across /orth -frica. &he 'afd so)!ht to ret)rn to po(er. &he palace, spearhead of the anti1'afdist and pro1-@is forces in 8!ypt d)rin! the (ar, (as the co,,on ene,y. &he British a,bassador, .a,pson, arran!ed for the 'afd>s cooperation thro)!h his tr)sted inter,ediary 5and E-bb)d>s b)siness partner;, -,in EUth,an, and carried o)t his co)p (ith the help of British ar,ored cars, (hich s)rro)nded the palace on the evenin! of 6 Iebr)ary 196B. &he a,bassador offered Nin! Iar)+ the choice bet(een abdication or ac+)iescence to the appoint,ent of /ahhas, (ho, the kin! detested, as pre,ier. Ior his part, E-bb)d had enco)ra!ed and benefited fro, the rise to infl)ence (ithin the party of an entreprene)rial cohort co,,itted to adaptin! the 'afd to the standard ,odel of postcolonial politics. &h)s, accordin! to

'arb)r!, Cfavoritis,, nepotis, and politici4ation of the ad,inistration s(ept the co)ntryside. &he 'afd (as Edi!!in! in,> to )se .a,pson>s (ords, and tryin! to ,ake )p for the five lean years it had spent in oppositionD 519%5: 1"%;. E-bb)d established b)siness ties (ith the pre,ier>s in1la(s, the notorio)sly corr)pt al1'akil fa,ily, and other (o)ld1be investors, incl)din! -,in EUth,an, the -b) al1Iath fa,ily, and the a,bitio)s lando(ner I)>ad 9ira! al1Fin, (ho sei4ed de facto control of the party in 196B and (ho re,ained at the head of the party ,ore than fifty years later 5Ber+)e 19$B: 5667 &i!nor 19%6: B617 'arb)r! 19%5: 1"$7 Gakra, EUbayd P196"Q 19%6;. -s British e,bassy observers pointedly re,arked at the ti,e, there (ere Cvery fe( b)siness,en in 8!ypt (ith (ho, E-bb)d is (holly )nassociated.D[12] 'hat co)ld E-bb)d offer the party in ret)rn for its s)pport* &(o thin!s co,e to ,ind 5apart fro, o)tri!ht bribes;. Iirst, as (as co,,on in 8!ypt 5and else(here of co)rse;, the b)siness,an co)ld offer a,bitio)s politicians or their sons positions in his enterprises, l)crative s)bcontractin! opport)nities, etc. 9econd, tho)!h virt)ally nothin! has been (ritten on the s)b2ect, the party needed f)nds to f)nction, and virt)ally all observers a!ree that as a party of Crelatively poor ,en,D the 'afd (as less able to f)nd its activities than Crich partiesD s)ch as the .iberals or 9aEdists.[)3] Iro, the ti,e of their reconciliation in 196B )ntil the party (as forced to disband in 195B, E-bb)d (as (idely reco!ni4ed in fact as the 'afd>s pri,ary financier 5Goore 19%#: 1B6;. Iinally, and ,ost i,portant, the liberal econo,ic ,odel to (hich the 'afd re,ained co,,itted e,po(ered the private o(ners and ,ana!ers of the ,eans of prod)ction. E-bb)d !ained handso,e payoffs once (hat = call the b)siness (in! of the 'afd tri),phed over the re,nants of the party>s old !)ard in an intraparty po(er str)!!le. &he conflict pitted 9ira! al1Fin a!ainst E-bb)d>s old ne,esis, the la(yer Gakra, EUbayd, (ho (as the finance ,inister and n),ber t(o ,an in the 'afd )ntil his abr)pt dis,issal fro, the cabinet in Gay 196B and e@p)lsion fro, the party itself t(o ,onths later. 'arb)r! 519%5: 16#; describes this last of the historic splits (ithin the 'afd as the sin!le ,ost i,portant factor in )nder,inin! the /ahhas !overn,ent and helpin! the palace to recover the political initiative. Gakra, EUbayd later portrayed the str)!!le (ith the 9ira! al1Fin faction as a battle a!ainst corr)ption inside the party, (hich he p)blici4ed 5(ith the palace>s help; in his infa,o)s Blac$ Boo$ 5196";. =n fact, his dis,issal ca,e in the ,idst of a conflict (ith E-bb)d, (ho as the ne( chair,an of 8!ypt>s s)!ar ,onopoly opposed the finance ,inister>s plan for (idespread p)blic distrib)tion of the costly and increasin!ly scarce basic !ood. :is fall cleared the (ay for (hat British diplo,ats called E-bb)d>s Cthief>s bar!ain.D &he 'afd !overn,ent virt)ally ceded soverei!nty to E-bb)d, allo(in! hi, to trade Cs)rpl)sD stocks of s)!ar for fertili4ers, at a ti,e (hen the do,estic ,arket (as e@periencin! re!)lar shorta!es of the co,,odity. -fter protracted ne!otiations, E-bb)d sold enor,o)s +)antities of 8!yptian s)!ar to the British a)thorities, at an i,pressive profit, (hile co,pletely

circ),ventin! the nor,ally hi!h e@port ta@. -t the sa,e ti,e, he obtained the release of fertili4er stocks for his s)!ar plantation at -r,ant, tho)!h these s)pplies (ere officially ear,arked for )se on other crops. :e also received special ship,ents of ,achinery for his s)!ar factories as part of the deal.[)1] &he 'afd1borne (indfall (as spread across E-bb)d>s far1fl)n! co,,ercial e,pire. Ior instance, the /ahhas !overn,ent a(arded E-bb)d>s shippin! co,pany the l)crative concession to transport pil!ri,s to Gecca, despite its havin! been an e@cl)sive preserve of the Gisr !ro)p d)rin! the 19"#s.[))] &he !overn,ent also ,oved decisively to break the /ove,ber 196B strike by shipyard (orkers at E-bb)d>s Nhedival Gail .ine, one of the first )nions reco!ni4ed )nder the 'afd>s ne( prob)siness labor la( 5Beinin 19%B: 1%B7 Bianchi 19%3: 6"#J6"1, 6""J6"6;. -nother, even ,ore re,arkable aspect of this (arti,e political reali!n,ent entailed the rapid restoration of cooperative ties bet(een E-bb)d and the British e,bassy, (hich incl)ded increasin!ly fre+)ent, direct access to .a,pson hi,self. E-bb)d>s co,petitors a,on! the resident British b)siness co,,)nity (ere )nderstandably distra)!ht over this shift in policy, partic)larly as E-bb)d so)!ht to e@ploit this )ni+)e con2)nct)re and the )nprecedented de!ree of political latit)de that it conferred. E-bb)d>s political ,ane)verin! of the period is sy,boli4ed by the ,eetin! he arran!ed at his Upper 8!yptian estate in -r,ant in Garch of 196", (here .a,pson (as rec)peratin! fro, a dan!ero)sly hi!h fever. E-bb)d arran!ed for .a,pson to see the kin!>s representative and chief adviser, :assanha,4a Pasha. -s .ord Nillearn 5.a,pson received his peera!e on the /e( <ear, 196"; (rote, E-bb)d C(as obsessed (ith the idea that he had a ,ission to i,prove relations bet(een the 8,bassy and kin! Iaro)kD 59illearn Diaries# entry dated 19 Iebr)ary to "# Garch 196";. &he ,eetin! took place only ten days before the palace and Gakra, EUbayd la)nched the first of their atte,pts to brin! do(n the /ahhas !overn,ent 5'arb)r! 19%5: 16#J16";, and E-bb)d had obvio)sly hoped to pree,pt s)ch a challen!e.[)*] &hese efforts on behalf of the increasin!ly e,battled 'afd !overn,ent (ere linked to a plan (hose scope and a,bition !ave even the British pa)se: by 196" E-bb)d had la)nched a bid to take over the Gisr !ro)p>s plants and factories and to )se the reso)rces of the state to create ne( nitrate and po(er ind)stries )nder his e@cl)sive private control.

95&&ud #uys a #an7" The 5ssault on the 6isr %roup

=n late A)ly 196", E-bb)d called on the British a,bassador to disc)ss t(o ne( confidential pro2ects. Iirst, he proposed to take over the -s(an ne!otiations by for,in! an 8!yptian co,pany that (o)ld o(n and operate the entire sche,e. 9econd, he (anted to take over the Bank Gisr !ro)p. :e told .a,pson that he already held a controllin! interest in the bank and (o)ld seek to overthro( the present ad,inistration0i.e., his rival, E-fifi. E-bb)d so)!ht British backin! of this naked po(er play, and to !ain it he

co)ched his sche,e nat)rally in ter,s of enco)ra!in! -n!lo18!yptian post(ar trade. &he i,plications (ere clear ho(ever. :is -s(an sche,e ,eant that he and not the British co,panies 5or the 8!yptian !overn,ent; (o)ld control the vent)re 59illearn Diaries B9 A)ly 196";. E-bb)d clai,ed to hold B5 percent of Bank Gisr>s stock7 British so)rces esti,ated that he held B# percent at ,ost7 b)t at any rate, he (as the sin!le lar!est shareholder.[)+] &he chair,an of the bank, E-fifi, checked E-bb)d>s first atte,pt to )se his votin! bloc by ref)sin! to re!ister a portion of his holdin!s and then by alterin! the votin! ri!hts. Favis 519%": 153; ,istakenly dates this incident back to the ,id119"#s, and he attaches to it an idiosyncratic interpretation: CRather than (anin!, corr)ption in the Gisr Lro)p beca,e even ,ore pervasive as the str)!!le a,on! ,e,bers of the bo)r!eoisie for directorships increasedD 513%;. <et the Cstr)!!le for directorshipsD in this case (as ,ore acc)rately an atte,pt by the bank>s lar!est shareholder to e@ercise his property ri!htsH &he ,ane)ver forced E-bb)d to revise his plan and instead seek to separate the bank fro, its ind)strial s)bsidiaries, (ith the intention of !ainin! effective control of those s)bsidiaries. E-bb)d concerted his plans (ith his close friend, the ne( ,inister of finance, -,in EUth,an. :e in t)rn cons)lted (ith .a,pson, and, (ith the a,bassador>s approval, E-bb)d and the finance ,inister disc)ssed the ,atter at len!th (ith .a,pson>s financial adviser. &he a,bassador !ave their plan the !o1ahead in a ti,e1honored fashion: = ca)sed both -,in ?s,an Pasha and -bbo)d Pasha to be infor,edRthat the relations of either the !overn,ent or -bbo)d Pasha (ith either the Gisr Bank or :afi4 -fifi Pasha (ere far too delicate !ro)nd for ,e to have anythin! to do (ith. =t (as an entirely internal affair. = co)ld not be dra(n into any position (here the 8,bassy co)ld be ri!htly acc)sed of havin! had any fin!er in the b)siness. =t follo(ed that it *as for min Osman Pasha and for %%oud Pasha to decide entirely for themselves on the merits of the case.[)-] .a,pson>s reasonin!0that receivin! f)ll details of the plan (as f)lly consonant (ith keepin! the e,bassy>s fin!er o)t of the b)siness0is note(orthy. &here is no si!n in the diary entry or Iorei!n ?ffice files that E-bb)d (anted anythin! fro, the e,bassy other than a !reen li!ht, (hich he clearly received. &he diplo,atic dissi,)lation not(ithstandin!, .a,pson f)lly s)pported E-bb)d, as revealed in n),ero)s dispatches to .ondon )r!in! policy,akers to approve E-bb)d>s sche,e for cooperation in 8!ypt>s post(ar ind)striali4ation. &he e,bassy>s financial co)nselor ar!)ed even ,ore forcef)lly for 2oinin! (ith E-bb)d in the Cpost(ar ne( order,D pressin! .ondon to invite E-bb)d for talks at the ,inisterial level. 9)periors at the Fepart,ent of ?verseas &rade (ere forced to re,ind Cairo that not even ref)!ee !overn,ents in Britain (ere accorded the reception bein! advocated for E-bb)d.[).] -,in EUth,an>s plan to la)nch an attack a!ainst the bank in parlia,ent (as

delayed by yet another palace atte,pt to brin! do(n the !overn,ent in the s),,er of 1966 and a decisive intervention by .a,pson to keep it in office. By the ti,e he finally did ,ove a!ainst the Gisr !ro)p, the bank>s chair,an, E-fifi, had enlisted palace s)pport, the p)blic face of (hich entailed a hi!hly visible visit by Nin! Iar)+ to the Gisr ,ills at Gahalla al1N)bra and the bank>s head+)arters in Cairo. &he o)tco,e of the E-bb)d !ro)p>s conflict (ith E-fifi for control of the Gisr !ro)p>s ,an)fact)rin! e,pire (as )lti,ately deter,ined by the s)ccessf)l palace co)p a!ainst the 'afd in ?ctober 1966.[)0] -s in the hi!hly polari4ed arena of the ,id119"#s, these fierce co,petitive conflicts tended increasin!ly to overlap (ith, and reinforce, the str)!!le for state po(er, thereby constrainin! the choices of b)siness,en and politicians alike. =f in the sprin! of 196" E-bb)d had so)!ht a reconciliation bet(een .a,pson and Iar)+, by the fall he (as (arnin! direly that the Cboy Pi.e., Iar)+Q (as a real dan!er to the co)ntry,D a ,essa!e he (o)ld repeat at re!)lar intervals in the ,onths ahead.[)1] E-fifi, the Bank Gisr chair,an (ho in the re!i,e str)!!les of the 19"#s sided (ith the British a!ainst E-bb)d and the palace, (as forced by circ),stances 0E-bb)d>s ,assive stock p)rchases, the plot a!ainst his chair,anship and the reb)ff by the British e,bassy0to t)rn to the palace to safe!)ard his position. /ot only did the ,ove help Bank Gisr>s directors th(art E-bb)d>s atte,pted takeover, b)t E-fifi and his ne( allies challen!ed E-bb)d on the fertili4er pro2ect, another battle that (o)ld be (a!ed )nceasin!ly thro)!h, and )ntil, the 'afd party>s defeat.

The 5(&i alent 5lliance #ehind 95&&udDs #id for 5s,an

'hat e,er!es ,ost clearly fro, the record of bar!ains and ,ane)vers to revive the -s(an sche,e in 196"J1966 is the tenacity 5or, in the British vie(, the a)dacity; of E-bb)d>s efforts to take control of the proposed ne( ind)strial sector by positionin! hi,self as the indispensable pivotal force in the ,)ltinational ne!otiations. 9pecifically, E-bb)d e@ploited the 'afd>s short1ter, v)lnerability and the British !overn,ent>s increasin! concern (ith its lon!1ter, position inside 8!ypt to clai, a controllin! share in the vent)re. &he proble, of fertili4er s)pplies pla!)ed the 'afd !overn,ent fro, the ,o,ent it took office in Iebr)ary 196B, the year in (hich nitrate i,ports fell to their lo(est levels of the (ar. &he 'afd !overn,ent>s first steps incl)ded a f)tile appeal by the finance ,inister Gakra, EUbayd for an i,,ediate start on the -s(an pro2ect, tho)!h the e@i!encies of the (ar ,ade obtainin! the necessary ra( ,aterials 5pri,arily steel and copper for the !enerators and other electric1plant e+)ip,ent; i,possible. &he 8!yptians periodically rene(ed their re+)est, )nder increasin! press)re fro, a variety of constit)encies, as even .a,pson reco!ni4ed.[)2] Iro, 196B on, British strate!y in 8!ypt consisted in dis!)isin! their o(n

co)ntry>s increasin!ly v)lnerable econo,ic position by e@ploitin! the vesti!es of colonial political privile!e0in partic)lar, the 'afd>s dependence on British po(er. -s the private correspondence on the -s(an sche,e ,akes clear, British officials feared above all that U.9. co,panies (o)ld ,ake a s)ccessf)l bid for the contract. .a,pson th)s re!)larly reass)red /ahhas that the -s(an sche,e re,ained a top priority, a point that he invariably co)pled (ith a re,inder of the 88C>s historic ri!ht 5event)ally; to )ndertake the (ork. -,on! the,selves, British co,pany officials and !overn,ent representatives ad,itted that U.N. fir,s probably (o)ld not be able to b)ild the pro2ect )ntil so,eti,e after the (ar>s end.[*3] E-bb)d>s intervention in the s),,er of 196" to revive the -s(an pro2ect th)s played on the v)lnerabilities of 8!yptian and British political a)thorities alike. :e portrayed hi,self to /ahhas and .a,pson both as the indispensable !)arantor of the pro2ect and )sed this levera!e to )nderc)t the rival efforts of Bank Gisr>s ne(, hostile board of directors and its b)rea)cratic allies in s)ch redo)bts as the Ginistries of P)blic 'orks and 9)pply. ?ne ,eas)re of his o(n sense of increased a!enda1settin! capacity in this arena is his e@plicit redefinition of the pro2ect>s ter,s: E-bb)d proposed to create a ne(, private 8!yptian co,pany to o(n and operate both the po(er station and the nitrate plant. -s = have indicated, .ord Nillearn and his Cairo staff cha,pioned the strate!ic 2oint vent)re in the stron!est ter,s, pressin! 'hitehall to arran!e for E-bb)d>s passa!e to .ondon, (hich tri!!ered a protracted policy debate inside the halls of the Iorei!n ?ffice and the Fepart,ent of ?verseas &rade. Uns)rprisin!ly, in li!ht of the bitter conflicts of the 19"#s, so,e officials co)nseled a!ainst cooperation (ith E-bb)d: CP&Qhe special pleadin!Rdoes not i,press ,e very ,)ch. =t is s)rely evident that -bbo)d is ai,in! at beco,in! a kind of co,,ercial dictator in 8!ypt and he thinks he ,ay be allo(ed and helped in achievin! this position if he is allo(ed to co,e over here and ,ake contacts and affiliations (hich he can thr)st do(n the throats of the people in 8!ypt (hen he !ets back.D[*1] &he overarchin! concern for Britain>s post(ar ,an)fact)rin! position and ,arkets resolved the debate in E-bb)d>s favor. =n Fece,ber 196", both the president of the Board of &rade and the secretary of state for forei!n affairs, -nthony 8den, endorsed E-bb)d>s -s(an sche,e as a ,ove to(ard ,aintainin! Britain>s strate!ic position after the (ar.[*)] 8den p)t it baldly: tho)!h C-bbo)d>s first ob2ect is the f)rtherance of his o(n interests, o)r o(n look like bein! (ell served by the partnership.D[**] =n fact, the Ch)rchill ad,inistration and its corporate allies serio)sly ,iscalc)lated the benefits of the CpartnershipD and spent ,)ch of 1966 tryin! to )ndo the da,a!e7 nonetheless, at this re,arkable con2)nct)re, E-bb)d had s)ccessf)lly positioned hi,self and pro,oted hi,self to the politicians in .ondon and Cairo alike as a vital ele,ent in 8!ypt>s f)t)re. F)rin! the 'afd>s ann)al con!ress in /ove,ber 196", -,in EUth,an )nveiled his party>s 5and 8!ypt>s; first CIive <ear Plan,D in (hich electrification and, specifically, the -s(an pro2ect feat)red pro,inently as

part of the 'afd>s a!enda for developin! ne( 8!yptian ind)stries. &he 'afd>s leaders (ere obvio)sly !ropin! for sol)tions to the co)ntry>s ,)ltiplyin! econo,ic proble,s0,ini,ally, in order to ste, the party>s decline. /onetheless, their vie(s on 8!ypt>s econo,ic f)t)re coincided (ith those of planners and policy,akers in both the United 9tates and Lreat Britain (ho anticipated that ind)striali4ation (o)ld play a key role in the plans of post(ar 8!yptian !overn,ents 5Fe/ovo 19$$, Bara, 19$%, Bryson 19%1;. .a,pson>s )n(averin! s)pport for E-bb)d follo(ed fro, (hat he correctly perceived to be an -,erican policy of )sin! the (ar to challen!e Lreat Britain>s do,ination of the 8!yptian ,arket. &he Roosevelt ad,inistration had la)nched this ne( a!!ressive post)re in 8!ypt by appointin! the /e( Feal la(yer Aa,es .andis to the position of director of econo,ic operations in the Giddle 8ast 5and the rankin! U.9. civilian representative at G89C; in -)!)st 196" 5Bara, 19$%: 136J1357 Ritchie 19%#: 115J1B$;. .andis>s sin!le1,inded devotion to challen!in! Britain>s econo,ic and political pree,inence in fact contrib)ted to a serio)s hei!htenin! of -n!lo1-,erican tensions. &he British a,bassador>s defensiveness is capt)red in a lon!, e@asperated dispatch co,plainin! abo)t .andis, (ho, he derided as a Cs)per trade co,,issioner c), econo,ic dictator,D and in .a,pson>s pressin! .ondon to s)pport the E-bb)d pro2ect C(itho)t (aitin! )ntil the -,ericans have consolidated their positionD inside 8!ypt.[*+] .a,pson>s co,plaints, ill)strative of e,er!in! -n!lo18!yptian co,,ercial rivalry, (ere a,on! the s)b2ects disc)ssed (ith the b)siness,an and Roosevelt confidant, 8d(ard 9tettini)s, d)rin! his 1966 ,ission in .ondon. .a,pson>s defensiveness ,ay help e@plain (hat t)rns o)t to have been a relatively )ncritical, if not naive, policy of s)pportin! E-bb)d and his vario)s proposed invest,ent pro2ects, see,in!ly on the stren!th of E-bb)d>s professed loyalty to the principle of -n!lo18!yptian post(ar cooperation. 8@a,ples of this naivete abo)nd, be!innin! (ith the +)estion of E-bb)d>s ability to sec)re the ri!ht to operate the -s(an po(er station itself as a private concession. &he p)blic1(orks b)rea)cracy and the 'afd party leadership had opposed this option back in the 19"#s. V. B. Lrey, the 88C representative in Cairo and a local British b)siness1co,,)nity leader, (arned that the 8!yptian !overn,ent (o)ld never approve s)ch a plan. .a,pson lobbied hard, ho(ever, ar!)in! that there (ere Cstron! !ro)ndsD to believe E-bb)d (o)ld (in the ne( private concession, and, on the stron! )r!in! of the Iorei!n ?ffice, the 88C directors rel)ctantly a!reed to cooperate (ith hi,.[*-] =f only they kne( ho( )ninspired the a,bassador>s intelli!ence !atherin! had been, to 2)d!e fro, his )np)blished diaries: C= did ,ake it clear to -bbo)d that = pres),ed he felt reasonably s)re that the 8!ypt !overn,ent (o)ld be in favor of !ivin! hi, the concession. :e said he had ,ade preli,inary feelers and had no do)bt on that scoreD 59illearn Diaries " Fece,ber 196";. 'hat else (o)ld E-bb)d say* =n fact, /ahhas>s !overn,ent insisted on p)blic o(nership and independent ,ana!e,ent of the po(er plant. E-bb)d tried contestin! this condition b)t )lti,ately had to a!ree to it0at least on paper.

Bet(een -)!)st and Fece,ber 196", E-bb)d had ne!otiated s)ccessf)lly to obtain British approval for ,ovin! for(ard on the po(er plant and fertili4er factory, 8!ypt>s first lar!e1scale ind)strial pro2ect since the ,id119"#s and, as (e have seen, a fr)strated ob2ective of every (arti,e ad,inistration since that of E-li Gahir. &o do so, he depended heavily on the British a,bassador, the (ar havin! facilitated the painstakin! repair of their battered relationship. .a,pson s)bse+)ently backed E-bb)d>s atte,pted takeover of Bank Gisr and vario)s other b)siness deals, tho)!h e+)ally si!nificant, fro, E-bb)d>s point of vie(, thro)!ho)t 196"J1966 the a,bassador re,ained personally co,,itted to the policy of proppin! )p the 'afd a!ainst the palace, even as other British officials be!an (istf)lly to rei,a!ine the ni!ht1cl)bbin! Nin! Iar)+ as a kind of fr)strated, (o)ld1be refor,er 59,ith 19$9: 6$$7 .o)is 19%6: B"B;. &he details of the 1966 -s(an bar!ainin! ro)nd, reco)nted belo(, are i,portant both in tracin! the tan!led lines of political po(er and econo,ic interest in 8!ypt at the (ar>s end and in reconcilin! the apparently contradictory policies of British officials at a key 2)nct)re. -fter all, 8den and his staff had 2)stified cooperation (ith E-bb)d on the !ro)nd that it served the British state>s vital, lon!1ter, interests in inhibitin! the penetration of U.9. capital. E-bb)d had repeatedly ,ade it obvio)s that his plan depended on the 'afd party>s re,ainin! in po(er. -nd yet, al,ost i,,ediately, the Iorei!n ?ffice be!an to (ithdra( its s)pport for the 'afd, a!ain of co)rse on the !ro)nd of protectin! lon!1ter, vital interests. &o (hat e@tent (ere these policies at cross1p)rposes, as .a,pson hi,self see,ed to think* 9enior policy,akers in the Iorei!n ?ffice and directors in the 88C distr)sted E-bb)d and bridled at the conditions he had i,posed on these ar,>s1len!th allies. Gore cr)cially, they reali4ed that, his eff)sive celebrations of -n!lo1 8!yptian cooperation not(ithstandin!, E-bb)d>s a!enda directly conflicted (ith their t(in ob2ectives, (hich (ere reflected in an obsession (ith definin! the -s(an pro2ect as British: 51; that the 88C (o)ld control the ne!otiations, and 5B; that the involve,ent of -,erican capital (o)ld be ,ini,i4ed, if not e@cl)ded all to!ether. =n response, his CpartnersD be!an secretly searchin! for a (ay o)t of the deal. &he ,)ch1co,,ented1on -n!lo18!yptian political reali!n,ent d)rin! 1966 coincided (ith, and in a sense depended on, these British capitalists> and policy,akers> locatin! (hat they hoped (o)ld be a st)rdier lon!1ter, redo)bt a!ainst U.9. co,petition. M M M

The /ast #attle of the War" 5s,an, 12++

&here (as a si!nificant contin)ity in the institutional identities of the sectoral co,petitors, tho)!h al,ost t(o decades had passed since Focker first be!an pro,otin! the -s(an sche,e in the ,id119B#s. - co,parison of &able 1 5in Chapter "; and &able " ,akes this clear. ?f co)rse, the 88C>s interest in the sche,e had !ro(n steadily d)rin! the 19"#s, aided by the Iorei!n ?ffice and its representatives in Cairo, (ho served virt)ally as the 88C>s e@cl)sive private lobbyin! ar,.

". Rival Coalitions in 8!yptian =nd)striali4ation Pro2ects, circa 1966 ProCect 5ctors Iorei!n 9tates U.N. U.9. Iorei!n Capital U.N. 5s,an 9)pport 8+)ivocal 88C,=C=,5-8=;[a] Delta 8+)ivocal 9)pport 88C -,erican Cyana,id Palace <ahya Gisr !ro)p

U.9. -,erican Cyana,id[&] 8!yptian !overn,ent .ocal capital 'afd E-bb)d !ro)p

8n!lish 8lectric Co,pany and -,erican Cyana,id Co,pany, (ith -ssociated 8lectrical =nd)stries playin! a s)bsidiary role in the ]British] consorti),. -8= had stron! affiliations (ith U.9. Leneral 8lectric. -,erican Cyana,id often b)ilt s)ch pro2ects in con2)nction (ith Leneral 8lectric and had so,e )nderstandin! (ith L.8.>s British affiliate, -8=. &he 88C>s CnationalD rival, -8=, Focker>s old fir, (hich had been secretly sold to and reor!ani4ed by L.8. in the 19B#s, contin)ed to co,pete for the b)siness as (ell )nder the na,e of its t(o CindependentD s)bsidiaries, British &ho,son :o)ston 5-8=1B&:; and Getrovick 5-8=1GV;. &ho)!h Focker (as lon! !one, E-bb)d contin)ed to cooperate (ith the -8=1GV interests and, thro)!h the,, (ith the U.9. che,ical prod)cer -,erican Cyana,id, (hose en!ineers had dra(n )p the rival -,erican1desi!ned -s(an sche,e. <et the role played by 8!yptian capitalists had e@panded enor,o)sly over ti,e to the cha!rin of British officials, s)ch that by 19"9 the sectoral conflict essentially had been recast as a conflict a,on! 8!yptian investors to develop an i,port1s)bstit)tion fertili4er ind)stry. =n tande, (ith this chan!e, the role of -,erican Cyana,id and its en!ineerin! s)bsidiary, the Che,ical Constr)ction Corporation, !re( as (ell since they (ere in effect the only available so)rces of the technolo!y for both E-bb)d>s and E-fifi>s rival pro2ects. &his s)dden and )nprecedented pro,inence of -,erican capital in plans for developin! a ne( 8!yptian ind)strial sector (as an even ,ore si!nificant and alar,in! chan!e in the eyes of British policy,akers. &o p)t it bl)ntly, the !ro(in! ,arket po(er of U.9. prod)cers in this case threatened to )nder,ine the Iorei!n ?ffice>s policy of protectin! the 88C>s invest,ent in the -s(an sche,e and, by e@tension, of preservin! the post(ar 8!yptian

,arket for British heavy ind)stry. &his dile,,a (as ,ade painf)lly evident by the discovery that every fir, in the ne(, Iorei!n ?fficeJbacked consorti), e@cept the 88C had private arran!e,ents (ith the -,ericans0 incl)din! E-bb)d, -8= and the 88C>s lon!1ti,e affiliate in the sche,e, =C=.

The Desperate Diplo(acy of Econo(ic Decline

.ondon>s cable to .a,pson on " Iebr)ary 1966, (hich provided the a,bassador (ith his instr)ctions on the -s(an pro2ect, reveal the t(in fears that )nderlay the rapidly evolvin! positions of the British b)rea)crats and their b)siness allies. &ho)!h ready Cin principleD to collaborate (ith E-bb)d, .a,pson (as to infor, the 8!yptian !overn,ent that the 88C (as also ready to carry o)t the sche,e C(itho)t the inter,ediary of an 8!yptian co,panyD0in other (ords, (itho)t E-bb)d. 'hen .a,pson +)estioned the lo!ic of this Cloophole,D .ondon officials feebly 2)stified it on the !ro)nds of the hi!h co,,ission fee that E-bb)d (as alle!edly de,andin!.[*.] .etters e@chan!ed bet(een Lrey, the 88C a!ent, and E-bb)d, alon! (ith entries in .a,pson>s o(n )np)blished diaries 5his infor,ation ca,e fro, the censorship service;, sho( that Lrey ori!inated the clai, for Cco,pensation for e@penses inc)rred.D .a,pson sarcastically described the fee as Cthe paltry s), of X8 1## tho)sand,D appro@i,ately one1half ,illion dollars 59illearn Diaries 6 Aan)ary and B1 A)ne 1966;. Lrey had tried to dis!)ise his role in the rent seekin!. .a,pson>s fear of loopholes (as rational, !iven the second half of his brief: to keep /ahhas in the dark abo)t the probable participation of U.9. fir,s in the pro2ect (hile approvin! ne!otiations only on the basis of the ori!inal 88C sche,e. -s the Iorei!n ?ffice archives ,ake clear, the British policy,akers so)!ht to control U.9. capital>s direct involve,ent in the 8!yptian ind)strial sector and th)s dreaded the possibility that the 8!yptians ,i!ht be!in direct ne!otiations (ith the -,ericans. :ere lies the ,ore co,pellin! reason for the !ro(in! British rel)ctance to cooperate (ith E-bb)d, (hose control of the pro2ect increased the likelihood that the rival, -,erican1desi!ned sche,e (o)ld be adopted. &he U.9. investors sho(ed little si!n that they (ere abo)t to accept a back seat in the pro2ect. &o the contrary, -,erican diplo,ats and b)siness,en coordinated an appeal to /ahhas in Garch 1966 to delay a decision )ntil representatives of -,erican Cyana,id co)ld reach Cairo and present their o(n proposal. -t the sa,e ti,e, these investors had opened a second CfrontD in the (ar for the 8!yptian che,ical sector by be!innin! ne!otiations (ith E-bb)d>s local rival, E-fifi, to revive the Felta 9che,e, a!ain (ith U.9. diplo,atic s)pport. =n Cairo, /e( Fealers like .andis painted the opposition to the Felta 9che,e as part of a British strate!y to ,onopoli4e the post(ar Giddle 8astern ,arket7 and the -,ericans, (ho had recently e@panded their diplo,atic presence and appointed their first a,bassador to Cairo, (ere th)s ea!erly dra(n into the central arenas of 8!yptian political and econo,ic life for the first ti,e.[*0]

95fifiDs Counter$Coalition #uilding and the Defection of the EEC

E-fifi>s tenacity in pro,otin! the rival Felta 9che,e sho)ld p)t to rest the canard that, )nlike Bank Gisr>s ori!inal chair,an, he sho(ed no interest in developin! 8!ypt>s ,an)fact)rin! sector. By !ainin! U.9. diplo,atic s)pport for their bid to enter the nitrate ,arket, E-fifi and his coinvestors had taken yet another decisive step to co)nter the for,idable coalition of 'afd party leaders and British e,bassy officials that stood behind E-bb)d. -lon! the sa,e lines, they offered shares in the deal to key notables, obtainin! the capital and do)btless the political clo)t of, for e@a,ple, G)ha,,ad Badra(i1E-sh)r, the (ealthy lando(ner, 'afd party f)nder, and close relative of the n),ber1t(o ,an in the party, 9ira! al1Fin. -nd as = have already noted, E-fifi and his !ro)p (ere investin! heavily in the fort)nes of the opposition bloc.[*1] &he !ro)p>s ,ost brilliant stroke (as its atte,pt to disar, British opposition to the Felta 9che,e by brin!in! locally resident British b)siness,en into the deal. E-fifi be!an by offerin! a position on the board of the proposed ne( vent)re to Cecil Ca,pbell, Cairo representative of the British ,)ltinational, Garconi, and one of the pillars of the British co,,)nity. =,portantly, Ca,pbell (as close to Lrey, the 88C representative, and replaced Lrey as chair,an of the British Cha,ber of Co,,erce in 8!ypt. =t is )nclear that E-fifi reali4ed 2)st ho( strate!ic a choice he ,ade. &he 88C had taken over Garconi d)rin! the period 196"J1966 and retained Ca,pbell as its Cpolitical cons)ltantD in 8!ypt 5Aones and Garriott 19$#: 1$%;. Ca,pbell had likely been advisin! his clients to diversify their risk beca)se the 88C +)ietly approved a plan of cooperation (ith E-bb)d>s local rivals in the Felta 9che,e. Ca,pbell be!an by enlistin! his friend Lrey to draft a ,e,o sho(in! (hy the t(o pro2ects (ere not co,petitiveH Lrey officially 2oined the board of E-fifi>s ne( co,pany in A)ne, a step that co)ld hardly have been taken (itho)t the a!ree,ent of the 88C.[*2] ?f co)rse, E-bb)d (as o)tra!ed by the clear conflict of interest and (o)ld acc)se Lrey and Ca,pbell of atte,ptin! to sabota!e his pro2ect. &ho)!h the British a,bassador 2oined hi, in protestin! to .ondon, the Iorei!n ?ffice shifted its policy in line (ith the 88C>s evolvin! interests and in the s),,er of 1966 ended its opposition to the Felta pro2ect. &he Iorei!n ?ffice (as also shiftin! its position on the fate of the 'afd at this ti,e, tho)!h )ntil no( (e have been !iven little )nderstandin! of the lo!ic behind this ,ove, save in the ,ost !eneral of ter,s. &h)s, as in the political reali!n,ent in 19"6J19"5, analy4ed in Chapter ", the British once a!ain be!an co,plainin! of the corr)ption that had infected the 8!yptian ad,inistration. :istorians have preceded alon! si,ilar lines, t(innin! the ad hoc ar!),ent abo)t corr)ption (ith an e+)ally )nsatisfactory one abo)t the inevitability of a shift in ali!n,ents sooner or later. -nd (e find one ,ore parallel bet(een 19"6 and 1966 as (ell. ?nce a!ain, E-bb)d (as lobbyin! fr)itlessly in .ondon to save an 8!yptian !overn,ent.

The Collapse of 95&&udDs 5s,an Coalition

=n ,eetin!s in .ondon bet(een A)ly and -)!)st 1966, -,erican, British and 8!yptian investors ha,,ered to!ether a final a!ree,ent on their 2oint -s(an vent)re, on the basis of E-bb)d>s proposal to o(n and operate the factory. &echnical plans for both the che,ical and po(er plants (ere based on the sche,e dra(n )p by -,erican en!ineers in the 19"#s. -,erican Cyana,id (o)ld s)pply the key electroche,ical technolo!y. =C= (o)ld serve as ,ana!e,ent cons)ltants to E-bb)d>s 8!yptian co,pany, and =C=>s 8!yptian s)bsidiary, the co)ntry>s lar!est sales and distrib)tion a!ency, (o)ld ,arket the fertili4er.[+3] &he final plans for E-bb)d>s ne( post(ar ind)strial vent)re th)s violated both conditions stip)lated by the Iorei!n ?ffice (hen it approved the pro2ect as an e,er!ency priority. &he ,a2or fir,s appeared either )n(illin! or )nable to defend British national interests in this case. =C= had conceded the role of principal to -,erican interests7 it (as represented in the ne!otiations by Irederick Pope, a director of -,erican Cyana,id and a fo)nder of its en!ineerin! ar,, the Che,ical Constr)ction Corporation. -nd Pope re2ected o)t of hand the British !overn,ent>s de,and that the e+)ip,ent orders be placed only (ith British fir,s.[+1] &he 88C>s role (as red)ced to that of a s)bcontractor to E-bb)d and his -,erican cons)ltants, and they had to share the order for electrical e+)ip,ent (ith a co,petitor, British &ho,son :o)ston 5(hich, despite the na,e, (as s)bstantially -,erican1o(ned;, (hich E-bb)d had lon! represented in the 8!yptian ,arket. &he key to E-bb)d>s ability to infl)ence the ter,s of the bar!ain rested ,ost obvio)sly on his infl)ence (ith the 'afd ad,inistration. Vario)s parties in the ne!otiation (ere e@plicit abo)t this infl)ence, tho)!h E-bb)d>s tireless ca,pai!n in Cairo and .ondon on the /ahhas !overn,ent>s behalf ,akes the sa,e point even ,ore )na,bi!)o)sly.[+)] =n t)rn, t(o key variables shapin! the co,panies> decision abo)t cooperatin! or not in E-bb)d>s sche,e 5the opport)nity costs; (ere the esti,ates of 51; the val)e of the e@pected ret)rn and 5B; the likelihood of E-bb)d>s act)ally sec)rin! the deal. &he Iorei!n ?ffice and 9tate Fepart,ent archives contain ab)ndant evidence of the co,panies> contin)o)sly reesti,atin! these variables and atte,ptin! (here possible to infl)ence the,. Iollo(in! the concl)sion of the ne!otiations in -)!)st 1966, =believe that the 88C be!an to reesti,ate radically the val)e of co1operatin! (ith E-bb)d on the ter,s i,posed by hi, and his -,erican partner, Pope, and to disco)nt the risk in revivin! ne!otiations (ith a post1'afd 8!yptian !overn,ent. &his had been precisely the advice tendered by their Cairo representative, Lrey, (ho had ar!)ed a!ainst E-bb)d>s pro2ect, clai,ed that .a,pson and others e@a!!erated his infl)ence, and pressed instead for direct ne!otiations (ith the 8!yptian state. &he s)pport for the Felta 9che,e (as in fact a (ay to protect and perhaps i,prove the 88C>s position if the 'afd did fall fro, po(er. Iirst, E-fifi>s

!ro)p represented key fi!)res in the opposition bloc. 9econd, by b)ildin! the Felta plant, they (o)ld block E-bb)d>s atte,pt to enter the che,ical sector and ideally (eaken his infl)ence over the po(er sche,e. Certainly, it looks as if E-bb)d vie(ed the threat of the Felta pro2ect e@actly in this (ay beca)se in 9epte,ber 1966 he and his ne( -,erican b)siness partner decided to do)ble the planned ann)al capacity of the -s(an fertili4er factory, fro, three h)ndred tho)sand to si@ h)ndred tho)sand tons, an o)tp)t that (o)ld ,atch 8!ypt>s entire ann)al de,and and, i,portantly, ,ake E-fifi>s pro2ect s)perfl)o)s. &his (as obvio)sly a c)t1throat b)siness. -,erican Cyana,id s)ddenly p)lled the reins on the -,erican e,bassy and the E-fifi !ro)p, infor,in! the, both that the Felta pro2ect (o)ld have to be Crest)died,D (hile E-bb)d bra!!ed that he had CtorpedoedD E-fifi>s sche,e. B)t, by narro(in! their options, he also drove key leaders and opinion ,olders of the British e@patriate co,,)nity to pro,ote the ca,pai!n a!ainst corr)ption and to e,brace the disco)rse of refor, thro)!h (hich a bloc of royalists, nationalists, oli!archs and capitalists so)!ht to pry loose the 'afd>s !rip on state po(er. 9id+i>s plea in -)!)st on the pa!es of al- hram to keep party politics o)t of the -s(an b)siness sho(s once ,ore 2)st ho( close in fact the t(o had beco,e. -nd .a,pson>s insistence on cha,pionin! the side of the 'afd 5and E-bb)d; d)rin! the s),,er left hi, increasin!ly isolated a,on! British elites in Cairo and .ondon.[+*] &here is nothin! p)44lin! abo)t the closely allied vie(s of the 88C, its 8!yptian directors and the ,ana!ers of Ch)rchill>s Giddle 8ast policy in this case. &he ob2ectives of re!)latin! the role of -,erican capital and of sec)rin! ,illions of po)nds sterlin! in orders for British ,an)fact)rers (ere linked to the central iss)es in post(ar British political econo,y and forei!n policy, incl)din! -n!lo1-,erican relations, the health of British heavy ind)stry and ,ana!e,ent of the co)ntry>s ,assive balance1of1pay,ents deficits. -s E-bb)d and his -,erican partners o)t,ane)vered their co,petitors, they also steadily )nder,ined (hat officials at the Iorei!n ?ffice had defined as British national interests in a strate!ic arena. &he ,ana!ers of -n!lo1-,erican diplo,acy had even co,e to see the Felta pro2ect as a possible bar!ainin! chip in dealin! (ith U.9. investors and diplo,ats, to be traded to the -,ericans in ret)rn for respectin! British1 co,pany clai,s on -s(an. &he threat posed by E-bb)d>s and Pope>s desi!ns on this key arena ,ade the costs of contin)in! to s)pport their (arti,e allies, the 'afd, re,arkably concrete for .ondon policy,akers and contrib)ted to the (ell1kno(n decision in the fall of 1966 to enco)ra!e a chan!e of !overn,ent in 8!ypt. =n ?ctober, (ith .a,pson on leave in 9o)th -frica, the kin! received his !reen li!ht to cr)sh the 'afd. &he fall of the /ahhas !overn,ent forced E-bb)d into a desperate and )lti,ately f)tile scra,ble to hold to!ether the investor bloc that he had asse,bled to s)pport his -s(an sche,e. &he ne( !overn,ent (as riven by co,petin! clai,s on these reso)rces, and tho)!h one of E-bb)d>s closest friends and b)siness partners, -h,ad Gahir, had been appointed pri,e ,inister, Gahir>s assassination in Iebr)ary 1965 proved to be a fatal blo( to the E-bb)d !ro)p>s po(er pro2ect.

-t the sa,e ti,e, ho(ever, E-bb)d defeated his local b)siness rivals in the co,petition to sec)re the cooperation of U.9. investors in 8!ypt>s post(ar che,ical ind)stry. -fter ret)rnin! fro, his first trip to the United 9tates, and in response to the !overn,ent>s Gay 1965 decision to open the -s(an pro2ect to international tender, E-bb)d and his partner, Pope, laid the fo)ndation of a ne( era in 8!ypt>s political econo,y. =n -)!)st 1965, the last ,onth of the (ar, E-bb)d fo)nded a ne( X8 6 ,illion vent)re, the Che,icals Gan)fact)rin! Corporation 5 $h%ar al-6a*m 1 Iebr)ary 1963;. :e then opened ne!otiations for a U.9. !overn,ent loan to b)ild 8!ypt>s first i,port1s)bstit)tion nitrate factory at 9)e4, in the northeast corner of the 8!yptian Felta.[++] M M M

Su((ary" The Aall of the Neocolonial ProCect

8@ceptionalist historio!raphy ri!htly ,arks :arb>s overthro( in 19"9 as the end of an era in 8!ypt>s political econo,y, tho)!h for the (ron! reasons. =n the t(o decades since the 1919 revol)tion, 8!yptian investors like :arb, E-bb)d, <ahya and their cohorts had )n+)estionably e,er!ed as the ,ost dyna,ic se!,ent of the co)ntry>s econo,ic elite, s)ccessf)lly )s)rpin! as (ell as advancin! (hat = have described as the s)bordinate ind)strial1sector pro2ect ori!inally charted by local ,inority investors and international financiers like 8rnest Cassel at the t)rn of the cent)ry. &o p)t it as si,ply as possible, analysts have clearly e@a!!erated the de!ree to (hich Lreek, Ae(ish and other Cforei!nD residents contin)ed to co,,and the hei!hts of local lar!e1scale prod)ction and co,,erce in 8!ypt in the decades after independence. &he ne( 8!yptian investors possessed enor,o)s political advanta!es that they )sed in pro,otin! their co,petitive positions d)rin! the 19B#s and 19"#s. &he rena,in! of the fashionable crossroads in do(nto(n Cairo, lon! kno(n as C9)arVs 9+)areD 5'idan al-(i*aris;, for the fa,ily that (as Cassel>s partner and :arb>s ori!inal sponsor is a state,ent abo)t the rise of a ne( national political and econo,ic elite in 8!ypt. ?f co)rse, so is the fact that ,any of the vent)res and sectors ori!inally pioneered by the ,inority investors0the s)!ar co,pany, the alcohol (orks at &)ra, the te@tile ind)stry, the No, ?,bo Co,pany, etc.0(ere by the end of the 196#s effectively in the hands of 8!yptian investors like E-bb)d. &his chapter too sho)ld finally p)t to rest the co,,only repeated clai, that :arb>s overthro( in 19"9 ,arked the end of atte,pts to b)ild 8!yptian national ind)stries0that is, vent)res in (hich forei!ners did not hold shares 0for (hich :arb is ,ost often celebrated. 8,pirically, this is si,ply )ntr)e, as = have doc),ented. E-bb)d fo)!ht (ith :arb>s s)ccessors 5<ahya and E-fifi; to b)ild a (holly do,estically and privately o(ned nitrate ind)stry. :arb>s re,oval as chair,an of the Gisr !ro)p ,ore acc)rately ,arked an increased interest in b)ildin! 8!yptian ind)stries, alon! (ith the be!innin! of a protracted str)!!le over the iss)e of ind)strial re!)lation.

