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151. Retain, Restructure, or Divest? Policy Options for Egypt’s Military Economy

Author:
Yezid Sayigh
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
The Egyptian military has been on a dramatic expansionary trajectory since seizing power in July 2013. Having previously been an economic backwater, the Egyptian Armed Forces (EAF) and other military agencies have spearheaded the enormous state-led investment strategy that President Abdel Fattah el-Sisi has pursued since he came to office in 2014. The military controls a vast economic portfolio. It manages a significant share of the overall volume of publicly contracted infrastructure and housing. It builds industrial zones and produces capital goods, consumer durables, transport and heavy goods vehicles and parts, and information technology equipment. It undertakes associated retail, owns commercial media companies and hotels, and is rapidly increasing its stake in agriculture, fisheries, and mineral extraction. As of September 2021, the military even has a monopoly on the production of school meals. The Ministry of Defense (MOD) has formally controlled the use of state land by any civilian individual or entity, whether private or public, since 2001. The Ministry of Military Production (MOMP) is now one of two bodies that approves the import of foreign goods or services by government agencies. Military representatives sit on national boards, including for planning and sustainable development; feed into policy direction in several sectors, including the manufacturing industry, telecommunications, digital transformation, market development for electric vehicles, and rural development; and head major presidential initiatives, including the Long Live Egypt (Tahya Misr) development fund and the company responsible for constructing Egypt’s new administrative capital. Plans are underway to increase the capitalization of military companies by inviting private investment through the Egyptian sovereign wealth fund. What I have called an “officers’ republic”—comprising thousands of senior EAF retirees embedded in government ministries and agencies, regulatory and operational economic authorities, local government, and state-owned enterprises—complements the formal military economy. Military agencies and companies provide significant economic benefits. Military-managed public investment in transport infrastructure, for example, facilitates the movement of people and goods and expands access to external markets and investment opportunities. The construction of social housing for low-income groups addresses a serious shortage and assists government efforts to regenerate the informal settlements and slums where approximately one in seven Egyptians live. New industrial zones and extensive agricultural greenhouse projects attract investors, both domestic and foreign, contributing to economic growth and employment. And lower middle–class customers benefit from the expanding range of locally made consumer goods at affordable prices, alongside cheap meat and poultry imports, subsidized health services, and free food baskets for the poor. Why, then, should Egypt reconsider the military’s role in the economy?
Topic:
Armed Forces, Economy, Business, and Military
Political Geography:
Middle East, North Africa, and Egypt

152. Throwing Down the Gauntlet: What the IMF Can Do About Egypt’s Military Companies

Author:
Yezid Sayigh
Publication Date:
04-2022
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
Until recently, both the International Monetary Fund (IMF) and the World Bank were wholly reticent to say anything about the involvement of the Egyptian Armed Forces (EAF) and other military agencies in Egypt’s civilian economy. This is a longstanding problem. By turning a blind eye to the diversion of resources to the military sector and to the increasingly significant impacts on the economy and public finances, these international financial institutions (IFIs) have undermined the effectiveness of their own programs and allowed their resources to be invested in support of suboptimal policies by the Egyptian government. There is a question of propriety when international assistance allows distorted policy incentives to continue or even intensify and disregards the fact that much of the hype about global growth in the Egyptian economy obscures the very real constraints imposed on private sector development. It is high time to throw down the gauntlet: IFIs and their governmental sponsors should tackle the reality of military involvement systematically in their programs and policy recommendations, and they should confront the issue head on in their dealings with Egypt’s authorities. Reticence persists but is starting to dissipate. A report released by the World Bank in December 2020 noted that military agencies account for an appreciable proportion of all state-owned enterprises producing capital goods; consumer durables and apparel; materials; food, beverages, and tobacco; automobiles and components; retailing; media and entertainment; semiconductors and intelligent transportation system equipment; and technology hardware and equipment.1 The IMF went further in a July 2021 review of its loan agreement with Egypt, in which it referred to the presence and role of Egyptian military companies for the first time ever.2 Significantly, it included them explicitly in its assessment of state-owned enterprises in general—many of which, the report noted, are “registering weak financial performance while some are benefiting from an uneven playing field”—and implied that military companies should come under the same broad reform policies that the IMF proposes for the public sector as a whole. Now that the IMF, in particular, has broken its former silence, it should refine its approach so as to tackle the Egyptian military’s economic role in a more targeted and consistent manner—hence making its approach more effective and sustainable. This requires a mix of measures. The first set involves bringing military agencies and companies within the scope of recommendations proposed by the IMF for Egypt’s civilian public sector and state-owned enterprises as a whole. These first measures therefore engage with IMF recommendations and Egyptian government policy initiatives relating to broad questions of ownership, regulation, and financing strategy. The second set of measures tackles the specific aspects of the legal, regulatory, and judicial frameworks that enable the military’s activities in the civilian domain. Unless they are revised, these enabling frameworks will impede wider reforms, but the Egyptian government and IMF have, for the most part, neither reviewed nor addressed them to date.
Topic:
Regulation, Economy, Business, IMF, Civil-Military Relations, and Military
Political Geography:
Middle East, North America, and Egypt

