Opinion: What future for Egypt’s wealth?

The wealth of nations changes hands in times of turmoil or great transformation. It is seized by conquest, in wars, confiscated by rulers, transformed by changing economic conditions or redistributed by whoever commands power in the name of a revolution. In 1534, Henry VIII confiscated all property of the Catholic Church when, in a dispute with Pope Clement VII in Rome over his wish to divorce his first wife, Catherine of Aragon, he declared himself the head of the Anglican Church which he established to replace the Catholic Church. During the French Revolution in 1789, les sans-culottes chased noblemen out of their lands, guillotined or banished them. In 1805, Mohammed Ali, the founder and first ruler of modern Egypt, massacred the Mamelukes, confiscated all their land and property and reallocated it to his family and loyalists. More recently, the Occupy Wall Street movement in the U.S. marked the first anniversary of its founding and nationwide protest action, deepening the crisis of the capitalist system. Meanwhile, the Bill and Melinda Gates Giving Pledge initiative, jointly launched with Warren Buffet in 2010, has enlisted 92 American billionaires to give away at least half their fortunes to charity, education and public services. Wealth is changing hands, with a smile.

Wealth changed hands in Egypt a few times since it gained nominal independence from Britain in 1922. The founding of Banque Misr in 1920 by Talaat Harb marked the beginning of a shareholders’ capitalist economy in a country largely dependent on agriculture and where the majority of the population tilled the land, virtually as land serfs. While vast swathes of land remained the main source of wealth, Talaat Harb’s Banque Misr founded, financed and initially managed major industrial and trading companies through public financing, not private ownership. It established textile, insurance, shipping, publishing, movie-making industries and Egypt’s first airline, EgyptAir, among scores of other projects. It was the second Egyptian industrial renaissance after Mohamed Ali's. Then came the 1952 Free Officers’ Movement that introduced land reform to break up the political and economic weight of the super-class of landlords. It established state control over business, banking and industrial activities, eventually leading, 10 years later, to state capitalism under the pseudo name of socialism. Nationalization and sequestration measures created a bloated public sector marked by over-employment and inefficiency, managed retired officers of the army. The regime needed a trusted class of loyalists to shore it up, particularly after the wave of nationalizations. But the regime also had a mammoth achievement in building the High Dam and laying down the foundation of heavy industry.