=nd)strialis, and related refor, +)estions had !ained increasin!ly (ide c)rrency by the eve of the (ar, evinced for instance in the spate of social provisions0r)di,entary (elfare and labor1relations bills0passed by the (arti,e 8!yptian !overn,ents. -t the sa,e ti,e, investors and )ndo)btedly others (ere clearly a(are of the li,its to the CeasyD e@pansion of i,port1s)bstit)tion ind)stry )nder the liberal econo,ic ,odel in place since the 1%%#s. -s .ord GcLo(an, the chair,an of =C=, had reported confidentially in 19"$, and as fi!)res on do,estic prod)ction levels at the ti,e see, to indicate, there (ere increasin!ly fe(er profitable invest,ent possibilities in 8!ypt, barrin! either a si!nificant transfor,ation of the internal ,arket or increased levels of !overn,ent protection and other s)bsidies.[+-] ?ne need look no f)rther than the corridors of 'hitehall for reco!nition of the !ro(in! i,portance of ind)stry in 8!ypt and in other parts of the periphery, as British planners so)!ht (ays to protect post(ar ,arkets a!ainst -,erican capital. B)t (hile e@plicitly artic)lated neocolonial pro2ects ,ay have been s)ccessf)l in parts of s)b19ahara -frica in the years after 'orld 'ar ==, the strate!y never stood a chance in 8!ypt. &he privile!ed political position of local 8!yptian investors and their clearly diver!ent econo,ic preferences effectively checked British neocolonial a,bitions at least a decade before the (ave of national anticapitalis, s(ept these investors fro, the 8!yptian sta!e. &he role of investors like E-fifi, <ahya and E-bb)d in this +)iet, ,arket1 or interest1driven challen!e to British po(er is all the ,ore i,portant !iven that, as Beinin and .ock,an see it, these investors (ere Cnot partic)larly nationalistD 519%$: 11;. -s (e have seen, the (ar allo(ed E-bb)d to restore his relations (ith the British a,bassador and, thro)!h his invest,ent in the British1backed 196BJ1966 'afd !overn,ent, to recover fro, the econo,ic setbacks his co,petitors dealt hi, bet(een 19"5 and 19"9. -nd in the (ar (ith his rivals for control of the proposed ne( nitrate ind)stry, E-bb)d 2oined forces (ith -,erican capitalists (ho (ere seekin! access to the 8!yptian ,arket. = believe that E-bb)d>s celebration of -n!lo18!yptian cooperation d)rin! the (ar, alon! (ith his close ties to the Ccorr)ptD 5and, for ,any, Ctraitoro)sD; 'afd !overn,ent, ori!inally earned hi, his end)rin! rep)tation as a co,prador and an architect of the postJ'orld 'ar == neocolonial order a,on! the infl)ential (ave of historians (ho be!an to p)blish in the 195#s and the 193#s. &he irony of co)rse is that, for the British i,perial ,ana!ers, E-bb)d (as revealin! precisely ho( hopeless the task had beco,e. &he record of the 1966 -s(an bar!ainin! ro)nd sho(s that the pace of chan!e rapidly o)tstripped the ability of the Iorei!n ?ffice to protect British interests in this sector, defined ,aterially in ter,s of the si4e of the order to be !iven to the 88C, sy,bolically in ter,s of a British identity for the pro2ect, and politically in ter,s of a !ate1keepin! f)nction to li,it the role of U.9. capital. /eedless to say, E-bb)d, like the other 8!yptian investors, sho(ed little interest in or co,,it,ent to any of these ob2ectives. Certainly,

fro, this point on, nationalists and others (ill have to base their criticis,s of E-bb)d and his rivals on different ideolo!ical and e,pirical !ro)nds. =n li!ht of the inevitable t)rn to -,erican capital to b)ild the nitrate pro2ect, perhaps they are destined to be recast as the spirit)al fathers of the !nfitah. Gore critically, ho(ever, in this chapter (e find the ori!ins of a ne( vie( of the 8!yptian political econo,y in the decade after 1965, d)rin! (hich the co,plicated and protracted str)!!le over the privile!e of privati4in! p)blic reso)rces and b)ildin! 8!yptian ind)stries takes a decisive t)rn. 'e ,i!ht concept)ali4e this str)!!le as bein! over the b)ildin! of a ne( re!)latory re!i,e in 8!ypt, startin! (ith the takeover of Bank Gisr in 19"9 and contin)in! (ith a host of other ne( for,s of intervention introd)ced and ad,inistered by British officials d)rin! the (ar. &he ri!ht of 8!ypt>s investors to privati4e reso)rces (o)ld face increased challen!es in the 196#s and 195#s, to!ether (ith the other property ri!hts that had sec)red b)siness privile!e in 8!ypt since the ti,e of Cro,er.

Notes
1. 9ee I?"$1 B""55, AB3$3 B"6 13, .a,pson to I?, B3 A)ne 19"9. B. ?n Gahir>s b)siness connection (ith E-bb)d, see I?"$1 B""55, A"1B3 B"6 13, enclosin! letter fro, Nelly 5I?; to 9ir A)lian Ioley, Board of &rade, 1# -)!)st 19"9. -s Nillearn (o)ld later (rite, C-bbo)d (as of co)rse a partic)lar friend and confidant of P-h,ad GahirQ (ith (ho, he had for years past the closest ties.D 9ee I?"$1 65919, A9$6 " 13, .a,pson to I?, 3 Garch 1965. &hese ties (ere confir,ed by E-bb)d>s da)!hter, Grs. Gona E-bb)d1:)sha,4a, intervie(, .ondon, -)!)st 19%3. ". E-bb)d had been discovered the previo)s s),,er in a Paris hotel roo, (ith the (ife of a 9yrian fro, -le@andria. -ccordin! to .a,pson, the a!!rieved h)sband possessed a n),ber of letters fro, E-bb)d to his ,istress, (hich, C(hile containin! co,pro,isin! e@pressions of affection, also incl)ded acco)nts of E-bb)d>s daily b)siness activities.D 8a!er for reven!e, the h)sband t)rned so,e of the letters over to the 'afd, and the party p)blished the, in al-Wafd al-'isri. &he ,ost co,pro,isin! bra!!ed of Gahir>s val)e in helpin! E-bb)d (ith his s)bsidy. &he paper pro,ised that ,ore revelations (o)ld follo(. I?"$1 B""55, AB3$3 B"6 13, .a,pson to I?, B3 A)ne 19"97 E-bd al1E-4i, Ra,adan 519$%: B"3JB"9;7 Favis 519%": 155J153;. &hese latter so)rces accept at face val)e the opposition>s clai, that E-bb)d served as a front ,an for British capitalists. 6. Ior the ne!otiations bet(een E-bb)d and the British !overn,ent, see I?"$1 B""55, A"1B3 B"6 13, et se".7 I?"$1 B$65%, A5$9 B#1 13, .a,pson to I?, B3 Iebr)ary 196#. -,in EUth,an served as the b)siness,an>s inter,ediary. Ior the acco)nt of the Clobbyin! a,on!st dep)ties and other s)bterranean (orkD in the -s(an sche,e, see I?"$1 B""59, A6%$5 B%5 13, .a,pson to I?, B$ /ove,ber 19"9.

5. I?"$1 B63BB, A3$ 3$ 13, 9o,erville19,ith to Cook, B Aan)ary 196#. 3. I?"$1 AB$#1 B%5 13, /elson 588C; to Cavendish1Bentinck 5I?;, $ A)ly 19"9, and enclos)res7 AB$1" B%5 13, .a,pson to I?, $ A)ly 19"97 A"#BB B%5 13, /elson to Nelly 5I?;, 1 -)!)st 19"97 A"16% B%5 13, Rice 588C; to Nelly, 1# -)!)st 19"9. $. Ior the CfallahD +)ote, see I?"$1 B""59, AA6%$5 B%5 13, .a,pson to I?, B$ /ove,ber 19"#7 on the effort to block the <ahya !ro)p, see I?"$1 B""59, AB"53 B%5 13, Cavendish1Bentinck to Bennett 5-le@andria;, % A)ly 19"97 also I?"$1 B63BB, Cook 5&reas)ry; to Aopson 5Fepart,ent of ?verseas &rade0F?&;, 1" Iebr)ary 196#7 and I?"$1 B""59, A5#$1 B%5 13, 9o,erville19,ith 58@port Credits L)arantee Fepart,ent0 8CLF; to 'aley 5&reas)ry;, B% Fece,ber 19"9. %. Nillearn, +)otin! a co,pany representative, in his Diaries B# ?ctober 19"9. 9ee as (ell the entry for 3 /ove,ber 19"9, for the a,bassador>s contrib)tion to ,appin! o)t the 88C>s lobbyin! strate!y. 9. Ior the 88C>s ne( ter,s, see I?"$1 B""59, A6BB6 B%5 13, .a,pson to I?, 1% ?ctober 19"9. Ior a conte,porary perception of the str)ct)ral press)res i,pin!in! on Gahir, see I?"$1 B63BB, A3$ 3$ 13, 9o,erville1 9,ith 58CLF; to Cook 5&reas)ry;, B Aan)ary 196#. 1#. I?"$1 B""59, A5#6# B%5 13, .a,pson to I?, B1 Fece,ber 19"9. 11. Ior this re,arkably s(ift t)rn aro)nd, see I?"$1 B""59, A699" B%5 13, 'aley 5&reas)ry; to G)llins 5F?&;, 16 Fece,ber 19"9, and enclos)res7 A5#5# B%5 13, 'aley to &ho,son 5I?;, B1 Fece,ber 19"97 and A5#$1 B%5 13, 9o,erville19,ith 58CLF; to 'aley, B% Fece,ber 19"9. Parts of the econo,ic b)rea)cracy tried to distance the,selves fro, the past history of e@cl)sive s)pport for the 88C and laid the bla,e for the policy on the Iorei!n ?ffice. &he Board of &rade appears to have contin)ed to s)pport the 88C. -s one participant recalled, C=n the ,eanti,e, another !ro)p in this co)ntry (ith lar!e -,erican participation Pi.e., B&: and -,erican Cyana,idQ entered the field in f)ll kno(led!e that their action (as contrary to the (ishes of :GL. &he President of the B?& PBoard of &radeQ asked the, to (ithdra( and (as ref)sed.D 9ee B&11 1151 1961, C&he 9pears GissionD file, letter fro, :. 9o,erville19,ith to Ronald ?verton 5B&;, 1 Garch 1961. 1B. I?"$1 B63BB, A36% 3$ 13, .a,pson to I?, B6 Iebr)ary 196#7 and A%5$ 3$ 13, .a,pson to I?, 1$ Garch 196#. 1". 9ee 9illearn Diaries % and 9 -pril 196#7 I?"$1 B63BB, A1BB1 3$ 13, .a,pson to I?, 1B -pril 196#7 I?"$1 B63B5, A15## 9B 13 PLreen IileQ, .a,pson to I?, B# Gay 196#7 and B&11 1511 1961, C&he 9pears GissionD file, letter fro, 9o,erville19,ith to ?verton 5B&;, 1 Garch 1961.

16. 9ee I?"$1 B$"93, A1%63 " 13, I? Gin)te, " A)ne 19617 A1%5B " 13, Ginistry of 9)pply, 1# A)ne 19617 and I?"$1 B$6#$, A$"$ 9 13, I? Gin)te 5Bate,an;, B3 Garch 1961. 15. 9ee B&11 1511 1961, C&he 9pears GissionD file, 9o,erville19,ith, 8!ypt, correspondence re!ardin! the proposed -s(an Fa, and nitrate sche,e, ,in)te sheet, B$ /ove,ber 1961. &his does not precl)de the possibility that the 8!yptians (ere lobbyin! for the sche,e. &he G89C re+)est ,i!ht have been in response, b)t = did not find doc),entation on this. 13. 9ee B&11 1151 1961, C&he 9pears GissionD file, letter fro, 9o,erville1 9,ith to ?verton 5B&;, 1 Garch 1961. 1$. 9ee I?"$1 "15%", AB%9 B%9 13, /i@on 5United Nin!do, Co,,ercial Corporation; to 9crivener 5I?;, 1$ Aan)ary 196B, and enclos)res. 1%. I?"$1 "55%3, A"6"B %66 13, ,in)te by 8. Chap,an1-ndre(s. 19. I?"$1 "55%3, A6559 %66 13, Cairo Chancery to 8!yptian Fepart,ent, B$ ?ctober 196"7 I?"$1 "55"6, AB119 B 13. B#. &his is a paraphrase of the e@planation for the 'afd>s tolerance of corr)ption. 9ee I?"$1 "55"3, Nellar to 9crivener, $ A)ne 196", C&he Black Book and =ts Goral,D cited in 'arb)r! 519%5: 155, n. 9%; 5file n),ber o,itted in citation;7 also I?"$1 %#"6%, A1#13 B5, .abor Co)nsellor, Cairo, to I?, $ Aan)ary 195#. Ior a description of E-bb)d as the ,oney behind the 'afd, !iven by the Irench a,bassador to the chair,an of the 9)e4 Canal Co,pany, see I?"$1 %#5B1, A81#13 $1, 9ir Irancis 'yle to -llan, BB -)!)st 195#. B1. &he basic files on this case are fo)nd in I?"$1 "1553, "155$ and "553". Ior Gakra, EUbayd>s attack on E-bb)d, see I?"$1 "155$, AB6$5 $ 13, enclosin! .a,pson to I?, B3 Gay 196B7 for the Cthief>s bar!ainD +)ote, see A5#%1 $ 13, Ginistry of 'ar &ransport PUNQ, B3 /ove,ber 196B, and enclos)res7 for the ter,s of the a!ree,ent finally concl)ded (ith the help of E-bb)d>s friend, .ord 'oolton, see I?"$1 "553", AB"B6 1# 13, Nillearn to I?, B" Gay 196", AB"5B 1# 13, Ginistry of 'ar &ransport to I?, B1 Gay 196", and AB"%B 1# 13, Nillearn to I?, "1 Gay 196"7 for evidence that E-bb)d (as ne!otiatin! behind the !overn,ent>s backs see 9illearn Diaries 1$ A)ne 196", (hich notes both E-bb)d>s concern to keep the details fro, the a)thorities and .a,pson>s ac+)iescence to E-bb)d>s sche,e. Gakra, EUbayd later attacked the !overn,ent for its role in this deal. 9ee Nillearn>s acco)nt of the Cse+)elD to the Blac$ Boo$# I?"$1 61"B3, A5B3 "1 13, Nillearn to I?, "# Aan)ary 1966. Iinally, the acco)nt in 'oolton 51959;, (hile colorf)l, sho)ld not be read (itho)t cons)ltin! the I? doc),ents.

BB. ?n the contract, see I?"$1 "55%3, A6559 %66 13, Cairo Chancery to 8!yptian Fepart,ent, B$ ?ctober 196". B". I?"$1 "55"#, A16#9 B 13, .a,pson to I?, B3 Garch 196". B6. I?"$1 "55%3, A6665 %66 13, 9hone to I?, B6 ?ctober 196"7 I?"$1 61"#5, A9$B " 13, Nillearn to I?, % Garch 196", incl)din! note by 8,pson, C:oldin!s of -bbo)d Pasha in Bank Gisr,D 15 /ove,ber 196". B5. &he +)ote is fro, I?"$1 61"#5, A9$B " 13, Nillearn to I?, % Garch 1966, e,phasis ,ine. &his file contains details of the plan. Ior -,in>s ori!inal approach to .a,pson, see 9illearn Diaries 11 Iebr)ary 1966. .a,pson noted that C-,inRobvio)sly had his knife deep into :afi4 -fifi.D B3. 9ee I?"$1 61"#5, A" " 13, Nillearn to Cado!an, 1$ Fece,ber 196", and enclos)res. B$. Ior -,in>s attack in parlia,ent in A)ly and the kin!>s visit a short ti,e later, see I?"$1 61""1, AB95" "1 13, .a,pson to I?, % -)!)st 1966. &he a,bassador>s acco)nt is strai!htfor(ard: C&here can be no do)bt that these t(o royal visits (ere desi!ned as a de,onstration a!ainst the recent attacks ,ade by -,in ?s,an,D and Cit has been evident that the Palace (as in sy,pathy (ith :afi4 -fifi as a!ainst -bbo)d and -,in ?s,an.D E-bb)d later recalled this as one of the t(o fail)res of his life. 9ee $h%ar al-6a*m 6 Aan)ary196$. B%. 9illearn Diaries B3 /ove,ber 196"7 I?161 %$5, the e,bassy>s internal file on E-bb)d, enclosin! a dispatch fro, Nillearn to I?, B% /ove,ber 196". B9. Ior Gakra,>s appeal, see I?"$1 "1553, A%35 $ 13, .a,pson to I?, B1 Iebr)ary 196B7 other interventions by the ,inister of p)blic (orks and the pri,e ,inister are fo)nd in A%66 %66 13, .a,pson to I?, 1% Iebr)ary 196"7 and I?"$1 "55%3, AB135 %66 13, .a,pson to I?, 1B Gay 196". "#. 9ee, for instance, the ,in)te attached to I?"$1 "15%", A"B#B B%9 13, .a,pson to I?, 13 A)ly 196B. "1. 9ee I?"$1 61"#5, A" " 13, Nillearn to Cado!an, 1$ Fece,ber 196", and enclos)res, (hich doc),ents .a,pson>s stron! s)pport. &he +)ote is fo)nd in a ,in)te to this file. =n addition, see A9$B " 13, enclosin! note by financial co)nselor, 3 Garch 19667 and A1196 " 13, .each 5F?&; to 9crivener, "# Garch 1966. "B. 9ee I?"$1 "55%3, A51## %66 13, enclosin! Falton to .yttelton P,inister of state for ,iddle east affairs, CairoQ, 1$ Fece,ber 196", and 8den to .yttelton, "1 Fece,ber 196"7 I?"$1 61"#5, A169 " 13, .yttelton to 8den,

% Aan)ary 1966. Ior the policy debates the,selves, see, for e@a,ple, B&11 1151, C&he 9pears GissionD file, correspondence of :. 9o,erville1 9,ith, ,in)te sheet, 3 Fece,ber 196"7 I?"$1 "55%3, A6B"" %66 13, ?>/eill 5Ginistry of 'ar &ransport; to 9crivener, % ?ctober 196". A6665 %66 13, enclosin! Peterson to Cairo, 13 /ove,ber 196". "". Peterson, another I? official, sho(ed that he had not for!otten his depart,ent>s attit)de to the 8!yptian b)siness,an before the (ar: C:e is a rascal b)t = a!ree that (e cannot i!nore and ,)st have hi,.D Both +)otes fo)nd in I?"$1 "55%3, A51## %66 13, B?&, B# Fece,ber 196", and enclos)res. "6. 9ee the revealin! series of ,in)tes and dispatches contained in I?"$1 61"9$, A$53 $53 13, incl)din! Nillearn to Peterson, 1% Iebr)ary 1966. "5. I?"$1 "55%3, A6%5B %66 13, Nennedy to Roberts, /ove,ber 196", for reports of the ,is!ivin!s of /elson, the 88C chair,an7 A69B5 %66 13, .a,pson to I?, 5 Fece,ber 196"7 A5B6# %66 13, enclosin! Lrey to E-bb)d, 1" Fece,ber 196", and E-bb)d to Lrey, 16 Fece,ber 196". "3. I?"$1 61"#5, A"$3 " 13, I? to Cairo, " Iebr)ary 1966, repeated to 'ashin!ton7 I?"$1 "55%3, A5B6# %66 13, Lrey to E-bb)d, 1" Fece,ber 196", and E-bb)d to Lrey, 16 Fece,ber 196". "$. U9RL 59, 196#J66, Bo@ 515%, %%".363" "B, ,e,os by Parker, 1% and B# Garch 19667 %%".363" B#, Nirk to 9tate, B1 Garch 19667 %%".363" B3, enclosin! ,e,orand), by 'arfield, 1# Garch 19667 and %%".363" "#, &)ck 5.andis; to 9tate, B# A)ne 19667 I?"$1 61"#5, A1#5% " 13, .a,pson to I?, B" Garch 1966, and A1#%" " 13, Nillearn to I?, B6 Garch 19667 I?"$1 61"#3, A13#3 " 13, .yal 5F?&; to 9crivener, 1 Gay 1966, and A13B# " 13, .yal to I?, 6 Gay 19667 B&11 1151, 9o,erville19,ith correspondence, ,e,o B1%, B3 -pril 1966, and brief B1$ by G)llins, B$ -pril 1966. "%. Ior evidence of Badra(i E-sh)r>s involve,ent in the Felta 9che,e,see I?"$1 61"#5, A1$"9 " 13, enclosin! Ca,pbell to 8,pson, B$ -pril 1966. "9. 9ee I?"$1 61"#5, A1#%" " 13, .a,pson to I?, B6 Garch 19667 I?"$1 61"#3, A1%93 " 13, .a,pson to I?, BB Gay 19667 AB#31 " 13, enclosin! tele!ra, fro, 88C to Lrey 5in letter to 9crivener;, 1" A)ne 19667 and ABB1" " 13, .a,pson to I?, 13 A)ne 1966. &hese files confir, the 88C>s involve,ent. 6#. Ior details, see I?"$1 61"#$, AB$$% " 13, enclosin! ,essa!e fro, =C= to =C= Cairo, 5 -)!)st 1966, and A"#"6 " 13, E-bb)d to 9crivener, B% -)!)st 1966.

61. I?"$1 61"#$, A"133 " 13, F?&, $ 9epte,ber 19667 U9RL 59, 196#J 66, Bo@ 515%, %%".363" 911166, 9tate to Cairo, 11 9epte,ber 1966. 6B. Ior evidence of E-bb)d>s lobbyin!, see I?"$1 61"#5, A15" " 13, 9crivener to Lilbert, 1B Aan)ary 19667 I?"$1 61""1, AB$5B "1 13, .a,pson to 8den, 16 A)ly 19667 and 9illearn Diaries Garch BB, 1966. 'arb)r!>s disc)ssion of CcollaborationD in the 196BJ1966 period leads hi, to ,ischaracteri4e E-bb)d as actin! at .a,pson>s behest 5C)sedRthe !ood services of E-bb)d PashaD; 519%5: 16%;. 6". I?"$1 61"#$, AB3$% " 13, 9crivener to .each, 16 -)!)st 19667 U9RL 59, 196#J66, Bo@ 515%, %%".3"$6 $1B#66, 9tate to .ondon, B# A)ly 19667 %%".3"$6 $1B366, .ondon to 9tate, B3 A)ly 19667 %%".363" 911166, 9tate to Cairo, 11 9epte,ber 19667 Egyptian 7a8ette 11 -)!)st 1966. 66. I?"$1 659%#, A1%"3 16B 13, .a,pson to I?, "1 Gay 19657 I?"$1 5""96, A6"5 6"5 13, Lilbert 5F?&; to 9crivener, B% Aan)ary 19637 and A5#6 6"5 13, enclosin! 8,pson to Lilbert, "# Aan)ary 1963. 65. 9ee I?"$1 B#%9% A"B$# 31 13, enclosin! ,e,orand), fro, .ord GcLo(an to 9ir R. Vansittart, 1" A)ly 19"$.

*. #usiness, the State and 4ndustriali;ation 12+-B12--. Po,er and the Postcolonial State
-s in other co)ntries )nder!oin! the transition fro, colonial to postcolonial r)le in the t(entieth cent)ry, the elites (ho ass),ed po(er in 8!ypt follo(in! independence in 19BB faced challen!es to their r)le and, in this partic)lar case, CfailedRto consolidate control, to !overn, and to re,ain in po(erD 5Boone 199B: 13;. =n A)ly 195B, a ,ilitary cli+)e la)nched a s)ccessf)l co)p d>Ktat, overt)rnin! the ,onarchy and, over the co)rse of the ne@t t(o years, the party syste,. =n the sli!htly lon!er ter,, E-bb)d and other leadin! local capitalists (o)ld be driven fro, the boardroo,s and )lti,ately fro, 8!ypt. - definin! feat)re of e@ceptionalist acco)nts is their locatin! the e@planation for this o)tco,e in the ori!ins of the partic)lar confi!)ration of capitalist prod)ction relations in the nineteenth cent)ry. 8@ceptionalist lo!ics have !enerated conceptions of fail)re of a ,arkedly different order: the fail)re of capitalists to constit)te the,selves as a co,pletely independent national ind)strial bo)r!eoisie7 the fail)re of the national !overnin! elite to achieve so1called tr)e or co,plete political and econo,ic independence. -s acco)nts of i,perialis,, capitalis, and party politics in 8!ypt, they are no lon!er

convincin!. &hey re,ain i,portant, ho(ever, as re,inders of the disc)rsive di,ensions of the )nfoldin! challen!e to the established postcolonial order in the decade after the (ar. &ho)!h ,obili4ation a!ainst the vesti!es of colonialis, (as a key part of the nationalist pro2ect after the (ar, it is clear that Lreat Britain (as not o,nipotent, and in the arena )nder st)dy here0the develop,ent of basic infrastr)ct)re and capital1!oods ind)stries0representatives of the ne( -tlee !overn,ent lost virt)ally all capacity to dictate o)tco,es. &his decline took place despite 8!ypt>s i,portance as a potential ,arket for British en!ineerin! fir,s and heavy1,achinery prod)cers, and the a,ple de,onstrations by British officials of the i,portance they attached to preservin! i,perial prero!atives in this do,ain. -s 'aterb)ry correctly notes, C&he BritishRtried in the 19"#s and 196#s to ,ake =,port 9)bstit)tion =nd)striali4ation 5=9=; (ork in favor of British technolo!y, e@pertise and s)ppliesD 519%": 59J3#;. &he critical point is that by 'orld 'ar == the effort had failed. -nd tho)!h their co,pro,ises (ith colonialis, and forei!n capital (o)ld beco,e central the,es in oppositional disco)rses, the day1to1day ad,inistration of the 8!yptian state (as in the hands of an indi!eno)s political elite, and, ,ost certainly, local0and increasin!ly 8!yptian0 investors directed day1to1day decision ,akin! in vario)s spheres of econo,ic prod)ction and distrib)tion. &he thr)st of this !enerali4ation holds even if the royal fa,ily is vie(ed as non18!yptian. =n tracin! the o)tco,es of the co,petin! plans for hydropo(er and nitrate ind)stries in 8!ypt, = (ill provide f)rther evidence for this deepenin! do,icili4ation of the postcolonial state and econo,y, incl)din! the e,er!ence of constit)encies and cadres 5and, i,plicitly, rationales; pro,otin! ind)strial re!)lation. &he creation by the /)+rashi ad,inistration of a p)blic a)thority to b)ild and operate the -s(an hydropo(er plant (as the harbin!er of a ne( era in the early post(ar political econo,y. -s s)ch, this atte,pted e@tension of the state>s re!)latory and prod)ctive capacity (as contested by private investors, and, )nder the 'afd !overn,ent of 195#J1951, the initiative (as bl)nted. 'hen the ,ilitary !overn,ent took po(er in A)ly 195B, its p)blicists (o)ld p)t the -s(an pro2ect for(ard as a sy,bol of a decisive break (ith the past, b)t the contracts for the pro2ect (ere act)ally si!ned and preli,inary e@cavation (ork be!)n bet(een 196$ and 196%. &he related o)tco,e of this key post(ar bar!ainin! ro)nd is that E-bb)d, (hose efforts to capt)re the -s(an deal (ere )nder,ined by a bloc of old political and econo,ic rivals, (ent on to i,ple,ent the first lar!e, capital1intensive, i,port1s)bstit)tion pro2ect of the post(ar era, near 9)e4, (here he fo)nded a ne( 8!yptian fertili4er ind)stry bet(een 1969 and 1951. &here is by no( little need to e@plain the si!nificance of the lon!1delayed -s(an sche,e, (hich -,erican intelli!ence a!ents identified as the CkeystoneD of post(ar 8!yptian develop,ent efforts and, th)s not s)rprisin!ly, the foc)s of rene(ed controversy and conflict.[1] By the end of the (ar fe( still +)estioned the lo!ic of developin! a do,estic nitrate1

fertili4er ind)stry. &he ar!),ents of the -,erican and Chilean nitrate prod)cers, e@porters and their local allies lost ,)ch of their po(er, partic)larly as bottlenecks contin)ed to ha,per the recovery of post(ar (orld trade. &he stron! consens)s in s)pport of this partic)lar =9= sche,e is perhaps best reflected in the decision taken in the 8!yptian 9enate in A)ly 196$, (here lando(ners approved f)ndin! for the -s(an pro2ect by a vote of seventy1ei!ht to t(o, and (here the lone opposin! votes (ere cast by E-bb)d>s allies, 9ira! al1Fin and 9irri. 'hile the si!nificance of the opposition of landlords and ,erchants declined, in the after,ath of the (ar ne( factors e,er!ed to infl)ence the battle bet(een E-bb)d and his rivals for control of the -s(an pro2ect and the co)rse of post(ar ind)striali4ation ,ore !enerally. Iirst, -,erican b)siness,en and !overn,ent officials be!an to (iden their involve,ent in the 8!yptian political econo,y, (here they p)rs)ed the lar!ely co,ple,entary !oals of sellin! !oods and services and )nder,inin! (hat re,ained of British i,perial prero!ative. &h)s, at the end of the (ar, the -,ericans forced the dis,antlin! of the -llied econo,ic a)thority in Cairo 5G89C;, (hich the British had hoped to )se to f)rther their o(n post(ar econo,ic pro2ect. - second factor (as the )nfoldin! of the post(ar finance re!i,e, or (hat (as referred to at the ti,e as the sterlin! +)estion. 8!ypt b)ilt )p ,assive sterlin! balances d)rin! the (ar as a res)lt of heavy -llied spendin!. =n 1965, Lreat Britain o(ed the 8!yptian state and private creditors X6##J66# ,illion 5or ro)!hly ^1.3J1.% billion;. &he -tlee !overn,ent clearly did not have the reso)rces to repay any si!nificant portion of this debt and reb)ild its o(n do,estic econo,y 5Polk 1953;. =n response to the proble,, the British state ri!idly controlled 8!ypt>s access to dollars, prod)cin! a serio)s forei!n1e@chan!e crisis bet(een 196$ and 1969 and )lti,ately reinforcin! =9= c)rrents inside 8!ypt, even (hile creatin! si!nificant obstacles in the short ter, to b)ildin! ne( 8!yptian ind)stries. Gost acco)nts of the post(ar period ine@plicably i!nore the financial di,ensions of the rapidly developin! crisis in the political econo,y and in -n!lo18!yptian relations, in a sense adoptin! Ci,perialD vie(s on the ,atter. Lovernin! elites at the ti,e clearly vie(ed thin!s differently. Ior instance, 8!yptian and other dele!ates to the A)ly 1966 Bretton 'oods conference pressed, f)tilely, to incl)de the proble, of blocked sterlin! assets on the a!enda of the =nternational Gonetary I)nd and in disc)ssions of the post(ar international ,onetary order 5Lodfried 19%$: 6%;. &hird, the rene(ed drive to develop national po(er reso)rces and ,an)fact)rin! ind)stries (as intert(ined (ith efforts to b)ild )p the re!)latory capacities of the state. &his ne( post(ar ro)nd of instit)tion b)ildin! e@tended to ,any arenas, incl)din! the partial nationali4ation of )tility services 5the tra,(ays; in -le@andria, the incorporation of Cairo as a ,)nicipality, and the atte,pt to e@tend controls over the forei!n1do,inated petrole), sector. 'orld 'ar == had hastened the end of the laisse4 faire era in the 8!yptian political econo,y, (hich posed ne( opport)nities and ne( challen!es for 8!ypt>s b)siness oli!archs. =n the case of the electric1po(er sector, the creation in A)ne 1965 of a ne( p)blic :ydroelectric Po(er

Co,,ission to oversee the b)ildin! of the -s(an pro2ect ended E-bb)d>s bid to take over this reso)rce. Gore !enerally, the conto)rs of a ne( post(ar re!)latory re!i,e be!an to e,er!e a,idst, and as part of, the on!oin! str)!!le over the distrib)tion of reso)rces. M M M

The Political Econo(y of De elop(ent in Post,ar Egypt

Under the !)ise of a revitali4ed national pro2ect of social refor, and econo,ic develop,ent, Pri,e Ginister Gah,)d al1/)+rashi>s cabinet decided in Gay 1965 to )ndertake the po(er1station pro2ect in the p)blic interest. &he pro2ect (as to be f)nded by an internally floated loan, opened to international tender, and operated by the 8!yptian state. &he E-bb)d !ro)p tried (hat t)rned o)t to be one last ti,e to salva!e the co,petitive position that it had b)ilt d)rin! the period of (arti,e 'afd r)le. &he co,position of the fract)red coalition !overn,ent ,ade predictin! the )lti,ate fate of E-bb)d>s pro2ect ha4ardo)s, tho)!h the odds see,ed to be a!ainst hi,0or so the Cairo1based British investors Lrey and Ca,pbell ar!)ed in a torrent of dispatches to 88C head+)arters in .ondon. ?n the one hand, E-bb)d>s closest confidant, -h,ad Gahir, had been na,ed pri,e ,inister. E-bb)d clearly co)nted on Gahir>s cooperation, and on this basis .a,pson tried to ,ake a credible case for contin)in! to back the E-bb)d plan in his o(n cables to .ondon. ?n the other hand, Gahir>s position in the cabinet (as (eak. &he finance ,inister and fo)nder of the dissident 'afdist Bloc, Gakra, EUbayd, (as ar!)ably ,ore pop)lar, (as ,ore r)thless and, as he ,ade clear to the e,bassy and to British co,pany officials, intended to cr)sh E-bb)d>s sche,e. &he ne( ,inister of co,,erce and ind)stry, :abashi, lined )p solidly behind Gakra, EUbayd in this arena, not least beca)se of his o(n connections to E-bb)d>s co,petitors in the Gisr !ro)p. 'hatever hopes E-bb)d still harbored for his -s(an sche,e (ere s)nk in the (ake of Gahir>s tra!ic ,)rder in Iebr)ary 1965 and the elevation of /)+rashi, cofo)nder (ith Gahir of the 9aEdist party, as the ne( pri,e ,inister. /)+rashi, (ho in the old British personality reports had been d)bbed an e@tre,ist and (as once s)spected of plottin! the ,)rder of a hi!h British colonial official, (as, like his o(n ,)rdered collea!)e Gahir, no( s)spect in the eyes of yo)n! ,ilitants for collaboratin! (ith colonialis,. &he le!acy of the past +)arter cent)ry of nationalist politics and decoloni4ation had e,er!ed as part of the post(ar contest for po(er in 8!ypt. =n the 19"#s, /)+rashi led the call to open the -s(an sche,e to an international co,petition. :is opposition to the 88C sche,e had helped to fract)re the 'afd party in 19"$. 8i!ht years later, /)+rashi rene(ed his principled s)pport for an open international tender, b)t no( national interest coincided ,)ch ,ore closely (ith those of his relatives, Cinti,ate friendsD and political allies (ho (ere or!ani4in! as a co,petin! investor bloc in the po(er sector 5Egyptian 7a8ette B3 9epte,ber 19657 al-9utla B Gay 196$;.

&hese incl)ded &ahir al1.o4i, /)+rashi>s brother1in1la(, fro, a fa,ily (hose ,e,bers (ere the,selves fo)ndin! investors in the Gisr !ro)p7 U.9. 'estin!ho)se, the ne(est ,)ltinational entrant in this cro(ded field7 relatives of the kin!7 and Ga,d)h Riyad, /)+rashi>s ne( ,inister of co,,erce and ind)stry, (ho had propitio)sly closed a cons)ltin! deal (ith a U.9. en!ineerin! fir, before takin! office.[)] &he Gisr !ro)p>s invest,ent in the opposition to the 'afd bet(een 196B and 1966 had obvio)sly be!)n to pay dividends. B)oyed by the profits a,assed d)rin! the (ar and steered by the politically ast)te and (ell1connected E-fifi Pasha, these investors recovered fro, the financial crisis of the late 19"#s and the hostile takeover bid by E-bb)d. =n the po(er sector, E-fifi and his allies had adopted a strate!y ,)ch like E-bb)d>s, b)ildin! brid!es si,)ltaneo)sly to the leadership of the British Cha,ber of Co,,erce in 8!ypt in s)pport of the proposed Felta 9che,e (hile or!ani4in! a consorti), to bid for the -s(an pro2ect. 59ee &able 6.; Gost cr)cially, E-fifi and his partners a!ain tried to attract -,erican Cyana,id to their side, ar!)in! (ith so,e 2)stification that (hile the Gisr !ro)p>s political fort)nes (ere (a@in!, E-bb)d>s (ere clearly on the (ane.[*] 8@a,ples abo)nded. &he Gisr !ro)p obtained !overn,ent backin! for its proposed ne(, -,erican1s)pplied rayon factory. &he /)+rashi !overn,ent had ret)rned the state>s Red 9eaJGecca pil!ri,a!e concession to the Gisr !ro)p>s shippin! line and the 8!yptian 9enate had opened a hi!hly p)blici4ed investi!ation of E-bb)d>s b)s lines. &he ,inister of finance, a relentless opponent since the 19B#s, played the key role in this ,)ltifront attack on E-bb)d>s fir,s, la)nchin! a drive to recover ,illions in alle!ed e@cess profits o(ed by E-bb)d>s shippin! and s)!ar co,panies 5Egyptian 7a8ette " -pril 19657 &i!nor 19%9: 53J5$;. &hese clai,s (o)ld do! E-bb)d for the ne@t decade.[+] Lovernin! officials and rival investor blocs (ere en,eshed in a protracted chicken !a,e thro)!h the first half of 1965. E-bb)d>s strate!y entailed pro,otin! hi,self as the key to a s)ccessf)l a!ree,ent (ith the international fir,s that controlled the necessary electroche,ical technolo!y. &o p)t it si,ply, if the !overn,ent (anted to see a do,estic nitrate1 fertili4er ind)stry b)ilt in 8!ypt, they (o)ld have to reach an accord (ith E-bb)d. /o side blinked despite a +)ickly escalatin! ,i@ of incentives and threats. Gost cr)cially, Pope, the -,erican Cyana,id director, sho(ed little (illin!ness to )nderc)t his 8!yptian partner, and he deferred, (isely or not, to E-bb)d>s hard1ball strate!y. &h)s Pope ref)sed all re+)ests to s)b,it details of the offer )nless and )ntil the 8!yptian !overn,ent decided to fore!o a p)blic tender. =n ,eetin!s (ith Pri,e Ginister /)+rashi, Pope press)red hi, on the !ro)nds that scarce e+)ip,ent ear,arked for the 8!yptian sche,e (as bein! bid for in =ndia and other ,arkets. Gore blatantly still, Pope tried to !ain the s)pport of the cabinet>s technical adviser, E-bd al1E-4i4 -h,ad, a ,e,ber of the 8!yptian 9enate, (ith a cl),sy offer of a bribeH Pope>s ethics (ere ,ore fine1t)ned than ,ost. 'hile

ad,ittin! to havin! offered E-bd al1E-4i4 a 2ob, he ,ade a point to note that he never ,entioned any specific salary.[-] /)+rashi did not blink. =nstead, his cabinet voted in Gay 1965 to !o to tender, a ,ove that .a,pson ad,itted ,i!ht be lo!ical fro, an econo,ic point of vie(. /onetheless, he dee,ed it reckless and irresponsible since it i!nored the lon!1standin! British clai,s in this arena. &he a,bassador also bla,ed the Gisr !ro)p>s chair,an, E-fifi, for playin! a behind1the1scenes role. &he cabinet, (hich had pointedly ref)sed to co,,it to a specific end )se for the electricity, elevated the lon!1ti,e critic of the fertili4er factory idea, -h,ad, to head the ne(ly created p)blic :ydropo(er Co,,ission.[.]

6. Co,petitive Conflicts over Pro2ects and Partners, Circa 1965 ProCect %roup Gisr Lro)p Delta Plan 88C -,erican Cyana,id Po(er Las Co,pany E-bb)d !ro)p -,erican Cyana,id 88C -8= -,erican Cyana,id 5s,an Plan 'estin!ho)se

&he vote ,et ,any constit)encies> needs, ,ost notably those of E-bb)d>s rivals, <ahya and E-fifi, (ho hoped, finally, to (oo the -,ericans to their side. E-bb)d>s response to the cabinet !a,bit de,onstrates once ,ore the 4ero1s), nat)re of the conflict as acted on by these 8!yptian investors. &he reversals at the hands of /)+rashi drove hi, first to try to b)ild ne( brid!es to the palace, via both the kin!>s adviser, :assanha,4a Pasha, and 9irri, a (arti,e pri,e ,inister and a relative of the kin!>s by ,arria!e (ho E-bb)d had ne(ly incorporated into his invest,ent !ro)p. -t the sa,e ti,e, tho)!h, he (as )r!in! .a,pson to intervene to p)t his 'afd party cronies back in po(er.[0] -nd in tande, (ith these and )ndo)btedly si,ilar political initiatives, he acted once a!ain to end the Gisr !ro)p>s hopes of brin!in! -,erican capital into their rival -n!lo18!yptian Felta nitrate1factory sche,e. E-bb)d>s U.9. partner, Pope, had (arned that )nless the cabinet acted +)ickly, he (o)ld advise E-bb)d to drop the -s(an sche,e. &)rnin! )p the press)re, in -)!)st 1965, E-bb)d re!istered a ne( X8 6 ,illion vent)re, the Che,icals Gan)fact)rin! Corporation, (ith 9irri and, if U.9. doc),ents are to be believed, the cro(n prince of 8!ypt holdin! shares.[1] &his co,pany

then beca,e the vehicle thro)!h (hich E-bb)d and Pope event)ally opened ne!otiations (ith the 8@port =,port Bank of the United 9tates 58@=, Bank; for a dollar loan to b)ild a diesel1po(ered nitrate factory so)th of 9)e4, on the eastern ed!e of the Felta. &h)s, the contin)ed setbacks in his -s(an sche,e and his partnership (ith U.9. investors led E-bb)d to take over the idea of the Felta 9che,e fro, its ori!inal 8!yptian pro,oters. &he o)tco,es of the play or plays in this arena acco,,odated so,e parties, reinforced the positions of others and t)rned disastro)sly a!ainst still others. =t appeared that 8!ypt (o)ld finally have a do,estic nitrate ind)stry, tho)!h this o)tco,e (as not (hat E-bb)d>s co,petitors intended. By Aan)ary 1963, the Gisr !ro)p chair,an, E-fifi, had ad,itted defeat, and to(ard the end of the year he be!an ne!otiatin! for a position on the board of E-bb)d>s proposed ne( U.9.1backed vent)re.[2] &here (as little .a,pson co)ld do as he prepared to leave Cairo in Garch 1963 after ,ore than a decade of pro,otin! the 88C>s hydropo(er pro2ect other than to constr)ct a )sable acco)nt of the fail)re. :e bla,ed the /)+rashi !overn,ent>s Cne!ative attit)deD and consoled hi,self (ith the lie that the 8!yptians did not )nderstand their o(n best interests.[13] E-bb)d>s decision to fo)nd the Iertili4ers and Che,ical =nd)stries of 8!ypt, .td., a,o)nted to a do)ble blo( to the British investors (ith the lon!est1 standin! clai,s in these pro2ects: the 88C and its Cairo1based affiliates, the -ssociated British Gan)fact)rers in Cairo, V. B. Lrey and Cecil Ca,pbell. &hese forei!n investors and their local representatives atte,pted to cooperate (ith both rival 8!yptian b)siness !ro)ps. &ho)!h the strate!y (as desi!ned to ,ini,i4e their risks in an )nstable political environ,ent, fro, E-bb)d>s perspective it had contrib)ted to the )nder,inin! of his o(n co,petitive position and )lti,ately led hi, to revise his ob2ectives. -s a res)lt, not only (as their potential share in the Felta factory sche,e lost, b)t the obstacles in front of their one re,ainin! hope0the -s(an sche,e0 !re( steadily ,ore for,idable. -s E-bb)d deepened his co,,it,ent to b)ildin! the alternative 9)e4 5e@1Felta; fertili4er plant bet(een 1963 and 196%, his ob2ectives in the -s(an arena be!an to shift a!ainst the -s(an fertili4er1factory proposal0the develop,ent pro2ect that he had been tirelessly pro,otin! for al,ost t(o decades since 19B$. M M M

The Lphill #attle to #uild a State

&he decision in Gay 1965 to create the national :ydroelectric Po(er Co,,ission 5:8PC;, (hich (as char!ed (ith s)pervisin! the -s(an electrification pro2ect, sho)ld be seen as part of a broader process of instit)tion b)ildin! and reor!ani4ation that had been cataly4ed by 'orld 'ar ==. 'arti,e de,ands had e@acted a tre,endo)s toll on the co)ntry>s cra4y +)ilt of p)blic and private po(er plants and had ,ade the related iss)es of rationali4ation and e@pansion of the po(er sector a priority for post(ar refor,. &he -s(an pro2ect (as event)ally inte!rated into the P)blic 'orks Ginistry>s e@pansive vision of a ten1year1lon! electrification pro!ra, for all

of )pper 8!ypt. &he co,,ission>s chair,an, -h,ad, a retired civil service official and 9aEdist party s)pporter (ho had developed the plan back in the 19"#s to deliver po(er fro, -s(an to Cairo, ree,er!ed as a key lobbyist for p)blic o(nership of po(er reso)rces and, )ns)rprisin!ly, for his o(n pet sche,e of lon!1distance po(er trans,ission. :is vie(s (ere !iven e@tensive covera!e in Cairo>s ,ain -rabic, 8n!lish and Irench dailies as (ell as in the pa!es of 'a+alla al-'uhandisin# the 2o)rnal of the en!ineers> professional association. /e(ly ,atric)lated 8!yptian en!ineers and other professionals, (hose prospects for private e,ploy,ent (ere li,ited by entrenched patterns of forei!n and 8!yptian ,inority do,inance in salaried positions, for,ed a s)pportive and increasin!ly visible social base for an e@panded p)blic sector 5Egyptian 7a8ette 19 Garch, B# -pril 19657 'a+alla al-'uhandisin -pril 1965, Gay 19657 Bianchi 19%9: $5J$37 Goore 19%#: B$J"B, 61J66, 156J 15%;. -h,ad>s p)blic ca,pai!n (as also an open invitation for even ,ore a,bitio)s professional rivals to la)nch technical criticis,s of his pet electrification plan. Gore critically, ho(ever, -h,ad faced an )phill battle to sec)re the independence and a)thority of 8!ypt>s (o)ld1be &ennessee Valley -)thority a!ainst the co,petin! clai,s and co)ntervailin! po(er of politically infl)ential blocs of do,estic investors. 8!yptian capitalists (ere intent on ,a@i,i4in! the flo( of, and access to, distrib)tive reso)rces fro, the :8PC (hile ,ini,i4in! the de!ree of re!)latory interference (ith their o(n ,arket1based privile!es. Ior instance, E-bb)d and his rivals clearly did not (ant to s)rrender the !ains accr)in! fro, their privile!ed bar!ainin! position (ith forei!n capital in this arena, in part beca)se these local 8!yptian capitalists sa( the po(er1prod)ction and distrib)tion sector itself as ripe for Cindi!eni4ationD and absorption into their private e,pires. 9i,ilarly, Iorei!n ?ffice doc),ents fro, this period describe a proposed ne( private 8!yptian vent)re to take over electrification of Cairo and the 8!yptian Felta, (ith the !overn,ent to be offered an )nspecified n),ber of seats on the board of directors.[11] &he 2)stification for the -s(an pro2ect in the eyes of ,any of the co)ntry>s b)siness and lando(nin! oli!archs hin!ed on the pro,ise that it (o)ld s)bsidi4e a ne(, profitable ,an)fact)rin! sinec)re and fill the skyrocketin! de,and of food and cotton prod)cers. ?ther(ise, the :8PC stood little chance of !ainin! the cabinet>s s)pport for the sche,e, ,)ch less that of the pashas (ho headed the parlia,ent>s finance co,,ittees. &h)s -h,ad>s capacity to shape the a!enda appeared li,ited, and he reconciled hi,self to the reconfi!)ration of the pro2ect as a develop,ent plan for the elites of Upper 8!ypt, (here, incidentally, the 9aEdist coalition !overn,ents had the stron!est re!ional base of s)pport. &he old en!ineer had his hands f)ll in ,arshalin! the political, econo,ic and technical reso)rces necessary to protect the :8PC fro, the (itherin! attacks on its co,petence, instit)tional capacity and a)tono,y. 'hen the co,,ission )nveiled its in1ho)se desi!ns for the pro2ect in Garch

1963 and invited bids to s)pply the plant and e+)ip,ent, the co,petin! !ro)ps ref)sed to tender, (hile blastin! -h,ad and his presti!io)s British cons)ltin! en!ineers, the fir, of Nennedy and Fonkin, for their alle!ed ine@pertise. &he co,,ission a!reed to postpone the closin! date of the co,petition (hile they re(rote the specifications. &he co,panies then insisted on the ri!ht to s)b,it their o(n proprietary desi!ns, (hich see,ed to cast f)rther do)bts on the +)alifications of the :8PC and led to t(o additional postpone,ents of the biddin! deadline, )ntil the end of Aan)ary 196$.[1)] -h,ad>s retrospective acco)nt obsc)red the ca)se of this year1 lon! delay, (hich he attrib)ted si,ply to the co,panies> preocc)pations (ith other concerns 51955: 3"J35;. -s the co,panies contin)ed their ,ane)vers a!ainst the :8PC, a second front (as opened in the (ar by Gah,)d al19hishini, an a,bitio)s and pro,inent professional (ho headed the 8lectrical 8n!ineerin! Fepart,ent at Cairo University. 9hishini e,er!ed as the sin!le ,ost persistent and forcef)l ne( critic of -h,ad and the :8PC, (hose desi!n for the po(er plant, he char!ed, placed the fifty1year1old -s(an Fa, in dan!er 5'a+alla al'uhandisin Garch 1963: 5J9;. &he ar!),ent (as an old one. &he desi!n, (hich (as based on the (ork ori!inally carried o)t by -h,ad and others on the staff of the Ginistry of P)blic 'orks in the 19"#s, (as kno(n as the penstock sche,e. Penstocks (ere the steel pipes that (ere to be inserted into the da,>s sl)ice !ates to s)pply (ater to the t)rbines. 9hishini ar!)ed that the pipes (o)ld trans,it )nacceptable levels of vibrations fro, the t)rbines, and he )r!ed the :8PC to adopt his o(n alternative desi!n, (hich, coincidentally, the U.9. 'estin!ho)se1led consorti), (as proposin! to i,ple,ent. 8!yptian en!ineerin! circles co,,only presented 9hishini>s interventions solely as a technical or professional ,atter, alon! the lines,for e@a,ple, of the British irri!ation en!ineer 'illcocks>s ill1fated dis1sent over hydra)lic policy after 'orld 'ar =. /onetheless, 9hishini(as a fo)ndin! investor in the 8lectrical Fevelop,ent Co,pany of 8!ypt, incorporated in 1963 to co,pete for the -s(an b)siness and other anticipated electrification contracts. =n essence, the ne( fir, represented U.9. 'estin!ho)se in the e@pandin! 8!yptian po(er1!eneration and 1distrib)tion ,arket. .eadin! b)siness,en, al-'isri p)blishers and 'afd party allies, Gah,)d and :)sha,4a -b) al1 Iath, (ere ,a2or financial backers of the vent)re (ho sided (ith 9hishini (hen 9hishini>s overly confrontational approach (ith -h,ad, the :8PC and other !overn,ent a!encies finally led to an )prisin! a,on! the directors and shareholders.[1*] &he ob2ectives of the t(o ,ain co,petin! blocs of investors conver!ed on tryin! to stop the !overn,ent fro, !oin! thro)!h (ith a p)blic tender. &here is little ,ystery in the :8PC>s choice of the tender strate!y. Liven a predictably opti,istic assess,ent of their o(n abilities to ,onitor the process, the co,,issioners intended to obtain the ,ost )p1to1date technolo!y at the ,ost co,petitive price. A)st as predictably, e@ec)tives of -,erican Cyana,id, 88C and other fir,s dispara!ed the 8!yptians> technical capacities, tho)!h these capacities (ere not (hat had the, (orried.

