WHY IS EGYPT SO RICH 4,500 years ago, one of the
greatest feats in human history was achieved. The ancient Egyptians constructed the first pyramids.
A marvel so spectacular it even has many scientists and archeologists awed.
They simply can’t fathom how such structures could be constructed in an era deemed to be primitive.
Well, that’s the marvel of Egypt, the core of civilization. Egypt is a country
in the northeastern corner of Africa. Egypt's heartland, the Nile River valley and delta,
was home to one of the ancient Middle East's most important civilizations,
as well as one of the world's first urban and literary cultures, similar to Mesopotamia
further east. Pharaonic Egypt flourished for about 3,000 years, alternating between native
dynasties and brief periods of foreign rule. Urban Egypt became an important element of
the Hellenistic civilization after Alexander the Great conquered the country in 323 BCE. The city
of Alexandria flourished under the Greek Ptolemaic dynasty, but in 30 BCE, the Romans seized Egypt.
Egypt eventually became one of the Arab and Islamic world's intellectual and cultural centers,
a position it cemented in the mid-13th century when Mongol troops attacked Baghdad and terminated
the Abbasid caliphate. The population of the Nile valley and delta, which is home to the vast
majority of Egyptians, is a reasonably homogeneous community with dominant physical traits resulting
from the combination of indigenous African and Arab ancestors. Foreign conquerors and
immigrants such as Persians, Romans, Greeks, Crusaders, Turks, and Circassians long ago
left behind a more diversified combination of physical kinds inside urban regions,
particularly the northern delta towns. There are more people with blond and red hair,
blue eyes, and lighter complexions than in the delta's rural areas, where peasant
agriculturists, known as fellahin, have been less affected by marriages with outside groups.
Now let’s talk about Egypt’s economy, Egypt has a GDP of $363 billion.
Despite the fact that the 1971 constitution classified the economy as socialist, with the
people controlling the means of production, the public sector controlled the economy for only
around two decades after the 1952 revolution—prior to which the country enjoyed a free market.
The majority of major nationalization occurred between 1961 and the early 1970s,
when the majority of important sectors of the economy were either public or tightly
regulated by the government. Large-scale industry, communications, banking and finance,
the cotton trade, overall international trade, and other sectors were included.
During that time, private enterprise steadily saw its scope narrowed, but there was still some
leeway in real estate, agriculture, and, later, the export sector. The government
imposed tight restrictions on personal income and land ownership. Furthermore, when the government
did not own the means of production, it regulated all major areas of production and distribution.
It regulated agricultural prices, set rents, managed internal trade, prohibited overseas travel
and the use of foreign currency, and established and monitored corporate boards of directors.
Projects were started by the government, and funds were granted.
Some of these limits were removed in the last quarter of the twentieth century
as part of the economic policy enacted in the early 1970s, allowing greater private-sector
participation in many fields. Although corporate boards of directors are now in
charge of day-to-day operations, they nevertheless receive instructions from public boards, and board
chairmen frequently coordinate their production policies with the relevant state minister.
To guide economic development, the government creates five-year development plans.
Similarly, the Egyptian government has been campaigning for increasing international
investment since the early 1970s, first obtaining financial aid from oil-rich Arab governments.
Despite the fact that Arab aid was suspended as a punitive measure after Egypt signed a peace
treaty with Israel in 1979, the subsequent return of several Western and Japanese corporations,
aided by the normalization of Egyptian-Israeli relations,
increased the potential for further foreign investment in Egypt. In the early 1980s, much of
the government's work was focused on adjusting the economy to the situation created by the 1979 pact.
Defense spending was lowered, while funding for roads, bridges, oil pipelines, telephone lines,
and other infrastructure projects was raised. Egypt's economy began to strengthen,
owing in part to new oil and natural gas finds, but also to increased Western aid.
Egypt's per capita gross domestic product increased dramatically in the late 1990s
and the first decade of the twenty-first century, as the government tried to increase
domestic output and overseas commerce. The economy, on the other hand,
has continued to endure numerous challenges. Egypt's general level of living is low,
and its economic resources are limited in comparison to the number of its population.
Land is the country's principal source of natural resources, but there isn't enough productive land
to feed the population. Increased population has put strain on resources, resulting in persistent
underemployment, prompting many Egyptians to seek work overseas. Political uncertainty following the
2011 uprising that deposed President Hosni Mubarak had a detrimental influence on most sectors of the
economy, with tourism, construction, and manufacturing suffering the most.
