Price distortions and subsidies were magnified over time, resulting in the misallocation of resources and straining the government budget. For example, in 1987 the ratio of consumer price per kilowatt-hour of electricity to production and distribution costs was less than 0.25. This shortfall, coupled with rising consumption, contributed to a growing government deficit, which compelled the government to reconsider its pricing policy.

Achievements were mixed: GDP grew at a rate close to the target of 7 percent per annum, but other goals were not met. The lack of macroeconomic coordination and implementation mechanisms, as well as the projection of unrealistic targets are cited as reasons for this failure. Furthermore, private-sector investment, which was expected to play a key role, did not materialize, especially after the wave of nationalization in the early 1960s.

A number of subsequent plans were never implemented. It is indicative of the long hiatus in planning that the next plan was also called the First Five-Year Plan (FY 1982-86). (To avoid confusion, this plan is referred to as the 1980s First Five-Year Plan, and the earlier one as the 1960s First Five-Year Plan). It was seen as part of a long-term plan extending to the year 2002. With this plan, the Ministry of Planning began to assume major responsibility for the economic process.

The plan itself had the same thrust as that of the 1960s, emphasizing heavy industry and electricity, and suffered similar problems. Apart from improving the infrastructure, especially in the metropolitan areas, its targets, including an annual GDP growth rate of 8 percent, were seldom accomplished. Before its conclusion, Egypt was feeling the heavy burden of external debt.

The latest plan, the Second Five-Year Plan (FY 1987-91), promised continuity and change. The most prominent investment areas were those of electricity and power, industry, public utilities, irrigation, and land reclamation. It anticipated a GDP growth rate of 5.8 percent per year, which in early 1990 it was already failing to meet. Most noticeably, the plan envisaged that private-sector investment would almost double to 39 percent of the total, from 23 percent in the previous plan. The increase was predicated upon an assessment of the sector's outlays in the preceding plan, which showed outlays as often surpassing targets, and upon the incentives the government would offer. The government specified other plan objectives, such as increased productivity, rather than added capacity; a shift to exports rather than import substitution; improvement of data gathering by spreading computer usage and training census personnel; and redressing regional disparities through investment in new and previously neglected regions.

Available information seemed to indicate perceptible, albeit slow, changes in the relative weights of the state and private sectors in the economy that favored the latter. For example, between FY 1983 and FY 1986 the ratio of public investment to gross investment dropped from 83 percent to 70 percent. The FY 1987-91 Five-Year Plan envisioned private sector investment to rise to 37 percent of all investment compared with 24 percent in the previous plan. In September 1982, Mubarak introduced a new investment law that offered Egyptian investors most of the privileges foreign investors had enjoyed. The draft of another new investment law was being debated in early 1989 in the People's Assembly (Majlis ash Shaab, formerly the National Assembly), but as of early 1990 no action had been taken. This latest proposal aimed at combining and amending all the investment laws passed in the preceding fifteen years to provide more incentives for the private sector.

Private-sector investment was largely confined to the service areas and agriculture, where land was privately owned, although the state retained considerable influence through a web of price and other controls. At the end of the FY 1982-86 Five-Year Plan, 57 percent of private investment was in housing and about 11 percent in agriculture. The private sector made some inroads into the tourist industry after the mid-1980s, when privatization was actively encouraged by the minister of tourism. As of 1990, private investment had not yet become a major player in the commodityproducing sectors, apart from agriculture. Foreign direct investment was not forthcoming, and what little there was went mainly into the oil industry.

The government's control of the economy was reinforced by various financial and administrative mechanisms. Prominent among these were price controls, setting the exchange rate of the Egyptian pound, collection of public revenues and allocation of expenditures, and development planning. Since 1987, reforms loosened the government's control over these areas.

Source: U.S. Library of Congress

The process transformed the state into the dominant economic agent in the country and culminated in a new economic system labeled "Arab socialism" in the National Charter issued in 1962. The government implemented a land reform program that aimed at eliminating what it referred to as a "feudalist" stratification of landholding and instead distributing land to small peasants and the landless. By 1964 a huge public sector had evolved, including all utilities, communications, and finance as well as large manufacturing enterprises, transportation, wholesale and foreign trade, some big retail stores, and construction firms. By 1973 the ratio of public to private in the composition of GDP was 58 to 42 in contrast to 15 to 85 in 1953. The government fixed the exchange rate of the Egyptian pound, began development planning, and controlled foreign trade. Nasser nationalized the Suez Canal in 1956 and in the early 1960s nationalized about 300 key enterprises owned by Egyptian nationals and foreigners. The private sector came under extensive regulation.

Because of the economic difficulties in the second half of the 1960s, which were exacerbated by the June 1967 War with Israel, the regime began to reconsider aspects of state controls and its attitude toward the private sector. A pronounced shift in orientation, however, awaited Sadat's takeover at the end of 1970.

