economic and business history research centre...
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ECONOMIC AND BUSINESS HISTORY RESEARCH CENTRE CHRONICLES
JULY 2005, VOL 1/1
hronicles
May 2005 Forum
Young Scholars Papers
Seminar Series
Industrial Revolution Crippled by Lack of Innovation
The Editor’s Note
The Director’s Note
Index - “Al-Dalil”
An Egyptian Car Called Fiat: Egypt’s Experiment in theAutomotive Industry
Fouad Sultan: A Champion of Economic Liberalism
The Rentier State in The Middle East: Oil…& Others?
Hearing the Voices of Egyptian and African Firms
A Tale of Two Banks; A Bank’s History in Perspective
Documenting the History of the Century-Old Café Riche
Heliopolis: Beyond the Centenary
Appendix:
Archives
Announcments
Listening for History: A Report on “Oral History: Scope,Fidelity and Methodology”
A Historical Glance at the Egyptian Textile IndustryBefore it Migrates
The American University in Cairo
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CONTRIBUTORSEditor: Dina Khalifa
Copy Editor: Prof. John Salevurakis
Director, EBHRC: Prof. Abdelaziz Ezzelarab
Project Officers:Mostafa Hefny
Wael IsmailKarim El-Sayed
Dina Waked
Young Scholars Contributors:Lina Attalah
Mohamed I. Fahmy Menza
Layout &Design:Magda Elsehrawi
Logo:Nadine Kenawy
*******
About EBHRC
EBHRC Executive Committee:Prof. Ahmed Kamaly
Prof. Nagla RizkProf. John Salevurakis
Prof. Herbert Thompson
EBHRC Supporting Institutes:
Center for Middle East Studies, Harvard University
Near East Studies Program, Princeton University
Princeton Institute of Internationaland Regional Studies (PIIRS)
Middle East Center,University of Pennsylvania
Middle East Center,University of Washington
Global Business Center, Business School,University of Washington
Office of Provost, AUC
Office of Dean of BEC, AUC
EBHRC Collaborating Scholars:Prof. Ellis Goldberg,
(University of Washington)
Prof. Roger Owen (Harvard)
Prof. Robert Tignor (Princeton University)
Prof. Robert Vitalis (University of Pennsylvania)
EDITOR’S NOTE...
The Economic and Business History Research Centre (EBHRC)originated while embracing a spirit to provide a forum throughwhich young graduates interested in academic research can
explore a wide scope of research topics via the various activities ofthe Centre. EBHRC’s The Chronicles is yet another medium throughwhich the goal of promoting historical research, particularly in eco-nomic and business history, is sought. Business history, being a virginfield in Egypt and the Middle East, is a perfect match for a centrethat brings together the voices of the past through oral history andthe young researchers. A pool of activities: An annual May Forum,a seminar series and a Young Scholars Conference, crystallize theactivities of the Centre. Reporting them launches the first issue ofThe Chronicles.
The Chronicles is meant to provide a space for EBHRC’s historicalrecords outside archival boxes to reach a wider crowd. Beyond theclosed seminar rooms and workshops, The Chronicles becomes anoutlet for the researchers to share their reflections on the variousissues that they come across in their work. Borrowing from a grow-ing collection of oral history records, a rich material craves to beexposed and such a publication becomes a convenient channel.
While digging through the narratives of the past, the present stillhaunts us. Amid enthusiasm to explore new projects, EBHRCembarked on a project of producing an index for contemporaryeconomic and business news items, namely “al-Dalil.” A reflectionon this project is included in the first issue of The Chronicles. Like theindex project, The Chronicles is also a forum to shed light on signifi-cant current economic and business affairs.
This issue begins a journey of producing a periodic publication thatreports on the Centre’s activities and provides to the reader richsubstantive pieces of writing that bounce between the history andthe present.
WORD FROM THE DIRECTOR...
This month, the Economic and Business History Research Centre(EBHRC) will complete its first year of existence. In our first year ofoperation, we worked in several directions to fulfill our mission of
acting as a centre for documentation and research in the eco-nomic and business history of Egypt and the Middle East.
Oral History was one of our most vibrant activities in terms of itsoutcome and the energies it claimed in background re s e a rc h ,interviewing, transcription, and liaising with interviewees for texta p p roval. We already have on hand some 64 hours of re c o rd e dinterviews with former high state officials, economists, corporateexecutives, businessmen, and entre p reneurs. Some 25% of thesere c o rds have already been transcribed and are at diff e re n tphases of obtaining interviewees’ permission to make them avail-able for re s e a rchers. There are two areas that need enhance-ment during the coming year as far as oral history is concerned:
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Dina Khalifa, Project Officer, EBHRC
bringing up the process of transcription to a level closerto par with interviewing and beginning systematicindexing of the contents of various interviews and tran-scripts.
Another vibrant area of activity is Young ScholarsResearch. Our pool of ‘Young Scholars’(YS) includesover 60 names of recent graduates with active orpotential involvement in the centre’s activities. The mostactive among them are the four Project Officers whoare employed on full time basis to conduct the variousactivities, including oral history, conference organiza-tion, and publications. This year, together with other YS,they conducted methodological and field research ontopics that included the study of business history in USacademia and its relevance to Egypt, entrepreneurialinitiatives in large enterprise, as well as case studies ofsmall businesses, suburban development projects, andforeign business communities. Field research involvedfairly intensive use of oral history and new archivalmaterial.
During the spring semester, some of the results of thisre s e a rch were disseminated through a series ofSeminars and Conferences that also provided anopportunity to explore the employed methods and toaddress new areas of inquiry. A revised version of someof this research will be presented in MESA 05 in a paneltitled ‘Egyptian Business History: New Sources, NewMethods and New Directions’.
As explained in another section of The Chronicles,EBHRC was the outcome of meetings held during the‘First AUC Forum for the Economic and Business Historyof Egypt and the Middle East’ that was held in May 04.In keeping up with this tradition, the centre organizedthe ‘Second AUC Forum for the Economic and BusinessHistory of Egypt and the Middle East’ in May 05. Througha number of closed workshops with former ministers,corporate executives, and business people, the Foruminvolved the accumulation of fresh source material onEgyptian industrialization and industrial policy, tourism,and the textiles and automotive sectors. The use of thisgathering as a forum for accumulating fresh materialhighlights its unique nature in contrast to other scholarlygatherings.
During our first year of operation, our Archival Collectionrelied mainly on documents which we acquired in thecourse of field research, as well as donations of docu-ments or publications by our expanding list of contactsparticularly those generated through oral history efforts.There were also a few occasions when we acquireddocuments and rare publications by direct purchasefrom second hand book and general dealers. In thecoming year, we will continue to rely on these sources,but will also attempt to explore the prospects for obtain-ing private papers of state or corporate officials throughdirect contacts with their descendents.
Earlier this year, we also tested the possibility of produc-ing a Monthly Index of Egyptian economic and corpo-
rate affairs through intense extractions from selectedpapers and magazines. Since this was taken on trialbasis, we confined ourselves to three Arabic dailypapers and three weekly publications (two in Arabic).Our attempt resulted in some 60-page index that cov-ers March 05, to which we gave the title al-Dalil (‘TheDirectory’ or ‘The Guide’). The experiment showed thatthis is an activity that requires a very substantial share ofavailable resources at the expense of other activitiesthat involve the direct gathering of material or con-ducting research. We accordingly decided to discon-tinue it until such time when we could assemble a teamdedicated mainly to this particular work, possibly undersome special funding arrangement.
As The Chronicles comes close to its first appearance,our role as a Service center for researchers is beginningto be realized. We are just starting to receive requestsfrom scholars and graduate students to access thematerial presently in our possession. This has begunrecently as awareness of our existence began tospread through the previous activities as well as othercontacts with scholars and institutions at home andabroad. We expect this demand to increase with con-tinued activities and communication, particularly withthe circulation of The Chronicles among interestedscholars and centers.
We hope that The Chronicles will be a venue for spread-ing awareness of our existence and interacting with ourreaders and potential constituencies. Through thisvenue, we hope to acquaint the readers with our stockof source material, keep them abreast of fresh additionsto that stock, and investigate possible research ques-tions that this material could open up. In addition, wewill be using it to make calls for papers and a news bul-letin on the center’s activities in general. Furthermore,through a close scrutiny of current periodicals on Egyptand the Middle East, we will try to make of T h eChronicles a tool for following ‘history in the making’, soto speak, through news and focus captions that cap-ture current events of historical significance in publicpolicy, economics, and business affairs.
Finally, there remains a word of due thanks. Like all elsethat EBHRC has done in its first year of existence, TheChronicles comes out by the energies and hard work ofthe center’s crew of young Project Officers: Karim El-Sayed, Mostafa Hefny, Wael Ismail, Dina Khalifa andDina Waked whom we are losing to Harvard Law Schoolsoon. It is their energies that carried the center through-out this year, and it is to them that it owes whatever isreported between the covers of this magazine. TheChronicles comes out as a final piece of their work thisyear, helped as usual by the never failing support andart-creativity of Magda El Sehrawi who has alwaysacted as part of the center’s family even without offi-cially belonging to it.
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Abdelaziz EzzelArab, Director, EBHRC
Alibrarian walks in on respectable, bespec-tacled middle-aged man ravaging thetop shelves in the introductory economicssection at a large university’s library. Sheoffers her assistance. Panting, panicking,
he declares, “I am an economist. I've been teachingat this university for the past ten years. I'm attending abusiness meeting tomorrow, and I need to know howthe economy has changed in the past ten years."
The above is an old joke on the remoteness of theeconomist told -more often than not- by economists.The historian’s residence in beautifully imaginary ivorytowers of rosy narratives is as palpable and commona charge. The accusations are not groundless. For his-torians and economists a connection to the real world
of contemporary happenings lends their work imme-diacy and purpose. A picture of the present shapesthe economic historian’s portrait of the past, giving itrelevance not only to the scholar, but also to govern-ment, entrepreneurs and the layman.
At the Economic & Business History Research Centre aconcrete link between issues in the Egyptian econo-my and the center’s collection of historical materialon same is constructed through al-Dalil, a monthlyindex of broadly defined economic and businessnews emanating from six leading publications.
