Praetorian spearhead: the role of the military in the evolution of Egypt’s state capitalism 3.0

Military involvement in the Egyptian economy is giving rise to a new version of state capitalism. Driven by Arab socialism in the 1960s and reshaped by privatisation in the 1990s, under President Abdel-Fattah el-Sisi the state has sought to bend the private sector to its capital investment strategy while continuing to profess commitment to free market economics. His administration seeks private sector investment, but exclusively on its own terms. This is demonstrated through the expansion and diversion of military economic activity in five sectors: real estate development, creation of industrial and transport hubs, rentier or extractive activities related to natural resources, relations with the private sector, and the effort to increase the state’s financial efficiency while seeking private investment to help capitalise the public sector. This approach may generate macro-level economic growth and improve the efficiency of public finances, but it also reinforces the grip of the state rather than consolidating free markets. Reflecting this, private sector investment in the economy is lower today than it was in the socialist phase of the 1960s