Caisse de la Dette Publique

The Caisse de la Dette Publique ("Public Debt Commission") was an international commission established by a decree issued by Khedive Ismail of Egypt on 2 May 1876 to supervise the payment by the Egyptian government of the loans to the European governments following the construction of the Suez Canal.

It was initially led by a secretary and three commissioners representing the governments of Austria-Hungary, France and Italy; from 1877 the United Kingdom and from 1885 Russia and Germany. One of the Commissioners would serve as the President, or chairman, of the commission.

"This system was under the control of two main countries, France and Britain. This system of 'dual control' represented Europeans direct intervention in Egypt's financial affairs."[1]

The Public Debt Commission was abolished by a bilateral agreement between the British and the Egyptian governments, signed on 17 July 1940,[2] due to Allied interest in improving relations with Cairo during the Second World War.

History debt accumulation

During the late 19th century Egypt undertook several modernization projects for which they needed loans from other states. The main sources of the major debt accumulation of Egypt for which the debt commission was instigated, were the construction of railways, telegraph lines, irrigation systems and the construction of the Suez Canal[3]. Under Ismail Pashas rule several railways were constructed, The Cairo-Aswan railway, Cairo-Alexandria Line and the Cairo-Suez Line[4]. For the construction of these railways Egypt took out a loan worth £3.000.000, in 1866 from the Anglo-Egyptian bank[5]. To purchase estates and develop sugar refineries, a loan of £3,387,000 was taken out 190. Half of this loan went towards the purchasing of estates and the other half went to the development of sugar refineries[5]. another loan contributing to estate purchasing and the development of sugar refineries was taken out in 1867, worth £2,080,000. Further loans were received in 1886, 1870 and 1873 totalling in £19.033.000.

In eleven years time Egypt accumulated an estimated debt of £68,000,000[5]. Egypt's floating debt increased as well totalling £20,000,000. The floating debt and nominal debt combined accounted for £94,000,000 which Egypt owed to several states including Great Britain, France and many more[6].

Suez canal

In 1875 Ismail Pasha decided to sell Egypts shares in the Suez Canal to make up for its foreign debt[7]. The shares were bought by the British prime minister[5]. The construction of the Suez Canal had cost £16,000,000, and left the state of Egypt saddled with a debt of £100,000,000. This major debt caused an additional debt for the Egyptian people with regard to interest that needed to be paid back under the supervision of the public debt commission, this extra dept was estimated around £300,000,000[6].

See also

Notes
  1. A History of the Modern Middle East: Cleveland and Bunton, p. 91
  2. Text in League of Nations Treaty Series, vol. 202, pp. 98-105.
  3. Yackee, J. W. (2016). "The First Investor-State Arbitration: The Suez Canal Company v Egypt (1864)". The Journal of World Investment & Trade. 17 (3): 401–462.
  4. Barbier, E. B. (2010). The Golden Age of Resource-Based Development (from 1870 to 1914). United Kingdom: Cambridge University Press. pp. 368–462. ISBN 9780521701655.
  5. Lutsky, V. B. (1969). Modern History of The Arab Countries. progress publishers. p. 190. ISBN 0714701106.
  6. O'Connor, D. (2006). "The Suez Crisis 1876-82". RUSI Journal. 151 (3): 74–78.
  7. Watt, D. C. (1956). Britain and the Suez Canal. London: Royal Institute of International Affairs.
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