Husni Mubarak succeeded Anwar al-Sadat in October 1981 at a time of troubled civil-military relations. Sadat’s pursuit of a separate peace with Israel after the war in 1973 raised important questions about the military’s future role, size and sources of weapons. If Egypt was no longer at war, it would no longer need its huge military establishment. Over the following decade, the number of men under arms declined as Sadat began to convert the military into a rapid strike force that could intervene in the Horn of Africa, the Gulf or Libya.  Western arms suppliers, especially the United States, replaced the Soviet Union as Egypt’s chief source of weaponry, although by 1986 only five of Egypt’s 12 divisions had been converted to American arms and order of battle, while approximately one-third of the air force was similarly equipped. 
Changes of this magnitude were bound to elicit mixed feelings from the officer corps. Under the slogan of “everything for the battle,” they had established first claim on the nation’s resources. Now the military would become just another bureaucratic claimant for a share of available funds.
These changes in size, mission and weapons systems accompanied a profound downgrading of the military’s political role, a trend which began at the outset of Sadat’s presidency. True, Nasser, Sadat and Mubarak had themselves all risen through the military ranks. But under Nasser, more than one third of all cabinet ministers had military backgrounds. By comparison, those with military backgrounds constituted less than 13 percent of all Sadat’s ministers, and two-thirds of these were officers who had further technical training.  In the final Sadat cabinet, only the portfolios of defense and foreign affairs were held by those with military training. Sadat engineered a similar demilitarization of governorships; by 1980, less than five were held by military men, compared with 22 of 26 in 1964.  Impressionistic evidence suggests a corresponding decline in the ratios of former officers in the bureaucracy; as officers retired, their posts were filled by civilians.
From 1952 until 1967, under Nasser, the military was indisputably the strongest institutional element within the political system. It supplied the core members of the elite and successfully defended itself from all attempts to impose external control. The official party, the Arab Socialist Union (ASU), was never allowed to operate within the military. When ASU activists attempted to steer the country leftward in 1966, Field Marshal ‘Abd al-Hakim ‘Amr was put in control of the Higher Committee for the Liquidation of Feudalism lest the ASU radicals cause it to run out of control. The disastrous performance of the military in the June 1967 war and the subsequent purge of ‘Amr and his patronage network of officers significantly reduced the political role of the military, but the military’s political leverage persisted. Real demilitarization of the political order had to await the arrival of Anwar Sadat.
While Sadat’s policy of peace and infitah (opening) worked against a preeminent role for the military, just as Nasser’s policy of militancy coupled to a state-controlled economy had tended to support it, demilitarization had to be forced on the military. To forestall a backlash, Sadat constantly reshuffled the high command. He jailed Minister of War Muhammad Fawzi in 1971 and replaced him with General Muhammad Sadiq.  A year later Sadiq was himself arrested after Sadat had ensured the loyalty of Chief of Staff Saad al-Din Shazli; Shazli was chased into exile once Sadat secured the loyalty of Minister of War Ahmad Isma‘il and Shazli’s replacement, General ‘Abd al-Ghani Gamasi. Gamasi took over as minister of war after the death of General Isma‘il in December 1974. Gamasi and his chief of staff, Muhammad ‘Ali Fahmi, lasted until 1978, when Camp David required more pliant military chiefs.  Kamal Hasan ‘Ali, then intelligence chief, became minister of defense briefly and then foreign minister. ‘Ali’s successor, the popular Ahmad Badawi, died along with 12 senior officers in a helicopter crash in March 1980. He was replaced by Egypt’s military attache in Washington, General ‘Abd al-Halim Abu Ghazala.
This record suggests tension and distrust between Sadat and his high command. Some Egyptians connect this general dissatisfaction in the military to Sadat’s assassination in October 1981. Whatever the truth in these matters, Mubarak definitely inherited a restive military. Not only had its size and role been reduced, but the debate about additional duties the military might perform had produced few tangible results. Inflation ravaged military salaries, such that in 1982 it was confided to a Western reporter that “a good secretary in a foreign oil company can now earn more than a full colonel.”  Earlier that year, air force technicians went on strike at four bases to protest a change of promotion regulations. Mubarak soon moved to restore the military’s status and influence, but the price to his personal power has become higher than he must originally have anticipated.
Mubarak and Abu Ghazala
It is entirely consistent with Mubarak’s military background that he would seek to restore the military’s eroded sense of purpose and some of its political influence. Sadat controlled the military through manipulation of the officer corps. By contrast, Nasser had indulged this crucial institution of power and related to it through his comrade ‘Abd al-Hakim ‘Amr. Mubarak demonstrated that in at least this way he was a Nasserite. Not only did he set about reassuring the officer corps that there would be no further cutbacks and that he would enhance the military’s “peace” role; he also opted to permit a latter-day ‘Amr to emerge in the person of ‘Abd al-Halim Abu Ghazala.
Abu Ghazala was the ideal candidate to become Mubarak’s man in the military. The gap in age (two years) and rank underlined Mubarak’s authority. Abu Ghazala and Mubarak had not been in competitive positions in the armed forces; Abu Ghazala is an artillery specialist, while Mubarak is a bomber pilot. Both had trained in the Soviet Union (they overlapped briefly in 1961). From 1976 until 1979, while Abu Ghazala was defense attaché in Washington and Mubarak was vice president, the two worked closely in developing the military aid program with the United States.
While Mubarak and Abu Ghazala possess personal characteristics and shared experiences that facilitate this politically crucial relationship, in fact the two men are as unlike as chalk and cheese. Abu Ghazala is an articulate, forceful, ambitious figure. His off-the-record meetings with American reporters, in contrast to those with Mubarak, leave the audience impressed with his ability to address points directly and concisely.  Mubarak gives the impression of having had the presidency thrust upon him and resolving, out of a sense of duty, to do the best job possible. Abu Ghazala gives every sign of thirsting for the position and wanting to put a program into effect. Abu Ghazala cuts a dashing figure compared to Mubarak’s thick-set physique. In the immediate aftermath of Sadat’s assassination, Abu Ghazala stood erect, pointing his baton at the fleeing assassins, yelling orders to give chase. Mubarak had crawled under chairs and was extricated by bodyguards who bundled him away unceremoniously.
