The money behind the Egyptian military

CAIRO – One year into Egypt’s unfinished revolution, fateful questions loom here in the most populous nation in the Arab world as it leans forward into a new and uncertain future.

How to square a hope for democracy with a history of autocratic rule? What will be the role of religion in shaping a new constitution and what will the sweeping victory by Islamist parties in recent elections mean for the rights of the Christian minority, women and so many who put so much on the line in this revolution to make Egypt a more democratic country?

But of all the questions casting a shadow across Egypt, there is one that is most sharply in focus right now as the tumult of the ‘Arab Awakening’ continues to unfold in the region.

That is, what role will the military play in a new Egypt?

Will the military relinquish its executive power, which it currently holds through the governing Supreme Council of the Armed Forces (SCAF), as it has promised to the Egyptian people and guaranteed to its US benefactor?

What is clear in assessing this question of succession of power is that Egypt’s 350,000 strong military has everything at stake in a new Egypt — most pointedly its $1.3 billion in annual assistance from the United States and the vast, multi-billion dollar economic enterprise the Egyptian military has built up over the last 60 years.

A timetable is set, the governing generals say publicly and US officials confirm privately, for a transition of power in July when the first civilian president is modern history is expected to take office.

But the political process in Egypt does not trust this timetable. That was made dramatically evident earlier this month when Mohammed ElBaradei, Nobel laureate and a leading presidential candidate, withdrew his candidacy in protest. On January 14, he pulled out of the race before it really got started because he said the governing SCAF and the forces of the old regime were still firmly in place and unlikely to allow a civilian government to implement the reforms needed for a democracy to take shape.

Most analysts and retired officers here say that the military’s increasingly brutal show of force foreshadows the fact that it is not likely to give up executive power easily in large part because it seeks to hold on to its sprawling economic interests — that stretch from industry to hotels to supermarkets and huge real estate portfolios.

Amr Hamzawy speaks with GlobalPost-Open Hands Initiative 'reporting fellows' in Cairo in October 2011. (Elizabeth D. Herman/GlobalPost)

Like so many things in life, it seems it’s all about the money.

But how much are we talking about? GlobalPost has spent several months of reporting in Cairo and Washington to try to come up with some sense of the scale — if not a precise figure — of the military’s economic might.

Newly elected parliamentarian and leading public intellectual Amr Hamzawy and others in the more secular, liberal parties have announced their intention to directly challenge the SCAF to get a better accounting of the bottom line of the military’s largely hidden assets and business interests. Extravagant perks for retired generals, who often end up as heads of large corporations despite having virtually no business experience, is a charged issue in a country where 40 percent of the population live on less than two dollars per day.

For 60 years, the military’s financial empire has been completely hidden from the scrutiny of the parliament, which in the past was appointed through elections that were hardly free and fair and rarely challenged the regime. Now that has changed, and newly elected parliamentarian is a big part of that change.

Hamzawy, a former research director for the Carnegie Middle East Center and political science professor at Cairo University, has researched the military and Egypt’s economy for years and estimates that the military may control up to 30 percent of Egypt’s total $180 billion economy, or $60 billion.

This, Hamzawy told GlobalPost, is why “they are keen on securing their economic assets” by trying to preserve the remnants of the old regime that will allow them to continue to avoid transparency and accountability to parliament.

Other more conservative estimates of the military’s economic holdings, including one by Mohamed Kadry Said, a retired major general and long-time military analyst for the Al Ahram Center for Political and Strategic Studies, put the figure at an estimated 8 percent of GDP, or about $15 billion.

Western diplomats in Cairo and Egyptian experts interviewed by GlobalPost say somewhere in the middle of these estimates, or about $35 billion, is a safe guess.

But the reality is that none knows the precise extent of the Egyptian military’s economic holdings because successive authoritarian regimes have made sure it was kept secret.

http://www.globalpost.com/dispatch/news/regions/middle-east/egypt/120122/overview-the-army-the-people