Thursday, March 29, 2012
Egypt's military will not give up their business empire
A leading member of Egypt's ruling military council (SCAF) warned it will not allow civilians to encroach on the armed forces' extensive business enterprises, Associated Press reports. The warning by major-general Mahmoud Nasr, the deputy defense minister for financial affairs and member of SCAF, was published in Egyptian media Wednesday. The general spoke in a conference on economic reform that was attended by a select group of prominent local journalists and writers.
The military has enjoyed a near-autonomous power in Egypt for the last 60 years. Over that time, it expanded its business ventures that granted it privileges such as large government construction contracts and well paid government jobs for its retired generals. It built a massive economic empire that according to some estimates, accounts anywhere between 15 and for 40 percent of the nation's GDP. The generals have never confirmed any figures. The Egyptian military receives around $1 billion a year in U.S. aid, but its budget is largely unknown.
Nasr defended the military's right to hold businesses, saying they were used in the national interest and were needed to finance the Defense Ministry. He said the ministry receives only about 4.2 percent of the national budget but needs around 15 percent. He said the economic projects, which include anything from potable water, to electronics, food stuff and hotels, yield about $200 million a year in revenues, the state-owned Al-Akhbar reported. He said the Armed Forces used its revenues to prop up the Egyptian economy in the post-uprising period, paying more than $ 2 billion to support the Central Bank, to pay salaries and support the police and various ministries. The total number of the Egyptian defense production plants is 32. They are supervised by three government entities: The ministry of Military Production (16 factories), the Arab Organization for Industrialization (AOI, nine factories), and the National Service Project Organization (four factories). This last holding company has yielded about $1.3 billion in profits between 1990 and 2011, according to general Nasr's comments in Al-Shorouk. NASPO includes companies working in manufacturing of canned foods and drinks; the bottled water and olive oil company; an Optronics company, and a chemical and agriculture products company.