Economic conditions: industry

03Economic conditions: industry

• Industry was heavily affected by the occupation, having already suffered when monopoly fell: the Egyptian market became an arena for marketing European industrial production, protected by the Capitulations and the commercial treaties with Europe.
• The Egyptian government could not protect local industry; rather, it placed it in unequal competition through the following measures:
  • an 8% tax on all cotton textiles, which caused the stagnation of the spinning and weaving industry;
  • an excise duty on sugar made in Egypt, raising its price until it equalled imported sugar;
  • making the tax on imported industrial machinery equal to the tax on foreign consumer goods, so national industry's costs rose and marketing it became hard;
  • a duty of 1.25% on Egyptian manufactures exported, raising their price abroad so that they found no buyer.
• Industrial education deteriorated after the end of monopoly, and the government only saw the danger in 1907, when an administration of technical industrial education was created.
• Faced with this unequal competition and the government's inability to protect local industry, nothing remained but to sell the cotton-spinning mills and weaving workshops it owned.
• The gun and ammunition factories were closed and their equipment sold, and the government came to rely on purchasing from England for the army's equipment and ammunition.
• Small non-governmental industries deteriorated and bankruptcies spread among their owners, and there was no longer any guild to protect them, since the guilds were abolished in 1891.
• Imported goods formed a large share of Egyptian consumption, so much that Cromer boasted in his 1905 annual report that European textiles had replaced local ones.
• Despite the abundance of capital in the landowners' hands, they preferred to invest it in land reclamation and agriculture rather than in industrial production doomed to unequal competition; and the foreigners themselves refrained from investing in industry, in order to leave room for the sale of their own countries' products.