In the late 19th century, Egypt found itself embroiled in financial and political turmoil that led to significant changes in its governance and foreign relations. The introduction of the law of liquidation in 1880 was a pivotal moment that set the stage for a series of events shaping the nation’s future.
Introduction of the Law of Liquidation
The law of liquidation established a framework for managing Egypt’s financial obligations by dividing its annual revenue into two equal parts. One half was allocated specifically for the payment of interest to creditors through the Caisse de la Dette Publique, an institution created to oversee Egypt’s debt repayment. This arrangement was intended to stabilize the country’s finances by ensuring that creditors received their dues consistently.
Rise of Nationalist Sentiment
Around the same time, Egyptian nationalist sentiment was on the rise, fueled by opposition to foreign intervention and control. In 1881, this growing nationalist fervor manifested in a military demonstration orchestrated by Arabi Pasha. The show of force compelled the then ruler of Egypt, the Khedive, to accept a government that was more aligned with nationalist interests. The Chamber of Notables, Egypt’s upper house, boldly asserted its right to approve the budget without the oversight of foreign financial controllers, signaling a desire for greater autonomy.
Nationalist Government’s Reforms
The nationalist government moved quickly to implement reforms, including plans to expand the Egyptian army and appoint native officers to positions of power. These moves were seen as an attempt to reduce foreign influence and establish a more independent national military apparatus.
Foreign Reaction and British Occupation
The actions of the nationalist government did not go unnoticed by the foreign powers with stakes in Egypt, particularly the French and the British. The British were quick to respond, leading to the dismissal of the nationalist government. Despite some resistance, British forces succeeded in capturing Cairo and establishing control over Egypt. The French, on the other hand, abstained from direct military involvement, largely due to indecision within their government. This resulted in the British abolishing the dual control system, which had previously allowed both Britain and France to oversee Egyptian finances, causing further resentment from the French.
Lord Cromer’s Rule and the Convention of London
Following the occupation, Lord Cromer became the de facto ruler of Egypt, a position he held from 1882 to 1906. Under his administration, significant changes were made to the country’s governance and economic policies. In 1885, the Convention of London was signed, which facilitated an international loan to aid Egypt’s economy. This agreement expanded the membership of the Caisse de la Dette Publique to include Germany and Russia, further internationalizing Egypt’s financial obligations.
Questions for UPSC
– How did the introduction of the law of liquidation impact Egypt’s sovereignty and its relationship with foreign creditors?
– In what ways did the nationalist movement in Egypt challenge the existing power structures, and what were the immediate consequences of their actions?
– What were the implications of the British occupation and the rule of Lord Cromer for Egypt’s political and economic independence?