On 29th November, an Egyptian court dismissed murder charges brought against former president Hosni Mubarak concerning the deaths in January and February 2011 of 239 peaceful protestors who were demanding an end to his 30-year dictatorship. Mubarak's acquittal was the final chapter in the reversal of the democratic uprising, welcomed enthusiastically in the west as the "Arab Spring." With former field marshal Abdel Fattah el-Sisi now firmly in the driving seat, the generals are back with a vengeance. But unnoticed by most commentators, the army's considerable control of Egypt's economy had largely remained undisturbed throughout 2011 and 2012.
In February 2011, the Supreme Council of the Armed Forces (SCAF) elbowed out Mubarak, whose plan to groom his businessman son Gamal as his successor threatened to break the chain of continuous military rule that stretched back to 1952. Also, the aggressive neoliberal policies pursued by the Mubarak administration from 2004 onward made SCAF members fear that the stake that the military had carved out in the public sector and in private-public partnerships would be severely diminished.
Mubarak's acquittal was the final chapter in the reversal of the democratic uprising, welcomed enthusiastically in the west as the "Arab Spring"
It was Colonel Gamal Abdul Nasser, the founder of the Arab Republic of Egypt after the overthrow of the inept, corrupt regime of King Farouq in July 1952, who inserted the military into the economy. He did so in pursuit of his nationalistic import substitution industrialisation programme. He built up the defence industry and also appointed military officers to run key public sector enterprises.
Nasser was the leader of the Free Officers group which toppled King Farouq, who had been a client of Britain, the region's superpower. Subsequently, the much larger officer corps won popular support by carrying out sweeping socio-economic reform which benefitted poor peasants and urban salaried employees at the expense of feudal lords and the commercial classes.
The pioneering pro-poor drive of the officer corps is a thing of the past. The rot set in when Mubarak's predecessor, Anwar Sadat, aligned Egypt with Washington in 1974, discarding Nasser's egalitarian policies in the process. This stance reached its apogee during the 30-year rule of Mubarak. He embraced the neoliberal orthodoxy, the so-called "Washington consensus," with as much enthusiasm as he received the weaponry supplied by the US under the terms of its generous military aid programme.
Mubarak's acquittal was the final chapter in the reversal of the democratic uprising, welcomed enthusiastically in the west as the "Arab Spring"In Egypt today the entry to the officer corps remains an assured channel for joining the upper reaches of society. But the rules for getting there tend to favour the rich. Only those with both parents holding university degrees are allowed to apply for admission to the Egyptian Military Academy and other military colleges. And often it's only those who have attended expensive private schools or have received extra coaching who succeed in passing their stiff entrance exams.
This rule would have barred the past military presidents from applying. Nasser was the son of a village postal clerk. Sadat was born in the household of a petty civil servant. And Mubarak was the son of a low-grade court functionary.
Besides the social prestige that naturally attached to a man in an officer's uniform, those holding this rank began to enjoy economic benefits when Sadat diverted a large proportion of the military production capacity to the civilian sector under the National Service Projects Organisation (NSPO) after signing the peace treaty with Israel in 1979.
In Egypt today the entry to the officer corps remains an assured channel for joining the upper reaches of society. But the rules for getting tend to favour the rich
The NSPO soon expanded its activities into the production of washing machines, heaters, clothing, doors, stationery, pharmaceuticals, olive oil and shoe polish. Its Food Security Division developed a network of dairy farms, cattle feed lots and poultry and fish farms. Its first priority was to supply the ranks, with the excess sold in the private sector.
SCAF managed the NSPO on its own, keeping its income streams out of the grasp of the public exchequer. Its traditional exclusive control of the defence budget and US military assistance remained intact, with no supervising role for parliament or any other civilian authority.
