Egypt
The sprawling business of the Egyptian army
The armed forces manage 35-40% of the country's GDP. They produce everything, from food to television, and get the most lucrative contracts. They are the foundation of al-Sisi’s extra-parliamentary power
The Regeni family, with his stubborn and necessary search for truth, not only challenges a State. It challenges a monolithic system of power in which economic interests, political strategy and authoritarianism are intertwined in the hands of those, directly and indirectly, responsible for the Giulio’s death.
The apparent rifts within the Egyptian government between the Ministry of Foreign Affairs (which April, 2 reiterated to the daily al-Shorouq the intention to cooperate with Italy) and the Ministry of the Interior (determined to save itself from the storm) can be pushed into a corner, mere philosophical exercises that hardly translate into a real change of the national balances. It is no coincidence that, despite the pressure of the Italian public and the independent Egyptian media, the Egyptian Parliament remains silent, a passive spectator of a system that operates autonomously.
To understand the Egypt ruled by the president-general, it is enough to look at those who hold the economic power.
Cairo came out from the ashes of an unprecedented revolution but it still is the army’s prey. A power deeply rooted, long before Gamal Abd el-Nasser and more and more sprawling today. This is the foundation of coup leader al-Sisi’s regime and his Ministry of Interior, the hand that manages the security forces and intelligence services, the real internal authority in a police state.
Abdel Fattah al-Sisi does not enjoy the support of a political party, he misses a parliamentary force behind him. Because the Parliament is not the key to control the public opinion, but the army is, his only source of political legitimacy.
Al-Sisi has the army and the army has the wealth.
And the wealth brings political influence, social authority, jobs in a recession, building patronage networks faithful to the source of interests.
Since he took power by force, the president-general has issued 263 presidential decrees. Out of these, 32 are related to the army: he increased by 10% the pension checks of the military; he authorized the Ministry of Defense to create private security companies; he awarded Lands Projects Agency, a company owned by the army founded in 1981, the power to act in the commercial sector to make profits. Obviously without paying any taxes and taking advantage of young conscripted men as free labor.
The numbers are exorbitant, a business shrouded by State secrecy which would – according to estimates from independent sources – manage 35-40% of the Gross Domestic Product. More than a third of the economy of a country of 85 million people, of which a portion is attributable to the armed forces and the other to the Ministry of Interior.
Al-Sisi denied it in an interview in 2014 and spoke of a minimum share of the national economy: no more than 2% of GDP. But two years before that, the then Deputy Minister for Financial Affairs, General Mohamed Nasr, had revealed revenues of 198 million dollars.
The army controls countless private companies, from the construction industry to agriculture, from tourism to health. Even the manufacturing of fertilizers: in November, al-Sisi announced the creation of an industry of fertilizers, entrusted to the el-Nasr company, owned by the armed forces, which will churn out a million tons a year in nine different plants.
Behind this, there is the National Service Projects Organization, a body created by the army in 1979 to meet the procurement needs of the armed forces but soon, it became so powerful that it started to sell its huge surplus in the Egyptian domestic market. It manufactures and sells everything: pasta, mineral water, gasoline, cement, refrigerators, TVs, computers.
At the same time, the army is entrusted with the most profitable infrastructure projects: the widening of the Suez Canal, $ 9 billion; the Sohag airport and the Gurghada port; bridges, stadiums, hospitals and roads; and now the mega project to transform 600 thousand hectares of desert into arable land.
The system is based on an oligopoly impossible to scratch: first, the political power, represented by government, grants contracts to companies linked to the armed forces; then those same companies produce goods and services at lower costs than those of the civil private sector, eating up much of the consumer demand.
The Egyptian people remains outside, forced into the limbo of the economic crisis, the investment gap between center and outskirts, the weakening of small and medium-sized companies stifled by taxes and unfair competition, and the lack of job opportunities. The answer is often the same: cronyism, favors, loyalty to the political and economic elite in order to get inserted in the supply chain.
And the Egyptian Parliament has no say in the matter: it has no right to know the real budget of the armed forces, the value of public-owned lands, or the sprawling economic interests of the military leadership. Nor has it the power to closely supervise or oversee the commercial and economic projects of the military.
Nevertheless, new attempts are being made: a group of members of Parliament is working on drafting laws to get definitive answers to requests that have always remained unanswered.
According to the anonymous statements of a Member of Parliament to the Al-Monitor website, the economic wealth of the army is expanding year after year, but “the national interest prevents Parliament from opening an investigation.”
Originally published at http://ilmanifesto.info/soldi-e-stellette-il-tentacolare-business-dellesercito-egiziano/ on 2016-04-03