.et )s consider the case of the -s(an consorti), then still no,inally led by E-bb)d. Ior the t(o British ,achinery prod)cers, 88C and -8=, to have to co,pete on price and delivery dates basically ,eant forfeitin! the ,)lti1 ,illion po)nd order. British officials ad,itted in private that these fir,s (o)ld be )nable to s)pply any of the re+)ired electrical and che,ical plant bet(een 196$ and 1969, a C!loo,yD forecast then, (hich in retrospect appears overly opti,istic. =C= contin)ed to advise its Cairo office to strin! alon! -h,ad and the :8PC, (hile deprecatin! the !overn,ent>s atte,pt to re!)late the ind)stry and reiteratin! that it had no interest in r)nnin! a factory in 8!ypt.[1+] -s for E-bb)d, the increasin! ti,e and reso)rces that he devoted to the Felta pro2ect (ere as clear an indication as any of his o(n shiftin! ob2ectives.[1-] &ellin!ly, (hen the tenders for the -s(an pro2ect (ere finally opened in Aan)ary 196$, E-bb)d had not even entered a bid 5Egyptian 7a8ette "1 Aan)ary 196$;. &he 'estin!ho)se consorti), p)rs)ed a strate!y si,ilar to the 88C>s, tho)!h the U.9. prod)cers (ere pres),ably not concerned abo)t their co,petitiveness per se. &hese investors also attacked the :8PC>s co,petence (hile p)rposely holdin! back on their bid, (ith the )lti,ate ob2ective of takin! over the pro2ect. &hey (ere clearly (ell connected, as evidenced by the s)ccessf)l ca,pai!n ,o)nted in the fall of 1963 by ,e,bers of the 9id+i cabinet to delay the closin! of the co,petition (hile 'estin!ho)se ostensibly prepared an alternative plan for s)b,ission.[1.] -t the sa,e ti,e, the !ro(in! shorta!e of hard c)rrency, and partic)larly dollars, to(ard the end of 1963 created a po(erf)l disincentive to adoptin! the -,erican desi!ns )nless and )ntil 'estin!ho)se co)ld sec)re appro@i,ately ^B#J6# ,illion in financin!. &he fail)re to do so led the fir, and its allies both to ,o)nt a ne( ca,pai!n to discredit the :8PC and to propose to re1en!ineer the entire pro2ect 5Egyptian 7a8ette B" Iebr)ary 196$7 $h%ar al-6a*m B3 -pril 196$;. &his delayin! tactic ca,e in the sprin! of 196$ as the parlia,ent prepared to debate f)ndin! for the !overn,ent>s sche,e.[10] &he foc)s of political action by the co,petitors !rad)ally shifted to the parlia,ent, (here co,,ittees of the Cha,ber of Fep)ties and of the 9enate be!an deliberations on the -s(an pro2ect and the /)+rashi !overn,ent>s re+)est for X8 1#.5 ,illion 5appro@i,ately ^6".6 ,illion at the prevailin! e@chan!e rate;. &he dep)ties )lti,ately approved the pro2ect in A)ne, and the 9enate follo(ed s)it in A)ly 196$. &he details of the le!islative ,ane)vers shed ,)ch li!ht on the evolvin! interests of the E-bb)d !ro)p and its political allies. .ittle evidence s)!!ests that the co,,ission or its o(n cabinet and b)rea)cratic allies 5pri,arily (ithin the Ginistries of P)blic 'orks and Iinance; e@pected the pro2ect to sail thro)!h the shoals of the le!islat)re )nassisted. /)+rashi in fact tried to bypass the le!islat)re 5Egyptian 7a8ette 9, 11 Iebr)ary, 13 Garch, B9J"# -pril 196$;. &he co)rse had to be (ell ,apped in advance, be!innin! (ith the asse,bly in -pril 196$ of yet

another international co,,ission, the last in a lon! line of e@perts bro)!ht to 8!ypt to approve one or another version of the pro2ect. &he e@perts> endorse,ent of the !overn,ent sche,e (as p)blished at the end of -pril, strate!ically in vie( of the (ave of p)blicity !iven to the criticis,s of 'estin!ho)se, 9hishini and others, and the al,ost daily interventions in the pa!es of al-9utla# the pro1/)+rashi al- sas# the 'afd>s al-'isri and the -,in brothers> $h%ar al-6a*m. &he !overn,ent and its allies so)!ht the hi!h !ro)nd, defendin! the :8PC>s decisions a!ainst alle!ed press)res fro, Lreat Britain, the Cinternational ,onopoliesD and their a!ents. &hey in fact s)cceeded in that these ar!),ents have for,ed the core of the conventional narrative ever since. &he opposition>s defense of the national interest, by contrast, foc)sed on the alle!ed threats to the da, and the irri!ation syste, in !eneral, the sche,e>s technical fla(s, and the hi!h and )nnecessary costs that a hard1pressed pop)lation (as bein! asked to absorb 5 $h%ar al-6a*m B3 -pril, 1B A)ly 196$7 al-9utla 1JB, 1", 13, B1, B3, B9 Gay 196$7 al-'isri 11 A)ne 196$7 al- sas 1$ A)ne 196$7 E-bd al1E-4i4 -h,ad 1955: 3B7 'aterb)ry 19$9: 16$;. &he !overn,ent appeared to clear one h)rdle (hen a ,a2ority in the finance co,,ittee of the lo(er cha,ber endorsed the :8PC>s pro2ect in its A)ne 196$ report, b)t only after the ,inority s)cceeded in appendin! a report of its o(n, (ritten by 9hishini, conde,nin! the pro2ect 5Cha,ber of Fep)ties 196%: B6JB5, 617 $h%ar al-6a*m $ A)ne 196$7 Egyptian 7a8ette 1B A)ne 196$;. &he debate in the f)ll cha,ber (as cond)cted alon! fa,iliar lines: (as the !overn,ent s)ccessf)lly defendin! 8!ypt a!ainst Ci,perialist policyD or foolishly p)rs)in! a technically and financially )nso)nd invest,ent sche,e* 'hile the co,petitors contin)ed to ply the le!islators (ith rea,s of technical data, /)+rashi fed the press key doc),ents fro, the !overn,ent>s b)l!in! archives7 these doc),ents (ere )sed to sho( ho(, for years, the British e,bassy had been pro,otin! the interests of the 88C and opposin! the principle of co,petition. &he cha,ber, (hich (as itself a prod)ct of ri!!ed elections, voted over(hel,in!ly, 166 to 3, to s)pport the allocation of f)nds 5al- sas 15 A)ne 196$7 Egyptian 7a8ette 15J1$ A)ne 196$7 $h%ar al-6a*m 1B A)ly 196$;. ?ne of the !overn,ent>s opponents on the s)bco,,ittee, E-bd al1Wa(i -h,ad, the ,inister of p)blic (orks in 9id+i>s 1963 cabinet, described the press ca,pai!n as e@tre,ely effective in convincin! parlia,ent to s)pport the !overn,ent>s plan. &he president of the 9enate, G)ha,,ad :aykal, hoped to boost the !overn,ent over the second h)rdle, b)t the 9enate>s investi!ative co,,ittees protested the haste (ith (hich the iss)e had been disc)ssed by the dep)ties and pro,ised a ,ore thoro)!h revie(. &he Egyptian 7a8ette 513 A)ne 196$;, (hich had lon! backed the 88C in this arena, raised the hope that leadin! en!ineers a,on! the 9enate>s ranks ,i!ht yet ,ake the case for re2ectin! the !overn,ent>s plan. /)+rashi (as event)ally forced to resolve the ,ore !larin! and costly inconsistencies bet(een the bl)eprints of the :8PC, on the one hand, and the Ginistry of P)blic 'orks> o(n, ne(ly

p)blished ten1year plan for 8!yptian electrification, on the other. Under attack for his ref)sal to co,,it the !overn,ent in advance to a partic)lar end )se for the po(er, /)+rashi had to re2ect key parts of the :8PC plan as the price for a ,a2ority vote in the s)bco,,ittee, (hich finally passed the f)ndin! re+)est by a vote of five to three. &he :8PC proposal called for constr)ction of a calci), nitrate1prod)cin! factory at /a!E :a,,adi7 the Ginistry of P)blic 'orks proposed an a,,oni), nitrate factory and a steel factory in -s(an. &he international co,,ission that revie(ed the :8PC sche,e re2ected the idea of a steel factory as )necono,ical. /)+rashi finally endorsed the -s(an a,,oni), nitrate pro2ect, obtainin! the key s)pport of 9enate Vice1President G)ha,,ad 9hafi+ in the process 5al-9utla B3, B9 Gay 196$7 al-'isri BB A)ne 196$7 Egyptian 7a8ette B"JB3 A)ne 196$;. &he pro2ect>s opponents in the s)bco,,ittee, led by the 'afd>s r)thless boy (onder, 9ira! al1Fin, and E-bb)d>s ne(est b)siness partner, 9irri, redo)bled the attack on !overn,ent policy d)rin! the f)ll 9enate debate early in A)ly 196$. 9ira! al1Fin blasted the !overn,ent for its irre!)lar proced)res and contradictory ob2ectives and for lyin! abo)t the tr)e costs of the pro2ect, incl)din! the cost of the fertili4ers. 9irri seconded 9ira! al1Fin, ar!)in! that it (as cra4y to b)ild the pro2ect in sta!es. :e (anted the po(er to be devoted to steel prod)ction 5(hich, incidentally, (o)ld protect his ne( invest,ent in E-bb)d>s fertili4er pro2ect;. 9irri called on the state to invite a co,petin! set of tenders on the basis of the alternate desi!n. &he t(o failed to s(ay the solid pro1/)+rashi bloc (ithin the 9enate, ho(ever, (hich defeated a last, desperate atte,pt to postpone the vote and approved f)ndin! for the sche,e, seventy1ei!ht to t(o 5'ada%it ma+lis al-shuyu$h PGin)tes of the 8!yptian 9enateQ session 55, $J9 A)ly: 161BJ16"1, 166"J 163B, 16%#J15#6, 1551J15537 Egyptian 7a8ette 1# A)ly 196$;. &he !overn,ent>s confidence (as no do)bt hi!h in A)ly 196$. -h,ad, the :8PC and, by e@tension, the /)+rashi re!i,e appeared to have ,oved the po(er pro2ect for(ard after years if not decades of setbacks and delays. -t the sa,e ti,e, and follo(in! ,onths of fr)itless ne!otiations, /)+rashi>s Ginistry of Iinance had concl)ded an interi, financial a!ree,ent (ith the British a)thorities. Ior a brief ,o,ent, 8!ypt looked to have s)r,o)nted its forei!n e@chan!e crisis.[11] 'ithin days of the 9enate vote, -h,ad anno)nced the a(ard of the contracts for t)rbines, !enerators and s(itch!ear, (ith the b)lk of the appro@i,ately X8 5 ,illion in orders !oin! to 9(edish and 9(iss fir,s 5Egyptian 7a8ette 16 A)ly 196$;. /)+rashi>s cabinet +)ickly approved the decision. &ho)!h -h,ad contin)ed to press ahead (ith the pro2ect, the ,ood and ,otivation had chan!ed dra,atically by the fall of 196$. &he bi!!est proble, (as .ondon>s decision in -)!)st to s)spend convertibility of the po)nd, the effects of (hich reverberated +)ickly in Cairo and in the capitals of other creditor nations. Ior instance, tho)!h the 8!yptian state had co)nted on the release of so,e ^1$5 ,illion e+)ivalent of hard c)rrency for the rest of 196$, after -)!)st they co)ld co)nt on no ,ore than ^3 ,illion

over (hat they earned on c)rrent transactions 5ro)!hly ^"# ,illion;, accordin! to -,erican treas)ry officials. 8!yptian ne!otiators spent the re,ainder of the year finali4in! arran!e,ents (ith ,an)fact)rers, central bankers and the contractors (ho bid for the preli,inary e@cavation of the site. -h,ad (as portrayed in British acco)nts as driven by the fear that the /)+rashi ad,inistration>s days (ere n),bered.[12] &he ,ore acc)rate portrait (o)ld be of a !overn,ent desperate to de,onstrate to its o(n pop)lation so,e capacity to solve the co)ntry>s ,o)ntin! proble,s 5.o)is 19%6: B5$JB36;. &he declinin! po(er of the British state to shape o)tco,es in this sector left co,pany officials protestin! feebly in .ondon and the career Giddle 8ast hands cl)ckin! self1ri!hteo)sly abo)t 8!yptian Cnational arro!ance.D ?liver .yttelton, the (arti,e cabinet official (ho took over -8=, (anted the sterlin! ne!otiations to be )sed as a cl)b to sec)re the contract. <et the )nderstandable vie( fro, 'hitehall of the -s(an deal as one ,ore case of Canti1British pre2)dice tri),phantD needs to be interro!ated.[)3] Iirst, British en!ineers served thro)!ho)t as the ,ain international cons)ltants to the :8PC, and they oversa( the tender process 5earnin! a hefty fee for their service;. Leoffrey Nennedy, the head of Nennedy and Fonkin, event)ally received a decoration 5the first order of ,erit; fro, /asser for his fir,>s role in b)ildin! the hydropo(er station.[)1] 9econd, at least one ,a2or British ,an)fact)rin! fir, obtained ^" ,illion in orders thro)!h the :8PC, ro)!hly 15 percent of the a(ard 5British Cham%er of Commerce in Egypt 9epte,ber 196$;. &hird, and ,)ch ,ore pivotally, the conflict bet(een the :8PC and the 88C consorti), (as at heart abo)t investors> preferences for or!ani4in! and i,ple,entin! the pro2ect0that is, (ith a ,ini,), of state oversi!ht and re!)lation0rather than the corporations> national identities. &h)s, the rival U.9. 'estin!ho)se consorti), faced precisely the sa,e kind of concerted and s)ccessf)l opposition to its o(n bid to take over the pro2ect fro, the :8PC. &he relative tentativeness of this partic)lar challen!e in co,parison (ith later ro)nds, or the fact that in other re!)latory arenas 5s)ch as those enco,passed by the co,pany la( of 196$; local capitalists pres),ably derived so,e benefit, (o)ld ,ake little difference in the responses of E-bb)d and other investors to this clai, of re!)latory a)thority. =n the case of the E-bb)d !ro)p, the reaction incl)ded the fo)ndin! of the ne( ,an)fact)rin! s)bsidiary, Iertili4ers and Che,ical =nd)stries of 8!ypt, .td., (ith a ^5.3 ,illion loan approved by the 8@=, Bank board in 'ashin!ton in A)ly 196$. &he fo)ndin! of the co,pany see,s to have ,arked the be!innin! of a ne( phase of cooperation bet(een E-bb)d and erst(hile rivals in the Gisr !ro)p, (hich be!an (ith the offer of a seat on the board of the che,ical fir, to E-fifi and c)l,inated in 195#, (hen E-bb)d 2oined the board of Bank Gisr, reportedly a!ainst E-fifi>s (ishes. &he si!nificance of this rapproche,ent sho)ld not be )nderesti,ated, !iven the decades1lon! fe)d bet(een these t(o personal anta!onists and the history of relentless co,petitive conflicts bet(een the rival !ro)ps that = e@cavated in Chapters " and 6. &his ne( and li,ited accord a,on! rival investors (as an or!ani4ational response thro)!h (hich the b)siness oli!archs str)ck back at (hat ,)st

have appeared as related challen!es to their privile!ed position by state1 b)ildin! elites, a ne( set of (o)ld1be co,petitors or both. <et, by ,id11969, a !overn,ent headed by =brahi, E-bd al1:adi, (ho took over as 9aEdist party president and 8!ypt>s pri,e ,inister after /)+rashi>s assassination, (as p)rs)in! a different, clearly less threatenin! and incl)sive approach to re!)lation. =t certainly ,)st have appeared that (ay to b)siness,en s)ch as E-bb)d, 9irri and E-fifi, (ho (ere appointed to an entirely ne( co,,ission to oversee the b)ildin! of an iron and steel factory in -s(an that the !overn,ent (o)ld )nder(rite and the oli!archs and their partners (o)ld operate. -s for the proposed nitrate factory, this ne( ad,inistration dee,ed it so,e(hat less vital to the co)ntry>s f)t)re develop,ent and filed the plan a(ay. 9irri, (ho (o)ld !o on to en!ineer the ret)rn of the 'afd to po(er, (as a ,ain pro,oter of the iron and steel factory. E-bb)d 2oined the board of the ne( parastatal ind)strial develop,ent bank, fo)nded by the E-bd al1:adi !overn,ent in 1969. :e also fo)nd the cli,ate s)ddenly cond)cive to si!nin! a ne( a!ree,ent coverin! the ter,s of the s)!ar1co,pany ,onopoly after years of delay 5Egyptian 7a8ette B#, B% Gay, 16 A)ne 19697 al- sas B ?ctober 19697 .e,onias 1956: "6J"5;. &hese sa,e investors s)ccessf)lly bl)nted the re!)latory initiative by the /)+rashi ad,inistration, tho)!h even British a)thorities ad,itted that creation of s)ch a p)blic a)thority (as lon! overd)e. ?nce 9irri, (ho had an obvio)s and direct stake in these ,atters, took over the pri,e ,inister>s d)ties in A)ly 1969, the ori!inal head of the :8PC, -h,ad, (as )ncere,onio)sly fired, and (ork on the hydropo(er sche,e itself (as s)spended pendin! a thoro)!h revie( by the ne( ,inister of p)blic (orks: the 'afd>s o(n G)harra,. &h)s, broad iss)es of party, interest and ideolo!y (ere involved in this partic)lar arena. -t the sa,e ti,e, ,any of the criticis,s leveled at -h,ad and his cons)ltants d)rin! the 1963J196$ bar!ainin! ro)nd over the alle!ed desi!n fla(s in the ori!inal sche,e looked to have been so)nd. -h,ad (as forced to ad,it that X8 5 ,illion o)t of a total of X8 $ ,illion in cost overr)ns since 196$ had been d)e to C,odificationsD in desi!n and layo)t. &hese revelations, (hich (ere !iven a,ple space in the pa!es of the Egyptian 7a8ette 5"# 9epte,ber, 3, 1# ?ctober, B9 Fece,ber 1969, B1 Iebr)ary, "# Gay, 3 A)ly 195#; and the 'afd party>s standard al-'isri#(ere (elco,ed by critics ea!er to dis,antle the :8PC or at least dil)te its a)thority 5al- hram " -pril 1951, 3J$ Aan)ary 195B7 'a+alla al-'uhandisin Gay 195B: B1JBB7 E-bd al1G)Eti E-bd al1'ahab E-,r 193#: $J9;. 9till, the /)+rashi !overn,ent>s initiative (as no ill)sion. ?n 19 Garch 196%, !ro)nd (as broken so)th of the to(n of -s(an. Nin! Iar)+ laid the cornerstone for the f)t)re ind)strial co,ple@. -nd (ork0pri,arily e@cavation in the riverbed for the po(er station0finally be!an on the hydropo(er plant. M M M

!eining the State #ac7 4n

9irri>s last and ,ost i,portant action as a transition pri,e ,inister in the (inter of 1969J195# (as to prepare the !ro)nd for the ret)rn of the 'afd to po(er. = (ill take )p the iss)e of the last 195#J1951 'afd !overn,ent in detail as part of a broader analysis of 8!ypt>s b)siness oli!archy and its relations (ith the !overn,ents that directly preceded and follo(ed the A)ly 195B co)p. :ere, = a, interested in the chan!e in !overn,ent ,ainly in ter,s of its i,pact on the co)rse of the -s(an pro2ect. 9ince the electrification sche,e (as the centerpiece of 8!yptian p)blic ind)strial1 develop,ent policy )ntil at least 1956, (hen plannin! for the ne( ,assive -s(an :i!h Fa, and po(er pro2ect !ot off the !ro)nd, the instit)tional history helps in ill),inatin! the evol)tion of state capacity in the ind)strial sector as (ell as the ,ytholo!y of the early period of ,ilitary r)le. 'hen 9irri handed the reins of !overn,ent to the 'afd in Aan)ary 195#, G)harra, re,ained at his old fiefdo, in the p)blic1(orks b)rea)cracy. :e contin)ed on the co)rse plotted in ?ctober 1969, (hen he Cte,porarily postponedD the sched)led anno)nce,ent of tenders for the second phase of civil1en!ineerin! constr)ction at the da, site, to the cha!rin of the British fir,s that (ere desperate to (in the esti,ated X8 " ,illion contract. &he ,ain U.N. !ro)p s)spected that a Ler,an co,petitor had en!ineered the delay, b)t the :8PC>s internationally reno(ned senior cons)ltant, Nennedy, confir,ed that the delays (ere part of G)harra,>s pro2ect to discredit the co,,ission chair,an, -h,ad.[))] &he venerable en!ineer (as finally re,oved fro, his post 2)st (eeks before the !eneral election 5Egyptian 7a8ette $, 1#, 1B ?ctober, B9 Fece,ber 1969;. &he postpone,ent of tenders re,ained in place for a year, )ntil /ove,ber 195#, (hile G)harra, reor!ani4ed lines of a)thority over the pro2ect7 retained his o(n favorite cons)ltin! en!ineer, 9ir G)rdoch GacFonald, (hose fir, (as ,ost pro,inently associated (ith /ile en!ineerin! (orks over the past half cent)ry7 and recast the pro2ect>s ter,s yet once ,ore. G)harra, created a ne( )ndersecretarial post (ithin the ,inistry, (hich took over s)pervisory a)thority fro, the :8PC. Gore cr)cially, G)harra,>s ne( appointee follo(ed the ,inister>s 5and GacFonald>s; direction in ret)rnin! to a co,prehensive approach to po(er prod)ction and distrib)tion, and he be!an to re(rite specifications for all re,ainin! e+)ip,ent and en!ineerin! services as a !iant sin!le tender. G)harra,>s takeover and reconfi!)ration of the pro2ect s)rvived the first h)rdle in the sprin! of 195#, (hen yet another co,,ittee of forei!n and local e@perts he had asse,bled approved the penstock desi!n. - sin!le dissentin! vote (as cast by representatives of a 9(edish cons)ltin! fir,, VBB, (hich had s)b,itted a report critici4in! it. &his dissent (o)ld prove i,portant to G)harra,>s opponents in 195B. B)t ,ost note(orthy at this 2)nct)re (as that U.9. 'estin!ho)se and its local partners, notably 9hishini, dropped their o(n lon!standin! p)blic criticis,s of the penstock plan. &he reasons are no( fairly plain.

&hese partic)lar co,petitors had basically been sh)t o)t of the 8!yptian heavy1electrical e+)ip,ent ,arket d)rin! the /)+rashi years, not only in the case of -s(an b)t also in the co,petition in 196$J196% to reo)tfit the Cairo /orth po(er station. =ndeed, 9hishini bla,ed the old :8PC head 5and 9aEdist party ,e,ber;, -h,ad, personally and bro)!ht s)it a!ainst the 8!yptian !overn,ent after -h,ad alle!edly infl)enced the o)tco,e of this second co,petition.[)*] &he pict)re chan!ed dra,atically, ho(ever, once G)harra, took over as ,inister of p)blic (orks. =n ?ctober 1969, he delivered an X8 5 ,illion po(er1station contract to 'estin!ho)se and, i,portantly, to party allies 9hishini and the -b) al1Iaths, (ho (ere investors in the 2oint vent)re. =n Garch 195#, the contract (as for,ally a(arded (ith ,)ch fanfare, 9hishini>s s)it a!ainst the !overn,ent (as dropped, and he (as ,ade a senator 5Egyptian 7a8ette "# ?ctober 1969, "# Aan)ary, B, B1 Iebr)ary, B6 Garch, 6 -pril, "# Gay 195#7 E-bd al1G)Eti E-bd al1'ahab E-,r 193#: $;. By the s),,er of 195#, G)harra, and officials at P)blic 'orks (ere boastin! e@pansively of a ne( and co,bined electrification and ind)striali4ation ,aster plan for the -s(an re!ion, to cost X8 1## ,illion and to incl)de both a steel factory and a fertili4er factory. 'hen British e,bassy analysts atte,pted to reconcile this h)!e ne( p)blic invest,ent plan (ith the diver!ent preferences of the 'afd>s private backers, notably E-bb)d, they took note of G)harra,>s caref)l specification of the ti,etable for i,ple,entin! the sche,e. 'ork on the po(er plant, be!)n in 196%, (as to contin)e as soon as possible0that is, once tenders for the ne( civil1 en!ineerin! (orks (ere iss)ed later in the year, the offers (ere eval)ated, and final contracts (ere approved and si!ned. &his phase (as !oin! to cost appro@i,ately X8 BBJB5 ,illion 5Egyptian 7a8ette 19 -pril 19697 al- hram " -pril 1951;. G)harra, insisted, ho(ever, that the ,ost efficient (ay to proceed (as to finish the po(er plant before startin! the constr)ction of the factories, and the ne( ti,etable envisioned co,pletion of the po(er plant in sta!es bet(een 1955 and 195$.[)+] -n i,portant obstacle in the (ay of G)harra,>s revised sche,e (as cleared as (hat so,e British officials called the 'afd>s C9ira! al1FinJE-bb)d (in!D !rad)ally e@tended its control over policy,akin!. &his e@pansion of control took place in a series of conflicts (ith a so1called refor, (in! associated (ith 9ira! al1Fin>s ,ain rival inside the party, /a2ib al1:ilali. =n /ove,ber 195#, Pri,e Ginister /ahhas fired his finance ,inister, Oaki E-bd al1G)tEal, a fiscal conservative and :ilali>s ,ain protK!K in the cabinet. -,on! other ca)ses of this controversial cabinet p)r!e, G)tEal resol)tely opposed plans for financin! the lar!e1scale p)blic1(orks pro2ect. E-bb)d and other critics of :ilali and co,pany (ithin the b)siness oli!archy (ere then appointed to a ne(ly created :i!her -dvisory Co)ncil 5:-C; to assist in developin! a coordinated !overn,ent policy for the Cnational econo,y.D[)-] &ho)!h it is !enerally not reco!ni4ed, this or!ani4ation (as essentially rechristened the /ational Prod)ction Co)ncil in the (inter of 195B, (hen a ne( set of b)siness,en1advisers approved the -s(an pro2ect as the first Cne(D develop,ent sche,e of the revol)tionary re!i,e. G)harra,>s ,inistry and cons)ltants co,pleted desi!n chan!es, called for

ne( tenders, eval)ated the offers and ,ade the preli,inary reco,,endations on the bids bet(een /ove,ber 195# and ,id11951. -s of that point, X8 6 ,illion had been spent on cons)ltin! and preli,inary constr)ction. = have been )nable to find detailed doc),entation on these deliberations, b)t :a,id al1Waddah, then risin! in the ranks of the en!ineerin! syndicate, close to its leadership 5incl)din! G)harra,; and an investor in the b)ildin! ,aterials and contractin! sectors, clai,s that a consorti), (ith (hich he and other local capitalists (ere involved had been tapped for the contract and involved in final ne!otiations late in 1951 5intervie(s (ith :a,id al1Waddah, Cairo, B6 -pril, 16 A)ly 19%57 al- hram " -pril 1951;. =t is no (onder, therefore, that Waddah )sed his col),n in 'a+alla al-'uhandisin 5-pril 195B p. 1#7 Gay 195B pp. B1JBB; to conde,n the politici4ation of technical iss)es (hen the 'afd !overn,ent>s -s(an policy ca,e )nder fresh attack in parlia,ent in the (inter of 1951J195B, 2)st (eeks before the e@plosion of fi!htin! in the Canal Oone and riots in Cairo bro)!ht the last pop)larly elected 8!yptian !overn,ent to an end. Political conditions in 8!ypt after ?ctober 1951 (ere hardly cond)cive to pro!ress on any kind of develop,ent initiative. =n place of ad,inistrative contin)ity, fo)r !overn,ents rose and fell in +)ick s)ccession in the ,onths before the A)ly 195B ,ilitary co)p. <et, for a post1'afd pri,e ,inister like :ilali, (ho staked his clai, to r)le on the pro,ise of s)bstit)tin! refor, for 'afdist de,a!o!)ery and corr)ption, the -s(an pro2ect (as an easy one to sei4e )pon in order to le!iti,ate his cli+)e>s r)le. - reva,ped :i!her Cons)ltative Co,,ittee r)bber1sta,ped the pro2ect, and, despite the invariable criticis, of the technical desi!n, :ilali apparently p)shed thro)!h an a)thori4ation for credits by late sprin! 195B, (hile the ne( ,inister of p)blic (orks prepared to co,plete ne!otiations (ith the pri,e contractin! fir,s. -fter A)ly 195B, tho)!h, the earnest efforts of ,ost of these partic)lar ancien r0gime stal(arts no lon!er ,attered 5al- hram 13 -pril, 1B Gay 195B7 E-bd al1E-4i4 -h,ad 1955: 337 ctnE-bd al1G)Eti E-bd al1'ahab E-,r 193#: 9;. M M M

National Po,er and the 5s,an ProCect, 12-*B12.3

&ho)!h :ilali did not re,ain in po(er lon! eno)!h to reap the sy,bolic (indfall, the po(er pro2ect paid off handso,ely for /asser and the other officers t)rned state b)ilders. &he rapid pro!ress on the final1i,ple,entation phase of the -s(an sche,e beco,e e,ble,atic of the ne( re!i,e>s ostensible technocratic and develop,entalist ethos, (hile the t)rbines, !enerators and pylons (ere icons for the co)ntry>s co,,it,ent to national ind)stry and ind)strial po(er, at least )ntil constr)ction of the :i!h Fa, pro2ect in the 193#s. Understandably eno)!h, the ne( re!i,e and its o(n key backers0for instance, U.9. -,bassador Aefferson Caffery, the C=- station chief and his staff, second1tier investors like the -,ins and the 2o)rnalists they sponsored s)ch as :aykal, etc.0(ere invested in creatin! the appearance of a sharp,

rapid and decisive break (ith the past. /onetheless, ?>Brien 51933: 3"; pointed to possible tensions in s)ch acco)nts: F)rin! the early years (hen the officers re,ained very preocc)pied (ith consolidatin! po(er and e@pellin! the British fro, the canal 4one, no very clear depart)re can be observed fro, the kind of econo,ic policies p)rs)ed by the old re!i,e. Gen so over(hel,in!ly concerned (ith a str)!!le for political po(er nat)rally fo)nd little ti,e to consider the lon!1ter, f)t)re of their co)ntry. 8@cl)din! land refor,, )p to the &ripartite -!!ression Pthe 1953 'arQ, contin)ity see,s ,ore evident than chan!e. &his observation is indisp)tably tr)e in the case of the -s(an po(er sche,e, (hich (as reapproved for i,ple,entation in /ove,ber 195B by a ne( 8!yptian cabinet headed by Leneral G)ha,,ad /a!ib, (ho also served as the 2)nta>s fi!)rehead. :is ,inister of finance, Lalil al1E=,ari, the b)rea)crat1t)rned1b)siness,an, held the sa,e post si@ ,onths earlier )nder :ilali. :e (as probably the sin!le 8!yptian ,ost fa,iliar (ith the financial aspects of the pro2ect, !iven his )bi+)ito)s presence inside the corridors of the postJ'orld 'ar == Iinance Ginistry. Gore cr)cially, Leneral /a!ib>s ,inister of p)blic (orks (as G)rad Iah,i, the en!ineer (ho had served as the secretary !eneral of the :8PC in the 196#s. /o t(o fi!)res (ere ,ore capable and better placed for contin)in! this no( even ,ore cr)cial piece of develop,ent (ork. Reports conte,porary (ith these events co)ld not easily narrate the past a(ay, tho)!h (hen al- hram 515 Iebr)ary 195"; anno)nced that /a!ib>s cabinet had approved a(ard of the ,ain civil1en!ineerin! contract to a Irench consorti),, a distinction (as ,ade bet(een those phases co,pleted Cin past a!esD and those at hand Cin the a!e of liberation.D &hirty years later, a one1line acco)nt in the sa,e paper reported si,ply that the ori!inal pro2ect C(as started in 195"Rand finished in 1931D 5al- hram 9 A)ne 19%5;. Vie(ed Con the !ro)ndD in the po(er depart,ent>s offices and at the constr)ction site o)tside of -s(an, rather than fro, the perspective of the Revol)tionary Co,,and Co)ncil 5RCC;, the history of the hydropo(er sche,e (o)ld see, to reinforce ?>Brien>s point abo)t the contin)ities ,arkin! econo,ic policies. /onetheless, certain ne( political factors likely facilitated the process of restartin! (ork on the pro2ect. &he ,ost i,portant (as the closin! of the channels0parties, print and parlia,ent0e@ploited re!)larly by the shiftin! and diverse coalition of opponents in the past. &he si!nificance of the a)thoritarian t)rn is i,,ediately !a)!ed by the re,arkable t)rn by the ne( ,inister of p)blic (orks, Iah,i. .on! kno(n as an opponent of the penstock sche,e, he i!nored the vie(s of his o(n one1 ti,e s)periors at the :8PC and the planeloads of international cons)ltants (ho had flo(n in and o)t of Cairo after the (ar, and proceeded to b)ild the po(er station )sin! the alternative t)nnel desi!n. &his partic)lar feat of en!ineerin! (as by all acco)nts i,pressive. Iah,i added the 9(edish cons)ltants, VBB, (ho back in 195# reco,,ended a!ainst the penstock

sche,e, to the payroll7 he sent the revised specifications o)t to the 195# short list of contractors in ?ctober7 and he (as revie(in! the ne( offers by the end of Fece,ber 195B.[).] &o the e@tent that they had to, Iah,i and his cohorts defended the case for the s(itch in desi!n on t(o !ro)nds. Iirst, the decision to abandon the penstocks, (hich (ere essentially lon! ,etal pipes, and the ne( sl)ice !ates into (hich they (o)ld be fitted ,eant a red)ction in the price of the pro2ect 5and a savin!s in hard c)rrency;. =t also ,eant a lar!er share of the costs spent at ho,e since local contractors and labor (o)ld be involved in di!!in! the t)nnels. 9econd, they ar!)ed that a ne( set of tests sho(ed that alterin! the da,>s sl)ice !ates posed an )nreasonable de!ree of risk to the da,>s str)ct)re. =n essence, this (as a variant of the char!e opponents had been )sin! since the 19"#s 5intervie(s (ith Leoffrey Nennedy and Ben2a,in Croft, &hetford, 8n!land, -)!)st 19%3: el1Nholy 195$;. - ,ost si!nificant difference in this arena co,pared (ith the earlier 19"#s a)thoritarian interl)de 5or any period )p to 195B; is that Iah,i and the rest of the cabinet (ere s)ddenly free of the need to vet these clai,s before a ne( Cne)tralD panel of e@perts. &his freedo, (as likely to be 2)d!ed a pl)s fro, the standpoint of national a)tono,y and defended inside the Ginistry of P)blic 'orks on the related !ro)nds of professional co,petence. Iah,i>s sit)ation (as an 8!yptian technocrat>s drea, co,e tr)e. Parlia,ent had been proro!)ed7 the parties (restled (ith the re!i,e>s orders to p)r!e their ranks7 and the ,ost notorio)s of an earlier !eneration of Cpolitici4edD p)blic1 (orks ,inisters, the 'afd>s G)harra,, (as in 2ail and a(aitin! trial in the re!i,e>s ne( &reason Co)rt. &he party presses had of co)rse been sh)t do(n. 8!yptian en!ineerin! circles, (here debate on the pro2ect had been especially fierce, pointedly i!nored the s)!!estion by the editor of 'a+alla al'uhandisin in ?ctober 195B for a ne( ro)nd of disc)ssions on the po(er pro2ect 5Goore 19%#: 15$;. -nd, in a step that see,s at once to stand for contin)ity and chan!e in this arena, -h,ad, the first chair,an of the :8PC, (as restored to his old position by a cabinet ,inister (ho once served directly )nder hi, and (ho, ,ore i,portantly, b)ried the desi!n that -h,ad had been pro,otin! for the past t(enty years. &he ne( revol)tionary leadership had little incentive, obvio)sly, to e,phasi4e its indebtedness to the instit)tions of the re!i,e it had 2)st overthro(n, b)t if the pylons (ent )p relatively +)ickly after 195B, it (as d)e to the !ro)ndbreakin! (ork, ,essy as it had been, carried o)t bet(een 1965 and 195B. &he contracts for the ,ain electrical ,achinery had been si!ned in 196$J196%, and the sa,e fir,s be!an delivery of the plant in 1953. &he tenders for civil (orks s)b,itted in 1951J195B served as the basis for Iah,i>s a(ard of contracts, totalin! X8 11 ,illion and anno)nced in Iebr)ary 195", to a set of Irench and Ler,an heavy1en!ineerin! fir,s 5alhram %, 1#, 11 Iebr)ary 195"7 E-bd al1G)Eti E-bd al1'ahab E-,r 193#;. 'ork (as finally res),ed on site at the end of the ann)al flood season in the fall of 195". = fo)nd no f)rther si!n of the kind of )bi+)ito)s p)blic interventions that had s)rro)nded this pro2ect for decades, (ith a sin!le tho)!h hardly decisive e@ception that ca,e, si!nificantly, in the ,idst of the bitter po(er str)!!le over the a)thoritarian re!i,e>s f)t)re in Garch 1956

5al- hram 15 Garch 1956;. M M M

Su((ary
&he years after 'orld 'ar == (ere ones of sharp and escalatin! conflicts, of rene(ed political ,obili4ation a!ainst the re,ainin! vesti!es of colonial r)le inside 8!ypt and, by 196$J196%, of (ar (ith the Ae(ish settlers in Palestine and the ne( =sraeli state. &he decision of the palace1backed /)+rashi re!i,e to fi!ht in Palestine helped to shape s)bse+)ent -,erican vie(s of Iar)+ and the Ccorr)ptD 8!yptian lando(nin! elite d)rin! the last years of the ,onarchy. B)t it (as the disastro)s o)tco,e of the (ar that shaped s)bse+)ent political develop,ents inside 8!ypt, incl)din! the (ave of assassinations in 1969, the ret)rn of the 'afd in 195# and the abro!ation of the -n!lo18!yptian treaty in ?ctober 1951. &ho)!h not )s)ally seen this (ay, these fa,iliar land,arks of the post(ar era hi!hli!ht ho( the +)alifications ori!inally attached to CindependenceD in 19BB had !enerally ceased to constrain the political leadership of the post(ar 8!yptian state. &his is not a clai, that /)+rashi and his s)ccessors (ere free fro, o)tside interference, b)t neither (ere those (ho !overned after the A)ly 195B co)p. -nd the opposition to /a!ib and /asser in 195BJ 1956 rehearsed a the,e fa,iliar fro, the de,onstrations of the late 196#s and early 195#s: that the ,ilitary, like its civilian predecessors, (as an a!ent of i,perialis,. Gany have since co,e to adopt the revol)tionary leadership>s o(n preferred narratives of this period, (hich nat)rally so)!ht to p)t as ,)ch distance as possible bet(een it and the ancien r0gime. B)t the sy,bolic distancin! fro, the colonial roots of the state (as no less part of the pro2ect of the i,,ediate post(ar leaders and their cadres. =n one partic)larly relevant case, a hi!h official contested a part of the history that = have been e@cavatin! in this book, tho)!h Cthe factsD (ere literally carved in stone. 'hen (ork on the ori!inal -s(an Fa, (as co,pleted in 19#B, a pla+)e (as attached to co,,e,orate (hat at the ti,e (as re!arded by so,e as Cthe !reatest sin!le (ork ever planned and carried o)t by British contractorsD 5Giddle,as 193": 16$;. &he pla+)e read as follo(s: &his Fa, 'as Fesi!ned -nd B)ilt By British 8n!ineers 8!yptians -ssisted By Lreeks 8@cavated &o &he Rock Io)ndations -nd B)ilt &he R)bble Gasonry 9killed =talian 'ork,en Fressed -nd B)ilt &he Lranite -shlar -h,ad Nhary, a civil en!ineer, one of the post(ar !overn,ent>s ,ain e@perts on da,s and a ,e,ber of the 1965 :8PC, had the pla+)e re,oved in 196$, on the !ro)nds that it did Cnot shed a tr)e li!ht on thin!sD

5Egyptian 7a8ette 19 A)ne 196$;. &o b)ttress his case he recalled his o(n role as resident en!ineer d)rin! the second hei!htenin! in the 19"#s, tho)!h this (as decades after the da, had been b)ilt. =n essence, he (as clai,in! the da, for the ne( /)+rashi re!i,e. &he chair,an of the co,,ission, -h,ad, (o)ld do the sa,e for the hydropo(er pro2ect in the late 196#s. &he site had been reinscribed (ith a radically ne( !enealo!y by the ti,e /asser traveled so)th for the official openin! of the po(er station in 193#. &his process be!an i,,ediately after the ,ilitary took po(er, as attested to by the follo(in! 1956 acco)nt: /o sooner did the Revol)tion take )p the reins of office than it started to carry into effect 8!ypt>s ,ost i,portant pro2ect (hich has en!a!ed p)blic attention for over a +)arter of a cent)ry, na,ely the -s(an :ydro18lectric 9che,e. &he pro2ect (hich )sed to afford ,aterial for cheap political propa!anda, has no( beco,e an acco,plished fact.RUnder the present re!i,e,Rand (ithin the co,paratively short period of si@ ,onths, the pro2ect passed thro)!h all the preli,inary sta!es, (ith the res)lt that the co)ntry felt a ne( era of real develop,ent and pro!ress has da(ned. 5Nhadr and :asso)n 1956: 63J6$; =t see,s al,ost inevitable that the kind of styli4ed and tri),phant te@t sa,pled above (ill appear contrived no(. =t (as, after all, lar!ely the previo)s pro!ress that ,ade it possible for Iah,i>s ,inistry to shepherd the pro2ect Cthro)!h all the preli,inary PsicQ sta!esD in 195BJ195". -nd after the ti,etable for co,pletion (as set back by the 9)e4 crisis in 1953J195$, the ne( a)thorities perhaps considered earlier s)ch Ce@o!eno)s shocksD0 'orld 'ar ==, the 196$J196% Palestine 'ar and the 1951J195B Canal Oone crisis0in a ne( li!ht. 9till, it see,s reasonable to ar!)e that the ,ilitary bro)!ht so,ethin! ne( and i,portant to the e+)ation after A)ly 195B. -nalysts revisited the history of the -s(an pro2ect in the 19$#s and 19%#s pri,arily to ref)te the idea that British po(er had so)!ht to hinder 8!yptian ind)striali4ation. C=t Pthe -s(an pro2ectQ, for instance, (as not the victi, of colonial hostility to 8!ypt>s ind)striali4ation b)t rather of the clan infi!htin! over a(ard of contract, and the diffic)lties of financin!D 5'aterb)ry 19%": 3# and 19$9: 6$7 see also &i!nor 19$$b and 19%#a;. -s = have been ar!)in! thro)!ho)t, in its broad thr)st, s)ch a clai, is s)rely correct: British policy !enerally s)pported the e@pansion of its co)ntry>s o(n ,)ltinational1 oriented en!ineerin! and heavy ,an)fact)rin! fir,s in territories s)ch as 8!ypt. B)t those in 8!ypt (ho pointed to forei!n opposition to e@plain the pro2ect>s delay (ere not all !)ilty of blind adherence to indefensible doctrinal positions. Chapters " and 6 of this book provide n),ero)s e@a,ples of efforts by forei!n econo,ic and political elites to block or other(ise interfere (ith decision ,akin! on the -s(an pro2ect. =n the late 196#s, representatives of =C=, the lar!est s)pplier of fertili4ers to the ,arket, (ere still p)rs)in! a

strate!y of divertin! the 8!yptians fro, the pro2ect for as lon! as possible. 8,phasi4in! the retardin! effects of forei!n intervention is inherently no ,ore or less pla)sible an e@planation for (hy the -s(an pro2ect (as not b)ilt before 193#. &o ,ake the point in sli!htly different ter,s, the list of factors that ,i!ht e@plain the s)ccessive delays is in fact +)ite a bit lon!er: i,perialis,, (ar, b)rea)cratic infi!htin!, Palestine, shillal 5cli+)es;, the co,position of 8!yptian cabinets, the ti,in! of 8!yptian elections, the technical capacity of p)blic a!encies, party rivalries, bribery, the co,petitive str)ct)re of international ,arkets, the needs of Chilean fertili4er e@porters, and so on. 8@plainin! (hy the -s(an hydropo(er sche,e (as not b)ilt in 8!ypt 5that is, (hy so,ethin! did not happen; is lo!ically e+)ivalent to e@plainin! (hy the bo)r!eoisie failed to transfor, 8!ypt. &he lon! history of s)ccessive bar!ainin! ro)nds has nonetheless provided a )ni+)e vanta!e for st)dyin! the evol)tion of the bar!ainin! capacity of local capitalists over ti,e. E-bb)d had 2oined Focker>s consorti), in 19B$, seekin!, realistically, to obtain a share of the profits in ret)rn for sec)rin! the !overn,ent>s s)pport for (hat, if their plan had been adopted, (o)ld have been a predo,inantly forei!n1o(ned concession co,pany. /onetheless, by the 196#s, E-bb)d (as pro,otin! the pro2ect as his o(n, 8!yptian1o(ned po(er1!eneratin! station and fertili4er factory, for (hich the forei!n fir,s (o)ld s)pply the plant and e@pertise. =n the sa,e (ay, the case )nderscores the basic, tho)!h often for!otten point that the scope and precise nat)re of state involve,ent in these t(o sectors (as politically deter,ined. -s late as the 196#s, E-bb)d and his allies still envisioned the private appropriation of the /ile>s po(er1!eneratin! reso)rces as a pla)sible o)tco,e. P)blic o(nership of the hydropo(er plant (as contested, and the contest appears to have been settled by 1965J1963, at (hich point E-bb)d and his allies apparently !ave )p their efforts to b)ild and r)n the po(er plant as a private concession. =n a si,ilar (ay, local capital clearly de,onstrated its preference and intent to r)n the vario)s proposed che,ical ,an)fact)rin! plant as a private vent)re, b)t, in 1953, the state nonetheless e,er!ed as ,a2ority o(ner in the ne( -s(an 5Ni,a; fertili4er1factory 2oint vent)re. &he political roots of the entire ran!e of no( nat)rali4ed vie(s abo)t (hat the private sector ostensibly co)ld not or (o)ld not do, to!ether (ith the clai,s abo)t (hat the state ostensibly had to do after 195B, need to be retho)!ht. &his )nfoldin! contest over a ne( post(ar re!)latory re!i,e reflected both the effects of the reor!ani4ation of econo,ic ad,inistrative a!encies d)rin! 'orld 'ar == and (hat analysts correctly point to as a post(ar res)r!ence of Cpolitical and econo,ic nationalis,D 5&i!nor 19%6: 1$5J1$3, 1$9J195, B1"J B16;. B)t a contest (as on!oin! over the precise ter,s of econo,ic nationalis, or over co,petin! nationalist pro2ects. =nvestors vie(ed and pro,oted 8!yptiani4ation as a ,eans to contin)e to privati4e reso)rces. =n the -s(an case, this o)tco,e (as s)ccessf)lly avoided. Iinally, the details of the conflicts that = have been e@a,inin! here, (ith their i,plications for )nderstandin! the factors that shaped the scope and

pace of ind)strial invest,ent after the (ar, are )s)ally obsc)red in the conventional narratives of ind)striali4ation7 these narratives are (ritten !enerally as a parable of failed national1class for,ation and the sei4)re of po(er by ar,y officers in A)ly 195B i,a!ined as the lo!ical c)l,ination of a process of econo,ic chan!e steered )nsteadily by the (eak bo)r!eoisie. ?ver the years, the disparate c)rrents and historically contin!ent effects of a co,ple@, overdeter,ined con2)nct)re 5the CcrisisD of 195#J195B; have been presented, so,e(hat too )nreflectively, as a revol)tionary sit)ation, (ith the political econo,y ,ade to appear spiralin! do(n(ard, the elite establish,ent paraly4ed, society Cinfla,edD and in fer,ent Cfro, belo(,D 8!ypt ine@orably slidin! Cinto chaosD 5Baker 19$%: 1, 1#7 &i!nor 19%6: B6B7 Beinin and .ock,an 19%$: "95J"9%7 Bot,an 19%%: 115;. = propose to look at the crisis or crises of 195#J195B afresh, fro, the vanta!e of the end of 'orld 'ar == and the openin! of a ne( phase in 8!ypt>s postcolonial history (hen it (as bein! steered by a ca)tio)sly confident, reactionary1capitalist elite that (as tryin! to reconsolidate its a)thority (hile navi!atin! the co,ple@ities of the )nfoldin! post(ar (orld order. &he investors (hose strate!ies and political choices = have been analy4in! ,ost certainly did not act as if the post(ar years (ere harbin!ers of so,e latent, near1f)t)re )pheaval, and they (o)ld be hardpressed to reco!ni4e the,selves in the descriptions that typically follo( fro, the fa,iliar concept)ali4ation of elite vie(s at the hei!ht of the crisis: resi!ned and helpless to prevent the collapse of the old re!i,e. Certainly, the idea that after the (ar capitalists (ere too ti,id to )ndertake necessary invest,ents or act forthri!htly to i,ple,ent the refor,s that they kne( (ere in their o(n best interests see,s to be (ron!. -cco)nts of the post11965 political econo,y re,ain heavily tied to these partic)lar pre,ises a,on! others in (hich the s)ccessor, revol)tionary re!i,e>s o(n official histories (ere deeply invested. -s = (ill try to sho(, the real proble, for ,any in 8!ypt 5and, keep in ,ind, the hope for ,any others; (as that the 'afd and the investors (ho do,inated the party see,ed to offer a (ay o)t of the political i,passe that follo(ed the b)rnin! of do(nto(n Cairo in Aan)ary 195B.

