February 2, 1952 Volume IV—No. 5 Eight annas EDITORIALS Cairo Will Not Capitulate 125 Cairo Will Not Capitulate Will Sterling Area Hold Together? 127 EHERAN is far away from any British military base. Near Cairo T then! is the Suez Canal base manned and garrisoned by British WEEKLY NOTES troops. That is a tale of two cities. Teheran has got away with some­ thing which Cairo has not been able to achieve. Iranians knew that January 30 —The National Sector Britain could not maintain the " legal" rights of the Anglo-Egyptian —Continental Jute Mills and Oil Company by force. But Britain left Egypt in no doubt that she US Buying — How Australia was determined to stay in the Canal Zone; that she had the military Fights Inflation — Deficit in might to stick to her determination. Egypt had no illusions about her India's Balance of Payments— military prowess. She relied on her moral strength to win the battle The Direction of Trade—Deve­ for freedom against foreign domination or occupation, lopment of Sulphur Mines in Italy—Preference Shares Only Nahas Pasha won a decisive first round. When he abrogated the for Oil Refineries 128 1936 Treaty Britain immediately retorted that Egypt had no legal right to terminate the Treaty before its expiry without prior consent of the FROM THE LONDON END interested party. Cairo remained unmoved. Its stubborn attitude had Sterling Leakages 132 the desired effect. London was forced to accept, by implication, that Cairo was entitled to abrogate the Treaty. Britain abandoned her insistence on treaty rights. With the support of America, France and OFF THE RECORD Turkey, Britain offered a Four Power proposal for the creation of a Fair Price 133 Middle East Command. It was rejected by Egypt. SPECIAL ARTICLES Britain did not abandon her firm resolve to remain in the Canal Zone. But she took elaborate care to explain the Four-Power proposal Group Farming in Nigeria to Egypt. Egypt was offered equal partnership in the defence arrange­ —Kenneth Baldwi 135 ment. All the Arab States were invited to join the pact. Egypt and Quality Factor in Coal Consumption others were told that they would be allowed to participate in the —K. M. Purkayastha 137 proposed security arrangement for the Middle East without any cost or obligation on their part. They were assured by the Western Powers FROM THE CHAIR that their sovereign rights would be scrupulously honoured and respected, The Associated Cement Compa­ nies Ltd. 139 Cairo did not yield. Nahas Pasha warned the Arab States against falling into the trap laid by the Western Powers. Experience had taught STOCK EXCHANGE him a bitter lesson. He warned the Arab States that it would be 1941 all over again. He had personal experience of what happened Hesitancy After Parly Advance 143 when the British " took over" the business of preventing war in the Middle East during the last war. They remained as an Occupation COMPANY NOTES Power. Britain is still in the Canal Zone as an Occupation Power. These were the reasons why Nahas Pasha rejected the Four-Power proposal. Scmdia Turns The Corner 145 Egypt declared her unwillingness to align with Power blocks. Some of the Arab States were not so stubborn. But they followed Cairo's lead. CURRENT STATISTICS 146 Then things happened in the Canal Zone which were not unexpect­ Yearly Subscription post free ed. For a long time after the abrogation of the Treaty Nahas Pasha India and Pakistan Rs 24/- maintained a correct official attitude towards the activities of the Egyptian ForeignRs 27/- guerillas. The Government discouraged their activities.. Nahas Pasha was too shrewd not to realise the risks involved in any widespread out­ The Economic Weekly break of violence. Only after the British troops forcibly demolished Noble Chambers, Parai Bazar St., huts in the village of Kafar Abdu did the Government threaten police Fort, Bombay. resistance. There was evidence of police assistance to, or connivance Phone: 23406 at, the activities of the Egyptian " commandos " in recent weeks. Both THE ECONOMIC WEEKLY February 2, 1953 sides gradually stiffened their atti­ Command. In the past few days, cussion of the Anglo-Egyptian dis­ tude. It culminated in the brutal Mr Eden and Mr Churchill have pute. He waited too long to make military action by the British at both expressed Britain's willingness his decision. And he paid the poli­ Ismailia. Military events at lsmai- to come to a settlement. Neither tical penalty for his delay in coming lia had their reaction in Cairo. of them has made the Middle East to a definite decision. There were violent demonstrations Command a condition precedent All this will not be denied. But by the mob. The, situation got out for a settlement of the dispute. the impression will linger that Aly of