What's Happening?
Egypt's military has significantly expanded its role in the country's economy, owning a wide array of businesses from restaurants to building supplies. This expansion is part of a historical trend that began under President Gamal Abdel Nasser in the 1960s
and was further institutionalized by Anwar Sadat in 1979 with the establishment of the National Service Projects Organization. The military's economic activities have grown particularly since the 2011 revolution, with increased involvement in strategic sectors like cement and steel. This expansion has raised concerns during Egypt's negotiations with the International Monetary Fund (IMF), which has delayed disbursements of a €6.8 billion loan due to worries about the dominance of state-owned and military-run enterprises in the economy.
Why It's Important?
The military's deepening involvement in Egypt's economy has significant implications for both domestic and international stakeholders. Domestically, it creates an uneven playing field that could stifle private entrepreneurship and innovation, as military-owned businesses benefit from state support and lack of oversight. Internationally, this situation complicates Egypt's economic relations, particularly with institutions like the IMF, which are wary of lending to economies dominated by public and military sectors. The military's economic dominance could also affect foreign investment, as private investors may be deterred by the lack of transparency and competition.
What's Next?
As Egypt continues to negotiate with the IMF, the military's role in the economy will likely remain a contentious issue. The government may face pressure to implement reforms that reduce the military's economic footprint to secure international financial support. Additionally, there could be increased scrutiny from international observers and potential calls for greater transparency and accountability in military-run enterprises. Domestically, there may be growing demands from the private sector for a more level playing field to foster economic growth and innovation.
Beyond the Headlines
The military's economic expansion in Egypt raises broader questions about the role of military institutions in civilian economies. This trend reflects a global pattern where military forces are increasingly involved in economic activities, often justified by national security concerns. However, such involvement can undermine democratic governance and economic efficiency, as military-run businesses may prioritize strategic interests over market-driven outcomes. The situation in Egypt highlights the potential risks of blurring the lines between military and civilian spheres, which could have long-term implications for governance and economic development.