Al-Dalil is a record of history as it happens. With an eyeto accessible readability, the editors synthesized themyriad of news stories into coherent entries that tie isolated
Capital Taxi Project,Cairo Local Councilapproves new tariff forthe Capital Taxi project
with EGP 3 for firstfare and EGP 1 foreach kilometer.( a l - A h r a m , M a r c h1, p. 14);Cairo gover-norate opensthe floor fortender on the“Capital TaxiProject” via com-
panies in coordi-nation with the
Ministries of Financeand Transportation.( a l - A h r a m, March 9, p.9 )
Orascom Construction Industries (OCI), Company announces04 operating results and projects under construction inArab markets (a l - H a y a t , March 7, p. 15); The companycalls for a General Assembly meeting on 15 March2005 to discuss issuing LE 1.45 billion bonds.(al-Boursa al-Misriya, supplement to al-Ahramal-Iqtisadi, March 7, p. 8); The Company’sGDRs witness an upsurge due to the releaseof the company’s financial statements. (a l -‘Alam al-Yum, March 8, p. 15); Recordprofits pushes share to new high levels.(a l - M a l , March 13, p. 7); Egyptian CompanyGDR’s traded in London Exchange witnessedconsiderable activity in accordance withtrading of stocks in Egyptian exchange. Thetrading in Orascom Telecom, OrascomConstruction Industries and the CommercialInternational Bank are most active. (al-‘Alam al-Y u m , March 15, p. 15); OCI to issue bonds for LE 1.45billion. (al-‘Alam al-Yum, March 16, p. 1, p. 9);
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Qualified Industrial Zones Protocol (QIZ), QIZdoubles our exports to the US. This is notedas The Ministry of Foreign Trade and Industryhands out 397 certificates to companies for QIZpurposes. (al-’Alam al-Yum, March 1, p. 11);Egyptian businessmen voice demands to removeobstacles against implementing QIZ (al-‘Alam al-Y u m, March 7, p. 11); An undisclosed Egyptiantextile company has imported 1,000 tons ofIsraeli cotton and negotiates for another 1,500tons shipment. (al-‘Alam al-Yum, March 12, p.10);The repercussions of the application of QIZand the plan of penetrating American markets.(al-Ahram al-Iqtisadi, March 14, p. 3); A num-ber of 397 Egyptian companies are sched-uled to start exportation next week tothe U.S. as part of the QIZ agree-ment. Ongoing debates rage on thereal benefits of QIZ. (a l - A h r a ma l - I q t i s a d i, March 14, p.14); TheMinister of Foreign Trade &Industry investigates granting 120million pounds for the factoriesthat are negatively affected by theagreement. (al-‘Alam al-Yum, M a r c h19, p. 1); An analytical op-ed piecedeclares that the missing price inthe QIZ protocols is foreign invest-ment. A similar case is found in Jordan,where the agreement has brought the country$500 million in investments. A call forredesigning export policy to exploit the agree-ment is also made. (a l - M a l, March 20, p. 4);The ministry of Foreign Trade and Industryresearches new mechanisms of supportingexporters that do not fall under the QIZ agree-ment. (a l - A h r a m, March 20, p.16); Competitionand price wars rage between the exporters inthe QIZ. (al-’Alam al-Yum, March 28, p. 4)
Consumer Protection, TheMinister of Foreign Trade &Industry issues decree to ensurethat food industries abide byinternational standards and pro-tect consumer rights in effortsto promote exports. (a l - A h r a m ,March 1, p. 17); The Committeefor Consumer Protection in thecars sector of the Chamber ofCommerce called for the impor-tance of sticking to the specsof local and exported goods bycompanies. (al-Ahram, March 4,
p. 7); The Prime Ministeraddresses the anti-trustlaw and draft law on theconsumer’s protection.(a l - A h r a m, March 4, p.1 )
Shell Egypt, Shell uti-lizes technology for deep-
water exploration for natu-ral gas in 3 exploratory
wells off Mediterranean coast.( a l - A h r a m , March 2, p. 17); TheCompany takes 30% share inWestern Desert concession withTharwa Petroleum Company (45%)and Petronas (25%) (al-‘Alam al-Y u m, March 7, p. 1; a l - A h r a m,March 7, p. 17; a l - H a y a t, March7, p. 15)
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news items to related stories in two parallel categories:a subject index in which a collage of topically relatedstories are assembled and a company index in whichnews items relating to a specific enterprise aregrouped together. The entries are edited to form achronological narrative of a subject or company, asreported by selected publications within the month.
The number of publications has been limited to six(three of which are specialized) during this experi-mental phase of production. As the center acquiresthe resources necessary to raise the number of publi-cations, additional perspectives on the news eventsthat shape the economies of Egypt and the MiddleEast will provide the many-angled view that is therasion d’etre of this project.
A complete index for the month of March 2005 nowexists. It is the model that EBHRC will follow to producean expanded version when the resources becomeavailable for the laborious, methodical but rewardingprocess of extraction, synthesis and editing of all dailyeconomic news from Egypt and the Middle East.
MAY 2005 FORUM
INDUSTRIAL REVOLUTION
CRip LEd by
LACK of i n n o v a t i o n
Wael Ismail, Project Officer, EBHRC.
Under the umbrella of theSecond AUC Forum, theEconomic and BusinessHistory Research Centre(EBHRC) organized a
workshop based upon the person-al narrative of His Excellency Eng.Mohammad Abdel-Wahab, for-mer Minister of Industry. This work-shop was entitled, “Egypt inIndustrial Quest.” This form of work-shops is considered an expansionof the currently adopted methodby the centre based upon one onone interviews. It was enriched bythe attendance of executives fromvarious industrial sectors as well asi n t e rested scholars andresearchers.
Eng. Abdel-Wahab was one of thefirst people who agreed to partici-pate in oral history interviews con-ducted by the centre and hischoice, as one of two guests to
speak in the personal narrativeworkshops, was primarily due to hismulti-faceted career in industry.The other workshop followed thesame format hosted His ExcellencyMr. Fouad Sultan, former Minister ofTourism and Civil Aviation. The twof i g u res were appointed to thecabinet in the mid-1980s and leftoffice by 1993. Other than docu-menting their narratives, theseworkshops were meant to show-case different individuals workingin the same period under one gov-ernment. It was believed that thisworkshop would also highlight aparadox that speaks loudly abouta period filled with important yetsubtle changes uncharacteristic ofp o s t - revolutionary or post-infitaheras.
Eng. Abdel-Wahab spoke foralmost 40 minutes. However, hispassion while talking about Egypt’s
industrial prospects, that was soevident in the previously conduct-ed , only appeared in the Q & Aperiod. The topic of Research andDevelopment (R&D) that was todominate the workshop wasbroached by Dr. Heba Handoussa,former advisor to various Ministersof Industry and founder of theEconomic Research Forum (ERF).R&D as well as the general con-cept of innovation and technolog-ical advancement ( as well as itsimpact on industry) were the mainpoints discussed in the session.Although Eng. Abdel-Wahab tack-led other issues, including thefamous General Motors deal in the1980s, the proposed EgyptianNuclear power station andLaw203/1991, every other topic,question or answer seemed tocome down to the issue of R&D.
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MAY 2005 FORUM
When Dr. Gouda Abdel Khalek,Professor of Economics at CairoUniversity, asked about the missinglink in Egypt’s industrial strategy,Eng. Abdel-Wahab did not hesi-tate to indicate that it was theabsence of the R&D mentality. Theimportance of these types of work-shops is that they bring the archi-tects of Egypt’s past economicstructure closer to a specializedand interested audience morecurious about what actually tookplace rather than working to fitcertain historical events into a pre-determined theoretical paradigm.Needless to say, this form of col-lecting oral history through anenlarged format has a number of
benefits. Primarily, it allows severalindividuals with a dispersed spec-trum of interests to ask questionsand extract information from thesevaluable figures in a manner unat-tainable in other ways. Further, theaudience will not usually confineitself to merely asking questions orcommenting, but will add histori-cal substance to the ensuingdebate. Former Minister ofPlanning Dr. Ismail Sabri Abdullah'sinterjection is a prime example. Hewent about comparing the role ofthe Economic DevelopmentO rganization (EDO), which heheaded in the late 1950s, to theholding companies set up underlaw 203/1991.
The narrative that was given byEng. Abdel-Wahab was not onlybased upon his time as Minister ofIndustry, but was extended toinclude previous experienceswhether in the military industrialcomplex or later on as a head of anumber of companies. It seems,however, that his spell as Ministerwas colored by his willingness topromote local industry and intro-duce to it the required level ofinnovation and developmentneeded to transform what hecalled “simple production units”into an integrated set of industriesable to compete in the interna-tional arena. It is more than appar-ent to those familiar with Eng.Abdel-Wahab’s background thathe was influenced by his work atthe military industrial complex. He,of course, once referred to thecomplex as the sole entity withindustrial activities in Egypt.
A believer in Egypt’s indigenouscapabilities from real world experi-ence rather than through abstractnotions of patriotism and glory,Eng. Abdel-Wahab remained anardent advocate for a number ofpolicies meant to create andincrease demand for locally pro-duced goods and R&D activities.He was responsible for the adop-tion of a number of laws designedto increase interest in those activi-ties. By promoting the productionof capital equipment, he meant tocreate a strong engineering force
able to adapt and create tailoredequipment to suit Egyptian needs.His efforts were crowned by theprojects Egypt won to export sugarfactories to both Sudan and Iranthrough international bids.
This obsession with R&D exhibitedby Eng. Abdel-Wahab is deeplyrooted in the line of thinking thatpromotes a production mentalitybased upon a “value-added”framework rather just pro d u c i n gmere outdated old replicas. To therest of the world, technology hasbecome a “commodity” traded inthe international markets and with-out acquiring and nurturing thiscommodity at home; Egypt will notbe able to join the advancedworld. He indicated that currentEgyptian industrialists are wellaware of what is taking place inthe world. However, they remaintotally ignorant of what is going tohappen in the future. They insist onlinking their “manual labor” withforeign technology and thus inhib-it local original thought from everprospering and growing.
“to the rest of the
WORLD,
technologyhas become a
“commodity”traded in the
internationalmarkets
and withoutacquiring andnurturing this
commodity at home;
Egypt will NOT BE
ABLE to join the
advancedWORLD...”
“this workshopwould also highlight
a PARADOX that
speaks loudlyabout a period
FILLEDwithimportant yet subtle changes
uncharacteristicof post-
revolutionary or
post-infitah eras...”
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a HISTORICALGlance at the
Dina Khalifa, Project Officer, EBHRC.
EGYPTIANTextile
Industry before it
M I G R AT E S . . .
“The Textile Industry betweenPrivate and Public Hands"was the title of the historicalworkshop taking place onMay 14th as part of the
Second AUC Forum on Economic and BusinessHistory of Egypt and the Middle East. Withthree panelists who are experts in this industry:Mr. Louis Bishara, creator and chairman ofBTM, Mr. Mounir Ezz El Din who is the chairman,MD and founder of the Egyptian Irish Co. forLinen and Dr. Bahaa Raafat, chairman and
MD of the Egyptian Knitting and Ready MadeCompany. Dr. Heba Handoussa, founder ofthe ERF, served as the chair of the session andthe two hour workshop swayed between thereminiscences of the old cotton bourse, thepre-revolution liberal era, the predicaments ofnationalization and the current path back toprivate control. Thus, the diversity ofa d d ressed topics formulated an historicaloverview of an industry standing as Egypt'smost important and also a view of MohamedAli's impact upon modern Egypt.
MAY 2005 FORUM
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The pre-revolution era has been characterized by cos-mopolitanism, free market, competition and the crestof the private sector. Thus, while attempting to tracethe origins of the textile industry, Mr. Bishara remem-bered the categories of Egyptian cotton in the bourse,"I can still hear it in my ear," he said, "Karnak, Zagura,Saklaridis…the finest of cotton. That was a free market."Whether Egypt's textile industry was doomed by its longstaple cotton and by constant attempts sinceMohamed Ali to use high quality cotton in the produc-tion of low quality goods was a question that ProfessorRoger Owen of Harvard University put forth. ProfessorOwen re-iterated how, in the light of the laws of 1920,Egypt was not allowed to import low quality cotton andthus, being unable to face competition, textile millswere doomed to sell-ing mainly in a pro-tected Egyptian mar-ket. In response, andgiven the very limitedand specializeddemand for long sta-ple cotton, the pan-elists addre s s e dattempts by the cur-rent regime to encour-age the production ofshort and mediumrange cotton as wellthe importation ofcheap Asian varieties.D r. Raafat and Mr.Bishara pre s e n t e dinteresting remarks onthe matter with the for-mer voicing the fearthat engineers might meddle with the genetic natureof Egyptian cotton by replacing it with the short, lowerquality cotton. Bishira noted that, due to the Egyptianclimate, attempts to cultivate lower quality cottonoften fail.
