Military role in economy to diminish within 2-3 years: Egypt PM

Ahram Online , Tuesday 25 Oct 2016

The army’s role in the economy will diminish within two to three years, Egypt’s PM Sherif Ismail said on Monday.

In an exclusive interview with Egyptian privately-owned channel CBC’s Lamees El-Hadidi, Ismail said that the army maintains a role in managing national projects, stressing that the actual work is usually executed by private sector companies.

“The army executes some projects, but the government benefits from the armed forces’ role in administering projects,” Ismail said.

El-Hadidi said that her questions came from private companies who feel unfair competition, due to the army’s role in projects, to which Ismail replied that most projects were conducted by private firms.

“Isn’t the army’s sector a part of the state? And isn’t the government a part of the state? Today, there are certain projects that the state should be involved in along with the private sector. A state’s role is needed in some economic projects to ensure a balance and secure the market,” he added.

He said this does not mean that he’s telling the private sector not to bid for, or execute projects.

“But in this stage the state should still have a role. The armed forces are a part of the state and we have to deal with it this way,” Ismail said.

“We benefit from the army at certain times when we have a problem, and this is a normal procedure because they are organised and they have the capabilities to help us,” he said.

“This is normal and we don’t find fault with it because we know the state’s apparatus has had problems, due to the accumulation of crises in recent years,” he said, defending the military’s role.

CBC’s El-Hadidi provided the example of baby formula, and how the army interfered to counter the scarcity.

Ismail’s comments come nearly a month after the army announced it would intervene to solve the baby formula crisis—saying it would provide milk formula at a lower-than-market price—days after dozens of parents protested shortages and price hikes of the subsidized milk powder.

The move sparked a debate on whether the army had become overly involved in the economy at the cost of its main duty to secure the country.

In a speech later that month, Egypt’s President Abdel-Fattah El-Sisi defended in the army’s role, which also included providing food essentials in the prior period to counter price hikes for low income citizens, suggesting that the action was a choice made by the army to help him build up the country.

“We were able to provide it and the army moved as well. This doesn’t mean the state didn’t interfere, we interfered and the stock provided by the army was added to the market without them making a profit,” he insisted.

Describing the relationship, Ismail said that the army acts as a “parallel arm along with the state apparatus.”

El-Hadidi also raised a complaint that the number of appointed ministers and governors “coming from a military background” is increasing.

In September, former army general Mohamed Ali El-Sheikh was appointed as the new minister of supply, replacing Khaled Hanafy, who decided to resign from office after a fact-finding parliamentary committee accused him of corruption and graft.

“I meet a huge number of civilians for certain posts, of whom the majority decline to undertake the post. I don’t want to say that they don’t want to handle responsibility but 90 percent of them retract,” Ismail said.

Ismail observed that Egypt currently faces a “difficult stage,” but that his government has a readiness to handle responsibility for its decisions. El-Hadidi asked whether the government would still accept responsibility if its decisions had negative outcomes, which could lead to a “sacrifice of Ismail’s cabinet.”

“We care only for the interests of Egypt. If this means that we would pay the price as a government, then so be it,” Ismail concluded.

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