A combination of economic problems, political considerations, and his own predilections led Sadat after the October 1973 War, to declare a new policy he dubbed infitah (opening or open door). The main ingredients of the policy were to relax existing government controls over the economy and bureaucratic procedures, to encourage the private sector, and to stimulate a large inflow of foreign funds.

The open-door policy succeeded in generating a large inflow of foreign funds in the form of remittances, foreign grants, and aid, especially from the United States after the signing of the Camp David Accords with Israel. The economy also grew at impressive rates. But the negative side of the policy was that the country was flooded with imports, and the government was compelled several times in the 1980s to reimpose import restrictions. The income gap between rich and poor widened, and conspicuous consumption reappeared.

Despite the infitah, the government found itself even more deeply involved in the economy. Subsidies grew from 1 percent of GDP in 1970 to 11 percent in 1979. The state's contribution to fixed investment remained high, at 87 percent in 1977. In the same year, government employment accounted for 32 percent of the total, but the increased personnel did little to clear up the bureaucratic snarls that blocked development. Private domestic and international investment went primarily to housing and trading companies. Foreign investment remained meager because of the cumbersome regulations, the bureaucracy, the political uncertainty, and insufficient incentives.

Like most countries in the Middle East, Egypt partook of the oil boom and suffered the subsequent slump. Available figures suggest that between 1975 and 1980 the GDP (at 1980 prices) grew at an annual rate of more than 11 percent. This impressive achievement resulted, not from the contribution of manufacturing or agriculture, but from oil exports, remittances, foreign aid, and grants. From the mid-1980s, the GDP growth slowed as a result of the 1985-86 crash in oil prices. In the two succeeding years, the GDP grew at no more than an annual rate of 2.9 percent. Of concern for the future was the decline of the fixed investment ratio from around 30 percent during most of the 1975-85 decade to 22 percent in 1987.

The post-World War II growth was accompanied by a certain degree of diversification of the economic structure, although not without serious flaws in the diversification. By 1952 agriculture's share of GDP at fiscal year (FY) 1959 market prices was 33 percent, industry's (including mining and electricity) share reached 13 percent, and the service sectors' share amounted to 54 percent. The diversification resulted from the decline of agriculture's contribution to the GDP and the ascendancy of industry and, particularly, of government services. Agriculture's share in the GDP dropped by more than half from 1952, stabilizing near 15 percent through most of the 1980s. Industry's share moved in the opposite direction: from only 13 percent in 1952, it hovered around 35 percent in the 1980s.

Although the industrial sector's contribution to the GNP rose during this period, that growth was due to the increase in energyrelated activity, especially oil-drilling. Manufacturing stagnated and may even have declined. In 1974 (when data for the subsector became available), manufacturing accounted for 15 percent of GNP, but its share fell to 12 percent in 1986 and remained there in early 1990. The lackluster performance of manufacturing was one of the main reasons for the Egyptian economy's inability to become self-sustaining, and for its dependence on oil and external financing.

The services (including construction) held relatively steady, comprising around one-half of GDP, a figure that included the contributions of the various subsectors. An important subsector from a developmental viewpoint was the one entitled "other services"--mostly government services. These averaged 14.2 percent of the growth in GDP in the years from 1952 to 1959 and 32.7 percent of the growth in the years from 1959 to 1969. The increase resulted primarily from the expansion in the bureaucracy that followed the 1961 decree guaranteeing government jobs for all university graduates. The trend continued under Anwar as Sadat (1970-79), and slowed, or may have reversed under Husni Mubarak as the state became financially incapable of hiring the many new jobseeking graduates. Although government employment may have encouraged economic growth temporarily, it impeded it over the long run, competing for scarce investment funds and exacerbating the trade deficit.

Infrastructure

In spite of progress in the 1980s, by the end of the decade Egypt still had a long way to go in expanding and improving existing services such as housing, transportation, telecommunications, and water supply. Housing remained inadequate; urban dwellings were often very crowded, and residents lived in makeshift accommodations. Housing was essentially a private activity, and the government tended to underinvest in the sector. The electric grid reached essentially all villages in Egypt by the early 1980s, but blackouts in Cairo and other cities were not uncommon. A major sewage project was under way. It aimed at revamping and expanding the overflowing, antiquated network of sewers, pumping stations, and treatment plants. Some of the work was scheduled for completion by 1991. With help from the United States Agency for International Development (AID), telephone lines doubled at the end of the FY 1982-86 Five-Year Plan.

Because infrastructural improvements and additions were costly and required a long lead time, no relief was anticipated before the mid-1990s. The FY 1987-91 Five-Year Plan allocated more than £E4.1 billion for infrastructure. The problem that faced the government was how to balance the badly needed improvement of the infrastructure against the fact that such investments created only temporary employment and had small impact on industries that served or were served by the infrastructure.

