Production of Civilian Goods

Beginning in 1978 the armed forces launched a number of enterprises that produced goods for military and civilian use. The National Service Project Organization (NSPO) controlled these enterprises. The government set up the NSPO to help reorient the military toward national economic development efforts as the military's role in defense diminished after the 1979 peace treaty with Israel. Moreover, government officials believed that national security would be bolstered if the military achieved a degree of self-sufficiency in food and other essential supplies.

Agriculture, the most important sector of military production, accounted for ŁE488 million in production in FY 1985, the last year for which data were available. The output of nonmilitary manufactured goods amounted to ŁE347 million in FY 1985, construction ŁE174 million, and other goods and services ŁE144 million. Military-operated facilities (including dairy and poultry farms, fisheries, cattle feedlots, vegetable and fruit farms, bakeries, and food-processing plants) accounted for 18 percent of the nation's total food production in FY 1985. The military consumed much of the food it produced, selling the surplus in commissaries and through civilian commercial channels.

Military-operated manufacturing enterprises included factories that produced clothing, doors, window frames, stationery, pharmaceutical packages, and microscopes. Abu Ghazala planned to develop a military-operated automobile assembly plant with assistance from General Motors Corporation, but the government shelved the idea because of widespread criticism on both economic and political grounds.

The military was also involved in a number of infrastructure projects. It installed more than 40 percent of the new telephone links covered in the First Five-Year Plan (FY 1982-86). It constructed power lines, sewers, bridges, and overpasses in Cairo and elsewhere. It also participated in land reclamation projects.

Many career military officers disapproved of the military's role in national economic development projects they believed that the armed forces should concentrate on the nation's security. Others, however, believed the projects improved the military's image and made the armed forces seem more efficient than the public sector. Senior officers argued that these projects had no effect on combat capabilities because the soldiers employed on them were not physically qualified for normal military functions. The precise number of troops detailed to economic development was not disclosed, although observers have estimated that tens of thousands of troops were so engaged. Food production employed 5,000 service personnel, including about 500 officers, in 1986. In the same year, Abu Ghazala announced that he would assign 30,000 conscripts to newly created development regiments after they received special training following basic training.

Opposition politicians and some business people complained that the military competed with the private sector in the country's development efforts. Critics argued that the 2a5 e private sector would be at a disadvantage as long as the armed forces were exempt from taxes, import licenses, and business permits and were not held accountable for profits or losses. Some business people, however, liked the military's growing role in the economy because many of them were awarded lucrative contracts from the military for a variety of goods and services.

Data as of December 1990