It’s not about the oil, stupid!

It’s about the water.   The Nile River, to be more precise.

Nile River

First the geography & history.   The Nile River gets its water from SubSaharan Africa.   You may remember that one British gentleman named David Livingstone went looking for the source back before we had Google Earth.  The White Nile River originates in Central Africa, the Blue Nile (which is most of the water) in Ethiopia.   The two meet near the capital of Khartoum in Sudan.  (Has Sudan been in the news lately for something?)

The river flows North through the deserts of Egypt and winds up draining into the Mediterranean Sea.   The Nile is very seasonal – it is fed by the Monsoons which hit each Summer…. the floods provided the sediment which made the Nile valley so fertile and flushed out the salinity in the Mediterranean.

Then the Euopeans arrived to “help”.   Egypt and France built the Suez Canal in the 1860s.  England strongly opposed the building of the Canal, which opened in 1869.  However, Egypt was deeply in debt to European banks, and England ended up taking control of the Egyptian portion of the ownership of the Canal.   At the same time, the Transcontinental railroad in the U.S. opened, changing the entire way goods were sent around the world.

In 1902, an earthen dam was built across the Nile River at a place called Aswan – the dam would help to reduce the effect (and benefit) of the annual floods.

After World War 1, Egypt wound up as a British “protectorate”.    One of the things than the British wanted to pin down was who gets to use what portion of the water in the Nile River.   In 1929, Egypt with the backing of the British Military “negotiated” a “treaty” which gives Egypt the right to use 60% of the water in the Nile, despite almost none of the water orignating from Egyptian sources. 

Then in 1954, the guy named Nasser showed up and kicked out the British.  He had the dream of creating an Arab State, unifying all of the Arab countries under the leadership of Egypt.

Nasser was a Socialist and closely allied with Russia.   Russia proposed funding the construction of a bigger, higher dam called the “High Aswan” dam that could generate electricity in large amounts and completely control the annual floods and avoid wasting all that water that was doing nothing but flushing the salt out of the Mediterraean and renewing the croplands in the delta.   Irrigation and control is a much better solution!

The High Aswan dam was built between 1960 and 1970 – I clearly remember reading about it in the “Weekly Reader” in grade school – what a wonderful thing it was that the Soviet Union was helping the poor people of Egypt to gain equality with the developed nations.    The High Aswan dam provides virtually all of the electricity used to power Egypt – Egypt has no nuclear power plants.

In 1973, they had that nasty war thing with Israel.   Nasser would die 3 years later, and Ansar Sadat took over running Egypt.   Sadat had been an associate of Nasser and led the forces in the 1973 war with Israel.    Sadat was personally very close to the Shah of Iran.  In 1980, he signed the Peace Agreement with Israel brokered by Jimmy Carter that returned control of the Sinai back to Egypt, in exchange for Egypt agreeing to let Israel exist and a big yearly stipend from the U.S. Treasury.  

He was quickly assassinated for betraying the Arab “cause” by Islamist radicals.  Among those on the stage that were injured was Vice President Hosni Mubarak.  After the Soviet Union fell apart in 1991, Egypt no longer had its military and economic sponsor and became more aligned with the United States.

So…  the upstream countries now want to undo the “colonial” treaty that gives Egypt 60% of the water and veto rights over any upstream country building dams on the river.   Six upstream countries have now signed a pact to work to break the treaty so they can use the Nile river for their own economic interests.  [Story].   With no functioning government in Egypt at the moment, Egypt probably will have little choice but to surrender control of the Nile.   The military is a bit busy at the moment to get involved in a regional war.

I wonder how many of those development projects will be financed by Goldman Sachs.