Transportation

Egypt's road and rail network was developed primarily to transport population and was most extensive in the densely populated areas near the Nile River (Nahr an Nil) and in the Nile Delta. Areas along the Mediterranean coast were generally served by a few paved roads or rail lines, but large areas of the Western Desert, Sinai Peninsula (Sinai), and the mountains in the east were inaccessible except by air. The Nile and a system of canals in the Delta were the traditional means of transporting goods, although freight was increasingly carried by truck or rail. The entire system was unable to keep up with rapid population growth, particularly in the large urban areas, and expansion and modernization of all forms of transportation were under way.

In early 1990, Egypt had more than 49,000 kilometers of roads, of which about 15,000 kilometers were paved, 2,500 kilometers were gravel, and the remaining 31,500 kilometers were earthen. The highway system was concentrated in the Nile Valley north of Aswan and throughout the Delta; paved roads also extended along the Mediterranean coast from the Libyan border in the west to the border with Israel. In the east, a surfaced road ran south from Suez along the Red Sea, and another connected areas along the southern coast of Sinai from Suez to the Israeli town of Elat. A well maintained route circled through several western oases and tied into the main Nile corridor of highways at Cairo in the north and Asyut in the south. Large areas of the Western Desert, the mountainous areas near the Red Sea, and the interior of the Sinai Peninsula remained without any permanent-surface roads, however.

The state-owned Egyptian Railways had more than 4,800 kilometers of track running through the populated areas of the Nile Valley and the coastal regions. Most of the track was 1.435-meter standard gauge, although 347 kilometers were 0.750-meter narrow gauge. Portions of the main route connecting Luxor with Cairo and Alexandria were double tracked and a commuter line linking Cairo with the suburb of Hulwan was electrified. Built primarily to transport people, the passenger service along the Nile was heavily used.

Less heavily traveled routes provided connections to outlying areas. A coastal route west from Alexandria to the Libyan border was being upgraded to allow for increased passenger travel. Tracks along the Mediterranean coast of Sinai, destroyed during the June 1967 War, had been repaired, and service was restored between Al Qantarah on the Suez Canal and the Israeli railroad system in the Gaza Strip. New ferry boats allowed passengers at Aswan, the southern terminus of the Egyptian Railways, to connect with the Sudanese system. A new line intended to export phosphates was under construction from Al Kharijah in the Western Desert to the port of Bur Safajah.

The southern leg of the forty-two-kilometer Cairo Metro, the first subway system in Africa or the Middle East, opened in 1987. This line, built with the cooperation of France, linked Hulwan in the south with three main downtown stations, named Sadat, Nasser, and Mubarak. In 1989 the northeast line opened, extending from downtown to the suburbs. The city planned to build an east-west route across the Nile to Giza (Al Jizah). The government hoped that the subway construction would relieve the extremely jammed streets, buses, streetcars, and trains.

Although Egypt had sixty-six airfields with paved runways, only the airports at Cairo and Alexandria handled international traffic. EgyptAir, the principal government airline, maintained an extensive international network and had domestic flights from Cairo and Alexandria to Luxor, Aswan, Abu Simbel (Abu Sunbul), and Al Ghardaqah on the Red Sea. In 1983 EgyptAir carried 1.6 million passengers. A smaller, state-owned airline, Air Sinai, provided service from Cairo to points in the Sinai Peninsula. Zas Passenger Service, the newest airline and the only one that was privately owned, had daily flights from Cairo to Aswan, Luxor, Al Ghardaqah, and points in Sinai.

Alexandria was Egypt's principal port and in the early 1990s was capable of handling 13 million metric tons of cargo yearly. Egypt's two other main ports, Port Said (Bur Said) and Suez, reopened in 1975, after an eight-year hiatus following the June 1967 War. Realizing the importance of shipping to the economy, the government embarked on an ambitious plan in the late 1980s to build new ports and increase capacity at existing facilities, including constructing a facility capable of handling up to 20 million metric tons of cargo just west of Alexandria. Bur Safajah on the Red Sea was being developed to handle phosphate exports, and the first stage of a new port at the mouth of the Nile's eastern Damietta (Damyat) tributary opened in 1986.

Egypt had about 3,500 kilometers of inland waterways. The Nile constituted about half of this system, and the rest was canals. Several canals in the Delta accommodated ocean-going vessels, and a canal from the Nile just north of Cairo to the Suez Canal at Ismailia (Al Ismailiyah) permitted ships to pass from the Nile to the Red Sea without entering the Mediterranean Sea. Extensive boat and ferry service on Lake Nasser moved cargo and passengers between Aswan and Sudan.

