Seven weeks in, the Middle East continues to practice the art of
neutrality over the war in Ukraine, unwilling to openly take sides in a
conflict many do not consider to be their war.
اضافة اعلان
Yet the war is still affecting countries in the
region, particularly those reliant on relations with or imports from Russia.
None more so than Egypt, the Middle East’s biggest country, which is facing a
combined food security and economic crisis, exacerbated by the war.
Egypt has suffered two painful blows from the
conflict. The country is the world’s largest importer of wheat, getting 80
percent of its supply from Russia and Ukraine, and is preparing for possible
severe disruption. Alongside that uncertainty are prices; Egypt provides
subsidized bread for approximately two thirds of its population, or around 70
million people. That is an enormous expenditure.
At the same time, the country’s tourism, a major
part of its economy already hit by the global pandemic, is facing the
possibility of losing visitors from Russia and Ukraine – its two largest
tourism markets. By one estimate, tourists from the two countries represent 40
percent of all visitors to the country’s beaches.
In the short-term, Egypt, with considerable pain to ordinary Egyptians, will probably weather these economic trials. But the longer-term impact of the war in Ukraine will be to entrench the central role Egypt’s army plays in the national economy. A change a decade in the making will accelerate because of a war far from home.
Taken together, the possibility of both these
stressors has pushed the Egyptian government to act, raising interest rates and
devaluing the Egyptian pound – meaning that the tens of millions of Egyptians
with savings in the country’s banks saw their money slashed by 15 percent
overnight.
In addition, Cairo is seeking aid and investments
from Arab countries in the Gulf and the International Monetary Fund.
In the short-term, Egypt, with considerable pain to
ordinary Egyptians, will probably weather these economic trials. But the
longer-term impact of the war in Ukraine will be to entrench the central role
Egypt’s army plays in the national economy. A change a decade in the making
will accelerate because of a war far from home.
The Egyptian military has always played a part in
the economy, but under Hosni Mubarak – himself once part of the air force – the
role was relatively limited. After the military took power in 2013, that
involvement has steadily expanded. Abdel Fattah El-Sisi, a former officer,
inherited a weak state, one hollowed-out by decades of one-person rule and the
chaotic post-revolutionary period.
In response, he has leaned on the military of which
he was part, using them to deliver services and manage projects that should
have been handled by other parts of the government. The end result – after
nearly a decade of this – has been to entrench the power of the military to
unprecedented levels.
Today, the army controls an estimated 25 percent of
all government spending, through a combination of managing public goods like
housing, and services like food. Military companies are involved in the
manufacture of food and electronics; in the management of ports and industrial
zones; in the supply of pharmaceuticals; and act as gate-keepers for decisions
on planning and telecommunications. There are few parts of the economy that the
army does not now have a hand in.
This inflated role for the army weakens the state,
its institutions and the private sector. Private companies, unable to compete
with the army, are crowded out of running, for example, major infrastructure
projects. Without that experience inside the country, they are unable to
compete with their peers abroad. Instead of developing government institutional
knowledge of running industries, ministries play a supporting role to the
secretive army, which further sidelines expertise that ought to properly exist
within government.
The current crisis will only speed up this process.
A rapid increase in food prices caused by the Ukraine war should make Egypt
recognize that it needs to prioritize its own food security. But it is how this
is done which will entrench the army’s power.
Under Sisi, the Egyptian government has tended to
see the army as the answer to every problem, and this latest crisis is no
exception. The army is preparing, distributing and selling boxes of basic foods
– rice, pasta, meat – around the country, for – by presidential decree – half
the going rate. That means the Egyptian state is subsidizing millions of meals,
in addition to subsidizing bread.
But that is a temporary measure; bigger changes will
follow. One option would be to increase the amount of wheat grown domestically,
something the Cabinet said it would do at the start of March. The farms that
plant these crops will almost certainly be run by the army. Another option
would be for the army to take on more of a role in allocation and distribution,
another area where inefficiencies are expensive. Again, such an outsize role
for the army only entrenches its privileges, and means other companies have no
way of competing.
For the moment, creating an outsized role for the
army works for both the institution and the presidency. But Egypt functions
best when the various parts of the state and the private sector balance out
each other’s power; tilting too much toward one group is dangerous in the
long-run. In an unexpected way, Vladimir Putin’s war abroad is actually helping
the Egyptian army thrive at home.
The
writer is currently writing a book on the Middle East and is a frequent
commentator on international TV news networks. He has worked for news outlets
such as The Guardian and the BBC, and reported on the Middle East, Eastern
Europe, Asia and Africa.
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