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Egypt - 1968

Egypt - 1968

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Published by Hossam el-Hamalawy
This is Chapter 4 of my MA Thesis, written in 2001, at the American University in Cairo Political Science Department.
This is Chapter 4 of my MA Thesis, written in 2001, at the American University in Cairo Political Science Department.

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Categories:Types, Research, History
Published by: Hossam el-Hamalawy on Jun 13, 2011
Copyright:Attribution Non-commercial


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After discussing the global and regional panoramas, this chapter sets out toinvestigate the Egyptian political arena in the late 1960s. The precipitants of therevolutionary political process in Egypt started with the economic crisis in the mid-1965. The defeat in the 1967 war was to help speed up the revolutionary process, withthe global and regional radicalizing factors acting as catalysts. The 1968 events inEgypt were a turning point, paving the way for the future explosions in the 1970s.
The Crisis of the Nasserite State Capitalism
The Nasserite regime embraced a Five-Year-Plan in 1961, with high ambitionsof industrialization, building the High Dam, and increasing Egypt’s exports. However,the basic sources of financing this plan were loans from foreign countries. Out of US$5 billion: $1.6 billion from the Soviet Union, $300 million from the US and $840million from other countries. The rest of the funds came from the nationalized capitaland from the surplus extracted from the peasantry.
The results were catastrophic.Imports increased from $229 million at the beginning of the plan to $413million (at 1964 prices). The trade deficit reached $166 million; the percentage of imports as a part of the GDP increased from 15% in 1961 to 20% by the end of the plan.
 The continuous decline in local investments as a source of financing the Five-Year-Plan, led the regime to depend more on external loans. Things were made worse
Figures quoted in “
Tahawolat ‘l-Iqtisad al-Massri
,” 12.
Figures quoted in Ibid., 13.1
 by the crisis of the cotton crop in 1962, which led to the decrease of foreign exchangeearnings from LE121 million in 1960/61 to LE75 million in 1961/62. In addition tothat, the government had to pay LE25 million to Britain and LE27.5 million to theshareholders of the Suez Canal company as compensations for the nationalization;and another LE15 million to Sudan to resettle Nubians disaffected by building theHigh Dam. The defense budget also was swelling during to the war in Yemen.
 In order to finance the trade deficit, the government resorted also to using itsforeign currency reserves, which led to their decline from LE109 million in the beginning of the plan to only LE7 million in 1962! In May 1962, the governmentreached a deal with the IMF, whereby it took a loan for LE20 million and theEgyptian pound was devalued from 35.3 pt for the dollar to 43.5 pt.
By 1965 the US stopped its wheat exports to Egypt, leading to generalinflation in the food market reaching 11.5%. In summer 1966, the government struck another agreement with the IMF, whereby the pound was further devalued by 40%,and a program of austerity measures was to be adopted, leading to the decline ininvestment budget from LE383 million in 1966 to LE365 million in 1967.
 The 1967 defeat came as a further heavy blow to the Egyptian economy. Theregime could not adopt any more Five-Year-Plans. The defense budget swallowednational resources. The ones who paid the price were the poor from the working and peasantry classes. The annual per capita consumption of wheat declined from115 Kgin 1966 to 72 Kg in 1970.
 The same pattern is reflected on other basic commoditiesin one year 1967-8: the consumption of corn declined by 8.4%, sugar by 14.3%, oil by14.5%, gas by 16.7% and beans by 20.9%.
Figures quoted in Waterburry, 94-5.
Figures quoted in Ibid., 95.
Figures quoted in Ibid., 95-8.
Tahawolat ‘l-Iqtisad al-Massri
,” 15.
Shoukri, 39.2
The 1967 Defeat
The 1967 defeat in front of Israel was a turning point for Nasserite Egypt. Thedefeat came as a shock for the Egyptian masses whose expectations the regime’srhetoric was inflaming before the war.
In fact the Palestinian cause was one of themain cornerstones upon which Nasser’s legitimacy rested. The regime even used it for suppressing internal democracy (in the name of “unifying the internal front”). Thedefeat, according to former student leader Dr. El-Salamony, had cut the “umbilicalchord” binding the Egyptian nation to Nasser.
Nasser’s legitimacy started to be put inquestion, and the defeat would cause a high level of radicalization in the Egyptian political arena.
The Rebirth of the Mass Movement
February 1968
Following the declaration of Nasser’s intention of resigning, anti-western and pro-Nasser demonstrations engulfed Egypt, with attacks against western embassiesand interests. In my view, the demonstrations were still supportive of Nasser becausethe sheer scale of the defeat was not clear yet. Moreover, Nasser’s speech gave theimpression that the US was directly involved and that the Egyptian army faced boththe Israeli and the American armies.
The public mood changed later, with more facts being disclosed everyday. In his book on “political jokes” Hammouda describes howthe regime and the military establishment became subject of the Egyptian people’sirony, cynicism, and mocking. The spread of jokes ridiculing the establishment pointed out to the start of erosion in the regime’s legitimacy.
El-Salamony, 67.
Ibid., 75.
“The enemy whom we were expecting from the East and North came from the West- a factwhich clearly showed that facilities exceeding his own capacity and his calculated strength had beenmade available to him,” quote from Nasser’s resignation speech, Arab Report and Record. 1-15 June1967: 199.
Adel Hammouda,
 Al-Nokta al-Siyassia: Kayf Yaskhar al-Messryoun men Hokkamehem?
(The political joke: how do the Egyptians mock their rulers?) (Cairo: Dar Sphinx 1990).3

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