In addition to radiating dynamism, Abu Ghazala seems blessed with good luck. He and the president frequently rotate attendance at important soccer matches, Mubarak having the ill fortune of being present at an embarrassingly large number of defeats. This association persisted until by 1986 it had become a joke gone sour. Miraculously, in the summer of that year, the Egyptian team won the Africa Cup as Mubarak cheered them on. The competition was immediately renamed the Mubarak Cup.
The political beliefs and behavior of the president and his minister of defense also differ substantively and stylistically. Mubarak, a managerial type by temperament, has sought to integrate various trends in Egyptian politics, and to restore some balance in Egypt’s foreign relations.  Abu Ghazala, on the other hand, is an outspoken conservative, fervently anti-communist and correspondingly pro-American. He has asserted that Egypt’s security is inseparable from that of the US and NATO, and argued that Arab forces should be coordinated with the US Central Command.  He strongly favors the participation of American multinational corporations in the Egyptian economy. In contrast to Mubarak’s unhesitating preference for secularism, Abu Ghazala has cultivated an image of devoutness and is popular within many religious circles. His wife, almost alone among those of cabinet ministers, wears the hijab (Islamic headgear) on public occasions.
The Mubarak-Abu Ghazala relationship, like that of Nasser and ‘Amr before it, has exhibited some stress and strain. A surface reflection of the subterranean struggle is provided by personnel shifts in the military and political elites. Mubarak, unlike Nasser, has not given his defense minister a free reign when making high level appointments. The president is able to draw on his own numerous personal connections within the military elite to monitor the ebb and flow of alliances there. The reshuffle of the senior officer corps in the autumn of 1983 may have been Mubarak’s attempt to place officers loyal to him in positions of greater influence and to warn any that doubted his authority.  On the other side, Abu Ghazala has been able to resist the appointment as chief of staff of any person who could easily succeed him, though he has not been able to put one of his loyalists into the post either.
Civilian personnel changes suggest that Abu Ghazala has been able to expand his influence since 1985. Mubarak’s first two prime ministers, Fu’ad Muhi al-Din and Kamal Hasan ‘Ali, both competed in the cabinet with Abu Ghazala, and ‘Ali had his own connections into the military. But when economist ‘Ali Lutfi replaced ‘Ali in September 1985, the way was thrown open for Abu Ghazala to carve out a substantial domain in the cabinet and beyond. ‘Ali Lutfi’s low profile automatically elevated Abu Ghazala’s. The minister of defense began to be seen more frequently in the daily press than the prime minister. This trend became even more noticeable under Lutfi’s successor, ‘Atif Sidqi.
Mubarak lost yet another round to Abu Ghazala in the wake of the Central Security Force (CSF) riots of February 25-26, 1986, when he was obliged to dismiss Minister of Interior Ahmad Rushdi. An uncompromising and stubborn person, Rushdi had been inserted into Kamal Hasan ‘Ali’s government in part as an additional counterweight to Abu Ghazala. Rushdi had a clean image, and Mubarak saw him as a tool with which to whittle down the power of various pernicious elements, such as drug dealers and their protectors in the security apparatuses. Rushdi’s successor, Zaki Badr, is a throwback to an earlier era: his name is widely associated with illegal activities and drug dealing. As governor of Asyut, Badr had demonstrated a readiness to confront Islamist activists with force, but despite his tough image Badr lacks the finesse and the base of support to counterbalance Abu Ghazala.
The CSF, composed largely of potential army recruits who fail the military’s increasingly strict entrance requirements, had been created in the wake of the 1967 defeat. By Nasser’s death it numbered 100,000 and under Sadat it mushroomed to over 300,000. The military did not want to be involved in suppressing public disorder, but it did not favor resources being allocated to another barracked force. This accounts in part for the monthly pay of CSF being the outrageously inadequate sum of £E6. The CSF revolt destroyed the illusion that the interior ministry could guarantee public security and underlined the fact that the real protector of the regime was the military.
Unable to rely on military or cabinet restraints on Abu Ghazala, Mubarak likewise could not count on the unwavering support of Washington in the event of a showdown with his defense minister. This was made evident in October and then again in November 1985. Mubarak, not wanting to jeopardize Egypt’s reintegration into the Arab world, decided secretly to give safe passage aboard an Egyptian plane to the Achille Lauro hijackers. By one version of events, Abu Ghazala informed the US, presumably through the military mission in Cairo, that the hijackers were being flown to Tunis.  Interceptors from the Sixth Fleet duly forced the Egyptian plane to land in Sicily. The upshot of the affair was unruly student demonstrations at ‘Ayn Shams University, protests at al-Azhar mosque, and a quick visit by US Deputy Secretary of State John Whitehead to repair the damage.
The following month an Egypt Air flight was hijacked and diverted to Malta, where it was detained until a plane carrying Egyptian commandos and three senior American military advisors, including the head of the US military mission in Egypt, arrived. In the operation that followed, more than half the passengers on board were killed. A public relations disaster ensued when Minister of Information Safwat al-Sharif gave orders to portray the mission as a success. That effort unraveled as the unpleasant facts quickly filtered into Egypt through the BBC and other world media sources. The articulate public assumed that the “rescue” mission was ordered and organized by Abu Ghazala, but the affair did nothing to challenge Mubarak’s image of ineptness.
There is considerable evidence that at this point Mubarak had had enough and tried to remove Abu Ghazala from the ministry of defense. He dangled the vice presidency in front of Abu Ghazala in the hope that it could induce him voluntarily to take his finger off the trigger. Abu Ghazala reportedly accepted the offer on the condition that he retain the defense portfolio.  Before events moved to a showdown the American Embassy let it be known that it would look unfavorably on the transfer of Abu Ghazala from his current post.  There the matter remained until the CSF riots some three months later, which forced Mubarak to fall back on the military and its chief.
Immediately after the February riots Abu Ghazala demonstrated that in future he and the military would play an even larger role. Crucial new responsibilities were added to his long list of duties. In June and November 1986 he headed missions to the United States to discuss mutual relations, encompassing not only the military debt but also a wide range of economic issues, including the sensitive “reforms” which Washington and the IMF have long sought to impose on Egypt. On Abu Ghazala’s return from Washington in June, the entire cabinet was at the airport to greet him, Prime Minister ‘Ali Lutfi conspicuously in the background. The drumbeat of announcements of new tasks to be undertaken by the military, from treating civilians in military hospitals to cleaning the polluted beaches, grew at such a pace that Egyptians were left wondering what, if any, civilian activities were to be left untouched. In 1986, the opening ceremonies for new military undertakings, including chicken farms and new cities in the desert became occasions on which the appropriate ministers had to tag along behind Abu Ghazala to give their blessings to his latest encroachments into their domain.
