Egypt’s Soft Coup d’Etat

by Charles Krakoff on June 20, 2012

in Business Models, Democracy and Governance, Politics, Social Issues

In retrospect, no one should be surprised at recent moves by the Egyptian armed forces to consolidate their power, in what some have called a soft coup d’état. Although the Supreme Council of the Armed Forces, which has ruled the country since Hosni Mubarak’s ouster, maintains that it will hand over power to a civilian government as planned by the end of June, it is hard to see how this might happen.

With both sides claiming victory in Sunday’s presidential election, the armed forces are poised to retain the real power no matter which of the two candidates is declared the winner when the results are announced on Thursday. Egypt’s Supreme Court, which is packed with Mubarak appointees, last week dissolved the elected parliament in which Islamists held the majority of seats, declaring it unconstitutional. This past Sunday, after the polls had closed, the armed forces issued a constitutional declaration giving it the right to veto many presidential decisions and to maintain control over its own budget. The decree also said the military would soon name a group of Egyptians to draft a new constitution, which will be subject to a public referendum within three months. Following ratification of the new constitution, an election will be held to replace the Islamist-dominated Parliament.

Even if Mohamed Morsi, the Muslim Brotherhood candidate, is elected President – unlikely, given the military’s control over the vote count – his powers will be severely circumscribed. But if the military were really clever it would declare Morsi the winner. With one of their own as President, the Muslim Brotherhood could be neutered, unwilling to take to the streets when for the first time it holds a position of power, however limited, and has the possibility of dominating the new Parliament as it did the one just dissolved.

I was always somewhat skeptical of the often-repeated claim that Egypt’s armed forces enjoyed substantial public support and respect. True, the military was less feared and reviled than the police and other Interior Ministry paramilitary forces, and it won some genuine support for its refusal to fire on protesters when they first occupied Tahrir Square in January of 2011, but it’s worth remembering that Hosni Mubarak was a military dictator, as were Anwar Sadat and Gamal Nasser before him, even though each of them swapped a uniform for a suit and tie.

The armed forces play a huge role in Egypt’s economy –15 percent to 40 percent of GDP, according to the Al Jazeera television network. They dominate many sectors, including food (olive oil, water, pasta), cement, and gasoline, and have a big presence in others, including car and TV assembly, household appliances, restaurants, real estate, and construction. Though omnipresent, the armed forces are also highly secretive, keeping military budgets classified.  Some of this activity goes back to the 1950s, when Nasser nationalized much of Egypt’s industry, but it picked up steam under Sadat and then Mubarak, due at least in part to a need to give retired military officer a way to make a living and to forestall any threat of a coup. Officers, forced to retire at age 50, could look forward to a comfortable second career as company executives, so had little incentive to rock the boat.

From the beginning, the big question mark hanging over the Egyptian revolution was whether the military would submit to civilian control, which would include transparency with respect to its budgets. As far back as November 2011, the Supreme Council mooted a constitutional declaration that would have kept the armed forces’ budget under their direct control. Popular demonstrations caused them to withdraw it, but Sunday’s declaration contains an identical provision. Seen in this light, the military’s actions over the past several months have been motivated principally by a desire to protect its assets. Running their own presidential candidate, dissolving Parliament, neutering the office of the President, and promising to appoint the Egyptians tasked with drafting a new constitution can all be seen as a way to keep the army’s business private.

Even if the Supreme Council does hand over power as promised to an elected government, the military will have made sure its position, its assets, and its revenues are all protected. Egypt may prove to be slightly better off than it was under Mubarak, but that will be small consolation to the thousands of Egyptians who risked their lives and put their hopes on display in Tahrir Square, and the millions who supported them.

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