Egypt Independent

Boycott them: Activists raise awareness about military’s economic empire



As part of a larger campaign to demand that the ruling Supreme Council of the Armed Forces relinquish power to civilians, activists have launched initiatives calling for the boycott of army-produced goods and services.

Several initiatives to compile lists of military-run enterprises sprang up across Facebook and the blogosphere, examples of which are a page on Facebook entitled Qate'oohom (boycott them) and a website.

Researchers estimate that the Egyptian military controls 25 to 40 percent of Egypt's economy. Military firms dominate key sectors, including food (olive oil, water, pasta), cement and gasoline, vehicle production (joint ventures with Jeep to produce Cherokees and Wranglers), and construction.

“Some may ask why we publish this information now. The answer is simple. These projects were undertaken using our money, and the information we are circulating is readily available on websites of military-run companies,” wrote activist and accountant Reda Issa in a comprehensive online list surveying activities of the military-owned National Service Project Organization.

“Most importantly, we publish this information because it is the right of the people to know.”

The armed forces' business enterprises are run by retired and in-service generals and colonels. They are granted privileges not enjoyed by any other firm in the public or private sectors; they receive various subsidies and tax exemptions and are not accountable to any government body.

Military-run firms benefit not only from having a ready supply of free labor, which comes in the form of conscripts, but also from other exceptional rights granted to them by law — most importantly the right to acquire public land. Although their control of vast tracts is justified on grounds of national defense, the army has used the land for commercial investments, mainly through the Armed Forces' Land Projects agency.

Making the military institution more transparent is one of the boycott’s goals. “It is the people’s right to monitor the performance of the various executive and legislative institutions,” wrote Issa.

While armed forces’ budget covers activities unrelated to national defense, military leaders outlaw any public discussion of their activities and treat the matter as classified information. Activists attribute the secrecy to military leaders’ desire to conceal unlawful profiteering practices and preserve the flow of enormous revenues.

Campaigners hope to challenge several myths about the military’s role in the economy. “People think the army runs businesses to achieve self-sufficiency; they think their activities help boost the economy and create needed job opportunities,” said Zeinab Abul-Magd*, a professor of history at the American University in Cairo. “But army businesses make profits that are way beyond self-sufficiency.”

Activists argue that the profit-driven activities of the Egyptian armed forces harm the military's defense capabilities. Political influence and loyalty precede qualification and merit in hiring and promotion. Experts believe that this has resulted in the deterioration of the military’s actual fighting capabilities. “It is not the function of the Ministry of Defense to run such businesses,” said activist and academic Noha al-Shoky.

“No ministry should be allowed to engage in profit-driven economic activities,” she added. Military holdings engender sizable revenues, which allow officers to build luxurious social clubs for themselves and enjoy extravagant retirement packages.

Moreover, Abul-Magd suggests that military business is actually bad for the economy. “Military business is neither public nor private. It is unaccountable and non-competitive. It turns investment away from the private sector.” The fact that military business relies largely on compulsory drafting means that “hundreds of thousands of youth in the most productive phase of their life are deployed in military firms as free forced labor, which is one way military-run businesses damage the Egyptian economy, by depriving it of the energy and qualifications of these youth for years,” Abul-Magd told Egypt Independent.

Workers in military-run factories, farms and service enterprises are also deprived of basic rights. “From scattered reports of strikes and incidents, we estimate that a lot of workers are on temporary contracts, do not receive meal allowances, and are not allowed to form unions. In several instances they have staged strikes and held sit-ins but faced military trials for revealing military secrets,” said Abul-Magd.

She thinks that the army fears significant economic losses if its workers protest low wages and bad working conditions, which has led it to repeatedly denounce the pursuit of “factional demands” and fight labor mobilization as unpatriotic.

“I know that our campaign will not affect the revenues of military enterprises for the obvious reason that their sales do not target the regular consumer,” Abul-Magd said when asked about what she hopes the boycott campaign will achieve.

“Military production is non-competitive because they forcibly sell their products to government bodies. For instance, some public university dorms are forced to buy the food products of the army. This is in addition to the patron-client relations army enterprises have with private sector clients. Also, some military-military cooperation agreements allow the military to sell its products to foreign armies. For instance, I accidently found a Safi water brochure online that says, ‘We proudly sell our water to US army.’ It only says that in English, no such information is provided in Arabic,” she explained.

Activist Malek Mostafa, however, thinks that some military goods reach consumers widely. “Queen pasta, Pyrosol insecticides and Safi oil are widely sold to regular consumers. Boycotting these products could help exert substantial pressure on the SCAF,” he said.

“We are aware that we will not be able to pose a real economic challenge to the military institution, but our goal is to make it public knowledge that the military controls such a large portion of the economy, and to make it clear that the military's interests are directly bound to the economic role it plays,” Shoky said.

“Military rule will not be toppled by boycott alone, but by a combination of things, the basis of which should be public awareness about the army's activities and corruption, and personal interests behind their desire to rule,” said Abul-Magd.

*Correction: This story previously misspelled Zeinab Abul-Magd's name.