The Suez Canal was Egypt's most important waterway and one of the world's strategic links, being the shortest maritime route between Europe and the Middle East, South Asia, and the Orient. Serious proposals for a canal between the Mediterranean and the Red Sea had been made as early as the fifteenth century by the Venetians, and Napoleon ordered the first survey of the region to assess a canal's feasibility in 1799. After several subsequent studies in the early nineteenth century, construction began in 1859. After ten years of construction and numerous unforeseen difficulties, the canal finally opened in 1869.

The canal extends 160 kilometers from Port Said on the Mediterranean to a point just south of Suez on the Red Sea. It can handle ships with up to sixteen meters draught; transit times through the length of the canal averaged fifteen hours. Passing occurs in convoys with large passing bays every twenty-five kilometers to accommodate traffic from opposite directions. Traffic patterns have changed considerably over the last century, reflecting different global priorities: passenger transit has dropped while the movement of goods, especially petroleum, has increased dramatically. It was estimated that before the 1967 ArabIsraeli War, 15 percent of the world's total sea traffic passed through the canal.

Communications

In addition to its radio and television facilities, which were well developed, Egypt had a domestic telephone system that in 1984 counted approximately 600,000 telephones, most of them located in Cairo or Alexandria. Although improvement to the system was under way in the early 1990s, domestic service was still unreliable. The quality of international service was better, as international calls traveled over a variety of high-quality links: submarine cables to Lebanon and to southern Europe; radio-relay links with Libya and Sudan; and a ground satellite station just south of Cairo with two antennas for worldwide telephone, television, and data transmissions. Egypt was to be a focal part of the Arab Satellite (Arabsat) communications network linking the various Arab states, scheduled to be inaugurated in 1991.

Source: U.S. Library of Congress

Like most countries in the Middle East, Egypt partook of the oil boom and suffered the subsequent slump. Available figures suggest that between 1975 and 1980 the GDP (at 1980 prices) grew at an annual rate of more than 11 percent. This impressive achievement resulted, not from the contribution of manufacturing or agriculture, but from oil exports, remittances, foreign aid, and grants. From the mid-1980s, the GDP growth slowed as a result of the 1985-86 crash in oil prices. In the two succeeding years, the GDP grew at no more than an annual rate of 2.9 percent. Of concern for the future was the decline of the fixed investment ratio from around 30 percent during most of the 1975-85 decade to 22 percent in 1987.

The post-World War II growth was accompanied by a certain degree of diversification of the economic structure, although not without serious flaws in the diversification. By 1952 agriculture's share of GDP at fiscal year (FY) 1959 market prices was 33 percent, industry's (including mining and electricity) share reached 13 percent, and the service sectors' share amounted to 54 percent. The diversification resulted from the decline of agriculture's contribution to the GDP and the ascendancy of industry and, particularly, of government services. Agriculture's share in the GDP dropped by more than half from 1952, stabilizing near 15 percent through most of the 1980s. Industry's share moved in the opposite direction: from only 13 percent in 1952, it hovered around 35 percent in the 1980s.

Although the industrial sector's contribution to the GNP rose during this period, that growth was due to the increase in energyrelated activity, especially oil-drilling. Manufacturing stagnated and may even have declined. In 1974 (when data for the subsector became available), manufacturing accounted for 15 percent of GNP, but its share fell to 12 percent in 1986 and remained there in early 1990. The lackluster performance of manufacturing was one of the main reasons for the Egyptian economy's inability to become self-sustaining, and for its dependence on oil and external financing.

The services (including construction) held relatively steady, comprising around one-half of GDP, a figure that included the contributions of the various subsectors. An important subsector from a developmental viewpoint was the one entitled "other services"--mostly government services. These averaged 14.2 percent of the growth in GDP in the years from 1952 to 1959 and 32.7 percent of the growth in the years from 1959 to 1969. The increase resulted primarily from the expansion in the bureaucracy that followed the 1961 decree guaranteeing government jobs for all university graduates. The trend continued under Anwar as Sadat (1970-79), and slowed, or may have reversed under Husni Mubarak as the state became financially incapable of hiring the many new jobseeking graduates. Although government employment may have encouraged economic growth temporarily, it impeded it over the long run, competing for scarce investment funds and exacerbating the trade deficit.

Infrastructure

In spite of progress in the 1980s, by the end of the decade Egypt still had a long way to go in expanding and improving existing services such as housing, transportation, telecommunications, and water supply. Housing remained inadequate; urban dwellings were often very crowded, and residents lived in makeshift accommodations. Housing was essentially a private activity, and the government tended to underinvest in the sector. The electric grid reached essentially all villages in Egypt by the early 1980s, but blackouts in Cairo and other cities were not uncommon. A major sewage project was under way. It aimed at revamping and expanding the overflowing, antiquated network of sewers, pumping stations, and treatment plants. Some of the work was scheduled for completion by 1991. With help from the United States Agency for International Development (AID), telephone lines doubled at the end of the FY 1982-86 Five-Year Plan.

