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In its fourth review of Egypt’s $8 billion loan program released earlier this month, the International Monetary Fund (IMF) raised renewed concerns about the dominant role of military and state-owned enterprises in the country’s economy, warning that this model hampers competition and long-term growth.
“The economic landscape is dominated by public-driven investments, an uneven playing field, and state-owned entities, including military ones, that operate directly in product markets,” the IMF stated.
The report noted that 97 military-owned companies span various sectors, with 73 percent engaged in industrial activity and 15 percent in services—a reach that experts say distorts Egypt’s economic fundamentals.
Economists warn that this setup rewards military-affiliated firms while sidelining private businesses. A Cairo-based economist told Middle East Eye (MEE):
“Military involvement in the country’s economy undermined competition, discouraged private investment, and distorted market signals, creating a dual economy—one transparent and risky—and the other opaque and protected.”
Private sector voices echoed this frustration. A construction contractor in Alexandria, speaking anonymously due to security concerns, told MEE:
“Before the army stepped into our industry, I used to have three projects running in and around Alexandria. Now, I’m lucky if I get one a year. We just can’t compete with the pricing or timelines of military-backed companies.”
The IMF’s report also warned that the “reallocation of public spending towards military-related or high-profile projects diverts resources from more productive uses, and undermines long-term growth potential,” adding that continued dominance by the public sector discourages foreign investment and stifles private enterprise.
In a sign of growing concern, the IMF has merged and delayed the fifth and sixth reviews of Egypt’s loan program—an indication of what analysts describe as the Fund’s mounting frustration over the slow pace of structural reforms.
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