Aside from the cotton dilemma, the nationalization ofthe 1960s was a major point in the path of the industry.Even though the state control era constituted only 15years of the industry’s history (1961-1974), it still domi-nated the discussion when addressing industry hurdles.Dr. Handoussa stated that nationalization was particu-larly detrimental to the dyeing and finishing industriesand that, even today, it is very difficult to revive them.There was a general consensus that managementplayed an important role in the fate of the industry.Issues of credibility and managerial competence wereaddressed when Mr. Ezz El Din asserted that chairmenof textile companies were replaced by military officerswho lacked the essential industry knowledge andfocused on organizational discipline. In contrast, Dr.Raafat shared his experience in the Misr-Rayon Co.which stood as a successful example of good man-
agement even after nationalization. Dr. Raafatexplained how in 1954, management had a vision tobring an expert from Belgium in order to implement anindustrial plan for the company. This plan was lateradopted to organize most of the textile factories afternationalization. Thus Dr. Raafat maintained that nation-alization does not have negative effects if coupled withgood management. In addition, he stressed that thegreatest harm was done by the authorities who cen-tralized the management of the textile companies, rais-ing a banner of “we have to govern them all.”
With a labour-intensive industry such as that of textiles,the status of workers was invariably a topic of this dis-cussion. Mr. Ezz El Din explained how the labor laws
after 1952 disrupted therelationship between theworkers, the employeesand the factory. He elab-orated that the workersno longer worked for pro-duction incentives. Herecalled how he wasconstantly being trans-ferred between the vari-ous companies. Such astrategy led to adecrease in the employ-ees’ loyalty to the placeof pro d u c t i o n .Conversely, Professor EllisGoldberg of University ofWashington argued thatLaw 317 of 1952 gaveworkers more rights toretain their jobs and thus
increased the loyalty to firms. Dr. Raafat justified theover staffing as a result of the labour laws by arguingthat, since everything was then controlled by the pub-lic sector, a fired worker would have no alternativeplace to work. He then added that it became themanagement’s responsibility to efficiently use its humanresources. On an ending remark Dr. Hadoussa statedthat, despite the pitfalls of the state control era, onething that can be praised is the presence of a vision.There existed, in essence, “a bill of right that broughtpeople around it even in the industrial complex.” Bycontrast, vision is what is currently lacking in our modernsocioeconomic system.
In an earlier interview with Mr. Bishara, he described theglobal trend of the textile industry as migratory towardthe south due to its labour intensive nature. Thus, beforeit migrates, it operates in a relatively open economyand free market. Simultaneously however, the textilesexperts call for an industrial vision by the current gov-ernment and competence on the part of the new busi-nessmen engaged in the technical aspects of theindustry.
“Beside the cotton dilemma, the
n a t i o n a l i z a t i o nof the 1960s
was a MAJOR POINTin the path of the
i n d u s t r y . . .”
MAY 2005 FORUM
8
Wael Ismail, Project Officer, EBHRC.
An Egyptian Car
Called F i ATEgypt’s Experiment in the Automotive Industry
One of the Centre’s workshops in its secondannual forum was dedicated to an industrythat has long been cloaked by controversy,
failures and high expectations. This is, of course, theautomotive industry. Although this workshop wasdesigned to study an industrial sector, it even-tually reviewed the ebbs and flows of acompany that has become synony-mous with the car industry in Egypt, ElNasr Company for Automobiles.The invited panel consisted of ElNasr Company chief executivesEng. Dr. Adel Gazarin, Eng.Abdel Moneim Khalifa, andEng. Magdy Abu Zeid. Otherspeakers came from differ-ent backgrounds, includingEng. Ali Tawfik from thefeeding industry and Mr.Ziyad Nashif re p re s e n t i n gthe view point of multina-tional companies. Dr. HebaHandoussa, whose insightand ability to connect scat-t e red narratives, enrichedthe debate by chairing thepanel.
The enterprise history of El NasrCompany shaped the course ofthe workshop. However, the work-shop also addressed the history of thecar industry in Egypt beginning with a dis-cussion of the establishment of FordCompany for assembling cars in the early 1950s andfinishing with a discussion of assembling companies inthe 1990s. The historical presentation also touchedupon a point that received little attention. This point isthat Egypt’s automotive industry stemmed from themilitary desire to supply its own need for trucks andbuses. This is a statement that truly sheds new light onthe reasons behind delving into this capital-intensive
industry. Most scholars, researchers and even practi-tioners attributed this adventure to reasons such aspolitical glorification associated with the productionof a domestic car whilst others theorized that it was
needed for the creation of viable and strongfeeding industries. The debate tran-
scended the specific example of ElNasr Company which constant-
ly stimulated the debate.Other issues discussed
included the nature of thecar industry and its rela-
tionship with its feedingindustries as well as thec u r rent status ofEgypt’s automotivesector.
Eng. Magdy AbuZeid, the current MDfor production andmarketing affairs at ElNasr Company spokepassionately about acompany being driv-
en to bankruptcy by acontinuing legacy of
misguided policiesimposed by the govern-
ment. The company, whichc o n t rolled the automotive
market in Egypt since its cre-ation in 1960 through the mid-
1980s, was plagued by a number ofdecisions that burdened it. These included
assigning the company too many projects with variousinternational companies and having too many work-ers left wandering aimlessly around the streets of thefactories when work was slow. Further, the companywas deprived of valuable investments necessary tocompete in such a market where only the most effec-t i ve and innovat i ve o f compan ies su rv i ve .
“this workshop
was designed to study an
industrial sector,it eventually reviewed the
ebbs and flowsof a company that has become
SYNONYMOUS with the
car industry in EGYPT,
El Nasr Company for
Automobiles...”
MAY 2005 FORUM
9
This is due simply to the fact that such an industry isbased upon technological breakthroughs and hugecapital investments. Eng. Khalifa, former chairman ofEl Nasr Company indicated that R&D, “was totallyneglected and that the concept was not truly appre-ciated.” This forced the company to remain everbound to foreign licenses and know-how. The ques-tion that was on every one’s mind was triggered by Dr.Handoussa when she asked the panelists to explainwhy Egypt failed while so many other developingcountries such as Turkey, Korea and Tunisiasucceeded. Mr. Nashif as the mostadamant advocate of free enter-prise stated that the failure“was a natural result for agovernment- run compa-ny.” The other speakersattributed the disap-pointments to thelack of governmentsupport which is,naturally, unlikewhat took place inthe above-men-tioned countries.The govern m e n tdid not invest in ElNasr Company foralmost 14 yearswhich is a horrifyingfact putting in mind thenature of the automotiveindustry. Another importantfact to point out is that the com-pany operated for a very long timein a government-controlled setting where italmost lost whatever abilities it had to stay in tune withthe needs of the local and external markets. Dr.Gazarin indicated that the company and Egyptianfirms at a certain point in time lacked, “the art ofexporting.” This inability was nurtured by the govern-ment and forced the industry into a track paved byimproper calculations and a lack of vision for thefuture.
The final part of the workshop was dominated by twoquestions asked respectively by Dr. Abdel AzizEzzelarab, Director of the Centre and Dr. Nagla Rizk,Associate Pro f e s s o r, and Chair of the EconomicsDepartment at AUC. Ezzealrab’s question was con-cerned with the appraisal of the firm’s experiencethus far and Rizk’s aimed towards knowing future stepsand plans for the industry. In response to the formerquestion, Dr. Gazarin, reiterated statements that wehad heard previously in one of our interviews with him.He stressed the importance of El Nasr Company as aninstitution helping to create a cadre of executivesthat are currently running the Egyptian automotiveindustry. He further added that El Nasr Company
exposed these executives and even workers to theworld markets thus offering a chance that could havebeen impossible without the company. Although thelosses of the company and its failures are well docu-mented and quantified, its gains are still unexploredand are most probably largely unquantifiable.
Addressing the latter question Eng. Abu Zeid statedthat the dissection of El Nasr Company in 2000 intofour divisions was meant to hasten the process of pri-
vatization. However, the burdens of all theprojects were consolidated into the
passenger car division thus crip-pling the ability of the com-
pany to operate in themarket. The passenger
car division, which isnow an independent
company, currentlyranks second in themarket in terms ofsales. However,since thea n n o u n c e m e n tof the sale of ElNasr in 1996, thecompany lost its
Fiat contract andwas left only with
p roduction of theTurkish Shahin automo-
bile. The recent decreasein customs duties, however,
did not bolster the position ofthe company as it became more
exposed to foreign competition.
The general image of the El Nasr Company and theentire automotive industry in Egypt was perceived dif-ferently by the panelists. Mr. Nashif, stated, “we haveto be realistic, nice people do not win battles.” Hisoutlook stems from a multi-national background andis innately critical of Egyptian policies that do not offerthe right incentives for investors to enter the market.He called for a clearer understanding of what multi-nationals need via the adoption of a number of inno-vative and creative strategies catering to the needsof these giant conglomerates. This gloomy approachwas not shared Dr.Gazarin who stated that, “soon wewill be feeling the wind of change in Egypt” which willusher in a new era for the automotive industry. Thefocus of the future might not rest in passenger cars butit might be in the bus or truck manufacturing indus-tries.
“we will beFEELING the
wind of CHANGE in
Egypt”
MAY 2005 FORUM
10
MAY 2005 FORUM
F uad Sult n:A CHAMPION of
EconomicKarim El-Sayed, Project Officer, EBHRC
The first session of the SecondAUC Forum on Economic &Business History of Egypt &the Middle East featured atalk by His Excellency Mr.
Fouad Sultan, the former Minister ofTourism and Civil Aviation andpresently the CEO of Al-Ahly forDevelopment & Investment (ADI).Mr. Sultan was invited to share hisexperiences in the National Bank ofEgypt and later the Central Bankwith the International MonetaryFund (IMF). His experiences in thecabinet with scholars, universityprofessors, economic historians andyoung researchers also contributedto this session.
Following numerous pre l i m i n a r ymeetings between Mr. Sultan andthe EBHRC staff, in which Mr.Sultan's long and varied career wasre c o rded and documented, Mr.Sultan agreed to meet with aselected group for an open discus-sion that capitalized on the specialvantage point he had overlookingmany events and major transfor-mations relevant to the businessand economic history of Egypt. Hepresented a wealth of primary infor-mation, and added greatly to theEBHRC collection of source materi-al.
Listening to Mr. Sultan, one benefit-ed not only from his insight and the
information he gave about specificbusiness ventures, like the infamousGeneral Motors offer to rent thep roduction lines of Al-NasrAutomotive Co., the first of its kindprivatization deal of public-sectorhotels, but also his insight as aMinister in the government thatadopted the IMF-suggestedEconomic Reform and StructuralAdjustment Program (ERSAP). Moreimportantly, one benefited evenm o re from listening to a stro n gadvocate of economic liberalismwho has been consistent, throughhis writings in the press and his pio-neering decisions and actions, inpromoting the need for reform andstructural readjustment of the legalregulatory framework to allow forgreater economic freedoms whileworking within a system that strong-ly resisted change.
P rofessors Robert Ti g n o r, fro mPrinceton University, and HebaHadnoussa, founder of theEconomic Research Forum, botha rgued that the decision toappoint Mr. Sultan to the Ministry ofTourism and Civil Aviation in the1980s was an astute move from thegovernment leadership. Effecting agradual transformation required Mr.Sultan's pioneering intellect andconsistent advocacy for economicliberalism. Nevertheless, it wasmandatory at first to provide testing
“It was evidently
this lack of
support frominside the
CABINET that eventually
led Mr. Sultan to
leave his OFFICIAL post,
and return,
"gladly,"to the businesscommunity
in 1993...”
