19th century cotton boom

For Egypt, the 19th century brought drastic and sudden changes to the economy. The groundwork for this explosion of production had been in place for decades. Earlier, cotton production for export was present, but represented an insignificant portion of revenue for the country.^[1] By the 20^th century, this was completely reversed. This drastic economical change was afforded with the help of continual investment into the actual production and processing of cotton, which enabled several infrastructure improvements. Several social movements occurred simultaneously, influenced by the continuous changing of the economic landscape.^[2]

One of the first individuals to contribute to the future framework of Egypt's economy was Mohammad Ali. A lasting effect of Mohammad Ali's economic visions was Egypt’s tenured land system. Relationships Mohammad Ali made with foreign countries provided an easy transition to an industrialized economy that survived off exports.^[3] Muhammad Ali’s vision included factories staffed by than peasants, who’s contribution to new economic development was enforced utilizing the corvee system.^[2] This feudal-like system began to face national pushback in the 1880s; a process heavily influenced by the British.^[4]

One factor that led the cotton industry to success was continuous dedication to its funding.  Change is not the first example of federal investment in cotton. Previously, the Egyptian government had funded research in cotton production. The research resulted in an improved cotton plant that was nearly unrivaled.^[1]

Several infrastructure projects were taken on by the government throughout the entirety of the 1800s. These projects focused on both production and processing of cotton. Production and agricultural improvements included canal and dam construction. The canals, as well as several newly built railways, enabled greater national travel.^[5] Other projects included the development of several ports and communication improvements.^[6] The new infrastructure played a key role in the “boom” of the Egyptian cotton industry.^[7]

The American Civil war began in 1861,^[8] enabling the Egyptian cotton market to boom. The primary reason this phenomenon occurred was the drastic decrease in competition caused by the sudden American exit from the market. A demand for cotton came from the Cotton Supply Association and the many British factories and investors that made up the association. Prior to the American Civil War, American cotton made up the overwhelming majority of cotton imported into Britain. Cotton was also imported from India, but Indian cotton was of inferior quality when compared with American cotton.^[9] The demand for cotton increased steadily during the latter half of the 1800s, propelled by the ongoing “Cotton Famine.” Egypt took advantage of this.^[10] During the three-year period between 1861 and 1864, Egypt ceased nearly all agricultural activity unrelated to cotton.^[11]

1900s Cotton market decline

The decline of Egypt’s Cotton Market and foreign trade created an economic crisis brought by a drop in demand.^[12] Some of the contributing factors included increased competition, production issues and national debt. More foreign competition in the cotton industry plateaued international cotton prices, leaving the Egyptian market with little room to grow.^[13] Egypt’s agricultural production had swelled at an incredible rate and kept up with itself until the early 1900s. In the early 1900s, environmental and human factors both lowered production rates.^[14] After the prior “boom” of the cotton industry, the population began to increase quickly and consistently. The economy did not follow suit.^[15] Earlier expansions done to increase cotton production were costly, and the accumulated cost of these projects created high amounts of national debt. In 1914, Egypt’s debt added up to over one hundred million pounds.^[16]