Is there any way to reconcile the American impulse to get home fast and the manifest need for long-term commitment in Iraq if nation building is to work? Again, there is something to be learned in this regard from the British experience, though the place to look for a lesson is not Iraq but Egypt. Iraq was, after all, a relatively late addition to the British Empire, more or less run on a shoestring. The British never quite had their hearts in the matter, and financial constraints would have checked them even if they had. Egypt was another story. It was acquired in the 1880s at the very height of Britain’s economic and strategic power. It was run until the Second World War as the very model of what a liberal empire could do. Yet from the outset the British publicly insisted that Egypt was being run not by them but by the Egyptians.
The resemblances between Britain’s occupation of Egypt 121 years ago and America’s current occupation of Iraq are indeed uncannily close. There is also an obvious lesson the Bush administration might learn from the earlier case. There is in fact a great deal to be said for promising to leave—provided you do not actually mean it or do it.
In 1882 a nationalist army officer named Said Ahmed Arabi seized power in Egypt, overthrowing the pro-British khedive Tewfik. First the differences. Arabi was no Saddam, and the pretext for foreign intervention was not the same: violence against European residents in Alexandria, as opposed to noncompliance with international calls for disarmament. However, the deeper causes and consequences of intervention strikingly prefigure today’s imbroglio in Iraq. For a start, the newly elected British government had pledged during the 1879 election campaign not to behave in an imperialistic way. The Liberal leader, William Ewart Gladstone, had expressly condemned his archrival, Benjamin Disraeli, for meddling in Egyptian affairs. “Our first site in Egypt,” Gladstone had warned, “be it by larceny or be it by emption, will be the almost certain egg of a North African Empire, that will grow and grow until … we finally join hands across the Equator with Natal and Cape Town….”55 In the third of his famous speeches to the voters of Midlothian, Gladstone had set out his six principles of Liberal foreign policy. They included the preservation of peace, good relations with the other European powers, the avoidance of needless overseas entanglements, equal rights for all nations and “the love of freedom.” It was hardly a manifesto for unilateral imperialist intervention. Indeed, as late as January 1882, Gladstone was still arguing that “Egypt for the Egyptians” would be “the best, the only solution of the ‘Egyptian question’.”56 He never ceased to hope for “real movement towards institutions & local self-government” in Egypt.57
Secondly, however, Britain had substantial economic interests in the country. What the oil in Iraq is today, so the Suez Canal was then. More than 80 percent of the traffic going through the canal was British—indeed, 13 percent of Britain’s entire trade went through the canal—and in 1876 Britain had acquired a substantial shareholding in the canal company itself. Moreover, the Egyptian economy had emerged during the American Civil War as an alternative source for the raw cotton insatiably consumed by Britain’s textile industry. As if that were not enough, a substantial chunk of the Egyptian external debt was held by British bondholders, including the new prime minister himself. Today’s liberal commentators fret about the links between the Bush administration and oil companies like Halliburton. But Halliburton’s share price declined by a third in the three years after former chief executive Dick Cheney became vice president, whereas Gladstone’s substantial investments in Egyptian loans soared in value—by over 40 percent—as a direct result of his decision to invade the country. Had this fact become known at the time, it is hard to say what the effect would have been on Gladstone’s reputation for sea-green incorruptibility. Even without it, there was widespread suspicion that the government’s motives were at least partly mercenary; one critic detected the hand of financial interests “whose only wish is to convert Egypt into a couponpaying machine directed by European controllers and administered solely for European Employées.”58
A third factor was the expectation that any resolution of the crisis would need to involve the French, who were also substantial holders of Egyptian bonds and canal shares, and who had indeed been responsible for the construction of the canal itself. Since the Egyptian debt default of 1876, the country’s finances had been under a joint Anglo-French control commission. Gladstone’s immediate response to the crisis was to continue with this cross-Channel partnership. There was a widespread belief that decisions governing what was then known as the Near East should be settled among all the five great powers—Britain, France, Germany, Austria and Russia—with Turkey (which still exercised formal suzerainty over Egypt) bullied as much as consulted. To repeat, the regular great power conferences were the Victorian equivalent of the United Nations Security Council today, and in the 1880s they were about as productive. Gladstone, good internationalist that he was, tried to secure foreign backing for military action against Egypt, just as George W. Bush sought explicit authorization from the UN for his action against Iraq. In both cases, the failure to achieve this, followed by the decision to act anyway, strained great power relations, and especially relations with France. Gladstone kept insisting that he had been a “labourer in the cause of peace” and that Egypt had been “neutralized by European act.”59 The French just sneered, while the Germans gloated. A fourth resemblance is that as in Iraq today, there was at least some popular opposition to a foreign occupation. As that arch-cynic Lord Salisbury shrewdly put it, “The Musselman feeling is still so strong that I believe we shall be safer and more powerful as wire-pullers than as ostensible rulers.”60 Egyptian resentment never went away.
