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Egypt’s Armed Forces Cement Economic Power

Military Business Expansion Impedes Structural Reforms

SWP Comment 2017/C 05, 23.02.2017, 7 Pages Research Areas

Since toppling President Mohamed Morsi in July 2013, the Egyptian military has successively expanded its civil economic activities. This development has attracted growing criticism, above all in the private sector. The government responded in October 2016 by announcing that the armed forces would diminish their economic role over the coming two to three years. But strong market positions, established privileges and historically ingrained structures make it unlikely that this will actually occur. Instead the economic activities of the armed forces, for example in the food, energy and construction sectors, will continue to shape the Egyptian economy. Realisation of the structural reforms Cairo agreed with the IMF in November 2016 is more than doubtful under these circumstances. Not least on those grounds, international donors should urge Egypt’s leaders to curb the army’s privileges.