Al-Ahram: A Diwan of contemporary life (562)

Born a ministry

The Ministry of Trade and Industry, created in 1935, had two major functions: to enhance commercial activities and to prove to sceptics that it was not set up simply to boost Britain's economy at Egypt's expense. Professor Yunan Labib Rizk sees how the ministry fared

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El-Hilali

"I, King Fouad I of Egypt,

After having reviewed the royal decree of 10 December regarding the distribution of government agencies under the various ministries and associated orders and amendments;

And in consideration of the fact that the need to promote the affairs of trade and industry in the nation and to better organise their relationship with agriculture requires the transformation of the Department of Trade and Industry to a ministry, thereby enabling its activities to have a greater and broader impact and ensuring that the necessary care and attention is dedicated to the development and implementation of economic policy;

And on the basis of the proposal approved by the cabinet and presented to us,

Have decreed the following:

Article 1: A Ministry of Trade and Industry shall be created to which shall be transferred the Department of Trade and Industry under the Ministry of Finance and the administration of which shall be assumed by a minister aided by a deputy minister.

Article 2: The prime minister and our other ministers shall implement this decree, which shall go into effect as of the date of its publication in the Official Gazette."

The foregoing decree was dated 20 December 1934. By the standards of the history of Egyptian government administration, the development was momentous. In the more than half a century since the institution of the cabinet system in Egypt in 1878, the system had undergone only two changes before this. The first was with the creation of the Ministry of Awqaf (religious endowments) Foundations in 1913 and the second with the creation of the Ministry of Transport in 1919, bringing the original seven ministerial portfolios up to nine.

However, there was a world of difference between the birth of the two latter ministries and the birth of the ministry. In the first two instances the ministries arose smoothly and naturally immediately following the royal decrees issued to create them. This would not be the case with the Ministry of Trade and Industry, which took an additional six months to see the light of day. The strenuous birth, which finally took place on 18 June 1935, became all the more apparent when no minister was appointed to this portfolio. It instead was handed to the then minister of education, Ahmed Naguib El-Hilali. And thus the situation remained until the government of Tawfiq Nassim resigned on 30 January 1936, all of which makes for a curious and interesting chapter in the history of Egyptian cabinets.

In the opening pages of this chapter, it appears that the new ministry virtually popped out of the blue; the first news of it appeared in the press only a few days before the royal decree. Thus, one day readers of Al-Siyasa, the mouthpiece of the Liberal Constitutionalist Party, came across the following:

"There is no doubt that the creation of a Ministry of Trade and Industry is important and valuable. Our growing economic needs and the increasing diversity of commercial activities all propel us towards the creation of such a ministry and it was inevitably the duty of our governing officials to contemplate such a step... Certainly, there are many aspects of the commercial life of the country that an organised governing body can turn to the advantage of a broader segment of the people. Indeed, it is amazing that a country such as Egypt, whose life depends on trade and commercial activity, has not had a Ministry of Trade and Industry up to now."

Perhaps that same morning was the first time readers of Al- Shaab would have heard about the new ministry, although as this newspaper was the mouthpiece of the party founded by former Prime Minister Sidqi and therefore hostile to the Nassim government it attacked the idea. Al-Shaab linked the creation of the new ministry with a recent meeting of the merchants of Manchester, whom a pro-government newspaper had described as "the best commercial agents for Egypt and the Egyptian people". The anti- Nassim newspaper continued: "We ask the advocates of a new ministry to give us a clear explanation, one that will put to rest our suspicions and assure us that their promised ministry will be independent of British trade... The Ministry of Trade and Commerce, which the government intends to make its second step after jettisoning the constitution [the 1930 Constitution instituted by Sidqi] and dissolving parliament, will be no more than a ministry in the service of the economic ties between Egypt and Britain."

Taking note of this divergent lay of the land, Al-Ahram greeted the royal decree creating the new ministry with an element of caution. In its editorial of 23 December, it expressed its hope that the new ministry would take the lead in abandoning the customary ministerial rites and the revolving around in circles of bureaucratic red tape. "We further hope that its employees will embrace the interests of good merchants, who understand the value of time, and that the ministry will encourage export trade and promote national industries."

