The Arabist

The Arabist

By Issandr El Amrani and friends.

The Egyptian military's economic empire

The Army and the Economy in Egypt, in Jaddaliya:

Any discussion of the relationship between the army and economy cannot ignore the military establishment’s near-absolute dominance of the local economy in various Egyptian governorates. It is well known to many that Egyptians outside of Cairo live under virtual military rule, wherein twenty-one of the twenty-nine appointed governors are retired army generals. This is in addition to dozens of posts in city and local governments that are reserved for retired officers. These individuals are responsible for managing wide-ranging economic sectors in each governorate. In other words, army generals—whose expertise does not go beyond operating armored tanks or fighter jets—are suddenly tasked with managing and overseeing significant economic activities, such as the critical tourism sectors of Luxor and Aswan, Qena’s sugar manufacturing enterprises, or Suez’s fishing and tucking industries.

There is no shortage of corruption stories involving army generals and their mismanagement of local economies. For example, in one such incident former Luxor Governor General Samir Farag—who previously served as director of morale affairs of the Armed Forces—sold land to a local businessman below market prices. The land was initially designated for building an Olympic games stadium. In fact, after hundreds of millions of Egyptian pounds were spent on the project, all of a sudden construction was suspended and all the spent funds went to waste, as the land was sold to a businessman that owned a hotel across the street. Similarly, the residents of Aswan allege that their governor General Mustafa al-Sayed was involved in corruption cases involving public lands and the tourism sector. Al-Sayed recently appointed at least ten retired army brigadier generals as managers of the quarries and river ports and offered them exorbitant salaries, even though they lack relevant qualifications and experience.

Given that those in charge of managing our local economies receive such jobs as a “retirement bonus,” it is unsurprising that local development throughout Egyptian governorates has remained stagnant for decades and lags behind other countries.

This story barely scratches at the details, but is well worth reading. A look at military conscripts who end up working (for no money) in military factories would be particularly enlightening. It's really hard to underscore how terrible this military regime has been for this country, in every possible way. One thing though: some estimates cited in others pieces for how much of the Egyptian economy is controlled by the military go as high as 40%. That is almost certainly an exaggeration, since the private sector is at least 50% by itself and there is a large official state sector outside the military's control.