Self-Sufficiency and Patronage
‘Abd al-Hakim ‘Amr extended his military patronage network at a time of institutional expansion, whereas Abu Ghazala has accomplished the same during a period of contraction. The government has shrunk the military to between 300,000 and 450,000 men by shedding lower ranking soldiers while retaining commissioned officers. The result is a top-heavy military.  Without battles to fight and with far fewer troops to lead, the officer corps was restless. Abu Ghazala responded by applying constant pressure in the cabinet for salary raises for his officers, and he met with regular success.  Increasing military cooperation between Egypt and the West provided various additional benefits for Egyptian officers. Up to 200 per year are trained in the United States.  Military facilities, vehicles, and even uniforms have been significantly upgraded. The constant flow of state-of-the-art weaponry, even if in quantities considerably less than those obtained by Israeli or even Saudi forces, provides a basis upon which military self-esteem can comfortably rest. 
An even more critical ingredient in the growth of Abu Ghazala’s patronage system has been a wide range of new benefits to officers. In Nasr City, adjacent to Heliopolis and its military academy, large base and military factories, thousands of relatively sumptuous flats have been built for purchase by officers at highly subsidized prices. For many, this becomes a second, third or fourth source of rental income. Due almost entirely to construction for the military, Nasr City has become the fastest growing district in Cairo. Its population leapt to a quarter of a million in 1986, from less than 100,000 10 years earlier.  In 1985-86 almost five percent of all housing constructed in the country was built by and for the military.  A substantial percentage of this is in the new military cities scattered in the desert, principally around Cairo. Two such cities were inaugurated in November 1986, while 10 others are scheduled for completion by July 1988.  To help finance these projects, Abu Ghazala has authorized the sale of valuable land adjacent to Egypt’s largest cities on which military camps had been situated. Another credit to the military’s account comes from sales of land in military cities to civilians who want to escape to the desert to avoid the trials and tribulations of life in the congested Nile Valley. 
A chain of military consumer “cooperatives” caters to the day-to-day requirements of officers and their families. They sell a range of domestic and imported goods generally unavailable or only to be had at much higher prices elsewhere in Egypt. These pleasant shops (far nicer than the civilian consumer cooperatives) are concentrated in the Heliopolis/Nasr City/Abbasiyya area of Cairo where officers are congregated. It is now a sign of distinction for civilians to have a friend in the military who can provide access to these “cooperatives,” hence to such basic goods as sugar and rice that are elsewhere in chronic short supply. Officers and their families also benefit from military hospitals, and a chain of military resorts cater to their holidays in the country.
Entrance into this neo-Mamlukian, autonomous military world is regulated by an increasingly separate educational system. Access to the Military Academy in Heliopolis requires a combination of examination results and influence. The Military Technical College has been assigned a wide variety of research tasks at a time when universities are being starved of funds. Abu Ghazala called for the creation of a Military Academy for Administrative Sciences; enabling legislation was passed by the People’s Assembly on June 14, 1986. The staff in military hospitals are now trained in the Academy of Military Medicine. Children of officers no longer have to compete with others for access to higher education. As with housing, health care and consumer goods, the military provides for its own. 
While the entire officer corps has access to the housing, education, health, consumer, and recreation facilities provided by the military, a more select number are directly engaged in procurement of military hardware and other commodities. Such responsibilities provide innumerable opportunities for earning commissions that help cement the patronage system. Abu Ghazala has supervised the purchase of equipment from France, Italy, West Germany, Austria, Brazil, Spain, Canada, various communist countries, and of course the United States, personally conducting negotiations in most cases. The opposition intimates, although it does not openly allege, Abu Ghazala’s involvement in the “commissions” rackets. 
The most notorious deal occurred during Abu Ghazala’s tenure as military attaché in Washington. It involved the initial arms shipment from the United States to Egypt following the signing of the Camp David Accord. President Sadat’s brother Ismat and several generals formed a company to ship a $300 million consignment. They reportedly charged $56 million, despite a Pentagon estimate that the shipping cost should be around $11 million.  Ismat Sadat was subsequently tried for other offenses, but not in the regular court system which may well have investigated this matter further. He was instead brought before the special “Court of Ethics” where the scope of inquiries was limited so that the entire edifice of the regime would not be destroyed.
Another open secret about the involvement of officers in lucrative and corrupt practices concerns operation of the Port of Alexandria. Among the various rackets unaccountably escaping the notice of Port Director General Faruq Zawil was an insurance fraud involving claims for damaged goods.  This particular scheme was reduced to acceptable proportions by the intervention of Lloyds of London. Normal pilferage and the extraction of bribes for services rendered remain unaffected by this intervention. The Alexandria Stevedore Company, accused by the opposition and by the stevedore’s union of various illegal practices such as monopolization of warehouse facilities, was formed in 1984 by officers who formerly worked for the Port Authority. It is one of several private sector firms now competing in what had been a public sector monopoly. 
The military apparatus, an enclave of modernity and no longer devoted exclusively to warfare, has broadened its activities dramatically into areas that are usually civilian preserves. This has widened the field for patronage and tightened Abu Ghazala’s grip. Expansion has proceeded most rapidly in three general areas: weapons production and other manufacturing; agriculture and land reclamation; and construction and services.
Both Nasser and Sadat tried to set up major weapons and munitions manufacturing. Nasser’s efforts were foiled by a shortage of funds, erratic commitment, the ill-advised use of former Nazi experts, Soviet disfavor and Israeli sabotage efforts.  Nevertheless, Egypt was the second-largest arms manufacturer in the region, after Israel. Sadat sought to invigorate the arms industry by creating in 1975 the Arab Organization for Industrialization (AOI). This was to draw on Arab capital and Western technology to manufacture weapons in Egypt. Egyptian capital came in the form of four existing military factories. AOI foundered when Gulf states withdrew their capital in the wake of Camp David. There were also persistent reports of large-scale financial improprieties on the part of Ashraf Marwan, Nasser’s son-in-law and AOI’s main contact with the Europeans and the Saudis.
But AOI, renamed the Egyptian Organization for Industrialization, had a physical plant already in place. With additional resources from the new Military Production Industries, it provided a base from which assembly and manufacturing operations expanded rapidly after 1981.
