Egypt's Military, Inc. : Planet Money One reason for the military's peaceful response: the unique role it plays in the Egyptian economy. The military owns "virtually every industry in the country," according to one expert.

Why Egypt's Military Cares About Home Appliances

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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.


And I'm Michele Norris.

As thousands of Egyptians continue to stage massive protests, the Egyptian military has been notably non-confrontational. Earlier in the week, it issued a statement affirming the rights of Egyptian citizens to gather peacefully. It even went so far as to protect protesters from attacks by pro-government forces.

Alex Blumberg, of our Planet Money team, says one of the reasons for the Egyptian military's peaceful response is the unique role it plays in the country's economy.

ALEX BLUMBERG: Before the protests began, regular civilians came into contact with the Egyptian military on a daily basis without necessarily knowing it. That's because a lot of the stuff Egyptians buy and use is made by the Egyptian military. The Egyptian military owns businesses in many different industries.

Mr. ROBERT SPRINGBORG (Professor, U.S. Naval Postgraduate School): We are talking about virtually every industry in the country.

BLUMBERG: Robert Springborg is a professor at the Naval Postgraduate School. He's written several books about Egypt. He's lived in Egypt. He's consulted with the Egyptian military, and he's an expert on the various businesses that they run.

Mr. SPRINGBORG: Car assembly; we're talking of clothing; we're talking of construction of roads, highways, bridges; we're talking of pots and pans; we're talking of kitchen appliances.

You know, if you buy an appliance, a good chance is that it's manufactured by the military. If you don't have natural gas piped into your house, and you have to have a gas bottle, the gas bottle will have been manufactured by the military.

Some of the foodstuffs that you will be eating will have been grown and/or processed by the military. So there's almost no area of the economy in which they are not active.

BLUMBERG: Springborg says the reasons for this arrangement go back to the '60s and '70s, when the Egyptian military was very large as a result of the wars with Israel. After the peace treaty with Israel was signed, there wasn't the need for such a large fighting force. But leaders worried about all those young men released from military service suddenly flooding the job market.

So the military transformed itself from a fighting force to a hiring force. And some of the businesses it got into were pretty far away from its traditional mission. For example, it had all these defense forces stationed on the coast

Mr. SPRINGBORG: The peace treaty with Israel comes and the question is, OK, what are we going to do with this military zone that is huge, and in the most desirable part of the country...

BLUMBERG: And has extremely beautiful beaches.

(Soundbite of laughter)

Mr. SPRINGBORG: And has extremely beautiful beaches and some of the greatest coral reefs in the world, and was absolutely crying out for touristic development.

So the military controlling it struck deals with private developers whereby the private developers would get access to the land, and the military - meaning officers within it - would obtain shares of the enterprises. So military officers are large shareholders of touristic development up and down the beaches of Egypt.

BLUMBERG: No one knows for sure how many resort hotels or other businesses in Egypt are run by the military. Estimates range all over the place, from 5 percent to 40 percent of the Egyptian economy. But Robert Springborg says whatever the number, officers in the Egyptian military are making a lot of money.

Mr. SPRINGBORG: Billions and billions and billions.

BLUMBERG: And these billions and billions would be threatened if the current protests devolved into full-on civil conflict. People in the middle of violent political chaos don't buy dishwashers - which the Egyptian military knows full well.

Mr. SPRINGBORG: The last thing it wants is instability or war. The military wants stability above all. It's not able to operate the equipment it has. You know, it's not focused on war fighting; it's focused on consumption.

BLUMBERG: One of the few glimpses we have into the role of the Egyptian military in the economy comes via a 2008 diplomatic cable made public by WikiLeaks.

In the cable, there's discussion of the various businesses that the military is involved in, and about how competition from private enterprise is forcing military-run businesses to improve their quality.

But then, discussion moves to how the military might react if Egypt's current president, Hosni Mubarak, leaves power. And here, the words of that 2008 cable appear a bit prophetic.

The military would almost certainly go along with a successor, the cable's author writes, if that successor didn't interfere in the military's business arrangements. But, the cable goes on, quote: In a messier succession scenario, it becomes more difficult to predict the military's actions.

For NPR News, I'm Alex Blumberg.

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