11
MAY 2005 FORUM
g rounds for those ideas and toi n t roduce them into a sector inwhich they would not cause severerepercussions on the population oreven public outrage. It was thennecessary to apply these ideasmore widely to other sectors oncethey were accepted. This is quitetelling of the vision Mr. Sultan hadand always promoted in the pressand made him the likely candidatefor initiating the reform. It is alsotelling of the magnitude of resist-ance he was likely to face in orderto affect those changes.
Mr. Sultan remembered how thedecision to appoint him to thetourism sector was justified as it wasthe sector least distorted by social-ist policies and the one with thesmallest social implications on soci-ety. Moreover, it was explained tohim that the results of his decisions,whatever they may be, would notcause outrage in the Egyptian soci-ety. Therefore, he was invited toapply the ideas he has been pro-moting for so long in this sector totest his ability to transform it.
As Minister, Mr. Sultan felt the needto encourage private investmentsin the tourism sector. This he did byselling land in Sinai, at very lowprices, to investors willing to con-tribute to the infrastructure of thearea and turn uninhabited areasinto potential international tourismspots. He also accomplished thisgoal by selling public-sector hotelsto private and foreign investorswho are willing to renovate thebuildings and add to the ro o mcapacities. Mr. Sultan re c o u n t e dthe severe media campaign thatwas waged against him and theensuing decision from parliamentto form a committee to investigatethe compatibility of his decisionswith the constitution.
M r. Sultan's role in the GeneralMotors deal, first as CEO of Misr IranDevelopment Bank (which was themain financier) and later fro minside the cabinet, incited anotherround of public dissent. Eng. AbdulMonein Khalifa, the former CEO ofAl-Nasr Automotive Co., was a
member of the technical commit-tee that reviewed the GeneralMotors offer. He remembered howthe decision to turn down the offerwas more political than financialbecause there were top-level polit-ical concerns for the repercussionsupon the labor movement and thee n t i re society from securing thisdeal. This arrangement was, ofcourse, the first of its kind, in termsof scale and outreach.
It is quite interesting to note the dif-ferent interpretation His ExcellencyEng. Muhammad Abdel Wa h a b ,who was the guest speaker in thesecond session of the EBHRCForum, gave about the GeneralMotors deal in particular. While thecontrast in ideology and approachbetween Mr. Sultan and Eng. AbdelWahab was quite apparent to any-one who attended both sessions, itwas the debate about the GeneralMotors deal that highlighted thosedistinctions. More o v e r, it is quiteinteresting to note that the terms ofMr. Sultan and Eng. Abdel Wahabas ministers overlapped for almost 8years and yet they had diametri-cally diff e rent views about theeconomy in general and the publicsector in particular.
It was evidently this lack of supportfrom inside the cabinet that even-tually led Mr. Sultan to leave his offi-cial post, and return, "gladly", to thebusiness community in 1993.Although by then ERSAP had beenadopted (and some might arguethat the overall climate was moreconducive to change), Mr. Sultanargued that this was not the case.He considered that Egypt hadbeen forced to accept the ERSAPbecause of major financial prob-lems and because of the hugeincentives the US govern m e n toffered. At the same time, howev-er, members of the Egyptian gov-ernment were neither welcomingof this "reform" nor ready to imple-ment it.
Not surprisingly, talks about reformturned the debate from the past tothe present. Dr. Karima Korayem,from the Faculty of Economics atAzhar University, held diff e re n tviews from Mr. Sultan and arguedthat the current reforms are notenough and are most of the timetoo weak to regulate the market. Inaddition, she stated that marketeconomies still need strong regula-tory laws to restrain the influence ofprivate capital, to protect the con-sumer rights, to limit monopoliesand to maintain the social servicesand welfare. These are thingswhich are clearly lacking in the cur-rent Egyptian system. Mr. Sultanargued that ERSAP was successful,but concurred that the economystill needs the structural adjustmentcomponent, which always laggedbehind economic and monetaryreform. He even suggested somefurther amendments to the consti-tution providing a proper climatefor investment. This would beaccomplished via a restructuring ofthe legal regulatory frameworkstarting with articles in the constitu-tion that give primacy to the publicsector which do not promote pri-vate investment. Finally, with therecently suggested reforms in thecustoms and tax structures, Sultannoted that we have yet to beginthe true quest for a real and propertransformation into a liberal marketsystem.
“we have
yet to begin
the true questfor a REAL and
propert r a n s f o rm a t i o n
into a
market system...”
12
TheRentier State in The Middle East:
OIL…& Others
MAY 2005 FORUM
Mohamed I. Fahmy Menza, Dialogue Coordinator, AUC
Ifirst encountered the term “Rentier State” in an economics lecture, most probably given by professor GalalAmin. All I could make out of it then was the apparent correlation that the word “rentier” had with theword “rent”. As few weeks later, I was assigned by another economics professor to conduct a briefresearch project on the status of the Egyptian economy as a rentier economy in the post-1991 era. Onlythen did the true meaning of the term begin to germinate in my mind.
My initial intuition was mostly correct. Derived from the original word “rent”, the concept of a “rentier econo-my” refers to an economic system that mainly depends on rent in acquiring its resources. Hence, in the contextof a thematic discussion tackling the concept of the rentier economy/state and the connotations pertaining toit under the auspices of the Economic & Business History Research Centre (EBHRC), a multidisciplinary panel washeld with contributions from professor Ellis Goldberg of University of Washington and professor Robert Vitalis ofUniversity of Pennsylvania along with a few other scholars and students. This brief review is a summary of themajor points and subsequent debates of the panel with particular focus upon Goldberg’s presentation regard-ing to the concept of the rentier state.
Goldberg’s Rentier State
In his presentation, Goldberg offers a comparativesynopsis of the concept of the rentier state. In short, hebelieves that the concept of the rentier state eluci-dates the lack of democracy and economic devel-opment within the countries that are major producersof oil. The “rentier effect”, as defined by Goldberg, is acondition that is necessary as well as sufficient for theemergence of dictatorships and economic system fail-ures. But one must ask if this must always be the case.
In fact, it could be argued that the prevalence of arentier economy is a potential cause for the appear-ance of an authoritarian system, due to the reasonsthat are well put by Goldberg. Primarily, the acquisi-tion of the main resources of the state within a limitednumber of economic sectors, mostly oil, and the lackof viable wide-scale economic activities that incorpo-rate a sizeable portion of the society eventually over-empower the rulers at the zenith of the political system.T h e re is also empowerment, under such circ u m-stances of lower level politicians that manipulate therevenues generated from the rent-oriented resources.
“The “rentier effect”as defined by
GOLDBERG, is a
CONDITIONthat is necessary
as well as sufficient for
the emergence of
dictatorshipsand economic system
failures...”13
MAY 2005 FORUM
Deficient Approaches?
Contemplating the approaches with regards to therentier effect, Goldberg established that two basicscopes of analyses prevail. First, there is the case studyapproach which aims at setting a chain of causal rela-tions that end with a variety of findings on the directeffects of the rentier economy on the political system.Logically, this approach could be successful if the sub-ject of concern is a single country with an extant nar-
rative that can be traced and tested. Yet, it would berather hasty to presume that these findings could begeneralized. If we merely tackle the general hypothe-sis of a rentier effect on case-by-case basis, the case-study approach is naturally viable but hardly yieldinguniversalizable results.
Then there is the “Large N” approach described byGoldberg which employs a set of statistical/empiricaldata from a plethora of countries with various economic and political circumstances. This data set is thenanalyzed in order to attain a correlation between thedomination of a rentier-oriented economy and theemergence of an authoritarian governing system. Ofcourse, the loopholes of such an approach are numer-ous. Standing on its own, a sheer empirical approach isnot sufficient to comprehend the causalities leading tothe dominance of certain economic/political trends.For example, two different countries that depend on oilrevenues as a primary source of income, to more or lesssimilar degrees, and end up with seemingly undemoc-ratic polities at a certain timeframe could possibly besubject to two entirely different sets of factors that yieldthe emergence of authoritarianism within them.
Can we trace a rentier effect?
Apparently, the two approaches outlined earlier donot seem sufficient if we are to attain an objectiveanalysis of the potential effects that a rentier economymight have upon the political system of a certain coun-try. Hence, one must ask if it is mandatory for anauthoritarian system to emerge in a rentier economyparadigm. I would argue that it is not. Indeed, the
prospects of an authoritarian political system eruptingwithin a rentier paradigm are amplified. However, itwould be an intellectual shortcut to assume that,based upon the existing examples of rentier states(which could mostly be described as un-democrat-ic/authoritarian systems) that all rentier states have tobe consequently authoritarian ones. Internally, withinthe boundaries of the state, a rentier economy couldbe a potential factor for the ascent of a dictatorship.However, within the international arena, the outcomeseems somehow more definitive.
We could more safely assume the direct causality ofthe rentier effect when considering international poli-tics. A certain role will then have to be imposed uponthe country of concern. This role is that of the distributorof non-permanent resources over the internationalmarket. Such a role could result in a mixed signal ofpros and cons for a rentier state within the global mar-ket. Conversely, it might reflect an increasingly essen-tial role for such a state especially if the source of therent is a commodity like oil which has unquestionablepolitical and economic significance. Simultaneously,however, this might also imply a fragile status for such acountry within the global market when taking intoaccount the volatility of oil prices.
The rentier state and the Middle East
Now, a few points could be pivotal if we are after am o re comprehensive understanding of the re n t i e reffect. Most importantly, a broader and more inclusiveconceptualization of the term “rentier economy” isneeded. Comprehending the rentier state as a singlenation that is primarily dependent upon rent in acquir-ing its resources seems insufficient. The scope of theanalysis could be widened to include other sources ofincome along with oil. For instance, the overwhelmingdependence of certain states upon the services sector,including tourism and other naturally endowedresources, could also place them within the categoryof a rentier state and broaden the focus of research toincorporate a more all-encompassing view of the term.This could actually aid us in tracing the actual effect ofrent on the economic/political paradigm of states. Inshort, rentier economies do not have to be oil or evencommodity producing economies per se.
The consideration of the rentier effect on the politicalsystems of the Third World should be praised for tappingan area that is predominantly unexplored. In the con-text of the Middle East, and especially in the milieu ofthe prospective democratization of the region in theaftermath of 9/11, this area of research is rather unsul-lied. Most of the recent scholarly attributions havefocused attention on issues of culture, or more specifi-cally Islam, and the role it could potentially play withinthe political equation of nation-states in the region. Analternative question could be “Is it Oil?” as opposed to“Is it Islam?”
“Internally, within THE boundaries of the state, a re n t i e re c o n o m y could be a POTENTIALfactor for the ascent of a
D I C T A T O R S H I P ...”
14
MAY 2005 FORUM
Hearing the Voicesof Egyptian A f r i c a n& FIRMS
John Salevurakis, Assistant Professor, Economics, AUC
An obvious feature of Dr. Tignor’s “TheBusiness firm in Africa” as presented in theopening panel of the EBHRC’s 2005 MayForum, is the belief that “the firm” is alargely neglected area of historical and
economic inquiry. We are, as Tignor immediatelynotes, largely ignorant of firm activities in Africa. Thisignorance exists in spite of the fact that the businessfirm played a substantial role in the partition of Africa,its development, and its decolonization. Firms were,according to Tignor, there at the “major moments” inAfrican history but are still ignored. This neglect is part-ly due to the culture of Economics departmentswhich, according to Tignor, are reluctant to accepteconomic historians as “proper economists”. AtPrinceton, for instance, economic history courses aretaught almost entirely by faculty who may developonly a passing interest in the topic. Given that thesefeelings exist with respect to the economic history ofthe U.S., it is therefore, unsurprising that so little atten-tion should be paid to African or European firms.
