The Carnegie Middle East Center held the launch of its latest report, “Owners of the Republic: An Anatomy of Egypt’s Military Economy,” authored by Yezid Sayigh, senior fellow and director of the program on Civil-Military Relations in Arab States (CMRAS).
Since the popular uprising that forced then-president Hosni Mubarak from office in February 2011, military agencies have expanded their influence into virtually all sectors of the Egyptian economy, from delivering infrastructure projects to manufacturing consumer goods to producing steel. The Egyptian military today accounts for far less of the national economy than is commonly believed. However, its takeover of power in 2013 and the subsequent election of then-defense minister Abdel-Fattah al-Sisi as president have transformed its role in both scope and scale, turning it into an autonomous actor that can reshape markets and influence government policy and investment strategies.
Entrenchment of the military economy is detrimental to Egypt’s politics. The military economy must be reversed in most sectors, rationalized in select remaining sectors, and brought under unambiguous civilian control if Egypt is to resolve the chronic structural problems that impede its social and economic development, inhibit productivity and investment, subvert market dynamics, and distort private-sector growth. Nor can any Egyptian government exercise efficient economic management until informal officer networks in the civilian bureaucracy, public-sector companies, and local governments are disbanded.
The report dissects Egypt’s military-led economic model and offers thoughts on how external actors can engage with the country’s formal and informal networks. Many external actors have stood by while the Sisi administration institutionalizes the military’s newly vigorous role in the economy, arguing that Egypt is “too big to fail,” but this acquiescence is part of the problem, not the solution.
Yezid Sayigh is a senior fellow at the Carnegie Middle East Center and leads the program on civil-military relations in Arab states (CMRAS).
Mohanad Hage Ali is the director of communications and a fellow at the Carnegie Middle East Center.