About 96 percent of Egypt’s overall area is desert. The lack of forests, permanent meadows,
and pastures puts a strain on the available arable land, which accounts for only around
3% of the total land area. This small area, which supports an average of 8 people per acre,
is, nonetheless, extremely fertile and is cropped several times a year.
Agriculture is still a significant part of Egypt's economy. It accounts for almost one-eighth of the
country's GDP, employs roughly one-fourth of the workforce, and generates a significant
portion of the country's foreign exchange through agricultural exports. Egypt's high population
growth necessitated a farming intensification that was nearly unheard of elsewhere. Canals,
drains, dams, water pumps, and barrages all require significant financial investment,
as do professional labor, commercial fertilizers, and pesticides. Crop rotation, in addition to
government regulations on the allocation of land to crops, the kinds grown, fertilizer
and pesticide distribution, and marketing, contributes to good agricultural productivity.
Egyptian agriculture, unlike that of other emerging countries, is largely orientated toward
commercial rather than subsistence cultivation. Field crops account for over three-quarters of
Egypt's total agricultural output, with the rest coming from livestock, fruits and vegetables,
and other speciality crops. Egypt has two growing seasons, one for winter crops and the other for
summer crops. Cotton is the most important summer field crop, absorbing much of the available labor
and accounting for a significant amount of export value. Egypt is the world's leading
producer of long-staple cotton, accounting for roughly one-third of global production;
yet, Egyptian cotton production represents a minuscule percentage of global yield.
Corn, rice, wheat, sorghum, and beans are among the most important field crops. Despite its high
output, Egypt's grain production falls short of the country's complete consumption demands;
a large percentage of the country's foreign cash is spent on the import of cereals and milling
goods each year. Sugarcane, tomatoes, sugar beets, potatoes, and onions are all key crops.
Many types of fruit are grown, and some are exported, such as citrus.
The cycle of inundation and decreasing water, of high Nile and low Nile, created the Egyptian year
and regulated the lives of Egyptian farmers—and most Egyptians were linked to a life on the
land—from birth to death, from century to century, until the completion of the Aswan High Dam
in 1970. The land's wealth, perhaps its very continuity, depended on the Nile's regular
behavior. The three seasons of the Egyptian year were named by the land conditions caused by the
river: akhet, which meant "inundation," peret, which meant "recovery," and shomu, which meant
"lack of water." When the Nile acted as expected, which was most of the time, life went on as usual;
when the flood failed or became excessive, disaster ensued. The Aswan High Dam allowed
not just for flood control on the Nile, but also for the reclamation of enormous swaths of land for
agricultural. By 1975, the Aswan High Dam project had reclaimed almost 1,000,000 acres of land,
in addition to 700,000 acres that had been changed from basin irrigation to perennial irrigation.
Egypt's mineral resources are limited in comparison to the country's physical size
and population density. The quest for petroleum began earlier in Egypt than elsewhere in the
Middle East, with small-scale production beginning in 1908. However, major results
were not found until the mid-1970s, especially in the Gulf of Suez and areas of the Western Desert.
Egypt had become a major oil producer by the early 1980s, despite the fact that total production was
still minor by Middle Eastern standards. The Gulf of Suez Petroleum Company, often known as Gupco,
operates the Morgan, Ramadan, and July fields in the Gulf of Suez, as well as the Ab Rudays
area of the Sinai on the Gulf of Suez, which provide the majority of Egypt's petroleum.
Egypt also obtains oil from fields in the Western Desert at Al-Alamayn and Razzaq.
Some significant natural gas deposits have been discovered while searching for oil,
including large quantities in the delta and the Western Desert, as well as offshore under
the Mediterranean Sea. In the Ab Qr region, northeast of Alexandria, wells have been dug.
In the north delta near Ab M, an Egyptian-Italian gas discovery was made in 1970, which was
developed partially to provide a fertilizer factory and partly to fuel the industrial
centers in the north and northwest delta. Abu Madi was the first Egyptian gas field to start
producing in 1974. Other natural gas reserves may be found in the Western Desert, the delta,
the Mediterranean shelf, and the Gulf of Suez, and by the early twenty-first century,
natural gas output had begun to match that of oil, both as a domestic and export fuel.
Egypt has a number of oil refineries, including two in Suez. In 1977, the first of Egypt's twin
crude pipelines was completed, connecting the Gulf of Suez to the Mediterranean Sea near Alexandria.
Sumed, the Suez-Mediterranean pipeline, is capable of transporting 2.5 million barrels
of oil per day. A consortium of Arab countries, principally Saudi Arabia, Kuwait, and Egypt,
funded the Sumed pipeline. A crude oil pipeline connecting Ras Shukhayr, on the Red Sea coast,
and the refinery at Musurud, north of Cairo, was inaugurated in 1981. Additional oil pipelines
connect Musurud to Alexandria, as well as fields near Hurghada to Red Sea terminals.
