The inauguration of Egyptian President Abdel Fattah el-Sisi will take place on July 7-8. Professor Vladimir Isayev of the MSU Institute of Asian and African Studies has described the role of the army in the life and the economy of Egypt and has given forecasts for socio-economic tendencies.
The professor notes that “Egypt has never been a rich country. It has being doing quite commendably among African and Asian states, excluding major oil exporters and new industrial states, in terms of gross domestic product, but it has always been among countries on the edge of squalor and poverty and the situation remains the same, sadly.” Vladimir Isayev emphasized the key role of the army in the economic and the political life of the country. “The situation now is changing in the following aspect: the army is keeping its positions in the economy, it is not a secret. It was in control of about 30% of the gross domestic product of Egypt before the revolution. Nothing has changed much. The army is the country's largest entrepreneur, with its own plants, factories, oil rigs, tourism centers etc. Income from business serves military interests. It has been that way. I doubt that the percentage has increased much, although, considering that the new president is part of the military, he should somehow increase military expenditures. There are several reasons for this. First, the president needs to show that his emergence makes life better. The army is not very sensitive to this, but the problem is that the army is the only organized and armed force in Egypt, as in many other developing countries, and its opinion should be taken into account. Secondly, there are resistance centers of the so-called “Islamists” that come from the Sinai Peninsula, the Gaza Strip or from the Lebanese border. The situation is serious, the army needs strengthening and there is nothing you can do about it. And the costs will grow, I have no doubts about it.” The professor assumes that the important role of the army in the country would most likely have a positive effect on the pace of economic revival, the guarantee of stability and attraction of foreign investments: “Egypt is in a much better situation than many other developing states in the following way: you have a clear understanding that investors do not visit places with an unstable economic situation. Egypt has a traditional government run by the military and the military have always enforced stability. Of course investors are expecting certain stabilization measures from the president in the economy.”
This stabilization in Egypt may have a direct impact on the Russian economy: “We need to refer to the current situation that our country is in, which is being hit by sanctions in the energy sector as well. The European Union is saying indiscreetly that dependence on Russian oil and gas should be reduced. How will it be reduced? There were two projects to build gas and oil pipelines from Egypt to Italy, especially a gas pipeline, because Italy is the closest point encircling the whole pipeline system and delivering gas to Europe. I think that it will be reanimated now, especially considering that it was done at the very end of Hosni Mubarak’s reign and even feasibility studies were carried out. I think that of those who were making feasibility studies, a serious role was played by France’s Total, Italy’s Eni, the Americans, of course, were not left aside. I think that the projects will be reanimated because the European economy has grown. Considering the political aspect, I think that the projects will be developing quite rapidly to accomplish the plans.”
Nonetheless, despite relatively favourable economic prospects, according to Isayev, the country needs to solve serious socio-economic problems. “The bad side is the indigent swamp that needs to be fed in the context of rising prices. More funds will be spent on donations. The swamp (I mean the indigent swamp with no intention to offend people suffering in it) will grab Egypt and pull it downwards. Especially considering the fact that Egypt suffers from another very serious problem, a brain drain.” The ability of the new president to stop this outflow of skilled technicians and engineers remains a big question.”