Because infrastructural improvements and additions were costly and required a long lead time, no relief was anticipated before the mid-1990s. The FY 1987-91 Five-Year Plan allocated more than £E4.1 billion for infrastructure. The problem that faced the government was how to balance the badly needed improvement of the infrastructure against the fact that such investments created only temporary employment and had small impact on industries that served or were served by the infrastructure.

Transportation

Egypt's road and rail network was developed primarily to transport population and was most extensive in the densely populated areas near the Nile River (Nahr an Nil) and in the Nile Delta. Areas along the Mediterranean coast were generally served by a few paved roads or rail lines, but large areas of the Western Desert, Sinai Peninsula (Sinai), and the mountains in the east were inaccessible except by air. The Nile and a system of canals in the Delta were the traditional means of transporting goods, although freight was increasingly carried by truck or rail. The entire system was unable to keep up with rapid population growth, particularly in the large urban areas, and expansion and modernization of all forms of transportation were under way.

In early 1990, Egypt had more than 49,000 kilometers of roads, of which about 15,000 kilometers were paved, 2,500 kilometers were gravel, and the remaining 31,500 kilometers were earthen. The highway system was concentrated in the Nile Valley north of Aswan and throughout the Delta; paved roads also extended along the Mediterranean coast from the Libyan border in the west to the border with Israel. In the east, a surfaced road ran south from Suez along the Red Sea, and another connected areas along the southern coast of Sinai from Suez to the Israeli town of Elat. A well maintained route circled through several western oases and tied into the main Nile corridor of highways at Cairo in the north and Asyut in the south. Large areas of the Western Desert, the mountainous areas near the Red Sea, and the interior of the Sinai Peninsula remained without any permanent-surface roads, however.

The state-owned Egyptian Railways had more than 4,800 kilometers of track running through the populated areas of the Nile Valley and the coastal regions. Most of the track was 1.435-meter standard gauge, although 347 kilometers were 0.750-meter narrow gauge. Portions of the main route connecting Luxor with Cairo and Alexandria were double tracked and a commuter line linking Cairo with the suburb of Hulwan was electrified. Built primarily to transport people, the passenger service along the Nile was heavily used.

Less heavily traveled routes provided connections to outlying areas. A coastal route west from Alexandria to the Libyan border was being upgraded to allow for increased passenger travel. Tracks along the Mediterranean coast of Sinai, destroyed during the June 1967 War, had been repaired, and service was restored between Al Qantarah on the Suez Canal and the Israeli railroad system in the Gaza Strip. New ferry boats allowed passengers at Aswan, the southern terminus of the Egyptian Railways, to connect with the Sudanese system. A new line intended to export phosphates was under construction from Al Kharijah in the Western Desert to the port of Bur Safajah.

The southern leg of the forty-two-kilometer Cairo Metro, the first subway system in Africa or the Middle East, opened in 1987. This line, built with the cooperation of France, linked Hulwan in the south with three main downtown stations, named Sadat, Nasser, and Mubarak. In 1989 the northeast line opened, extending from downtown to the suburbs. The city planned to build an east-west route across the Nile to Giza (Al Jizah). The government hoped that the subway construction would relieve the extremely jammed streets, buses, streetcars, and trains.

Although Egypt had sixty-six airfields with paved runways, only the airports at Cairo and Alexandria handled international traffic. EgyptAir, the principal government airline, maintained an extensive international network and had domestic flights from Cairo and Alexandria to Luxor, Aswan, Abu Simbel (Abu Sunbul), and Al Ghardaqah on the Red Sea. In 1983 EgyptAir carried 1.6 million passengers. A smaller, state-owned airline, Air Sinai, provided service from Cairo to points in the Sinai Peninsula. Zas Passenger Service, the newest airline and the only one that was privately owned, had daily flights from Cairo to Aswan, Luxor, Al Ghardaqah, and points in Sinai.

Alexandria was Egypt's principal port and in the early 1990s was capable of handling 13 million metric tons of cargo yearly. Egypt's two other main ports, Port Said (Bur Said) and Suez, reopened in 1975, after an eight-year hiatus following the June 1967 War. Realizing the importance of shipping to the economy, the government embarked on an ambitious plan in the late 1980s to build new ports and increase capacity at existing facilities, including constructing a facility capable of handling up to 20 million metric tons of cargo just west of Alexandria. Bur Safajah on the Red Sea was being developed to handle phosphate exports, and the first stage of a new port at the mouth of the Nile's eastern Damietta (Damyat) tributary opened in 1986.

Egypt had about 3,500 kilometers of inland waterways. The Nile constituted about half of this system, and the rest was canals. Several canals in the Delta accommodated ocean-going vessels, and a canal from the Nile just north of Cairo to the Suez Canal at Ismailia (Al Ismailiyah) permitted ships to pass from the Nile to the Red Sea without entering the Mediterranean Sea. Extensive boat and ferry service on Lake Nasser moved cargo and passengers between Aswan and Sudan.