As part of the major waiver of Egypt's external debt and the renegotiation of its 1987 International Monetary Fund loan following the 1991 US-led Gulf War to expel Iraq from Kuwait, Mubarak undertook a major drive to privatise the public sector. In practice, it meant creating a private-public partnership sector in which the military owned shares, with specific projects often undertaken in conjunction with Western multinational corporations. These covered infrastructure, maritime shipping and arms production.
Within a decade, the military became involved in such projects as the building of power lines, sewers, bridges, overpass roads, schools, and installing and maintaining telephone exchanges. Since implementing these projects involved giving sub-contracts to private firms the line between military and civilian economies became blurred. In order to improve their chances of securing lucrative sub-contracts, many private registered companies resorted to having retired or reserve military officers on their payroll.
The exact share of the military economy in the national GDP is a matter of conjecture, with estimates ranging from 5 to 40 per cent. The armed forces' share holdings in companies are classified as state secret, and disclosing them can lead to imprisonment.
The military's many economic activities had a negative impact on its fighting prowess. "The Egyptian army is not the tight professional force that many consider it to be," noted the academics Clement Moore Henry and Robert Springborg in an article published early in 2011. "It is bloated and its officer core is indulged, having been fattened on Mubarak's patronage. Its training is desultory, maintenance of its equipment is profoundly inadequate, and it is dependent on the United States for funding and logistical support."
Concern about this state of affairs had been raised earlier by the US Embassy in Cairo. Its December 2008 cable to the State Department, published by WikiLeaks two years later pointed out the problem as US diplomats saw it. "Defense Minister Field Marshall Muhammad Hussein Tantawi, in office since 1991, has resisted any change to usage of FMF (foreign military financing) funding and has been the chief impediment to transforming the military's mission to meet emerging security threats. During his tenure, the tactical and operational readiness of the Egyptian Armed Forces (EAF) has decayed."
This decadence, undoubtedly noticed by Israel's military intelligence, would have reassured its leaders while causing mild concern among the top brass at the Pentagon for whom Israel's security remained top priority. However, the deteriorating state of Egypt's military did not alter the fact that it had become an autonomous entity. The overthrow of the Mubarak regime in February 2011 made little difference to that reality.
When the popularly elected, Islamist-dominated Constituent Assembly started to produce a new constitution, it realised that it dared not whittle down the military's prerogatives. In its draft finalised in late 2012, the assembly refurbished the old National Defence Council (NDC) into a civilian-dominated National Security Council, and a military-majority NDC which, as before, retained the exclusive control of the military budget. It went further by specifying in the new constitution that the defence minister had to be a military officer. The draft constitution was passed in a referendum on 15 December 2012.
It is useful to compare Egypt with Pakistan. There, the military budget is beyond the purview of the parliament. However, the reasons for the army's dominance in the Pakistani polity are different from those in Egypt. Within months of the founding of the state in August 1947, Pakistan's military fought a war with India over the disputed territory of Kashmir. The army emerged as the pre-eminent institution in the country, with General Muhammad Ayub Khan, the commander-in-chief, becoming the defence minister in 1954, breaking the protocol whereby a civilian always occupied that position. The following year he extended the reach of the military into the civilian sector by establishing the Fauji ("army" in Urdu) Foundation, an economic entity charged with protecting the welfare of ex-servicemen.
Under Khan's dictatorship, which ran from 1958 to 1969, the ambit of the Fauji Foundation expanded, with serving and retired army officers being posted to run factories. Later, officers were given large plots of virgin land on retirement. The military's penetration into the civilian economy accelerated under the 11-year dictatorship of General Muhammad Zia ul Haq, which began in 1977. Among other things, the Fauji Foundation was given the franchise to run a lucrative nation-wide chain of petrol stations. Also, in the name of safeguarding national security, the military high command started playing a dominant role in shaping Pakistan's foreign policy.