Just as happened in 2003 over Iraq, the public at home was at first delighted by the swiftness of the military victory that ensued after the order was given to invade Egypt. At Tel el Kebir Sir Garnet Wolseley smashed Arabi’s army in a matter of hours and with minimal British casualties (fifty-four British dead, as against at least two thousand on the other side).61 This was the kind of victory the nascent popular press adored; indeed, even the high-minded Mr. Gladstone was infected by the euphoric mood. “We and the whole country are in a state of rejoicing,” he wrote shortly after Wolseley’s victory, “We certainly ought to be in a good humour, for we are pleased with our army, our navy, our admirals, our generals & our organization.”62 One noteworthy difference is that this mood lasted much longer than the comparable mood in the United States in 2003. Indeed, British newspaper readers soon became enthused by the prospect of extending British rule to neighboring Sudan too, especially when a radical Islamic revolt erupted there under the leadership of the charismatic Mahdi.
Finally, there was the Egyptian economy. It swiftly became clear to the British administrators charged with the task that Egypt’s finances could be stabilized only with sweeping reforms, but that these would be possible only if there were an ongoing British military presence. In the supremely condescending words of Evelyn Baring, the all-powerful British agent and consul-general in Egypt from 1883 to 1907, “We need not always enquire too closely what these people … themselves think is in their own interests …. It is essential that each special issue should be decided mainly with reference to what, by the light of Western knowledge and experience … we conscientiously think is best for the subject race.”63 As Gladstone put it in his diary, the challenge was “how to plant solidly western & beneficent institutions in the soil of a Mohamedan community?”64 It clearly could not be done overnight.
To recapitulate, then: a government reluctant to be labeled “imperialist,” compelling economic reasons for intervention, a failure to arrive at a multilateral solution, indigenous resistance to occupation, popular support for it at home and technocratic reasons to maintain a military presence for an unspecified period. The net result offers an intriguing template for the United States in Iraq.
