Home International News Egypt's military generals defend their business
Issued : Wednesday, March 28, 2012 03:14 PM
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Egypt's military generals defend their business


CAIRO Egypt's ruling military council warned it will not allow civilians to encroach on the armed forces' extensive business enterprises in rare comments about its secretive economic interests in the face of increasing demands for public scrutiny.

The comments by Maj. Gen. Mahmoud Nasr, the deputy defense minister for financial affairs and member of the ruling military council, were published in the local media Wednesday.

They come amid an unprecedented national scrutiny of the huge military economic sector, following the ouster of the former President Hosni Mubarak in the face of a popular uprising last year.

The military has enjoyed a near-autonomous power in Egypt for the last 60 years, providing all the country's leaders since the 1952 military coup that brought generals to office. Over that time, it expanded its business ventures that granted it huge perks and privileges such as large government construction contracts and almost guaranteed well paid government jobs for its retired generals.

In recent years, it built a massive economic empire that is shrouded in secrecy and, according to some estimates, accounts anywhere between 15 and for 40 percent of the nation's GDP. The generals have never confirmed any figures.

The military council took over from President Hosni Mubarak after his ouster last year in the face of a popular uprising. It has promised to transfer power to a civilian administration by July. But leaders of the uprising have demanded civilian oversight into the military budget. The new parliament led by the Islamist Muslim Brotherhood, whose members have their own extensive and largely unaccounted-for network of businesses has promised to work toward realizing such a demand.

"We will fight for our projects and it is a battle we won't give up on. We have sweated for 30 years and we won't leave this for anyone to destroy," Nasr said according to comments published in the independent daily Al-Shorouk. "We will not allow anyone, whoever they may be, to come near the projects of the Armed Forces."

He spoke in a conference on economic reform attended by a select group of prominent local journalists and writers Tuesday.

The Egyptian military receives around $1 billion a year in U.S. aid, one of the largest recipients. But its budget is largely unknown. Under Mubarak and previous leaders, the budget was discussed in a secret panel in parliament, dominated by ruling party officials and loyalists.

Generals insist their economic interests have always been subject to public scrutiny, through the Central Auditing Organization, which keeps records of public spending and has also always been controlled by a regime loyalists.

Nasr defended the military's right to hold businesses, saying they were used in the national interest and were needed to finance the Defense Ministry. He said the ministry receives only about 4.2 percent of the national budget but needs around 15 percent.

He said the economic projects, which include anything from potable water, to electronics, food stuff and hotels, yield about $200 million a year in revenues, the state-owned Al-Akhbar reported.

He said the Armed Forces used its revenues to prop up the Egyptian economy in the post-uprising period, paying more than $ 2 billion to support the Central Bank, to pay salaries and support the police and various ministries.

The general said one of the Armed Forces holding companies, the National Service Project Organization, has yielded about $1.3 billion in profits between 1990 and 2011, according to his comments in Al-Shorouk.

NSPO includes four main companies working in manufacturing of canned foods and drinks; the bottled water and olive oil company; an Optronics company, and a chemical and agriculture products company.

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