Business
The Military Means Big Business in Egypt
In a Feb. 6 interview with the business newspaper al Mal (Money), Major General Taher Abdullah, director of the Engineering Authority of the Armed Forces, detailed the army’s UAE-funded activities. He suggested that the UAE asked the military to handle the aid portfolio. Abdullah said the military was building 50,000 housing units, 78 medical clinics, and 25 warehouses. “The state gave to the army the task of making these projects, because we have a good reputation in accuracy and timeliness, and we make them at 60 percent of the cost of the budget,” he said. “Besides that, citizens trust us.”
The military uses private subcontractors, but without a published budget, analysts cannot figure out who they are. Even when a civilian company wins a contract, the military machine may be involved. Care Construction and Maintenance received a 43 million-pound contract to build low-income housing. Managing Director Yousry Fadel says this is a boon for a company with revenue of 30 million pounds. Two members of Care’s board, one of whom is a shareholder, are listed as ex-generals.
Businessmen have publicly said the dire situation makes the army’s growing role in the economy understandable. According to Mideast specialist Robert Springborg of the Naval Postgraduate School, the cabinet announced late last year that in cases of emergency the government could award contracts without competitive bids. That makes it easier for the army to win government contracts.
El Enein says that after Egypt recovers, the army shouldn’t take advantage of its position: “I assure you, this is unacceptable that the military gets something because of advantages more than the normal investors.” Retired General Sameh Seif Elyazal, chairman of the Al-Gomhouria Centre for Political and Security Studies, says he has already spoken with al-Seesi about preferential treatment for the military and retired generals under his possible presidency. “He has no intentions whatsoever to do that, I promise you that,” Elyazal says. “That’s not in his mind at all.”
Copyright Bloomberg Businessweek 2014