Notes
1. 9ee Central =ntelli!ence -!ency, 9it)ation Reports, 9R11", B$ 9epte,ber 1969, &r),an Papers, President>s 9ecretary>s Iiles, Bo@ B3#, &r),an.ibrary. 9i,ilarly see the 11 -pril 196$ address by Gah,)d :assan, first8!yptian a,bassador to the United 9tates, stressin! develop,ent of 8!ypt>s (ater1 po(er reso)rces. &r),an Papers, 'hite :o)se Central Iiles, ?ffice Iile, ?I B%", Bo@ 91", 8!ypt, &r),an .ibrary. B. U9RL 59, 196#J66, Bo@ 515%, %%".363" 1111166, ,e,orand), of conversation on the -s(an Fa, pro2ect, 11 /ove,ber 1966, and %%".363" 111B666, .andis to 9tate, B6 /ove,ber 19667 RL 151, Bo@ 61#B,

file ,arked CConstr)ction and Fevelop,entD7 I?"$1 659$9, A1##3 16B 13, .a,pson to I?, 3 Garch 1965, and Ca,pbell to 8,pson, 16 Iebr)ary 1965. ". 9ee the correspondence intercepted by the British censorship service and enclosed in I?"$1 61"#$, A"%"# " 13, 9hone to I?, B3 ?ctober 19667 and A6161 " 13, Pope to E-bb)d, B3 ?ctober 1966. 6. Ior details see U9RL 59, 1965J69, Bo@ 3916, %%".355 B$65, :)dson to 9tate, B$ A)ly 19657 I?"$1 659$9, A$"% 16B 13, Nillearn to I?, 19 Iebr)ary 19657 I?"$1 6596", ABB93 19 13, .a,pson to I?, 5 A)ly 19657 I?"$1 5""96, 8,pson to Lilbert, "# Aan)ary 19657 and 9illearn Diaries BB Fece,ber 1965. 5. 9ee I?"$1 659%#, A1%"3 16B 13, .a,pson to I?, "1 Gay 19657 on the bar!ainin! takin! place at this ti,e, see I?"$1 659$9, A1BB3 A1B%5 16B 137 I?"$1 659%#, A1$5$ 16B 137 I?"$1 659B1, A1$55 " 137 and the 9illearn Diaries 19 Gay 1965. 3. Egyptian 7a8ette# " and 15 A)ne 19657 Cha,ber of Fep)ties 5196%: 97 I?"$1 659%#, A1%B9 16B 13, .a,pson to I?, "1 Gay 19657 I?"$1 6596", AB#5B 19 13, .a,pson to I?, B1 A)ne 1965. $. 9ee the 9illearn Diaries 3 and "1 Garch, 5 A)ly, 15 and BB Fece,ber 1965. %. 9ee 8@port =,port Bank of the United 9tates archives, Fenison to Gaffry, ,e,orand), re!ardin! C-,,onia Iertili4er Plant in 8!ypt,D B3 A)ne 1963, released thro)!h the Ireedo, of =nfor,ation -ct 5I?=-; and in ,y possession. 9. 9ee I?"$1 5""96, A5#6 6"5 13, 8,pson to Lilbert, "# Aan)ary 19637 and A"9## 6"5 13, Ca,pbell to I?, 16 9epte,ber 1963. 1#. 9ee the 9illearn Diaries 19 Gay 19657 I?"$1 659%#, A19$B 16B 13, .a,pson to I?, 9 A)ne 1965. 11. I?"$1 5""96, A1"B5 6"5 13, ,e,o by Bo(ker, B# Garch 1963. 1B. Ior details, see I?"$1 5""96, A1193 6"5 13, Betts to 9hort P88CQ, B Garch 19637 A515% 6"5 13, enclosin! ,e,orand), on the -s(an Fa, 8lectrification Pro2ect, /ove,ber 1963. 1". U9RL %6, Bo@ B6", 51#.B1, C8lectrical Fevelop,ent Co,pany,D Cairo 11%$, Gay B" 195#, and 15%9, A)ly 5, 195#7 9hishini is so,eti,es described as a 'estin!ho)se cons)ltant. 9ee Waddah 19$97 intervie( (ith

Waddah, Cairo, B6 -pril 19%5. 16. 9ee I?"$1 5""96, A515% 6"5 13, .yal to 9crivener, 5 Fece,ber 19637 and I?"$1 3"#B", A63B# 1## 13, (hich incl)des a ,e,o fro, 9peyer, a director of =C= in .ondon, to Gackay, the head of their Cairo office, % 9epte,ber 196$. 15. Ior E-bb)d>s ne!otiations to sec)re the release of hard c)rrency to finance the Felta deal, see I?"$1 5""96, A6#1B 6"5 13, Irance to Riches, B5 9epte,ber 19637 A6B$9 6"5 13, Bo(ker to I?, 1B ?ctober 19637 and A515% 6"5 13, .yal to 9crivener, 5 Fece,ber 1963. Co,pletion of E-bb)d>s 9)e4 factory (as delayed by contin)ed s)pply bottlenecks in Lreat Britain, (hich re+)ired hi, to shift a lar!er part of the order to U.9. ,an)fact)rers. 13. I?"$1 5""96, A6B$9 6"5 13, Bo(ker to I?, 1B ?ctober 1963. 1$. &he diffic)lties (ith findin! dollars for the pro2ect and for 8!yptian i,ports ,ore !enerally can be traced in U9RL 59, 1965J69, %%".51 1B1 "#63, &)ck to 9tate, "# Fece,ber 19637 %%".51 11BB6$, Garshall to 8,bassy, B# Iebr)ary 196$7 %%".51 1111#6$, &)ck to 9tate, 1# /ove,ber 196$7 and %%".5151 1#1$6$, ,e,o by Polk, CFollar Crisis,D B3 9epte,ber 196$. Fetails on 'estin!ho)se>s postbid ,ane)vers can be fo)nd in U9RL 59, 1965J69, %%".6- "11#6$, -cheson to 8,bassy, 1# Garch 196$. 1%. ?n the !overn,ent>s opti,is, after the si!nin! of the -n!lo 8!yptian Iinancial -!ree,ent 5"# A)ne 196$;, see U9RL 59, 1965J69, %%".5151 $1 B16$, 8,bassy to 9tate, B1 A)ly 196$7 and %%".5151 91"6$, Patterson to 9tate, " 9epte,ber 196$, dispatched after the -tlee !overn,ent s)spended all of its convertibility a!ree,ents. 19. Ior the esti,ates of forei!n e@chan!e, see U9RL 59, 1965J69, %%".5151 1#1$6$, ,e,o by Polk, B3 9epte,ber 196$7 and %%".5151 B1 B6%, Foherty to 9tate, B Iebr)ary 196%7 for the i,pact of the e@chan!e crisis and details of the ne!otiations, see I?"$1 3"#B", A51%1 1## 13, B&, B$ ?ctober 196$7 and A5"B" 1## 13, Cairo to I?, B$ ?ctober 196$7 for the contin)in! political fall o)t fro, the e@chan!e crisis, (hich incl)ded the dis,issal of a key )ndersecretary and /)+rashi>s personally takin! over the finance portfolio, see U9RL 59, 1965J69, %%".51 1111#6$, &)ck to 9tate, 1# /ove,ber 196$7 and %%".51 111BB6$, &)ck to 9tate, BB /ove,ber 196$. B#. 9ee I?"$1 3"#B", A"#9# 1## 13, .yttelton to Gc/eil, B$ A)ne 196$. &he +)otations are dra(n fro, correspondence bet(een the Cairo e,bassy and the Board of &rade, fo)nd in A""16 1## 13. B1. =nfor,ation fro, -hra, Io)ndation -rchives, Cairo, folder ,arked Ckha4an -s(an, kahraba kha4an -s(an, no. 99D7 and intervie( (ith Leoffrey Nennedy, Ar., -)!)st 9, 19%3, &hetford, 8n!land.

BB. I?"$1 16B19, A59B3 16B19 13, 9tephen PAohn Cochrane and 9ons .td.Q to Bevin, 15 A)ly 19697 A3$$6 16B19 13, Iitch P8CLFQ, B" -)!)st 19697 and A965# 16B19 13, Ca,pbell to I?, "# /ove,ber 1969. B". U9RL %6, Bo@ B"%, 5#6.16, ,e,orand),, C/orth Cairo Po(er Plant,D "# Aan)ary 195#7 I?"$1 %#5B", A816B" 13, Ca,pbell to I?, 13 Gay 195#. B6. I?"$1 %#5B", A816B" 13, Ca,pbell to I?, 13 Gay 195#. B5. 9ee U9RL 59, 195#J56, $$6.1" 111BB5#, Cairo 1193, Caffery to 9tate, BB /ove,ber 195#, C9i!nificance of Cabinet Chan!esD7 and $$6.1" 11B51, for the royal decree establishin! the :-C in Fece,ber 195#. &hese events are disc)ssed f)rther in Chapter 3. B3. &hese decisions, taken in the Ginistry of P)blic 'orks in 9epte,ber, (ere approved by /a!ib>s cabinet in /ove,ber 195B. = have based this para!raph on the follo(in!: al- hram "# -)!)st 195"7 E-bd al1E-4i4 -h,ad 51955: 33;7 I? "$1 1#B$%B, A811#1 1, Gonthly 8cono,ic Report 55, Fece,ber 195B7 and intervie( (ith :a,id al1Waddah, 16 A)ly 19%5. =n addition, see 'aterb)ry 519%": 3#; and Goore 519%#: 153J15$; for partially conflictin! acco)nts.

.. 4ndigenous !oots of EgyptDs Socialist Transfor(ation" The !e olt against #usiness Pri ilege
=t (as in order to re,ove the obstacles to develop,ent by enactin! basic refor,s and allo(in! 8!yptian capitalis, to reali4e its f)ll potential that the Iree ?fficers sei4ed po(er in A)ly 195B.

&hen the revol)tion ca,e in 195B to i,pede the develop,ent of 8!yptian capitalis, even (hile per,ittin! the establish,ent of a capitalist syste, in the technical sense.

?n B" A)ly 195B, a s,all !ro)p of 2)nior ar,y Cfree officersD la)nched a s)ccessf)l co)p d>Ktat in 8!ypt, and as they (ent on to consolidate their po(er and for!e a social coalition to s)pport their r)le, they defended their actions in the na,e of Crevol)tionD 5Lordon 199B: ";. Gany of the 2)nta>s earliest and ,ost ardent s)pporters0for instance, the ;u8 al-6usuf col),nist E=hsan E-bd al1Wadd)s and the -,erican a,bassador in 8!ypt, Aefferson Caffery0do)btless sa( in the A)ly 195B Revol)tion confir,ation of both the fatal shortsi!htedness of the ancien r0gime in the face of social

)nrest and the (isdo, of the refor, path that had been )r!ed )pon the kin! (itho)t s)ccess. -s a res)lt, Iar)+ (as deposed (ithin days of the co)p, and by 9epte,ber 195B the ar,y passed the co)ntry>s first co,prehensive land1refor, la(. =n the follo(in! ,onths, parties (ere banned, and, thirty years after its birth, the 19B" constit)tion (as b)ried. &he s)bse+)ent co)rse of the Revol)tion0fro, a U.9.1s)pported, Peronist1 or Cardenas1styled Cnational1pop)larD dictatorship 5Ga@field 199#; )nder /asser in the ,id1195#s to a 9oviet1backed C-rab1socialistD e@peri,ent in the 193#s and beyond0re,ains a definin! foc)s of e,pirical investi!ation and theoretical debate a,on! ,ost s)bse+)ent analysts of the political econo,y 5e.!., =ssa(i 1956, ?>Brien 1933, -bdel1Galek 193%, :)ssein 19$$, &ri,ber!er 19$$, Cooper 19%B, 'aterb)ry 19%", :inneb)sch 19%5, Oaalo)k 19%9;. By contrast, neither the interpretation of s)rface events nor the deeper historical process )nderlyin! the A)ly 195B co)p d>Ktat and s)bse+)ent re!i,e chan!e are seen as si!nificant analytical proble,s, (ith the sin!le e@ception of definin! the ,ode of prod)ction in the co)ntryside 5E-bd al1E-4i4 Ra,adan 19%1, ?(en 19%1b, Richards, 19%B;. B)t this consens)s itself needs so,e sharp +)estionin!, be!innin! (ith (hat Lordon says is Ctoo often taken for !rantedD 5or at least taken too literally; by analysts, na,ely that C8!ypt stood on the brink of a social revol)tionD (hen the ar,y conspirators sei4ed po(er 5199B: 5;. &he ob2ective of this final chapter is to ret)rn to the idea of the 8!yptian Revol)tion as the o)tco,e of a failed national1bo)r!eois pro2ect la)nched in the 19B#s. Gore acc)rately, it is to ret)rn to those fo)ndational ass),ptions abo)t class str)ct)re, interests and a!ency that are derived fro, colonial1 e@ceptionalist narratives of political econo,y. -s = first noted in Chapter 1, ,ost clai,s abo)t capitalists and politics )ntil no( are essentially abo)t the Revol)tion, histories (ritten back(ard to ded)ce /asseris, as an o)tco,e of the e@ceptionalist circ),stances of colonial capitalist develop,ent. Ior those (hose reassess,ents of this narrative strate!y (ill t)rn on e,pirical or internal1validity iss)es, it is i,portant to sho( the (ays in (hich the archival so)rces challen!e basic clai,s abo)t the alle!ed preferences and choices of 8!yptian capitalist and party elites at a critical 2)nct)re. &he first section of this chapter offers a revisionist vie( of the 195#J195B 'afd !overn,ent, (hich in nationalist and e@ceptionalist historio!raphy is portrayed by Revol)tion>s eve as the instr),ent of the lar!e lando(ners and led by an elite that (as either )nable or )n(illin! to i,ple,ent the ,ost cr)cial parts of the bo)r!eois pro2ect 5a!rarian refor,, a ,ore e+)itable distrib)tion of (ealth, and accelerated ind)strial develop,ent;. -nd, fro, this partic)lar conception of (hat alle!edly constit)ted 8!yptian investors> basic interests, 8!yptian ,ar@ists ar!)ed that the post(ar ind)strial bo)r!eoisie (as C!enerally hostile to the 'afdD 5Beinin and .ock,an 19%$: 1#J11, "95J"99;. = sho( that the 'afd party (as ,ore nearly the instr),ent of the entire b)siness oli!archy0that is, the ,ain 8!yptian invest,ent !ro)ps and th)s the core of the co)ntry>s ind)strial sector. &hese leadin! 8!yptian capitalists

+)ite rationally tended to i!nore or oppose iss)es like land refor, in the absence of positive ind)ce,ents or credible threats. =n other (ords, those ,ost heavily invested in ind)stry (ere least invested in ideas s)ch as land refor, and other for,s of redistrib)tion. /or (ere s)ch proposals ,ore convincin! (hen posed in ter,s of facilitatin! lon!1ter, !ro(th, partic)larly (hen (ei!hed a!ainst the party>s strate!y of enrichin! its b)siness (in! in the short ter,. &he second section of this chapter t)rns to the series of post1'afd cabinets bet(een Aan)ary and A)ly 195B, (hich are !iven little specific attention in the left>s historio!raphy and are instead absorbed into the lar!er narrative of incipient political1econo,ic collapse. Ior instance, in Bot,an>s history of the 8!yptian co,,)nist ,ove,ent, these events are back!ro)nd to an end already foretold: so,e co)nterestablish,ent force (o)ld have to take po(er. C- crisis of !overnin! e@isted: no stable !overn,ent co)ld preside fro, above,Rand fro, Aan)ary to A)ly 195B fo)r Cabinets s)cceeded one another.D Ior the left, the basic concern has lon! been (hy the co,,)nists, as opposed to the ,ilitary, did not Ccapt)re the ,o,entD 519%%: 115; 9ince = a, not as s)re (hat these co,ple@ events foretold, ,y +)estions are different. 'hy did the -,ericans and British, (ho (ere centrally involved in these events, favor the 'afd>s do(nfall in 1951* 'ho (ere the investors ,ost centrally involved in this si@1,onth1lon! crisis in 195B* 'hat (ere the stakes* 'as there no (ay o)t for the establish,ent* 'orkin! thro)!h the details of the s)ccessive and open1ended !a,es a,on! British, 8!yptian and -,erican elites is cr)cial beca)se only by i!norin! the, can a str)ct)ral acco)nt of the Revol)tion as an o)tco,e of bo)r!eois fail)re or of a re!i,e inevitably facin! its final days be ,ade to appear e,pirically pla)sible. Iinally, = no lon!er find it convincin! to see the ar,y conspirators as history>s a!ent in this instance, actin! so that capitalis, co)ld Creali4e its f)ll potentialD 5Beinin and .ock,an 19%$: 1B;. =n the third section, = t)rn to the rapidly )nfoldin! confrontation (ith capitalist privile!e and the challen!e posed for the b)siness oli!archy by U.9.1backed etatist and anti,onopolist c)rrents inside the ne( re!i,e. = can i,a!ine t(o kinds of ob2ections to ,y acco)nt and (ant to address the, at the o)tset. Iirst, the chapter is not intended nor sho)ld it be read as a ne( and co,prehensive readin! of the forei!n1policy di,ension of the )nfoldin! 8!yptian crisis of 1951J195B as it is )s)ally conceived. = a, f)lly convinced of the priority that both .ondon1 and 'ashin!ton1based elites accorded to ,ilitary and strate!ic considerations at this critical 2)nct)re, even if = do not e,phasi4e the, here. B)t even the ,ost sensitive diplo,atic historians or others (ho )se the diplo,atic archives have tended to read these te@ts )ncritically in disc)ssin! 8!yptian do,estic politics. 9econd, tho)!h = concentrate here on 8!yptian elite actions, = do not (ant to be read as i,plyin! that the ,obili4ation of relatively lar!e se!,ents of (orkers and other parts of )rban political society (as )ni,portant to the

(ay in (hich the Canal Oone crisis )nfolded, or since = disp)te conceptions of 8!ypt on the ver!e of revol)tion, that = a, ar!)in! that no crisis e@isted. Clearly, the 'afd party leaders faced a si!nificant challen!e to their r)le. =n 1951, contenders for po(er threatened to o)tflank the, on the nationalist iss)e, leadin! to the decision to abro!ate the -n!lo18!yptian treaty. Rather, = open )p for +)estion here the tendency to red)ce the 'afd>s decision ,akin! to a ,atter of a C(ron!D choice on the basis of a ,isconceived idea abo)t the collective needs and actions of capitalists. M M M

The 12-3B12-) Wafd %o ern(ent" #ig #usiness Ainally Kas 4ts Party
&he E-bb)d !ro)p invested heavily in (hat Lordon 519%9; has ter,ed the 'afd>s Clast h)rrahD0the re,arkable election victory in Aan)ary 195# that sec)red for the b)siness1backed, 9ira! al1Fin (in! of the party t(o years of )nrivaled and virt)ally )nchecked control over state po(er and reso)rces. &he co)ntry>s ,ost po(erf)l local 8!yptian investors like E-bb)d, the -le@andria1based <ahya and Iar!hali !ro)ps, al-'isri o(ners Gah,)d and :)sha,4a -b) al1Iath, G)ha,,ad al1'akil and the 9ira! al1Fins cha,pioned a conservative refor, a!enda that a,o)nted to f)ndin! their o(n private en!ineerin!, trade and ind)strial vent)res7 reversin! the ,ild etatist thr)st of the previo)s three years7 and concedin! as little as possible to the redistrib)tive pro2ect favored by the 'afd>s left (in!. Clearly, those (ho cha,pioned and artic)lated vario)s versions of etatis, or the restr)ct)rin! of property ri!hts in the co)ntryside reflected a variety of ideolo!ical orientations, b)t 2)st as clearly the co)ntry>s lar!est ind)strialists tended to see s)ch a pro2ect as retardin! rather than pro,otin! 8!yptian capitalis,, and the e@planation for this vie( cannot be red)ced to the fact that they had holdin!s in land as (ell as ind)stry. Barrin! a (holesale conversion of this property1o(nin! class to the vie( that redistrib)tion (as a val)e in its o(n ri!ht, the hi!hly d)bio)s, f)t)re1oriented )tilitarian rationale 0the fallahin as a ne( cons),er ,arket0co)ld hardly o)t(ei!h the concrete costs. Iro, the perspective of the oli!archs, the national econo,y 5and their pockets; co)ld ill afford (elfare ,eas)res at the e@pense of ,ore i,,ediately prod)ctive invest,ent. Certainly, for ,any circa 195# there see,ed to be no co,pellin! reason to alter this calc)l)s. =nstead, leadin! capitalist oli!archs like 9id+i, 9irri, 9ira! al1Fin, E-bb)d and E-fifi preferred the ti,e1honored ,i@ of repression, reli!ion and nationalis, for containin! co)nter1establish,ent c)rrents.[1] =ronically, the left>s preferred interpretation of the 'afd>s ret)rn to po(er in Aan)ary 195# see,s as (ildly off the ,ark as the predictions of vario)s interested parties at the ti,e, fro, the Times correspondent 5and ardent /)+rashi s)pporter; C. F. W)illa, to U.9. -,bassador Caffery. =t had been !enerally ass),ed that the kin! and his advisers (o)ld never let /ahhas and the 'afd ret)rn to po(er. &he Times>s editors scoffed at char!es that 9irri (as favorin! the 'afd, appla)ded his efforts to foc)s attention on

Cb)ildin!, ind)striali4ation, develop,ent sche,es and social le!islation,D and all b)t endorsed the ri!!in! of the vote. &h)s, the C,ain proble,D (as Cho( to cond)ct the election so that a balanced coalition (ill be ret)rned (itho)t unduly interferin! (ith the choice of the electorsD 5the Times# 1$ ?ctober 1969, e,phasis ,ine;. <et 9irri, tho)!h co,,only identified as the Ckin!>s ,an,D personally helped orchestrate the party>s co,eback, by choosin! to r)n a fair election. :is b)siness partner, E-bb)d, po)red cash into the 'afd>s ,achine, the party (ent on to (in an absol)te ,a2ority in parlia,ent and, tho)!h the kin! (as reportedly st)nned at the o)tco,e, /ahhas (as )lti,ately invited to for, a ne( !overn,ent. &he -,erican officials in Cairo (ho (ere tryin! to p)44le o)t the t)rn of events ass),ed that the kin! ,)st have ,iscalc)lated 9irri>s C(illin!ness to act in his o(n interest.D[)] B)t the b)siness,an (ho had bro)!ht 9irri into his e@pandin! ind)strial e,pire and (hose econo,ic vent)res had beco,e synony,o)s in 9irri>s ,ind (ith 8!ypt>s f)t)re prosperity 5not to ,ention his o(n; had ,ade clear (here his interest lay. By then, no ancien r0gime fi!)re (as ,ore closely associated (ith the E-bb)d !ro)p. =n the after,ath of the elections, 8!ypt (itnessed an )nprecedented de!ree of conciliation bet(een party and palace 5Lordon 19%9, &ari+ al1Bishri 19%";. 'hat has !one )nnoticed )ntil no(, ho(ever, is the loose alliance of investors (ho served as the brid!e09irri, 8lias -ndraos 5another of the kin!>s advisers (ho directed the Gisr !ro)pJBradford Fyers 2oint vent)re;, the 9ira! al1Fins and E-bb)d. -nd tho)!h the left sees in the 'afd>s alle!ed deference to the ,onarchy )n,istakable si!ns of both crisis and paralysis, a!ain based on a +)estionable idea of (hat capitalists (o)ld have done if they (ere an independent and self1confident bo)r!eoisie, the fl)rry of activity in the ,onths that follo(ed s)!!ests that investors at the ti,e (ere vie(in! a different and far rosier hori4on.

Egypt 4ncorporated
&he 195# 'afd !overn,ent>s basic econo,ic strate!y e,phasi4ed p)blicly s)pported and privately !)ided infrastr)ct)re invest,ent, r)ral p)blic (orks, ho)sin! constr)ction, C,odel villa!es,D land recla,ation and ind)stry b)ildin!, (hich, its proponents ar!)ed, (o)ld lift the standard of livin! for the pop)lation. ?ne thin! for certain is that the strate!y increased e,ploy,ent in the p)blic1(orks sector and a)!,ented the ranks of the contractors re!istered (ith the Iederation of =nd)stries, as investors hoisted billboards in Cairo and the provinces advertisin! their ne( vent)res: the 8!yptian 8n!ineerin! and Constr)ction Co,pany 5E-bd al1Wa(i Pasha>s 2oint vent)re (ith Leor!e 'i,py and Co,pany;7 -l19ha,s 59irri, E-fifi, Gah,)d 9h)kri and Irench investors;7 -l19hark 5ne(spaper o(ner Gah,)d -b) al1 Iath and locally resident forei!ners;7 9?&R-C 5the 9hihata fa,ily and :a,id al1Waddah, a,on! others;7 .>8nterprise de la Gaison /o)velle 5a ne( British constr)ction vent)re that had the a!in! leader of the /ationalist Party, :afi4 Ra,adan, as its presidentH;7 and :-B8C? 5G)khtar =brahi,, the Rabbath !ro)p and the 9hihatas;. 'hile the 'afd pressed ahead (ith the infrastr)ct)re and ind)strial1

invest,ent sche,es, it also introd)ced ne( and at the ti,e )nprecedented pro!ra,s for )niversal, free pri,ary, secondary and technical ed)cation7 increased s)bsidies for basic foods7 r)di,entary health care in the co)ntryside7 and social1sec)rity and ,ini,),1(a!e provisions in the cities 5&i!nor 19%B7 Lordon 19%9;. &he ad,inistrators of so,e of these initiatives (ere identified as protK!Ks of /a2ib al1:ilali, a ,e,ber of the 'afd e@ec)tive and 9ira! al1Fin>s ,ain rival inside the party. = (ant to consider the !overn,ent>s pro!ra,s and investors> responses to the, (ith so,e care beca)se there has been a tendency to red)ce the policy process to the iss)e of corr)pt party insiders battlin! refor,1,inded o)tsiders0that is, in ter,s of the rise and fall of :ilali and Chis ,en.D -t least t(o different and conflictin! policy initiatives are )s)ally l),ped to!ether as refor,s and identified (ith :ilali>s protK!Ks 5i!norin! those invest,ent1 and prod)ction1oriented policies disc)ssed here and in Chapter 5 that after A)ly 195B (ere to)ted as refor,s by the Iree ?fficers;. ?n the one hand, there (ere the ne( spendin! pro!ra,s associated (ith the !overn,ent>s t(o ,ost pro!ressive appointees, &aha :)sha,4a, the 8!yptian a)thor (ho headed the Ginistry of 8d)cation, and -h,ad :)sha,4a, son of a 'afd party notable and a f)t)re a,bassador to the United 9tates (ho skyrocketed to pro,inence at the Ginistry of 9ocial -ffairs 5 $h%ar al-6a*m# 16 Aan)ary 195#7 al- hram# "# /ove,ber 19%6;. &hese ,inisters drea,ed of b)ildin! schools and health clinics across the co)ntry. ?n the other hand, there (ere the efforts by the ne( finance ,inister, Oaki E-bd al1G)tEal, to c)rb spendin! and e@tend the re!)latory a)thority of the state, essentially alon! the lines favored by /)+rashi>s !overn,ent in 196$J 196%. Clearly, these t(o i,p)lses (ere in conflict. =nvestors co,plained abo)t the costs associated (ith the ne( (elfare pro!ra,s. &he )ltraconservative 9irri Pasha branded &aha :)sha,4a an e@tre,ist, and E-bb)d, less viscerally, !r),bled to the British abo)t 9ira! al1 Fin>s fail)re to ride herd on the t(o yo)n! and idealistic ,inisters. 9i,ilarly, the opposition 9aEdist party head, E-bd al1:adi, protested to the -,ericans that -h,ad :)sha,4a>s social1sec)rity pro!ra, (as a (aste of ta@payers> ,oney and a diversion of scarce reso)rces fro, ind)stry 5that is, fro, the pockets of E-bd al1:adi and allied b)siness,en;.[*] /onetheless, = (o)ld ar!)e that b)siness1!ro)p heads and their allies !enerally s)bstit)ted talk for collective action in this arena, fo)nd (ays to defray the costs and, at (orst, resi!ned the,selves to these pro!ra,s. Ior instance, (hen :ilali>s protK!K 5and a favorite contact of U.9. -,bassador Caffery; -h,ad :)sha,4a resi!ned, dra,atically, in A)ne 1951 after ei!hteen ,onths in office, his defeat in an inter,inisterial t)!1of1(ar 5alon! (ith, for obvio)s reasons, his preferred e@planation for it; (as absorbed into the !eneral antirefor, brief then bein! asse,bled a!ainst the 'afd inside the U.9. e,bassy. B)t :)sha,4a>s pro!ra,s the,selves (ere si,ply not the tar!et and certainly (ere not the tar!et of the b)siness interests ,ost closely tied to the 'afd. &he -,erican e,bassy reported that E-bb)d hi,self had intervened to try to keep :)sha,4a in the cabinet, no do)bt in part for narro( reasons since E-bb)d>s da)!hter (as ,arried to :)sha,4a>s brother, and s)ch elite1fa,ily connections carried a pre,i),.

Gore broadly, tho)!h, party leaders appreciated the contrib)tion that these pro!ra,s ,ade to holdin! to!ether the 'afd>s electoral coalition, tho)!h so,eti,es the cynicis, (as hard to dis!)ise. &h)s 9ira! al1Fin ob2ected (hen an editor of al- hram 59 9epte,ber 1951; described hi, as a capitalist. C= (ish to affir, an )ndo)bted fact that = a, a convinced socialist, that the 'afd is a socialist party and that the present !overn,ent is a socialist !overn,ent.D[+] 9e!,ents of the -,erican intelli!ence co,,)nity at the ti,e took 9ira! al1 Fin>s prono)nce,ents serio)sly, if not literally, describin! the, as part of a Cdeliberate do,estic political strate!yD of controlled chan!e to shore )p the )pper class of a Csociety PthatQ ,i!ht (ell be characteri4ed as reactionary capitalistic 5in the opprobrio)s sense of the latter ter,;.D[-] &he (riter pointed to personalities inside and o)tside the party09ira! al1Fin, E-bb)d, the independent E-44a, Pasha 5fro, a fa,ily of bi! lando(ners in Li4a;, as (ell as -h,ad :)sha,4a0as lendin! s)pport to this effort. = have identified others, like the <ahyas 5!enerally not linked to 8!yptian party politics; and 9aba :abashi, pro,inently linked (ith U.9. oil co,panies and, )ntil 195#, a ,e,ber of the opposition 9aEdist party.[.] &he ,ore vital concern of the party>s Creactionary capitalists,D 9ira! al1Fin chief a,on! the,, (as the refor,s cha,pioned by :ilali>s ally at finance, G)tEal, (hose antispendin! brief and atte,pted e@tension of re!)latory po(ers bro)!ht hi, into conflict (ith an array of po(erf)l investors. :is ,inistry clashed directly (ith the party>s b)siness allies in at least three basic arenas, (hich led to his do(nfall before the year>s end. = have already disc)ssed one of these conflicts in Chapter 5: G)tEal>s opposition to f)ndin! the co)ntry>s bi!!est ind)striali4ation pro2ect at -s(an. =n other (ords, G)tEal>s refor,s entailed a c)rb on the 'afd !overn,ent>s ,odest p)blic spendin! levels. &he second conflict involved the re!)lation of the -le@andriacotton1f)t)res ,arket, (hich the (arti,e econo,ic a)thorities had closed in 196# and (hich 9irri>s !overn,ent reopened in 9epte,ber 1969. &he ,inistry>s atte,pt to control its operations d)rin! the hei!ht of the Norean boo, p)t it on a collision co)rse (ith the lar!est e@porters, ,ost notably the <ahyas and Iar!hali, (hose infl)ence in the cabinet and palace enabled the, to co)nter G)tEal>s ,inisterial a)thority. &he irony is that ,any of these sa,e investors (elco,ed the kinds of re!)latory policies cha,pioned by G)tEal as the ,arket be!an to collapse one year later, tho)!h by that ti,e he had been forced fro, office. &he third conflict involved the decision by a!encies of the Iinance Ginistry to proceed (ith the clai, for so,e X8 1# ,illion in back ta@es fro, the Gisr and E-bb)d !ro)ps. =n a ,atter of ,onths, the politically artless finance ,inister had ,ana!ed to ali!n the co)ntry>s ,ost po(erf)l private instit)tions a!ainst hi,, b)t the details of this sectoral conflict (ere obsc)red as the 'afd>s political opponents fed the r),or ,ills (ith a strea, of l)rid stories abo)t coll)sion a,on! the Ccotton lords,D ri!!ed ,arkets and spec)lative fort)nes flo(in! to the bank acco)nts of 9ira! al1Fin, /ahhas>s

(ife and her relatives 5Lordon 19%9: B#6, B#$;. -n alternative pict)re e,er!es in the reportin! by the U.9. e,bassy>s econo,ic officers.[0] &he 8!yptian pri,e ,inister finally asked for G)tEal>s resi!nation in /ove,ber 195#. &he 195#J195B 'afd !overn,ent>s approach to re!)lation (as pre1 e,inently self1re!)lation by the co)ntry>s 5and party>s; bi!!est ind)strial investors. =n other (ords, the b)siness oli!archs e@tended the process of rationali4in! vario)s sectoral holdin!s and transfor,in! the Bank Gisr offices into an e@ec)tive coordinatin! co,,ittee of 8!ypt>s leadin! fir,s and sectors. CB)siness investors have available a )ni+)e ,eans for solvin! so,e collective action proble,s: ,er!ers and ac+)isitionsD 5Fevere)@ 19%%: B9;. =n Chapter ", = noted the be!innin! of this process in the for,al carteli4ation of the te@tile ind)stry by the Gisr and <ahya !ro)ps. =n Chapter 6, = )nderscored the si!nificance of E-fifi>s brin!in! the <ahya fa,ily0tho)!h they (ere ostensible co,petitors in te@tiles, shippin!, cotton e@portin! and ins)rance0onto the Bank Gisr board. By 1965, the -le@andria /avi!ation Co,pany 5<ahya; and Gisr Gariti,e /avi!ation Co,pany had ,er!ed their operations.[1] E-bb)d>s shippin! fir, (as linked via a for,al consorti), (ith the ,er!ed fleet by 195". &his process (as f)rther e@tended (ith the 'afd>s s)pport in early 195#. Under the a)spices of the oli!archs, proposals first raised in 196$J196% to nationali4e tra, and b)s service in Cairo (ere reconstit)ted as a ne( private1,onopoly 2oint vent)re of the Gisr and re,nants of the 8,pain 5Bel!ian; !ro)ps0in others (ords, the consolidation of the entire Cairo transport ind)stry )nder the a)spices of Bank Gisr 5Egyptian 7a8ette 9 Iebr)ary, BB A)ly and $ /ove,ber 1969, B1 A)ne 195#;. 'orkers in the ,ain transport )nion opposed this ,ove and called instead for nationali4ation of the transport ind)stry 5Beinin and .ock,an 19%$: 6#$;. -lon! these sa,e lines, the party leadership>s distinctive approach to Cco,,andin! the hei!htsD see,s to be reflected in the )nfoldin! or!ani4ation of the ne( and controversial Ginistry of /ational 8cono,y, char!ed (ith ad,inisterin! (hat a,o)nted to a r)di,entary trickle1do(n strate!y of develop,ent. 9pecifically, )nder a rene(ed ,andate and (ith a resh)ffled ad,inistration follo(in! its first rocky ,onths of e@istence, the ,inistry appointed E-bb)d, E-fifi, -ndraos, <ahya and their cronies to its ne(, oli!arch1do,inated advisory co)ncil.[2] B)t the 'afd>s ,ost si!nificant contrib)tion to oli!archic consolidation (as the backin! !iven to E-bb)d, (ho, in /ove,ber 195#, despite the s)ddenly ineffect)al opposition of the bank>s chair,an and his lon!ti,e foe, E-fifi, (as invited to 2oin the board of Bank Gisr. Recall that this (as a !oal that had lon! el)ded E-bb)d, tho)!h he (as one of the sin!le lar!est stockholders in the bank by 1966 and apparently re,ained so )ntil its nationali4ation in 193#. &he !ro)nd (as prepared for this ne( alliance (ith the Gisr !ro)p 5E-fifi not(ithstandin!; in 1969, (hen E-bb)d and <ahya a!reed to serve as coinvestors in a 2oint vent)re (ith U.9. Gonsanto to ,an)fact)re FF&. E-bb)d>s political ties to the 'afd helped clinch the position, (hich he then

occ)pied for the ne@t seven years. <ahya and others (ithin the bank>s leadership pres),ably sa( the lo!ic in cooperatin! (ith E-bb)d, tho)!h 9ira! al1Fin ,ade no secret of the !overn,ent>s capacity to infl)ence appoint,ents to the board.[13] &he core o(ners and directors of the co)ntry>s lar!est enterprises lined )p behind the 'afd, (ith ind)strialists like E-bb)d 5)sin! 9irri; and -ndraos of the Gisr !ro)p 5one of the kin!>s ,ain advisers; (orkin! constantly to s,ooth relations bet(een the cabinet and palace, and, a!ain in E-bb)d>s case, to ,ana!e the 'afd>s relations (ith the British and -,erican e,bassies. E-bb)d (as essentially 9ira! al1Fin>s ,ain cond)it to Caffery. =n ret)rn, the leaders of the 'afd>s )nofficial bi!1b)siness federation (ere sho(ered (ith re(ards and s)bsidies, incl)din! 9enate appoint,ents 5E-bb)d, -ndraos, Iar!hali, 9hishini;7 ta@ e@e,ptions 5the E-bb)d !ro)p>s still )nfinished fertili4er factory, the Gisr Lro)p>s synthetic1silk factory;7 protection for their sinec)res 5the reor!ani4ed transport ,arket, the s)!ar ,onopoly, the shippers> cartel;7 and 9ira! al1Fin>s intervention on behalf of cotton e@porters 5<ahya and Iar!hali; and the petrole), sector 5:abashi, a la(yer on retainer for -R-GC? and a C,ediatorD in the cartel>s price disp)te (ith the state;.[11] Gost critically, these investors en2oyed re!)lar, direct, effective0and, one is te,pted to add, e@cl)sive0access to !overnin! officials, alon! (ith the fle@ibility to shift the costs associated (ith post(ar price controls, 2ob1 sec)rity provisions and (a!e le!islation. &h)s, accordin! to the acco)nt in Beinin and .ock,an>s Wor$ers on the -ile# E-bb)d co)ld rely on the Cpeople>s partyD to arrest the entire )nion leadership at the :a(a,adiya refinery for callin! a strike in order to force E-bb)d to co,ply (ith the !overn,ent>s year1old 5and i!nored; cost1of1livin! decree. 'hile the or!ani4ers lan!)ished in 2ail, E-bb)d (as plied (ith f)rther ta@ abate,ents to ind)ce hi, to resolve the disp)te.[1)]

National Capital
Clearly, no investor benefited ,ore fro, the 'afd>s ret)rn to po(er and 9ira! al1Fin>s do,inance (ithin the party than E-bb)d, (ho had ar!)ably attained the hei!ht of his infl)ence in the 8!yptian political econo,y in 195#J195B. &he E-bb)d !ro)p added ne( vent)res and holdin!s to its b)l!in! invest,ent portfolio. &hey i,ported b)ses and tr)cks to s)pply the !ro)p>s transport co,panies in Cairo, the Felta and Upper 8!ypt. E-bb)d e@panded into te@tiles by b)yin! the /)4ha 9pinnin! and 'eavin! Co,pany. :e ,oderni4ed the old Co44ika fa,ily distillery in &)rah7 took over as chair,an of the board of the old 9)arVs1Cassel land1develop,ent enterprise in )pper 8!ypt, the No, ?,bo Co,pany 5(hich prod)ced s)!ar cane for the factory;7 and had hi,self na,ed chair,an and ,ana!in! director of the Upper 8!ypt :otels Co,pany 5o(ners of the 'inter Palace and Cataract hotels;, spreadin! his involve,ent in the so)thern re!ion>s econo,y still f)rther. /e(spaper articles at the ti,e re!)larly referred to hi, as one of the richest ,en in the (orld 5 $h%ar al-6a*m $ A)ne 196$ and "1 -)!)st 196%7 Egyptian 7a8ette 1 /ove,ber 195#7 al-'usa**ar B Garch 1951 and

