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A Strange Coup
Egyptian Military: a State Within a State
by BARRY LANDO

In ousting Egypt’s first freely elected president, Mohammed Morsi, the Egyptian military have certainly not acted to preserve democracy. They’ve never shown much interest in that. They’re determined to put a break on the mounting political and economic chaos that is ripping the country apart.  That turbulence was threatening not just the survival of Egypt, but, more to the point, it was menacing the vast state within a state that Egypt’s military presides over.

Of course, the Egyptian Army is not monolithic. Its lower ranks are very much of the people: filled with hundreds of thousands of conscripts, drawn from the most humble ranks of society—and has a strong identity with the Egyptian people.

It has traditionally been the most important means of socializing and educating the lower classes, in theory, inculcating them with a sense of pride and patriotism.

Indeed the 1971 Constitution says that the Egyptian Army shall “belong to the people”

Thus, as I have previously blogged, in 1977 when the army was called in to quell riots after President Sadat announced cuts in basic food subsidies, the generals refused to intervene unless the subsidies were reestablished. Sadat restored the subsidies.

The top ranks of the army, however, have other concerns—beginning with personal survival. They certainly will never forget the lurid spectacle of Iranian generals being publicly executed in the aftermath of Khomeini’s revolution in Iran. Iran also demonstrated that a radical revolution also means a radically transformed military. (Egypt’s generals have a constant reminder of that lesson nearby:  The Shah is buried in a Cairo mosque.).

But since the fall of Mubarak, the military have feared not just a takeover by radical Muslims. There is also the fact that real civilian rule could spell an end to the system of massive military corruption and patronage that has gone on for decades in Egypt, a system that has given the military unimpeded control over an estimated 40% of the Egyptian economy–“a state within a state” as a well-informed Egyptian friend of mine puts it.

For years, Egypt’s top military ranks have enjoyed a pampered existence in sprawling developments such as Cairo’s Nasr City, where officers are housed in spacious, subsidized condominiums. They enjoy other amenities the average Egyptian can only dream of, such as nurseries, bonuses, new cars, schools and military consumer cooperatives featuring domestic and imported products at discount prices. In other areas, top officers are able to buy luxurious apartments on generous credit for 10 percent of what those apartments are actually worth.

But we’re not just talking about sensational official perks. Many of Egypt’s brass are notoriously corrupt. Vast swathes of military land, for instance, were sold by the generals to finance some major urban developments near Cairo — with little if any accounting.

Other choice military property ran on the Nile Delta and Red Sea coast boasted idyllic beaches, and exquisite coral reefs. In return for turning the land over to private developers, military officers became key shareholders in a slew of gleaming new tourist developments.

The generals also preside over 16 enormous factories that turn out not just weapons, but an array of domestic products from dishwashers to heaters, clothing, doors, stationary pharmaceutical products, and microscopes. Most of these products are sold to military personnel through discount military stores, but large amount are also sold commercially.

The military also builds highways, housing developments, hotels, power lines, sewers, bridges, schools, telephone exchanges, often in murky arrangements with civilian companies.

The military are also Egypt’s largest farmers, running a vast network of dairy farms, milk processing facilities, cattle feed lots, poultry farms, fish farms. They’ve plenty left from their huge output to sell to civilians through a sprawling distribution network.

The justification for all this non-military activity is that the military are just naturally more efficient that civilians. Hard not to be “more efficient” when you are able to employ thousands of poorly paid military recruits for labor.

Many civilian businessmen complain that competing with the military is like trying to compete with the Mafia. And upon retiring, top military officers are often rewarded with plum positions running everything from factories and industries to charities.

Whatever the number, Robert Springborg, who has written extensively on Egypt, says officers in the Egyptian military are making “billions and billions and billions” of dollars.”

But there’s no way to know how efficient or inefficient the military are, nor how much money their vast enterprises make, nor how many millions or billions get skimmed off since the military’s operations are off the nation’s books. No real published accountings.

No oversight.  Even Mohammed Morsi when he became president, was obliged to agree to the military’s demand that there would be no civilian oversight of the military budget.

Of course none of the above is a surprise to U.S. officials who dole out some 1.3 billion dollars a year in military aid to the Egyptian Army, and hope that sum and the neat weapons it provides will keep the army in line. [One of the most detailed studies of the military's non-military activities was done by a U.S. military researcher at Fort Leavenworth.]

The U.S. also has a 1.3 billion dollar carrot dangling in front of the Egyptian Army. That annual American military aid to Egypt has allowed the Egyptian officers to get their hands on some of the most sophisticated of modern weapons—as we’ve seen over the past couple of years in downtown Cairo.

The generals realize there is no way the U.S. will continue paying for those goodies if a new regime more hostile to Israel takes power in Cairo.

A perceptive look into all this came via a 2008 U.S.diplomatic cable released by WikiLeaks.The writer in the U.S. Embassy in Cairo ticked off the various businesses the military was involved in, and considered how the military might react if Egypt’s then president, Hosni Mubarak, were to lose power.

The military would almost certainly go along with a successor, the cable’s author wrote, as long as that successor didn’t interfere in the military’s business arrangements.

But, the cable continued, “in a messier succession scenario, it becomes more difficult to predict the military’s actions.”

No scenario could be “messier” than the mounting chaos in Egypt over the past few months.

The military acted.

BARRY LANDO is a former producer for 60 Minutes who now lives in Paris. He can be reached at: barrylando@gmail.com or through his website.