The swearing in of Muhammad Morsi to the office of the Egyptian president in the first week of July 2012 should ideally have marked the end of the political upheaval that toppled Hosni Mubarak.    However, the problems that had triggered across the region the ripple of dissent known as the Arab Spring – economic stagnation, price rise, rising unemployment in the background of authoritarian rule – have not disappeared during the period of turmoil. Given the strategic significance of Egypt in the global trade in oil on account of the Suez Canal, the international community is keen that these matters are resolved with minimum dislocation.  But for a large number of Egyptians, the change of guard has opened up an opportunity for more enduring change – and for many of them, Morsi’s rise to presidency, and with him that of the Ikhwan (Muslim Brotherhood) – marks not the end of the revolution, rather its beginning.

The economic malaise of Egypt goes back a long way.  The regime of Gamal Abdel Nasser that came to power through a military coup in 1953 had undertaken a major programme of industrialisation and nationalisation of most of the country’s economic resources.  Since modernisation of the military was one of the central aims behind Nasserite industrialisation, the Egyptian armed forces began to dominate the heavy industrial sector in particular. When the state-led industrialisation programme began to falter, and Nasser’s successor Anwar al-Sadat embarked on a programme of de-nationalisation of industries in the 1970s, Egyptian military’s domination of the heavy industrial sector remained unchanged.  When Sadat’s successor, Hosni Mubarak continued and then speeded up the pace of privatisation of the country’s economic resources in the 1980s and still more in the 1990s, the military began to buy these up – to such an extent that the Egyptian military outfits manufacture everything from fire extinguishers and medical equipment to laptops, televisions, sewing machines, refrigerators, pots and pans, butane gas bottles, bottled water, olive oil and petroleum (refining and distribution). Ministry of Military Production has over 40,000 employees and makes about $345 million p.a. It controls anywhere between 25-40% of the economy – much like Pakistan, Egypt has a military that owns a country.

The stranglehold that Egyptian military enjoys over the country’s economy has been widely understood as the principal obstacle to sustained economic development in the country.  The huge investments made by the Nasserite regime in Egypt’s educational infrastructure has resulted in ever-increasing number of well-educated workers, far larger than the military dominated economy is capable of providing economic opportunities to.

In the 1960s, in the early days of state-led economic growth, the lack of adequate opportunities had turned the social welfare-oriented outfit of the Ikhwan al-Muslimin (Muslim Brotherhood), with its predominantly lower- and lower-middle class clientele, towards militant opposition against the state.  By the 1980s, given the expansion in education, Egyptian youth from middle, lower-middle and lower classes alike gained job opportunities in the oil-rich countries in the neighbourhood, causing an unprecedented degree of prosperity among a large number of the people.  

When expatriates from the oil rich countries began to return after their contracts expired, they found the Egyptian economy moribund and in need of drastic change.  While some of the highly-educated, upwardly mobile professionals veered towards disparate secular but democratic outfits, many among them of in the 1990s began to join the only organisation that the state had not penetrated, the Ikhwan, and began to steer it towards a political direction by contesting municipal and then even national parliamentary elections, using the platforms of various professional associations.  The demonstrators of Tahrir Square in January-February 2011 came principally from the ranks of this upwardly mobile class.  Alongside these were the traditional elements of the Ikhwan and other Islamist welfare organisations continued to cater to the basic needs (health, education, social welfare) of the urban underclass, whom the military regimes had systematically ignored – these were the constituencies which account for the strong showing of the Ikhwan’s political outfit (Freedom and Justice Party) and the Hizb al-Nour in the legislative elections.

Egypt in 2012 finds these two forces – the military on the one hand and the upwardly mobile elements and the depressed underclass on the other – locked into a combat.  By playing up the bogey of Islamic rule (involving redistribution of resources), the military is trying desperately to wean away the secularist and propertied elements away from Morsi. By contrast, Muhammad Morsi needs balance the upwardly mobile Egyptians’ demand for economic growth with the underclass’s demand for redistribution of state resources.  To succeed, he needs dismantle the military’s stranglehold over Egyptian economy. If he manages this unlikely feat, 2012 will mark the beginning of a social revolution in Egypt, and not the end of a political one.

 Kingshuk Chatterjee is an Assistant Professor, Department of History, Calcutta University.