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Egypt military's economic empire
Calls for accountability and transparency grow at a time the military has fallen out of favour with the public.
Last Modified: 15 Feb 2012 21:01

The military’s vast economic interests in Egypt are one of those secrets which is not really a secret. Their social clubs, complexes, villages and products are clear for all to see, but their precise hold on the country’s economy has never been determined.

Analysts have predicted the Egyptian military control anything from 15 per cent to 40 per cent of the economy. Even those are wild estimates.

Khaled Fahmy, head of history at the American University in Cairo, calls it a “grey economy, in the sense that we know very little of them, they are not subject to any Parliamentary scrutiny, the Egyptian government auditing office has no control or knowledge of them".

The military has, over decades, created an industrial complex that is well oiled and well funded. In over 35 factories and companies it produces everything from flat-screen televisions and pasta to refrigerators and cars.

It owns restaurants and football grounds. Much of the work force are conscripts paid below the average wage. And it is not just manufactured goods: the military provide services, managing petrol stations for example.

The influence extends far beyond Cairo across Egypt. They are huge land owners in the country.

Prime real estate

We do not know exactly how much land military personnel own, but do a quick drive through Nasr City in Cairo and look at the prime real estate in army hands.

They also speculate on the value of land which has proven very lucrative for them. So too have the joint ventures they have entered into with construction companies building resorts and other complexes.

Their soldiers live in their own mini villages. The army has become a separate entity untouchable by the state with an anaudited economy.

The Egyptian military consists of almost half a million conscripts. They have not fought a war since 1973 and are well funded. These soldiers need to be placated and controlled.

Fahmy explains how under Mubarak a tight lid was kept on his officer corps because of the deep and historic anxiety of a coup [after all it was a coup in 1952 which brought the army to power in the first place].

“Mubarak made sure his high brass are loyal to him and he made sure his mid-ranking officers were put under tight control and one way to do this was to force them into retirement when they get to the age of 50, then the question is what do you do with all these retired officers?”

It’s estimated that up to 250,000 officers were retired under the 30 years of Mubarak’s presidency - a huge number of men and families that needed to be placated and one way was to open up prospects of employment for them after retirement.

Reward for officers

Under Nasser, ex army officers would be rewarded by being given ministerial positions or positions in the provincial governorates.

Under Sadat and Mubarak, Fahmy explains, that was not the preferred options to placate officers and so Sadat and even more so Mubarak would reward army officers by inserting them into this empire and service industry, and reward police officers with political positions.

The military’s economy, like its political dealings is more under the spotlight now than it has ever been. On a grassroots level groups like April 6 are starting a campaign to boycott army made products.

As one member, Salem Mahmoud puts it:“Just like we’re trying to bring them down politically, now we’re also trying to do it economically and redistribute the wealth to the people.”

But the boycott is still at an infant stage, and unlikely to get much traction amongst the majority of the population.

What is of increasing concern to the Generals is the possibility of increased oversight of their budget in parliament. Back in November the government [and, by extension, the army] tried to pass through a constitutional declaration which [amongst other things] would have ensured the army’s budget would remain autonomous and under their direct control.

Critical issue

The people rose up and the declaration never passed, but it was an indication of just how critical the issue of their economy is to the military establishment, and the concern over an elected authority scrutinising it.

So far it does not seem like the new parliament, dominated by Islamists, will want to pick a fight with the army over where it gets it’s money.

But if Egypt is going to be a true democracy complete with transparency of it’s institutions, at some point the military will have to diverge some of it is business dealings and its privileges [subsidies, tax breaks] will be questioned.

In countries around the world the military enjoys a degree of benefits and even secrecy in its operations.

In Egypt where the army is already in hot water with the population, calls for accountability and transparency are growing.

Source:
Al Jazeera
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