Manufacturing became one of the most important sectors of Egypt's economy during
the twentieth century, accounting for nearly one-fourth of GDP by the twenty-first century.
Domestic manufacturing was weak from the late 1800s until around 1930 as a result of free
trade rules that favored the importation of foreign goods. In 1930, the government put
a customs duty on imported goods to foster the development of Egyptian manufacturers,
motivated by the need to boost national income, diversify the economy, and meet the ambitions of
emerging nationalism. In the 1920s and 1930s, the Bank of Egypt provided loans to Egyptian
entrepreneurs to help boost domestic output. Printing, cotton ginning, transportation, spinning
and weaving, vegetable oil extraction, and the manufacture of medicines and rayon were among
the businesses established. During World War II, Egypt was a key Allied base, but it was cut off
from European imports, which drove the development of industry, particularly textile products.
Following a long-term trade and aid deal with the Soviet Union in 1964, most large-scale
manufacturing firms were nationalized, and a focus was placed on building heavy industry.
In 1970, a new aid arrangement with the Soviets allowed for the building of an iron and steel
complex at Ulwn as well as the establishment of a number of power-based companies,
including an aluminum complex that uses the High Dam's power.
In 1971, an ammonium nitrate facility was established at huwan, based on gases generated
in the steel mill's coking unit. At Aswan, there is also a nitrate fertilizer facility.
Banking as we know it now dates back to the mid-nineteenth century. The Bank of Egypt
and the Anglo-Egyptian Bank were founded in 1858 and 1864, respectively. In 1866, the French bank
Crédit Lyonnais, followed by the Ottoman Bank, and subsequently other French, Italian, and Greek
banks, began operations in Egypt. The National Bank of Egypt and the Egyptian Agricultural
Bank were both established with British funds. The Banque Misr was the first Egyptian bank.
The National Bank of Egypt has performed the tasks of a central bank since its creation,
a status that was recognized by law in 1951. All English and French banks and insurance businesses
were nationalized and taken over by various Egyptian joint-stock corporations in 1957;
as a result, all shareholders, directors, and managers of those financial institutions were
legally required to be Egyptian residents. Banque Misr was nationalized in 1960
after holding a number of industrial firms in addition to doing routine banking activities.
The National Bank of Egypt, which had similarly been nationalized in 1960,
was separated in 1961 into a commercial bank that retained its former name and a central bank,
the Central Bank of Egypt. In addition to the central bank,
the government-sponsored Public Organization for Agricultural Credits and Co-operatives, the
Development Industrial Bank, and three mortgage banks, all remaining financial institutions were
nationalized later that year, and their operations were concentrated in five commercial banks.
The Egyptian pound, the national currency, is issued by the central bank.
In the early 1970s, the government reformed the banking system once more,
combining some of the biggest banks and assigned particular functions to the others.
As part of a program aiming at liberalizing the economy, two new banks were established,
and international banks were once again permitted to operate in the country.
Joint banking projects between Egyptian and foreign banks were of particular importance.
In 1980, Egypt formed its first international bank since the revolution,
as well as a national investment bank. Imports typically account for one-third
of Egypt's GDP, while exports account for one-tenth. Since World War II, exports have
consistently lagged behind imports. From 1960 to 1965, the trade gap grew significantly as
development spending increased, peaking in 1966. Following the 1973 war with Israel, a
concerted attempt was made to restrict imports and increase exports, but it was largely unsuccessful.
The trade deficit reached new highs in the early and mid-1980s, owing to a fall in petroleum export
revenue and an increase in food imports. These issues are still present in the early twenty-first
century. Transfers from abroad, notably as aid from Western governments and remittances from
Egyptians working in other countries, helped to offset the massive visible trade deficit.
Raw materials, mineral and chemical products, and capital goods such as machinery,
electrical apparatuses, and transportation equipment account for about two-fifths of imports,
while foodstuffs account for one-fifth and other consumer items for the remaining one-fifth.
Petroleum and petroleum products are the most important exports, followed by raw cotton,
cotton yarn, and textiles. Raw resources, mineral and chemical products, and capital goods are all
exported. Agricultural exports include rice, onions, garlic, and citrus fruit.
Egypt's most important trading partners are China, the United States,
Italy, Germany, and the Gulf Arab countries. In hindsight, Egypt is a relatively wealthy
country with a rich historical and cultural ancestry, which pioneered modern civilization
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