Gamal Abdel Nasser on the Nationalization of the Suez Canal

Context

The nationalization of the Suez Canal was one move in a complex geopolitical chess match. The canal, which had opened in 1869, was originally financed by the governments of France and Egypt. It was placed under the control of an enterprise chartered by the Egyptians called the Universal Company of the Suez Maritime Canal. In 1875 the Egyptian viceroy, Isma'il Pasha, was forced to sell his shares in the company because of a financial crisis. The British government bought the shares, which gave it a 44 percent interest in the canal company. British influence in the region increased as a result of the Anglo-Egyptian War of 1882. In response to a revolt by the Egyptian army, Britain invaded, defeated the Egyptians, and occupied the country in an effort to protect the canal and British financial interests in the region. The key battle in the conflict was the Battle of Tel el Kebir, near the Canal Zone, on September 13, 1882.

Britain had physical control of the canal and its operations, but France still held the majority of the company's shares. France hoped to weaken Britain's control of the canal by persuading other European powers to support internationalization of the canal. As a compromise, Britain, France, Russia, Austria-Hungary, and other European nations as well as the Ottoman Empire signed the Convention of Constantinople on October 29, 1888. The purpose of this treaty was to declare the canal and the Canal Zone neutral territory that would be open to all nations during peacetime and wartime. Britain and France, though, had strong reservations about the treaty; Britain expressed its reservations in the tortuous language of international diplomacy:

The delegates of Great Britain, in offering this text as the definitive rule to secure the free use of the Suez Canal, believe it is their duty to announce a general reservation as to the applicability of its provisions in so far as they are incompatible with the transitory and exceptional state in which Egypt is actually found and so far as they might fetter the liberty of action of the government during the occupation of Egypt by the British forces. (Allain, p. 53)

Because of these reservations, the treaty did not come into effect until 1904 with the signing of the Entente cordiale (usually translated as “cordial agreement”), which ended nearly a thousand years of intermittent conflict between Britain and France and formed the alignment of European powers that would later prevail at the end of World War I.

In the early years of the twentieth century, the strategic importance of the canal had become apparent. For example, during the Russo-Japanese War of 1904–1905, Britain refused to allow Russian ships to pass through the canal because of an agreement that Britain had with Japan. This gave Japan a strategic advantage, since Russian ships based on the Baltic Sea were forced to sail all the way around the southern tip of Africa in order to reach East Asia. During World War I, Britain refused to allow non-Allied shipping to pass through the canal. In 1936 England and Egypt signed the Anglo-Egyptian Treaty, by which Britain agreed to reduce its troop levels in Egypt and to defend Egypt in case of war. The Egyptian government wanted the treaty because it feared invasion by Italian forces under the direction of the dictator Benito Mussolini, who had recently invaded Ethiopia. But in the decades after World War II, the role of the canal began to change. As the world was becoming more dependent on Middle Eastern oil, roughly half of the traffic through the canal consisted of oil tankers.

In the years following World War II, tensions between Britain and Egypt began to mount. England was the dominant power in the Middle East, with interests not only in Egypt but also in Iran, Iraq, and other Middle Eastern countries. It maintained a large military force—some eighty thousand troops—at a garrison in the Canal Zone, at the time one of the largest military forces stationed in a foreign nation. Predictably, opposition to the British presence in Egypt began to grow. Egypt was experiencing economic distress, with inflation and high unemployment. Various radical political groups emerged, including the Communist Party, the Arab Socialist Party, and the Muslim Brotherhood. Founded in 1928, the Muslim Brotherhood was one of the first Islamist groups that called for a pan-Islamist, anti-Western imposition of Islamic law throughout the Middle East and North Africa. These radical groups opposed the British presence in Egypt and had been particularly bitter about the Anglo-Egyptian Treaty. Opposition to the British spread throughout the Egyptian population; Egyptians who worked for the canal company went on strike, and those who were thought to be collaborators with the British were attacked. In light of this opposition to Britain, the Egyptian government under the leadership of King Farouk I abrogated the treaty in 1951. Three years earlier, Israel had declared its independence as a nation on May 14, 1948. Egypt, opposing this “Zionist” takeover of Palestine, led the coalition of Arab nations that attacked Israel—unsuccessfully—the following day, launching the Arab-Israeli War. The Egyptians closed the canal to Israeli shipping, though in 1951 the UN Security Council passed a resolution calling on Egypt to discontinue this practice.

