Egypt: Industry Minister Recruits Army Body to Construct New Industrial Zones

In a sign of what may be called “a civil militarized economy”, the Egyptian Ministry of Industry assigns the army’s Engineering Authority to establish a new industrial zone in Alexandria.

“The Egyptian military takeover in 2013 and the subsequent rise of Abdel Fattah al-Sisi have transformed the army’s role in national economy, both in scope and scale, turning it into an autonomous actor that can reshape markets and influence government policy setting and investment strategies…,” says Yezid Sayigh, the senior fellow at the Carnegie Middle East Center in Beirut, in his study, titled, “Owners of the Republic”.

In this context, the official Facebook account of the Egyptian Ministry of Trade and Industry on Sunday published a post titled “Upon Sisi’s Directives” about a meeting between the Trade Minister and Vice President of the Armed Forces Engineering Authority to establish an industrial zone in the Alexandria Governorate’s Masharef project.

According to the post, Egyptian Minister of Trade and Industry Nevine Gamea discussed with the Vice President of the Armed Forces Engineering Authority of the  for the Northern Military Zone a plan to establish an industrial zone in the Masharef project in Alexandria Governorate, where Nevin Gamea said “there are presidential directives to expand the establishment of industrial zones and complexes in all governorates across the country in various productive sectors

According to Sayigh, the military delivers massive infrastructure projects, produces consumer goods ranging from food to household appliances, manufactures industrial chemicals and transport equipment, and imports basic commodities for civilian markets. It has expanded into new sectors as diverse as gold prospecting, steel production, and managing religious endowments and pilgrimage. In parallel, thousands of retired senior officers benefit from the military’s powerful political influence to occupy senior positions throughout the state’s civilian apparatus and public sector companies, complementing the formal military economy while benefiting themselves.

The ministry’s post emphasizes that the Armed Forces Engineering Authority (AFEA) plays a major role in establishment of industrial complexes “in record time and according to the latest international standards”.

The ministry said that in the context of implementing the directives of Abdel Fattah al-Sisi to establish an industrial zone in the Alexandria Governorate’s Masharef project, Mrs. Nevine Gamea held an extensive meeting with Major General Ahmed al-Azzazi, the AFEA Vice President for the Northern Region, at the headquarters of the Northern Zone Command in Alexandria

During the meeting the two officials reviewed the potentials and components of the industrial zone targeted within the second phase of the city, on an area of 1,000 acres.

Gamea was keen to highlight the important role played by the AFEA in establishment of these complexes “in record time according to the latest international standards”, which contributes to achieving comprehensive development plans targeted for the Egyptian industry.

The Trade minister stressed her ministry’s keenness to establish specialized industrial complexes to allow investors to obtain distinctive and equipped units and start immediate production, noting that these complexes significantly contribute to achieving integration between production and supply chains, providing a distinct domestic product and reducing imports.

For his part, Major General Ahmed Al-Azzazi, the Vice-President of the Armed Forces Engineering Authority for the Northern Region, confirmed that the new city of Masharef established in Amriya, Alexandria, would be an integrated city with a total area of ​​1,550 feddans (acres).

He pointed out that the first phase covers an area of ​​550 feddans, with a total capacity of 60,000 housing units and about 480 thousand commercial flat meters. It also provides alternative housing for slums with a total of 40 thousand housing units, and social housing, with a total of 20 thousand housing units, where the project covers the needs of different social and economic categories from average and below average levels.

Sayigh says the military boasts of superior managerial skills and technological advances and claims to act as a developmental spearhead, but its role comes at a high cost. It has replicated the rentierism of Egypt’s political economy, benefiting like its civilian counterparts (in both the public and private business sectors) from an environment in which legal permissibility, bureaucratic complexity, and discretionary powers allow considerable space for predation and corruption. At best, the military makes good engineers, but bad economists: the massive surge of megaprojects in public infrastructure and housing it has managed since 2013 is generating significant amounts of dead capital and stranded assets, diverting investment and resources from other economic sectors.