As evidence of this neglect, Tignor notes that, usingJStor, only 91 articles in The Business History Revieweven mentioned “Africa”. Only three of thesefocused on the firm and could be viewed as havingtheir foundation in primary sources. Similarly, a searchof The Journal of African History only yielded 131 arti-cles possessing the search term “firm”. The leadingeconomic history journals, while having a great num-ber of articles dealing with Africa, also rarely refer-enced the firm specifically. The rare exceptions to thiswere articles dealing with the Atlantic slave trade.
According to Tignor, we know that “a lack of coordi-nation exists between business historians and ‘african-ist’ or ‘middle eastern’ scholars who have recently
turned their attention to business firms”. The lattergroups, however, do not speak directly to the issuesbeing addressed by business historians. There exists,a c c o rding to Tignor an “empirical disconnect” .Tignor notes that major works dealing with the parti-tion of Africa focus upon the role of great Europeanbanks in an implied partnership with governmentsrather than firms explicitly. This encourages, or per-haps reflects, a tacit acceptance of ideologies con-sistent with dependency theory. Micro level empiricalwork however, has undercut “dependency theory”.For example, firm level data (particularly focusing onBank Misr) according to Tignor and others, shows thateconomic diversification and industrialization in Egyptwas not solely obstructed by western actions as posit-ed by dependency theory but also discouraged bymicro level decisions.
An analysis of firm level data will, as stated by Tignor,allow the formation of a more complete picture ofAfrican and Egyptian independence from Europeaninfluence. American academics, in their generality,are therefore engaging in the “re-imperialization” ofthe third world. This generality is reflected in the igno-rance these historians have of both general and firmlevel data. It is therefore, the task of the EBHRC to pro-vide such information.
Mostafa Hefny’s discussion of Tignor’s paper immedi-ately referred to it as “deceptive, probably decep-tively simple”. Yet, according to Hefny, a radicalargument is also being made that we are in need ofan “entirely new narrative of Africa”. Tignor is notedas advocating a view of financial practice on the firmlevel as a cause of the Bank Misr Collapse whileadherents to dependency theory focus on govern-ment data and would naturally view Bank Misr
15
MAY 2005 FORUM
business practices as incidental to the process ofbroader colonial forces. Hefny wonders if the aban-donment of dependency theory amounts to “blamingthe victims”. While historians of Africa have rarely writ-ten about the Egyptian bourgouise, Hefny simultane-ously notes a belief that most of this class were selfserving and working with colonialists. They were trulyrent seekers. The tale of these less than heroic men incombination with a macro level analysis may, forHefny, “give Egypt and Africa her voice”. If only thishistory were written.
I adopted the position that there exists a possible justi -fication for the traditional avoidance of firm leveldata. The firm represents an important avenue foranalysis but may be neglected due to the possibleacademic costs involved in the collection of suchdata relative to the perceived potential benefits. Ifthe historian or economist has ready access to macro-level data and the firm data is believed unlikely toyield a substantially different picture of the historicalincidents, clearly there are relative benefits to focus-ing one’s attention upon the broader image. Similarly,it seems probable that firm level data is much less like-ly to physically survive the time separating the histori-cal incidents themselves and the historian seeking toexplore them. Firms are transient in nature and itseems likely that their records must be as well.
Dr. Roger Owen then noted that Tignor’s article andthe comments preceeding his own expose the impor-tance of trying to “locate the EBHRC somewhere”.We must ask ourselves, according to Owen, “Whatdoes it take to make a successful EBHRC project?” Wemust also question whether we, as economic histori-ans, are lacking something relative to true “business
historians”. Is it possible that business schools impartskills that we have yet to develop? Tignor is alsodescribed by Owen as a bit “too cavalier” in hisembrace of micro-level analysis. Owen asserts thatthe neglect of firm level data does not mean that asomehow less descriptive vision of the world isacheived. There are, in essence, questions that onlymacro level analysis can answer. In short, one methodof analysis or one focus cannot describe the world inits entirety. For example, Owen notes that Tignor failsto mention legal factors leading to economicchange. Legal changes over time can, of course,encourage or discourage development. The “familyfirm” is also as a topic of study that may be useful asan even more pronounced micro-level of analysis.Owen sought, in his comments, a generalist approachthat had been neglected previously in our discussionand he simultaneously asked if we might possibly beeven more focused in our analysis than Tignor’s papersuggests.
D r. Abdelaziz Ezzelarab then acknowledged theimportance of family businesses, particularly in Egypt.He noted a particular curiosity with regard to whyEgyptian family businesses fail to extend their livesbeyond three generations. He wondered if this wassomething cultural or political. Family businesses havebeen improperly and properly planned historically bysometimes taking into account the abilities of secondand third generations to manage firms and by some-times failing in this regard. The emphasis that thispanel ultimately came to place upon the family firmstrongly illustrates the point that, while the firm is a neg-lected as a topic of discussion, there are finer levels ofanalysis that should also be undertaken. Generality isclearly a relative term.
According to EzzelArab, it is a fundamental task of theEBHRC to gather documents and make them avail-able as subjects of research. The oral history projectwill, of course, serve as a valuable archive and simul-taneously as a research tool. There are, however, alsobroader and equally fundamental research questionswhich exist for those of us in academia as well as busi-ness. Given this, it is important that we talk to the busi-ness community in Egypt to provide guidance. A goalof the EBHRC, as illustrated by a later session in theMay forum 2005, is a bilateral relationship with busi-ness. To those in power, we can provide a broadsense of history that has been achieved through bothmacro and micro level perspectives.
“If only this historywere written... ”
“economic diversification
and industrialization in
Egypt was not solelyobstructed by Westernactions as posited bydependency theory
but also discouraged by microlevel decisions...”
16
LISTENINGHistory
LISTENINGfor History
SEMINAR SERIES
“Oral History:
Scope, F I D E L I T Y and
M e t h o d o l o g y ”
A REPORT ON
Mostafa Hefny, Project Officer, EBHRC
First comes the method. In any process there alsoexists an overarching goal and a set of findings.However, the former is only generally defined and
the latter is inevitably unknown. It is the method, theprocess through which we tend to aspirations thatdefines an institution.
Within a newly established center, and the Economic& Business History Research Center (EBHRC) maybe sodescribed, the above would be words to live by. Theyare however little more than an ideal which the worlddiametrically inverts. We learn by doing. The child ona bicycle, the student of language and indeed theadministrator of a research enterprise, must embarkon an initiation with an unsure step.
EBHRC, as the reader may be well aware, is less thanone year old. What is novel about the center, andperhaps news to the reader, is that the center is thefirst of its kind in Egypt. The delights of probing virginterritory, of being no one’s apprentice, are mitigatedby the fact that being a pioneer brings the addedresponsibility of charting a possibly tre a c h e ro u scourse never before attempted. The situation com-pels one to not only define his role within the land-scape, but to fashion the landscape itself.
Hence, oral history. This writer has been in the positionof witness as those responsible for the collection of
oral accounts, the center’s director AbdelAzizEzzelarab and the Project Officer Wael Ismail, refineda technique that was as much a conscious choice ofmethod as one mandated by a rough landscape. Yetthe method, tailored by EBHRC to its needs in anEgyptian environment, is not without traditions of itsown. It was never an ambition of this undertaking tobecome a premier practitioner of oral history in thefield of Egyptian business and economic history.H o w e v e r, after amassing 63 hours of re c o rd e daccounts by 22 of its leading figures, that is preciselywhat EBHRC has become.
As a mainstay of the anthropologist’s modus operan-di, oral history’s considerable tradition is more inclinedtowards service to that social science. It remainsnonetheless, in the parlance of another social sci-ence, fungible. It is a tool which may be molded andremolded. Given its centrality to the center’s historicaldocumentation, a deeper understanding of theimplications of its use, the possibilities it presents us asresearchers, its limitations, prejudices, nuances, prac-tices and advantages became imperative.
“Oral History: Scope, Fidelity and Methodology” (28thof March, 2005) was the first seminar in EBHRC’s serieson methodological issues in the practice of econom-ic and business history. It was an occasion for a reflex-ive process examining the center’s sculpting of oral
17
SEMINAR SERIES
accounts in an Egyptian, economic context. Theemphasis was placed upon the ideological andmethodological considerations of oral history aspondered by earlier practitioners and authors. Theaim was not merely to place the practices ofEBHRC in a larger context for comparative purpos-es. By encouraging debate within a seminar for-mat, we hoped to hone the techniques of oral his-tory and subsequent historiography. The seminar,originally planned over two sessions, was plannedwith the ambitious aim of exploring everythingrelated to oral history. From exploring the esotericissues surrounding the epistemological pathwaysaccessible to the interviewer/historian to legalissues concerned with the disclosure of informationobtained to practical concerns of transcription andstorage of records, there were no boundaries.
The horse had followed the cart as far as planningand practice were concerned. With this seminar,however, we were determinedthat now EBHRC’s principle activ-ity was to be pulled in the direc-tion most in line with the needs ayear of experience with all man-ner of characters had crystal-lized. The seminar aimed to con-struct the center’s oral historyapparatus.
It was a small affair. The center’sp roject officers undertook topresent and discuss major worksin the field. The books discussed were The Voice ofthe Past: Oral History by Paul Thompson, The Deathof Luigi Trastulli and Other Stories: Form andMeaning in Oral History by Alessandro Portelli, andEnvelopes of Sound : The Art of Oral History byRonald J. Grele. In addition to the texts, one of thep roject officers, Karim El-Sayed, talked aboutColumbia University’s method of collecting oral his-tory. EBHRC’s own methodology is an adaptationof this method. The center’s director joined with theproject officers, young scholars associated with thecenter, Professor Emeritus Robert Tignor of PrincetonUniversity, and Steve Urgola of the AUC’s own RareBooks Library.
All present had a stake in a functioning and practi-cal oral history. The discussion was therefore unlike-ly to remain at an abstract level for long. Indeed,the beginning of the proceedings was marked byWael Ismail’s account of the center’s own experi-ence with the technique.
Oral history, he explained, was indicated in situa-tions whence little or no history had been previous-ly recorded. The center had meandered into itspresent set of practices beginning, as a pilot proj-
ect in early 2004, with interviews of Egypt’s formerMinister of Industry and Prime Minister Aziz Sidqi. Inthis interview, a general question was posed andthe subject was allowed to expound in whateverdirection he deemed appropriate. The result was aspillage of substance amid loudly bellowed opin-ions which are evinced in EBHRC’s first annualforum in May 2004 when capsules of the interviewswere presented in workshops attended by interest-ed scholars . However, the general focus providedby the broad framework of inquiry on the industrial-ization in Egypt was lost. A tweaking was in order.
The center regrouped in September of 2004 afterseveral months of reassessment. Time served only toconfirm the primacy of oral history over the center’smission. This is a nation still without a tradition of freeaccess to documents. Oral accounts are not with-out their objective advantages over written docu-ments, but this is a case where talking to the deci-
sion makers and administratorswas less a qualitative choicethan a necessary one. Thosemen are the guardians of a his-tory that has never been madeavailable to scholars, let alonethe public. Specialized, as theyoften are, many remain inno-cent of the historical value oftheir experiences. A cohere n tsynthesis of the testimony of offi-cials, bureaucrats, administra-tors and businessmen serves as
a prism through which an historical perspective willalmost certainly be entirely original.
Then there is the quandary of time. Oral history maybe richer source material than accessible writtendocuments, but its sources are human, fallible andmortal. It is a delicate but unavoidable fact thatthe guardians of invaluable accounts of economicand business endeavors are in the twilight of theirlives.