1% A)ly 195B;. E-bb)d pro,oted hi,self as the leadin! force in 8!ypt>s national econo,ic renaissance, (orkin! tirelessly to e@pand 2obs in r)ral and )rban 8!ypt, to create invest,ent opport)nities for the ,iddle class, and to 8!yptiani4e the co)ntry>s econo,ic instit)tions. &he financially strapped al- $h%ar chain, a,on! other presses, happily ran pa!es of these thinly 5if at all; dis!)ised self1advertise,ents, (hich are still on file in the paper>s archives, even d)rin! the period (hen p)blishers G)stafa and E-li -,in (ere or!ani4in! a!ainst the E-bb)d1backed 'afd !overn,ent, as = (ill detail belo(. &h)s, (hen he (as elected president of the -hli 5/ational; Cl)b in /ove,ber 1969, the cl)b (as fra,ed sy,bolically a!ainst the vesti!e of colonialis, ne@t door, the La4ira Cl)b, (here 8!yptians still constit)ted a ,inority and (eresecond1class ,e,bers. 'ith the help of 9irri, /ahhas, and 9ira! al1Fin, as (ell as the British and Irench e,bassies, E-bb)d !ained entry in 195# to an e+)ally e@cl)sive forei!n enclave: the board of directors of the 9)e4 Canal Co,pany, after the Paris1based ad,inistration tried for ,onths to re2ect the !overn,ent>s ne( no,inees. =n his ne( hyperbolic nationalist style, E-bb)d declared his ,e,bership to the board of the canal co,pany to be the harbin!er of the renaissance of the 8!yptian navy 5Egyptian 7a8ette B" ?ctober 1969, % -)!)st and % /ove,ber 195#7 $h%ar al-6a*m 15 and B9 ?ctober 1969, 16 Aan)ary 195#7 Picot 19$%: BBJB6;. B)t his ^B6 ,illion che,ical1factory co,ple@, nearin! co,pletion ten ,iles so)th(est of 9)e4, (as ar!)ably the potentially ,ore val)able contrib)tion to the national econo,y. Felays in the delivery of ,achinery ordered in 8n!land and the s(itch fro, U.N. to U.9. and 8)ropean s)ppliers p)shed back the start of operations at the plant fro, 195# to the s),,er of 1951. &he plant (as, ho(ever, pla!)ed by a host of desi!n fla(s and shoddily b)ilt e+)ip,ent, accordin! to the ,ain constr)ction s)pervisor, and E-bb)d (as forced to absorb the costs of an i,,ediate, fo)r1,onth1lon! overha)l. 'hen prod)ction (as finally res),ed, late in 1951, operations (o)ld be disr)pted by the political dist)rbances in the Canal Oone that follo(ed the !overn,ent>s abro!ation of the 19"3 treaty (ith Lreat Britain.[1*] 8ven before the ori!inal plant (as finished, E-bb)d had started to arran!e (ith U.9. fir,s to e@pand the prod)ct line of the fertili4er co,ple@ and, (ith '. R. Lrace and Co,pany, to b)ild his o(n paper ,ill near Cairo for packa!in! the fertili4ers prod)ced at 9)e4. :e s)b,itted an additional ^5.B ,illion f)ndin! re+)est to the 8@=, Bank7 bank personnel had revie(ed the proposals favorably (hen, in the (inter of 1951, the &r),an ad,inistration blocked E-bb)d>s loan to!ether (ith the 'afd !overn,ent>s pro2ect proposals then before the 'orld Bank. &he 'afd leaders and their allies (ere )nlikely to have ,issed the point. U.9. -,bassador Caffery had appealed to /ahhas not to cashier the fifteen1year1old canal1base treaty. -nd as the crisis +)ickly escalated into clashes bet(een British troops and 8!yptian vol)nteers, the -,ericans ,o,entarily closed ranks (ith the Ch)rchill !overn,ent.[1+] &here are th)s t(o points to keep in ,ind abo)t a period that is

conventionally portrayed as one of profo)nd social crisis0an era of violence and revol)tion. &he first is that E-bb)d and allied investors see, to have assessed the sit)ation so,e(hat differently fro, virt)ally all later historians and analysts if (e )se as an indicator E-bb)d>s plans for ne( invest,ents in this period. &his is not to clai, that politically po(erf)l capitalists like E-bb)d or the 9ira! al1Fins, (ho fo)nded the ne( Ban+)e d) Caire in the sprin! of 195B, provided the ,ore acc)rate or ob2ective assess,ent, b)t, !iven their obvio)s invest,ent stake, can (e afford to i!nore these apparently b)llish vie(s*[1-] &he second and related point concerns the s)dden and dra,atic conversion of the U.9. and British e,bassies to the vie( of the 'afd as a party (hose corr)ption and fail)re to ,ove forcef)lly or far eno)!h to(ard refor, (as the real proble, facin! 8!ypt at this 2)nct)re. W)ite strikin!ly, it (as d)rin! the s),,er of 1951, precisely as the 'afd escalated the stakes in the -n!lo18!yptian arena, that the e,bassies be!an radically to revise their vie( of 8!yptian politics and society. Ior instance, as late as B% -pril 1951, Caffery believed that Cat no ti,e in recent 8!yptian history has the Party or Cabinet see,ed ,ore sec)re and in a better position to look to the f)t)re (ith confidence than can the present 8!yptian Lovern,ent.D[1.] &he -,ericans> assess,ent (as hardly s)rprisin!. ?ne ,onth earlier, in Garch, 9ira! al1Fin had forced a po(erf)l bloc of o)tra!ed landlords in parlia,ent and his o(n party to back do(n on their threat to oppose the 1## percent increase in the ta@ rate on a!ric)lt)ral land that he had i,posed as finance ,inister and ,ade retroactive to 1969. &he battle in the le!islat)re is si!nificant for a n),ber of reasons, not least beca)se it clearly contradicts the clai, that 9ira! al1Fin and the landlord1do,inated 'afd (ere )n(illin! or )nable to )ndertake refor,s in arenas like ta@ation. -ccordin! to Caffery>s acco)nt, 9ira! al1Fin ,arshaled s)pport in the press and the streets for his position, (hich he t)rned into a vote Cof personal confidenceRin his policies as Ginister of Iinance,D and scored a s)rprisin! victory. &he o)tco,e of this confrontation (ith the landlords had Caffery convinced ane( of the 'afd>s political stren!th and pop)larity and the -,ericans deter,ined to press ahead (ith an aid pro!ra,.[10] <et, to!ether (ith other like1,inded realists, (ithin the space of ,onths Caffery had t)rned )pside do(n his appreciation of the do,estic scene, )ntil it (as virt)ally indistin!)ishable fro, that of ne(spaper o(ners G)stafa and E-li -,in, (hose stock, like that of other die1hard elite opponents of the 195# 'afd !overn,ent, be!an to cli,b at the U.9. e,bassy in the s),,er of 1951. &he va!)e, a)thoritarian1leanin! anticorr)ption and internal1refor, plank p)t for(ard by these co)nter1elites (as the only possible alternative aro)nd (hich these b)siness,en ,i!ht hope, ho(ever re,otely, to b)ild an opposition to a !overn,ent0and here (as the cr)@ of the proble,0that had si,)ltaneo)sly deflected the antire!i,e activities of !ro)ps like the G)sli, Brothers and, ar!)ably, a)!,ented the ranks of s)pporters via a rene(ed ca,pai!n a!ainst the British occ)pation.[11] &here (as th)s a strikin! rese,blance bet(een the ti,in! and for, of the

shift in the -,ericans> stance to(ard the 'afd in ,id11951 and the British state>s o(n anti1'afd t)rn in the s),,er of 1966. W)ite lo!ically, in both cases, specific and sharp policy disa!ree,ents preceded the discovery that the oli!archs (ere indeed too corr)pt to )ndertake s)pposedly vital internal refor,s. - co,parison (ith Caffery>s o(n 2)d!,ents abo)t Nin! Iar)+ at this ti,e is profitable. Iar)+ (as reportedly co,plainin! to the 'afd cabinet abo)t the proble, of inflation. Caffery ar!)ed that CPeQven tho)!h the cost of livin! is certainly a f)nda,ental proble, of pri,ary i,portance, this e,phasis on a perennial iss)e at this particular time (hen the -n!lo18!yptian +)estion, the -r,y in+)est, and the ?pposition>s ca,pai!n for a p)r!in! of the Palace ento)ra!e are all approachin! an i,portant cli,a@ strongly suggests the presence of a Ered herrin!.> D[12] -nd, of co)rse, in this sphere Caffery (as no less cynically i,perial1,inded than .a,pson. Gore cr)cially, ho(ever, he (as also !enerally no ,ore clear than his British co)nterparts or those elite factions seekin! to replace the !overn,ent in definin! these vital Crefor,sD or assessin! the rate of pro!ress to(ard the,. -t the center of the Chonest oppositionD 5Caffery>s phrase; to the C9ira! al1 FinJE-bb)d PartyD 5to +)ote British a,bassador Ronald Ca,pbell; (ere a co,petin! set of b)siness,en and technocrats, incl)din! the E-,in brothers, (ho o(ned the al- $h%ar !ro)p7 E-fifi, the director (ho )ns)ccessf)lly opposed E-bb)d>s ,e,bership on the board of Bank Gisr and (ho in -)!)st 1951 attacked the 'afd>s forei!n policy in the pa!es of al- hram7 Lalil al1E=,ari, a risin! star in the b)siness co,,)nity and a director of U.9. -nderson Clayton>s cotton1e@portin! and cotton1seed1oil ,an)fact)rin! s)bsidiary7 landlord1t)rned1investor 9ayyid GarEi7 the yo)n!, aristocratic social en!ineer -h,ad :)sha,4a7 and related ,e,bers of the net(orks in (hich these elites (ere en,eshed 5e.!., E-li 9ha,si Pasha, :)sha,4a Iah,i, :ilali Pasha;. &heir ,otivations for opposin! the 'afd !overn,ent at this partic)lar 2)nct)re (ere no do)bt co,ple@, b)t the factor that = (ant to dra( attention to here, in part beca)se it has not previo)sly been disc)ssed, is the obstacles they fo)nd in the (ay of their o(n a,bitions. -s (e have seen, access to state1,ediated reso)rces 5or a connection (ith those investor coalitions (ho had access to the,; (as the sine +)a non for a,bitio)s (o)ld1be capitalists. B)t the barriers to entry in the vario)s oli!opolistically str)ct)red sectors (ere for,idable, and the oli!archs> !rip on state po(er ,eant that the opport)nities for private acc),)lation represented by the ne( ro)nd of bi! irri!ation, electrification and ,an)fact)rin! pro2ects like the proposed -s(an iron and steel factory (ere effectively lost. =t (as no accident, therefore, that the strate!ies of these ne(, (o)ld1be capitalists rese,bled the path follo(ed by E-bb)d in the late 19B#s, (hen he first be!an to co,pete (ith the 9)arVs, Gisr, 9alva!os and 8,pain !ro)ps. &hey so)!ht partnerships (ith forei!n fir,s. Gore cr)cially, like E-bb)d, (ho )sed his British political connections to !ood effect, elites like :)sha,4a and the -,ins 5and those in their e,ploy like G)ha,,ad :aykal; t)rned to the

-,erican e,bassy and the C=-. Gost i,portant, tho)!h, these ne( investors d)sted off and hoisted the sa,e standards of pro!ress and refor, 5to!ether, of co)rse, (ith the (arnin!s of i,pendin! chaos; that fr)strated co,petitors like E-bb)d raised as 2)stification for s)pportin! the a)thoritarian pro2ect bet(een 19B% and 19"5. M M M

The T,ilight of Palace Pluralis( and #usiness 8ligarchy

&he 'afd>s a)dacio)s act of brink,anship in ?ctober 1951 in cancelin! the -n!lo18!yptian treaty divided the national political arena and its constit)ent !ro)ps into t(o co,ple@, sharply polari4ed, lopsided ca,ps. ?n the one side (as a Creactionary capitalistD 'afd party elite leadin! (hat is referred to in 8!yptian historio!raphy as the national ,ove,ent 5al-hara$a al-*ataniyya;, incl)din! its o(n left1(in! 5the 'afdist Van!)ard;, G)sli, Brothers, lar!e parts of the or!ani4ed (orkers> ,ove,ent, and the dissident ar,y officers (ho (o)ld later or!ani4e a co)p a!ainst Nin! Iar)+. &his alliance, tho)!h )ndo)btedly driven in part by the fear that a ,obili4ed and ar,ed ,ove,ent ,i!ht spiral o)t of control, !ained the 'afd stron! s)pport at a critical ,o,ent, (hile prod)cin! so,e incon!r)o)s events0for e@a,ple, 9ira! al1Fin helped the Iree ?fficers s,)!!le a ,ine into the Canal Oone, and 8!ypt>s leadin! ind)strialist, E-bb)d, ostensibly ,oved by the patriotis, of (orkers (ho had left their 2obs at the British bases, pled!ed one ,illion 8!yptian po)nds of his o(n to the strike f)nd he (as pro,otin!H[)3] -rrayed a!ainst this relatively broad bloc of 8!yptians (ere those ele,ents of the liberal establish,ent (ho had either been locked o)t of po(er by the 'afd or else (ere less confident than 9ira! al1Fin that a ,inor !)errilla (ar in the Canal Oone (o)ld not end in disaster for 8!ypt. =t is pla)sible that these are the elites (ho are !iven the collective desi!nation Cind)strial bo)r!eoisieD in so,e historical acco)nts, despite the label>s poor fit (ith the act)al invest,ent portfolios and political preferences of leadin! anti1'afd b)siness,en like the -,ins or 9ayyid Gar>i. Lravitatin! to their side (ere those parts of the left either )nconvinced or else threatened by the 'afd>s brand of anti1i,perial str)!!le 5Bot,an 19%%: 9", 11BJ11";. =t is not s)rprisin! that the disparate set of ,inority1party politicians, landlords, b)siness,en, royalists and technocrats co)nterpoised and tried to rally s)pporters aro)nd a pro2ect of do,estic social refor, and anticorr)ption. -fter three decades, the basic for,)la for )nseatin! a de,ocratically elected !overn,ent re,ained the sa,e: 2oin forces (ith the kin! and the i,perial po(er. &he &r),an ad,inistration>s !ro(in!, active interest in 8!yptian affairs and its e,er!in! fi@ation (ith instability (orld(ide, (hich (ere hall,arks of post1Nennan !lobal strate!y, ,eant that the U.9. e,bassy loo,ed increasin!ly lar!e as a site and foc)s of elite 8!yptian political activity. Caffery d)tif)lly recorded the appeals for U.9. s)pport and the pro!ress of vario)s proposals: fro, the prospective p)r!e of the party leadership or the creation of a nonparty salvation cabinet to the for,ation of a C/e( 'afdD

party. &ho)!h the British e,bassy, pri,arily thro)!h the -,in brothers, enco)ra!ed the idea of overt)rnin! the 'afd, its o(n capacities (ere li,ited, and the -,ericans (ere e@tre,ely (ary of takin! sides in this lopsided do,estic po(er str)!!le0at least officially. /o (onder, therefore, that the sit)ation see,ed so bleak to certain opposition fi!)res like the for,er ,inister -h,ad :)sha,4a, even as he o)tlined plans for a palace1 backed cabinet p)r!e to the U.9. a,bassador.[)1] /eb)lo)s as it (as, the basic plan0to dis,iss the 'afd and install a !overn,ent ,ore !en)inely co,,itted to tacklin! the proble,s of corr)ption and social ine+)ality0had little chance of (innin! the )n+)alified backin! of the kin! or his ,ore ast)te advisers. -t no ti,e (as the palace ,ore (ary than in the ,onths after ?ctober 1951 of the dan!ers in sidin! openly (ith the opposition 5and the Ci,perialistsD; a!ainst a !overn,ent leadin! s)ch an obvio)sly pop)lar str)!!le. /or is it clear that the +)estion of corr)ption act)ally ,attered very ,)ch to politically ,obili4able opinion, (ith perhaps the sin!le e@ception of the char!e, (hich predated the 'afd>s ret)rn to po(er, i,plicatin! vario)s ,e,bers of the kin!>s fa,ily and his ento)ra!e in illicit profitin! fro, ar,s sales d)rin! the Palestine 'ar 5Lordon 19%9: 19";. Clearly, tho)!h, as the conflict over the 9)e41base policy deepened, elites like the -,in brothers and others seekin! the !overn,ent>s fall reco!ni4ed that the corr)ption the,e (as val)ed by their e,bassy contacts (ho (ere fed a steady diet of s)ch char!es.[))] &he (ell1(orn acco)nts of 'afd ,alfeasance0dra(n fro, the infa,o)s 5and ,iso!ynist; e@posKs of the pri,e ,inister>s (ife and her fa,ily in the -,in brothers> press 5after all, they needed to sell ne(spapers; or the sensational char!es a!ainst the 'afd leaders raised in the early Crevol)tionary trib)nalsD0have distracted )s fro, the steady if less i,,ediately accessible increase in conflicts over the !overn,ent>s econo,ic policies thro)!h the latter part of 1951 and the !ro(in! opposition a,on! sectors of the b)siness co,,)nity that fed the -,ins> ca,pai!n a!ainst the 'afd. Parts of the bankin! and e@portin! sectors in partic)lar (ere )p in ar,s abo)t the disastro)s effects of the !overn,ent>s defensive interventions in a collapsin! (orld cotton ,arket. &he po)nd s)ddenly be!an to drop faster than other c)rrencies, e@ports failed to rise, the dist)rbances in the Canal Oone tri!!ered an )nprecedented flo( of capital o)t of 8!ypt, and ,an)fact)rers faced at once sharply risin! ra( ,aterial prices and ne( ta@es.[)*] =n the chan!ed econo,ic circ),stances, the e@tent of !overn,ent coll)sion (ith bi! investors like E-bb)d and <ahya and the partic)lar privile!es these investors (ere tho)!ht to have, for instance, in escapin! the costs associated (ith the !overn,ent>s policies (ere eval)ated differently. Certainly, so,e (ere bein! enco)ra!ed even ,ore positively than before to seek s)ch a position for the,selves. Until no(, tho)!h, (e have !lossed over cr)cial details of these elite conflicts in the r)sh to narrate 5rather too cataclys,ically; the events leadin! )p to the ar,y co)p in A)ly 195B or have considered the, only insofar as they fi!)re in the s)ccessive and no( (idely assi,ilated indict,ents of 5circa 195BJ1956; the ancien r0gime and of 5circa 1955J1931; 8!yptian C,onopolists.D

F)rin! the ,onths of deepenin! crisis in late 1951, E-bb)d p)rs)ed the )nenviable !oal of tryin! to prevent the British and -,erican e,bassies fro, co)nselin! either for an escalation of repression inside the Canal Oone or for a chan!e of !overn,ent inside 8!ypt. &hro)!ho)t the fall he served as one of the ,ain channels thro)!h (hich the 8!yptian anta!onists in effect tried to contain the conflict. :e of co)rse (o)ld attest to the C,oderationD of the 9ira! al1Fin faction 5and his o(n infl)ence over 9ira! al1Fin; and its alle!ed capacity to coopt the Ce@tre,ists,D (hile ar!)in! that any other !overn,ent in 8!ypt (o)ld in effect leave the British (orse off. &he -,ins and others in the anti1'afd ca,p, ho(ever, (o)ld portray 9ira! al1Fin as a po(er h)n!ry, (o)ld1be de,a!o!)e (ho paid for the !)errillas that (ere terrori4in! British personnel. ?nce the 'afd !overn,ent fell in Aan)ary 195B, E-bb)d and his allies or!ani4ed in order to stave off0s)ccessf)lly, if te,porarily0a challen!e by rival investors for !reater access to 5or redistrib)tion of; parts of this for,idable CprivateD econo,ic e,pire. &here (ere heavy costs involved in (hat t)rns o)t to have been the last elite econo,ic conflict of the liberal era. 8!yptian investors played a central role in the rise and fall of 8!ypt>s three last and infa,o)sly short1lived !overn,ents. -t the sa,e ti,e, the )nfoldin! of these events stron!ly s)!!ests that elites differed in their assess,ents of the nat)re, so)rces, e@tent and depth of the crisis tri!!ered by the fi!htin! in the Canal Oone and the end of the Norean 'arJdriven cotton boo,. Certainly, E-bb)d acted as if he had ,ore to fear fro, his class rivals than his class ene,ies.

Deconstructing the Discourse of !efor(

- lopsided, bloody battle in =s,aEiliya bet(een 8!yptian police and British artillery led to a ,assive de,onstration in Cairo the ne@t ,ornin!, B3 Aan)ary 195B 5CBlack 9at)rdayD;7 the de,onstration t)rned into an )prisin! a!ainst the 8)ropean presence in the city. 9hops, sho(roo,s, hotels, cine,as, bars and ni!htcl)bs (ere b)rned, leavin! ,illions of po)nds in da,a!e, t(enty1si@ 8!yptians and forei!ners dead and the /ahhas !overn,ent dis,issed fro, office in the fire>s (ake. /o (onder that labor1 )nion ,ilitants, the Iree ?fficers and other parts of the co)nter1 establish,ent vie(ed the fire as an i,perialist plot and the palace as no( s+)arely in lea!)e (ith forei!n po(ers. &he i,position of ,artial la( led to a ne( (ave of arrests of the re!i,e>s ene,ies7 the -,ericans approved the ship,ent of riot1control !ear 5incl)din! ar,ored cars and s)b1,achine !)ns; to the police and enco)ra!ed the ne( E-li Gahir !overn,ent in a strate!y of p)r!in! co,,)nist leaders fro, the trade1)nion ,ove,ent7 and, ,ost cr)cially, all anti1British activities in the Canal Oone (ere ended. =n the after,ath of the Cairo fire, royalists in the Gisr !ro)p led the effort to shore )p the ,onarchy. 8lias -ndraos, a 9)dan1born investor (hose rise fro, clerk at the Beida Fyers te@tile ,ill at Nafr al1Fa((ar to ,ana!in! director and a key decision ,aker had !ained hi, a rep)tation as a financial !eni)s, played a pivotal role. -ndraos, (ho ori!inally s)pported and profited fro, the 'afd>s ret)rn to po(er, (as follo(in! the path carved by E-bb)d

hi,self bet(een 19B% and 19"5 by )sin! the palace to assist his o(n li!htnin! rise in the local political econo,y. :e (as appointed pasha, senator and 9)e4 Canal Co,pany director in 195# as he prepared to ,ove into the che,icals sector and e@pand his te@tile interests (ith a ne( pro2ect in the 9)dan. Uns)rprisin!ly, this a!!ressive press into the center of 8!yptian b)siness and political arenas (as acco,panied by the sa,e kinds of conte,pt)o)s 2)d!,ents that political ene,ies and b)siness rivals in the 19"#s offered abo)t E-bb)d.[)+] =n ?ctober 1951 -ndraos (as na,ed Chonorary econo,ic adviser to the royal khassaD 5that is, the kin!>s treas)ry;, (here he steered the palace>s last reali!n,ent, in alliance (ith the heads of the ,inority parties, the British e,bassy and e@1palace stal(arts like the -,ins, (hose ne(spaper e,pire, accordin! to -,erican e,bassy files, had ori!inally been bankrolled by Iar)+.[)-] -ndraos shared the chore (ith the e,inently ,ore Ccl)bbableD Gisr Bank board chair,an, E-fifi, (ho resi!ned his positions (ith the Gisr !ro)p in Fece,ber 1951 to beca,e chief of the royal cabinet.[).] ?nce a!ain, therefore, E-fifi and, pres),ably, a pro1E-fifi faction (ithin the Gisr !ro)p of fir,s (ere ali!ned a!ainst his lon!1ti,e personal and b)siness rival E-bb)d, (ho (as strainin! thro)!ho)t the fall and (inter of 1951J195B to keep the 'afd in po(er. Both the British and the -,ericans (ere nat)rally inclined at this 2)nct)re to(ard the elite opposition>s appeal to address 8!ypt>s CrealD need for internal refor,. &he dile,,a consisted in the )tter lack of any practical political strate!y for advancin! this pro2ect in the face of the 'afd>s i,,ensely pop)lar !a,ble of confrontin! the 5,)ch1(eakened; British i,perial state. 'hile the -,ins (o)ld insist in the (eeks before the fire that Cthe first stepsD in !ettin! rid of the 'afd had already been taken, aside fro, so,e des)ltory contacts (ith C=- officer Ner,it 5Ni,; Roosevelt, they offered nothin! ,ore concrete than a ca,pai!n in the pa!es of $hir 5ah8a acc)sin! the 9ira! al1Fin fa,ily of sellin! cotton to =srael. -nd -h,ad :)sha,4a had no ,ore practical plan to offer to the -,ericans than to (ait for the 'afd to lose control of events0tho)!h he co)ld hardly have kno(n that the strate!y (o)ld t)rn o)t to be the correct one.[)0] 'hen the venerable politician and Gisr !ro)p director E-li Gahir (as na,ed pri,e ,inister in Aan)ary 195B, he sho(ed hi,self (illin! to take the heat for the stron! dose of a)sterity that bankers (ere de,andin! (hile tryin! to )ndo the da,a!e of the 'afd !overn,ent>s disastro)s cotton price1s)pport policy. :e ref)sed, ho(ever, to carry o)t a vendetta a!ainst the 'afd itself, in effect, do)ble1crossin! the E-,in1palace bloc that had p)t hi, in the pri,e ,inister>s seat, and these tireless if not very skillf)l cabinet ,akers ret)rned to the shop. =n less than a ,onth Gahir had been cast aside and, (ith the help of the British e,bassy, replaced (ith an obvio)sly e,bittered and tra!ically shortsi!hted :ilali, (ho had finally broken (ith the 'afd in /ove,ber 1951 over the treaty1abro!ation iss)e. C=- operative Roosevelt appears to have been involved, at least on the periphery, (ith these ,ane)vers 5Lordon

199B: "6, 13B7 9ayed1-h,ad 19%9: 61J6B, 6%;. Gore i,portant, for the ne@t three ,onths, :ilali did e@actly (hat his s)ndry backers had (anted: b)ryin! the treaty iss)e and la)nchin! a f)ll1scale attack on the 9ira! al1 FinJE-bb)d party, (hich incl)ded the arrest of the 'afd>s secretary !eneral, the dissol)tion of parlia,ent 5(here 9ira! al1Fin had de,onstrated his do,inance; and an attack on E-bb)d>s b)siness e,pire. U.9. -,bassador Caffery heralded :ilali as an honest patriot, a corr)ption b)ster and essentially 8!ypt>s last chance for refor,, tho)!h a ,ere nine ,onths earlier :ilali (as leadin! the battle in parlia,ent a!ainst C-,erican i,perialis,D in the !)ise of the U.9. Point =V pro!ra,.[)1] Caffery>s pra!,atis, is less interestin! here than the )nravelin! of the ,ain disc)rsive thread in the -,erican narrative abo)t 8!ypt )nder the 'afd, (hich for one year posited refor, as the real proble,. &h)s, in the first days of the ne( :ilali ad,inistration, one of Caffery>s key 8!yptian contacts, -h,ad :)sha,4a, revealed that he (o)ld not be 2oinin! the !overn,ent of his Cclose friend and confidantD both beca)se he ostensibly ob2ected to the Cen!ineerin!D of Gahir>s dis,issal by the -,in brothers and the palace, and, ,ore i,portantly, beca)se the !overn,ent had 4ero p)blic s)pport. -s :)sha,4a p)t it, in the eyes of ,ost 8!yptians, :ilali>s refor, plank (as si,ply a distraction fro, the real iss)e.[)2] :)sha,4a (as correct, of co)rse. Relative to forcin! Lreat Britain to end its ,ilitary presence in the Canal Oone there (as indeed little concern abo)t this latest ro)nd bet(een oli!archic factions that he had been dra!!ed into and no( appeared desperate to escape, tho)!h :)sha,4a>s depiction of the sit)ation (as ,ore )nderstated than that of so,e others. Ior e@a,ple, in a broadside, the clandestine Iree ?fficers conde,ned :ilali as the servant of Ci,perialists and 8!yptian traitorsD (ho had Cfor!otten that the so)rce of the !reatest corr)ption is i,perialis,,D and they branded his (ar a!ainst the 'afd as Ca ne( co)pd>KtatD 5Lordon 199B: 51;. Ior broadly the sa,e reasons, the &r),an ad,inistration fo)nd that its o(n ,odest effort to b)ild a coalition inside the :ilali !overn,ent in s)pport of a land1refor, pro!ra, faced resistance fro, so,e officials, tho)!h :ilali>s o(n position re,ains )nclear. =t sho)ld also be noted that -,erican proposals for land refor, in 1951J195B centered on recla,ation, the settlin! of landless peasants and the re!)lation of landlord1tenant relations.[*3] =n fact, proposals alon! these lines be!an to proliferate in the ,onths after the Cairo fire, pro,oted ,ost stron!ly by those (ho did not (ant to see the 'afd back in po(er or the ca,pai!n revived a!ainst the British bases. -!ain, the iss)e of land refor, is often presented as so,ethin! that (as ob2ectively necessary for ind)strial develop,ent, and the fact that 8!yptian investors failed to p)rs)e s)ch a co)rse is vie(ed as a si!n of their incapacity to act in their o(n best interests at a critical 2)nct)re. &he pre,ise is, ,ini,ally, a contestable one. Gany ar!)ed the opposite, for instance, pointin! to the disr)ptions in prod)ction that (o)ld acco,pany the redra(in! of property lines, and (e kno( that this ar!),ent event)ally (on

the backin! of the ,ilitary in 195B, even as they carried o)t the confiscation of royal properties and other ,assive holdin!s. &here (ere additional rationales for land refor,. &he ,ost basic0social 2)stice0(as for obvio)s reasons the one least likely to (in the backin! of property o(ners. - second rationale (as that land refor, (o)ld pree,pt the potential or!ani4ation of a co,,)nist ,ove,ent in the co)ntryside. -!ain, it is hardly s)rprisin! that ,any 8!yptians (o)ld be left )npers)aded, at least in the short r)n. - third rationale (as i,plicitly derided in the observation by -h,ad :)syan +)oted above. - refor, a!enda centerin! on land redistrib)tion had little direct connection (ith the discontent and de,ands of lar!ely )rban1based constit)encies (ho backed, or ,ore properly propelled, the 'afd>s act of brink,anship. Io)rth (as the possibility of b)ildin! an alternative, relatively conservative, r)ral1based constit)ency as the base of s)pport for a non1 'afd party or, ,ore likely, an a)thoritarian 5refor,; re!i,e. &ho)!h the ,ilitary leaders (o)ld p)rs)e this co)rse, it hardly solved the Canal bases +)estion. Ior !ood reason, therefore, -,erican policy,akers the,selves be!an to reconsider the relative (ei!ht of internal and e@ternal obstacles to stability in the sprin! of 195B. Caffery atte,pted to brin! local representatives to the bar!ainin! table, (hile Fean -cheson looked to 8den for ne( concessions to break the -n!lo18!yptian stale,ate. .ondon conceded little, ho(ever, in part beca)se (ith the Canal Oone cal,, the 'afd o)t of po(er, and :ilali en!a!ed in his vendetta a!ainst the 9ira! al1FinJE-bb)d party, Ch)rchill>s hard1line !overn,ent concl)ded 5not entirely )nreasonably; that they had !ained the,selves so,e ti,e and ,ane)verin! roo,. -cheson and his staff pressed 8den ,ore heavily in A)ne, ar!)in! that :ilali (o)ld event)ally fall if the British contin)ed to resist concessions. -nd tho)!h the -,ericans later (rote that they had also e@pected :ilali to han! on )ntil ?ctober, he handed the kin! his resi!nation )ne@pectedly on B% A)ne.[*1]

95&&ud and his :4l7<

&he ,ost notorio)s tale of the re!i,e>s last days is the r),ored plot behind :ilali>s resi!nation0the tr)th so e@plosive, (arned the Cairo correspondent of the Times# as to be C)np)blishable.D &he r),or ,ills (ere in tr)th r)nnin! overti,e d)rin! the last (eek in A)ne, as stories started circ)latin! abo)t intense contacts bet(een the kin! and 9irri Pasha, intri!)es takin! place behind :ilali>s back and the kin! )nder intense press)re to chan!e the !overn,ent. ?ne incontrovertible fact broke the rhyth, ,o,entarily: :ilali>s )ne@pected resi!nation. &he ca)se of his do(nfall follo(ed +)ickly in his letter to the kin!, leaked by :ilali>s forei!n ,inister a,on! others: E-bb)d had alle!edly paid X8 1 ,illion into one of the kin!>s 9(iss bank acco)nts in order to brin! 9irri back as pri,e ,inister.

&(o na,es (ere ,ost often linked (ith E-bb)d>s in this vent)re. &he first (as Nari, &habit, an e@12o)rnalist, adviser to a host of ,a2or fir,s and !ro)ps 5incl)din! =C= and Beida Fyers;, and the kin!>s personal friend, tho)!h he see,s to have had little contact (ith Iar)+ at this 2)nct)re. &he second (as -ndraos, the kin!>s financial adviser, b)t others (o)ld occasionally add and s)btract na,es fro, this basic list of Cintri!)ers.D[*)] 9ince &habit (as re!)larly e@coriated by the pashas then and historians no( as an )n+)alified, )n(ise and corr)ptin! infl)ence on Iar)+ 5e.!., see Lordon>s 5199B: 1%; description of the CsycophantsD; , it is (orth notin! that Caffery described hi, as Cone of the keenest political ,inds in 8!yptD and relied on &habit e@tensively for his o(n vie(s of 8!yptian po(er politics. Ior aristocrats like 9irri and E-fifi, (ho resented and at ti,es paid the price for &habit>s infl)ence inside the palace, it (as nat)rally soothin! to critici4e his relative lack of social standin! 5i.e., he (as born in Nharto),, he did not co,e fro, an established C8!yptian fa,ilyD; and, of co)rse, to conde,n the 4eal (ith (hich &habit a,assed his (ealth.[**] &he (ay the E-bb)d1&habit1-ndraos bribery plot (as fitted into vario)s narratives tells )s a !reat deal abo)t the forces ,ost intensely involved in the !a,e for control of the 8!yptian state and its policies on the eve of the co)p, incl)din! the -,ericans, the British e,bassy and rival parts of the oli!archy. /eedless to say, E-bb)d, &habit and -ndraos all vehe,ently deno)nced the bribery r),or as an o)tra!eo)s lie. 'hat co)ld not be denied, ho(ever, is their havin! (orked in loose cooperation for the past t(o ,onths to (eaken :ilali and, at least in E-bb)d>s case, ret)rn the 'afd to po(er. &he British e,bassy and its intelli!ence ar, tried d)rin! the ne@t (eeks to confir, details of the alle!ed bribery, b)t co)ld not, and once the ar,y took po(er three (eeks later the evidence no lon!er ,attered. &he British sei4ed )pon the bribery story for t(o reasons, and then cl)n! to it for a third. Iirst, they (ere heavily invested in :ilali and his refor, pro2ect, as (e have seen, and they considered his resi!nation a setback in their strate!y vis1T1vis both the 8!yptians and the -,ericans. &hey feared the ret)rn of the 'afd and (anted :ilali reinstated, and the ostensible o)tra!eo)sness of the alle!ed action 2)stified and provided a,,)nition for press)rin! the kin! on :ilali>s behalf. - second reason for r)nnin! (ith the story (as so p)rely instr),ental and lo!ically convol)ted that cynicis, is the ,ost reasonable interpretative strate!y to e,ploy in this case. Ge,bers of the Iorei!n ?ffice sa( the story as a Cheaven sent opport)nityD to force C-ndraos and co,panyD o)t of the kin!>s orbit and to leave hi, ,ore fir,ly )nder the infl)ence of :ilali>s ,ain palace ally, E-fifi. 'hitehall concl)ded that it (as the kin!>s t(o disrep)table advisers, &habit and -ndraos, (ho (ere preventin! the 8!yptian !overn,ent fro, ne!otiatin! CrealisticallyD (ith the,.[*+] &hird, there (ere for,idable obstacles in the (ay of reversin! the co)rse set in ,otion by :ilali>s resi!nation. -s British officials ad,itted, his do,estic s)pport (as no( li,ited Cpractically to the -,in t(ins,D and tho)!h his vendetta a!ainst the 'afd (as a policy the British state enco)ra!ed, its officials had a re,arkable capacity to absolve the,selves of its )nintended conse+)ences0na,ely, that it tended to ,obili4e those (ho (ere ,ost

threatened. &h)s in tar!etin! fi!)res like 9ira! al1Fin and E-bb)d, they concl)ded that :ilali had possibly been Ctactless and ill1advised.D &he bi!!er proble,, ho(ever, is that the Iorei!n ?ffice (anted the -,ericans to line )p behind the, in s)pport of a 2oint intervention on behalf of :ilali and E-fifi a!ainst the Ccrooks,D yet Caffery and the 9tate Fepart,ent ref)sed, ar!)in! that the British (ere in fact the ,ain ca)se of :ilali>s do(nfall.[*-] 9ince the bribery story had only li,ited val)e for the -,ericans, they (ere ea!er to do(nplay its si!nificance. -t best, it reinforced the vie( that :ilali represented a reasonable 5C,oderateD; alternative to the 'afd and Cvested interestPsQD s)ch as those represented by the Cvenal trioD of E-bb)d, &habit and -ndraos. <et, it also clearly allo(ed the British to escape reco!ni4in! that :ilali>s 5or any other non1'afd led !overn,ent>s; best chances re,ained in (innin! concessions in the deadlocked bases talks. =nstead, 8den>s first, pet)lant response to these events (as a vo( to let Iar)+ and his ne( pri,e ,inister 9irri Cste(.D :e co)ld conte,plate this plan beca)se, as his forei!n1policy staff ,ade clear, they sa( no threat to 8!yptian sec)rity and stability fro, this ne(est t)rn of events, at least in the short ter,. =n their vie(, the lon!1r)n threat of the 'afd re,ained the ,ost serio)s proble,, and the Iorei!n ?ffice contin)ed to hold )p the bribery clai, in order to deflect the -,ericans> criticis,s. -nother threat (as that the -,ericans (o)ld p)sh harder for treaty concessions. &he obsession (ith the -,ericans can be seen in the British e,bassy>s theory that Caffery hi,self (as at least indirectly to bla,e for :ilali>s fall since his fre+)ent and (ell1 p)blici4ed contacts (ith E-bb)d ,ade it appear as if the -,ericans (ere leanin! to(ard the 'afdH[*.] &he !a,e (as an i,,ensely co,plicated one b)t also one that key players hardly vie(ed as deadlocked in early A)ly 195B, (hich e@plains both the ca)tio)s opti,is, of the E-bb)dJ9ira! al1Fin (in! as (ell as the increasin! fr)stration of the al- $h%ar circle, its British backers, the kin! and E-fifi, (ho (as probably Iar)+>s ,ost infl)ential adviser d)rin! the last ,onth of r)le. -s vario)s -,erican and British officials ackno(led!ed, the probability (as hi!h that a ne( ro)nd of elections (o)ld be held so,eti,e in the fall, and ,any 8!yptians vie(ed elections as the ,ost likely ro)te to resolvin! the national +)estion. -ll the relevant forces in the 8!yptian scene had co,e to reco!ni4e the cr)cial i,portance of the United 9tates in the o)tco,e. &here is no clearer evidence than E-bb)d>s and 9ira! al1Fin>s appeal to the &r),an ad,inistration to back the 'afd>s ret)rn to po(er. =n e@chan!e, they had proposed a Cdetailed secret a!ree,ent (ith the United 9tates.D &he RCC (o)ld try to do the sa,e si@ ,onths later.[*0] - U.9.1'afd alliance (as one of the chief fears of all those (ho, for vario)s reasons, coalesced aro)nd :ilali>s alternative refor, pro2ect, the British state fore,ost a,on! the,. -s = have noted, the fear (as palpable in the rather paranoid co,plaints abo)t Caffery>s ,eetin! too fre+)ently (ith E-bb)d or, of co)rse, the idea

that E-bb)d co)ld si,ply b)y the pre,iership for his ally 9irri. B)t the fear is e+)ally palpable in the ener!y spent tryin! to sell the Cvenal trioD scenario to the -,ericans. 8!ypt>s ,ost fa,o)s 2o)rnalist, G)ha,,ad :aykal, then in the e,ploy of the -,ins, t)rned over to the -,ericans d)bio)s proof of the conspiracy a!ainst :ilali0a private letter for(arded by the pre,ier to the kin!.[*1] Perhaps the best evidence for this !ro(in! fear a,on! elites that a ne( ro)nd of elections (as in the offin! and, th)s, that a rene(ed ,andate for the E-bb)dJ9ira! al1Fin party (as probable is the s)dden appearance of and fre+)ent references specifically to land refor, in records of conversations, other archival so)rces and the 8!yptian press, especially by anti1'afd elites in the late sprin! and early s),,er of 195B. &he lo!ic is si,ple, tho)!h this partic)lar path to b)ildin! a co)nter1electoral coalition 5or, alternatively, to sec)rin! a de!ree of pop)lar s)pport for a)thoritarian r)le; (as fra)!ht (ith its o(n dan!ers and )ncertainties: co)ld :ilali or so,e alternative set of elites r)n s)ccessf)lly a!ainst the 'afd on the basis of land1refor, pro!ra,* =n any case, the sit)ation in 8!ypt in ,id1195B (as far fro, deadlocked0this (as the real proble,. -t the sa,e ti,e, the sit)ation (as hardly one of cal, or of b)siness as )s)al. /o action is ,ore sy,bolic of the errors in 2)d!,ent d)rin! this prolon!ed crisis than the disastro)s decision by the ,onarchy in ,id1A)ly to try to reassert its a)thority (ithin the ar,y, the step that pro,pted dissident officers to plan and ,o)nt a co)p d>Ktat on B" A)ly 195B in order to protect the,selves a!ainst arrest 5Lordon 199B;. Certainly, the si4e and scope of the Aan)ary )prisin! had sobered ,any. B)t fro, ,id1Iebr)ary )ntil the ,ilitary conspirators carried o)t their pree,ptive co)p on B" A)ly, strikes, de,onstrations and other )s)al indicators of political )nrest had dropped effectively to 4ero.[*2] Repression had proved effective. ?n B6 A)ne 195B, in a conversation (ith U.9. secretary of state -cheson, Britain>s a,bassador to 8!ypt, Ralph 9tevenson, !)essed that :ilali (o)ld hold on a fe( ,ore ,onths at best before a ne( caretaker !overn,ent (as bro)!ht in to oversee the ne@t elections. -cheson nat)rally pressed the a,bassador for his vie( of the ne@t si@ ,onths and, partic)larly, (hether he anticipated a decline in stability. B)t 9tevenson 2)d!ed the sit)ation positively, in part beca)se of i,proved internal sec)rity and in part beca)se, before elections, he e@pected the !overn,ent to concentrate on the iss)e of Credistrib)tion of land.D[+3] &(o (eeks 5and t(o !overn,ents; later, and literally on the eve of the co)p, the kin!>s top official and e@1Gisr !ro)p head, E-fifi Pasha, (as even ,ore )pbeat than 9tevenson. 9pecifically, E-fifi had told another top British e,bassy official that his opti,is, (as hi!her than at any ti,e in the previo)s si@ ,onths for t(o reasons. Iirst, the atte,pt by E-bb)d and his allies to hi2ack the state had !one a(ry. 9econd, and (hat ,)st in retrospect be the sin!le ,ost ironic co,,entary on the f)t)re of the ancien r0gime by one of its chief pillars, E-fifi looked for(ard to a s(ift resol)tion of the Car,y proble,.D[+1]

&here (ere at least t(o broad and, in the eyes of the key players, viable sol)tions to the crisis. ?ne of co)rse (as fa,iliar fro, the past0na,ely, e@tendin! the bo)ndaries of soverei!n decision1,akin! a)thority in arenas still contested by the e@1colonial po(er. &he second sol)tion entailed so,e kind of redistrib)tive pro2ect in the co)ntryside. &he 'afd (as probably in the stron!er position. Certainly, those like the -,ins or &habit, (ho tried to i,a!ine Iar)+ as head of a refor,ist1a)thoritarian re!i,e, (ere no do)bt disco)ntin! the f)t)re so,e(hat ,ore heavily in A)ly 195B than (as the 9ira! al1FinJE-bb)d party, (ho had placed 9irri back in po(er and had be!)n settin! the sta!e for a ne( ro)nd of elections in the fall before leavin! for their re!)lar s),,er vacations in 8)rope. &he -,ericans en2oyed the l)@)ry of hed!in! their bets. -s = have ar!)ed, Caffery>s s)periors (ere ,ovin! the ,achinery of state in position to press)re .ondon for concessions on the bases or 9)dan or both. -t the sa,e ti,e, by the sprin! of 195B, t(o land1recla,ation e@perts had been seconded to 8!ypt )nder the a)spices of the &echnical Cooperation -d,inistration 5Point =V; and (ere (orkin! (ith a circle of policy,akers and :ilali allies in advancin! a land1refor, pro2ect. &he sa,e ,ission (as a)!,ented in ,id1-)!)st to facilitate the i,ple,entation of the ar,y>s hi!hly p)blici4ed land1refor, initiative, la)nched (ithin (eeks of the co)p, tho)!h a,bassador Caffery insisted that the -,erican role (as not to be p)blici4ed.[+)] &he !eneral lo!ic of these t(o, co,petin! approaches to resolvin! the 8!yptian crisis (as confir,ed by events s)bse+)ent to the co)p. 'ith critical -,erican s)pport, the ne( revol)tionary re!i,e ,oved in both these directions si,)ltaneo)sly 5Binder 19$%7 'aterb)ry 19%";. M M M

#efore the Aall

Gost disc)ssions of b)siness and politics in the post1195B period 5e.!., -bdel1Galek 193%, 'aterb)ry 19%", Oaalo)k 19%9, &i!nor 199B; start (ith the ass),ption that the t)rn to C-rab socialis,D (as neither foreseen nor p)rs)ed by the ,ilitary officers (ho took po(er in A)ly. ?>Brien first developed this ar!),ent syste,atically in The ;evolution in Egypt<s Economic (ystem51933;. :is for,)lation of the Revol)tion>s vario)s phases in ter,s of the re!i,e>s !eneral policy to(ard capital and, in partic)lar, its first so1called free1enterprise phase bet(een 195B and 1953 )nderpins virt)ally all s)bse+)ent acco)nts )ntil no(. &h)s, fro, varyin! ideolo!ical positions, both Beinin 5199#: %$; and &i!nor 5199B: B$6; e,phasi4e the (ide !)lf dividin! preJ and postJ9)e4 'ar policies to(ard 8!yptian and forei!n investors. B)t the i,peratives that once ,ade it cr)cial to label 8!ypt>s political econo,y as either capitalist or socialist have lost their force, and the ter,s no( see, both so,e(hat cr)de and +)aint. 'hat others have insisted (as a policy of enco)ra!in! private enterprise is analy4ed here as a strate!y of opposin! the local b)siness oli!archy and its privile!ed position (ithin the political econo,y.