By 1984 Egypt had reached self-sufficiency in the manufacture of small arms, mortars and most calibers of ammunition, and was nearly so in rockets and howitzers.  The Saqr factory, in Heliopolis adjacent to the airport, employs more than 5,000 and makes portable surface-to-air missiles based on the Soviet SA-7. Since 1983 France’s Aerospatiale has cooperated with Egypt to produce Gazelle helicopters. The first locally assembled Franco-German Alpha jets were handed over to the Air Force in November 1982. Over 100 Tucano trainer jets from Brazil are now being assembled. The Benha Electronics factory employs over 2,500 workers and produces various military electronic systems.
Local production now accounts for some 60 percent of the Egyptian military’s needs.  In addition, Egypt exports large quantities of weapons and ammunition, its best customer being Iraq. The proceeds from such exports are a military secret and are not included in national accounts or reported to parliament. In 1984, there were reports that the figure already exceeded $1 billion, while at the end of 1986 it was suggested that exports had climbed to $800 million. Another account has exports to Iraq alone in 1983 exceeding $1 billion.  All that can be said with certainty is that arms exports are substantial. The secrecy that surrounds the subject has given rise to controversy over the destination of those arms. When the American press reported in the midst of the unfolding Iran arms scandal that Egypt had sent 11 planeloads of arms to Iran, the Egyptian government flatly denied it. A week later, al-Gumhuriyya reported that foreigners, including Adnan Khashoggi, had made three attempts to buy Egyptian arms; all were rejected when it was revealed that they were intended for Iran.  Abu Ghazala himself reiterated denials of secret deals with Iran in February 1987. 
Even more confusion surrounds the profitability of military industries. In the summer of 1986, the opposition persistently clamored to bring these accounts under the jurisdiction of the Central Auditing Organization (CAO), Egypt’s equivalent of the US General Accounting Office. No action was taken. Al-Ahrar, mouthpiece of the conservative Liberal Party, alleged that one factory alone had lost £E20 million in two years.  According to this source, a report of the Directorate of Supervision describes General ‘Abbas ‘Abd al-Gawad, chairman of the board of Military Factory 360, as having abused his position by misappropriating funds, conducting secret deals with Italian firms, and distributing company property “to high officials in various sectors of the state.”  Amin Huwaydi, who had served as minister of defense and director of intelligence under Nasser, claims that Egypt cannot compete with arms manufacturing nations such as Israel, Brazil, Argentina and Taiwan. He estimates that of the £E7 billion annual defense budget, Egypt could save at least £E1 billion were the armed forces to disengage from various non-military activities and from arms manufacturing. 
But accurate accounting might not in any case come to terms with an underlying structural distortion: the military benefits from access to manufacturing inputs, including energy, at subsidized prices. All enterprises manufacturing for export are by law to be charged so-called “world” rates for their purchases. While that law is not uniformly enforced, only the military is absolutely and permanently exempted. The resulting difference in cost structure is very appreciable. Electricity, for example, is provided at a subsidized rate of well less than one-half the “world” rate, while petroleum products are around a quarter of their world market price. Egypt, in short, is subsidizing its military exports; payment goes directly to the military and not into national accounts. On paper, these industries could well appear profitable while in fact constituting a large net loss in national income.
This satrapy of arms manufacturing is far too important to the field marshal’s power base for him to relinquish control, yet its management is a full-time cabinet level job. Abu Ghazala resolved this dilemma in November 1986 by bringing into the government General Gamal Sayyid Ibrahim as Minister of State for Military Production, while himself retaining the portfolio of Military Production. The term “State” normally implies that the minister does not have responsibility for, or control over, a ministry. In this case it is a device whereby Abu Ghazala retains overall supervisory control and General Ibrahim works as his manager, an arrangement that ensures Abu Ghazala’s continued ability to make the appointments necessary to service his patronage network. (Ibrahim, who had hoped to capitalize on his control of workers at the Helwan arms plant, was defeated in the April 1987 parliamentary elections.)
Since 1982, as civilian industry has stagnated, the military has branched out into other areas of industry, and has constructed factories producing wooden doors and windows, optical goods, boxes, tin cans and other products.  Production of civilian goods in 1985-86 is reported to be about £E250 million.  The process has antagonized some civilians, but it has also cemented shared interests of civilian and military managers and the bourgeoisie more generally. The Benha Electronics Company management, for instance, has mastered the technique of extracting commissions from Western appliance suppliers, a lesson which can be readily applied to its military operations.  The military’s alliance with public and private sector enterprise and the proliferation of arms industries creates a class of military, and military dependent, munfatihun.
The GM Scam
The most prominent example of military intervention into civilian industry is the General Motors deal. After two years’ negotiations, it was finally signed in June 1986 but is again on hold. As Chairman of the Higher Committee for the Egyptian Passenger Car, Abu Ghazala worked closely with the American Embassy, in particular Commercial Counselor Ted Rosen and Ambassador Nicholas Veliotes, to prepare a package that could compete with bids from Fiat, Peugeot and various Japanese car manufacturers.A reluctant GM was enticed with a US Agency for International Development (AID) pledge that up to $200 million of its aid budget for Egypt would be channeled to GM in order to guarantee profitability. 
Rosen and Veliotes pressed this redirection of funds on AID Cairo using Abu Ghazala’s personal involvement and commitment to GM to persuade reluctant AID officials that the deal would further US interests. Several AID staff objected strongly, arguing that this diversion made a mockery of the aid program, that the planned operation could not achieve economies of scale, and that Abu Ghazala’s real interest was the construction of an engine plant from which military vehicles could be outfitted. These staffers were transferred to other duties.
GM, which had privately told AID that it had no intention of ever building an engine plant in Egypt, told Abu Ghazala that it was interested in establishing an engine plant but would delay that phase until car assembly operations were properly up and running.  Apparently unsure as to whether Abu Ghazala had enough clout on his own to secure the contract for them, GM executives retained the services of Niyazi Mustafa, one of Egypt’s wealthiest entrepreneurs, with interests in hotels, construction, agriculture and land reclamation. Years earlier he had acted as GM agent for a large locomotive deal. GM won that contract. The deal embodied the alliance of the military and the bourgeoisie and its subordination to international capital.