An invaluable history of Egypt may perish with thesemen. Much has been written on the varied tech-niques of oral history as conducted in the rest of theworld but, in addition to designing an oral historymethod appropriate to the field and to anEgyptian context, EBHRC had to contend withunforgiving pressures of time. The accounts couldbe synthesized in accordance with an elegant oreven practical theoretical framework. They wereperishable.
And so interviews continued through the fall of2004. The learning-by-doing approach also contin-ued, but experience had refined the apparatus toinclude an initial meeting with the subject in which
“Those men are the
GUARDIANS of a
history that has
never been made
AVAILABLE TO SCHOLARS,
let alone the public”
18
a free flow of memory was encouraged with the sub-ject having been made aware of the framework ofinquiry which, in turn, had been refined to addressingthe relationship of finance and Egyptian industry. Theinterviewers would then listen to a recording of the ini-tial session and formulate a series of questions thatconnects the subjects’ experience with the frameworkof inquiry. This procedure governed the reminiscencesto the general topic without unnecessarily curtailingpotentially valuable information that had not been tar-geted beforehand by the interviewers.
The apparatus was taking shape. Subjects were, on thewhole, surprisingly cooperative and generous with theirtime. There did, however, remain an unfortunate “sta-tus” issue which necessitated that the center’s directorbe present at all the interviews. The novelty of theenterprise and the subjects’ lack of previous experi-ence with scholars (the very thing that makes their tes-timony so valuable) meant that they could not entrusttheir accounts to anyone who they considered a dele-gate. This problem has yet to be resolved by EBHRC. Itsmagnitude has only increased as subjects providedthe names of colleagues and the pool of accountsgrew ever larger.
It remains one of the problems unique to the center’sexperience. The contrast of that experience with thewritten texts on “Oral History” as a subject was perhapsthe preeminent theme during the seminar session.Indeed some of the texts expressed an entirely differ-ent understanding of the method and purpose of oralhistory.
Consider the first title discussed, The Voice of the Past:Oral History by Paul Thompson, a complete textbookon the subject. Marrying a technical approach with anargumentative one, the author offers a highly read-able work that provides instruction to the collector oforal accounts whilst making an argument in favor oforal history as a valuable medium. In doing this, how-ever, he betrays an ideological presumption that limitsthe use of the book to the center. For Thompson, anoral historian himself, the technique of oral history is firsta democratizing process that gives voice to the mar-ginalized and inarticulate. It yields a counter-historythrough which a political position is exercised. His senti-ments are noble, but limiting to the possibilities of thetechnique and leading inevitably towards an anthro-pological approach to a community’s history. On hear-ing the arguments presented by the author, RobertTignor pointed out that there are far more inarticulatethan articulate people. Their history would necessarilybe an aggregate account. In Tignor’s view, it is the his-tory of those that have provided leadership and entre-preneurship that is of most interest. He did howeveroffer the caveat that the definition of business shouldbe broadened as much as possible.
The relevance of the texts, or perhaps their lack of rel-evance, to the center’s experience was still more per-
ceptible in The Death of Luigi Trastulli and Other Stories:F o rm and Meaning in Oral History by AlessandroPortelli. In this post-modernist work, the author declareshimself to be more interested in the collective memoryof a politically significant incident rather than the factsof the incident itself. The approach, argued AbdelAzizEzzelarab, is an entirely valid one if the object of studywere a people’s collective “immaginare” rather thanan account of the forces that shaped history. He fur-ther suggested that this sort of work would ideally servea literary purpose.
The yawning shear between text and experience wassomewhat narrowed during the discussion Envelopesof Sound : The Art of Oral History, inasmuch as thisanthology of essays written by practitioners of oral his-tory raised issues that the EBHRC crew could now con-sider as regards their own activities. Questions of objec-tivity and subjectivity or professionalism and cordialityhad become sufficiently tangible over a year’s worthof interviews. Wael Ismail talked of the center’s experi-ence with the initially circumspect Aziz Sidqi with whomthe interviewers were eventually able to establish arepertoire that yielded not only a more munificent rec-ollection and more sessions granted for later interviewsbut also valuable documents and a list of people thathe thought would make good subjects.
SEMINAR SERIES
“for all the loss of
i n f l e c t i o n and toneJUSTIFIABLYpredicted by critics
of this method, the
presentation of a
written transcriptto the interviewee has proved to
be an incrediblyrewarding STEP...”
19
SEMINAR SERIES
This then triggered a discussion of the interviewer’sstance and demeanor towards his subject. Inevitably,the EBHRC crew has learnt that the relationship is notwholly transferable from one subject to another.Indeed, the project officers noted that in transcripts ofsome of the early interviews there existed a dialoguebetween the interviewer and interviewee. This is notnecessarily a flaw in the process. Robert Tignor, whofavors an opaque, professional stance in an interview,conceded that “the fourth interview should be betterthan the first” and that such an improvement would bedependent on a growing trust between interviewerand subject.
For his part Dr. Ezzelerab argued that the dialogueapproach to oral history may be deficient inasmuch asit adds an additional layer to the oral accounts. Thislayer exists between the interviewer and the subject inaddition to the one between the subject and the facts.Researchers who would later consult the transcripts ofthese interviews will likely trample upon the interjectionsof the interviewers as unnecessary appendages to becleared away rather than as an enrichment of thematerial. As a procurer of primary documents whoseuses in potential research remain open-ended, EBHRCmust heed such concerns.
The method is more the product of toil than instructionand planning. It is however refined by and sharpenedby instruction and planning. On the practical, if end-lessly convoluted, matter of storage and transcription,EBHRC utilized the experience of others by molding it tosuit its environ- its lingual environ to be more precise.
In his capacity as director of EBHRC AbdelAzizEzzelarab had traveled to Columbia University inJanuary of 2005 to observe the workings of their oral his-
tory program. The preeminent center of its kind in theworld. Columbia, enables its interviewees to amend atranscript of their documents. It enables them to add,edit and delay the publication of its contents. Thisempowering of the interviewees made the final writtentranscript a definitive document that is later madeavailable for researchers.
During 2005, EBHRC was able to absorb some of thatexperience by offering a copy of the transcript to sub-jects to edit at their pleasure. The extant dividebetween the spoken colloquial Arabic and the writtenClassical Arabic had to be bridged in transcription andwas more complex than anything envisioned byColumbia. Yet, for all the loss of inflection and tone jus-tifiably predicted by critics of this method, the presen-tation of a written transcript to the interviewee hasproved to be an incredibly rewarding step. More thanjust providing space for an editing and expansion oftheir comments, some of the men interviewed weremoved to see their stories treated as text; as historicaldocuments. The transcripts enable the interviewees tosee the fruits of the sessions and the goals of the inter-viewer. Trust then becomes that much easier to estab-lish.
Hence, we return to the method. It was never first, atleast not temporally. It develops with time. It is first onlyin importance. Eventually, the efficacy of the methoddetermined the center’s field of inquiry and the scopeof its ambition. Eventually the center will be defined byit.
“The of that
e x p e r i e n c ewith the written textson “Oral History”as a subject was p e r h a p sthe preeminent theme
during the seminar session”
SEMINAR SERIES
Seminar SeriesFour sessions were conducted, part of EBHRC’sSeminar Series (March 28 – May 11) entitled“Molding Paradigms in Economic & BusinessHistory” as an effort to place some of the center’spractices into a broader philosophical contextand to expose those practices to constructive crit-icism.
1. Oral History: Scope, Fidelity and Methodology(28th of March, 2005)
2. Alternative Economic Views on BusinessEntrepreneurship (7th of April, 2005)
3. Paper Mansions: Cliometrics, Positive Economicsand Economic History (3rd of May, 2005)
4. On the Practice and Relevance of BusinessHistory (11th of May, 2005)
20
YOUNG SCHOLARS PAPERS
A Tale OF TWO BANKS:
Bank’sHistory in
There is a quote mounted on one of our officewalls that stares at you every time you walk in. Itreads, “Historians are dangerous people.” Theyare dangerous because they hold the keys tothe past and consequently, whether conscious-
ly or not, shape our memories, views and perceptionsof this past. Over time, certain constructed imagesacquire a sense of holiness surrounding them. Thesevisions of the past become accepted truths not to bequestioned or revisited. Banque Misr and its legendaryfounder Talat Harb Pasha are most probably the mostvivid examples of such images in contemporaryEgyptian history. The bank has always been seen asthe defender of Egyptian nationalism and pride whilethe man, who has taken on nearly mythical propor-tions, has been called the founder of the modernEgyptian economy.
My own image of Talat Harb and Banque Misr wasformed during my undergraduate years through eco-
nomic history classes, while wandering through thestreets of downtown Cairo and within the frameworkof popular culture. However, the picture seemed to befilled with contradictions and ambiguities that I havedecided to explore in the paper I presented duringFebruary’s Young Scholars Seminar.
Wael Ismail, Project Officer, EBHRC
21
“Over time, certain CONSTRUCTED imagesacquire a sense of
holinesssurrounding them...”
YOUNG SCHOLARS PAPERS
The paper was titled, “A Tale of Two Banks, Germanyand Egypt’s Plight for Industrialization.” The reasonbehind this endeavor was to study the macro environ-ment that gave birth to such an entity at the hands ofsuch a man. Through a comparative approach thatwas chosen to shed some light upon larger issues andthemes, I began the process of reading secondarysources coupled with what little primary material Icould gather given my time constraints.
At the heart of the paper rest two important elements.The first of these is the importance of business history asa field capable of absorbing and analyzing differentissues via sociology, history, political science, andthrough utilizing hard financial figures. The second ofthese elements is to be found in the utilization of such
a field to dismantle the woven myths around thoseholy images of the past that we so long preserveduntouched. To study Banque Misr is to be faced with acolossal body of literature praising the bank as a bas-tion for economic nationalism and its founder as avisionary patriot of unwavering beliefs. To look moreclosely at the matter, one might find a business enter-prise headed by a prudent businessman and support-ed by a large number of landowners. Comparing thelatter description with the former flatters neither thebank nor its founder. The aim of my paper, however, isby no means an attempt to dethrone neither TalatHarb nor Banque Misr. It is merely an over ambitiousendeavor meant to cast light over this enormousestablishment that has played such a vital role in theeconomic history of contemporary Egypt.
The adoption of my comparative approach wasdesigned to use the enterprise at the micro level tobetter understand the macro level in which it operates.T h rough comparing Banque Misr with Germ a n y ’ sUniversal Banks, the study was fraught with pitfalls incomparing two distinct banking experiences at differ-ent stages of evolution. However, such an approachwas needed in order to clearly highlight the study’sgoal. This goal was an exploration of the difficultiesthat exist when attempting to compare certain eco-nomic experiences occurring in one country to thosehappening in another. It was through comparingBanque Misr and the social classes that supported itwith their German counterparts that this paperattempts to reach such a conclusion.
Entrepreneurship was one of the main themes thatwere highlighted through the adopted approach. Itbecame clear that viewing a firm from beyond its bal-ance sheets and gazing more deeply into its activitiesthrough an inter-disciplinary approach would reapsubstantial benefits for researchers. This method allowsthem the opportunity to explore unfamiliar territory withmore deliberate steps. The entrepreneurship of TalatHarb and the Egyptian landowners was truly high-lighter when compared to those from Germ a n y .Moreover, this comparison opens up the debate aboutwhether there exists a single type of entrepreneurshipor whether the concept is flexible according to theenvironment surrounding it.
To embrace a subject such as Banque Misr is no easytask and this study does not claim to have even begunto touch the surface of the topic. It merely attempts tohighlight and discuss certain issues that were dominantin the mind of the author. However, it is time for such anarduous and detailed study to take place. A studythat is willing to go beyond the curtains of myth andjournalistic flattery to truly chronicle both the lives ofthe man and the bank is necessary. In the absence ofsuch work, the influence of Talat Harb and Banque Misrwill never be truly appreciated.
