When Cora and I researched historic and economic timelines on the Internet, we discovered a connection between man-made travel routes - especially waterways - and an increase in global trade. This equation fits perfectly with last week's lesson on colonization, as trade routes built during the latter half of the nineteenth century center on land deals, labor forces, and regional peripheries. These canals figuratively - sometimes literally - cut world trade transport time and some expenses in half. Modern construction of these man-made waterways seems to initiate the concept of "global shrinkage."

As a result of this discovery, Cora and I focused on a short, condensed history of the Suez Canal so we could follow its historic course in the global economic revolution. We've chosen this waterway because it isn't located in the U.S., yet its purpose is vital to global economics and trade markets. You and your teens might prefer to study other canals (or even other modes of transportation) to trace the construction of global trade routes.

The Suez Canal, as we know it today, was inaugurated in Egypt on November 17, 1869. This water route is still the longest canal in the world built without locks. Originally conceived and created by the Egyptians, this route was rebuilt by the Greeks, and then dug out again by the Romans. Each time this waterway reopened, it was for two purposes - to allow safer and more convenient passage for naval military troops and for foreign trade.

Ferdinand de Lesseps, a Frenchman, designed the Suez Canal (he also designed the Panama Canal), and the French built the Canal in agreement with the Egyptian government. The original plan between these two nations stated that the Canal would serve the interests of both countries for ninety-nine years, then ownership would revert solely to Egypt. The Canal links the Atlantic with the Mediterranean, and the Indian Ocean with the Red Sea, so it creates a direct passage between the Eastern and Western markets. The possible income for both countries was probably mind-boggling at the time.

The Canal took ten years to build, and over 125,000 Egyptians died in the process. Although the final product was an engineering and financial success for France, Egypt managed, somehow, to lose out on the deal. In 1875, the British bought out a majority of Egyptian shares in the Canal. If your teen's attention is rapt in this subject, they might ask, "Why did Egypt do something so?silly?" At this point, you reply, "Because they needed money to pay off debts."

Egypt's financial situation was indeed desperate, and the British were anxious to assert economic and military power. Although Egypt envisioned a new economic freedom from debt, England maintained its control of this waterway for almost eighty-four years, and this power struggle reduced Egypt's chances of gaining a global economic foothold. The British opened the Canal to international traffic, and - in 1936 - they wrangled a treaty to keep military forces in the Canal Zone. These policies remained in affect until 1956, when Egypt nationalized the Suez Canal, formed the Egyptian Suez Canal Authority, and asked Britain to remove themselves from this area, pretty please.

In response to these actions, Britain and France planned to regain economic, political, and physical control over the Canal with Israel's assistance. The plot was carried out between October 31 and November 7, 1956, as Israel invaded Sinai, and Britain and France intervened to occupy the Canal Zone. This ploy didn't sit well with the U.S. and Russia (two major East-West markets affected by this disturbance). Both countries applied pressure on Britain and France, and the latter two countries withdrew.

On June 7, 1967, Egypt closed the Canal during the Six-Day War with Israel. The Suez became part of a boundary that separated Egypt and Israeli-occupied Sinai. The Canal remained closed for the next eight years, but Egypt was not the only country that lost revenue because of this action. According to some online resources, the Canal closing resulted in huge financial losses for Britain. Other resources claim the "world" lost $1.4 billion in trade income during those eight years. Within an Egyptian web site, we found the natives of this country still call historic French and British occupation of the Canal Zone "colonization," and the canal closing was essential to shake colonizers from their land. With this explanation, we were able to use the guidelines we learned last week to reinforce the understanding of this concept.

When Egypt reopened the Suez to business in 1972 - just seven years shy of the original French-Egyptian agreement that handed ownership of the Suez to Egypt - the newly initiated trade traffic created a financial boon for Egypt and stimulated world economics. Although many ships built after the closing of the Canal are too large to navigate this waterway, the Suez still accommodates over 25,000 vessels per year.

In 1999, the Egyptian Suez Canal Authority entered into an agreement with the Port Authority to help New York and New Jersey capture a larger share of Asian trade. In 2002, Egypt announced a record financial year for the Canal, even though the 9/11/2001 attack on the World Trade Center briefly threatened this income. Constant war and terrorism in this area and in surrounding regions continue to be problematic, but - in spite of these worries - this path between East and West remains open and vital for world trade.

We didn't realize so many canals built over a century ago still function today. Many of these routes are located in politically unstable areas, and this discovery prompts Cora to ask, "What happens to our investments if all these canals shut down?" I reply, "Why don't you find out yourself, my little financial maven, and come back to me with an answer?" Unfortunately, Cora learned her colonization lesson far too well. She suggests the "mother" country and her subject research this problem together to avoid a revolution. We'll get back with you on the results.

Until Next Week,
Linda Goin