Egypt: From Mineral Water To Tourism, Military’s Affairs In Economy

“The Egyptian military industry involves an enormous amount of business. Even while there are no official estimates because the related data is unknown having been protected by state secret, it is estimated that the armed forces control from 25 to 40% of GDP,” said Nicola Pedde, director of the Global Studies Institute and president of the Association of International and Strategic Affairs Analysts and Researchers’ Association.

“In hindsight, we can say that the collapse of Hosni Mubarak after being in power for more than 30 years…has changed nothing ; in fact, the subject is the true nexus in the negotiation between the army, civil society and opposition parties, which began even prior to Mubarak’s resignation”. From birth and the first steps taken during the Nasser era, with logistics and uniforms, “the military industry became, first under Anwar Sadat and then under Hosni Mubarak, a producer of a wide range of consumer added products from bottled water, to fertilizers, appliances, bread, real estate, tourism management, shopping centers, tour operators, and resorts on the Red Sea”.

This economic empire has made thee armed forces into a self sufficient industry that is independent from the state budget and whose non-strategic ‘core-business’ is directly controlled by the Ministry of Defense and managed by retired officers. According to some diplomatic dispatches sent by US ambassador Margaret Scobey in September 2008, recently published by Wikileaks, “retired generals are given leading posts in corporations, especially those active in construction, cement, hotels, and fuel”.

The armed forces also own prized land in the Nile delta and along the Red Sea coast. “A sort of additional indemnity — said Scobey — ensured by the regime to secure the armed forces’ support”, in a scenario such as that of contemporary Egypt, where a military career is ever less attractive and remunerative compared to the private sector. It is in this scenario that the demands of the street for a greater liberalization of the economy and more political assurances are to be considered. “We must observe and understand how real the military’s desire to lead the country toward democracy is,” said Pedde. “in the next few weeks – adds Pedde – much of the economic future and new development perspectives of the new Egypt will be established”.