Synopsis: As Egypt maintains its position as MENA’s strongest military power, President al-Sisi’s regime grapples with a complex economic reality. While boasting impressive Egyptian GDP growth and decreased Egyptian unemployment, the nation’s increasing military-economic entanglement raises concerns about sustainable development. This analysis explores how Egypt’s armed forces shape both regional influence and domestic economic structures, revealing the delicate balance between military strength and economic stability
Egypt’s Military Dominance in MENA
A population of 106.6 million and a first ranking in MENA (Middle East and North Africa) for military strength according to the Global Fire Power. Although in the Middle East, Egypt is ranked third for their military capacities.
For decades, Egypt has successfully danced elegantly in bolstering its military capacities, maintaining regional significance and domestic political authority. Unfortunately, their successes economically have not been as forthright.
The Economic Challenges Facing Egypt
The Egyptian economy has displayed great resilience by making strategic manoeuvres with domestic policies and receiving aid from various international bodies like the IMF, EU or their neighbouring states in the Gulf areas specifically from Saudi Arabia and the UAE. In order for one to understand Egypt’s military and economic influence in MENA, they must understand the relationship and political and economic structures of the state.
The Power Elite and Economic Influence
In Egypt the control of power is quite centralised specifically to the Egyptian power elite population. One ‘qualifies’ as elite by their economic fortitude or their affiliation to the military with high ranking. The strategic economic objectives are created following a top-down approach, thus, the power elite are perfectly positioned to support political authorities and influence them to strategize in a manner that is suited to them. For example the Egyptian power elite is able to supervise/ influence investment into specific sectors to generate revenues, jobs or particular benefits. The clear division in needs being met, negatively emphasises the equality disparity for citizens.
Al-Sisi’s Economic Legacy: Growth or Instability?
The economic status of Egypt is in a very precarious position currently. Since al-Sisi’s election in 2014, Egypt’s economic performance has been relatively stable, with annual growth averaging 4.3%- which is 2.8% higher than the MENA average- unemployment reduced from 13.1% (2014) to 9.3% (2021), and increased Egyptian GDP growth during the pandemic. However, the economic structures of the state may negatively hinder long term, sustainable economic growth and development. Egypt’s economic gains are temporary, risking long-term economic prospects. Other structural issues include low productivity, inequality, informal employment and a suppressed private sector. Overall, Egypt’s reliance on funding for financial aid and investments reflects a reduction in regional influence.
The Military’s Role in Egypt’s Economy
On the side of the military (Egyptian Armed Forces (EAF)), for decades Egypt has been ruled by the Egyptian Armed Forces. This has been a repetitive pattern since the abolishment of the monarchy in 1952/53. This means that there is a strongly intertwined relationship between the Presidency and the Egyptian Armed Forces; through it Al-Sisi has successfully held firmly onto his command of the state through a transactional dynamic. As described, the elite has influence over important strategic and governance decisions of the state, and that includes the EAF. The EAF is heavily involved in economic activities with its representatives who sit on policy making bodies in several vital sectors such as cement, steel, extractives or companies that engage in civilian goods production.
The EAF’s Expanding Economic and Military Reach
Under Al-Sisi’s leadership, the military has strategically developed and enhanced its arsenal. The EAF has diversified its arms supply with notable acquisitions from France and Russia as reflected in being the third largest arms importer globally and second in MENA after Saudi Arabia in 2015-2019. The exorbitant funding that is directed to the military is fueled by their control of vast land and mega national Egyptian military projects in housing, infrastructure, healthcare, food security, roads and seaports for instance. Through these Egyptian military projects, independent revenue for prioritised military needs are purchased.