&he analysis b)ilds on a point that 'aterb)ry 519%"; )sef)lly co)nterpoises to the ,ore str)ct)rally oriented and deter,inist conceptions of the ,ilitary re!i,e>s takin! po(er in order to f)lfill the bo)r!eois pro2ect: na,ely, the re!i,e>s profo)nd s)spicions of, and antipathy to(ard, 8!ypt>s leadin! capitalists. = ar!)e that the key ,ilitary leaders had an e@plicit, broad ideolo!ical orientation to(ard capital, artic)lated in ter,s of anti,onopolis,, (hich shaped the re!i,e>s policies, (hile the relatively feeble or ineffective re!)latory capacities of the state a!encies that the ar,y officers inherited f)rther enco)ra!ed the early 5i.e., preJ9)e4 'ar; shift to(ard dis,antlin! or takin! over rather than re!)latin! e@istin! capitalist instit)tions and partic)larly those at the center of the b)siness oli!archy, be!innin! (ith the E-bb)d !ro)p.[+*]

The :#lessed 6o e(ent< against the 6onopolists

&he idea that the ar,y officers took po(er (itho)t clear or specific desi!ns for econo,ic refor, and, cr)cially, C(itho)t an econo,ic ideolo!yD has been repeated so often over the years that it has ceased even to re+)ire a defense 5e.!., .aco)t)re and .aco)t)re 195%7 ?>Brien 1933;. <et this kind of clai, rests on an )nderstandin! of ideolo!y as bein! ,ore akin to Clofty theoryD or a f)lly (orked o)t philosophical syste, than to the kind of Cco,,on senseD vie(5s; of the (orld held by ,ost ,en and (o,en. 5-)!elli and G)rphy 19%%: 1"J"#;. &he ideolo!ies of /asser and his co,rades (ere no ,ore or less coherent, or!ani4ed and contradictory than the Cideolo!iesD of 8den, -cheson, 8isenho(er and their representatives in Cairo, 9tevenson and Caffery, a,on! other key actors at this 2)nct)re. &he officers had collectively defined their pro2ect in ter,s of si@ )nderlyin! Cprinciples,D (idely believed to have been (ritten by ,ar@ist officers -h,ad :a,r)sh and Nhalid G)hiy al1Fin, incl)din! the co,,only cited one abo)t Cendin! fe)dalis,.D &ho)!h often dispara!ed, this for,)lation does not see, partic)larly va!)e (hen co,pared (ith conte,porary disco)rses abo)t stren!thenin! the ,arket, enco)ra!in! de,ocracy or respectin! difference. -nd, as is readily reco!ni4ed, once in po(er the officers had little diffic)lty in ,obili4in! the necessary intellect)al and technical reso)rces for developin! specific policies that reflected this principle, as attested to by the land1refor, pro!ra, developed by 8!yptian civilians 5(ith the inp)t of =talian advisers and -,erican technicians; and p)t into la( si@ (eeks after the co)p. &he other principles of the Revol)tion (ere no less i,portant in shapin! the ,ilitary>s approach to the political econo,y. Probably the least disc)ssed part of the officers> pro2ect (as the co,,it,ent to Cendin! the ,onopoly syste,,D a syste, (hich, as (e have seen, (as desi!ned, b)ilt and n)rt)red by British colonial state officials, forei!n and local investors and 8!yptian national political elites. By 195B lar!e1scale prod)ction and distrib)tion (ere no lon!er sectors ,onopoli4ed by forei!n capital and nonnationals7 instead, control of these ,onopoly and oli!opoly sectors (as shiftin! to coalitions of 8!yptian investors. &he C,onopoly syste,D (as in essence a synony, for 8!ypt>s b)siness !ro)ps and their cross1sectoral holdin!s in te@tiles, shippin!, transportation, che,icals,

services, food processin!, etc. 8ven ,ore concretely, the essence of that syste, see,ed to be represented by the co)ntry>s sin!le ,ost po(erf)l capitalist at ,id1cent)ry, E-bb)d. ?pposition to ,onopoly (as as ,)ch or ,ore a part of the conte,porary landscape as land refor, and (as ,ade e@plicit in the (ork of Rashid al1 Barra(i, the radical 8!yptian econo,ist (ho rose to pro,inence as a p)blicist for the Revol)tion on the left and adviser to the ne( re!i,e on econo,ic iss)es. -ccordin! to Lordon 5199B: 13$;, U.9. -,bassador Caffery blocked a cabinet post for Barra(i in the first post1co)p !overn,ent. &he -,ericans then tried to coopt the increasin!ly infl)ential left1technocrat, offerin! to brin! hi, to the United 9tates for an ed)cational1st)dy to)r in 1956.[++] &o!ether (ith a handf)l of other intellect)als on the left, Barra(i ,et re!)larly (ith the 2)nta and (as i,portant in shapin! its pop)list disco)rse and pro!ra,s. Bet(een 195" and 195%, he directed the state>s ind)strial1develop,ent bank and served (ith the ,ar@ist la(yer -h,ad I)>ad, /asser>s closest econo,ic adviser in the 195#s 5.aco)t)re and .aco)t)re 195%;, as the left (in! of the !overn,ent>s advisory co)ncil on ind)strial policy. 9ince the ,id1196#s, Barra(i had been (ritin! in favor of land refor, and a !overn,ent1directed ind)striali4ation drive, (hich (as to incl)de nationali4ation of basic ind)stries in line (ith (elfare1state develop,ent ,odels then bein! adopted in 8)rope 5Rashid al1Barra(i and G)ha,,ad Ga4a EUlaysh 1965;. =n his 195B CinstantD acco)nt of the ,ilitary co)p, Barra(i had foc)sed on the inordinate po(er e@erted by C,onopolistsD like E-bb)d and the Gisr !ro)p, both as an indict,ent of the old re!i,e>s reactionary social1political order and as part of an ar!),ent for the inevitability of the kind of pro!ressive econo,ic pro!ra,s to be )ndertaken by the revol)tionary leadership 5Rashid al1Barra(i 195B7 Gei2er 199#;. &he anti,onopolist co,ponent in the ne( leaders> (orld vie(s (as evident to observers at the ti,e in the for, of the deep s)spicions that (ere openly harbored to(ard E-bb)d and every other b)siness oli!arch, fro, Iar!hali to <ahya, even as an )neasy and relatively short1lived acco,,odation (as ne!otiated (ith the,. <et, rather than reconcilin! the,selves to b)siness privile!e, in a (ay that ,i!ht have prod)ced alternative disco)rses and practices 5e.!., the inevitability or necessity of concentration7 self1re!)lation by b)siness interests7 societal corporatis,;, the revol)tionary leaders ,ade anti,onopolis, the e@plicit rationale for s)ccessive encroach,ents by state a!ents d)rin! 1956J1955 into the factories and boardroo,s of the b)siness oli!archs. E-bb)d>s relations (ith the ne( leaders and the instit)tions they so)!ht to b)ild ill)strate the co,ple@ politics behind the re!i,e>s enco)nter (ith the co)ntry>s leadin! capitalists. E-bb)d chose pr)dently to re,ain abroad for ,ost of A)ly thro)!h 9epte,ber. Iro, Paris, (here he (as attendin! the 9epte,ber ,eetin! of the 9)e4 Canal Co,pany board, he praised the !overn,ent>s br)tal handlin! of the infa,o)s strike at the Gisr !ro)p>s te@tile ,ills in Nafr al1Fa((ar in -)!)st, appla)din! /a!ib as head of a

,ove,ent that Call 8!yptiansD had (elco,ed. E-bb)d ass)red reporters that life in 8!ypt (as Cback to nor,al.D Io)r days later an e@traordinary ,ilitary trib)nal e@ec)ted t(o of the strikers by han!in! 5al- $h%ar " 9epte,ber 195B7 Beinin and .ock,an 19%$: 6B1J6B37 Lordon 199B: 3BJ3", 96J957 Bot,an 19%%: 1B5J1"1;. ?nce back in Cairo, E-bb)d reached instinctively to vario)s parts of his decades1old repertoire in order to recover fro, the setback of the co)p and the e@propriation of his 5,###1faddan estate. Ior instance, by late Fece,ber 195B, $h%ar al-6a*m had been enlisted in a ne(p)blic1relations effort. &he paper reported that the e@iled Nin! Iar)+ had once alle!edly offered X8 1,### to his royal !)ard to kill E-bb)dH -s E-bb)d sole,nly declared, CIar)+ loathed every person (ho (orked in his co)ntry.D :is ne( invest,ents in Ch),an capitalD follo(ed alon! these sa,e lines, to 2)d!e fro, the e,er!ence in the post1195B period of ne( ,ana!ers and directors in vario)s of E-bb)d>s vent)res, s)ch as =s,aEil 9abri Bali!h, the brother of a tr)sted, second1rank Iree ?fficer, E-li 9abri.[+-] &he basis of the ne( bar!ain bet(een E-bb)d and the co)ntry>s ,ilitary leaders (as, nonetheless, his instit)tional position as the co)ntry>s leadin! o(ner1investor. &he o)tp)t of his nitrate factory (as a vital ra( ,aterial for a,,)nition as (ell as for fertili4ers, and the ,ilitary t)rned to hi, for help in developin! a do,estic (eapons ind)stry. Unfort)nately, little is kno(n abo)t the ori!ins and operations of the ,ilitary sectors of the econo,y. <et prore!i,e papers be!an to pro,ote E-bb)d>s contrib)tion to the co)ntry>s renaissance, even as his allies in the 'afd (ere dra!!ed off to 2ail. -nd, by the (inter of 195B, U.9. -,bassador Caffery (as describin! relations bet(een the b)siness,an and the 2)nta as CcooperativeD tho)!h not CcordialD since the officers obvio)sly needed capital and at the sa,e ti,e distr)sted capitalists.[+.] .ittle that the officers and their backers (o)ld do in the follo(in! ,onths can be interpreted as allayin! the e+)ally deep and )nderstandable s)spicions of the oli!archs the,selves. &he attack on the party syste, in 195BJ195" (as a serio)s blo( to E-bb)d, b)t the effort to contain his infl)ence enco,passed nonparty arenas as (ell. &he best e@a,ple is the creation of the vario)s p)blic econo,ic a)thorities and +)asi1plannin! a!encies in 195BJ195", notably the Per,anent Co)ncil for Fevelop,ent of /ational Prod)ction 5hereafter the /PC;. :ere, as in other policy,akin! do,ains, investors like E=,ari, the re!i,e>s ne( ,inister of finance, battled (ith less reliably procapitalist co)nsel 5e.!., Barra(i, Ga!di :asanha,4a, -h,ad I)>ad, Nhalid G)hiy al1Fin;. =f anythin!, analysts have tended to )nderrepresent the force of etatist c)rrents in these )nfoldin! instit)tional arran!e,ents.[+0] B)t, 2)st as cr)cially, E-bb)d and other leadin! b)siness oli!archs had been kept o)t of the,. &he representation of local capital in these ne( instit)tions tells )s so,ethin! abo)t the Revol)tion>s early i,pact on the b)siness co,,)nity, (hile at the sa,e ti,e re,indin! )s of the li,its that the Iree ?fficers +)ickly ran )p a!ainst after sei4in! control of the state. 59ee &able 5.; Liven the hi!hly concentrated, overlappin! str)ct)re of o(nership and control

across key ind)stries, it (as virt)ally i,possible to tap 8!yptians (ho (ere not linked in one (ay or another to the E-bb)d, <ahya, 9alva!os, etc., !ro)ps. -t the sa,e ti,e, the opport)nity appeared irresistible to an a,bitio)s set of second1tier investors 5or (o)ld be investors; seekin! to advance their o(n fort)nes in ti,e1honored fashion: thro)!h preferential access to decision ,akers and a relatively ,ore rather than less intense co)rtin! of forei!n backers.

5. Ge,bership in the Per,anent Co)ncil for Fevelop,ent of /ational Prod)ction, Aan)ary 195" Na(e Position in the Political Econo(y

N8TE" /! H (e(&er, Kigh Co((ittee for /and !efor(I AE4 H Aederation of 4ndustriesI AT H full$ti(e (e(&er of co((ittee S8L!CES" 57hir Sa9a 0 >anuary 12-*I WhoDs Who in Egypt, 12-). Cairo" 4(pre. franMaiseI LS!% -2 files. :)say Iah,i 5chair; <ahya al1E-layli E-li Iathi =brahi, Biy),i Gadk)r 9halabi 9ar)fi, Rashid al1Barra(i 5I&; G)ha,,ad =brahi, 5I&; E-bd al1Rah,an :a,ada G)ha,,ad E-li :)say E-li al1Liritli Iathi Ri4+ 5-r,y; 9a,ir :il,i 5-r,y; La,al 9ali, 5-r,y; b d, 9alt and 9oda Co. 5<ahya;, I8= a!ric)lt)ral en!ineer7 b d, No, ?,bo Co. 5E-bb)d;, I8=, .R civil en!ineer e@1,inister, senator, investor* lando(nin! en!ineer, investor econo,ist !eolo!ist en!ineer b d, Gisr 9pinnin! and 'eavin! en!ineer1contractor 5E-bb)d>s son1in1la(; econo,ist, /ational Bank of 8!ypt en!ineer civil en!ineer Iree ?fficer7 .R

Na(e E-bd al1Ra44a+ al19anh)ri G)ha,,ad 9ali, 5secretary !eneral;

Position in the Political Econo(y President, Co)ncil of 9tate7 la(yer en!ineer

E=,ari played the pivotal role in shapin! (hat ,i!ht be tho)!ht of as the No, ?,bo (in! of the RCC, or so it see,ed to -,erican observers s)ch as Caffery, (ho described hi, as a key fi!)re in the RCC>s ten1person Cinner cabinet.D[+1] E=,ari>s o(n protK!K at the Iinance Ginistry, E-li al1Liritli, (as appointed to the /PC. ?ther investors (hose political fort)nes (ere on the rise incl)ded :)sha,4a Iah,i, chair of the /PC7 <ahya al1E-layli, the ,ana!in! director of the No, ?,bo Co,pany and ,e,ber of the land1 refor, co,,ittee7 9ayyid GarEi and his fa,ily, another key b)siness,an on the land1refor, co,,ittee dra(n fro, the board of directors of the No, ?,bo Co,pany7 and the 9ar)fi, fa,ily, (ho, like E=,ari, (ere identified (ith the -nderson ClaytonJo(ned oil ,ills and cotton1e@portin! co,ple@ in Ginya and -le@andria. -s (e have seen, ,any of these investors had actively opposed the 'afd1 oli!arch alliance and re,ained o)tspokenly critical of E-bb)d and his ,ethods, tho)!h their s)pport of this ne(, forei!n1backed a)thoritarian t)rn (as al,ost identical to the co)rse E-bb)d had p)rs)ed so s)ccessf)lly in the 19"#s.[+2] &he ,ost s)ccessf)l 8!yptian capitalists of the inter(ar years had no( beco,e an entrenched set of interests standin! in the (ay of this ne( cohort, ,)ch in the (ay that 9)arVs, Cattao)i and other ,inority investors ,)st have been vie(ed three and fo)r decades earlier. -t the sa,e ti,e, ho(ever, there are no credible !ro)nds for describin! these key s)pporters of the E-li Gahir and /a!ib !overn,ents 5195BJ1956; as the core, finally, of an ind)strial bo)r!eoisie. Certainly, ,any of the, had opposed land refor, 5or at least the confiscation of their o(n estates;, and, )nder their infl)ence, the /PC 5and the !overn,ent>s invest,ent policies !enerally; (ere still (ei!hted to(ard s)pport of a!ric)lt)ral prod)ction. Unlike the sit)ation in any other period in the t(entieth cent)ry, tho)!h, these ne( and by all acco)nts politically a,bitio)s investors had to contend (ith a re!i,e in (hich local capitalists> prero!atives, preferences and property ri!hts (ere openly challen!ed for the first ti,e, not least via the e@propriation of their estates. -s early as 195" individ)al ,e,bers of the RCC be!an to press for Csociali4ation of portions of the econo,y.D E=,ari (as described as ea!er to co)nter s)ch press)re and reass)re the b)siness co,,)nity. <et, E=,ari (as distr)sted by c)rrents (ithin the 2)nta (ho (ere keepin! Ca very close check on his activities,D and, as = (ill disc)ss belo(, he and his allies fell victi, to the re!i,e>s anti,onopolist c)rrents by 1956J 1955.[-3] =n si,ilar fashion, /asser approved the creation of the cabinet1 level national plannin! co,,ittee in 1955, (hich (as a step intended to (eaken still f)rther the infl)ence of capitalists in the fashionin! of ind)strial policy. By 1953, and, i,portantly, prior to the se+)estration of Irench1 and British1o(ned enterprise, /asser appointed E-4i4 9id+i, a ,ain architect of

etatis, in 8!ypt, to head the ne(ly created Ginistry of =nd)stry.[-1] &he infl)ence of E=,ari and allied investors in vario)s policy arenas 5e.!., the re!i,e>s p)blic invest,ent priorities and their financin!, the e@panded U.9. contrib)tion in land1refor, and ind)strial1develop,ent policies, the revision of the ,inin! la(; (as a bar!ain (hose ter,s the RCC probably had relatively little capacity to shape, at least initially, tho)!h the ,ilitary (o)ld !rad)ally adopt a ,ore openly clientelist policy to(ard capitalist factions. -t the sa,e ti,e, the -,ericans see,ed no less (ary of the oli!archy than 8!ypt>s ne( r)lers, and they (ere no less i,plicated, finally, in pro,otin! an alternative set of C(eakerD 8!yptian capitalist elites. 9pecifically, the U.9. 9tate Fepart,ent, like the British Iorei!n ?ffice in the 19"#s 5see Chapter "; la)nched a ca,pai!n of its o(n a!ainst E-bb)d. 'ithin ,onths of the co)p, representatives of '. R. Lrace and Co,pany infor,ed the B)rea) of /ear 8astern -ffairs of their interest in !oin! for(ard (ith plans to b)ild a paper ,ill in 8!ypt. E-bb)d (as )ndo)btedly pressin! his ne( U.9. partners on s)pplyin! the hard c)rrency re+)ired, hopin! a,on! other thin!s to de,onstrate his contin)in! co,,it,ent and indispensability to 8!ypt>s ind)strial develop,ent. &he 9tate Fepart,ent (as e+)ally interested in assistin! the ind)stry1b)ildin! efforts of 8!ypt>s ne( ,ilitary re!i,e. =t is especially note(orthy, therefore, that -ssistant 9ecretary :enry Byroade and his advisers in this case pressed the U.9. ,)ltinational to abandon E-bb)d and find an alternate set of local investors before )ndertakin! the pro2ect.[-)]

Pipe Drea(s" The 6irage of Aoreign 4n est(ent in Egyptian 4S4

&he Revol)tion>s co)rse (as relatively open1ended, b)t (e have tended to conf)se the e@i!encies of re!i,e consolidation and the e@tre,ely li,ited capacities of the 2)nta (ith the officers> alle!ed ideolo!ical incoherence 5or, alternatively, their pra!,atis,;. =n the case of the -s(an electrification pro2ect 5Chapter 5;, vast stretches of the policy,akin! terrain (ere effectively sei4ed by, or conceded to, pre1e@istin! elite net(orks (ho p)rs)ed their o(n a!endas. ?ne of the ,ore controversial and s)rprisin! policy initiatives of the Revol)tion, !iven the thr)st of nationalist disco)rses before and since, (as the reversal of ,any of the 8!yptiani4ation policies of the late 196#s0la(s !overnin! forei!n invest,ent, oil prospectin! and co,pany for,ation0for the p)rpose of attractin! ne( flo(s of forei!n capital to the co)ntry 5?>Brien 1933: $1J$B7 Ginistry of Co,,erce and =nd)stry 1955: 166J1357 'aterb)ry 19%": 3#J3", 1B"J1"6;. -)thorship of this packa!e rests chiefly (ith the I)>ad = 9ociety for Political 8cono,y, .e!islation and 9tatistics 5ro)!hly, 8!ypt>s first econo,ic1policy think tank;, (here ,)ch of it had been o)tlined as early as 195#J1951. =t (as i,ple,ented by :il,i Bah!at Bada(i, the society>s assistant secretary !eneral. Bada(i, (ho beca,e the first ,inister of co,,erce and ind)stry after the co)p, (as one of the key

voices in the s),,er 1951 debate over Point =V aid.[-*] &ho)!h virt)ally )nreco!ni4ed )ntil no(, Point =V (as the instit)tion thro)!h (hich the &r),an and 8isenho(er ad,inistrations paid for the -,erican b)siness leaders, econo,ists, en!ineers and other technical cons)ltants (ho helped desi!n and pro,ote the Revol)tion>s early ind)strial1develop,ent initiatives, (hich (ere associated, perhaps too e@cl)sively, (ith /asser, the ,ilitary re!i,e and technocrats in the /PC.[-+] &he /PC (as itself a reconfi!)ration of the b)siness1do,inated advisory co)ncil on econo,ic policy created by the 'afd. Gore i,portant, d)rin! the s),,er and fall of 1951, the 'afd !overn,ent and the I)>ad = 9ociety (ere ne!otiatin! (ith the -,ericans in Cairo to cooperate in a co,prehensive develop,ent plan for the political econo,y. 'ithin (eeks of the co)p, -,bassador Caffery and the Point =V office (ere pressin! the ne( pre,ier, Gahir 5no do)bt in con2)nction (ith 8!yptian c)rrents;, to revive the 'afdJI)>ad = pro2ect in the for, of a Cnational plannin! bodyD to s)rvey 8!ypt>s econo,ic potential and establish priorities for invest,ent.[--] Gahir +)ickly approved the plan, b)t it (as his s)ccessor, /a!ib, (ho (o)ld follo( thro)!h (ith the initiative. Gonths before the /PC held its first ,eetin!, the 9tate Fepart,ent contracted (ith the Ca,brid!e, Gassach)setts, cons)ltin! fir, -. F. .ittle for an initial ^"# tho)sand s)rvey of the econo,y7 this s)rvey for,ed the basis for the s)bse+)ent, fo)r1year1lon! ^"##J5## tho)sand -. F. .ittle ,ission to 8!ypt. -nd -. F. .ittle selected a hi!h1profile U.9. e@ec)tive to lead the ,ission and advise /a!ib on ind)strial policy.[-.] &he line of contin)ity bet(een the 'afd andpost1'afd era is clear in this case, tho)!h the -,ericans helped to ens)re it. &ho,as Cabot, the for,er president of United Ir)it (ho had helped or!ani4e the 9tate Fepart,ent>s forei!n1aid pro!ra,, visited 8!ypt in the (inter of 195BJ195", and his Iebr)ary 195" report to the inco,in! 8isenho(er ad,inistration )r!ed s)pport for ind)strial develop,ent in 8!ypt (hile layin! o)t a virt)al bl)eprint of s)bse+)ent !overn,ent refor,s in co,pany la(, ,inin! la(, ta@es, tariffs and profits re,ittance.[-0] 9i@ ,onths later, the /PC p)blished its fo)r1year p)blic and private invest,ent pro!ra,, (hich (as derived fro, the proposals of the Ca,brid!e cons)ltin! fir, for e@tendin! 8!ypt>s road net(ork and investin! in tire asse,bly, food1 processin! ind)stries, oil prod)ction, to)ris,, etc.[-1] By 1956, the -,ericans had co,,itted ,ore than ^6# ,illion for an 8!yptian develop,ent strate!y that rese,bled other U.9.1backed =9= pro!ra,s then bein! )ndertaken thro)!ho)t the developin! (orld 5/olt and Ga@field 199#7 C&he I)t)re of Point Io)r,D -e* 6or$ Times 'aga8ine B3 9epte,ber 1956;. &ho)!h /a!ib and the RCC faced !ro(in! criticis, for its increasin!ly open alliance (ith the -,ericans, /asser hi,self defended the re!i,e, for instance, before a hostile !ro)p of st)dents in -le@andria protestin! the Point =V pro!ra,: 'e cannot live in isolation, ref)sin! any helpin! hand, beca)se (e

think it has )lterior ,otives behind it. =t ,ay have happened before, b)t it (as (e (ho let it, beca)se (e (ere not alert .R 'e sho)ld !et rid of this co,ple@ and (ith it the policy of isolation and fear. 'e sho)ld accept any kind of assistance (hether it be in the for, of Point =V or any other7 and (e sho)ld proceed (ith all the pro2ects that (e have started, conde,nin! once and for all this erroneo)s co,ple@.[-2] &he early e,phasis on forei!n capital and e@pertise, to!ether (ith the !ro(in! pro,inence of aid as a key forei!n1policy proble, in 1956J1953, reflected so,e of the sa,e )nderlyin! factors0the lack of hard1c)rrency reso)rces and ad,inistrative capacity0that ha,pered the 'afd>s even ,ore ,odest develop,ent efforts.[.3] 'hat is perhaps ,ore re,arkable abo)t invest,ent policy after 195B is that the -. F. .ittle cons)ltants and their clients ,ay have act)ally believed the forecasts of X8 $ ,illion ann)ally in ne( direct forei!n invest,ent flo(in! to 8!ypt as a res)lt of i,prove,ents in the ever el)sive Cinvest,ent cli,ateD or of do)blin! e,ploy,ent in ,an)fact)rin! ind)stry bet(een 1955 and 1935.[.1] =nternal 'hite :o)se assess,ents diver!ed sharply fro, those of -. F. .ittle, Caffery and others of the Revol)tion>s ,ost avid boosters inside the -,erican 8,bassy: C=t is do)btf)l that the re,oval of all ad,inistrative i,pedi,ents (o)ld prod)ce a si4able inflo( of forei!n capital. &his is beca)se at the present ti,e there appears to be a relatively s,all n),ber of !ood invest,ent opport)nities in 8!ypt.D[.)] &his ,ore pessi,istic line of analysis can be traced back as early as the ,id1 19"#s, in the assess,ents by senior e@ec)tives of =C=, (ho, as disc)ssed in Chapter ", (ere at the ti,e part of the pioneerin! (ave of the (orld>s leadin! che,ical prod)cers investin! in overseas ,an)fact)rin!.[.*] -nd (hile =C= fo)nd lon!1ter, invest,ent prospects )ninvitin!, those ,)ltinational o(ners and ,ana!ers (ho did risk e@pansion into niches of the 8!yptian ,arket in the 19"#s and 196#s, s)ch as -nderson Clayton, obvio)sly did not find so1called ad,inistrative i,pedi,ents partic)larly onero)s or b)rdenso,e. &he )lti,ate tar!ets of the ne(, liberal forei!n1invest,ent la(s (ere international oil co,panies. =n 1969, the t(o ,)ltinational s)bsidiaries that controlled 1## percent of do,estic oil prod)ction and ro)!hly $5 percent of all sales of refined prod)cts in 8!ypt had stopped all e@ploration operations, )sin! as a (ell1p)blici4ed e@c)se the /)+rashi !overn,ent>s 8!yptiani4ation ca,pai!n. <et, it is clear fro, the co,panies> correspondence (ith -,erican officials that the core of the disp)te (as the pre1195B 8!yptian state>s a)dacio)s atte,pt 5in the co,panies> vie(; to set the sellin! price for indi!eno)s cr)de and to increase royalty rates for ne( prod)ction. &he ne( /a!ib !overn,ent !ranted additional !enero)s concessions to U.9. independents s)ch as Continental ?il 5Conoco; and Cities 9ervice in ret)rn for prospectin! ne( fields, pres),ably (ith the vie( of press)rin! the

established prod)cers, -n!lo18!yptian ?il 5Royal F)tch 9hell; and Gobil, b)t the a!ree,ent event)ally reached (ith the lar!er fir,s in 1956 left both the old rate and the royalty str)ct)re intact.[.+] &his (as ar!)ably one of the ,ost i,pressive displays of bar!ainin! po(er by forei!n fir,s in decades and )lti,ately (as the so)rce of ,ost of the ne( private forei!n capital invested in 8!ypt bet(een 195" and 1931. &he oil (as obvio)sly vital to the ne( re!i,e. .ocal investors !ained so,e of the rents fro, tradin! the concession ri!hts. B)t the U.9. e,bassy>s atte,pt to hail the e,ploy,ent1 creatin! benefits of this ne( invest,ent activity 5the oil ind)stry is hi!hly capital1intensive; rin!s especially hollo(. -doption of a ,ore syste,atic =9= invest,ent strate!y after 195B ,ay have been overdeter,ined, b)t it is i,portant to reco!ni4e that -,erican e@pertise and financial assistance (ere (ei!hin! in on one side of a debate. &ho)!h (e have tended to see post1195B ind)strial policy as a sea,less contin)ation and e@tension of pre1195B tendencies, and th)s a policy )ndertaken on the behalf of national capital, it t)rns o)t that se!,ents of the b)siness co,,)nity had be!)n to +)estion the lo!ic of =9= at this precise ,o,ent. =n the case of the te@tile ind)stry, the co)ntry>s bi!!est ind)strial sector and e,ployer, = fo)nd evidence of sharp disa!ree,ents over the best (ay to sec)re the ind)stry>s f)t)re prosperity, incl)din! calls for a ,ore e@port1oriented ind)strial policy. -s chair,an of the s)!ar ind)stry, E-bb)d s)pported the ar!),ent for dere!)latin! prices and re,ovin! e@port controls. -nd tho)!h it is !enerally )nreco!ni4ed, in late 1951 the Iederation of =nd)stries had co,e o)t in favor of a ne(, proe@port re!i,e.[.-] =n a revealin! intervie( (ith the -. F. .ittle cons)ltants in early 195", Robert Lasche, the ,ana!in! director of Iilat)re /ationaled>8!ypte and the son of the person (ho had been the co)ntry>s leadin! te@tile ,an for a !eneration, insisted that the f)t)re of the ind)stry hin!ed on openin! )p ne( e@port ,arkets. -t the sa,e ti,e he vehe,ently re2ected the ar!),ent that his spinnin! and (eavin! co,ple@ or the ind)stry as a (hole had been h)rt by the e@cl)sive )se of 8!yptian lon! and e@tra1lon! staple cotton as a ra( ,aterial, ,arshalin! fi!)res to sho( (hy i,ports of so1called lo(1 +)ality cottons (o)ld cost too ,)chH[..] =nstead, he clai,ed that the sin!le factor ,ost responsible for increasin! the costs of prod)ction (as the e@istin! labor re!i,e and, in partic)lar, the obstacles that the !overn,ent had erected to red)cin! e,ploy,ent levels at the ,ills.[.0]

The E'pansion of the Pu&lic Sector

Conservative econo,ists of the era, s)ch as Ray,ond Gikesell, attacked the precise kinds of develop,ent policies bein! pro,oted by U.9. a!encies in Cairo and else(here for departin! fro, cherished free1trade principles, enco)ra!in! Cstate o(nership and controlD and Ctheir bias to(ard plannin! and a!ainst free enterprise.D[.1] =f, indeed, preferred -,erican desi!ns for developin! co)ntries i,plied ne( for,s of state intervention 5Co(nership and controlD; in 8!ypt, and this priority coincided (ith that of (o)ld1be 8!yptian planners 5e.!., E-4i4 9id+i; and others (ho constit)ted the

e,er!in! anti,onopolist c)rrent (ithin the ne( r)lin! !ro)p, the b)siness oli!archs (ere 2)st as clearly opposed to the e@tension of a direct state role in the o(nership and operation of their private ind)strial sinec)res. &h)s, as ?>Brien notes, state a!ents involved the,selves in the finance and ,ana!e,ent of these pro2ects CPdQespite opposition fro, the Iederation of 8!yptian =nd)striesD 51933: %6;. 'aterb)ry instead ar!)es that p)blic o(nership (as a belated response to lon!standin! Cprivate sector appeals for !reater state sponsorshipD of ind)strial develop,ent 519%": 31;. Records fro, the ti,e s)!!est that the specific distrib)tion of local private and p)blic invest,ent shares in vario)s ind)strial sectors after 195B (as the o)tco,e of an on!oin! contest, alon! the lines of the electric1po(er sector disc)ssed in Chapter 5. Certainly, so,e investors actively resisted atte,pts by !overn,ent a!encies to clai, an e+)ity interest in ne( i,port1 s)bstit)tion enterprises. Ior instance, 9ayyid GarEi and local partners in the /ational Paper Co,pany apparently had to divert the plans of Iree ?fficer Ga!di :asanha,4a to b)ild and r)n the proposed ne( paper ,ill as a state1 o(ned enterprise.[.2] &his tendency !re( ,ore prono)nced over ti,e. &he local partners in a ,)ch1to)ted, 1956 a)to,obile tireJ,akin! vent)re 5a pro2ect ori!inally proposed by -. F. .ittle; resisted press)res fro, p)blic a)thorities to ,ake the state a partner in the factory.[03] <et in another case, despite the relatively s,all a,o)nt of capital involved 5X8 B## tho)sand;, the state e,er!ed as the lar!est shareholder in the ne( 8dfina food1processin! co,pany, re!istered officially in early 1953.[01] -nd tho)!h it is ar!)ed that the i,pet)s for p)blic o(nership, at least )ntil the (atershed e@propriations of British and Irench properties in 1953J195$, (as a response to private sector fail)re, E-bb)d>s proposal to take an e+)ity share in the state>s e@panded petrole),1refinin! capacity (as fir,ly reb)ffed by the 2)nta 5 $h%ar al-6a*m 11 -pril 195";. &he Revol)tion provided an e@panded arena for etatist c)rrents that had e,er!ed after 'orld 'ar ==, and the res)lts (ere +)ickly apparent in vario)s sectors, fro, fertili4ers, constr)ction, heavy ind)stry and petrole), to the private press. &he rail(ays had of co)rse never been privati4ed and (ere the real core of 8!ypt>s conte,porary state1o(ned enterprise sector. &he decision to e@pand the capacity of the !overn,ent petrole), refinery, another key party of the conte,porary landscape, (as taken late in the 196#s, and carried o)t (ith the help of U.9. fir,s7 this pro2ect (as endorsed and e@tended by the ,ilitary re!i,e. &he ,odel of an independent hydropo(er co,,ission devised in the early post(ar years (as adopted for overseein! the constr)ction of the ne( !overn,ent1o(ned po(er stations at the old and 5proposed; ne( -s(an da,s 5-y)bi 19%#: B1%JBB#7 =ssa(i 193": 567 'aterb)ry 199B;. &he ne( re!i,e sho(ed no partic)lar inclination to divest itself of the diverse ind)strial portfolio !ained as a res)lt of the e@propriation of the property of the kin! and his fa,ily in 195B, alon! (ith the property of e,er!in! ene,ies of the state, s)ch as the -b) al1Iaths, investors (hose

properties (ere confiscated in 1956 follo(in! the Garch Crisis. &h)s, the /a!ib and /asser !overn,ents e,er!ed as probably the sin!le lar!est do,estic shareholder in the /ational Bottlin! Co,pany, (hich prod)ced and distrib)ted Pepsi Cola, and a ,a2or shareholder in the 8,pain>s old po(er1 s)pply co,pany.[0)] <et since capitalists like E-bb)d had opposed the e@tension of state o(nership in sectors like po(er and che,icals, precisely beca)se they envisioned the, as ne( and l)crative invest,ent sites, it see,s safe to ass),e that the oli!archs vie(ed the increasin! s)pport for p)blic or ,i@ed o(nership of ne( ind)stries inside the re!i,e, correctly, as the ,ost o,ino)s of the threats directed a!ainst the,. &ho)!h analysts have described the ne( re!i,e>s ind)strial policy as a si,ple e@tension of the previo)s, private1enterprise1oriented econo,y, (ith the ,ost )ni+)e ele,ent bein! the n),ero)s ne( incentives desi!ned Cto enco)ra!e do,estic capital invest,ent,D this !enerali4ation is ,isleadin! 5=ssa(i 193": 5B7 Fek,e2ian 19$1: 1BBJ1B"7 Oaalo)k 19%9: B6JB$;. 9o, too, are the vario)s e@planations for the ostensible lack of positive response by 8!ypt>s bi!!est investors. &he proble, lies in the fail)re to see ho( for over seventy years virt)ally all do,estic ind)strial invest,ents had rested on privile!ed access to p)blic reso)rces, s)bsidies and other incentives. ?nce (e factor in the increasin!ly restrictive re!)latory environ,ent, (hich (as (hat p)blic o(nership )lti,ately ,eant, the !overn,ent>s ter,s after 195B are better )nderstood as disincentives to cooperate, and (e can see ho( coercion ca,e to play the do,inant role in the re!i,e>s )nfoldin! relations (ith capitalists like E-bb)d.

The End of the #usiness 8ligarchy

=n a series of bold and )nprecedented actions bet(een 1956 and 1953, /asser and his co,rades t)rned on its head the seventy1year1lon! re!i,e that had !overned capital in 8!ypt and bro)!ht to an end the era in (hich investors !overned the econo,y. &he ,ilitary r)lers (ere e@plicit abo)t this pro2ect, conceived of ter,s of riddin! 8!ypt of C,onopolistic capitalis,D and elevated as a chief ob2ective of the Revol)tion by 1955. /asser>s allies in the e@pandin! -,erican co,,)nity in Cairo, top1heavy (ith b)siness,en, bankers, aid specialists and spies, !enerally !ave this pro2ect their contin)ed s)pport. &he sta!es of this pro2ect are easily discerned, be!innin! (ith the Garch Crisis of 1956, (hen /asser tri),phed over /a!ib and the /asser1 do,inated RCC cr)shed the ,ove,ent to ret)rn the co)ntry to parlia,entary r)le.[0*] Realistically or not, late in Garch, the 'afd>s cadres (ere anticipatin! 9ira! al1Fin>s tri),phant ret)rn as pri,e ,inister and C,an of the year.D[0+] Fays later, the -,erican e,bassy (ei!hed in on the side of police1or!ani4ed cro(ds and re!i,e1sanctioned strikers chantin!, C/o political parties and no de,ocracy,D C.on! live the Revol)tion.D Ior instance, on Garch "#, Caffery stressed the Peronist C)ndertonesD in /asser>s strate!y, notin! ho( CPoQr!ani4ed labor has been deliberately and effectively )sed for political p)rposes on nation1(ide scale for first ti,e in 8!yptian history and ,)st henceforth be e@pected to ,ake its voice increasin!ly

heard.D &he a,bassador concl)ded Cthat the res)lts fro, o)r point of vie( can be called satisfactory.D[0-] =nvestors (ho sided openly (ith /a!ib, incl)din! the sta)nchly pro1-,erican finance ,inister, E=,ari, (ere a,on! the first to pay the price for opposin! the consolidation of a C,ilitary dictatorshipD 5Caffery>s ter,;. E=,ari and other technocrats1t)rned1b)siness,en (ho had 2oined the re!i,e in 195B, s)ch as E-li al1Liritli, (ere forced fro, office. U.9. e,bassy observers correctly !a)!ed the broader i,plications of the p)r!e, ar!)in! that it (as the effect of /asser>s t)rn to labor leaders at a critical point and ,arked, ,ini,ally, a shift in the re!i,e>s social coalition. E=,ari>s brand of fiscal conservatis, (as bein! sacrificed.[0.] Gore o,ino)sly, the o(ners of al'isri and pro,inent 'afd party f)nders, the -b) al1Iath brothers, (ere tried and convicted for treason, and lost their printin! press, (hile a score of ancien r0gime party elites (ere stripped of all political ri!hts.[00] =n the follo(in! ,onths, the -,ericans re(arded the /asser re!i,e (ith a ne(, ^6# ,illion aid packa!e as the RCC (ent on to si!n the Canal Base a!ree,ent (ith Lreat Britain. &he second sta!e in the pro2ect be!an in early 1955, coincidin! (ith the ,ilitary leaders> increasin! preocc)pation (ith econo,ic develop,ent iss)es s)ch as the -s(an Fa,. &his sta!e involved the e@pansion of state a)thority to the re,ainin!, non1party1based instit)tions fro, (hich b)siness oli!archs still acted to shape basic conto)rs of the political econo,y. -s the ne(ly appointed ,inister of state for prod)ction affairs, :assan =brahi,, a ,e,ber of the RCC, took over s)pervision of the /PC fro, its no,inal head, b)siness,an :)sha,4a Iah,i, and 9id+i 9)lay,an, one of the ori!inal Iree ?fficers, (as na,ed as its replace,ent secretary !eneral.[01] -lon! these sa,e lines, the RCC en!ineered its p)r!e at the Ginistry of Co,,erce 5b)siness,an :assan GarEi resi!ned; and its land,ark corporatist reor!ani4ation of the Cha,bers of Co,,erce, reservin! for itself the ri!ht to appoint one1half their directors and then f)rther centrali4in! control thro)!h the creation of a ne( ),brella confederation 5Bianchi 19%9: 135J133, 13%J 139;. CRefor,D of the old Iederation of =nd)stries soon follo(ed. Gore cr)cially, tho)!h, the re!i,e str)ck at the heart of the b)siness oli!archy and a key instit)tion of 8!yptian capitalis,0na,ely, the pattern of centrally controlled, cross1sectoral holdin!s and interlockin! directorates that co,prised the co)ntry>s vario)s b)siness !ro)ps. By a,endin! the basic co,pany la( in 1955, the re!i,e li,ited the n),bers of fir,s for (hich individ)als co)ld serve as directors 5si@; or ,ana!in! directors 5t(o;7 at the sa,e ti,e it forced co,pany directors to retire after reachin! the a!e of si@ty. &he decrees affected so,e B## b)siness,en fro, fa,ilies (ho had steered the econo,y for over t(o !enerations0incl)din! Gah,)d 9h)kri, A)les Nlat, -tta E-fifi, :)sha,4a 9irri, -le@andre Benaki, 'ahib F)ss, -slan Cattao)i, -khno)kh Iano)s, -lbert Cic)rel, -h,ad R)shdi, Rene =s,al), and Aoseph Nfo)ry.[02] ?>Brien clai,ed that this ,eas)re (as desi!ned to stren!then the ri!hts of shareholders, repeatin! the old canard that co,pany directors 5and interlockin! directorates; played no )sef)l role in co,pany policy,akin! 51933: $"J$6;. B)t, as the list above attests, those affected (ere pioneerin! investors and do,inant fi!)res in the b)siness

co,,)nity. &he re!i,e (ent on to en!ineer the retire,ent of the leadin! li!hts at the pinnacle of local finance, incl)din! 9ha,si, the lon!1ti,e director of the /ational Bank of 8!ypt7 E=,ari, (ho had only recently been na,ed ,ana!in! director of Bank Gisr7 the Gisr !ro)p>s chair,an, E-bd al1Gaks)d -h,ad7 and its lar!est shareholder, E-bb)d.[13] &ho)!h it is !enerally not disc)ssed in the standard econo,ic histories, both fir,s (ere declared p)blic )tilities in the sprin! of 1955. ?ther fir,s in the finance sector reported intense press)re to accept !overn,ent1sanctioned appointees )nder threat of bein! declared p)blic )tilities as (ell. &he ne( ,inister of finance and one of the architects of the e,er!in! etatist political econo,y, E-bd al1G)ni, al1 Ways)ni, presided over this partial reconfi!)ration 5Cdeprivati4ationD; of the finance sector, (hich (as driven at least in part by concern for ,obili4in! the enor,o)s reso)rces necessary for the hi!h da, pro2ect.[11] /asser provided a bl)nter defense of these interventions, accordin! to internal U.9. e,bassy doc),ents, havin! re,inded -,bassador Byroade that one of the ob2ectives of the Revol)tion (as to rid 8!ypt of C,onopolistic capitalis,D and the Cbi! capitalistsD (ho, the re!i,e had l),ped to!ether (ith its other foes in the Garch Crisis.[1)] -t the sa,e ti,e, a ,ore e@plicitly pop)list /asser bro)!ht the sa,e the,e to the fore in his p)blic appearances, incl)din! a (ell1p)blici4ed -pril 1955 address to ,ilitary officers, (here he stressed the !overn,ent>s ob2ective of endin! C,onopoly and capitalist do,inance of !overn,ent.D =,portantly, and a!ain accordin! to -,erican reports, /asser advocated nationali4ation of the co)ntry>s bi! ind)stries.[1*] ?>Brien>s 51933: 3%J39; disc)ssion of *idespread s)pport for the !overn,ent>s policies fro, the Cha,bers of Co,,erce, and the chair,en of Bank Gisr and the /ational Bank of 8!ypt ,)st be eval)ated in li!ht of the direct interventions by the re!i,e at this precise moment# U.9. acco)nts speak in the sa,e period of !ro(in! )nease a,on! bi! investors. &he third phase or co,ponent of the rene(ed ca,pai!n a!ainst the oli!archs, therefore, is ,arked by /asser>s follo(in! thro)!h on his proposal and sanctionin! the takeover of the co)ntry>s oldest e@istin! ,onopoly, the s)!ar ind)stry, in -)!)st 1955, an action directed specifically a!ainst the co)ntry>s sin!le bi!!est capitalist, E-bb)d. &he prete@t for the se+)estration (as a ten1year1old disp)te over the state>s share of the ,onopoly rents, b)t ,ore (as involved, incl)din! E-bb)d>s s)spect political loyalties and rel)ctance to s)bordinate his fir,s and their reso)rces to the state1b)ildin! pro2ects of technocrats like Ways)ni. -s the U.9. e,bassy analysts ar!)ed, the re!i,e (as both fr)strated by the or!ani4ation of E-bb)d>s !ro)p and C(o)ld like to break his po(er b)tRhas been afraid to do so beca)se of the effect on his ind)strial enterprises, (hich are so i,portant to the co)ntry>s econo,y.D[1+] &he reco)rse to e@propriation (as, ,anifestly, a si!n of the re!i,e>s inability to enforce its o(n policy preferences in a critical econo,ic sector 5Cha)dhry 199";. -t the sa,e ti,e, it represented an escalation of the re!i,e>s ca,pai!n to s)bordinate the ,a2or centers of po(er in the

do,estic political econo,y0the local fa,ilies (ho constit)ted the core of the vario)s investor coalitions and their fir,s0via an increasin!ly coercive alternative to re!)lation. &h)s, by the end of 1955, E-bb)d had been forced fro, the board of Bank Gisr, (hile the se+)estrator of his s)!ar ,ills and distillery 2oined the board of the ,assive bank1holdin! co,pany, to!ether (ith /asser>s confidant and e@1FG/. 5co,,)nist party; ,e,ber, -h,ad I)>ad, as the bank beca,e a +)asi1!overn,ent a!ency 5-h,ad :a,r)sh 19%6: 51J56;. &he partial nationali4ation of the E-bb)d !ro)p in 1955J1953 is conventionally described as a depart)re fro, the ,ain tendency in the !overn,ent>s va)nted policy of Cenco)ra!in! the private sectorD )ntil the ?ctober 1953 9)e4 'ar, and the se+)estration of Irench1, British1 and Ae(ish1o(ned fir,s that follo(ed 5the 8!yptiani4ation of the econo,y; is )s)ally described as ,arkin! a policy shift deter,ined first and fore,ost by Ce@ternalD factors. &his line of analysis necessarily dee,phasi4es the re,arkably e@plicit intensification of the etatist1oriented, anti,onopolist disco)rse of the re!i,e after the Garch Crisis, incl)din! the brandin! of the b)siness oli!archy as political han!ers1on fro, another era (ho obstr)cted the ret)rn to de,ocracy. -nd as ?>Brien correctly notes, the ne( A)ne 1953 constit)tion reflected and e@tended this ideolo!ical and pro!ra,,atic shift 51933: %5;. Cr)cially, = have fo)nd the first clear evidence that the re!i,e (as preparin! plans to take over other ind)stries. 9pecifically, -,erican records report n),ero)s ,eetin!s bet(een 8!yptian officials and forei!n cons)ltants in 1955 to prepare for the for,al nationali4ation of the po(er sector. &he state (as already a ,inority holder 56# percent;, a!ain ,ainly thro)!h e@propriation of the kin!>s holdin!s in lar!e vent)res like the old 8,pain !ro)p>s po(er1!eneration co,panies 5by 1955 the 8,pain !ro)p (as bein! represented by a Irench state a!ency actin! as tr)stee;. -ccordin! to U.9. e,bassy doc),ents, /asser (as plannin! to nationali4e the re,ainin! privately o(ned shares, follo(in! his ne(, pop)list orientation.[1-] -lon! these sa,e lines, on B1 A)ly 1953 the !overn,ent for,ally absorbed the s)!ar co,pany, declarin! it a state1o(ned enterprise, tho)!h this passed relatively )nnoticed in li!ht of the ,ore dra,atic takeover of the Irench1 and British1o(ned 9)e4 Canal Co,pany five days later. -fter A)ly B3, tho)!h, the re!i,e fo)nd it ,ore )sef)l to pro,ote the fiction that E-bb)d>s s)!ar co,pany (as another tentacle of the forei!n octop)s that had the national econo,y in its !rip.[1.] /o (onder that -,ericans in Cairo described the canal1co,pany takeover and related e@propriations as the o)tco,e of trends Calready clearly evident before the PA)ly1/ove,ber 1953 9)e4Q crisis.D[10] E-bb)d>s actions in the (ake of the earlier and, for the local oli!archs, ,ore decisive Garch Crisis reveal an investor desperately ,ane)verin! to s)rvive the re!i,e>s escalatin! assa)lt on b)siness privile!e. -s (e have seen, like virt)ally all other 8!yptian elites, he had at least a decade earlier reco!ni4ed the !ro(in! involve,ent of the U.9. e,bassy and U.9. capital in 8!ypt and

atte,pted to shape this evolvin! relationship to his o(n advanta!e. B)t this bar!ain had al(ays been one piece of a co,ple@ strate!y, its ter,s reflectin! the strate!ic position occ)pied by E-bb)d and other local investors in post119BB 8!yptian politics, econo,y and society. 'ith the collapse 5or the defeat; of the liberal pro2ect bet(een 195# and 1956, the -,ericans (ere E-bb)d>s last hope, yet ,ost of the, (ere bettin! on the state. -s the Garch Crisis )nfolded, E-bb)d (as once a!ain abroad, (here, accordin! to the boiler plate that (as the -,in brothers> specialty, the Ckin! of 8!yptian ind)stryD (as b)sy plannin! ne( 2oint vent)res, incl)din! an oil1 prospectin! co,pany, a paper ,ill, the e@pansion of his che,ical co,ple@, and other deals (hose details co)ld not be revealed 5 $h%ar al-6a*m $ Garch 19567 al- $h%ar 16 A)ly 1956;. &he pro2ects !re( ,ore e@pansive a year later, as he traveled in .ondon, Paris, /e( <ork, 'ashin!ton, Gia,i and 9an Irancisco. &he Cairo dailies reported a final a!ree,ent on a ne( national airlines, ,eetin!s (ith the petrole), fir,s that (o)ld be Ccooperatin! (ith hi,D in the 'estern Fesert, and the si!nin! of a ne( ^3 ,illion loan a!ree,ent (ith the 8@=, Bank, alon! (ith an acco)nt of a recent intervie( (ith the 'iami Daily -e*s. E-bb)d had ass)red readers in Ilorida that /asser (as Cb)ildin! the !overn,ent on a stron! de,ocratic basis,D a clai, that (as no ,ore tr)e than any of these alle!ed ne( b)siness tri),phs 5al- hram 1B Gay 19557 al- $h%ar 15 Gay 1955;. E-bb)d had little s)ccess after 195B in co,pletin! the pro2ects that had been planned before the Revol)tion, and his !ro)p>s three decades of e@pansion ca,e slo(ly to an end. &he e@propriation of the s)!ar ,ills and distillery, (hich follo(ed closely on the heels of the false 8@=, Bank loan story, ,ay have been connected to this disappointin! invest,ent record, tho)!h the takeover effectively ended E-bb)d>s plans (ith '. R. Lrace and the 8@=, Bank for the paper ,ill. ?ther reports fro, the period (ere (ild e@a!!erations at best. Ior instance, he had, in fact, be!)n to develop a b)siness relationship (ith '. -lton Aones, the investor (ho o(ned the lar!e U.9. independent oil fir,, Cities 9ervice, and (as a partner in concessions for the 'estern Fesert and other parts of 8!ypt. &ho)!h E-bb)d liked to clai, he (as b)sy developin! the co)ntry>s oil reso)rces, the reality is that an offer by Aones for a 1# percent share in Cities 9ervice>s part of the consorti), had never been taken )p. Gore i,portant, Aones (as conte,platin! takin! a lar!e stake in E-bb)d>s 9)e4 factory b)t Cities 9ervice instead abandoned the 8!yptian concession by 195$.[11] =n other (ords, E-bb)d (as a!reein! vol)ntarily to cede part of his e,pire to o)tside investors, reversin! a pattern of protectin! and e@pandin! the e@tent of personal o(nership and control that had ,arked all his invest,ent activity over three decades. &he only e@ception to this pattern had been the defeat at the hands of the 8,pain !ro)p in the (ar bet(een the b)s and tra, line interests in the ,id119"#s. &his )nprecedented ,ove (as no do)bt related in part to the diffic)lties in financin! the hard1c)rrency costs of e@pansion. -t the sa,e ti,e, there (as a ,ore e@plicitly political lo!ic

involved, in that e@panded -,erican participation in his che,ical1 ,an)fact)rin! vent)re 2)st ,i!ht serve to protect hi, a!ainst the threat of creepin! nationali4ation of the oli!archs> holdin!s. &he e@pansion of the 9)e4 plant did take place in sta!es after 195B, tho)!h it is diffic)lt to be precise abo)t this develop,ent or to deter,ine the e@tent of E-bb)d>s personal invest,ent. - plant to ,an)fact)re nitric acid (as b)ilt at the site, for )se by the ,ilitary in the b)ddin! ,)nitions sector. &his plant (as co,pleted and preprod)ction final testin! (as )nder(ay by Garch 195$. 'hen Aones declined to invest in the 9)e4 plant, E-bb)d reopened ne!otiations (ith the 8@=, Bank to co,plete the ori!inal, pre1Revol)tion e@pansion plans, and the 8isenho(er ad,inistration a!reed to f)nd the pro2ect late in 195% in con2)nction (ith the Cairo s)bsidiary of Iirst /ational City Bank, the first U.9. branch bank to open in the Giddle 8ast.[12] By the ti,e the ne( plant (as finished, it (as no lon!er E-bb)d>s. :is holdin!s in Bank Gisr (ere finally nationali4ed in 193#, and his o(n !ro)p>s core fir,s (ere taken over in 1931. ?n BB ?ctober 1931, the !overn,ent se+)estered his fa,ily>s personal property and the properties of 13$ other Creactionary capitalistsD and p)t hi, on trial the follo(in! ,onth. &he char!es (ere event)ally dropped on the !ro)nds of his service to 8!yptian ind)stry. =ronically, the first co,pany he fo)nded, his contractin! and dred!in! fir,, (as the last to be taken over, in -pril 193". :e died in .ondon, ei!ht ,onths later 5al- hram 11J1" Iebr)ary 193#, B1 Fece,ber 1931, "1 Aan)ary 193B, and B9 Fece,ber 193"7 al- $h%ar B5 Fece,ber 19317 Egyptian 7a8ette BB ?ctober 19317 al-&arida al-'isriyya % -pril 193": 51B;. M M M

Su((ary" The 8rigins of EgyptDs Co(prador #ourgeoisie

=n a ,anner re,iniscent of &alEat :arb and his allies at the end of 'orld 'ar =, -h,ad E-bb)d and his rivals rode the crest of a ne(, postJ'orld 'ar == nationalist (ave thro)!h (hat t)rns o)t to have been a lon! last s),,er for 8!yptian oli!archic capitalis,. &h)s, despite the e@ceptional e@pansion of national ad,inistrative capacity d)rin! the (ar, etatis, re,ained at best a s)bordinate c)rrent inthe post(ar political econo,y, (hile bet(een 195# and 195B, theE-bb)dJ9ira! al1Fin party p)rs)ed the ,ost a)dacio)s !overnin! strate!y deployed in 8!ypt since the 9id+i dictatorship of 19"#J 19"". -!ainst the 'afd>s contin)in! po(erf)l clai, over the nation 5and its b)siness (in!>s ever ti!hter !rip over p)blic reso)rces;, opposition elites (ere red)ced to protestin! corr)ption and, even ,ore el)sively, pro,otin! refor,. -s a ,eans for ,obili4in! votes, partic)larly in the cities (here the 9aEdist party did its (orst at the polls 5despite the standard identification of the party as CrepresentativeD of the co)ntry>s national bo)r!eoisie;, the strate!y proved )seless.