Tensions grew in 1952. In January, conflict broke out between British troops and the police force in Ismailia, a city on the west bank of the Suez Canal and the canal's administrative center. After some forty Egyptians died in the clash, rioting broke out in Egypt's capital, Cairo, resulting in the death of eleven British citizens. In the turmoil, an organization called the Free Officers Movement made its move to unseat King Farouk, drive out the British, and establish a republic. The Free Officers Movement consisted entirely of young military officers, many of them from humble backgrounds, who felt humiliated and betrayed because of Egypt's defeat in the Arab-Israeli War. On July 23, 1952, the officers staged a coup d'état that overthrew the king. The organization was led by Nasser, then a colonel in the Egyptian army, and Muhammad Neguib, who would serve as Egypt's first president.

Britain tried to mend fences with Egypt, but to no avail. The nations agreed to a phased withdrawal of British troops, but many Egyptians objected to the continued British presence in their country. Although Nasser did not assume the presidency of Egypt until June 23, 1956, he held most of the power in Egypt, largely as a result of disputes with Neguib, whom Nasser would later imprison. In the years after the 1952 revolt, Nasser took steps to frustrate the British. He positioned himself as the leader of a Pan-Arabist movement—in effect, the leader of the Islamic world. He believed that Britain was attempting to form a bloc of nations to the east that would neutralize Egypt. He was particularly disturbed by the signing of the Middle East Treaty Organization in 1955. This agreement, referred to informally as the Baghdad Pact, was a military and economic pact signed by Britain, Iran, Iraq, Turkey, and Pakistan. In response, Nasser formed an alliance with Saudi Arabia in an effort to check Britain's growing influence in not only the nations that had signed the Baghdad Pact but also in Syria and Lebanon. By allying with Saudi Arabia, Nasser played on the traditional animosity between the Saudi royal family and the Hashemite Dynasty that ruled Iraq until 1958. Nasser also successfully fomented opposition to the British in Lebanon.

The scope of the developing crisis widened when Nasser signed an arms deal with Czechoslovakia, then a member of the Soviet bloc in Eastern Europe, effectively ending Egyptian reliance on Western arms. This gave the Soviets and the Warsaw Pact (the name given to the Eastern European Communist bloc) a presence in the Middle East. In response, Britain tried to enlist the support of the United States. However, the strongest U.S. ally in the region was Saudi Arabia; therefore, the U.S. government under President Dwight Eisenhower refused to support the Baghdad Pact and chose instead to appease Nasser. Then, in May 1956, Egypt formally recognized the Communist People's Republic of China. This move troubled the U.S. government, particularly Secretary of State John Foster Dulles, who strongly supported the Nationalist government that the Chinese Communists had driven off the mainland to Taiwan; Taiwan was a major point of contention between the United States and Communist China. In response to Egypt's diplomatic recognition of China, Eisenhower withdrew American financial support for the construction the Aswan Dam, a massive project undertaken to control flooding of the Nile River and provide hydroelectric power. The dam was eventually completed in 1970 with the assistance of the Soviet Union.

For Nasser, the withdrawal of American financial support was the last straw. On July 26 he gave a speech in Alexandria, Egypt, during which he repeatedly mentioned the name of the canal's French builder, Ferdinand de Lesseps. Nasser's use of this name was a code that instructed Egyptian forces to seize the canal. In that speech Nasser announced that the canal had been nationalized under the terms of the Order concerning the Issuance of Law No. 285 of 1956 on the Nationalization of the Universal Company of the Suez Maritime Canal.