control. King Farouk got the Maher Pasha may have entered into Aly Maher Pasha has requested an unholy alliance with King Farouk opportunity he was waiting for. He Britain to expedite negotiations for dismissed Nahas Pasha. Under the to sell the Egyptian people " short". solving the dispute. He is seeming­ Nahas Pasha may have failed in his Egyptian Constitution, he has the ly prepared to discuss the Four- right to dismiss the Government in mission. But in the process of ful­ Power proposal for a Middle East filling his mission he had fanned the wider interests of the country. Command. But he significantly King Farouk has fired Nahas Pasha political flames which must have mentions that any plan for settle­ provoked the Palace and the Pashas on the ground that he has not been ment must be based on the United able to maintain peace and order to take swift and decisive action. Nations Charter. Aly Maher Pasha Nahas Pasha fell not because of his in the country. Therefore, " we ", is a polished diplomat. This may King Farouk informs Nahas Pasha, failure to solve the Anglo-Egyptian be his way of saying that the dispute crisis, but because of the alarming " have decided to forfeit your man­ should be reconciled on terms out­ date ". This is not the first time internal political developments lined by Nuri es Said Pasha, the which he had unwittingly encourag­ that Nahas Pasha has been dismiss­ Iraqi Prime Minister, and by King ed. In his life-long political expe­ ed. He certainly must have had the Ibn Saud. Both Nuri Pasha and vision, but he was seemingly unable rience he. has discovered that one King Ibn Saud had suggested a cannot rely on the King and the or impotent to stem the political security pact among Arab States as tide which would have swept him Palace, When King Farouk ap­ a possible compromise solution. The pointed some politicians, who were and his class away. Where he fail­ Arab States are not eager to parti­ ed to take action, the King and the known for their hostility to Nahas cipate in the Middle East Command Pasha, as members of his Royal Palace have stepped in. Aly Maher proposed by the Western Powers. Pasha may yet succeed in coming Cabinet, it was widely anticipated But they do not deny that the Mid­ that he was preparing to take action. to a settlement with Britain on terms dle East is in need of collective which will be acceptable to the Nahas Pasha committed mistakes. defence against aggression. They He should have known that he could Western Powers, as well as to the suggest that the defence arrange­ Arab States. Britain may yet re­ not continue the struggle by force, ment for the Middle East should be Military conditions in Egypt being cognise King Farouk as the Sove­ the responsibility of Middle Eastern reign of Nubia and the Sudan. But what they are, passive resistance States. They propose a Uefente was his only weapon. He did not the Egyptian people will not for long pact among Arab States which will submit to a denial of social, politi­ directly encourage the police and the ensure collective' security without Army to participate in the struggle cal and economic equality. By dis­ direct alliance with the Western missing Nahas Pasha and by ap­ for freedom from foreign occupa­ Powers. tion. But he ignored the fanatic pointing Aly Maher Pasha as the '' Muslim Brotherhood " and the There is much to be said in favour Prime Minister, King Farouk will subversive political elements. Young of some such arrangement. It helps not succeed in suppressing the social college students crying slogans and the Western Powers to attain their ferment. Nor will the Western shibboleths cannot free any country aim. By not directly participating Powers succeed in creating a mili­ from foreign occupation. They and in a defence pact with the Western tary base which can defend the the people can fulfil their aspira­ Powers the Arab States can claim Middle East. No such base can tions by creating the proper moral non-involvement in world power function effectively without the con­ atmosphere. Nahas Pasha could politics. It is an open secret that sent of the people. Herein lies the not inspire such moral indignation. America is in favour of this ar­ danger The turmoil in the Middle He could not possibly resist force rangement. The Arab States can East will continue, though the by force. So he paid the penalty. rely on the United Nations Charter Anglo-Egyptian dispute, may seem in their preparations for collective nearer solution. Nahas Pasha's personal political defence without getting directly in­ vicissitudes are less important than volved in the "cold war". It is the future of Egypt. King Farouk widely believed that Britain will may he wise in making a scapegoat have to accept a compromise be­ of Nahas Pasha.