The newspaper then proceeded to present its readers with a brief history of the Department of Trade and Industry which had formerly been under the Ministry of Finance and would now form the kernel of the new ministry. The department began as a committee created by the government in 1916. Initially headed by Ismail Sidqi, the committee was made subordinate to the Ministry of Finance. Its remit was "to establish a permanent system for stimulating and promoting the growth of trade and industry in Egypt". In 1920, the committee evolved into a department with an economic and an industrial branch. The first contained 14 sections: research, statistics, commercial legislation, transport and tariffs, chambers of commerce, commercial intelligence, expositions, publication and translation, the library, accounts, personnel, the archives, grain markets and commercial registration. The industrial branch consisted of nine sections: leather manufactures, dyeing, spinning and weaving, agrarian economy, chemical industries, industrial research, furniture, wool and carpets, and glass works.

In counterpoint to its initial good wishes, Al-Ahram betrayed a certain apprehension. The new ministry, it wrote, "must be a purely Egyptian ministry. It must work to promote the welfare of Egyptian trade and industry and to develop commercial relations with all foreign nations without discrimination apart from that based on the sole criterion of Egypt's interest above all other considerations."

The newspaper's apprehensions were not ill-founded. Nor was it alone in its apprehensions. The following day it noted that the creation of the new ministry had given rise to rumours "as it is well-known that the British government is pushing to develop its trade with countries within the sphere of its influence and it has shown a particular interest in trade with Egypt on several occasions".

The government's subsequent announcement that it had asked the British high commissioner's office to provide a technical adviser to the new ministry only heightened suspicions. Al-Ahram dispatched a reporter to an "official source" to inquire about the reason for this request. The official responded, "The purpose is to benefit from British expertise in setting up the new ministry, as such organisational expertise is not yet available among Egyptians who have not yet had the opportunity to acquire thorough proficiency in such matters." The official denied that the British expert would be appointed as a permanent adviser and that his purpose would be to further British trading interests.

Al-Ahram readers, as was their custom on matters pertaining to national independence, hastened to participate in the discussion. One of them brought up the fact that when the Department of Trade and Industry was created it engaged a British expert, Sir Henry Bain, at an enormous salary. "Then, as today, it was said that his mission was only temporary, but he remained in service for years and probably would still be there had not the fate of death intervened."

The writer went on to stress that Egyptian and British economic interests do not overlap. "The desire to promote British trade in Egypt is not consistent with the need to develop Egyptian industry," he said, adding, "It is no secret that the high commissioner's office had asked the previous government to reduce customs tariffs on British goods, especially those produced exclusively in Britain. Moreover, lengthy negotiations took place over the matter."

The discussion broadened to touch on the British influence in the country as a whole and the impact of this on the economy. In a report on the expatriate communities in Egypt, the Al- Ahram 's correspondent in Alexandria, which had the highest concentration of such communities, noted that the British there had long complained of their poor standing in the Egyptian economy. Their views on how to remedy this situation were divergent. Former British High Commissioner Lord George Lloyd, for example, believed that the best way to promote Britain's commercial interests in Egypt was to promote education in English so that English would become at least as prevalent in the country as French. Lord George, therefore, launched a donation drive, the proceeds of which would go to the expansion of Victoria College and the construction of a new elementary school for boys and a secondary school for girls. The drive was at least partially successful, for Victoria College now had new annexes and the boys' school was completed, although the school for girls had to be put off when funds ran out.

British businessmen in Egypt urged a more pragmatic approach with more immediate results, pointing to the severe trade imbalance with Egypt. Egyptian exports to Britain (LE12 million of which LE9 million was cotton) were double the value of British exports to Egypt (LE6 million). In response to the businessmen's demands, the British commercial attaché asked customs authorities to reduce tariffs on a broad range of British manufactures. However, according to the Alexandria correspondent, "these authorities found themselves only able to approve the requested reductions on four out of the 20 or more products listed." The correspondent added that if the new Trade and Industry Ministry were to remain purely dedicated to national interests it would have to be subject to a number of controls. Simultaneously, the Customs Authority should remain under the Ministry of Finance and any concerns over customs policies should be worked out through inter-ministerial consultations and deliberations.