The Suez Canal was Egypt's most important waterway and one of the world's strategic links, being the shortest maritime route between Europe and the Middle East, South Asia, and the Orient. Serious proposals for a canal between the Mediterranean and the Red Sea had been made as early as the fifteenth century by the Venetians, and Napoleon ordered the first survey of the region to assess a canal's feasibility in 1799. After several subsequent studies in the early nineteenth century, construction began in 1859. After ten years of construction and numerous unforeseen difficulties, the canal finally opened in 1869.

The canal extends 160 kilometers from Port Said on the Mediterranean to a point just south of Suez on the Red Sea. It can handle ships with up to sixteen meters draught; transit times through the length of the canal averaged fifteen hours. Passing occurs in convoys with large passing bays every twenty-five kilometers to accommodate traffic from opposite directions. Traffic patterns have changed considerably over the last century, reflecting different global priorities: passenger transit has dropped while the movement of goods, especially petroleum, has increased dramatically. It was estimated that before the 1967 ArabIsraeli War, 15 percent of the world's total sea traffic passed through the canal.

Communications

In addition to its radio and television facilities, which were well developed, Egypt had a domestic telephone system that in 1984 counted approximately 600,000 telephones, most of them located in Cairo or Alexandria. Although improvement to the system was under way in the early 1990s, domestic service was still unreliable. The quality of international service was better, as international calls traveled over a variety of high-quality links: submarine cables to Lebanon and to southern Europe; radio-relay links with Libya and Sudan; and a ground satellite station just south of Cairo with two antennas for worldwide telephone, television, and data transmissions. Egypt was to be a focal part of the Arab Satellite (Arabsat) communications network linking the various Arab states, scheduled to be inaugurated in 1991.

Source: U.S. Library of Congress

Another such ingredient was industrialization. Industrialization, however, proved for various domestic and external reasons to be less than successful, and until the 1930s, virtually no industrial build-up occurred. The failure of industrialization resulted largely from tariff restrictions that Britain imposed on Egypt through the 1838 commercial treaty, which allowed only minuscule tariffs, if any. The isolated industrial ventures initiated by members of Egypt's landed aristocracy, who otherwise channeled their investment into land acquisition and speculation, were nipped in the bud by foreign competition. The few surviving enterprises were owned by the foreign community. These enterprises either enjoyed natural protection as in the case of sugar and cotton processing, or benefited from the special skills that the foreign owners had acquired, as in the case of cigarette making by Greeks and Turks.

The beginnings of industrialization awaited the depression of the late 1920s and 1930s and World War II. The depression sent cotton prices tumbling, and Britain acceded to Egyptian demands to raise tariffs. Moreover, World War II, by substantially reducing the flow of foreign goods into the country, gave further impetus to the establishment of import-substitution industries. A distinguishing feature of the factories built at this time was that they were owned by Egyptian entrepreneurs.

In spite of the lack of industrialization, the economy grew rapidly throughout the nineteenth century. Growth, however, was confined to the cotton sector and the supporting transportation, financial, and other facilities. Little of the cotton revenues was invested in economic development. The revenues were largely drained out of the country as repatriated profits or repayments of debts that the state had incurred to pay for irrigation works and the extravagance of the khedives.

Rapid economic growth ended in the early 1900s. The supply of readily available land had been largely exhausted and multiple cropping, concentration on cotton, and perennial irrigation had lessened the fertility of the soil. Cotton yields dropped in the early 1900s and recovered to their former level only in the 1940s, through investments in modern inputs such as fertilizers and drainage.

The fall in agricultural productivity and terms of trade led to a stagnation in the per capita gross national product (GNP) between the end of World War I and the 1952 Revolution: the GNP averaged £E43.0, in 1954 prices, at both ends of the period. By 1952 Egypt was in the throes of both economic and political crises, which culminated in the assumption of power by the Free Officers.

Source: U.S. Library of Congress

The Free Officers dramatically expanded educational opportunities. They pledged to provide free education for all citizens and abolished all fees for public schools. They doubled the Ministry of Education's budget in one decade; government spending on education grew from less than 3 percent of the gross domestic product (GDP) in 1952-53 to more than 5 percent by 1978. Expenditures on school construction increased 1,000 percent between 1952 and 1976, and the total number of primary schools doubled to 10,000. By the mid-1970s, the educational budget represented more than 25 percent of the government's total current budget expenses. Since the mid-1970s, however, the government has virtually abandoned the country's earlier educational goals. Consequently, public investment in new educational infrastructure has declined in relation to total educational expenditures; about 85 percent of the Ministry of Education's budget has been designated for salaries.