The deal immediately confronted howls of protest, not only from the opposition, but from prominent figures in the regime such as ‘Adil Gazareen, one of the architects of the NASCO-Fiat partnership. American officials responded with hints that Gazareen had grown rich on kickbacks from Fiat over the years. The GM deal, they claimed, constituted an offer simply too good to refuse. 
Abu Ghazala clearly played the most important role in steering the GM deal acceptance through the labyrinthine approval process. Instead of military industries emerging from the civilian manufacturing sector, as in the industrialized countries, they spring to life in Egypt as a result of bilateral agreements between the Egyptian military and foreign arms manufacturers. Egyptian non-military industries that can provide weapons manufacturing inputs, such as Benha Electronics, are incorporated into this system. The managerial elites of these companies become part of the military-industrial complex, although in a far more subordinate role than their American counterparts.
The National Service Projects Organization (NSPO) was created by the military in 1978 for projects in what were then exclusively civilian sectors. It remained more or less dormant until Abu Ghazala seized on it as the principal organizational vehicle for broadening military activities. As a semi-military authority, its staff comes from within the military without regard to rank or civil service regulations. It has its own budget and bank account and is not subject to the CAO.
The NSPO justified its move into agricultural production and land reclamation with the argument that national security depends on “food security.” It plucked responsibility for those activities from the army’s veterinary corps and deposited them in a new Food Security Division (FSD) headed by General Muhammad Tsam al-Din Gawhar. The FSD’s task was to make the military 100 percent self-sufficient in foodstuffs. 
With the ample financial resources of the NSPO behind it and virtually limitless supplies of manpower via the military, the FSD became almost overnight the single largest agro-industrial organization in Egypt. Concentrating in high value, high technology areas, by 1985 the FSD had blanketed the country with dairy farms and milk processing facilities, integrated poultry complexes, fish farms and cattle feed lots. On October 6, 1986, it launched a drive into fruit and vegetable production and marketing, opening ceremoniously under Abu Ghazala’s watchful eye the 6 October Agro-Industrial Complex. Three weeks later Abu Ghazala inaugurated an FSD automated vegetable wrapping and packing plant. The previous month the FSD had announced that it would soon begin production in its new dairy factory which was to absorb one quarter of Egypt’s milk production and produce enough dairy products to satisfy the entire local market. 
The £E488 million worth of food produced by the FSD in 1985-86 was some 18 percent of the total value of food produced in Egypt that year.  It also makes food production the single most important NSPO activity. In the same year it constructed buildings and installations worth £E174 million and provided additional services worth £E144 million.
AID experts condemn the entire operation as counterproductive, citing high overhead and the fears of private investors that they will be forced to compete with the subsidized output of the FSD. General Gawhar dismissed AID’s complaints as arising out of jealousy; something is actually being done over which it has no control and for which it can claim no credit. Yet there clearly is a flaw in the FSD’s argument that the projects, in addition to producing food, train soldiers in useful skills. The majority of these skills depend on the availability of relatively sophisticated and capital-intensive technologies, to which the vast majority of peasant conscripts will not have access. Nor are there many jobs in civilian agro-industries. The FSD has thus tried to get the Principal Bank for Development and Agricultural Credit to provide subsidized loans to FSD conscript workers so that on leaving the military they can establish themselves in similar activities.
The military production of food is not as contentious as military land reclamation — the process of turning unused desert or waste land into valuable land for agriculture or urban development. During the Nasser period, land reclamation became a preserve of the officer corps, but it was turned over to the civilian sector and privatized by Sadat. The military resurgence in this area has rekindled old fears and hostilities. By the 1980s, it was not just the bureaucracy and public sector land reclamation companies that stood to lose by the military’s renewed involvement. Large private sector concerns, innumerable cooperatives formed of investors and individuals working the land, private individuals, foreign companies working on contract for landowners, and last, but by no means least, ‘Uthman Ahmad ‘Uthman’s Arab Contractors Company (responsible for the 56,000 feddan showcase Salhiyya Project) had all entered the field during the Sadat period and did not want to be brushed aside by the military. The economic return from buying and selling wholly or partially reclaimed land, or that simply earmarked for such work in the future, has become a prime area of economic speculation during the 1980s. Anytime land is marked for reclamation, installing a minimal amount of physical infrastructure, planting some windbreaks and maybe a few trees or vines means it can be sold for many times the cost. 
Given how the scarcity value of land is understandably ingrained in the national psyche, Abu Ghazala and the military had to tread warily in this area. In cases of areas that were highly desirable for possible use as retirement or holiday sites by officers or because of proximity to cities, soldiers would arrive, declare it as designated for military maneuvers and chase out any occupants.  In this way they seized six kilometers of prime beach front at Sidi Krayr, west of Alexandria, in the summer of 1986.  Shortly thereafter the military police sealed off a large area on the outskirts of Nasr City that had been sold by a land company to private individuals. The officers claimed that the transaction by which the land company had acquired the parcel was illegal and that it belonged to them. 
To obtain rights to reclaim very large tracts of land for which the state held undisputably valid title, the military worked out compromises with the Ministry of Land Reclamation and the public companies under its authority. But even if the minister or the chairman of the board of a company might agree to specific proposals, employees further down in the system could, for a variety of motives, impede the military's access.
One such case was in Nubariyya. Abu Ghazala had approached various foreign companies and governments within weeks of Sadat’s death to assist the military in reclaiming this area. In the meantime the General Authority for Reclamation and Development of Agricultural Projects, one of the bureaucratic enclaves under the Minister of Land Reclamation, set to work to derail Abu Ghazala. Its top-ranking employees, invited to assess the offers solicited by the field marshal, nitpicked their way through numerous proposals for almost three years.  In late 1985 their delaying tactics paid off: the project was abruptly switched from the military to the Ministry of Land Reclamation in response to Abu Ghazala’s meddling in the Achille Lauro and Egypt Air hijacking incidents.
But just a few months later, in the wake of the CSF riots, Abu Ghazala immediately turned the tables. He gathered under his chairmanship in the cabinet a 10-member ministerial policy committee. He informed them that the regiments which the ruling National Democratic Party (NDP) had formed of party youths for a general clean-up in the wake of the riots were such a good idea that the military henceforth would create from among its conscripts “development regiments” numbering 30,000 who would get additional training in development after boot camp.  On May 16 the government announced that this committee had decided to spend £E732 million on three reclamation projects.  The money for these endeavors would come directly from the state treasury without interference by the Ministry of Land Reclamation, or any other ministry for that matter.
