In 1922 Britain granted Egypt limited independence, ending its protectorate status and creating a sovereign state with Sultan Ahmad Fuad as king. In actuality, however, Egypt only achieved the same rights as British dominion states like Australia, Canada, and South Africa. Egyptian foreign affairs, the defense of Egypt against foreign aggressors, the protection of foreign interests in Egypt, the protection of minorities (ie Europeans, who formed only 10% of the population, albeit the wealthiest part), and the security of communications between the rest of the British Empire and Britain itself through the Suez Canal, were still under direct control of Britain.
Although Egypt was ostensibly ruled by King Faud and his prime minister, the British high commissioner was a significant power. Britain intention was for Egypt to achieve independence through a carefully controlled, and potentially long term, timetable.
Decolonized Egypt suffered the same problems that later African states encountered. Its economic strength lay in its cotton crop, effectively a cash crop for the cotton mills of northern England. It was important to Britain that they maintained control over the production of raw cotton, and they stopped Egyptian nationalists from pushing the creation of a local textile industry, and gaining economic independence.
World War II postponed further confrontation between British post-colonialists and Egyptian nationalists. Egypt represented a strategic interest for the Allies – it controlled the route through north Africa to the oil rich regions of the middle east, and provided the all important trade and communications route through the Suez Canal to the rest of Britains empire.
Egypt became a base for Allied operations in north Africa.
After World War II, however, the question of complete economic independence was important to all political groups in Egypt. There were three different approaches: the Saadist Institutional Party (SIP) which represented the liberal tradition of the monarchists was heavily