From academic year 1953-54 through 1965-66, overall enrollments more than doubled. They almost doubled again from 1965-66 through 1975-76. Since 1975 primary-school enrollments have continued to grow at an average of 4.1 percent annually, and intermediate school (grades seven through nine) at an average of 6.9 percent annually. The proportion of the population with some secondary education more than doubled between 1960 and 1976; the number of people with some university education nearly tripled. Women made great educational gains: the percentage of women with preuniversity education grew more than 300 percent while women with university education grew more than 600 percent. By academic year 1985-86, about 84 percent of the primary- school-age population (more than 6 million of the 7.2 million children between the ages of seven and twelve) were enrolled in primary school. Less than 30 percent of eligible youth, however, attended intermediate and secondary schools. Because as many as 16 percent of Egyptian children were receiving no education in the 1980s, the literacy rate lagged behind the expansion in enrollments; in 1990 only 45 percent of the population could read and write.

Law Number 139 of 1981, which defined the structure of preuniversity public education, made the nine-year basic cycle compulsory. Regardless of this law, most parents removed their children from school before they completed ninth grade. The basic cycle included six years of primary school and three years of intermediate school. Promotion from primary to intermediate school was contingent upon obtaining passing scores on special examinations. Admission to the three-year secondary cycle (grades ten through twelve) also was determined by examination scores. Secondary students chose between a general (college preparatory) curriculum and a technical curriculum. During the eleventh and twelfth grades, students in the general curriculum concentrated their studies on the humanities, mathematics, or the sciences. Students in the technical curriculum studied agriculture, communications, or industry. Students could advance between grades only after they received satisfactory scores on standardized tests. The Ministry of Education, however, strictly limited the number of times a student could retake an examination.

Various government ministries also operated training institutes that accepted students who had completed the basic cycle. Training- institute programs, which incorporated both secondary and postsecondary vocational education, varied in length and provided certificates to students who successfully completed the prescribed curricula. Teacher-training institutes, for example, offered a five-year program. In the academic year 1985-86, approximately 85,000 students were enrolled in all training programs; 60 percent of the enrollees were women.

As of 1990, problems persisted in Egypt's education system. For example, the government did not enforce laws requiring primary- school-age children to attend school. In some areas, as many as 50 percent of the formally enrolled children did not regularly attend classes. There were also significant regional differences in the primary-school enrollment rate. In urban areas, nearly 90 percent of the school-age children attended. In some rural areas of Upper Egypt, only 50 percent attended. Overall, only half of the students enrolled in primary school completed all six grades.

The enrollment rate for girls continued to be significantly lower than for boys. Although increases in the number of girls enrolled in school were greater than they were for boys in the 1960s and 1970s, boys still outnumbered girls at every educational level. In 1985-86, for example, only 45 percent of all primary students were girls. An estimated 75 percent of girls between the ages of six and twelve were enrolled in primary school compared with 94 percent of boys in the same age-group. Girls' primary- school enrollment was lowest in Upper Egypt, where less than 30 percent of all students were girls. Girls also dropped out of primary school more frequently than boys. About 66 percent of the boys beginning primary school completed the primary cycle, while only 57 percent of the girls completed all six grades. Girls accounted for about 41 percent of total intermediate school enrollment and 39 percent of secondary school enrollment. Among all girls aged twelve to eighteen in 1985-86, only 46 percent were enrolled in school.

The shortage of teachers was a chronic problem, especially in rural primary schools. Under British rule, educated Egyptians had perceived teaching as a career that lacked prestige. Young people chose this career only when there was no other option or when it would serve as a stepping-stone to a more lucrative career in law. Despite improvements in training and salaries, teaching--especially at the primary level--remained a low-status career. In 1985-86, Egypt's primary and secondary schools employed only 155,000 teachers to serve 9.6 million pupils--a ratio of about 62 students per teacher. Some city schools were so crowded that they operated two shifts daily. Many Egyptian teachers preferred to go abroad, where salaries were higher and classroom conditions better. During the 1980s, the government granted 30,000 exit visas a year to teachers who had contracts to teach in Arab countries.

Higher education expanded even more dramatically than the preuniversity system. In the first ten years following the 1952 Revolution, spending on higher education increased 400 percent. Between academic years 1951-52 and 1978-79, student enrollment in public universities grew nearly 1,400 percent. In 1989-90 there were fourteen public universities with a total enrollment of 700,000. More than half of these institutions were established as autonomous universities after 1952, four in the 1970s and five in the 1980s. The total number of female college students had doubled; by 1985-86 women accounted for 32 percent of all students. In the 1980s, public universities--accounting for roughly 7 percent of total student enrollment--received more than one-fourth of all current education-budget spending.

