Tuesday, February 7, 2012

The Egyptian Army’s Invisible Hand

CAIRO -- Mahmoud Yussif runs a mobile phone shop here in the Egyptian capital. He fields customers in rapid-fire succession explaining his products thoroughly, answering questions quickly and efficiently, and locating in seconds a cellphone or anything else in his small but crowded shop.

Started five years ago, it’s a prosperous business but a very small one. Yet even a tiny store like Yussif’s isn’t beyond from the long business arm of Egypt’s army. The owner of the space that he rents is a general, who has also his creditor, and between those two roles takes a big chunk of the store’s profits.

“I don’t own the shop itself,” Yussif told The Media Line as the afternoon rush hour frenzy of customers comes to an end. “The owner of the space, who really just gave me a loan, takes 20% of my earnings every month.”

The unnamed general dabbles in real estate and lending as a private sideline. But it illustrates the extent to which Egypt’s army is engaged in business as the owner and operator of a vast empire of factories, tourist resorts and real estate developments.

No one knows the extent of the Egyptian military’s economic holdings because successive authoritarian regimes have made sure it was kept secret. But since the military came to power in Egypt as the Supreme Council of the Armed Forces (SCAF) almost a year ago after a popular uprising ousted President Husni Mubarak, the armed forces role in business has come under increased scrutiny. Read More