'e sa( this corr)ption refor, co)nter1disco)rse deployed ti,e and a!ain a!ainst the 'afd or 'afd1led coalitions: in the late 19B#s and the ,id1 19"#s 5Chapter "; and a!ain in the 196#s 5Chapters 6 and 5;. =t ,ay have been ,ar!inally ,ore )sef)l by 1951J195B in sec)rin! the ac+)iescence of rando, intellect)als, investors and like1,inded elites to another ro)nd of palace1based ,inority r)le. B)t as (e have also seen, it see,ed absol)tely essential to the inter(ar and (arti,e interventionist narratives co,posed by British e,bassy officials. =n the 195#s, U.9. -,bassador Caffery and kindred so)ls ca,e to rely on the sa,e story. 'e can date its ori!ins precisely: -)!)st 1951, the ,onth that the 'afd>s forei!n ,inister first threatened to overt)rn the 9)e4 Canal bases treaty (ith Lreat Britain. By the fall of 1951, as the 8!yptian leadership ,ade !ood on its threat and vol)nteers be!an a ca,pai!n of ar,ed assa)lts on British personnel and property, the -,ericans deno)nced the t)rn of events as an act of desperation by a corr)pt elite tryin! to stave off its do(nfall. &hat this is one of the rare ,o,ents (hen the vie(s of the &r),an ad,inistration coincide perfectly (ith conte,porary ,ar@ist historio!raphy (o)ld see, note(orthy in and of itself, b)t = believe it points to the sa,e f)nda,ental dile,,a facin! 8!yptian co,,)nists and cr)sadin! -,erican anti1co,,)nists at the ti,e. 'hether or not they (ere desperate, the 'afd>s b)siness (in! nonetheless fashioned a strate!y that coopted broad sections of the polity, reinforced its o(n cross1class coalition and )nderc)t its rivals. &he task of pro,otin! an alternative to the E-bb)dJ9ira! al1Fin party appeared ,ore da)ntin! to those in E-bdin, Wasr al1F)bbara and 'hitehall after ?ctober 1951 than at any other point in the 'afd>s history. Unfort)nately for the 'afd, the concessions it de,anded fro, the British (ere delivered in 1956, not 1951, to a U.9.1backed ,ilitary a)thoritarian re!i,e. &he process of )nder,inin! the b)siness oli!archy and its do,inant position in the political econo,y follo(ed the e@traordinary co)p d>Ktat in A)ly 195B. &he ,echanis,s that the ne( re!i,e e,ployed are (ell kno(n, at least in their broad o)tline, and incl)ded the dis,antlin! of parlia,ent and the parties, e@propriation and redistrib)tion, ne( for,s of econo,ic re!)lation or, in place of re!)lation, nationali4ation by de!ree of key fir,s and sectors. -s (e have seen, the RCC>s anti,onopoly pro2ect, to )se its o(n ter,, )nfolded in sta!es0first, (ith the s)pport of (hat = called antioli!archic 5or (o)ld1be oli!archic; capitalists, a,on! others, and after Garch 1956 t)rnin! in a ,ore pop)list direction 5i.e., appealin! ,ore directly to sections of or!ani4ed labor;. -s (as the case (ith every other e@traconstit)tional, dictatorial !overn,ent since that of G)ha,,ad Gah,)d in 19B%, the RCC obtained ,aterial and sy,bolic s)pport fro, the do,inant forei!n po(er in the co)ntry, (hich in 195B (as the United 9tates. = took special note of the -,ericans> contrib)tion to the key phases of this )nfoldin! anti,onopoly pro2ect and, in partic)lar, their invest,ent in an e@panded p)blic sector. &he reinvention of nationalist disco)rses (as one of ,any practices (hich )nder,ined the po(er of the b)siness oli!archy. &h)s, perhaps the ,ost

re,arkable and heretofore end)rin! ,yth of the Revol)tion is that in 1953 forei!ners rather than 8!yptians controlled the co)ntry>s econo,y, or that after the C9)e4 invasionD the re!i,e reversed its policies to(ard forei!n capital !enerally. &he reality is that in sector after sector of the econo,y, po(er had shifted steadily in past decades fro, shareholders in Paris, Br)ssels and .ondon to o(ners and ,ana!ers in Cairo and -le@andria0that is, to local capital. 'ithin this local set, the 1919 !eneration of 8!yptian investors s)ch as E-bb)d, <ahya, E-fifi, Iar!hali, -ndraos, the -b) al1Iaths, and postJ'orld 'ar == risin! stars s)ch the GariEs and E=,ari ca,e to displace the positions once occ)pied by ,inority resident o(ners and ,ana!ers. 'e have dissected this process at len!th and, in partic)lar, the political bases of the 8!yptian b)siness oli!archs> rise. &he !eneral thr)st of this ar!),ent is si,ply reinforced if one looks caref)lly at the i,pact of the 1953 se+)estration of British1, Irench1 and Ae(ish1o(ned fir,s. Gost of the fir,s (ere old, locally fo)nded enterprises in sectors (here private 8!yptian invest,ent !ro)ps and their 2oint1vent)re partners had since co,e to do,inate the ,arket0for instance, in b)ildin! ,aterials, te@tile prod)ction and cotton tradin!0(ith the res)lt that !overn,ent a!encies no( o(ned additional instr),ents (ith (hich to try to alter the preferences of 8!yptian capitalists.[23] -t the sa,e ti,e, the sin!le lar!est se+)estered British asset, the X8 53 ,illion refinery and distrib)tion net(ork of 9hell ?il, (as +)ickly ret)rned to its le!al o(ners. &h)s, after 1953, the /asser re!i,e contin)ed its policy of co)rtin! the transnational oil co,panies 5and playin! the independents off of the,;. ?ther forei!n fir,s, s)ch as the -nderson Clayton s)bsidiary, the /ile Linnin! Co,pany, re,ained on e@tre,ely !ood ter,s (ith the 8!yptian a)thorities and, as late as Iebr)ary 1931, had plans for increasin! their invest,ent in 8!ypt.[21] =f (e think in ter,s of sectors, forei!n capital probably sho(ed no ,arkedly !reater propensity to invest in 8!ypt in the decade or t(o before 1953 than after, and the sa,e kinds of fir,s0oil, phar,ace)ticals, en!ineerin!, a)to,obile co,panies0re,ained actively interested in the 8!yptian ,arket thro)!h the so1called socialist era 5:ando)ssa 19$6, -h,ed 19%6, &i!nor 199#;. = a!ree (ith &i!nor that the !overn,ent sho(ed a propensity to strike ,ore advanta!eo)s bar!ains (ith forei!n capital over this period, b)t disa!ree that the ,)ltinational corporations (ere C!iven little enco)ra!e,entD or that his characteri4ation of Iord>s e@perience holds for co,panies !enerally in the 195#s and 193#s. &he ,ost i,portant i,pact of the 9)e4 se+)estration for the econo,y>s Cco,,andin! hei!htsD (as probably in advancin! the nationali4ation of the finance sector, incl)din! both branches of forei!n banks 5(hat (e have since co,e to refer to as transnational banks;, s)ch as Barclays or CrKdit .yonnais, and s,aller, local enterprises o(ned by Cforei!ni4edD 8!yptian Ae(s s)ch as the Co,,ercial Bank of 8!ypt.[2)] &he !overn,ent>s ,isleadin!ly na,ed 8!yptiani4ation pro!ra, for the bankin! sector (as desi!ned to overco,e the ineffective re!)lation of the ,oney s)pply and credit flo(s by t)rnin! the ,ain lendin! instit)tions into parastatals.[2*] /),ero)s other ind)striali4in! political econo,ies p)rs)ed si,ilar policies in the finance sector, incl)din! Ge@ico and 9o)th Norea. =n fact, in 193",

Norean President Park Ch)n! :ee clai,ed /asser as an inspiration for Norea>s o(n a)thoritarian ind)striali4ation drive.[2+] -s -,sden 519%9; and A)n!1en 'oo 51991; ,ake clear, in the 9o)th Norean case, control of the finance sector (as the ,eans to discipline private capital (hile enco)ra!in! the co)ntry>s o(n b)siness oli!archs0the Norean chae%ol 0to b)ild )p their vast private holdin!s. 9o)th Norean capitalists p)rs)ed an e@plicit strate!y of privile!ed access to reso)rces in the 195#s and 193#s to create the 9a,s)n!, :y)ndai and other ind)strial e,pires 5Gason et al. 19%#;. -s = have tried to sho(, in 8!ypt )nder /asser, b)siness1state relations ,oved in the precise opposite direction. &he le!acy of this )nfoldin! confrontation (ith 8!ypt>s o(n oli!opolists is fo)nd in places s)ch as the entry(ay to the !otha,es+)e =,,obilia B)ildin! off 9harif 9treet, (here the na,eplates of E-bb)d>s !ro)p of fir,s are still fi@ed to the (all7 in Oa,alak, (here E-bb)d>s t(in villas ho)se :el(an University>s fine arts fac)lty7 in the Bel!ravia section of .ondon, (here E-bb)d>s fa,ily no( resides7 and in key te@ts of the Revol)tion, (here 8!ypt>s co,prador bo)r!eoisie (as invented.

Notes
1. Ior back!ro)nd on the refor, efforts of the late 196#s and 195#s, see &i!nor 519%B: B#J55; and Lordon 519%9;. ?n the antire!i,e opposition ,ove,ent and the re!i,e>s response, see Beinin and .ock,an 519%$: ""5J "59, "39J"$3, "99J6#", 61BJ61$;. ?n the vie(s of b)siness,en, see for instance al- hram intervie( (ith :afi4 E-fifi, B5 -)!)st 19517 and U9RL 59, 195#J56, $$6 "1B"51, Caffery to 9tate, reportin! conversation (ith the 9aEadist party president =brahi, E-bd al1:adi. B. U9RL 59, $$6.## "11#5#, Caffery to 9tate. ". I?"$1 %#"6%, A81#13 "3, Cres(ell, 16 Garch 195#7 U9RL 59, $$6.## "1 B"51, desp. BB$5, Caffery to 9tate, B" Garch 1951. Gy disc)ssion is indebted to, dra(s heavily on, and respectf)lly dissents at key points fro, that of Lordon 519%9: 193J19$, B#6JB#3;. 6. Ior the resi!nation of :)sha,4a, see U9RL 59, 195#J56, $$6.## $1"151, desp. BB", C&he =nner 9tory of -h,ed :)ssein>s Resi!nationD7 and Lordon 519%9: B#5;. Gy readin! of the conflict as entailin! a backlash a!ainst :)sha,4a>s over4ealo)s acc),)lation of po(er at the e@pense of other ,inisterial a!encies 5rather than his i!norin! party patrona!e lines; is b)ttressed by the post1195B description of C,)ddled ad,inistration (ith all its irrationalitiesD that (as partly the o)t!ro(th of :)sha,4a>s ten)re. -y)bi 519%#: 1%%J1%9;. 5. 9ee U9RL 59, .ot Iile 95F5, Bo@ ", folder labeled CBack!ro)nd

=nfor,ation 195#,D doc),ent titled CPolitical =nstability in 8!ypt,D 9ecret 9ec)rity =nfor,ation =R 5$%B, ?ffice L=R =FR, n.d. W)otations in this para!raph taken fro, pp. 1, 5 and 16. 3. Ior :abashi>s endorse,ent of the 'afd, see U9RL 59, 195#J56, $$6.## 11115#, desp. 1B"B, Caffery to 9tate. $. 9ee, for instance, U9RL 59, 195#J56, %$6.15B1 11B$5#, Cairo, no. 1#B7 %$6.15B 511B5# Cairo, no. 1#317 %$6.15B 51B$5#, inco,in! tel. 53%7 %$6.15B 31195# Cairo, no. 16167 %$6.15B %11651, desp. B3", Caffery to 9tate7 and $$6.1" 111BB5#, Caffery to 9tate, BB /ove,ber 195#. %. 9ee the acco)nt by .as4lo P.adislasQ Pathy PPolna)erQ, :)n!arian Pro2ect, =ntervie( 1#$$, ?ral :istory Research ?ffice, Col),bia University, 19$$, p. "6. 9. Ior the controversies s)rro)ndin! the ter,s of and control over econo,ic pro!ra,s, see U9RL 59, 195#J56, $$6.1" $11#5#7 $$6.1" $1B95#7 $$6.1" 111BB5#, Cairo 11937 and $$6.1" 111B55#, Cairo 1BBB. 1#. U9RL 59, 1965J69, %%".359 $1569, Cairo 8,bassy to 9tate7 Egyptian 7a8ette# 19 -pril and 15 Fece,ber 195#7 U9RL %6, Cairo Post Iiles, Bo@ B"3, Cairo 16"#, -da,s to 9tate, 1% Fece,ber 195#7 9ira! al1din intervie( in al- hram 9 9epte,ber 1951. = have been )nable to trace the o)tco,e of the Gonsanto 2oint vent)re. 11. Ior s)bsidies a(arded by the 'afd, see the Egyptian 7a8ette# B6 A)ly, " and 6 /ove,ber 195#. Ior 9ira! al1din>s role in resolvin! the oil1pricin! disp)te, see U9RL 59, 195#J56, %$6.B55" 511#51, .a!er to 9tate, CPetrole), Fevelop,ents in 8!ypt,D -pril 1951. 1B. Beinin and .ock,an 519%$: "99J6##;7 Gah,)d G)ta(alli 519%5: $9J "%#;. =n addition, see &i!nor 519%9: 31; for evidence that the Gisr !ro)p escaped the !overn,ent>s e,ploy,ent re!)lations. &he Cpeople>s partyD +)ote is fo)nd in the U.9. e,bassy>s report of the opposition>s attack on the 'afd1E-bb)d connection. 9ee U9RL 59, 195#J56, $$6.## %1B65#, Caffery to 9tate, no. 63$, CPropa!anda of the ?pposition.D 1". 8@=, Bank -rchives, CGe,orand), to the Board of Firectors Re: 8@i,bank Gission to 8!ypt,D 6 Gay 195#7 E-bb)d to -rey P8@=, BankQ, B$ /ove,ber 19517 U9RL 59, 195#J56, %$6."9$B 111%51, Caffery to 9tate, B3 9epte,ber 1951. 16. Ior E-bb)d>s e@pansion plans and the co)rse of the ne( loan applications, see U9RL 59, .ot Iile 59F5, folder C-id and .oans,D ,e,o Iro, Aones to Nopper, n.d 5b)t probably early 195B;7 and &r),an .ibrary, Papers of Fean -cheson, Ge,oranda of Conversations, 195B, Bo@ 3$, BB

-pril 195B. Ior E-bb)d>s role as a cond)it bet(een Caffery and 9ira! al1din d)rin! the )nfoldin! crisis, see I?161 1651 P1951, C8!ypt Chan!e of Lovern,entDQ, 1#1B1 1% 51L, 'ardle19,ith, % /ove,ber 1951. &he financial press)re has not previo)sly been disclosed. ?n the diplo,acy of the crisis, see .o)is 519%6: 3%3J$##, $B#J$"5;, :ahn 51991: 9"J1"9;, -ronson 519%3: B5J"%;, and 9ayed1-h,ed 519%9: B3J"B;. 15. ?n the fo)ndin! of Ban+)e d) Caire, 9-8, see U9RL 59, 195#J56, Bo@ 5"$5, .ardicos to 9tate, $ A)ne 195B, reportin! the royal decree p)blished in P?fficial Ao)rnalQ, no. %B, 15 Gay 195B. 13. 9ee U9RL 59, 195#J56, $$6.## 61B%51, Cairo no. B533, CC)rrent =nternal Political 9it)ation in 8!ypt.D Co,pare (ith $$6.## 911%51, desp. $B9, C E&he Real 9it)ation> in 8!ypt,D for(ardin! G)stafa -,in>s editorial in $h%ar al-6a*m 9epte,ber %, 1951. 1$. Ior details of the conflict over ta@ refor,, see U9RL 59, 195#J56, $$6.1" "1B#51, e,bassy desp. 1936, 13 Iebr)ary 1951, C?ver(hel,in! Parlia,entary Vote of Confidence for 8!yptian Ginister of Iinance.D Ior back!ro)nd on the ta@ +)estion, see the 5partially conflictin!; acco)nts in Feeb 519%6: 6""J6"6; and :ansen 51991: 9";. 1%. 9ee, for e@a,ple, the assess,ent by -h,ad :)sha,4a, the for,er ,inister of social affairs, (ho (as bein! c)ltivated by the -,ins and (as involved by the fall in a plan to seek po(er in the na,e of (hat Caffery called an Chonest opposition.D U9RL 59, 195#J56, $$6.## 1#1551, desp. %%B, 5 ?ctober 1951, CContin)ed -ctivities of Ior,er Ginister of 9ocial -ffairsD7 and 9ayed1-h,ed 519%9: 6#J6B;. Ior the treaty1abro!ation iss)e>s relation to or!ani4ed antiestablish,ent !ro)ps like labor, other parts of the left, the G)sli, Brothers and the dissident ar,y officers, see Beinin and .ock,an 519%$: 6#3J61#;, Bot,an 519%%: 1##J1#6;, and Lordon 5199B: B5JB$, 69J51;. 19. U9RL 59, 195#J56, $$6.11 111"5#, Cairo 1#5#, " /ove,ber 195#, CNin!>s Ret)rn to Cairo,D e,phasis ,ine. B#. 8lias -ndraos, (ho reco)nted the story of E-bb)d in an intervie( at the British e,bassy, noted that he had i,,ediately rene!ed on the pled!e, (hile the strike f)nd (as the e@c)se he )sed to obtain the cabinet>s a!ree,ent to a rise in the price of s)!ar. 9ee I?161 1651, 1#1B1 6 51L, Conversation (ith -ndraos, B9 ?ctober 19517 on 9ira! al1din and the Iree ?fficers, see Lordon 5199B: 5#;. B1. 9ee U9RL 59, $$6.## 1#1551, desp. %%B, Caffery to 9tate, 5 ?ctober 1951, CContin)ed -ctivities of Ior,er Ginister of 9ocial -ffairsD7 and Lordon 519%9: B#9;. Caffery>s st)died nonco,,it,ent no do)bt contrib)ted to :)sha,4a>s vie( that conditions in 8!ypt (o)ld !et (orse before they !ot better and to his !rad)al disenchant,ent (ith the ,achinations of the -,in

brothers. -lso, see b)siness,an and e@1finance ,inistry official Lalil al1 =,ari>s assess,ent that the 'afd had to be kept in po(er to resolve the crisis and that plans for a refor,1oriented coalition no lon!er ,ade sense. U9RL %6, Bo@ B"3, ,e,orand), of conversation bet(een Caffery and =,ari, % Fece,ber 1951. BB. Ior e@a,ple, see I?161 1651, 1#1B1 1$ 51L, reportin! G)stafa -,in>s plan to depose the !overn,ent, n.d. Pb)t probably late ?ctober or early /ove,ber 1951Q. &he p)blic standard bearers of the 195#J195B anticorr)ption ca,pai!n, ne(spaper o(ners G)stafa -,in and E-li -,in, event)ally 5and +)ietly; offered a U.9. ,)ltinational its o(n private feat)re col),n in their papers for a pro!ra, of proJoil co,pany propa!anda. 9ee U9RL 59, 195#J56, %$6.B55" 3115", desp. B3B#, A)ne 1 195", C9ocony1 Vac)), Plans for Press Relations in 8!ypt.D B". Fetails on the (idenin! dissent to the !overn,ent>s fiscal, tariff and price1s)pport policies are fo)nd in U9RL %6, Bo@ B"%, desp. B"33, Gay B" 195B, C&rans,ittal of -nn)al Report for 1951 of 8!yptian Iederation of =nd)striesD7 Bo@ B6#, ,e,orand),, Parker to Caffery, B3 /ove,ber 1951, CFrop in 8!yptian Po)nd W)otations in Relation to 8!yptian Cotton PricesD7 U9RL 59, 195#J56, %$6.15B %11651, desp. B3", 6 -)!)st 1951, CLovern,ent Re!)lations on Cotton 9alesD7 and %$6.15B 911151, desp. 3"9, 11 9epte,ber 1951, CIinancial -spects of 8!yptian Lovern,ent>s =ntervention in Cotton Garket.D B6. 9ee U9RL 59, 195#J56, $$6.11 "1B951, Cairo, no. B""6, Garch B9, 1951, Relations bet(een the Nin! and Certain Co)rt Personalities7 $$6.## 1#1B#51, desp. 99$, Caffery to 9tate, B# ?ctober 1951, -ppoint,ent of -ndraos Pasha as :onorary 8cono,ic -dviser to the Royal Nhassa7 &i!nor 519%9: $BJ$";. B5. 9ee U9RL 59, $$6.5B1 61BB5", desp. BB1$, Caffery to 9tate, BB -pril 195", Confidential Bio!raphical Fata0G)stafa -,in. Caffery reported the credible r),ors that the -,ins (ere paid by a host of interested factions. B3. 9ee U9RL 59, 195#J56, $$6.## 1B1B551, tel. 965, B5 Fece,ber 19517 and $6.## 11115B, Caffery to 9tate, 11 Aan)ary 195B, Chan!es in Board of Firectors of Bank Gisr. =f there is any do)bt that E-fifi and -ndraos (ere cooperatin! at this point, it sho)ld be p)t to rest by the na,in! of -ndraos as ,ana!in! director of Bank Gisr and his appoint,ent to the board of several of the Gisr1!ro)p s)bsidiaries si,)ltaneo)sly (ith E-fifi>s resi!nation. B$. I?161 1651, 1#1B1 1$ 51L, G)rray>s Conversation (ith G)stafa -,in7 U9RL 59, 195#J56, $$6.## 1#1551, desp. %%B, Caffery to 9tate, 5 ?ctober 1951, Contin)ed -ctivities of Ior,er Ginister of 9ocial -ffairs7 9ayed1-h,ad 519%9: 61;. B%. 9ee U9RL 59, %$6.##1&- 31B$51, Cairo desp. "#B", A)ne B1, 1951,

Cha,ber of Fep)ties -pproves Point =V -!ree,ent. B9. 9ee U9RL 59, $$6.## "155B tel. 1691, 5 Garch 195B. &here is si,ply not eno)!h infor,ation at hand to constr)ct a coherent e@planation for :)sha,4a>s choice at this 2)nct)re, save to say that the reasons he !ave to the a,bassador are in and of the,selves )nconvincin!. :e (as a pri,e architect of a plan in the fall of 1951 to have the palace en!ineer an overthro( of an elected !overn,ent, (hen Cthe p)blicD (as no ,ore concerned (ith corr)ption than in Garch 195B. <et, (hen Caffery asked hi, (hat he and his !ro)p (o)ld do if it ca,e into po(er, CFr. :)ssein replied that one of its first acts (o)ld be to try ,ost of the ,e,bers of the present !overn,ent in re!)lar 8!yptian co)rts on cri,inal char!es.D 9ee $$6.## 1#1 551, desp. %%B, 5 ?ctober 1951. "#. C'e have these recla,ation e@perts here fro, the United 9tates on Point =V for the ne@t t(o years. &hey are not tellin! )s to break )p the estates. &hat>s (hat he PGah,)d Oaki 9ala,, )nder1secretary of state, ,inistry of national econo,yQ thinks yo) (ant )s to do b)t they have ,ade it clear at Point =V that they (ill not interfere. =t is a!reed that the Ginistry of 9ocial -ffairs (ill pick propertyless peasant fa,ilies and !ive the reclai,ed land to the, in far,s no bi!!er than they can c)ltivate (ell. &hat>s (hat (e did at Nafr 9aad (here yo) PCafferyQ and Gr. 9(ay4ee PCleon ?. 9(ay4ee, assistant to the assistant secretary of state for econo,ic affairsQ sa( 3## fa,ilies each (ith five acres of land to (ork.D 9ee U9RL 59, 195#J56, %$6.13 31135B, Pdispatch n),ber )nreadableQ, 13 A)ne 195B, -tte,pt to Revive .and Refor, co,,ittee. "1. Ior the -,erican post1,orte, on :ilali, see U9RL 59, 195#J56, $$6.## $1"5B, ,e,orand), fro, Byroade to Br)ce, " A)ly 195B, Chan!e of Lovern,ent in 8!ypt. "B. Ior instance, G)stafa -,in insisted 9ira! al1din played a role. ?thers i,plicated Gah,)d -b) al1Iath. 9ee I?161 165" 5195B;, A81#11 3B 5BL, record of intervie( (ith G)stafa -,in, 19 A)ly 195B. Ior the ,essa!e by the Times correspondent, see I?"$1 93%$3, A81#1% 13%, Cres(ell to I?, 1 A)ly 195B. &he Iorei!n ?ffice took credit for keepin! Nin! Iar)+>s na,e o)t of the story. A81#1% 139, ,in)te attached to the file. "". Ior Caffery>s acco)nts of &habit>s back!ro)nd, po(er and fall, see U9RL 59, 195#J56, $$6.11 1#1%51, desp. "#35, Caffery to 9tate, B3 A)ne 1951, Resi!nation of Neri, &abet Pasha as Press Co)nselor to the Nin!7 and $$6.5B1 $11%5B, desp. %9, Caffery to 9tate, 1% A)ly 195B, Confidential Bio!raphical Fata0Neri, &abet Pasha7 for the infor,ation on E-bb)d>s pay,ent to &habit, see I?161 165", A81#11 1B 5BL, Record of Conversation (ith -ndraos, B6 Aan)ary 195B. "6. 9ee I?"$1 93%$3, A81#1% 139, Cres(ell to I?, 1 A)ly 195B, and enclos)res.

"5. 9ee I?"$1 93%$3, A81#1% 1$6, Iranks PBritish e,bassy 'ashin!tonQ to I?, B A)ly 195B7 and A81#1% 139, Cres(ell to I?, 1 A)ly 195B. "3. &he ,aterial in the last t(o para!raphs is based on U9RL 59, 195#J56, $$6.## $1B5B, 9tate to Caffery, B A)ly 195B 5Cvenal trioD +)ote;7 I?"$1 93%$3, A81#1% 1$6, Iranks PBritish e,bassy, 'ashin!tonQ to I?, B A)ly 195B, and enclos)res 5-llen>s re2ection of British responsibility in :ilali>s do(nfall;7 A81#1% 1$5, Cres(ell to I?, B A)ly 195B 5reb)ttal of Caffery, assess,ent of stability;7 A81#1% 1$9, Cres(ell to I?, B A)ly 195B 5Caffery>s ill1advised contacts (ith E-bb)d;7 and :ahn 51991: 16"J166;, (ho ,isses these events in detailin! 8den>s s)dden hardenin! of the line a!ainst the 8!yptians. "$. 9ee U9RL 59, 195#J56, $$6.## 61135B, I)rther 'afd Gane)vers -!ainst :ilali Lovern,ent. "%. 9ee U9RL 59, $$6.1" $1$5B, desp. no. 13, Caffery to 9tate, $ A)ly 195B. -s Caffery specified, it Cis, of co)rse, i,perative that both the so)rce of this note and the fact that the -,erican Iorei!n 9ervice possesses it be !)arded ,ost caref)lly.D -h,ad :)sha,4a, (ho, :aykal later critici4es as bein! too pro1-,erican in the 195#s, e@plained his ref)sal to s)pport :ilali as the res)lt of :ilali>s dependence on the British and the -,ins. Ior :aykal>s o(n pec)liar recollections of this period, see his Cutting the 5ion<s Tail519%3;. Undo)btedly, :aykal (o)ld not reco!ni4e hi,self as an a!ent of the British and the -,ins at this key 2)nct)re, )sin! the sa,e lo!ic that he e,ploys (hen describin! E-bb)d. "9. ?b2ectively, then, it is diffic)lt to s)pport clai,s s)ch as one in :ahn 51991: 1"9; that the Cairo fire Cinaugurated a period of t)r,oil and instability in 8!ypt that seemed to render the country vulnera%le to communist revolutionD 5e,phasis ,ine;. Unless +)alified by the notation that this is ho( partic)lar -,erican observers sa( the sit)ation at partic)lar 2)nct)res, and (itho)t e@plainin! (hat constit)ted Ct)r,oil and instabilityD in 195B, the ar!),ent is ,ore easily ,ade in the reverse0the fire allo(ed the re!i,e once ,ore to cr)sh the antiestablish,ent opposition and render the co)ntry relatively less v)lnerable to co,,)nist revol)tion. :ahn (o)ld be hardpressed to find any si!n of revol)tionary a!itation d)rin! this period, accordin! to historians of the left s)ch as Bot,an 519%%; and Beinin and .ock,an 519%$;. 6#. Papers of Fean -cheson, Ge,oranda of Conversation, 195B, Bo@ 5$, Ginisterial &alks in .ondon, A)ne 195B, 9),,ary Gin)tes, B6 A)ne 195B Pdated 16 A)ly 195BQ, 8isenho(er .ibrary. =t sho)ld be noted that 9tevenson>s vie(s follo(ed closely the pict)re sketched by &habit in Gay. 9ee $$6.## 511"5B, Caffery to 9tate, 1" Gay 195B, &he Political Past, Present and I)t)re of 8!ypt -ccordin! to Neri, &abet Pasha. 61. 9ee U9RL 59, $$6.## $1B"5B, tel. 6#%, B" A)ly 195B, reportin! conversation bet(een Cres(ell and E-fifi prior to co)p. &he potentially ,ore

i,portant +)estion this doc),ent raises is the e@tent to (hich 5lo!ically to ,y ,ind; the kin!>s disastro)s p)r!e of the officers> cl)b on 13 A)ly and his strate!y ,ore !enerally to(ard the ,ilitary at this 2)nct)re (ere not, as is often i,plied, the res)lt of the kin!>s o(n i,pet)o)sness or of his bein! closeted too lon! (ith his pi,p and his b)tler. 6B. 9ee U9RL 59, %$6.13 %1B#5B, Caffery to 9tate, tel. 6#9, B# -)!)st 195B. CP/Qothin! Pco)ldQ ,ore 2eopardi4e &C- in 8!ypt or else(here in Giddle 8ast if land refor, pro!ra, linked (ith Point Io)r p)blicity Psho)ldQ backfire.D 6". =n developin! these ar!),ents abo)t anti,onopolis, and re!)lation, = have dra(n heavily on conversations (ith, and the (ork of, t(o partic)larly innovative analysts. 9ee Ritter 5199B; and Cha)dhry 519%9 and 199";. 66. 9ee U9RL 6%3, Records of -!ency for =nternational Fevelop,ent, Gission to 8!ypt, 8@ec)tive ?ffice, 9)b2ect Iiles 5C. Iiles;, 51J53, Bo@ 1, folder 1.1, /),bered .etters, 9tevens to 8vans, 1$ A)ly 1956, letter 9$. 65. 9ee al- $h%ar archives, file on E-bb)d, no. 6B5 5article in $h%ar al6a*m B$ Fece,ber 195B;7 Lordon 5199B: 155;. Lordon 5follo(in! the British at this 2)nct)re; e,phasi4es E-bb)d>s atte,pt to Cin!ratiate hi,selfD (ith the re!i,e, b)t ,isses (hat (as ,ost i,portant in brin!in! these t(o forces to!ether. -s Barra(i confir,ed for ,e, E-bb)d (as hated by the re!i,e, b)t nonetheless they needed his reso)rces and abilities as an ind)strialist. =ntervie(, Cairo, 6 Iebr)ary 19%5. 63. Ior Caffery>s assess,ent, see U9RL %6, Bo@ B6#, Caffery to 9tate, B# Fece,ber 195B. Ior evidence of the overt)re fro, the 2)nta to E-bb)d, see U9RL 59, 195#J56, %$6."9$B 11195B, 'illia,s Pthe e,bassy>s econo,ic1 affairs co)nselorQ to 9tate, 19 /ove,ber 195B7 and I?"$1 1#B9#%, A81631 ", F)ke 5Cairo; to -llen 5I?;, B$ Aan)ary 195". = a, !ratef)l to Aoel Lordon for the latter reference. -lso see $h%ar al-6a*m# 1# Aan)ary 195", (hich carries an advertise,ent for an E-bb)d1backed en!ineerin! (orkshop and ,achinery i,porter, 9hirka Gisr .il1:andasa (a al19ayarat, (hich (as to be involved in a,,)nition and (eapons prod)ction. 6$. Ior a ,ore recent e@a,ple, see Oaalo)k 519%9: B6JB$;. 9he ar!)es that the Iree ?fficers failed to !rasp that capitalists and lando(ners (ere part of the sa,e class and, therefore, Cholders of political po(erD as (ell. Gy acco)nt 5and the officers> ,any state,ents; directly contradict this entire line of analysis. 6%. U9RL 59, 195#J56, $$6.5 111B5", Cairo to 9tate, tel. 13B5, 1B Aan)ary 195". Ior E=,ari>s involve,ent in the appoint,ents, see RL%6, Cairo, 8!ypt, 196%J55, Bo@ B"%, folder C8!ypt, 5##, 195B,D ,e,orand), of conversation bet(een 'illia,s and .t. Col. -bd al1G)ni, -,in, 1$ /ove,ber 195B.

69. ?thers in this cohort (o)ld incl)de /ia4i G)stafa, an G=&1trained en!ineer identified in state depart,ent records of the early 195#s as a contractor (ith U.9. partners and a ,e,ber of the board of directors of the No, ?,bo Co,pany by 1955. :e ree,er!ed in the 19%#s (ith his son as partners (ith U.9. fir,s in 8!ypt>s b)r!eonin! a!roind)stry sector. 9ee U9RL 59, %$6.#5" 1B11%56, 8llis to 9tate, 1% Fece,ber 1956. Ior evidence of :)sha,4a Iah,i>s opposition to E-bb)d, in ter,s ,)ch like those )sed by his British co,petitors in the 196#s, see Records of 8@=, Bank, letter fro, Lhiardi to Polk, U.9. &reas)ry, 9 -pril 195" Pobtained thro)!h I?=- re+)est and in ,y possessionQ. /ote that the No, ?,bo>s ,)lti1tho)sand1acre holdin!s (ere e@e,pt fro, the 9epte,ber 195B land1refor, le!islation on the !ro)nds that it (as en!a!ed actively in land recla,ation. 5#. 9ee U9RL 59, 195#J56, $$6.5B1 %1B95", desp. 55$, B9 -)!)st 195", Confidential Bio!raphical Fata0-l 8,ari7 and RL%6, Cairo, 8!ypt, 196%J55, Bo@ B"%, folder C8!ypt, 5##, 195B,D ,e,orand), of conversa1tion bet(een 'illia,s and .t. Col. -bd al1G)ni, -,in, 1$ /ove,ber195B. 51. &he ,ost reliable chronolo!y of the fo)ndin! of co,petin! plannin! a!encies is fo)nd in -y)bi 519%#: BB3JBB%;7 for the history of plannin!, see the e@tre,ely )sef)l co,parative acco)nt of 8!yptian and =ndian e@periences by el1Lha4ali 519$1;. ?n 9id+i, see 'aterb)ry 519%": 39J$1;. 9id+i served on the short1lived 5195BJ195"; hi!h co,,ittee for plannin! and coordination. 9ee U9RL 6%3, Bo@ "", folder 1#"1, -. F. .ittle Reports, 195"J56, 9(eeney to /icols, 'eekly Report ", B Iebr)ary 195". 5B. 9ee U9RL %6, Bo@ B6#, ,e,orand), of conversation, :ill 5president, '. R. Lrace and Co.;, Byroade and 9tabler, B5 /ove,ber 195B. 5". 9ee, for e@a,ple, U9RL 59, 195#J56, %$6.## &- B1951, Cairo 19#5, 9 Iebr)ary 1951, 8!yptian Papers on Point =V. 56. 9ee, for instance, Iorei!n Relations of the United 9tates 5IRU9;, 195BJ 56, vol),e =_, no. 1#"5, p. 1%9$, Caffery to 9tate, B3 /ove,ber 195B, (here Caffery notes the delays in the ne( 8!yptian re!i,e>s aid re+)est. C&his derives lar!ely fro, econ i!norance and inability of yo)n! colonels to for,)late a sensible pro!ra, for econ develop,ent (hich cld be appropriately s)pported by U9 or UND7 and no. 1#56, pp. 191$J191%, 9ecretary of 9tate to 8,bassy, B6 Fece,ber 195B, (here proposals are ,ade to e@pand the n),bers of technicians on the Cabot ,ission. 55. 9ee U9RL 59, 195#J56, %$6.## &- %1B15B, 8,bassy to 9tate, desp. "#", B1 -)!)st 195B, enclosin! proposal Ctrans,itted to PG by point iv staff EPoint =V Plan for 8!ypt.> D 53. 9ee U9RL 59, 195#J56, %$6.##1&- 111$5B, 9tate to 8,bassy, Cairo 93$, $ /ove,ber 195B7 %$6.## &- B1$"5, Cairo to 9tate, desp, 15%", $ Iebr)ary 195"7 U9RL 6%3, Gission to 8!ypt, 8@ec)tive ?ffice, 9)b2ect Iiles,

Bo@ "", folder C1#"#, =nd)strial 9)rvey0195BD and Bo@ "", folder C1#"1 - F .ittle -pril1Fece,ber 195".D 5$. 9ee U9RL 6%3, Gission to 8!ypt, 8@ec)tive ?ffice, 9)b2ect Iiles, Bo@ "", folder C1#"1, -.V.PsicQ .ittle, Reports 195"J1956,D Cabot to /icols, 5 Iebr)ary 195", enclosin! draft report to 9ecretary of 9tate, 5 Iebr)ary 195", p. 3. ?n Cabot, see U9RL 59, Bo@ 6%$6, %$6.B316 1#1B655, $ /ove,ber 19557 and the Christian (cience 'onitor 15 -pril 195". 5%. 9ee Ginistry of Co,,erce and =nd)stry 51955; P-. F. .ittle 195", revised 1956Q7 -rth)r F. .ittle, =nc. 51953;7 Geyer 519%#: 66J65;. Ior the f)ndin! of the lar!er, develop,ent effort, IRU9, 195BJ56, no. 11#, pp. B##5JB##$, -ndre(s 5&echnical Cooperation -d,inistration; to ?hly 5G)t)al 9ec)rity -!ency;, " Garch 195". Co,pare (ith :ansen and Gar4o)k 51935: B55;, ?>Brien 51933: 39J$#;, and 'aterb)ry 519%": 31;. 59. W)oted inal-Balagh# 19 -pril 195", and translated in U9RL 59, 195#J56, %$6.## &- 511B5", 8,bassy to 9tate, desp. B6#6, Report of Point =V -ctivities fro, -pril 1 thro)!h -pril "#, 195", 1B Gay 195", p. B3. 3#. Ior instance, see the frank ad,ission by key officials that the !overn,ent>s sho(case develop,ent b)d!ets and ti,etables in 195" and 1956 (ere not achievable. -ccordin! to E-li al1Liritli, C&he so1called capital b)d!et ,erely reflects a sched)le of e@pendit)res on develop,ent pro2ects (hich sho)ld be )ndertaken d)rin! the year if f)nds (ere available.D Confir,in! and e@pandin! on the clai,, E-bd al1G)ni, al1Ways)ni, (ho by 1956 (as finance ,inister, ad,itted that Cthe li,ited availability of physical, technical, and ad,inistrative facilitiesD (ere additional factors ha,perin! develop,ent. U9RL 59, 195#J56, $$6.5 G9P 91B#56, 8,bassy to 9tate, desp. 5#5, U.9. Fevelop,ent -ssistance, B# 9epte,ber 19567 and $$6.51 G9P 911"56, 8,bassy to 9tate, desp. 66", U.9. Fevelop,ent -ssistance, 1" 9epte,ber 1956. Co,pare (ith :ansen 51991: 9%J99;. 31. Ginistry of Co,,erce and =nd)stry 51955: "9J61, 166J13$;. Ior an e@tended analysis of the 5)nrealistic; e@pectations e,bodied in the -. F. .ittle st)dies, see U9RL 59, 195#J56, $$6.## 31156, desp. B%16, CPolitical 9tability &hro)!h 8cono,ic Fevelop,ent,D 1 A)ne 1956. -ccordin! to 'aterb)ry 519%": 3";, X8 % ,illion (as the total ne( invest,ent fro, abroad bet(een 195" and 1931. 3B. U.9. Co)ncil on 8cono,ic Policy, Records 1956J1931, Reports 9eries, Bo@ ", folder on U9 Iorei!n =nvest,ents in .ess Feveloped Co)ntries, enclosin! /ational -dvisory Co)ncil, 9taff Foc),ent no. $6#, -ttach,ent F, CIactors -ffectin! Private and P)blic =nvest,ent in 8!ypt,D p. 6, 8isenho(er .ibrary. 3". 9ee I?"$1 B#%9%, A"B$B, GcLo(an to Vansittart, 1" A)ly 19"$, and enclos)res. &(enty years later, -. F. .ittle e,er!ed (ith essentially the

sa,e list of ,an)fact)rin! vent)res. 36. &he archival doc),entation on this lon! and co,plicated sectoral conflict is enor,o)s and has yet to be satisfactorily analy4ed. Ior evidence in s)pport of the interpretation advanced here, see U9RL 59, 1965J69, %%".3"3" %1$6%, Patterson to 9tate, $ -)!)st 196%7 %%".3"3" 11$69, Patterson to 9tate, $ Aan)ary 19697 195#J56, %$6.B55" 11B$5#, -cheson to 9tate, B$ Aan)ary 195#7 %$6.B55" %1B35#, .a!er to 9tate, B3 -)!)st 195#7 and U9RL 639, 8@ec)tive ?ffice, Classified 9)b2ect Iiles, 8!ypt, 1951J56, Lrove to 9tevens, B% Fece,ber 195". = find little !ro)nds for the clai, that the 8!yptian !overn,ent had C!ained the )pper handD over these fir,s in the 195#s. &i!nor 519%9: 96J99;. 35. CFisc)ssin! the local ind)stries (hich ,)st t)rn to e@port ,arkets if they are to pro!ress, the Iederation stated that the spinnin! and (eavin! ind)stry topped the list.D 9ee U9RL %6, Bo@ B"%, folder labeled C5##1 8!yptian Iederation of =nd)stries,D Cairo desp. B"33, Peters to 9tate, C&rans,ittal of -nn)al Report for 1951 of 8!yptian Iederation of =nd)stries,D B" Gay 195B, +)otin! fro, s),,ary attached to the translation of the ann)al report. Ior conditions )nderlyin! this ne(fo)nd interest in e@port ,arkets, see &i!nor 519%9: 59J3#;. 33. :e dis,issed Ce,phaticallyD the ar!),ent )sed for t(enty years to prove that the CinterestsD of the te@tile ind)stry had been sacrificed to the needs of the cotton lords. &i!nor 519%9: 3"J36; also discovered splits on the iss)e and links to a broader debate abo)t reorientin! the te@tile ind)stry, b)t ar!)es that C,ost e@pert opinionD (as on the side of i,portin! CcheapD ra( cotton. 3$. 9ee U9RL 6%3, Gission to 8!ypt, 8@ec)tive ?ffice, 9)b2ect Iiles, Bo@ "", folder C1#"1 - V PsicQ .ittle,D Reports 195"J56, ,e,orand), by -lt, no. 5%$%#, "1 Garch 195", CCotton &e@tiles.D &i!nor 519%9: 31; s)!!ests that the Iilat)re>s chief co,petitors, the Gisr !ro)p, s)ccessf)lly avoided the increasin! restrictions on firin! (orkers. &he Iilat)re>s position on the cotton1i,port +)estion ,ay th)s have been desi!ned to stop the Gisr !ro)p fro, f)rther e@pandin! its o(n do,estic ,arket share 5representatives of the Gisr ,ills had (anted the i,port ban on cotton lifted;. 3%. Both +)otes are fro, the ori!inal, )np)blished version of Ga@field and /olt 5199#: B1;. &he first is dra(n directly fro, Gikesell 51956;7 the second is their paraphrase of Gikesell. 39. 9ee U9RL 6%3, Gission to 8!ypt, 8@ec)tive ?ffice, 9)b2ect Iiles, Bo@ "", folder C1#"B -. F. .ittle -pril1Fec 195",D ,e,orand),, 9(eeney to /ichols, CPro!ress Report Coverin! Period -pril 1BJA)ne 1", 195",D 15 A)ne 195", p. ". $#. 9ee U9RL 59, 1955J59, %$6.#5" "1B95$, CI)rther L?8 Penetration =nto

Private =nd)stry.D &he -. F. .ittle ,ission (as not above e@a!!eratin! their effectiveness. =n their final report, they took credit for the paper1,ill vent)re that E-bb)d had be!)n to p)rs)e in 1951. 9ee -rth)r F. .ittle, =nc. 51953: $;. $1. 9ee U9RL 59, 1955J59, %$6.## $1B153, 9econd W)arter 8cono,ic revie(, 19537 and %$6.#5" 311953. &he -,erican partner in this 8!yptian1 9a)di 2oint vent)re (as Aa,es .a(rence and Co,pany, cotton e@porters, (hose senior partner sat on the board of L.8. -s late as Fece,ber 1959 .a(rence )sed the help of Pa)l /it4e to ne!otiate an 8@=, Bank loan for factory e+)ip,ent. 9a,)el 'a)!h Papers, Bo@ ", -lpha Records of Callers 195%J1959, 8isenho(er .ibrary. $B. RL %6, Bo@ B59, Cairo 8,bassy, Leneral Records, 8,bassy to 9tate, % A)ne 1956. $". Ior the ,ost thoro)!h acco)nt to date, see Lordon 5199B: 1B$J155, 1$1J1$6;. -s he notes 51B%;, the crisis Cpassed thro)!h three distinct phasesD: 51; Iebr)ary B"JGarch 1, (hen /a!ib resi!ned and then ret)rned to office7 5B; Garch 5JB5, Cplayed o)t lar!ely behind closed doors,D (hen /a!ib tried Cto (rest !reater po(ers fro, the officersD7 and 5"; Garch B5J "1, (hen /asser and his allies C,obili4ed loyal street forces to defeat /a!ib s)pporters.D $6. ?n Garch B5, /asser pro,ised a ret)rn to party political life, a ne( parlia,ent and the dissol)tion of the RCC, and then, as the opposition !re( bolder, the RCC or!ani4ed a proa)thoritarian alternative linkin! parts of the ar,y, labor ,ove,ent and traditional anti1'afdists like the -,in brothers 5and the -,erican e,bassy;. 9ee Lordon 5199B: 1"6J1"5;, ?n the 'afd>s a,bitions, see U9RL 59, 195#J56, $$6.## "1B$56, desp. B"1#, B$ Garch 1956. $5. 9ee U9RL 59, 195#J56, $$6.## "1"#56, tel. 1B1", Caffery to 9tate7 and $$6.## "1"156, tel. 1B1%7 Lordon 5199B: 1"5;7 and Beinin and .ock,an 519%$: 6"$J66";. Lordon sees the ,obili4ation of labor 5Cthe )se of the ,ob,D 1"5; as a t)rnin! point7 so,e opponents of the re!i,e had deno)nced /asser Cas a pro1-,erican dictator.D =n 'ashin!ton, the 9tate Fepart,ent official, Parker :art, (ho (as openly critical of /asser, co,plained abo)t the C=->s close contacts (ith the RCC, ar!)in! that this backchannel (as not the (ay to cond)ct diplo,acy. $3. 9ee U9RL 59, 195#J56, %$6.## 61BB56, Carr Pco)nselor for econo,ic affairsQ to 9tate, CPossible =nflationary &)rn in 8!ypt>s 8cono,ic Policy,D BB -pril 19567 for a s),,ary of these ,eas)res, (hich incl)ded ne( ,ini,),1(a!e le!islation, a ne( benefits packa!e and ti!htened restrictions over capitalists> discretion to fire (orkers, see ?>Brien 51933: $5J$3;. Both )nion leaders and the rank and file (ere, predictably, divided at this 2)nct)re. Ior the contin)in! debate on state1labor relations d)rin! this period, see Beinin 519%9;, Pos)sney 51991 and 199";, and Loldber!

