Of the 10 million people in Egypt at the turn of the century, approximately 2 million lived in towns and cities, and of those, 500,000 lived in cities with a population of more than 20,000. The population of Alexandria grew as it became the financial and commercial center of the cotton industry. New towns like Az Zaqaziq and Port Said (Bur Said) on the Suez Canal were established.

Most of the increase in Egypt's urban population was the result of the migration of peasants from the countryside. Although some became workers or petty traders, most joined the ranks of the under- or unemployed. By the turn of the century, a working class had emerged. It was composed mainly of transport and building workers and of workers in the few industries that had been established--sugar refineries, ginning mills, and cigarette factories. However, a large proportion of the new urban lower class consisted of a fluctuating mass of people without any fixed employment.

The old lower class of the cities and towns, particularly the artisans, suffered from the influx of cheaply made European imports. Whereas some crafts, like basketry, pottery, and rug weaving, survived, others such as textiles and glass blowing were virtually eliminated. The urban guilds declined and eventually disappeared because Europeans replaced Egyptians in production and commerce.

The old, or traditional, middle class also declined in status and wealth. This middle class included the ulama, religiously educated elite who staffed the religious institutions and courts, and the merchants. The ulama and the merchants were closely tied to each other because of family and business connections. Furthermore, these categories overlapped; the ulama were also merchants and tax-farmers. The decline of the ulama began during the reign of Muhammad Ali who considered the ulama an intolerable alternative power center. He abolished tax farms, which were a major source of ulama wealth, thus weakening their position.

The decline of the ulama and the merchants was accelerated by the socioeconomic transformation of Egypt that led to the emergence of secular education, to secularly trained civil servants staffing the government bureaucracy, and to the reorientation of Egyptian trade. Secular education and the establishment of schools influenced by Western ideas and methods occurred throughout the century but were particularly widespread during the reign of Khedive (see Glossary) Ismail. Secular education became identified with entrance into government employment. Moreover, once government employment was opened to Egyptians, it became the goal of the educated because of the power and social status it conferred. Between 1882 and 1907, the number of persons employed in public administration grew by 83.7 percent. The rise of this new urban middle class, called the effendiyah, parallelled the rise of the rural notables or umada. In fact, during the nineteenth century, the effendiyah tended to be first-generation urbanites from rural notable families who took advantage of expanded education and employment opportunities in the cities.

Whereas the Egyptian effendiyah and umada were rising, the traditional merchant class declined because the lucrative import-export trade was dominated by resident foreigners, and Egyptian merchants were confined to internal trade. During the nineteenth century, foreign trade was completely reoriented. In the past, it had dealt mainly in Sudanese, Arabian, and oriental goods. Cairo was one of the most important centers of trade, and Egyptian, Syrian, and Turkish merchants engaged in it. During the nineteenth century, Greeks and other Europeans resident in Egypt monopolized the export of cotton to Europe and the import of European industrial goods.

The change was reflected in the increase of foreigners in Egypt--from between 8,000 and 10,000 in 1838 to 90,000 in 1881. The majority was engaged in cotton production, import-export trade, banking, and finance. The European community occupied a privileged position as a result of the capitulations, the treaties governing the status of foreigners within the Ottoman Empire. These treaties put Europeans virtually beyond the reach of Egyptian law until the establishment of the mixed courts (with jurisdiction over Egyptians and foreigners) in 1876. Like the artisans, Egyptian merchants suffered from a large variety of oppressive taxes and duties from which foreign merchants were exempt. With the support of their consuls, foreigners in Egypt became an increasingly powerful pressure group committed to defending its own interests.

Data as of December 1990