On 26 July 1956, president Gamal Abdel- Nasser nationalised the Suez Canal. In his annual address to the nation from Manshiya Square in Alexandria, he said that the famous canal would now become Egypt’s exclusive property. Until that point, Egypt had had no control over it because it was run by a foreign-owned firm, and the country obtained only five per cent of its revenues. Although six decades have passed since that day, we still find people who question whether the nationalisation proclamation was worth it, given how it triggered the Tripartite Aggression by France, Britain and Israel in November that year.
Ironically, rather than harm us, the invasion boosted Egypt’s political might and confirmed its role as a post-colonial leader. Egypt became a model for the third world countries of Asia, Africa and Latin America struggling for independence and control over their national resources. Fidel Castro once acknowledged that Nasser’s nationalisation of the Suez Canal had inspired the Cuban revolution, which occurred some years later. One of Castro’s first actions, after the revolution succeeded, was to nationalise all the US oil refineries in the country. Meanwhile, the Tripartite Aggression proved a fiasco in the lead-up to the collapse of the old British and French colonial empires.
Critics of the nationalisation of the canal argue that the foreign company’s concession was going to expire in 1968 anyway, after which ownership would revert to Egypt automatically, so there was no need for nationalisation and the war that followed. That argument is a misleading oversimplification showing a weak grasp of the realities which clearly indicated that the foreign powers affiliated with the company planned to retain control of the canal even after the concession expired. The very fact that Britain and France went to war in order to seize control of the canal militarily already confirms that they never intended to let it out of their grip. If they truly intended to hand over the canal after the concession expired, they wouldn’t have gone to the trouble of holding secret war planning meetings in Sèvres or incurred such exorbitant economic, military and political costs.
Ever since 1909, the Universal Company of the Maritime Company of Suez had persistently tried to have the concession extended for another 30 years. Shortly before the nationalisation, Jacques Georges-Picot, who served as the company’s French general-director until it was nationalised, said the company had sent memoranda to France, Britain, the US and Italy, warning of problems that would arise when the concession expired and urging those governments to intervene to internationalise the canal. London and Washington rejected the request for fear that it would give an opening to the USSR to participate in negotiations, since Tsarist Russia had been a party to the 1888 Convention of Constantinople regulating the use of the Suez Canal. As for the countries that were parties to the concession, they preferred extension over internationalisation.
The company then put together a group of prominent British figures to launch an international campaign to keep the canal administration under foreign control. Their role was to spread alarm over the impending handover of the canal to Egypt which, they said, would lead to the withdrawal of the foreign supervisors and the consequent malfunctioning of the waterway. In 1954, the company also organised a massive media campaign in the US to build up pressure on officials in Washington to support the idea of creating an international authority based in Egypt to supervise the canal.
Critics of the decision to nationalise the canal also argue that Egypt was forced to pay huge sums of money as compensation to the company’s foreign shareholders. In the 1990s I had the opportunity to meet Jean-Paul Calon, the honorary president of the Association du Souvenir de Ferdinand de Lesseps et du Canal de Suez, who had represented France in the negotiations with Egypt over the amount of compensation the Egyptian government owed the shareholders after nationalisation. He told me that the French shareholders had received all the amounts due to them on time and that the amount they received was used to establish the association of which he was now the honorary president. In addition to activities intended to keep alive de Lesseps’ memory, the association also organises a range of cultural activities related to the canal and its history. Some years ago, Colon donated an important collection of historical documents that his association had possessed.
What many critics and others do not realise is that the natural expiry of the concession and handover of the canal to Egyptian administration would also have cost Egypt quite a lot. One of the terms of the concessionary contract stipulated that, upon expiry, Egypt would have to compensate the company for all the company’s machinery, equipment and materials, and that the price of these items would be determined by mutual agreement and, if that was not possible, then by experts. That would naturally have left the door open to disputes, which would have prevented the handover of the canal on time.
The decision to nationalise spared Egypt all these problems and ensured the return of the canal to its legitimate owners, the descendants of those who built it and who now enjoy its revenues in full.
*A version of this article appears in print in the 29 July, 2021 edition of Al-Ahram Weekly.