Having occupied Egypt, the British almost immediately began promising to leave. “Should the Khedive desire it,” declared Gladstone,
“a small British force may remain in Egypt, at the charge of that country, until his authority is solidly established & placed beyond risk.”65 But shortly after that there appeared, in the words of Gladstone’s biographer, “the first of what were to be at least sixty-six protestations of the temporary nature of the British presence in Egypt.”66 As early as August 1883 Gladstone himself had already made no fewer than five public pledges to leave Egypt.67 However, all attempts to agree a departure date with the other powers foundered. With the outbreak of the First World War, the British felt emboldened to convert their “veiled Protectorate” into a real one. But in 1922 they formally declared Egypt independent, and in 1936 they pronounced their military occupation at an end. The only caveat was that the British troops did not actually leave. As late as October 1954, eighteen years after the occupation had supposedly ended, there were still eighty thousand British troops in the canal zone, a huge military base covering an area the size of Massachusetts. It was not until June 1956 that they were finally compelled—seventy-four years after the original invasion and largely as a result of economic weakness at home—to honor their multiple pledges to go. Even then, as we have seen, they made a desperate last-ditch attempt to return after Nasser nationalized the canal. In short, from 1882 until the Suez crisis—as Lord Salisbury had said almost from the occupation’s outset—the independence of Egypt had been a “screaming farce.”68
Is this, then, how American policy should be conducted in Iraq: sixty-six promises to leave and seventy-two years of occupation? One way of answering that question is to ask how well the British project for Egyptian economic reform went. That, after all, was the primary rationale for the original occupation. In many ways, there was a very modern quality to what happened. The British administration of Egyptian finances had much in common with an International Monetary Fund mission—or rather the way an IMF mission would operate if it could call on the Royal Navy to enforce its prescriptions. Evelyn Baring, later Lord Cromer, ran Egypt’s finances much like a modern structural adjustment program. The results were a fiscal triumph. When the British took over Egyptian finances, debt service was consuming two-thirds of all tax revenue.69 Indeed, crippling taxation and cuts in the army’s budget had been among the principal causes of Arabi’s nationalist coup. By 1885, however, a debt rescheduling agreement had been reached with the foreign bondholders that gave the Egyptian economy a two-year breathing space and a new, internationally guaranteed loan of £9 million. By 1892 the debt crisis was over, and in the subsequent two decades the ratio of debt to revenue was halved, from 10:1 to 5:1.70
Fiscal reform paved the way for new foreign lending from British and other European investors (who reaped the benefits of the British occupation while publicly decrying it). Total capital flows from the London market to Egypt amounted to £40 million.71 And precisely because it was under British rule, and therefore guaranteed not to default, Egypt could borrow abroad at roughly half the rate of interest it had previously needed to pay. New loans helped to finance substantial investments in the country’s infrastructure, notably the first Aswan Dam, built between 1902 and 1906, which stored summer floodwater and then released it, doubling or tripling the crops peasant farmers could produce.72 Between 1886 and 1953 the area under cultivation expanded by nearly half. The railway network grew in size by a factor of four. Egypt’s trade expanded rapidly until the onset of the Great Depression and again during and after the Second World War. Egypt’s peasants benefited directly not only from better infrastructure but also from lower taxation and access to affordable credit. The proportion of the population attending schools also quadrupled. All this was achieved by a combination of “English heads and Egyptian hands,” as the British liked to say. The number of the former was remarkably small; there were just 662 British officials in Egypt in 1906.73
Yet there was a catch. So far as it can be estimated, Egyptian per capita gross domestic product stagnated between 1913 and 1950.74 Why? As was true in British India during the same period, economic advances were largely negated by the extraordinary growth in population, which nearly doubled between 1882 and 1917 and grew by half again in the succeeding thirty years. Matters were not helped by the vulnerability of the economy’s principal export, cotton, to the vagaries of global demand. In short, though Egypt got richer as a country, the average Egyptian did not. Indeed, there was no improvement whatever in the shockingly poor state of public health. Between 1917 and 1934 infant mortality actually rose.
What should Americans conclude from all this? The first thing is that it is possible to occupy a country for decades, while consistently denying that you have any intention of doing so. This is known as hypocrisy, and it is something to which liberal empires must sometimes resort. But the second thing is that running Iraq—trying to make it conform to Western institutional ideals—could prove to be a frustrating business, yielding only meager returns. In many ways, Cromer and his successors got both the policies and the institutions right. Indeed, some development economists today would give them close to full marks: they rescheduled the debt, balanced the budget, reformed the tax system, stabilized the currency, at- tracted new foreign investment in infrastructure, reduced corruption, enforced the rule of law and improved education. Yet the economic results were less than spectacular. And the Egyptian elites never ceased to resent British rule. Indeed, a modern nationalist movement, the Wafd, was well established before the First World War.
