ABSTRACT
The first years of Egypt's efforts to implement socialism were crowned with achievements in various fields. Egypt established a modern army and air force and built an armaments industry. The Suez Canal operated efficiently and the foundation of modern industry was established, a development with great symbolic value. Construction of the Aswan High Dam appeared to be on schedule and would produce much-needed new power and water for irrigation. Nevertheless, the problems in this period were enormous. Despite the introduction of many socialist measures, the gap between rich and poor, between town and country, was still immense. A yearly population increase of 600,000 meant a desperate race against time and against the country's limited resources. Nasser believed that new industry would reduce Egypt's economic problems; however, this was a long-term process, involving either the raising of the peasants' purchasing power through increased agriculture exports, or creating new markets for locally produced consumer goods. The first depended on a significant increase in agricultural productivity, but this was not achieved. The second appeared to be impossible due to inefficient marketing, high production costs and fierce international competition for new markets in Africa and Asia, in addition to the fact that Western markets were closed to Egyptian goods because of Nasser's foreign policy. As early as 1964, Egypt was on the brink of a short-term financial crisis caused by the war in Yemen and over-extension of credits. Nasser failed in his two major campaigns: to create a successful modern industrial state, and to double Egypt's national product within 10 years. As a result, Egypt could not move rapidly towards the application of radical socialist measures. 1