Now in the driver’s seat as Chairman of the Ministerial Policy Committee, renamed the Higher Strategic Committee in early 1987, Abu Ghazala could award the NSPO land for reclamation. He could also withhold it from his adversaries, including the public sector companies under the Ministry of Land Reclamation. He is also able to help former officers with interests in private sector investment companies, as well as their counterparts from the civilian bourgeoisie.
Abu Ghazala and the military perceive the bureaucratic public sector as incompetent. They have developed an autonomous capability, its management concentrated in the NSPO, its manpower drawn from the ranks of conscripts, and supplementary technical expertise solicited from various branches of the military. The military perceives the private sector as more dynamic and possessing superior resources. It is also able to reciprocate favors granted. The system now being established rests on the principle of farming out patronage to the private sector which, like its public sector predecessor, is to be the military’s junior partner in these activities.
Military Development Projects
Under Mubarak, the military has taken on a series of physical and human infrastructural development projects worth in excess of £E300 million. The principal justification is that the service currently is inadequately provided to the military and/or the civilian sectors. This covers virtually any activity in the country. 
Among the high profile projects of use to the military and civilian sectors and with substantial public relations value are the Ramses overpass in central Cairo and the installation of new telephone lines. Other projects glorify the military and its traditions. The new museum opened in Cairo’s Citadel in 1986 is devoted to “5000 years of Egyptian military history” and is, compared to virtually any other museum in the country, lavishly appointed and equipped. The former naval vessel Mahrusa, which served as King Faruq’s private yacht and on which he sailed into exile in July 1952, was restored by the navy on orders from Abu Ghazala, fitted out with appropriate antiquities, and designated a “floating world museum for antiquities carrying Egyptian artifacts to the ports of the world.” 
Abu Ghazala has a keen sense of public relations, and his timing in attending inaugurations and similar events is impeccable. During the continuing controversy over the pollution of Egypt’s Mediterranean beaches Abu Ghazala announced that military helicopters would spray along the northwest coast to combat oil pollution, “especially in regions where the pollution comes from outside Egypt’s territorial waters” (i.e., the military is protecting Egyptian beaches from Libya’s pollution).  While the controversy over the declining quality of health care in Egypt’s hospitals was raging, Abu Ghazala directed that the hospital operated by the Islamic Society for Charity and Guidance in Abu Za‘bal be given a £E25,000 kidney machine. He also declared that military hospitals would henceforth treat those who had requested the government finance their treatment abroad.  Meanwhile, reconstruction of the squalid civilian hospital in Cairo, Qasr al-‘Ayni, was caught up in a wrangle over a contract with a French firm that had netted the speaker of the parliament, Rifa‘t al-Mahgub, a $50,000 commission.
Relations between the military and the private sector have been cooperative. The military lets tenders to the private sector, domestic and foreign, worth hundreds of millions annually for its ventures in non-military areas. It actively seeks arrangements for military technicians to gain access to advanced technologies found in the private sector, such as in food production and processing. These developments suggest the possible emergence of a Latin American-style corporate state based on an alliance of the military with the upper bourgeoisie. Such a coalition is personified by the relationship between the military and ‘Uthman Ahmad ‘Uthman, labeled the godfather of the munfatihun by the Egyptian opposition. ‘Uthman, according to David Hirst, employs “scores of generals at ten times their former salary.” 
President, Field Marshal, Opposition
Civilian cabinet ministers, prior to the accumulation of power by Abu Ghazala and the military in the wake of the CSF riots, had sought to protect their fiefdoms from the military. After February 1986 they had little alternative but to give way to military demands. Even the most powerful of those ministers, including Minister of Agriculture/ Deputy Prime Minister/Secretary General of the NDP Yusif Wali and Minister of Development Hasab Allah al-Kafrawi, had to tag along behind Abu Ghazala as he opened military projects that impinged on their portfolios. 
Washington helped confirm Abu Ghazala’s new status in June 1986. He was received not only by Secretary of Defense Caspar Weinberger, but also by the secretary of state, the national security advisor, by Vice President Bush and by several senators and congressmen. He discussed not only reduction of interest on the military debt but also general economic issues. Civilian members of the delegation, including Minister of Planning and Foreign Cooperation Kamal al-Ganzuri, Minister of Finance Salah Hamid, and Minister of State for Cabinet Affairs ‘Atif ‘Ubayd, were left to sort out the technicalities after Abu Ghazala and the Reagan team had come to an agreement on principles. 
At precisely this juncture the opposition press launched a campaign to subject the military to greater civilian control. Was this attack on military profligacy encouraged by Mubarak himself? Virtually the entire opposition press latched onto this issue simultaneously, and then just as suddenly at the end of July dropped it. Although Mubarak publicly supported the military, and rejected claims that commissions were being paid on weapons purchases, he nevertheless sent a clear message to the reading public that he was following this debate with interest and possibly approval. Mubarak met with ‘Adil Husayn, after the editor-in-chief of al-Sha‘b called into question Abu Ghazala’s assertion that he had not given in to American pressure during negotiations in Washington. After a year of lambasting the opposition press and refusing to meet with its editors, Mubarak encouraged Husayn to expound his point of view.
If Mubarak intended to curtail Abu Ghazala, by the fall that attempt had failed. The drumbeat of military “victories” (completion of projects) quickened. In November Abu Ghazala returned to Washington to resume negotiations; Mubarak’s trip for the same purpose was postponed: Washington did not want to receive him prior to agreement on economic reforms.
What is taking place today in Egypt is a game of maneuver between Mubarak and Abu Ghazala. Mubarak continues to search for a counterweight to the ambitious field marshal. Within the military, the cabinet, the bureaucracy and even the NDP, Abu Ghazala has been able to overcome personnel and policy obstacles placed in his path. Mubarak has sought to contrast his tolerance of democratic forms of government with the possibility of a return to military rule. It is, however, an approach that causes concern within the officer corps, some of whom simply oppose anything more than marginal civilian political participation. Others fear that the removal of controls over political expression at a time of deepening economic crisis will result in a breakdown of political order. Sensitive to these apprehensions, Mubarak paid a lengthy publicized visit to the commanders of the Second and Third armies on February 5, 1987, the very day that the results for the referendum on the dissolution of parliament were announced.