Is that an argument against trying the same tactics today in Iraq? No. Egypt may not have experienced a Wirtschaftswunder under British rule. But nor did it experience an economic disaster, which the fiscal irresponsibility of successive Egyptian rulers might well have caused. The question we need to ask is what Egyptian incomes would have been in the absence of British-guaranteed foreign investment. More important, perhaps, Egypt proved an invaluable strategic asset during the two world wars. It was from Egypt that the British were able to wage war on the pro-German Ottoman Empire during World War I. It was from Libya into Egypt that first the Italians and then the Germans marched in their bid to secure the southern Mediterranean in World War II. With good cause, historians regard the British victory at the second battle of El Alamein, just fifty miles west of Alexandria, as one of the turning points of the war against the Axis. For similar strategic reasons, the United States simply cannot afford to walk away from post-Saddam Iraq; the last thing it needs is another Iran, an oil-rich country governed by Islamic fundamentalists, or a Middle Eastern version of Yugoslavia, descending into internecine war. No matter how much foreign critics and American voters may pine for an early American exit, in truth the only credible option is to hang on and try to make a success of economic and institutional reform.
Let us therefore be specific about what can be learned from Britain’s experience in Egypt. First, there must be limits on how much power can be entrusted to the interim Iraqi government, to say nothing of any elected National Assembly. Control of the country’s military, fiscal and monetary policies needs to remain, at least for the foreseeable future, partly in American hands. This will not be easy. Repeatedly, during their time in Egypt, the British had to resist the efforts of the country’s nominal rulers to go it alone. In 1884, 1888, 1891 and again in 1919 the British effectively sacked recalcitrant Egyptian ministers. In both world wars they had to use force to get their way, deposing the khedive in 1914 and surrounding the palace of his successor with tanks in 1942. Anti-British forces fought back. In 1924 the British-appointed commander of the Egyptian army, Sir Lee Stack, was assassinated.
Secondly, the United States needs to commit significant sums to the postwar reconstruction of the Iraqi economy, just as the City of London helped stabilize Egyptian finances in the 1880s. In the medium term, Iraq can hope to attract foreign investment and to finance some of its own recovery from exploiting its oil reserves. But confidence needs to be kindled; Iraq needs something equivalent to the big loans floated by the Rothschild bank in the 1880s and 1890s that were used to stabi
lize Egyptian finances. The trouble is that Iraq’s existing foreign debts are daunting: $120 billion to foreign governments, multilateral lenders and commercial banks, to say nothing of up to $125 billion in reparations claims arising from Saddam’s wars of aggression. This is why the International Monetary Fund, the modern equivalent of the Rothschilds, needs to be involved, and soon, in overhauling Iraq’s finances.75 Without substantial debt forgiveness, the country’s econom will be criled.
But the third and most important lesson is a diplomatic one. Like Gladstone, Bush was not so giddy with military success as to disregard international opinion about Iraq’s future. Just as Gladstone sought to reach agreement with France and Germany about the timing of Britain’s withdrawal from Egypt, so Bush returned to the United Nations to secure a lifting of the sanctions on Iraq and to offer the UN a limited role in postwar reconstruction—not least to take on some of the unglamorous work of peacekeeping that the American military so dislikes. Like Gladstone, Bush needed to give his foreign protectorate at least a semblance of international legitimacy, especially if he wanted the assistance of foreign troops. In the real world of international relations, as the Victorians knew better than some modern analysts of American foreign policy, there is no straight choice between unilaterism and multilateralism. Even after they had invaded Egypt, the British could not disentangle themselves from the interests of the other European powers. The French continued to be represented on the Caisse de la Dette Publique, set up to administer Egyptian finances after the 1876 default. Up until 1914 Egypt still owed formal allegiance to Ottoman Turkey, which came increasingly under German influence. In the same way, the future of Iraq simply cannot be decided without the involvement of the European powers today, and that would be true even if the United States were willing to shoulder all the costs of peacekeeping. For these reasons, President Bush and other U.S. officials have no real option but to keep on promising the imminent withdrawal of U.S. troops from Iraq. Still, as the British showed in Egypt, it is possible to make a great many promises to leave a country, over quite a long period of time, without actually having to go.
Colossus Page 29
