The effects of the fall of monopoly on the economy

06The effects of the fall of monopoly on the economy

Agriculture

• Farmers became free to grow whatever they wished in whatever way, and farming methods fell into lag and stagnation.
• Under Said the dakhuliya tax — levied on crops and goods passing between markets — was abolished.
• Cotton farming flourished and its price rose when Europe, and England especially, needed cotton.
• In Isma'il's era the state tried to develop farming methods again by introducing new plants.
• Land ownership widened from a right of use to rights of inheritance, gift and endowment.
• With foreign investment and lending from foreign banks, the government faced the problem of repaying debts, so the Muaraza Law (August 1871) was issued: whoever paid six times the tax on his land at once was exempted from half of it permanently and gained full ownership.
• This was one reason for the settlement of the peasants and attention to production.

Industry

• The output of state factories fell after most of them were closed.
• Small craft industries deteriorated and stagnated, unable to compete with foreign production; some disappeared, especially in Cairo.
• Some war industries boomed late in Abbas' reign and early in Said's, because of Egypt's part in the Crimean War (1853–1856) between Turkey and Russia, at the sultan's request.
• Under Isma'il the recovery continued through a larger army and the lifting of restrictions on building war equipment.
• Extractive industries: cotton-ginning, oil extraction and leather tanning; transformative industries: sugar, spinning and weaving, and paper.

Trade

• Internal trade was not much affected, but its restrictions were relaxed step by step:
  • agricultural producers were allowed to hold auction sales instead of selling through the government storehouse (shawuna);
  • English merchants were allowed to trade in agricultural and industrial products, sell them inside Egypt and export them;
  • foreigners supplied whatever the Egyptian market needed.
• The railway was built between Alexandria and Cairo and between Cairo and Suez.
• Land routes and agricultural railways were prepared, and the telegraph and postal networks were expanded.
• Two navigation companies were founded, one maritime and one riverine, with foreign capital.