Egypt Military May Block Free Economy

The Egyptian military defends the country, but it also runs day care centers and beach resorts. Its divisions make television sets, jeeps, washing machines, wooden furniture and olive oil, as well as bottled water under a brand reportedly named after a general’s daughter, Safi.

From this vast web of businesses, the military pays no taxes, employs conscripted labor, buys public land on favorable terms and discloses nothing to Parliament or the public.

Since the ouster last week of President Hosni Mubarak, of course, the military also runs the government. And some scholars, economists and business groups say it has already begun taking steps to protect the privileges of its gated economy, discouraging changes that some argue are crucial if Egypt is to emerge as a more stable, prosperous country.

“Protecting its businesses from scrutiny and accountability is a red line the military will draw,” said Robert Springborg, an expert on Egypt’s military at the Naval Postgraduate School. “And that means there can be no meaningful civilian oversight.”

As head of the Supreme Council of the Armed Forces, Field Marshal Mohamed Hussein Tantawi is the de facto ruler of Egypt. Tantawi has been a strong advocate of government control of prices and production and has consistently opposed steps to open up the economy, according to diplomatic cables made public by WikiLeaks.

Already there are signs that the military is purging from the cabinet and ruling party advocates of market-oriented economic changes, like selling off state-owned companies and reducing barriers to trade.

Tantawi and other senior officers were all commissioned before Mr. Sadat switched Egypt’s allegiance to the West in 1979. They trained in the former Soviet Union, where sprawling business empires under military control were not uncommon.

“In the cabinet, where he still wields significant influence, Tantawi has opposed both economic and political reforms that he perceives as eroding central government power,” the American ambassador at the time, Francis Ricciardone Jr., wrote in one 2008 cable released by WikiLeaks.

Complete article via New York Times

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