The New York Times ran a story yesterday that is, at least to citizens of the English-speaking world, quite astonishing.
The overthrow of the Mubarak regime and the subsequent troubles have badly impacted the Egyptian economy. Not surprisingly, both foreign investment and the vital tourist industry have more or less disappeared. As a result, the Egyptian currency is under pressure, as foreign exchange reserves drain away to meet import needs. To help out (and, hopefully, to get some good publicity, which it badly needs) the Egyptian military has loaned the central bank $1 billion to shore up the Egyptian pound.
As in many countries that lack the Anglo-American tradition of strict civilian control of the armed forces, Egypt’s military runs a vast commercial empire and doesn’t even report the profits to the civilian government, let alone turn them over to the treasury. As the Times reports,
If they lend $1 billion, it means they have got a far greater amount out there, Ragui Assaad, an Egyptian economist at the University of Minnesota, said in a telephone interview. They want to show that they are trying to be as helpful as they can, but it is also a reminder that they have this big autonomous budget.
This huge cash flow gives the military both independence from and influence over the civilian authorities. That this is a big problem can be demonstrated by quotes from two major 20th-century figures:
Georges Clemenceau: “War is too important to be left to generals.”
Harry S Truman: “If it were against the law for generals to be stupid, the jails would be full of them.”
