Will Egyptian parliament cut into the military's profit margin?
The Egyptian army’s strength may hinder any attempt at limiting its economic activities.
Egypt's politicians are preparing to do battle against its army. A number of lawmakers in the country's recently elected parliament are working on laws designed to provide answers to questions about the army's money and its place in the national budget.
“Armies are the basis of the administration and the administration is everything,” Maj. Gen. Mahmoud Nasr said at a conference four years ago on the role of the Egyptian Armed Forces (EAF) in supporting the economy through the institution’s many projects. At the same conference, held in Cairo and organized by the Supreme Council of the Armed Forces, he stressed that the so-called "army economy" is not derived from state funds, but rather from returns on Ministry of Defense projects.
The Defense Ministry’s projects and finances have long lacked transparency, and many critics have questioned whether its funds constitute a black-market budget. Some estimate the size of the army’s economy at 35-45% of the Egyptian economy. President Abdel Fattah al-Sisi denied both assertions during his election campaign. In a May 2014 interview with Reuters, Sisi said the correct number was no more than 2%.
The army’s wealth comes through what is owned by the EAF’s ministries, military production and subsidiary bodies or economic institutions. The Armed Forces Land Projects, a government agency affiliated with the Ministry of Defense, is tasked with creating investment projects (housing, commercial centers, administrative units, parking areas) on EAF-owned land to serve the civilian sector. But the agency isn't required to reveal the lands it owns or how it came to own them.