Abu Ghazala is very closely identified with Washington. The private consulting firm retained by the Egyptian government to lobby in Washington on its behalf is headed by a former member of the US embassy in Cairo and works almost exclusively for Abu Ghazala. Abu Ghazala’s US connection is at times useful, sometimes essential, but the deterioration in Egyptian-American relations simultaneously reflects more negatively on the field marshal than on Mubarak. The $4.5 billion military debt has been a heavy political burden for Abu Ghazala as well as a financial liability for the country as a whole. Mubarak’s demarche towards the USSR suggests a desire not only to restore balance in Egypt’s foreign relations but also to provide a counterweight to Abu Ghazala and his American backers. Abu Ghazala, for his part, has tried to torpedo those efforts.
Abu Ghazala has been able to parry most of Mubarak’s thrusts. He has brought the potentially pesky opposition almost completely to heel, probably through a mix of sanctions and inducements as well as by his political astuteness and sheer personal charm and presence. His major potential liabilities — his connections to the US and to corrupt practices and persons — are paradoxically also important sources of his strength. The patronage network he has established in the military, and which trails off into the public and private sectors, makes it very difficult for anyone to undermine his authority. By tying his fate not only to the military but also to the fortunes of a sizeable socioeconomic group, Abu Ghazala has raised the stakes. Anyone who wants to move against him has to contemplate a “corrective revolution” of the magnitude that Sadat launched in May 1971.
The opposition is much the weakest player in this three-handed game. It is not united. Its weakness reduces the opposition’s options in the game between the president and the minister of defense to selling their services to the highest bidder — volunteering their weight behind one or another in the hopes of affecting the outcome or aggravating the split between the two and thereby precipitating an open confrontation. The opposition, individually and collectively, is at this point still marginal to the outcome.
Even if Mubarak were fully to commit himself to the risky strategy of rapid and thorough democratization, the odds are stacked against him. In the ensuing race between the military and civilians around him for power, Mubarak’s civilian politicians are fatally handicapped by their inexperience, divisions, and by the fact that the most powerful social class, the bourgeoisie, is divided in its loyalties. When and if push ever comes to shove between Mubarak and Abu Ghazala, civilian politicians will be left on the sidelines to cheer whoever emerges victorious.
 On the reduction of the military over this period see Ibrahim Nafi‘, “Quietly,” Al-Ahram, July 11,1986.
 Colonel Willian Oldes, Head of Land Forces Program in Egypt, interview, May 26, 1986.
 Mark N. Cooper, The Transformation of Egypt (Baltimore: Johns Hopkins, 1982), p. 144. See also Mark N. Cooper, “The Demilitarization of the Egyptian Cabinet,” International Journal of Middle East Studies, 14,2 (May 1982), pp. 203-225; Raymond A. Hinnebusch Jr., Egyptian Politics Under Sadat: The Post-Populist Development of an Authoritarian-Modernizing State (Cambridge: Cambridge University Press, 1985), pp. 100-105; and Shahrough Akhavi, “Egypt: Diffused Elite in a Bureaucratic Society,” in I. William Zartman, et al., Political Elites in Arab North Africa (New York: Longman, 1982), pp. 237-242.
 Nazih N.M. Ayubi, Bureaucracy and Politics in Contemporary Egypt (London: Ithaca Press, 1980), p. 351. The figure for 1980 was obtained through interviews with local government officials at the Conference on the Decentralization of Local Government, Fayoum, January 1980.
 Sadiq has just published his version of these events. They provide an interesting insight into Sadat’s techniques of manipulation. See his Military Pages, published in Saudi Arabia in February 1987, and reviewed in the Middle East Times, March 1-7,1987.
 Hinnebusch, p. 130.
 Charles Richards, “Defense Forces Seek a Role,” Financial Times, June 7, 1982.
 Several reporters in attendance at an off-the-record question and answer session with Abu Ghazala at the Washington Post in June 1986, made these observations to the author.
 Robert Springborg, “Egypt,” Current Affairs Bulletin 62, 5 (October 1985), pp. 25-30.
 Cited by Philip Gallab, “Marshall Abu Ghazala and Non-Alignment,” Al-Ahali, May 19, 1982.
 Middle East Research Institute, University of Pennsylvania, Egypt (London: Croom Helm, 1985), p. 18.
 This version of the events was related on American ABC television on June 10,1986. The following day it was denied by the State Department. Sources close to the Egyptian presidency and the American Embassy confirmed the ABC version of events.
 This account of the minuet between Mubarak and Abu Ghazala over the vice presidency was circulating in Cairo in early 1986. In July 1986, Abu Ghazala was still denying ambitions to be vice president: “I find that I am only a soldier,” he told Al-Sha‘b, July 29,1986.
 This viewpoint was widely dispensed through various channels, including nominally off-the-record briefings by embassy officials, among them those given by the Political-Military Officer, John Michael Davis.
 These are the lower and upper limits of estimates from various sources. Richard claims that the army comprises 200,000 men, the Air Force about 40,000, Air Defense about 85,000 and the Navy 17,000. Reserves, according to him, bring the total figure to one million. “Defense Forces Seek a Role.” Jabber, on the other hand, states that Egypt has 445,000 men under arms (320,000 Army, 80,000 Air Defense, 25,000 Air Force and 20,000 Navy). See Paul Jabber, “Egypt’s Crisis, America’s Dilemma,” Foreign Affairs (Summer 1986), p. 970. Arab Strategic Report, 1985, published by Al-Ahram, also gives the figure of 445,000 men in active service, with reserves of 380,000 for a total of 825,000. See The Arab Strategic Report, 1985 (Cairo: Al-Ahram, 1986), p. 402 (in Arabic). The American Head of the Land Forces, Egypt, estimates Egypt’s military manpower at 300,000. Oldes interview. Ibrahim Disuqi Abaza, in a seminar organized by the Egyptian Society of Economists in July 1986, called attention to the manpower imbalance in the Egyptian Army, comparing it unfavorably to the ratio that prevails in the Israeli Defense Forces. See Hasan Amr, “Former Government Leaders Examine the Ills of the System,” Middle East Times, August 3-16, 1986. Illiterate conscripts were foisted onto the CSF. University graduates and graduates of the religious educational system who could demonstrate that they had memorized the Quran had their conscription reduced from two years to one. Graduates of the higher technical institutes had their periods of service reduced to one and a half years. Al-Akhbar, October 20,1986, and Al-Ahram, February 4, 1987.
 For details of the most recent salary increase, see Al-Wafd, January 22, 1987.
 Oldes interview.
