A researcher at the Carnegie Middle East Center questioned the wisdom of Egypt's military domination of most of the country's economy.
For decades, the Egyptian military has been allowed to engage in economic activities as a way to reduce the defense budget, Yazid al-Sayegh said in an article on Middle East Eye.``The military economy also allows senior officers to be compensated for low salaries and pensions, by giving them the opportunity to receive additional income and benefits.
Sayegh noted that the overall size of such economic activities was relatively modest until 2011, when former President Hosni Mubarak was forced to leave power, but since 2013, when the military seized power the situation changed because President Abdel Fattah al-Sisi, who became president in 2014 He relied on the military to take over the management of the economy, effectively replacing the government in awarding contracts and managing the country's public infrastructure.
But this approach ignores the real structural problems in the Egyptian economy, including low productivity and investment in all sectors except energy, real estate and low value added, especially in technology-based sectors.
Sayegh adds that the army's overall contribution to public infrastructure was somewhat limited until 2011 when the revolution toppled Mubarak, and since then there has been a major shift, with the army now managing about a quarter of total government spending on housing and public infrastructure, an estimated 370 One billion Egyptian pounds ($ 23 billion), which may not seem much compared to government budgets in the United States or Europe, but in Egypt is a huge amount.
Contempt for the Civil Service
This is why the Egyptian government is heavily indebted, giving an idea of the size of the military's work relative to overall government spending on public infrastructure.
The researcher said that Sisi has shown public disdain for his country's civil services and that he feels that he can only trust the military to carry out any task on time within the budget. The researcher believes that Sisi does not have an economic vision and does not understand how to create jobs or growth or increase revenue in a way Sustainable. It's all that the army follows orders so that if they are asked to go build a new city in the sand somewhere that's what happens.
In this way, he said, the army is flooding huge amounts of capital in unproductive projects, which often damage relations with the private sector, because it handles management and income from these projects.
The researcher concluded that in order to change this situation must be the president who is in office in Egypt to be aware of the need to dismantle parts of the military economy, and to do so will have to determine the new president of the precise parts of the economy that can be undone, while provoking less resistance from the military, Military support will be needed.
At the same time, the new president will have to compensate the military for the interests and benefits it loses, which may relate to salaries and pensions, because it was these advantages that initially prompted the military to participate in the economy.