5199B;. $$. U9RL 59, 195#J56, $$6.## 611B56, desp. B669, 1B -pril 19567 $$6.## 611356, desp. B6%5, 13 -pril 19567 $$6.## 61B956, desp. B5$#, B9 -pril 19567 and $$6.## 51556 tel. 1"93, 5 Gay 1956. &(o prore!i,e b)siness,en (ere pointedly e@cl)ded fro, the (orst of the retrib)tive (ave: E-li al19ha,si and 9aba :abashi 5the -ra,co co)nselor;, both of (ho, served as advisers to the re!i,e>s ne( party, the .iberation Rally. Ior the a,bivalences )nderlyin! 9ha,si>s early s)pport of the re!i,e, see U9RL 195#J56, $$6.5B1 311$5", desp. B$%B, 1$ A)ne 195", Confidential Bio!raphical Fata0-li -l 9ha,si. $%. Ior the i,portant and )s)ally )ndisc)ssed or!ani4ational shift at the /PC, see U9RL 59, 1955J59, Bo@ 6%3%, %$6.## 61B#55, Cairo to 9tate, B# -pril 1955, C&he 9i!nificance of Recent Lovern,ent -ctions in Iield of 8cono,ics and Iinance.D ?n 9)lay,an, see Goore 519%#: 69;. :e took over fro, G)ha,,ad -h,ad 9ali,, a favorite of the e,bassy, and tho)!h he (as appointed f)ll ti,e to the hi!h da, pro2ect, 9ali, described it as a de,otion and a si!n that he (as in disfavor (ith the RCC. $9. 9ee U9RL 59, 1955J59, %$6.#5" 31155, desp. BB1#, Carr to 9tate, 1 A)ne 1955, (hich incl)des a list of retired directors. %#. 9ee U9RL 59, 1955J59, Bo@ 6%3%, %$6.## 61B#557 Bank Gisr, nnual ;eport 51955;7 and &i!nor 5199B: B$%JB$9;. &i!nor notes that t(o1thirds of the /ational Bank of 8!ypt directors (ere retired, to!ether (ith seven o)t of ten Bank Gisr directors, b)t = have not seen a f)ll list. -lso, accordin! to ,y data, E=,ari (as only fifty1three, so (e ,)st ass),e that the ,eas)res a!ainst the t(o banks involved ,ore than the ,andatory1retire,ent1a!e provision. -fter all, E=,ari re,ained a director of the /ile Linnin! Co,pany 5e@1-nderson Clayton;. %1. 9ee U9RL 59, 1955J59, Bo@ 6%3%, %$6.## 61B#557 and &i!nor 5199B: B$9;. &he !overn,ent (as at the ti,e preparin! the lar!est b)d!et in its history. Ior Ways)ni and his role in or!ani4in! the financin! of the da,, ne!otiations for (hich (ere on!oin! thro)!h the second half of 1955, see N)n4 51991: 6%J3#;. %B. 9ee U9RL 59, 1955J59, Bo@ 6%3%, %$6.## 61B#55, to!ether (ith the ori!inal draft of this dispatch in RL %6, Cairo 8,bassy, Leneral Records, 1955, 8,bassy to 9tate, B# -pril 1955. %". 9ee U9RL 59, 1955J59, Bo@ 6%3%, %$6.## 61155, Cairo to 9tate, CPri,e Ginister ?)tlines 8cono,ic Principles of the Re!i,e,D 1 -pril 1955. %6. 9ee U9RL 59, 1955J59, %$6."9B %1155, desp. 1"5, 8,bassy to Cairo, C-h,ad -bbo)d08!yptian Paper Plant Pro2ect,D 1 -)!)st 1955 5for +)ote;7

%$6.#5" %1B$55, desp. B"5, 8,bassy to 9tate, C8!yptian Lovern,ent 9e+)estration of -h,ed -bbo)d>s 9)!ar Co,pany,D B$ -)!)st 19557 and %$6.#5" 91355, 8,bassy to 9tate, enclosin! ,e,orand), of conversation bet(een Carr and -h,ad -b) al1=la, B% -)!)st 19557 and for essential back!ro)nd, Egyptian 7a8ette B% Iebr)ary 195". %5. /asser (as reported as seekin! to carry o)t a Cpro!ra, of nationali4ation of the ind)stry, !ettin! rid of the Irench interest in partic)lar, and to place the entire ind)stry in a 9tate or!ani4ation )nder the Ginister of Co,,erce and =nd)stry, at the sa,e ti,e carryin! o)t lar!e develop,ent pro2ects and standardi4in! volta!es, etc., thro)!ho)t the co)ntry. :)rst Pone of Britain>s ,ost reno(ned electrical en!ineers and a cons)ltant to the ,inistryQ indicated that Colonel /asser is lookin! for(ard to elections to be held early in 1953 and believes that la)nchin! a pro!ra, of nationali4ation of the ind)stry, co,bined (ith an a,bitio)s pro!ra, for hydro1electric develop,ent and irri!ation, (ill have stron! pop)lar appeal.D Representatives of the Ginistry of Co,,erce and =nd)stry had been seekin! advice and cons)ltants to help in reor!ani4in! the proposed nationali4ed sector. 9ee U9RL 59, 1955J59, %$6.B316 1#1B%55, -,erican 8,bassy, Pretoria to 9tate, desp. 1B3, C=nfor,ation on 8!yptian Lovern,ent>s 8lectric Po(er Pro!ra,,D B% ?ctober 1955. %3. 9ee U9RL 59, 1955J59, Bo@ 6%3%, %$6.## 1#1953 and %$6.## 1#1B653. &i!nor 519%9: %%J%9; ,akes clear that control of the co,pany had shifted to local investors by the 19"#s. %$. U9RL 59, 1955J59, Bo@ 6%3%, %$6.## 1B1"153, C8!ypt0C)rrent 8cono,ic 9it)ationD7 also see N)n4 51991: $"J$6; for an e@tre,ely revealin! description of the escalatin! conflict bet(een the re!i,e and the canal co,pany d)rin! 1955 and 1953. Contrast (ith &i!nor 5199B: B%9J B9#;. %%. 9ee U9RL 59, 1955J59, Bo@ 6%$", %$6.B55" 111555, Byroade to GcLhee, 1 /ove,ber 19557 and %$6.B55" 1#1B5$, Cairo to 9tate, no. %$%, B ?ctober 195$7 and Bo@ 6%$3, %$6."9$B 31955 C9BG, Ge,orand), of Conversation, C=nterest of Cities 9ervice ?il Co. in Iertili4er Plant in 8!ypt,D 9 A)ne 1955. %9. 9ee al- $h%ar# BB Aan)ary 19597 8@port1=,port Bank of 'ashin!ton, Gin)tes of Re!)lar Geetin! of the Board of Firectors, 1" /ove,ber 195%7 and U9RL 59, 1955J59, Bo@ 6%3%, %$6.## $11555, Cairo to 9tate, 8cono,ic 9),,ary, 8!ypt, 9econd W)arter, 1955. 9#. 9ee the list in &i!nor 5199B: B$3; and the insi!htf)l disc)ssion of the position of these partic)lar forei!n fir,s in &i!nor 519%9: $BJ$5;. 91. F)rin! the 9)e4 crisis, the -nderson1Clayton Co,pany 5-CC?; s)bsidiary had apparently been )sed by the 8!yptian !overn,ent in order to

sell cotton to Irance. 9ee U9RL 59, 1955J59, Bo@ 6%$3, 9tate Fepart,ent, ,e,orand), of conversation, CC)rrent 8!yptian Cotton 9it)ation,D B# Fece,ber 1953. Ior -CC?s plans in 1931, see 'ill .. Clayton, CGe,o on Gy &rip to 8!ypt 'ith =,pressions, Reco,,endations, etc., Re!ardin! the I)t)re of the /ile Linnin! Co,pany,D -CC?, Clayton Papers, folder C-CC?, 1931, 8!ypt,D 'ads(orth Research Center. 9B. U9RL 59, 1955J59, Bo@ 6%$", %$6.19 B11$5$, 8,bassy to 9tate, B1 Iebr)ary 195$7 %$6.## 11B95%, 8,bassy to 9tate, 'eekly 8cono,ic Revie(, B# Aan)ary 195%7 &i!nor 519%9: 9BJ96;. 9". Ior e@a,ple, the 9ira! al1FinJo(ned Ban+)e d) Caire absorbed CrKdit .yonnais and Co,ptoir /ational d>8sco,pte de Paris, b)t the !overn,ent o(ned all the ne( shares of the consolidated enterprise, forced :a,id 9ira! al1Fin to resi!n as ,ana!in! director, and na,ed a !overn,ent appointee to the post. 9ee U9RL 59, 1955J59, Bo@ 6%$1, %$6.16 11B15$, C8!yptian Lovern,ent -c+)ires =nterest in Ban+)e d) Caire,D B1 Aan)ary 195$7 and ?>Brien 51933: 9"J93;. 96. 9ee Park Ch)n! :ee 5193": 1B9J1"6;7 A)n!1en 'oo 51991;7 -,sden 519%9;7 and Gason et al. 519%#;.

Conclusion
Relatively little is kno(n abo)t the politics of invest,ent in 8!ypt in the decades before the A)ly 195B Revol)tion, the period )nder st)dy here. &his point see,s i,portant to restate at the o)tset, and not only beca)se it serves as a kind of reass)rance for the ti,e spent readin! 5not to ,ention (ritin!; a book on an 8!yptian capitalist and his role in pro,otin! an electrification pro2ect and b)ildin! a fertili4er ind)stry. =t is an ar!),ent for skepticis, abo)t the stat)s of the conventional (isdo, 5(hether abo)t interest1!ro)p activity or the te@tile ind)stry>s )se of do,estic cotton;, for )ndertakin! ne( (ork in these areas, b)t also for e@a,inin! ,ore ri!oro)sly than is co,,on the ass),ptions that )nderpin the conventional (isdo,. =n other (ords, analysts need to reconsider the overarchin! narrative that has served since the 195#s as a te,plate for constr)ctin! acco)nts of the Chistorical processD 5Fa(ley 1991; in 8!ypt and that has been C,ade to stand in place of the sort of kno(led!e of political processes and str)!!le (hich acade,ics do not haveD 5Nitchin! 19%5: "1;. = called this approach colonial e@ceptionalis,. -s in other e@ceptionalist cases, the e@planation of the e,er!ence and consolidation of the capitalist ,ode of prod)ction 5or of capitalist property relations or of prod)ction for the (orld ,arket; in 8!ypt relies on co,parison (ith a hi!hly styli4ed acco)nt of the p)tative develop,ent tra2ectory of Lreat Britain and Irance. &he startin! point is the relatively abr)pt i,position of capitalist relations on the 8!yptian social for,ation Cfro, the o)tsideD via the co)ntry>s incorporation into the (orld ,arket bet(een 1%B# and 1%3#, the !reat infl)@

of forei!n capital and i,,i!rant capitalists bet(een 1%5# and 1%%# and the for,al colonial re!i,e that e,er!ed bet(een 1%$5 and 19150hence, Ccolonial.D 'hat ,akes this process Ce@ceptionalistD is an )nderlyin! si,ilarity in lo!ic and ,ethod s)ch that the ,ost basic e@planation for Ler,an e@ceptionalis, 5(hatever the character of its partic)lar Cpatholo!yD; is the sa,e as for 8!ypt and all other cases. 8@ceptionalist acco)nts are !enerally not a celebration of difference b)t a (ay (ithin the historical ,aterialist tradition of acco)ntin! for so,e fail)re of the political1econo,ic1,oral order, (hich in 8!ypt>s case (o)ld be the apparent inability of capitalis, or of the bo)r!eoisie to en!ender thoro)!h!oin! transfor,ations of state, society and econo,y, to s)pport a nation1b)ildin! pro2ect, to deepen the process of ind)striali4ation, to s)stain the process of acc),)lation, etc. Central to this ,ode of thinkin! and (ritin! abo)t 8!yptian history is a setof theses abo)t the nat)re of capitalists and of capitalist1class for,ation. &he hall,ark of 8!yptian radical te@ts of the 196#s and 195#s is a fairly ri!id application of Gar@>s fra,e(ork of forces relations of prod)ction to 8!yptian society. &h)s, the class of r)ral private property o(ners that had e,er!ed bet(een 1%6# and 1%%# has been portrayed as a fe)dal order, a!ainst (hich stood a nascent, risin! national bo)r!eoisie. B)t (hatever potential ,i!ht have e@isted for a bo)r!eois1led revol)tion (as precl)ded by the contin)in! do,inance of the colonial po(er and forei!n capital. - ne( ro)nd of ,aterialist1oriented historical analysis in the 193#s and 19$#s ar!)ed, in contrast, for vie(in! 8!yptian lando(ners as an a!rarian bo)r!eoisie p)rs)in! a kind of back(ard colonial capitalis, 5a!ain, in co,parison to Cthe 'estD; in alliance (ith forei!n capital. -s = noted in Chapter 1, analysts (ere at pains to concede that a ,eas)re of ind)strial invest,ent had in fact taken place in 8!ypt and that British colonial officials had not opposed its develop,ent. &o level a bl)nt ob2ection at these ostensibly less1,echanistic acco)nts of nation and class for,ation: the tra2ectory of the econo,y is seen to parallel precisely the fort)nes of the national independence ,ove,ent, (hich has lon! been conde,ned for havin! fatef)lly co,pro,ised (ith British po(er in 19"3. &hereafter, a neocolonial coalition steers 8!ypt erratically yet ine@orably to(ard the crisis of 1951J195B, and tho)!h the disparate strata that constit)te the ind)strial bo)r!eoisie are portrayed as reali4in! (hat needs to be done in order to avert disaster and allo( capitalis, to develop, they are )nable to act in their ob2ective class interests. .abor historians Aoel Beinin and Oachary .ock,an offer a s)ccinct synthesis of the state of the art of these post1195# 8!yptian debates on capitalist develop,ent and class str)ct)re, one (hich provides as clear a state,ent as any of the essence of colonial e@ceptionalis,: By the end of the Palestine (ar it (as beco,in! increasin!ly apparent that the coalition of class forces that had r)led 8!ypt since the end of the Iirst 'orld 'ar *as incapa%le of offerin! a

sol)tion to the political and econo,ic crisis of 8!yptian society. &he lar!e lando(ners (ho do,inated both the 'afd and the opposition political parties cl)n! tenacio)sly to their privile!es, and (ere )n(illin! to concede even ,ini,al refor,s in the vital areas of land ten)re, !ro)nd rent, and the ta@ation of a!ric)lt)ral property.R &he 8!yptian ind)strial bo)r!eoisie and its representatives in Parlia,ent, often identified (ith the 9a>dist party, ackno(led!ed the need for a!rarian refor,, a ,ore e+)itable distrib)tion of (ealth, and accelerated ind)strial develop,ent, tho)!h in practice, %ecause the industrialists *ere closely lin$ed to large lando*ning interests by fa,ily and social ties and derived ,)ch of their capital fro, a!rarian interests, they shared the sa,e social conservatis, and fear of )nleashin! the an!er of the i,poverished r)ral and )rban ,asses. Gany proposals for econo,ic and social refor, (ere blocked by this fear. &he ind)strialists did not co,prise an independent and self1 confident class prepared to challen!e the he!e,ony of the a!rarian bo)r!eoisie. 8!yptian ind)stry did not, and still has not# transcended the li,itations created by its ori!inal for,ation )nder the do,ination of 8)ropean capital. =n order to s)rvive, 8!yptian ind)strialists had to conciliate and ally (ith both the lar!e lando(ners and the 'est to obtain capital and political s)pport. 5Beinin and .ock,an 19%$: "95J"93, e,phasis ,ine; =n its basic o)tline the ,ore !eneral story told here abo)t 8!ypt is the story told co)ntless ti,es in the 193#s, 19$#s and 19%#s abo)t ,any different co)ntries, and it is the Cori!inalD Ler,an variant that is the central point of criticis, in the book1len!th essays by Blackbo)rn and 8ley in The Peculiarities of 7erman 4istory. -s they (rote in their 2oint introd)ction: ?ne of o)r intentions (as to probe the nor,ative ass),ptions (hich proponents of the (onder*eg necessarily ,ade abo)t (hat a proper historical develop,ent looked like. -nd here, so,eti,es e@plicitly and often i,plicitly, it (as C(esternD and ,ost partic)larly -n!lo1-,erican and Irench develop,ents that (ere taken as a yardstick a!ainst (hich Ler,an history (as ,eas)red. &here are, ho(ever, proble,s (ith this kind of approach. =t can easily co,e to rest on a ,isleadin! and ideali4ed pict)re of historical develop,ents in those co)ntries that are taken as ,odels.R - second series of points in o)r ar!),ent follo(s fro, the first. 'hat (as it, in ter,s of content, that (as said to ,ark an aberration in Ler,an history (hen 2)d!ed by (estern nor,s* =t (as, above all, the fail)re of a proper bo)r!eois revol)tion. Bo)r!eoisies are s)pposed to rise, b)t the Ler,an bo)r!eoisie (as co,,only depicted as ,ovin! disastro)sly thro)!h ,odern history in the opposite direction.R8ach of o)r contrib)tions also +)estioned a different part of the (idespread idea of a Cfe)dali4edD bo)r!eoisie.R&here (as, of co)rse, )ndo)btedly a for, of social rapprochement bet(een bo)r!eoisie and lando(nin! class in

Ler,any fro, aro)nd the 1%$#s. But *e *ondered ho* far this *as e3ceptional in European terms and *hat it actually signified.519%6, pp. 1#J1", e,phasis ,ine; G)ch of this book is concerned (ith the effects of a si,ilar if not the sa,e ,isleadin! and Cideali4ed pict)re of historical develop,entsD on the )nderstandin! of capitalists and politics d)rin! the first decades of 8!yptian independence. =s there a re,arkable )nderlyin! re!)larity in the )nfoldin! of the historical process, despite other(ise profo)nd c)lt)ral, spatial and te,poral differences, or have analysts told a story abo)t the co)rse of the 8!yptian political econo,y that is as ri!idly scripted as any classical ,ar@ist sta!es1of1history ,odel, ho(ever ,)ch they believed that they (ere ar!)in! a!ainst s)ch teleolo!ies* When Capitalists Collide co,bined a revisionist vie( of 8!yptian investors (ith an alternative narrative abo)t and tra2ectory for the early decades of capitalist develop,ent. =n Part ==, (hich for,s the core of the st)dy, = challen!ed the pivotal idea that a nascent national ind)strial pro2ect (as so,eho( )nder,ined d)rin! the co)rse of the 19B#s and 19"#s. 'hile = s)pplied both e,pirical and concept)al ar!),ents for an alternative ,odel of capitalist or!ani4ation, collective action and conflict, at the sa,e ti,e, (hat is )lti,ately at stake is a collective interpretation of 8!ypt>s political econo,y that is rooted in the anticapitalist and third (orldist disco)rses of the 19$#s. Iro, ,y vanta!e point, the c),)lative i,pact of postdependency (ritin!s in .atin -,erican and -frican st)dies, the criti+)es of nationalist ind)striali4ation strate!ies 5rent1seekin! states, state1o(ned enterprises, e@port1led ind)striali4ation; and, above all, the disill)sion (ith and disappearance of non1,arket1based econo,ic syste,s creates a different conte@t for assessin! 8!ypt>s past. &he overall res)lt is to see the process of capitalist develop,ent propelled by estate1do,inated e@port prod)ction and the transition to i,port1s)bstit)tion ,an)fact)rin! in both a relatively ,ore n)anced and a less e@alted li!ht. &his is partic)larly so if the i,plicit co,parison (ith 8!ypt circa 1965 is not the United 9tates, Lreat Britain, Aapan or Irance, b)t a ,ore pla)sible ran!e of cases s)ch as &)rkey, 9yria, 8ast and 'est -frica, Norea or the Philippines. = do not ,ean to s)!!est that this process of capitalist develop,ent (as )ncontested7 it (as, and ,)ch of the e@ceptionalist historio!raphy is itself testi,ony to the disc)rsive di,ensions of this challen!e. B)t neither (as its Cfail)reD ass)red ,erely by the e@istence of (ell1doc),ented British neocolonial a,bitions or 8!yptian 2oint vent)res (ith e,battled Ganchester te@tile fir,s and .ondon ins)rance a!encies. By the end of 'orld 'ar ==, the neocolonialist pro2ect itself had collapsed, openin! )p ne( possibilities for the national political class to consolidate po(er. -t the sa,e ti,e, if one adopts the ter,s in (hich these iss)es are c)sto,arily posed, the balance of po(er bet(een forei!n and local capital in 8!ypt appears to have been shiftin! in favor of the local capital and, (ithin this cate!ory, in favor of 8!yptian nationals. 9)ch a vie( is consistent (ith the kind of revisionist ar!),ent that Colin .eys, /icole 9(ainson and others (ere advancin! circa 19$%J19%1 in the debate on neocolonialis, in Nenya.

Gy thesis is, ho(ever, based on an i,plicit a!!re!ation of o)tco,es across discrete cases of co,petitive conflict0for instance, the >-bb)d !ro)p>s bar!ainin! po(er (ith the 88C in 196BJ19660and of the shifts in loc)s of control inside partic)lar fir,s or sectors, as in the case of Beida Fyers and the te@tile ind)stry ,ore !enerally. = have dra(n a sharp distinction bet(een this ,odel of co,petin! investors and the ,ore fa,iliar ,odel of capitalist class1 or class fractionJbased action via their p)tative representative associations. 9)ch an o)tco,e1by1a!!re!ation or invest,ent1conflict approach re+)ires no prior ass),ption abo)t collective conscio)sness 5not to ,ention a)thenticity;. &he vario)s instit)tional arran!e,ents for re!)lation of the econo,y that beca,e sedi,enti4ed over the co)rse of the late nineteenth and early t(entieth cent)ries0oli!opolistic ,arkets, the central role of bank1holdin! co,panies associated (ith s,all n),bers of (ealthy )rban and r)ral1based fa,ilies, cross1sectoral invest,ent patterns, etc.0prod)ced ,)ch of (hat has since co,e to be identified as the e,er!ence of an 8!yptian national ind)strial bo)r!eoisie, (hich (as co,posed, nonetheless, pri,arily of settlers, nonciti4ens, representatives of forei!n fir,s, lando(ners, bankers and cotton e@portersH &he si!nificance of the fe)dali4ation ar!),ent in the 8!yptian case0the idea that capitalists (ere )nable to p)rs)e their ob2ective class interests beca)se of their dependence on and social interconnections (ith landlords0is the role it plays in fillin! in the acco)nt of bo)r!eois fail)re and its ready availability to stand in as the alternative internal e@planation either for fe(er ind)stries on the ,ar!in or, ,ore incred)lo)sly, for 8!ypt>s not havin! beco,e an advanced ind)strial po(er once the so1called cr)der clai,s abo)t i,perialis, and dependency 5the e@ternal factors; have been partially displaced in vario)s te@ts. &he ori!ins of acc),)lation in lar!e lando(nership and the specific for,s of prod)ction instit)ted there are clearly i,portant, b)t the i,plications for the history of 8!yptian ind)stry b)ildin! are ,ore often asserted than developed syste,atically, be!innin! (ith the i,plicit co)nterfact)al.[1] =f the ass),ption is an alternate develop,ent tra2ectory in the 1%$#s and 1%%#s )nderpinned by a social coalition that did not incl)de a class of lar!e lando(ners, say, alon! the lines of a ,ore a)tono,o)s peasantry and state b)rea)cracy, then, as the &)rkish case s)!!ests, a distinctly possible o)tco,e co)ld have been fe(er lar!e fort)nes, less rapid acc),)lation and less private ,an)fact)rin! ind)stry.[)] -lternatively, if the thr)st of the fe)dali4ation ar!),ent is, as it often see,s, that over the 19B#s, 19"#s and 196#s the do,inance of lar!e lando(nin! interests checked the !ro(th of the ,an)fact)rin! sector, then there are co,petin! e@planations, be!innin! (ith the oli!opolistic str)ct)re of the sector itself. &he point is that )ntil no( the clai,s abo)t the effects of landlord do,inance or fe)dali4ation tend to(ard the ,etaphysical, ass),in! that so,e force or set of forces ,)st have prevented the bo)r!eoisie fro, playin! its nor,al role as history ,aker.

=n Chapter B = reinterpreted the e@istin! research on ho( basic ele,ents of 8!ypt>s capitalist ,arket syste,051; the instit)tionali4ation of private property ri!hts in the 8!yptian co)ntryside, 5B; the for,ation of a class of lar!e estate o(ners, and 5"; the develop,ent of ne( )rban b)sinesses, professions and ,an)fact)rin! enterprises in the interstices of the boo,in!, forei!n1f)nded, lar!e1estate1based cotton1e@port econo,y0(ere for!ed in the ,id11%##s and then e@tended in the after,ath of the British occ)pation in 1%%B. - key point in that chapter is that 8!ypt>s laisse41faire1era econo,y (as not so,e spontaneo)sly e,er!in! process 5tho)!h also not so,ethin! p)rposely constr)cted in all its di,ensions by political a)thorities either;. -t the sa,e ti,e, its or!ani4ation did not re,otely rese,ble the ideal of a perfectly co,petitive ,arket. &he ense,ble of practices fro, the ,id11%##s that (e refer to as state for,ation and that is ,ost often traced thro)!h an evolvin! syste, of b)rea)cratic instit)tions 5the Iinance Ginistry, p)blic (orks, the Ginistry of the =nterior, the hydra)lic re!i,e; also entailed the instit)tionali4ation of a syste, of private oli!opoly in lando(nership, co,,erce and ind)stry. &he processes of state and class for,ation (ere bo)nd )p (ith one another in (ays that to ,e do not see, to be )sef)lly capt)red in the idea that Cthe stateD (as Ccreatin!D classes in 8!ypt, partic)larly (hen that idea tends to connote a (illed or intended ob2ective 5'aterb)ry 19%", -nderson 19%$, Richards and 'aterb)ry 199#;. 9)ch a vie( rests once a!ain on a hi!hly ideali4ed vie( of capitalis,>s e,er!ence in Cthe 'est.D -cceptin! for the ,o,ent conventional (ays of definin! the t(o classes in 8!ypt, the e,er!ence of the bo)r!eoisie and of the lando(nin! class not only happened at ro)!hly the sa,e ti,e b)t rested on the sa,e kind of privile!ed access to the reso)rces of the khedival state in for,ation. -s ?(en 519%1a: 5"5J5"3; notes abo)t the creation of landed estates, P&his processQ had its ori!in not in the develop,ent of local ,arket forces b)t in an e@ercise of state po(er. =t (as 8!ypt>s r)lers (ho handed over a lar!e part of the Felta to !overn,ent officials and 8!ypt>s ad,inistrative syste, that allo(ed others to sei4e land for the,selves.R&he first tentative ,ove to(ard the establish,ent of private property in land (as entirely the (ork of the co)ntry>s r)lers, for reasons of their o(n, and they (ere al(ays prepared to disre!ard (hat so,e have taken as the spirit of their policy in the interest of b)ildin! )p their o(n holdin!s or confiscatin! the assets of an official . . . (ho had fallen fro, !race. = have tried to doc),ent the parallel process at (ork in the for,ation of 8!ypt>s C,odernD ind)strial and co,,ercial sectors. <et = (o)ld ar!)e that the kind of arbitrary e@ercise of absol)tist1like a)thority that ?(en and others see as constit)tive of this ,ode of class for,ation (as rapidly checked by the occ)pation, the capit)latory re!i,e and the !rad)al instit)tionali4ation of the private ,arket econo,y. Certainly, the British ad,inistrators fo)nd the Capit)lations and Gi@ed

Co)rts i,pedin! their o(n absol)tist1like a,bitions, (hile the b)siness co,,)nity, Britain>s forei!n rivals and leaders in the 8!yptian national ,ove,ent ca,e to see the Gi@ed Co)rt syste, ,ore favorably, for the sa,e reasons 5Bro(n 199";. P)t another (ay, one effect of state for,ation 0that is, the Febt -d,inistration>s and later Cro,er>s p)rs)it of fiscal refor,0(as the creation and consolidation of instit)tions and practices that rapidly e,po(ered investors. 'hatever the concept)al val)e of ,aintainin! the distinction bet(een lando(ners and bo)r!eoisie, partic)larly ind)strial bo)r!eoisie, the distinction is not easily ,ade at the sociolo!ical level, (here, if anythin!, (e r)n the risk of )nderesti,atin! the de!ree of indivisibility bet(een lando(nin! and capitalist fa,ilies. &here is probably little !ro)nd for ever seein! lar!e lando(ners and bo)r!eoisie as t(o distinct class cores in 8!ypt that at so,e point start to ,er!e, b)t certainly there (as nothin! !rad)al abo)t this process. Ior instance, to adopt a fa,iliar if not very convincin! ,odel of class for,ation, did Cclass conscio)snessD proceed +)alitatively faster and f)rther than fe)dali4ation* =f (e )se the standard ,arker of Cclass1for1itselfD type develop,ent in the 8!yptian case0na,ely, the for,ation of or!ani4ed interest !ro)ps 5e.!., the Cotton Lro(ers -ssociation;0the ans(er (o)ld be no, !iven that s)ch associations e,er!ed aro)nd the first decade of the t(entieth cent)ry. &h)s, if CPbQy the 9econd 'orld 'ar there (as . . . no sharp distinction bet(een the a!rarian and ind)strial sections of the bo)r!eoisieD 5Beinin and .ock,an 19%$: 11;, then this (as e+)ally tr)e at least a !eneration earlier, at the ti,e of the Iirst 'orld 'ar, and back even f)rther. &he sa,e fa,ily sets or individ)als, be!innin! (ith &al>at :arb, avatar of the national bo)r!eoisie, helped to fo)nd and served as heads of virt)ally all the co)ntry>s b)siness associations, incl)din! the Iederation of =nd)stries, the Property ?(ners -ssociation, the Cotton Lro(ers -ssociation, the Cotton 8@porters -ssociation, the 8!yptian Leneral -!ric)lt)ral 9yndicate. &his is )ns)rprisin!. - s,all n),ber of fa,ily1based or si,ilarly closely linked investor coalitions 5e.!., the 9)arVs, <ahya, Gisr, 9alva!o, Rabbath !ro)ps; all had cross1sectoral holdin!s in bankin!, trade, )rban real estate, cotton e@port, ,an)fact)rin! and r)ral land1recla,ation co,panies, not to ,ention their ,any individ)ally o(ned estates. -s is often noted abo)t this kind of ,)ltisectorally oriented local b)siness oli!archy, circa the 9econd 'orld 'ar, C&here (ere divisions and conflicts a,on! landed, financial, co,,ercial, and ind)strial interests as (ell as a,on! forei!n, mutamassir 5+)asi18!yptian; and 8!yptian capital before 195B, b)t there (as also considerable overlap and a fair de!ree of co,,on interestD 5Beinin and .ock,an 19%$: 11;. &he point is ro)!hly correct, tho)!h it hardly e@ha)sts the ,atri@ of conflict and cooperation (ithin the political econo,y, and it is 2)st as tr)e for earlier decades. =!norin!, as = do in this book, conflict bet(een capital landlords and peasants (orkers as a constit)tive part of the narrative of the develop,ent of capitalis, in 8!ypt,

there (ere Cdivisions and conflictsD bet(een re!ions, bet(een lar!e and s,all fir,s, across ind)stries or sectors 5e.!., shippin!, road and rail transport; and, as = have sho(n in so,e detail, a,on! co,petitors.[*] &here are )nderstandable, theoretically !ro)nded, historically pla)sible and politically co,pellin! reasons (hy analysts privile!ed t(o type of divisions rather than others d)rin! the for,ative phase of theori4in! abo)t peripheral political econo,ies. =n any partic)lar acco)nt, the )nderlyin! lo!ic is that the de!ree or e@tent of ind)strial develop,ent attained in 8!ypt (as a f)nction of the bo)r!eoisie>s a)tono,y vis1T1vis forei!n capital and the landlord class. 'hat = have tried to sho( in this book, ho(ever, is that the ar!),ent is (ron! in the 8!yptian case. -ll = can do here is note that the kinds of evidence0in ter,s of definition of interest, ho( interests acted, and ho( policy o)tco,es e,er!ed0)sed to ill)strate the alle!ed political effects of fe)dali4ation in the 8!yptian case are !enerally si,ilar to the kinds of evidence that alle!edly de,onstrate ho( forei!n capital and its co,prador allies sapped the stren!th of the bo)r!eois pro2ect. =n the third and final part of this book, = p)rs)ed the lo!ical i,plications of this criti+)e of colonial1e@ceptionalist acco)nts: +)estionin! the !ro)nds for contin)in! to see inscribed in the co,ple@ and ca)sally overdeter,ined events of 195#J195B the overarchin! lo!ic of an aberrant capitalist develop,ent path and investors collectively incapable of takin! even ,ini,al steps to resolve the co)ntry>s deepenin! dile,,as in their o(n interests, tho)!h the sol)tion has been ,ade to appear so obvio)s. 9tr)ct)ral chan!es0land refor, to help the peasantry and free capital for ind)strial develop,ent, a state1sponsored develop,ent pro!ra,, a co,,it,ent to i,provin! the standard of livin! of the (orkers and peasants, co,plete soverei!nty in both the political and econo,ic spheres0*ere essential to removing the %arriers to further economic development.. . . 'hile the ind)strial interests (o)ld have benefited fro, s)ch ,eas)res as land refor,, they (ere !enerally too closely tied to conservative a!rarian interests to take the initiative 5Beinin and .ock,an 19%$: 1B, e,phasis ,ine;. -!ain, Beinin and .ock,an provide a co!ent synthesis of theprevailin! (isdo, traceable fro, =ssa(i>s 51956; st)dy of the Revol)tion to Oaalo)k>s 519%9; rehearsal of its betrayal, (hile their o(n approach to iss)es of (orkin!1class for,ation and identity politics in Wor$ers on the -ile !oes far in challen!in! ,any of the conventionsof colonial e@ceptionalis,. B)t the incl)sion of ideas s)ch as Cco,plete soverei!nty in both the political and econo,ic spheresD in a checklist of develop,ent prere+)isites is a potent re,inder of the stron! strand of ro,anticis, that is (oven thro)!h s)ch vie(s 5Phillips 19$$;. =n this first detailed acco)nt of the role played by the co)ntry>s leadin! capitalists in the events that led )p to the A)ly 195B ar,y takeover, it (as both inevitable and overd)e that a disc)ssion revise the relatively ,ore s(eepin! 2)d!,ents abo)t class and politics0s)ch as 'afd ` landlords,

9a>dist ` bo)r!eoisie0that (ere first p)t for(ard in 8!yptian ,ar@ist te@ts in the 195#s and 193#s. Chapters 5 and 3 sho( that investors (ere certainly divided abo)t (hat the f)t)re portended and (hat (as the best strate!y for dealin! (ith it. &he benefit of ,y approach is that the investors are act)ally identified. B)t there is )lti,ately little that distin!)ished the, save that so,e had capt)red the reso)rces that others coveted. ?f co)rse, s)ch for,s of instr),entalis, are hardly )ni+)e in the annals of postcolonial politics 5e.!., 9trachan 19$3, Robison 19%3, :a(es 19%$;. &he rent seekin! that British cons)ls never ceased cha,pionin! on the part of their o(n national captains of ind)stry and that )nderpinned the creation of ,)ch of 8!ypt>s C,odernD econo,y, (as 2)st as ro)tinely read as a si!n of the hopeless venality of the 8!yptian elite (hen practiced by >-bb)d and his rivals. &he archives of both the British and the -,erican !overn,ents are b)l!in! (ith the records of interest conflicts over rent seekin! and ind)stry b)ildin! in 8!ypt. -nd these te@ts evince a clear pattern of escalatin! protestations of corr)ption and de,ands for refor, by their a)thors at those precise points (hen invest,ent conflicts (ere perceived to be threatenin! British or, increasin!ly after 'orld 'ar ==, U.9. interests. Gore i,portant than (hat the declassified records predictably reveal abo)t the cynicis, of a host of actors fro, the past, like U.9. -,bassador Caffery, and those (ho are still the occasional s)b2ect of U.9. e,bassy reportin! today, like 9ira! al1Fin, G)stafa -,in and G)ha,,ad :aykal, is the s)rprisin! and po(erf)l s)pport they lend to critics of the idea of the capitalist class as a corporate political a!ent (ith a collective class interest. &he notion that the 8!yptian ind)strial bo)r!eoisie in partic)lar believed in and p)rs)ed so,e collective interest in the redistrib)tion of private estates has lon! been taken for !ranted. Perhaps so,e individ)al investors had co,e to cha,pion this partic)lar strand of post11965 develop,ent doctrine, tho)!h = fo)nd little evidence of this in the actions of 8!ypt>s bi!!est ind)strialists. = did, ho(ever, )ncover a !reat deal of evidence that investors and invest,ent !ro)ps (ere po(erf)l actors (ho (ere involved in virt)ally every facet of !overnance of the state and econo,y. &he postJ'orld 'ar == years (ere hardly a)spicio)s for the efforts by the political class to consolidate po(er over the postcolonial state. &he res)r!ence of )rban labor and st)dent protest in 1965J1963, the ,o)ntin! of a sporadic if still o,ino)s ca,pai!n of political assassinations and bo,bin!s of 8)ropean and Ae(ish instit)tions, the a!itation over the Palestine crisis, etc., all can be read as si!ns that relatively broad strata of 8!yptians (ere intent on reshapin! the political a!enda, even if to(ard different ends. Certainly, the instit)tions that b)ttressed the oli!archs> infl)ence (o)ld not !o )nchallen!ed. &he Canal Oone crisis of 1951J195B epito,i4es this process of contestation fro, belo(, tho)!h ,y o(n readin! (as intended as a ca)tion a!ainst a too close1ended and ,echanistic acco)nt of class, politics and history at this 2)nct)re. &he pre,ise that the treaty1abro!ation iss)e, the fi!htin! in the Canal Oone and the Cairo fire of Aan)ary 195B (ere all reflections, f)nda,entally, of the

deeper str)ct)ral crisis of 8!yptian society rooted in a back(ard for, of colonial capitalis, and in a fe)dali4ed bo)r!eoisie that (as incapable of offerin! a sol)tion is no lon!er convincin!. -fter all, (ith the sin!le e@ception of land refor,, the specific econo,ic policies follo(ed d)rin! the early years of the ar,y re!i,e (ere developed by and (ere )nder(ay in the late 196#s and early 195#s0)nder the 'afd. &he ne( ,ilitary leaders 5and their U.9. backers; like(ise (ere no less co,pelled to p)rs)e the canal bases iss)e. -nd tho)!h a !reat deal of theoretical (ei!ht is attached to the ar,y>s land1 refor, pro2ect, in reality, its p)rposes, e@ec)tion and conse+)ences had little to do (ith deepenin! capitalist develop,ent in 8!ypt. Richards, convinced that it co)ld have ,attered, concl)des that the fail)re to p)rs)e Cthe kind of far1reachin! land refor, carried o)t in 9o)th NoreaD is Cone of the ,any tra!edies of ,odern 8!yptian econo,ic historyD 5199B: 66;. 9till, there is no need for a co,plicated sociolo!ical analysis to )nderstand ind)strial investors> lack of enth)sias,. &he confiscation of the assets of the royal fa,ily and t(o h)ndred or so other po(erf)l fa,ilies ,ay have been pop)lar, 2)st and )sef)l to the officers in en!ineerin! the transition to pop)list a)thoritarianis,, b)t it did little for capitalists or capitalis, in 8!ypt. &he co)nterfact)al0a A)ly 195B !overn,ent p)rs)in! Gahir>s alternative strate!y0is (orth(hile positin!, even tho)!h one ,ay (ell prefer the co)rse )lti,ately follo(ed by /a!ib and /asser. -,on! other cases in .atin -,erica, the Bra4ilian e@perience is a re,inder that a type of capitalist develop,ent si,ilar to 8!ypt>s contin)ed to )nfold and deepen in the absence of land redistrib)tion. -nd altho)!h the national bo)r!eoisie, land refor,>s p)tative cha,pion, is no( said to have e@tended its do,inance in 8!ypt and across the postcolonial third (orld 5-h,ad 199B;, land refor, itself has virt)ally disappeared as an international nor,. -t the sa,e ti,e, a ,o,ent>s reflection on the postJ'orld 'ar == history of -sia, Central and .atin -,erica can serve as a re,inder of the tolls e@acted by and on those (ho in the past, and no do)bt (ith less certainty than historians, identified other revol)tionary ,o,ents in co)ntries s)ch as Vietna, 5Nolko 19%5;, 8l 9alvador 5F)nkerley 19%B; or the Philippines. =n the Philippine case, there (ere scathin! criti+)es inside the /e( Peoples> -r,y of their leaders> past errors in actin! on predictions of a revol)tionary sit)ation in Ganila in the ,id1196#s 5.achica 19$1: 1B5J1B3, "#BJ"13;. -nd recall that this (as in a co)ntry (here ar,ed revol)tionary cadres already for,ed a hi!hly disciplined fi!htin! force opposin! the state. &he 8!yptian co)ntryside (as a placid sea in co,parison, (hile the co)ntry>s s,all and splintered co,,)nist leadership5s; had little s)ccess in ,obili4in! the cities. :istorians do not have to pay for errors in 2)d!,ent. 9till, there is no avoidin! the need to revisit the historical1str)ct)ral acco)nt of the ori!ins and )nfoldin! of the A)ly 195B Revol)tion, (hich is (hat colonial e@ceptionalis, )lti,ately p)rports to e@plain. Re!ardin! the ideas abo)t the bo)r!eoisie that are a le!acy of this partic)lar approach to historical1co,parative political econo,y, it is no lon!er convincin! to vie( and speak of a capitalist class as a potential or partially reali4ed collective a!ent or a!ency. Rather than narratin! 5heroically or

tra!ically; the process of evol)tion of that a!ency, researchers sho)ld think of class or classlike effects that are instit)tionali4ed in different (ays and in different de!rees thro)!h vario)s practices, ,any of (hich have nothin! to do (ith the (illed ob2ectives of vast n),bers of capitalists or the representative associations of those (ho o(n the ,eans of prod)ction. Blackbo)rn and 8ley 519%6; ,ake a si,ilar point ,ore ele!antly and )sin! alternate lan!)a!e7 ,ore i,portant still, they be!in to develop the analysis syste,atically as does, fro, another direction, Gitchell in Coloni8ing Egypt. 519%%;. = looked at a different set of 8!yptian instit)tions, practices and class effects in this book, e,ployin! the concept of b)siness privile!e. &ho)!h = paid relatively little attention to the disc)rsive di,ensions of this process, ?(en>s 519%1b; ar!),ent, that the versions of econo,ic nationalis, pro,oted in the 19B#s and 19"#s (ere i,portant ,ainly as a strate!y to preserve and e@tend private ,arket1based, oli!opolistic privile!e, is )ndo)btedly correct. 8!yptian capitalists pressed their clai,s for ,ore po(er, (ealth and ind)stry on the basis of protectin! 8!ypt a!ainst forei!n do,ination. =n the 196#s and 195#s, econo,ic nationalis, (as bein! reinscribed (ith a radical, indeed anticapitalist content and deployed in a str)!!le (ith the oli!archs. &he invention of &al>at :arb as a direct ancestor of etatis, in 8!ypt and of -h,ad >-bb)d as the avatar of neocolonial do,ination ,arks a ,o,ent of s)ccessf)l resistance to the e@pansion of capitalis, and of private ,arket privile!e, a ,o,ent that ,any 8!yptians have not yet ceased defendin!.

Notes
1. Ior a !ood disc)ssion of contrastin! ar!),ents abo)t the effects of lar!e lando(nership on develop,ent and class str)ct)re (ithin the left in .atin -,erica and, partic)larly, in Chile, another case of se,icapitalist prod)ction relations in the r)ral sector, a fe)dali4ed bo)r!eoisie b)t, )nlike 8!ypt, no land refor,, see Oeitlin and Ratcliff 519%%: 163J155;. B. Neyder 51991;. :is readin! of the cases is )sef)lly contrasted (ith that of Neddie 519%1; to ill)strate the seis,ic shift in ideolo!ical orientation 5and hence interpretation; bet(een the 19$#s and the 19%#s. ". :avin! (ritten (hat is no( the classic te@t on the for,ation of the 8!yptian (orkin! class, Beinin and .ock,an obvio)sly do not i!nore the i,portance of (orkers to 8!yptian history, b)t (hat no( strikes ,e as a proble, is that labor is not inte!rated into their s),,ary state,ent of ho(, precisely, capitalis, developed in 8!ypt. 'hat (o)ld happen if (e introd)ced labor as a variable affectin! the tra2ectory of ind)striali4ation, ,)ch as (e no( think abo)t the landlord class or forei!n capital* Ior one (ay to think abo)t the iss)e, see Loldber! 519%3: 1%1J1%5 and 199B: 15BJ 156;7 also Beinin and .ock,an 519%$: 65";.

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