“It becameCLEAR that
viewing a firm
from beyond its
balance sheets
and gazing moredeeply into its
activities through an
INTER-DISCIPLINARYapproach would
reap substantialbenefits for
researchers”
22
Anyone familiar with the contemporary politicalhistory of Egypt, or is familiar with present-daydowntown Cairo, will surely be familiar with CaféRiche. It, there f o re, did not re q u i re muchthought for us to decide on a "subject" for our
paper. This paper, "Café Riche: A Small Business in a LargeEnvironment", represents our first attempt at writing enter-prise history and, at the same time, represents our rebellionagainst the mainstream approaches of enterprise history.
While intellectual developments in the field of business his-tory managed to widen the scope of this hybrid "discipline"and include sufficient emphasis upon the role of society, thiswas carried out by providing alternatives to (and not bymodifying) the discipline's forerunner to be found in thestudy of enterprise history. Until today, writing the history ofa business unit, as suggested by the prominent practition-ers, should depend solely on numerical and statisticalanalyses of the firm. By focusing light upon the significantrole played by non-quantifiable macro economic, social,cultural and political factors in influencing the performanceof any given business entity, we attempt to raise somedoubts about the comprehensiveness of enterprise historieswhich depend solely on financial or statistical data. Weargue that it is feasible to prepare an appropriate businesshistoriography using non-quantitative (perhaps even non-quantifiable) elements of the macro environment.
There are several reasons why we chose Café Riche in par-ticular for this exploratory historiography. The windows ofCafé Riche that greet patrons claim that it was "establishedin 1908". Combine with this reality the pivotal position thatthe Café held in Egypt’s political and cultural scene duringthe1960s and 1970s and we were driven to choose Café
YOUNG SCHOLARS PAPERS
Documenting the History
of the Century-Old
Café RicheDina Waked and Karim El-Sayed, Project Officers, EBHRC
From top:Café Riche
double-doors -from the
outisde; innerrestaurant, thewalls scatteredwith photos of
prominentEgyptian
figures
23
YOUNG SCHOLARS PAPERS
Riche over similar business enterprises as the subject ofour research. We were further driven by the apparentchange in the nature of the establishment and thedeterioration of it’s position in more recent times. Wewanted to study the factors in the macro economicand political environment that might explain thechanges in the function and nature of Café Riche andalso explain the performance patterns of the entity.We identified several issues that, when thoroughlyexamined, should give a comprehensive historiogra-phy of Café Riche. These included the changes in thenature of Café Riche that varied given changes in itscommercial functions or activities and the definingcharacteristics of the Café's client base. Moreover, itseemed important that we pinpoint transformations inthe greater social, cultural, political and economicenvironments and their effects on the performance ofthe Café through client frequency, make-up of theclientele base, and the status of downtown Cairo.
We were very lucky to find that the owners of CaféRiche have managed to build an amazing archive ofprimary sources documenting the history of the estab-lishment. A collection of land deeds, official licensesfor different operations (coffee shop, bar, theatre andrestaurant), ownership transfer contracts and confi-dential correspondences between the Cairo CityPolice and British Army Headquarters was available. Inaddition, a tre a s u re of secondary sources writtenabout the Café exists. These items include newspaperand magazine articles, books, scholarly research stud-ies and a pair of master's theses as well. From thosedocuments, we were able to find out that, in the late1910s and early 1920s, Café Riche had a famous out-door theatre that hosted a plethora of renownedartists. Among them was “Sult_nit al-Tarab” Mounira il-Mahdiyya, and a young starlet whose name wouldlater be known to the whole Arab world, UmmKulth_m. This is a fact relatively unknown. More impor-tantly, those documents helped explain why theabovementioned operation of Café Riche wasstopped before the end of the decade.
Our work, nevertheless, revolves around oral accountsfrom the owners of Café Riche, owners of other bistrosand downtown restaurants, as well as customers ofCafé Riche who were conscious of the changes expe-rienced by the Café. We were very fortunate, there-fore, to be able to get accounts from customers whostarted frequenting the Café in the early 1940s. Wewere even more fortunate to record the reminiscencesof Am Filfil who has been there day-in day-out since1943, almost 20 years before the present owners, andwould be the best to report on the development of theCafé. It was from Am Filfil, for example, that welearned that the owner of Café Riche, George BasileAvayianos, the last non-Egyptian owner and managerof the Café, decided to expand its operations toinclude a small restaurant besides the coffee shop andbar. Because of the Second World War and with bat-tlegrounds in Egypt, the country was full of British and
Allies army officers demanding western-style restau-rants. This change was also made to capitalize on thefact that the owner was professionally trained as acook. Am Filfil recounted how Avayianos himself wouldgo to the meat market to choose the different cutlets,and that for at least a couple of years would do thecooking himself, while his wife overlooked the cashiercase.
Professors Galal Amin and Malak Rouchdy discussedthe paper when it was first presented at the EBHRCYoung Scholars Forum on the 28th of February, andthey both emphasized the significance of goingbeyond mere documentation of business perform-ance while writing enterprise history. Professor Aminstressed that "through business history you can tell thewhole story of Egypt because through business historyyou can discover all sorts of marvelous details". Whileour primary objective in writing the paper was to sug-gest an alternative approach to writing enterprise his-tory, one that does not rely solely on numerical andfinancial data, the fact is that focusing on a particularelement throughout time to deduce greater develop-ment in the larger environment was at the back of ourminds. We intend to develop this element of our workfor the Middle East Studies Association annual meet-ing. It is here that the paper is featured in a panel dis-cussing "Egyptian Business History: New Sources, NewMethods and New Directions in Research". The meet-ing will take place in November 2005.
"Café Riche: A SmallBusiness in a Large
Environment",represents our 1stattempt at writing
enterprise history and, at the
same time, represents our
rebellion against the mainstream
approaches of enterprise history...”
24
Walking through the authentic Avenuedes Pyramides, the heart of Heliopolis,the newly painted basilica along with itssurrounding buildings are proudly pos-ing for photographers from all over the
world. May 2005 is when the city is celebrating its cen-tenary and inviting people to remember how it brave-ly evolved from a barren northeastern desert into theold historic city of Heliopolis.
Just around the corner from where the celebrationstook place stands a 100-year-old company buildingestablished by the Belgian industrialist Baron EdouardEmpain, the founder of the suburb. This building is thenucleus around which revolves the urban masterpieceof Heliopolis which demands the focus of our researchagenda. Behind the flurry of the celebration, the factremains that the company deteriorated and the sub-urb faces urban malfunction making its residents nos-talgic for the idealized image of their city.
In the Fall of 2004, with the centenary on the horizon, aproject to write the history of such a place gripped us.Our fascination with oral history prompted us to writethe history Heliopolis through the memories of its peo-ple. Further, we believed that beginning our study withan exploration of the founding of Heliopolis OasisCompany (HOC), a Belgian enterprise pioneered bythe Empain dynasty, would be useful in understandingthe nature of this urban project. Similarly, the storiesrecounted by the city's residents are also useful as yetanother portrayal of Heliopolis, with all that it repre-sents in uniqueness, beauty and also faults. Ourresearch revolved around three interdependent play-ers: the place, the business and the people. In an introduction to his study, Héliopolis, Genèsed’une Ville, (Heliopolis: the Genesis of a City), Frenchhistorian Robert Ilbert wrote, “to study Heliopolis is to
both tackle what was a large private capitalist enter-prise and what remains, an urban cre a t i o n ”Unfortunately, not much of the HOC is left today.Renamed to be the Heliopolis Company for Housingand Urbanization after its nationalization in the 1960's,the company has refashioned itself, with different per-sonnel, different documents and different practicesamounting to a different role. All of this occurreddespite keeping the same headquarters dating backto 1906. According to Engineer Maged Al Maghrabi,urban planning manager in today’s HOC, many of thecompany’s documents traveled with the Empaindynasty back to Belgium following the nationalizationof the company.
YOUNG SCHOLARS PAPERS
Heliopolis: Beyond theCentenary
Heliopolis photographs by Alaa Eddin al-Dajani. Photographs featuring clock wise: Corba's bawaki (arches),Mosque of midan il-gami', Notre-Dame Basilica and tramway,a sculpture from Baron Empain's Palace, and Giza Street offmidan il-gami'.
Dina Khalifa, Project Officer, EBHRCLina Atallah, Journalist, The Daily Star
25
YOUNG SCHOLARS PAPERS
The HOC was a focal point in the city and not merelya business entity seeking profitability in constructionand land investments. According to Omar Al Hosseiny,an engineer who studied Heliopolis from the urbandevelopment perspective, the HOC provided certainnuclei for development that highlighted the endeav-or's successes. "First, there were architectural nuclei,"he said, referring to Corba in theheart of Heliopolis. Corba is alsothe Italian word for curve which isappropriate since it is known for itscurved arches. Corba is alsoknown to the suburb’s residents asAl Bawaki as it protects them fromsuns rays during their morn i n gshopping promenades. Anothernucleus was represented by land-mark constructions in Heliopolis.Other prime examples of this are,of course, the Heliopolis PalaceHotel (now turned into the presi-dential palace), the hippodrome(or the horse race court), the basil-ica and the Baron Palace. AlHosseiny mentioned the impor-tance of the building rules, widely known as the cahierde charges. These were prepared by the companyand applied to its own construction projects as well asinvestors' projects. This centralization guaranteed aunified and homogenous flavor for the urban creation.
With a hand in the tramway's administration, as well aswater and electricity supplies and the broader con-struction operations, the HOC wasrepeatedly described as a munici-pality itself. It was obviously per-ceived to be an integral part of then e w b o rn city. Between the eradominated by the Belgian compa-ny and that dominated by nation-alization lay historical socio-eco-nomic changes that shapedEgypt’s history and accord i n g l ythat of Heliopolis. These changesa re manifest in a collection ofdiverse memories by its residents.
Older residents had a rather nostal-gic memory of the early days ofHeliopolis. They remember a placethat was then more representativeof Empain’s so called “dream”. It was a place thatthey cherished for so many years. Blissful were his child-hood years in Heliopolis, according to Franco-Egyptianwriter and newspaper editor, Robert Solé, who spenthis foremost 17 years in Heliopolis. “It is a city that origi-nally tended to be a luxurious oasis and that turned outto be a mixed city, where different social classes cameto settle down. It was even a cosmopolitan city wherepeople of different national origins, religions and lan-guages came and established themselves.” Solé, who
resided in Heliopolis since 1945, called it an“Alexandria in its own way.”
For Nour Claire Assaad, who lived in Heliopolis since1939, a mention of the Heliopolis Palace Hotel woulddirectly remind her of the dancing nights and the for-mal dress codes which demanded a hat and gloves.
Heliopolis was, according to her, anattraction to race goers on Sundays.The race course was, of course,exclusive to a certain upper socialclass. People from everywhere usedto come and watch it from outside.Ali Shahin, who lived in Heliopolissince 1947, shared this visual memo-ry of thousands of dubious charac-ters standing outside the course, asthey could not afford the tickets."During the Cairo fire, race courseswere stopped as they were a signifi-cant symbol of class inequality at atime when Egyptians could take nomore of it," said Shahin.
Standing in harit il-furn, close tomidan il-Game’ is the shop of Samir Abdel Tawab, anold resident. He showed us where the gates of theHOC workers’ block once stood. With a triumphantvoice, he then explained how Gamal Abdel Nasseropened the gates, how he nationalized the foreigncompanies, brought them to the people and how hegave Egypt back to the Egyptians.
