By November 21, 2013 Read More →
The Army and the Economy in Egypt

The Army and the Economy in Egypt

The commanding heights of the Egyptian economy have for decades been populated by groups – Mubarak’s NDP, the Military, and until recently the Muslim Brotherhood – that have been notoriously unwilling to undertake meaningful and desperately needed economic reforms. While many saw the uprisings as a potential driver of radical change, problems such as high youth unemployment, endemic corruption, deteriorating infrastructure and a chronic fiscal crisis stubbornly persist almost three years after Mubarak was overthrown. The authors of a paper from Oxford University’s CSAE provide an interesting perspective on why this might be:

Revolutionary upheavals can often lead more quickly to de jure change in political institutions,  without necessarily altering the distribution of economic power. Whether it is the abolition of slavery and apartheid or the granting of voting and property rights, the underlying lesson is usually the same: de jure reforms do not automatically result in effective change. This is because elites have a remarkable ability to endure; they can reverse change or mould it in their favour. Even if old political players are replaced by new ones, this can simply lead to a reconfiguration of political power leaving the basic economic structure intact.

After a year of Muslim Brotherhood rule, the Egyptian Military is back in power. That it has proved unwilling to make the tough choices needed to reform Egypt’s economy should come as no surprise: the Military is deeply vested in the status quo. While its political clout is in plain sight, the size of the Egyptian Military’s economic bootprint has been a hotly debated subject. As Joshua Stacher and Shana Marshall have observed,

The army is known to manufacture everything from olive oil and shoe polish to the voting booths used in Egypt’s 2011 parliamentary elections, but no one knows for sure how much of the country’s economy the military industries control. News reports have cited “expert” estimates that are all over the map, from 5 percent to 40 percent or more.

How effective are the Generals at running this economic empire? Farah Halime offers an alternative to the more optimistic accounts of the Egyptian Military’s economic prowess in a recent article, persuasively arguing that

the Egyptian military is far from being a well-oiled business machine. In fact, historically, the army have been very bad at making money and its own failures have led it to seek other forms of income. Why else would an army diversify its interests so considerably?

…because of a track record of losing contracts, bad ties to regional powers and dodgy accountancy, the army are relying on selling bottled water and other domestic goods to survive.

Further Reading:

Farah Halime – Why Egypt’s Army is Bad at Doing Business – Rebel Economy

Zeinab Abul-Magd – The Army and the Economy in Egypt – Jadaliyya

Shana Marshall and Joshua Stacher – Egypt’s Generals and Transnational Capital – MERIP

Shana Marshall – Egypt’s Other Revolution: Modernizing the Military-Industrial Complex – Jadaliyya

(Image courtesy of Wikimedia Commons)

About the Author:

William Oliver is Nabateans’ editor for international economics and Middle East current affairs. He obtained his degree in History from the School of Oriental and African Studies in London. While his studies focused on the Middle East in the 18th and 19th centuries, William has a long-standing interest in international finance and the political economy of development. William’s work is aimed at understanding how the Middle East integrates with the global economy, and into the wider geopolitical landscape.

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