Egypt military looking to keep its grip at least on economy (LA TIMES) By Jeffrey Fleishman CAIRO, EGYPT 03/25/12)
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As a power transition looms in Egypt, the military bargains with the
Muslim Brotherhood to protect its widespread but murky business
The Egyptian military stamps itself as protector of the nation, but
behind this carefully tended mythology the army controls a
multibillion-dollar business empire that trades in products not
normally associated with men in uniform: olive oil, fertilizer,
televisions, laptops, cigarettes, mineral water, poultry, bread and
Estimates suggest that military-connected enterprises account for 10%
to 40% of the Egyptian economy. It is an opaque realm of foreign
investments, inside deals and privilege that has grown quietly for
decades, employing thousands of workers and operating parallel to the
army´s defense industries.
The coming weeks will reveal how the military will maneuver to
protect its authority and financial holdings as it prepares to hand
power to a new president and civilian government in June. The
transition is a key test in the unfinished revolution that toppled
President Hosni Mubarak, a career military man, and led to the
political ascension of the Muslim Brotherhood and other Islamists.
The military´s future role is often framed in the context of Turkey,
where the Islamist-dominated government has curtailed the reach of
the once-unassailable Turkish army. The more drastic flip-side
scenario is thatEgypt´s military, fearful of infringement, veers more
toward the Pakistani army, never bashful about sidelining the
country´s elected officials in moments of crises.
For now, at least, the military appears to be taking a pragmatic tack
to guarding its interests.
Islamists, led by the Muslim Brotherhood, control about 70% of the
parliament and will have a large say over choosing the next
president. The military has never trusted the Islamists and has
buttressed the governments that persecuted them for decades. But the
generals have been working with the Brotherhood so that each side
Some politicians and analysts say the Brotherhood and the military
have reached a closed-door agreement that the new president will be
sympathetic, if not loyal, to the army. The Brotherhood, however, is
facing internal dissension and has yet to endorse a candidate. Its
members are divided over whom to choose after several possible
contenders reportedly rejected the group´s backing.
"The military started preparing for its future right after Mubarak
was toppled," said Aboul Ezz Hariri, a parliament member who is
running for president with the Socialist Popular Coalition Party. He
said that by not blocking the political ambitions of the Brotherhood
and ultraconservative Salafis, the military entered into an odd, if
convenient, alliance with the Islamists.
"They have all conspired to serve the army´s aim of keeping its
control over the country for a long time to come," he said.
Much of that grip will be in key provinces where current and former
military officers are governors and leading political and business
figures, managing corporations that build hospitals, villas and toll
roads. They have attracted foreign investors from France to Taiwan in
companies in sectors as diverse as maritime shipping and computer
chips. It is a battle for the economy that began nearly a decade ago
when Mubarak´s son Gamal and his cronies benefited from privatization
and freer markets.
The generals viewed Gamal´s programs as a threat to national
stability and to their own interests in taking over state-owned
companies. The army´s disdain for the president´s son was so deep
that a 2008 U.S. diplomatic cable quoted an Egyptian analyst as
telling American officials: "The military does not support Gamal and
if Mubarak died in office, the military would seize power rather than
allow Gamal to succeed his father."
With Gamal and many of his confidants now on the run or in jail on
corruption charges, including steel magnate Ahmed Ezz, the military
has few obstacles to expanding its financial reach while the civilian
government concentrates on improving the lives of the more than 40%
of Egyptians who live on $2 a day or less.
"With several civilian oligarchs at the mercy of corruption probes,
the military is much freer to dictate its terms," according to a
recent study by the Middle East Research and Information
Project. "With the power to determine the winners and losers at the
commanding heights of Egypt´s capitalism, the [military] will retain
unchallengeable clout long after the formal return to civilian rule."
Some army-controlled corporations have been around for decades, such
as El Nasr Co. for Services and Maintenance, founded in 1988 and
managed by retired Gen. Ali Fahmy. The company´s website, in English
and Arabic, says it has 7,750 employees and provides pest
elimination, car repairs, crane rentals and nurseries.
The website´s mission statement, however, is a bit out of date. El
Nasr, it says, is working to "keep in line with the economical and
industrial revival that our state is having [under] President Mohamed
Despite crackdowns that have killed scores of protesters and YouTube
videos criticizing generals for enriching their ranks amid widespread
poverty, the army, which has tried 12,000 civilians in military
tribunals, remains revered by many Egyptians as the only institution
that has preserved national unity and cultural pride.
It is expected to rely on this image to ensure three things as it
prepares to step aside: minimal government oversight on its budget,
assurances its officers will not be prosecuted for human rights
abuses over the last year, and a new constitution that doesn´t weaken
"The decisive battle for the military will be over the constitution,"
said Mustafa Naggar, a lawmaker and member of the Justice Party. "The
army will insist on keeping some privileges … including keeping their
budget secret and [attempting to] form a national security council of
army officers to have the final say on political and military
The army has long straddled two worlds. Every president since the
1952 coup that led to Egypt´s independence has been a military man:
Gamal Abdel Nasser, Anwar Sadat and Mubarak. When the army seized
power after Mubarak´s overthrow, the popular slogan was: The army and
the people are one hand.
In fact, it was the army and the government that were always one hand.
But the last year has shown that the military has no affinity for
being the public face of power. The ruling Supreme Council of the
Armed Forces has clumsily, and at times violently, presided over the
nation whose aspirations for wider civil rights ran counterintuitive
to the military´s inherent rigidness. As the ruling generals prepare
to return to the barracks, however, they are laying down markers.
The army will be "hard-pressed to defend the lines it has drawn in
the face of a contentious political arena and energized Egyptian
public," Robert Springborg, a professor in the department of national
security affairs at theU.S. Navy´s Naval Postgraduate School, wrote
recently in the Egyptian Independent news website. "Demands will
intensify for scrutiny of its budget, its internal management, and
for it to at least share responsibility for making national security
Much of the military´s fate may rest on how astute and patient the
Brotherhood is in coming months. Too much time spent reining in the
army could distract the Islamists from the nation´s pronounced
economic and social problems. The Brotherhood has been waiting 84
years for this moment and doesn´t want to jeopardize it with a
protracted and risky fight with the army.
A central aim of the Islamists is to draft a constitution that gives
more power to the parliament. Such a tilt would siphon authority from
the president, which could gradually weaken the military.
There is also talk that the Brotherhood, which had said it would not
run a presidential candidate from its ranks, might break that promise
amid concern that some front-runner candidates may not support the
group´s agenda. Such a move could upset relations between the
Islamists and the generals.
But so far there have been no signs of weakening from an army that,
as it exits the public stage, takes with it a tight grip on the
nation. Amro Hassan in The Times´ Cairo bureau contributed to this
report. (Copyright 2012 The New York Times Company 03/25/12)
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