It is not difficult to see why, against this backdrop, that every step the Nassim government took to bring the new ministry into being was viewed with suspicion. Certainly, this was the case when the government moved to postpone implementation of the royal decree until the beginning of the forthcoming financial year, ostensibly on the grounds of providing sufficient time to bring over "the much talked-about British expert in order to study the matter and draw up the organisational designs for the new ministry".

Aware of the sensitivities it was arousing, the government once again issued a reassurance to the effect that the expert would serve a purely technical and temporary function. "It does not stand to reason that this expert would have any say over that of the minister or the government. It should also be remembered that it was the Egyptian, not the British, government that asked for this expert to be engaged."

Such assurances did little to decrease tension. In a statement on behalf of the Wafd, Hamed El-Basil expressed his regrets that this appointment and the "painful circumstances surrounding it" should take place at a time when the nation was just beginning to recapture its economic vigour. "Is it an intent to curtail what appear to be the beginnings of our economic independence?" he asked. "This appointment is a step backwards, and the people must begin, as of now, to search for a way out." In more vehement tones, Hafez Ramadan from the Nationalist Party: "I have said before that I fear that Egypt would suffer a political setback under the current government. At the time, I did not go further. But since then the government's actions have demonstrated that it regards the people with scorn and, today, it is encroaching on one of the nation's most highly cherished principles as no government has ventured to do before this."

The Nassim government was not to be deterred. In all events, it had already come to an agreement with the high commissioner's office to which it effectively owed its existence and upon which it was becoming increasingly dependent. Not only had this government never enjoyed the support of the palace from the start, it was losing whatever support it had among the Wafd Party because of its foot-dragging on restoring the 1923 Constitution. It was not odd, therefore, that it should announce on 12 April the appointment of Sir Geoffrey Corbett as "expert and technical adviser to the Ministry of Trade and industry".

At the time of his appointment, Corbett was chairman of the British food administration and an Oxford University lecturer on Indian history. He also had served for a while in the British administration in India, and thus had acquired expertise in colonial affairs.

If this had not heightened Egyptian misgivings, the powers Corbett would enjoy in his new post certainly would have. Not only would he effectively have the final say in the ministry's organisational affairs but his remit would give him the authority to familiarise himself with the affairs of all other government departments connected with the new ministry. As Al-Ahram put it, Corbett would be in a position "to penetrate the various ministries and their departments, and to learn the organisational details of each, and how these relate to one another and to his ministry".

Given the general pessimism over the new ministry, it was perhaps not without a touch of schadenfreude that an Al-Ahram headline of 15 June 1935 asked, "Will it be stillborn?" A nation's balance of trade, the article stated, is based on two primary factors: exports and imports. "Egypt's most important export is cotton, which is distantly followed by a group of other products, altogether totalling no more than 10. Most of Egypt's imports are in items that can not easily be manufactured here, the most crucial criterion here being attractiveness in price, the ease with which it can be obtained and the potential for marketing it in our country." Given this situation, in the opinion of the writer, no expert in commercial affairs, regardless of his depth of expertise, could tangibly alter the pattern of Egypt's foreign trade.

As for Egyptian industry, he continued, it was still in the early phase of formation. It, therefore, needed someone to take its hand and guide it but "we do not know whether the new expert is familiar enough with industrial affairs to offer the necessary technical advice." The writer thus advised the government to reconsider its decision to create the new ministry and to retain the Department of Trade and Industry as it currently stood. Unfortunately, the sword was quicker than the rebuke, as the saying goes. It was no longer possible to rescind the royal decree, however stern the criticism it aroused.