Both Ayub Khan and Zia ul Haq mounted their coups overnight. But in Egypt on 3rd July 2013, the head of SCAF, General Abdel Fattah el-Sisi, struck under different circumstances. He used the street demonstrations against the democratically elected President Muhammad Morsi, carried out by a coalition of various anti-Morsi elements with differing agendas, as the rationale for his coup. Yet opinion polls carried out by the Washington-based PEW Research Center, whose Global Attitudes Project initiated annual opinion surveys in Egypt after the end of Mubarak's police state suggest a rather different picture. A poll released on 16th May showed 53 per cent of Egyptians viewed Morsi favourably, compared to 43 per cent who had an unfavorable view. Furthermore, 63 per cent gave a positive rating to the Muslim Brotherhood.
When the popularly elected, Islamist-dominated Constituent Assembly started to produce a new constitution, it realised that it dared not whittle down the military's prerogatives.
While the Muslim Brotherhood enjoyed such popularity in the Arab world's most populous country, in June a court in the sparsely populated but ultra-rich United Arab Emirates (UAE) convicted 69 persons, allegedly allied with the Brotherhood, for "plotting a coup." As firm believers in absolute monarchy, which both Saudi and UAE royals regard as religiously sanctified, they dismiss democracy as a western construct, and view the Brotherhood's reformist, populist brand of political Islam and participation in elections, as a dangerous threat to their autocracy
In an interview with the Guardian in June 2013, Morsi refused to name which countries were meddling in Egypt's affairs, but maintained that it was happening. Asked whether he was referring to Saudi Arabia and the UAE, Morsi replied: "No, I am talking in general terms. Any revolution has its enemies and there are some people who are trying to obstruct the path of the Egyptian people towards democracy... [W]e observe it everywhere." Foreign intervention came in the form of channelling funds to foment anti-government street protest, he claimed. It would have been diplomatically suicidal for Morsi to name the meddling countries.
By contrast, Ahmad Shafiq, the man Morsi defeated by a narrow margin, was not so discreet. A former air marshal, and the last prime minister under Mubarak, he had fled to Abu Dhabi, the capital of the UAE, soon after his electoral defeat to avoid facing corruption charges (of which he was subsequently acquitted). On 1st July 2013, before SCAF gave Morsi a 48-hour ultimatum to settle the political crisis, Shafiq predicted that Morsi's rule would end within a week (that is, before on start of the holy month of Ramadan on 9th July) and said he was "in continuous coordination with colleagues in Cairo." He added. "No doubt, even though I've been sitting here [in Abu Dhabi] I've had a role in what's happening."
Saudi Arabia and the UAE were not the only one to rally behind the generals in Cairo. Israel did the same. President Barack Obama referred to "military actions" in Egypt, deliberately avoiding the "C" word. By contrast, his administration suspended aid to Mali in March 2012 when the generals toppled the democratically elected President Amadou Toure as required by the US Foreign Assistance Act.
If Obama was having any second thoughts, that process was halted by "marathon phone calls" from Jerusalem. Israel's prime minister and foreign minister Benjamin Netanyahu, defence minister Moshe Yaalon and national security adviser Yaakov Amidror, engaged their American counterparts—John Carey, Chuck Hagel and Susan Rice—in telephone conversations urging them not to freeze US military aid to Egypt's post-Morsi regime.
Israel's lobbying for the Egyptian generals continued unabated. Among others, Michel B. Oren, Israel's ambassador in Washington, kept arguing forcefully for an uninterrupted flow of $1.5 billion U.S. aid to Cairo. "Israel has been waging an almost desperate diplomatic battle in Washington," wrote Alex Fishman, a leading Israeli columnist, in the mass circulation Yediot Aharonot in August 2013.
The moral of the recent developments is that both the US and Israel prefer stability to the onset of democracy in Egypt. They are helped in this by the fact that roots of representative government in Egypt and elsewhere in the region—with the notable exception of tiny multi-sectarian Lebanon—are shallow, at best.
With its deep entanglement in the country's economy and its powerful external allies—the US, Israel and Saudi Arabia—the 468,000-strong Egyptian military, with another 479,000 in reserves, will remain the Big Brother in the Arab world, as formidable as the Pyramids.
