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Monday, January 02, 2012

Corrupt Egyptian army sells pasta and rents wedding halls

Jadaliyya last week had an utterly fascinating article about the profit-making enterprises of the Egyptian army, and the corruption that comes from it.

Should the production of pasta, mineral water, butane gas cylinders, and gas station services qualify as classified military secrets? And does discussing these enterprises in public pass as a crime of high treason? The leaders of the Egyptian Armed Forces believe the answer is “yes.”

Until this very day, the role of the military establishment in the economy remains one of the major taboos in Egyptian politics. Over the past thirty years, the army has insisted on concealing information about its enormous interests in the economy and thereby keeping them out of reach of public transparency and accountability. The Egyptian Armed Forces owns a massive segment of Egypt’s economy—twenty-five to forty percent, according to some estimates. In charge of managing these enterprises are the army’s generals and colonels, notwithstanding the fact that they lack the relevant experience, training, or qualifications for this task.

The military’s economic interests encompass a diverse range of revenue-generating activities, including the selling and buying of real estate on behalf of the government, domestic cleaning services, running cafeterias, managing gas stations, farming livestock, producing food products, and manufacturing plastic table covers. All this information is readily available on the websites of relevant companies and factories, which publicly and proudly disclose that they belong to the army. Yet for some reason the military establishment insists on outlawing any public mention of these activities.

Why is the budget of the Egyptian army above public transparency and accountability? Is it because it is exclusively concerned with national defense and thus must remain classified? Not really.

....The part of the military’s budget that is kept secret has little to do with national defense and more with the huge profits the army accrues from the production of non-military goods and services. In other words, these budgetary items have to do with: how many bags of pasta and bottled water were sold last month; how much money “Wataniyya”, the military’s gas station, generated last year; how many houses “Queen”, the military’s cleaning services company, attended to this month and how many nurseries the same company is in charge of running; how many truckloads of fresh beef have the military’s high-tech slaughterhouses in East Uwaynat sold this year; how many cabins they managed to rent out in the north coast Sidi Crir resort last summer; and how many apartments they sold in Kuliyyat al-Banat residential buildings and at what price? All these items together make up the “classified” part of the army’s budget, which the military establishment insistently keeps off the public record and out of the reach of parliamentary and public deliberation as well as oversight. Attempting to discuss the army’s so-called classified activities in public could result in military prosecution and trial, because these are, supposedly, “national security secrets” that Egypt’s rivals—like Israel—must not find out about.

...Of greater concern is how many of the army’s leaders have entered into networks of corruption and unlawful partnerships with private capital.

...As the managers of a state-owned economic empire built on corruption and oppression of working classes, military leaders have become decisively complicit in repressing labor and violating their rights.

Being an army general, a member of the National Democratic Party (NDP), and a Member of Parliament for ten years almost guarantees that one is part of a corruption network. General Sayed Mishaal perfectly fits this profile. Before becoming Minister of Military Production, Mishaal was a director of the National Service Projects Organization (NSPO). During that time, he was also a member of the NDP, and as an MP for Cairo’s district of Helwan for three consecutive terms from 2000 to 2011. He used to proudly brag about managing to name the military-produced bottled mineral water Safi after his daughter. Mishaal was removed from his post after the revolution as a result of referrals to the General Prosecutor accusing him of wasteful spending of the ministry’s funds. Mishaal’s victory in parliamentary elections in Helwan was made easy by the fact that he could mobilize the votes of tens of thousands of individuals who work at “Military Factory 99,” located in the district. Mishaal used to show up at the factory to celebrate and make merry with the workers during election campaign events, only to disappear and hardly return after his victory.

The name “Military Factory 99” has also become associated with the repression of workers, especially that labor-employer relations in the factory are not subject to traditional union or government regulations. In August of 2010, Factory 99’s workers broke out into intense protests after one of their colleagues died as a result of an explosion. The director of the factory, who was also a general, had brought in a number of gas cylinders in order to test them out, even though the workers were not trained to use them. When several cylinders exploded, he told the workers that it would not matter if one or two of them died. Then, when one of them did in fact die, they stormed his office, gave him a beating, and then staged a sit-in. Subsequently, the workers’ leaders were tried in military courts for charges of revealing “war secrets” on account that they spoke publicly about butane gas cylinders.
There's lots more in this well-researched article.

One of the commenters pointed to this article in Al Masry al Youm that alleges that army-owned chemical companies are creating an environmental disaster, killing animals and destroying nearby farms.

The army is the most stable institution in Egypt - and it is rotten to the core. Even without the prospect of the Islamist takeover, this does not bode well for the country.

(h/t Arthur)