The Dilemma of “Weak Country” and Egypt’s Reindustrialization Prospects

  Second, Sisi hopes to solve the problem of insufficient national capabilities through the high efficiency and execution capabilities of the military. During the Sisi era, the role of the army in the Egyptian economy increased dramatically, surpassing any era in the Republic period. In the past, the army only used its own privileges for rent-seeking and commercial contracting. However, in the Sisi era, the army has become one of the government’s main economic pillars. First of all, because of the income from operating military enterprises and receiving US$1.3 billion in military aid each year, the Egyptian military has its own economic reserves. This saved Egypt’s fate at a critical moment. For example, the Egyptian military invested US$1 billion in 2011 to save the Egyptian central bank, which was about to run out of foreign exchange. Second, the military has huge human and material resources, which are more efficient than the government and state-owned enterprises. It can plan and complete long-term projects that conform to Egypt’s strategic interests but will not generate immediate benefits, such as the opening of the new Suez Canal. Finally, the transformation of military enterprises into the civilian field is intended to revitalize Egypt’s national industry. The Egyptian Ministry of Military Production supervises 20 military commercial enterprises, the Egyptian Ministry of Defense controls dozens of military commercial enterprises, and the Arab Industrialization Organization established by the Egyptian government is responsible for at least 12 military enterprises. These military companies are shifting from weapon manufacturing to various industries, such as cement, home appliances, automobiles and even milk powder. On the one hand, they provide products for the Egyptian domestic market, and on the other hand, they also want to go to the international market and create local Egyptian brands. [27]
  At the same time, the military is deeply involved in national governance. After the revolution in 2011, the Egyptian government agencies faced problems such as loose organization and inefficiency. Therefore, after Sisi came to power, the military may directly intervene in management where the government is unable to handle it. Take the construction of the Egyptian Grand Museum as an example. After international aid agencies encountered problems of inefficient coordination with the Egyptian government ministries and commissions, the Egyptian government sent military generals to the project as a whole, and the communication efficiency was improved. [28] The Suez Canal Authority was originally chaired by a civil servant Ahmed Darwish, but because it was unable to coordinate the functions of various domestic ministries and commissions, it was later replaced by a military as its chairman. Other civil institutions of the Egyptian government are currently inclined to support the participation of the military in governance because they have been repeatedly humiliated by revolutionaries and the Muslim Brotherhood after 2011. Restoring national stability and the authority of state institutions is their collective aspiration. Therefore, a decision-making circle with Sisi as the core has been formed in Egypt, including high-level military officials and some government ministers. [29] They can make long-term plans beyond the level of government budgets, and these projects do not even require special government funding and are fully funded and implemented by the military.

  With the assistance of the army, President Sisi basically restored Egypt’s national capabilities and national autonomy, and gradually reopened the country’s leading industrialization strategy. The Egyptian government successively promulgated the “Industrial Development Strategy 2020” and the “Egypt 2030 Vision”, trying to promote Egypt’s industrialization process from four aspects. First, build industrial parks, improve infrastructure, and revise laws and regulations to form a real economy’s value chain and industrial chain across the country. The local industrial chain planned by the Egyptian government includes the furniture industry in Dumiyat, the auto parts industry in the Suez Canal area, the information and communication technology industry in the “smart village” in the suburbs of Cairo, the mining industry in the southern “Golden Triangle”, and Robbie Qi’s leather processing industry, the textile industry in Minya, Sohag and Asyut in Upper Egypt. Second, support 2.5 million small and medium-sized enterprises and informal economic sectors in Egypt, provide them with consulting and financing services, and encourage young people to participate in entrepreneurship. Third, guide domestic enterprises to develop export-oriented industries and strengthen export advantages. For the products that Egypt is exporting, the government strengthens its price competitiveness through policies such as export tax rebates and technical training; for the export industries that Egypt has not yet built, the government uses land allocation, administrative convenience, and tax incentives to attract foreign investment and technology. Transfer. Fourth, launch the “Vocational and Technical Education” program to specifically train relevant skilled workers for the needs of the industrial export sector and establish a nationally certified occupational evaluation system. [30]
  The world is currently in the fourth wave of manufacturing shifts. The newly industrialized countries dominated by China are Egypt’s potential investors and capacity exporters. This is highly compatible with the reindustrialization strategy currently vigorously promoted by the Sisi government. [31] However, whether Egypt can seize this rare historical opportunity depends on whether it can maintain a “strong country” and how the country appropriately regulates and guides the process of industrialization, including maintaining a safe environment for the country’s sustainable development and building cohesion. A very strong economic administrative organization, maintaining a good political-business cooperation relationship and implementing selective industrial policies. Excessive external wars and interventions during the Nasser period may lead to the loss of national capabilities; while the lack of national autonomy during the neoliberal reform period may lead to the virtualization and imbalance of the real economy-these are the failure lessons that the Sisi government must reflect on. How to position the country’s role in the process of development and transformation will continue to be an important issue facing Egypt.