Since the late 1970s, government policies have attempted to reorient postsecondary education. The state expanded technical training programs in agriculture, commerce, and a variety of other fields. Student subsidies were partially responsible for a 15 percent annual increase in enrollments in the country's five-year technical institutes. The technical institutes were set up to provide the growing private sector with trained personnel and to alleviate the shortage of skilled labor. Universities, however, permitted graduates of secondary schools and technical institutes to enroll as "external students," which meant they could not attend classes but were allowed to sit for examinations and to earn degrees. The policy resulted in a flourishing clandestine trade in class notes and overburdened professors with additional examinations. Further, widespread desire for a university degree led many students in technical institutes to view their curricula as simply a stepping-stone to a university degree.

Source: U.S. Library of Congress

Source: U.S. Library of Congress

The Copts, an indigenous Christian sect, constituted Egypt's largest religious minority. Estimates of their numbers in 1990 ranged between 3 million to 7 million. The Copts claimed descent from the ancient Egyptians; the word coptqubt (Egyptian). Egypt was Christianized during the first century A.D., when the country was part of the Roman Empire. The Coptic Church claims to hold an unbroken line of patriarchal succession to the See of Alexandria founded by Saint Mark, a disciple of Christ. Egyptian Christianity developed distinct dogmas and practices during the more than two centuries that the religion was illegal. By the fourth century, when Constantine made Christianity the official religion of the Roman Empire, Coptic traditions were sufficiently different from those in Rome and Constantinople (formerly Byzantium; present-day Istanbul) to cause major religious conflicts. Dissension persisted for 150 years until most Copts seceded from the main body of Christianity because they rejected the decision of the Council of Chalcedon that Christ had a dual nature, both human and divine, believing instead in Christ's single, divine nature. is derived from the Arabic word

The Coptic Church developed separately from other Eastern churches. The Coptic Church's clerical hierarchy had evolved by the sixth century. A patriarch, referred to as the pope, heads the church. A synod or council of senior priests (people who have attained the status of bishops) is responsible for electing or removing popes. Members of the Coptic Church worldwide (about 1 million Copts lived outside of Egypt as of 1990) recognize the pope as their spiritual leader. The pope, traditionally based in Alexandria, also serves as the chief administrator of the church. The administrator's functionaries includes hundreds of priests serving urban and rural parishes, friars in monasteries, and nuns in convents.

Following Islam's spread through Egypt, Muslims alternately tolerated and persecuted the Copts. Heavy taxation of Christians encouraged mass conversions to Islam, and within two centuries, Copts had become a distinct minority. By the tenth century, Arabic had replaced Coptic as the primary spoken language, and Coptic was relegated to a liturgical language.

The Ottoman millet system of drawing administrative divisions along religious lines reinforced Coptic solidarity. The dismantling of the millet system during the nineteenth century helped open new career opportunities for the Copts. Egypt's Muslim rulers had traditionally used minorities as administrators, and the Copts were initially the main beneficiaries of the burgeoning civil service. During the early twentieth century, however, the British purged many Copts from the bureaucracy. The Copts resented this policy, but it accelerated their entry into professional careers.

In the twentieth century, Copts have been disproportionately represented among the ranks of prosperous city dwellers. Urban Copts tended to favor careers in commerce and the professions, whereas the livelihoods of rural Copts were virtually indistinguishable from their Muslim counterparts. Urban Copts were stratified into groups of long-time residents and groups of recent migrants from the countryside. The latter group was often impoverished and fell outside the traditional urban Coptic community. The former group included many university professors, lawyers, doctors, a few prominent public officials, and a substantial middle echelon of factory workers and service sector employees.

Anti-Coptic sentiment has accompanied the resurgence of Islamic activism in Egypt. Since 1972 several Coptic churches have been burned, including the historic Qasriyat ar Rihan Church in Cairo. Islamist groups frequently and explicitly denounced Copts in their pamphlets and prayer meetings. The increasing tensions between Copts and Muslims inevitably led to clashes in Upper Egypt in 1977 and 1978 and later in the cities and villages of the Delta. Three days of religious riots in Cairo in 1981 left at least 17 Copts and Muslims dead and more than 100 injured. Isolated incidents of Muslim-Coptic violence continued throughout the 1980s and during 1990.

Coptic Pope Shenudah III (elected in 1971) blamed government silence for the increasing violence. He also expressed alarm at official actions that he said encouraged anti-Coptic feelings. In 1977, to protest a Ministry of Justice proposal to apply sharia legal penalties to any Muslim who converted from Islam, the pope called on the Coptic community to fast for five days. As harassment of Copts increased, Pope Shenudah III canceled official Easter celebrations for 1980 and fled to a desert convent with his bishops. Sadat accused the pope of inciting the Coptic-Muslim strife and banished him in September 1981 to internal exile. The government then appointed a committee of five bishops to administer the church. The following year, the government called upon the church synod to elect a new pope, but the Coptic clergy rejected this state intervention. In 1985 Husni Mubarak released Pope Shenudah III from internal exile and permitted him to resume his religious duties.

Source: U.S. Library of Congress