Friday, 18 February 2011

That Military-Industrial Complex again

Now that the New York Times has latched on to the popular meme that the Egyptian military is a force to be reckoned with in the Egyptian economy, and on top of that a brake on the economic liberalisation which Mubarak favoured after 2004, it's time to set the record straight about the circumstances under which Mubarak jettisoned most of the economic group of ministers when a new cabinet was formed on January 30. My interpretation at the time was that Nazif, Rachid, Garrana, Maghrabi and Youssef Boutros-Ghali were sacrificial lambs that Mubarak threw to the rebellious masses when he was cornered and wanted to placate public opinion. On February 1, the main state newspapers reinforced that impression when they carried headlines such as 'New Cabinet without Businessmen'. The ploy failed because the protest movement had much broader objectives, especially an end to police brutality and the monopolisation of politics by the ruling party. It's possible that the decision to dismiss them had the approval of the military and that winning military support was also one of Mubarak's aims. But in the end the decision was Mubarak's and made some sense in the context of those difficult days for the regime. The investigations into corruption allegations against some of those ministers was the natural consequence of their fall from power, not necessarily an indication of the military's attitude towards businessmen as a whole.  
    Rachid and Boutros-Ghali agreed to stay out of the new cabinet because they felt it would be better to start with new faces, a senior official said at the time. Those two ministers were replaced by their immediate deputies, suggesting some continuity of policy, albeit with less prominent figureheads.
    The New York Times story strikes me as a hodge-podge of hearsay and innunendo, with very little of substance in the way of signs to where the military council plans to take economic policy. For the moment the council has so much else to think about, and I doubt they have yet given it serious thought.
    It's also interesting that Rachid, who should know, says that the military's economic empire accounts for less than 10 percent of the economy as a whole. The measures against Rachid did surprise many people who know him, but until the investigations are complete, I would be reluctant to weigh in on whether they are just.
    As for the theory that the army thwarted 'free market reforms' after the bread price riots of 1977, its position was surely dictated solely by public order considerations and says nothing about its economic views. Since 1977 the prices of subsidised goods have risen on many occasions without the army stepping in to freeze them. 


  1. This is a great blog. Thanks for taking the trouble to write all this.

    If you have time, I'd be very interested in hearing your take on Gamal Mubarak's role in all this. There seems to be a narrative being pushed that he was partly responsible for the regime's increasing tone-deafness in the last few years, and that he was also the one that tried to convince Hosni M to stay on, even in the face of military opposition. I guess it could be so -- but it's also really convenient to blame him for everything that's gone wrong, after he's been run out of power.

    And, by the way, where is he now?

  2. Dear Johnathan, I'm looking for some information on Egyptian land holdings. One of your recent posts states that the state controls 90% of land in Egypt. Do you know what percentage of arable land is held by the state, versus private hands? much obliged -- Margaret Coker from The Wall Street Journal.