Egyptian Army Considered Economic Stakes in Coup

While the Egyptian army intervened to oust President Mohammed Morsi following massive public demonstrations, the army was likely also concerned with its own economic interests.

al-monitor Soldiers stand on an armored personnel carrier positioned outside the state-run television station in Cairo, July 6, 2013.  Photo by REUTERS/Khaled Abdullah.

Topics covered

muslim brotherhood, mohamed morsi, military, egyptian coup, egyptian army, egyptian economy, egypt, economic

Jul 10, 2013

Two years ago, the determined resistance at Cairo’s iconic Tahrir Square resulted in the overthrow of former President Hosni Mubarak’s 30-year rule. The revolution also provided the basis for a new political beginning. The people, acquainted with democracy for the first time, elected to power the party founded by the Muslim Brotherhood. Shortly afterward, Mohammed Morsi was elected head of state as efforts to draw up a new constitution gathered speed.

But on the first anniversary of Morsi’s presidency, a part of the groups that had joined forces in Tahrir to topple Mubarak, the opposition and those unhappy with the Brotherhood government took to the streets again, this time against an elected leader.

The military, which had propped up the anti-Mubarak demonstrations two years ago, got involved again in the uprising against Morsi. This time, however, it assumed the role of the lead rather than the supporting actor.

Pundits of Egyptian politics had said the military would not stand by and watch the upheaval in the streets. The coup has now completely changed the course of the struggle that Egyptians were waging in the streets for more than two years.

The elected civilian government did not and could not sever its ties with the army over the past year. In this context, a thorough understanding and a comprehensive analysis of the developments in Egypt would be impossible without taking into account the army’s economic might.

Speaking of the military’s presence in all production sectors one could imagine, we cannot ignore the fact that this giant economic status gives the army a most powerful say in politics.

In Egypt’s structural web of entangled links between army and industry, the military is estimated to control 40% of the economy through dozens of companies and plants it owns. Needless to say, this colossal economic power is far from being transparent and accountable. Hundreds of thousands of young officers have been sent to retirement and placed as managers in those companies. The profits and budgets of army companies are kept under wraps on grounds they constitute a “state secret.”

It is not hard to guess that a military with such a colossal economic power would hold an extremely privileged place in politics. The Muslim Brotherhood succumbed to traditional political clichés instead of turning to reforms to rectify this structural flaw, revise the army’s privileged status and curb its economic role. Rather than seeking to resolve economic issues and rising unemployment and poverty, the Brotherhood adopted an attitude that polarized the people, sought to impose its own understanding of religion, restricted rights and did not shy away from courting the military.

Let alone curbing the army’s privileges, the constitution drawn up under Morsi’s leadership grants the army extensive powers, including the authority to try civilians at military courts.

In short, the Muslim Brotherhood made no effort to change the military’s privileged political and economic status, and similarly the military did not go against the Brotherhood. But when the people got mobilized in the streets again, did the military use its extremely influential political and economic status as a trump card against the government? This is one of the questions to be asked.

It is likely that the military stole the show in the popular revolution out of concerns to preserve its political and economic privileges, thus taking the side of the people and laying claims to [hijacking] the movement.

The military’s haste in staging the coup is likely to have been precipitated by some developments it saw as a threat to itself, including the $4.8-billion loan expected from the IMF even though the protracted talks have been inconclusive, an expectation that the loan would eventually draw Western investors to the country and the government’s close relations with Qatar, rumored to have set an eye on the Suez Canal in return for the $5-billion financial assistance it has offered.

Regardless of how you describe the movement for rights and justice in Egypt — be it a spring, an awakening or a revolution — transparency and accountability are the only way to transform the oppressive and authoritarian state tradition into a democratic system. And this seems to be a distant prospect at the moment.

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