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.

Hosni Mubarak. Click image to expand.
Egyptian President Hosni Mubarak

CAIRO—The lavish headquarters of Egypt's Ministry of Military Production is a far cry from the rundown buildings that surround it in central Cairo. From the golden handrails of the sweeping central staircase to the ministry's fancy custom-made drink coasters—the place is awash with cash.

Minister Sayed Meshal, a former general, is eager to tell me that the ministry can afford its gaudy accoutrements—after all, it turns a tidy profit. He says the ministry's revenues from the private sector are about 2 billion Egyptian pounds a year ($345 million). It employs 40,000 civilians, who assemble water-treatment stations for the Ministry of Housing, cables for the Ministry of Electricity, laptops for the Ministry of Education, and armaments for the Ministry of Interior's vehicles. Meanwhile,other ministry employees produce washing machines, refrigerators, televisions, and metal sheeting for construction projects. 

While we're discussing metal sheeting, Meshal adamantly denies that the government subsidizes any of his products. But in the case of these sheets, the ministry has a monopoly; it is the only place in Egypt producing the alloy in this size. "You're a clever lady," exclaims Meshal with a smile and shake of his head when I point this out to him. He chuckles that I'm getting the best of him.

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I smile back. His small admission feels like a huge victory.

Almost everything related to the Egyptian military is a black box. The number of people serving, their salaries, the military's land holdings, its budget—none of that information is in the public record. Joshua Stacher, a political science professor at Kent State University who studies the Egyptian military, estimates that the military controls somewhere from 33 percent to 45 percent of the Egyptian economy, but there's no way to know for sure.

The military has defined Egypt's political path since Gamal Abdel Nasser overthrew the monarchy in 1952. And with President Hosni Mubarak 82 and ailing, the key question is whether the military will weigh in on his successor. Most observers think the president wants his banker-turned-politician son Gamal to take over, but can the all-powerful army accept a civilian leader for the first time in more than 50 years?

A Dec. 14 WikiLeaks cable dump exposed something that I had spent months chasing: The civilian regime has tried to neutralize the military's kingmaker powers by establishing it as a major stakeholder in the status quo. In a period of transition, the Egyptian military will be more concerned about whether Egypt's next president will protect its vast economic holdings rather than if he wears a uniform.

"The military helps to ensure regime stability and operates a large network of businesses, as it becomes a 'quasi-commercial' enterprise itself," wrote U.S. Ambassador Margaret Scobey in a September 2008 cable. "The regime, aware of the critical role the MOD [Ministry of Defense] can play in presidential succession, may well be trying to co-opt the military through patronage into accepting Gamal's path to the presidency," she speculated.

The Egyptian military manufactures everything from bottled water, olive oil, pipes, electric cables, and heaters to roads through different military-controlled enterprises. It runs hotels and construction companies and owns large plots of land.

The Egyptian military has "an enormous vested interest in the way things run in Egypt, and you could, I think, be sure that they'll try to protect those interests," a Western diplomat in Cairo told me. "There's a certain conventional wisdom [that] therefore the next president has to come from the military. I don't know that that's true. It's the interest that they'll be interested in protecting."

But reporting on the military is difficult. No one wants to talk about the subject, and people who are willing to talk don't want their names used. If civilians are worried, Egyptian journalists are petrified. "There is Law 313, [passed in] the year 1956, and it bans you from writing about the army," Hesham Kassem, an independent publisher, told me. "It's the taboo of journalism."

"If the minister of defense was to go on CNN and say, 'We have changed the color of our uniform,' and then you do a story about that, you could be [prosecuted.] You say, 'Well, he said it on CNN,' and they say, 'Yes we know, but you cannot write without a permit,' " Kassem explained.

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