On 18 June 1935, Al-Ahram announced that Ahmed Naguib El-Hilali had been appointed minister of trade and industry, the duties of which he would pursue in addition to his duties as minister of education. Al-Ahram suspected that this appointment was a bid on the part of prime minister Nassim to retain for himself three portfolios: Transport, Interior Affairs and Trade.

In an interview with El-Hilali before he assumed his post, an Al-Ahram correspondent asked him, perhaps not without a touch of maliciousness, how he planned to balance the responsibilities of two posts, especially given the ambitious reform projects the Ministry of Education was pursuing. El- Hilali responded that he would never abandon the Ministry of Education and that he would divide his day equally between the two ministries. One doubts whether the correspondent or any of his readers were convinced.

In all events, El-Hilali eventually commenced his duties as minister of trade and industry, and, in order to prove that he, rather than Nassim or the British expert, was the effective authority, he orchestrated considerable media fanfare over his activities. Under the boldly blazoned headline: "The minister inspects and studies the carpet factory and spinning and weaving experiments station" Al-Ahram of 30 June 1935 reports on El- Hilali's visit to these two manufacturing institutions. "He observed the women as they spun the wool and inquired as to the source of the raw material. When he was informed of the many difficulties in obtaining the wool, he promised to remedy the situation. He expressed his delight over the progress in the model carpet factory and praised the high quality of its products." Then, true to the long established custom in all official visits to factories and such establishments, El-Hilali paused to interview a machine operator and asked him about the school he had graduated from, how his education had helped him in his current job, how successful he felt he was at his job and other such questions intended to demonstrate the minister's concern for the common man.

Similar spectacles quickly followed at the model dyeing factory, and the glass and tarboush factories. In the first, the minister was informed that the factory had succeeded in discovering new types of dyes and original methods of dyeing. It was currently in the process of offering other factories the necessary technical advice in order to bring up the standards of this industry and set it on firm foundations. Managers of the glass factory told the minister that thanks to their efforts many Egyptians were now founding glass workshops of their own. "The minister was also told that the factory had succeeded in duplicating a European-made glass scientific apparatus that cost 140 piastres. He was surprised to learn that it could be produced locally at 14 piastres a unit and sold for 15." In the tarboush factory, the director personally explained its operations to El-Hilali. "He showed him the wool, which is mixed with a bit of oil then passed through two machines to prepare it for the spinning machines. They then proceeded to the looms and the dyeing and finishing processes."

On another occasion, the press reported on the minister's tour of the fruit and vegetable wholesale market. Here the director in charge explained to him the advantages the market brought to the nation in terms ensuring the diversity of products, the ability to dispose of surplus production, work opportunities for school graduates and an improvement in the balance of trade. This time, however, when he emerged from the director's office he found a popular demonstration of support waiting for him. Al-Ahram reports:

"His Excellency El-Hilali Bek was pleasantly surprised when several hundred fruit merchants and their employees lined the road and chanted, 'Long live El-Hilali Bek, Minister of Trade!' He was further startled when he noticed two pavilions, one for fruit merchants and the other for vegetable merchants, in which Upper Egyptian workers cheered the minister." It is difficult to believe that the minister could have missed the pavilions as he went into the factory, adding to one's suspicion that the demonstrations were stage managed.

While El-Hilali was busy with this personal PR campaign, the British expert was busily setting up the new ministry: drafting the necessary bylaws, drawing up contracts, studying the efficacy of current legislation, studying the state of existing industries, working out a system for industrial loans, instituting measures to promote fair competition among produce marketers, etc. All change is bound to claim victims. In this case, one of the first complaints to arise was from the employees of the former Department of Trade and Industry. After their department was elevated to a ministry, they said, they were either being laid off or given tasks not commensurate to their actual skills and abilities. Another victim was the old Department of Trade and Industry building on Qasr Al-Nile Street. This was to be demolished in order to make place for a modern apartment block. Al-Ahram found the decision regrettable, as the old building housed some of the antique furniture that had belonged to the mother of Khedive Abbas II. Furniture was removed from one of the royal stables, preparatory to its auctioning off, which came as much as a surprise to others as it did to Al-Ahram.