Analysis |

Egypt's Privileged Military Elites Feel Little Pain During the Coronavirus Crisis

The army has long managed an extensive economic empire, guaranteeing employment standards unknown to everyday Egyptians. With the pandemic, the gap is only widening

Zvi Bar'el
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A member of a medical team is seen beside a banner for Egyptian President Abdel Fattah el-Sisi, as he sprays disinfectant amid a COVID-19 outbreak in Cairo, Egypt, on March 22, 2020.
A member of a medical team is seen beside a banner for Egyptian President Abdel Fattah el-Sisi, as he sprays disinfectant amid a COVID-19 outbreak in Cairo, Egypt, on March 22, 2020.Credit: Mohamed Abd El Ghany/ REUTERS
Zvi Bar'el

The Egyptian Defense Ministry opened last weekend registration to military colleges for university graduates seeking to specialize in military and civilian professions and work for the army. This year, applicants are being allowed to submit their applications online, which the Defense Ministry hopes will ease the expected heavy load in handling the requests.

The acceptance criteria are tough and limit applicants to Egyptian citizens who are no older than 25 whose parents and grandparents were born in Egypt.

Alongside academic credentials, the physical requirements are no less strict. Other than applicants to the air force college, where the requirement is a minimum height of 1.58 meters (5'2''), the general height requirement is 1.7 meters. They also must produce a medical certification that they meet Defense Ministry guidelines.

Egyptian army members complete a new area at the Ain Shams field hospital prepared to receive COVID-19 patients in Cairo, Egypt June 16, 2020.
Egyptian army members complete a new area at the Ain Shams field hospital prepared to receive COVID-19 patients in Cairo, Egypt June 16, 2020.Credit: AMR ABDALLAH DALSH/ REUTERS

But the most unusual requirement is the ability to jump without hesitating off a 7.5 meter-high diving board into a swimming pool within 3 seconds of being ordered to jump. Successful candidates must also pass psychological exams and excel in English and the use of computers.

The tough standards are designed not only to prepare the next generation of commander-experts for modern battle conditions and the use of sophisticated modern weaponry, but to turn the graduates into a professional elite that can serve the Defense Ministry and the army in all sectors of the economy.

According to official estimates, the various branches of the Defense Ministry account for at least 2 to 3 percent of Egypt’s gross domestic product, but other estimates attribute 30 to 50 percent of all of the goods and services produced by the economy to the ministry.

In the absence of oversight of the army’s civilian activities or any transparent records, it appears that the truth is somewhere in between. But even if the real figure is just 2 percent, that would mean that the army is responsible for an annual civilian output of more than $6 billion.

The Egyptian army is a multifaceted conglomerate whose activities include paving roads and building residential neighborhoods, the sale of baby food, imports of electronics and the purchase of Israeli natural gas. It’s an economic entity that has been given priority in government bids, and in some cases even the exclusive right to bid.

Its revenues don’t go into the state treasury. The ministry’s civilian sector is exempt from paying taxes and only a small group of people have information about its investments. Details on its own reserves are also secret. The revenues from its civilian operations are of course in addition to the defense budget, which parliament approves unchallenged.

During a period when millions of Egyptians are being made jobless by the coronavirus pandemic, the staff at the Defense Ministry enjoy maximum job protection. They have excellent employment benefits that include medical care at military hospitals and free higher education, and their salaries, which are much higher than elsewhere in the economy, are being maintained in full.

The sanctity of the status of the army and the network of Defense Ministry subsidiaries is not subject to public scrutiny because by law, public criticism of the army is prohibited. At most, Egyptians are exposed to news reports with criticism in mild tones that military firms are taking the place of private companies and, in the process, are impeding the development of the country’s private sector. More blatant criticism does appear, however, in the periodic reports of international financial institutions such as the International Monetary Fund, the World Bank or credit-rating agencies.

Until the outbreak of the coronavirus pandemic, Egypt was attracting widespread praise for the management of its economy, over the reforms that President Abdel-Fattah Sissi had promoted and for its economic growth, which was 5.9 percent in 2019.

A mask-clad camel guide stands near the Great Pyramid of Khufu (Cheops) at the Giza Pyramids necropolis on the southwestern outskirts of the capital Cairo, on July 1, 2020.
A mask-clad camel guide stands near the Great Pyramid of Khufu (Cheops) at the Giza Pyramids necropolis on the southwestern outskirts of the capital Cairo, on July 1, 2020.Credit: AFP

But the reports also made note of the damage being caused to the private sector from the army’s control of civilian activity. Also noted was Egyptian that bureaucracy is still burdensome, despite legislation and presidential directives to improve it, and that financial transparency is still far lower than Western standards.

On balance, however, Egypt has been attracting high marks and growing confidence. The IMF provided the country a $2.8 billion loan in May, as assistance to combat COVID-19. This month the IMF also approved another $5.2 billion loan for the country, which the monetary fund said was “to help the authorities preserve the achievements made over the past four years.”

But in addition to this show of confidence, there is a warning light flashing. The IMF’s representative in Egypt, Uma Ramakrishnan, made it clear in an interview that appeared on the IMF website that economic growth in Egypt could be substantially lower this year than last. She also disclosed that about $16 billion was removed from the country in March and April.

The unanticipated expenditures necessitated by the coronavirus pandemic, the need to increase funding of medical services and for social welfare benefits and direct assistance to needy Egyptians has eaten into Egypt’s foreign currency reserves, which have dropped from a comfortable $37 billion to a dangerous $31 billion.

Tourism revenues, which account for nearly 5 per cent of the country’s GDP, have nearly dried up, and the remittances of Egyptians working in the Gulf states are expected to plummet from their usual $27 billion per year as a result of layoffs of foreign workers there.

Many of these workers have already begun returning to Egypt, where they join the growing numbers of other unemployed Egyptians. Egypt’s cafés have returned to nearly normal operations, so at least they have a place to while away their days of unemployment. And the army will continue to march on a full stomach.

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