A WikiLeaks cable shows how Egypt's regime has bought off the military.

Notes from different corners of the world.
Dec. 15 2010 6:02 PM

Egypt's Command Economy

A WikiLeaks cable shows how the regime has bought off the military.

(Continued from Page 1)

Consequently, very little is known about the military's expansion into the private sector. The transition occurred after the 1979 Camp David Accords, when army factories under the control of the National Service Products Organization shifted some of its production from armaments to consumer goods. The NSPO also happens to have been Minister Meshal's last posting.

The NSPO was impossible to reach, but Meshal explained that the NSPO's factories are staffed entirely by active military personnel, and, like his ministry, they produce goods, including olive oil and bottled water, for both the armed services and the civilian market. Safi, the famous Egyptianbottled water brand produced by the NSPO, is named after Meshal's daughter, he told me gleefully, pointing to a bottle on his desk.

But the Egyptian military has not only infiltrated the commercial market, it also dominates top posts in the civil service. Twenty-one of Egypt's 29 provincialgovernors are former members of the military and security services, as are the heads of institutions such as the Suez Canal Authority and several government ministries.

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Retired military officers are also seen throughout the middle-management levels of private sector companies "It's a sort of jobs program," says Kent State's Stacher. "They tend to offer them higher salaries as a sort of golden parachute to get them out of the military and into the economy."

An ex-airline industry employee told me that at EgyptAir, the country's national carrier, "a lot of the middle management is becoming ex-military, to the extent that the original employees are becoming depressed. They feel this organization is not theirs anymore. Imagine you are killing yourself in a position for years, and a military man arrives. What would you feel?"

For a country still struggling to remove the shackles of an old command economy, the price of keeping the military out of politics may be an economic one. The September 2008 cable released on Tuesday reports State Department sources claiming Egypt's defense minister can "put a hold on any contract for 'security concerns.' "

As Scobey argued in the same cable, the military and the market do not mix: "We see the military's role in the economy as a force that generally stifles free market reform by increasing direct government involvement in the markets," she wrote.

So, while post-Mubarak Egypt may end up being run by a civilian, it's likely that a good chunk of the economy will still belong to the generals.

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