Heliopolis’ origin even gave our veryjourney of exploration a unique fla-v o r. The Arab Bedouins or whatMahmoud Abu-Diguiga, a residentof Bedouin origins, called al-‘Urbanenjoyed special treatment and sta-tus in Heliopolis. According to him,anyone who got on the metrodressed in Bedouin clothes neverhad to pay the fair. The reason forthis special treatment stemmedfrom the relationship between theBedouins and Heliopolis in a geo-graphic sense. The Bedouins werethe original inhabitants of Heliopoliswhen a desert. Empain was able tocreate a relationship with them sothat they helped him with the
guarding duties of the company establishments. Inreturn he would extend the water pipes whenever theyhad to move farther into the desert due to the urbanencroachment.
With such a unique history and origin, Heliopolis’ cen-tenary was little more than a cosmetic touch of atten-tion with neither the ability to revive its urban strategynor reclaim the prestige to Empain’s company. Yet,despite everything, Heliopolis still stands with glamour.
"During the Cairo fire,
race courses were
STOPPED as they were a
significant symbolof class inequality at a
time when
Egyptians could
take no more of it,"
“to studyHeliopolis is to both
tackle what
was a LARGE privatecapitalistenterprise and
what remains, an
urban c r e a t i o n”
26
APPENDIX
OUR ARCHIVES
Aziz Sidqi:
Ministry of Industry Publications:1.“al-Thawra al-Sina’iya fi ‘ahad ‘ashar‘aman 1952-1963.” ( Eleven Years ofIndustrial Revolution).2. “Dalil al- Sina’a fi Misr fi thalathinsana 1952-1982” ( Guide to Industry inEgypt in 30 years).
Banque Misr Publications
1. Sixtieth Anniversary 1920-1980. 2.Diamond Jubilee 1920-1995.3.Golden Jubilee 1920-1970.4. Part 3 of Talaat Harb’s collection of speeches 1939.
Café Riche Documents,
Official Douments:1. Maslahit il-Dara’ib il-‘Aqariyyarecords 19052. Official copy of Maslahit il-Dara’ib il-‘Aqariyya records 1907. 3. Récépissé de déclaration pour unétablissement public: 16 October 1914.4. Formal Declaration to the Office ofthe Assistant to the Chief of Police: 9May 1916. 5. Déclaration pour l’ouverture d’unétablissement public: 9 May 1916. 6. Inspection Report: 16 May 1916:Chief of Abdin Police Precinct. 7. Internal Note: Cairo City Police:For/Commandant C.C.P.: 8 July 1919.8. Internal Note: Confidential:Commandant C.C.P.: For/ActingCommandant C.C.P.: 20 July 1919.9. Contract: 14 July 1921, Déclarationpour l’ouverture d’un établissementpublic: 4 November 1942. 10. Petition submitted by Mr. AbdelMalak Mikhail Salib: 22 May 1962, whichcites the transaction contract withAvayianos, registered in 1962.11. Letter from Russell Bey to CampCommandant of the British Officers,Head Quarters: 26 February 1918.
Mohammad AbdelAziz Zayed
Papers/Reports:1. Muzakira bi-Sha’n ’usus al-Tijarah al-Dakhiliyya wa al-Kharijiyya fi al-Mujtama‘ al ’Ishtiraki al-Dimukrati al-
Ta‘awuni (Memo Re: Foundations ofInternal and External Trade in theSocialist Democratic CooperativeSociety 1959).2. Bahth ‘an Wasa’il Tanmiyyat al-Tijaraal-Dakhiliyya wa Mada al-Nuhud Biha(Paper on the means for DevelopingInternal Trade and The Extent ofPromoting It) 1961.3. Taqrir ’an Rihlat MohammadAbdelAziz Zayed Ra’is Majlis al-’idara lil-kharij ’an al’Mudda min al-’usbu’ al-’akhir min ’uktubar hatta al-’usbu’ al-Thalith min December Sanat 1965(Report on Mohammad AbdelAzizZayed’s [Chairman of The AlexandriaCommercial Company] Trip Abroad[Duration: Last Week of October 1965 –Third Week of September 1965]). 4. Taqrir ’an Rihlat MohammadAbdelAziz Zayed Ra’is Majlis al-’idara ilaal-Yaban wa al-Wilayat al-Mutahidawa al-Miksik (Report on MohammadAbdelAziz Zayed’s [Chairman of TheAlexandria Commercial Company] Tripto Japan, The United States andMexico [Duration: October/November1966]).5. Taqrir ’an Rihlat MohammadAbdelAziz Zayed Ra’is Majlis al-’idara lil-’aswaq al-Qutniyya fi ’urupa al-Gharbiyya (REPORT MohammadAbdelAziz Zayed’s [Chairman of TheAlexandria Commercial Company]Tripto The Cotton Markets in WesternEurope [Duration: June 1968]).6. Taqrir ‘an Ma‘rad Suq Bari b-Italya(REPORT The Bari Exhibition, Italy[September 1970]).7. MINESTERIAL ORDER: The order is thepermission granted to Zayed to attendthe Bari Exhibition as Deputy Governorof the Central Bank. Dalil al-Wukala’ al-Tijariyyin bil-Iqlim al-Misri, 1960(Directory: Trade Agents in the EgyptianProvince, 1960.) The directory is pub-lished by “The General Union ofChambers of Commerce”
Purchased Documents:
1. Land Contracts: Three land contractregistered in the court of Alexandria in1889, 1890 and 1893 under theKhedives’ government. 2. Stock Certificates: Credit FoncierEgyptien 1951, Societe de Biere “Les
Pyramides” 1956, Egyptian Federationfor Agricultural Products 1943. Receipts:Three receipts from the Piastre Projectfor the Revival of Egyptian Industries(mashru’ il qirsh).3. Letter from Michel Politis to Assistantto the Chief of Police: 9 May 1916.
The following are samples of the documents contributed to EBHRC to be part of its archival depository. Donors of docu-ments vary from individuals to institutions. In addition documents received vary from original to copy forms and some olddocuments were purchased from a collector of old papers and artifacts in downtown Cairo. Donor name followed by a
description of the documents will be found below:
27
ORAL HISTORYRECORDS:
Below is a list of EBHRC’s oralhistory interviewees up untilJune 2005. The list excludes
the interviewees of theYoungScholars projects.
INDUSTRYEng. M. Abdel Wahab
Eng. Fouad Abu ZeghlaMr. Louis Bishara
Mr. Mounir Ezz El DinDr. Adel Gazarin
Eng. Abdel Moneim KhalifaMr. Zeyad NashefMr. Bahaa RaafatMr. Hasan RagabDr. Rouchdy Said
Eng. Ibrahim S. MohamedeinDr. Aziz Sidqi
PLANNINGDr. Ismail Sabri Abdullah
BANKING
AND FINANCEMr. Hasan Abbas ZakiMr. Mahmoud Abdullah
Dr. Salwa El AntariMr. Ali Dabbous
Mr. Mohamed El BarbariMr. Ali Shahin
Mr. Fouad Sultan
INSURANCEMr. Hasan Hafez
PRIVATE BUSINESSESMr. Mansour Hasan
DOCUMENTS:
ANNOUNCEMENTS
AN N O U N C M E N T S
28
The Young Scholars Conference will be heldon an annual basis in February. Originalresearch by young scholars and associated
graduate students will be the fulcrum aroundwhich the conference’s events will be organized.The will accept proposals for papers to be pre-sented no later than the 15th of November.
The facilitation and support of independentresearch by young scholars interested in the eco-nomic and business history of the Middle East,has become one of the principal components ofEBHRC’s raison d’etre. Young scholars are a con-siderable asset to the center as a resource forideas and initiative. A significant portion of thispool will likely embark on careers in research,academic or otherwise. Their involvement withthe center at this stage makes available theunique opportunity of launching an inquiry thatthey may well choose to revisit many years fromnow by building a long term relationship with thecenter.
EBHRC had always planned to make available itsoral history records to researchers from aroundthe world. The center has thus far conducted ses-sions with tens of people in government, industryand enterprise. Said records represent a histori-cal source material never before made avail-able to any researcher regardless of their statureor experience. The records can be made avail-able to young scholars should they choose touse them.
The scope of the material is not limited to thatderived from the center’s own collections. Asp recedent by February’s three-day event,there’s great potential in linking apparently soci-ological, cultural and political topics to theregion’s economic and business history. Feel freeto submit a written proposal for the paper youwish to present at the conference. It would befruitful to submit your material before the dead-
line so that constructive feedback may be pro-vided.
Your work will be discussed and witnessed bylarge group of dedicated scholars from AUC andother universities. Presenting your work in thisforum may also serve as a dry run for internation-al conferences and publication. This was thecase with last conference whereby three of thepapers presented are now being prepared forp resentation at the prestigious Middle EastStudies Association (MESA) Conference inWashington DC next November. Their authorswere encouraged to submit their work to MESAonly after they presented it first last February inthe Young Scholars’ Conference.
It may be the case that you are interested in tak-ing part but still feel in need of a tangible entrypoint for your research. Should this be the casethen perhaps the following list of broadly demar-cated subjects that EBHRC is currently workingon for Egypt and the Middle East may prove tobe fertile ground for your efforts:
1- Enterprise History (eg. El- Nasr Motor compa-ny)2- Institutional History: (e.g. Egyptian Federationof Industries).3- Biographical projects on policymakers, busi-nessmen and entrepreneurs. 4- Histories of Business Families. 5- History of a small business or businesses6- Sectoral Topics: (e.g. a history of the textileindustry in Egypt).7- Labor History
Think about the above as potential topics forconsideration rather than strict guidelines.
... We look forward to your queries and ideas.
Third AUC Forumon Economicand Business
History of Egyptand the
Middle East:
CALL FORPARTICIPANTS
The Third AUC Forumon Economic andBusiness History ofEgypt and the
Middle East is due toconvene in May 2006.At the present time, we seek research or dis-cussion papers from
scholars, researchers,and
other interested partiesfor sessions on: 1)
Experiences of business history research centres
and/or 2)Approachesto Middle
Eastern business history.
Abstracts up to 400words are welcome by
December 15, 2005.
For further informationplease e-mail:
EBHRC CALL FOR PAPERSFOR THE YOUNG SCHOLARS’ CONFERENCE, FEBRUARY 2006
EBHRC Crew
Gratitude forthe special
asstance of:Dr. Ismail Sabry
AbdallahEng. Mohamed Abdel-
WahabDr. Galal Amin
Dr. Sharif ElmusaDr. Adel Gazarin
Dr. Heba HandoussaDr. Amr Mortagy
Dr. Malak Rouchdy
ATTEND OUR PANEL IN MESA 05!" Egyptian Business History:New Sources, New Methodsand New Directions inResearch"Date: Sunday, November 20.Time: 2:00-4:00 pm.
Chair: Prof. Roger Owen, Harvard University.Discussant: Prof. AbdelAziz EzzelArab , EBHRC,AUC.
PAPERS BY:1 . Prof. Robert J. Vitalis, University ofPennsylvania: "Captive Narratives: On theHistory of Firms and States in the Middle East(and Beyond)"2. Karim El Sayed and Dina Waked, EBHRC,AUC: "Café Riche: In Pursuit of a Non-Quantitative Business Model: Implications ofM a c ro Changes for Small Eateries inDowntown Cairo"3. Lina Atallah and Dina Khalifa , EBHRC, AUC" A Brave New City! Heliopolis: Place, Businessand People"4. Mostafa Hefny, EBHRC, AUC: " The BusinessHistory Voyager: Revisiting Western Methods inthe Light of Oral History Accounts of Egypt'sIndustrial Experience"