 For the most recent comprehensive survey of weapons acquisitions by the Egyptian military, see The Arab Strategic Report, 1985, pp. 409-416.
 Egyptian Gazette, September 19, 1986.
 Misbah Qutb, “Military Infitah,” Al-Ahali, June 4, 1986.
 Al-Ahram, October 22, 1986; and Middle East Times, December 14-20, 1986.
 Middle East Times, November 2-8, 1986.
 On the military’s educational system, see The Arab Strategic Report, 1985, pp. 425-429.
 See the interview with Huwaydi in Al-Ahali, June 25,1986; and Husayn ‘Abd al-Raziq, “We and the President,” Al-Ahali, July 9, 1986.
 Washington Post, October 1, 1982; Wall Street Journal, October 1,1982. Richard Secord, currently under investigation in the Iran-contragate affair, also may have been involved.
 Lloyds hired a local agency owned by two expatriate Irish brothers to investigate. Shortly thereafter the Egyptian government revoked the residence and work permits of the Irishmen. Lloyds informed the Egyptian government that if these men were not allowed to continue their investigations no further insurance would be written for ships discharging cargo at Alexandria. A compromise was eventually reached whereby the Lloyds’ representatives undertook their assessments in the presence of an Egyptian admiral.
 Ahmad al-Husri, “The Private Sector Besieges the Public Sector in the Work of Loading and Unloading,” Al-Ahali, April 2,1986; and ‘Abd Allah ‘Abd al-Ghani Ghanim, The Immigration of Laborers: A Study in the Social Anthropology of the Social Structure of the Porters in the Port of Alexandria (Alexandria: Modern University Press, 1982) (in Arabic). Al-Wafd (April 2,1986) connects corruption at the Port with the formation of various stevedore companies by retired naval officers. In November the head of one of these companies was removed amidst allegations of embezzlement. See Al-Ahrar, November 7, 1986.
 For a colorful account of Israel’s role see Wolfgang Lotz, The Champagne Spy: Israel's Master Spy Tells His Story (NY: St. Martin’s Press, 1979).
 Robert Bailey, “Armed Forces Modernization Spurs Growth of Arms Industry,” International Herald Tribune, June 14,1984. For a current discussion, see the interview with General Gamal Sayyid Ibrahim, in Al-Ahram, February 3, 1987.
 Jabber, p. 971.
 International Herald Tribune, June 14, 1984; and Middle East Times, November 30-December 6, 1986; Jabber, op.cit.
 December 18,1986; see also Middle East Times, December 21-27, 1986 and December 28-January 3, 1987.
 Al-Ahram, February 8, 1987.
 August 4, 1986.
 “Big Deviations in the Military Factories,” Al-Ahrar, September 15, 1986.
 Al-Ahali, June 25, 1986. Sawt al-Arab, a Nasserite weekly, reported on November 2, 1986, that the minister of finance’s report for 1985 revealed that 47 percent of governmental revenue was allocated to cover military expenses.
 Arab Strategic Report, pp. 426-28.
 Qutb, op.cit.
 This company imports semi-finished televisions which require little more assembly than bolting the case onto the chassis. Since “components” attract a much lower tariff than finished sets and since Benha enjoys a monopoly over television assembly, it has a guaranteed market for its output. This attraction it dangles in front of Japanese television producers who compete for supply contracts by offering generous commissions to Benha’s management.
 Ted Rosen, interview, Cairo, June 19, 1986. Rosen married the daughter of Mustafa Kamil Murad, the head of the Liberal Party. According to Rosen, the $200 million figure was scaled down to as little as $40 million as private investors pledged investment funds for the project. In principle, however, GM still has AID’s approval to draw up to $200 million.
 This information was provided by various employees of AID/Cairo on the condition that they not be identified.
 Rosen interview; William Clark, Deputy Chief of Mission, US Embassy, Cairo, interview, June 17, 1986.
 Al-Ahram, April 13, 1982.
 Middle East Times, September 7-13, 1986.
 Percentage calculated from figures in Qutb, op.cit, and “Economic Profile of Egypt,” US Embassy, Cairo, March 9, 1986.
 On the inflation in land prices, see Amal ‘Alam, “Despite the Increase in Area Offered Demand is Still Three Times Supply,” Al-Ahram, February 1987. This writer attended several auctions of reclaimed land held by public sector land reclamation companies in the summer of 1986. Bidding on plots of less than 100 feddans was invariably highly competitive, with the average price being somewhere between £E4000 and £E5000 per feddan.
 This technique was first brought to my attention by Ambassador Tahsin Bashir. Interview, Cairo, May 21, 1986.
 Al-Ahrar, August 4, 1986.
 Al-Ahrar, September 29, 1986.
 Dr. Rifqi Anwar, former director of the General Authority for Reclamation and Development of Agricultural Projects, interview, Cairo, May 28, 1986.
 Ghada Ragab, “Military to Employ Conscripts in Desert Reclamation Plan,” Middle East Times, April 20-26, 1986.
 Al-Ahram, May 16, 1986.
 In 1985, the military adopted a policy of very selective announcement of its endeavours. By then its development projects included training courses for various construction and manufacturing trades (including spinning and weaving, Egypt’s oldest industrial undertaking); basic literacy courses; and professional training in medicine and engineering. A semi-official list of the goals of the military “in the area of national service” includes this rationale: “Providing the requirements of individuals in the armed forces and their families at reasonable prices is a sort of compensation for the lowering of their income in comparison to the income of workers in many other sectors.” Arab Strategic Report, pp. 426-429.
 Al-Akhbar, October 21,1986. Nasser and Sadat also used the Mahrusa, which had crossed the Suez Canal in 1869.
 Al-Ahram, September 27, 1986.
 Al-Ahram al-Iqtisadi, November 9, 1986; Middle East Times, May 18-24, 1986.
 Among them are ‘Adil Gabra‘il, former wakil (deputy director) of the National Security Council, who was appointed immediately upon retirement to the Isma‘iliya Poultry Company; Hasan Taha, former wakil of the security department in Ismai‘liya, was given a post in the Nasr City branch of Arab Contractors; and Yunis al-Ansari, former director of Cairo Airport.
 See Al-Ahram, October 22 and 30, 1986, and February 6, 1987; and Al-Akhbar, October 30, 1986.
 For a semi-official account of this visit, see the article by Hamdi Fuad in Al-Ahram, June 25, 1986.