The Effects of Al-Hakim bi-Amr Allah’s Economic Reforms on Reducing the Consequences of the al-Mustansiriyah Crisis

Egypt faced successive periods of inflation during the first generation of the Fatimid caliphs. The crises that resulted in the accumulation of gold and its gradual elimination from commercial interactions were so serious that the Fatimid caliph “Al-Hakim bi-Amr Allah” (the sixth Fatimid caliph and 16th Ismaili imam) was forced to adopt monetary reforms. The present study aimed to find out how did the economic reforms perpetuated by Al-Hakim bi-Amr Allah reduce the consequences of the al-Mustansariyah crisis? The study was conducted according to a descriptive methodology by analyzing historical data, and it was shown that the most significant economic reforms of Al-Hakim bi-Amr Allah included stabilizing the bimetallic system, establishing the “Divan-i Mufrad” and redistributing the cash flow as alms and state donations to return the hoarded gold (al-Kanz) to the cycle of economic transactions. The above reforms prevented the prevalence of less valuable currencies in the place of dirhams and dinars. Thus, they alleviated the effects of economic crises in Egypt in the long run particularly after the country cut ties with the Zirid Dynasty, the gold imports from Egypt were reduced, and the state treasuries were plundered during the al-Mustansiriyah crisis.