153. U.S.-China Technological “Decoupling”: A Strategy and Policy Framework

Author:
Jon Bateman
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Carnegie Endowment for International Peace
Abstract:
A partial “decoupling”2 of U.S. and Chinese technology ecosystems is well underway. Beijing plays an active role in this process, as do other governments and private actors around the world. But the U.S. government has been a primary driver in recent years with its increased use of technology restrictions: export controls, divestment orders, licensing denials, visa bans, sanctions, tariffs, and the like. There is bipartisan support for at least some bolstering of U.S. tech controls, particularly for so-called strategic technologies, where Chinese advancement or influence could most threaten America’s national security and economic interests. But what exactly are these strategic technologies, and how hard should the U.S. government push to control them? Where is the responsible stopping point—the line beyond which technology restrictions aimed at China do more harm than good to America? These are vexing questions with few, if any, clear answers. Yet the United States cannot afford simply to muddle through technological decoupling, one of the most consequential global trends of the early twenty-first century. The U.S. technology base—foundational to national well-being and power—is thoroughly enmeshed with China in a larger, globe-spanning technological web. Cutting many strands of this web to reweave them into new patterns will be daunting and dangerous. Without a clear strategy, the U.S. government risks doing too little or—more likely—too much to curb technological interdependence with China. In particular, Washington may accidentally set in motion a chaotic, runaway decoupling that it cannot predict or control. Sharper thinking and more informed debates are needed to develop a coherent, durable strategy. Today, disparate U.S. objectives are frequently lumped together into amorphous constructs like “technology competition.” Familiar terms like “supply chain security” often fail to clarify such basic matters as which U.S. interests must be secured and why. Important decisions are siloed within opaque forums (like the Committee on Foreign Investment in the United States [CFIUS]), narrow specialties (like export control law), or individual industries (like semiconductors), concealing the bigger picture. The traditional concerns of “tech policy” and “China policy” receive outsized attention, while second-order implications in other areas (such as climate policy) get short shrift. And as China discourse in the United States becomes more politically charged, arguments for preserving technology ties are increasingly muted or not voiced at all. This report aims to address these gaps and show how American leaders can navigate the vast, perilous, largely unmapped terrain of technological decoupling. First, it gives an overview of U.S. thinking and policy—describing how U.S. views on Chinese technology have evolved in recent years and explaining the many tools that Washington uses to curb U.S.- China technological interdependence. Second, it frames the major strategic choices facing U.S. leaders—summarizing three proposed strategies for technological decoupling and advocating a middle path that preserves and expands America’s options. Third, it translates this strategy into implementable policies and processes—proposing specific objectives for U.S. federal agencies and identifying the technology areas where government controls are (or are not) warranted. The report also highlights many domestic investments and other self-improvement measures that must go hand in hand with restrictive action.
Topic:
National Security, Science and Technology, Intellectual Property/Copyright, Authoritarianism, Economy, Espionage, Military, and Interdependence
Political Geography:
China, Asia, North America, and United States of America

154. Mexico’s Military Knew Ayotzinapa 43 Were Kidnapped, Then Covered It Up

Author:
Ñaní Pinto
Publication Date:
04-2022
Content Type:
Commentary and Analysis
Institution:
The North American Congress on Latin America (NACLA)
Abstract:
Following a new report, families of the 43 students criticized the government of President Andrés Manuel López Obrador for failing to follow through on promises to finally solve the case.
Topic:
Corruption, Crime, Government, Kidnapping, and Military
Political Geography:
North America and Mexico

155. Spring 2022 edition of Strategic Visions

Author:
Casey VanSise and Alan McPherson
Publication Date:
05-2022
Content Type:
Journal Article
Journal:
Strategic Visions
Institution:
Center for the Study of Force and Diplomacy, Temple University
Abstract:
News from the Director . . . . . . . . . . . . 2 Spring 2022 Colloquium . . . . . . . . 2 Columnist Trudy Rubin at CENFAD . . . . . . . . . . . . . . . . . . 3 Spring 2022 Prizes . . . . . . . . . . . . 3 First CENFAD Emerging Scholar . . . . . . . . . . . . . . . . . . . . . . 4 Thanks to the Davis Fellow . . . . . . 4 News from the CENFAD Community . . . . . . . . . . . . . . . . . . . . . 5 Note from the Davis Fellow . . . . . . . . 9 CENFAD Community Interviews Dr. Robert “Bob” Vitalis . . . . . . . 11 Dr. Elizabeth R. Varon . . . . . . . . . 15 Dr. Matthew Specter . . . . . . . . . . 19 Dr. Miguel La Serna . . . . . . . . . . 25 Dr. Paul Adler . . . . . . . . . . . . . . . 31 Short Essay: “The Stable Republic of Brazil,” by Dr. Philip Evanson . . . . . 35 Book Reviews Her Cold War: Women in the U.S. Military, 1945-1980, reviewed by Ariel Natalo-Lifton . . . . . . . . . . . 40 American Exceptionalism: A New History of an Old Idea, reviewed by Graydon Dennison . . . . . . . . . 46
Topic:
Economy, History, Interview, COVID-19, Strategic Interests, and Military
Political Geography:
Brazil, Global Focus, and United States of America

156. WILL NATO MILITARY EXERCISES DETER RUSSIAN EXPANSION?

Author:
Brian Blankenship
Publication Date:
02-2022
Content Type:
Commentary and Analysis
Institution:
Political Violence @ A Glance
Abstract:
As concerns that Russia might try to seize additional territory from Ukraine have mounted in recent weeks, policymakers in the United States and NATO have considered how best to shore up the alliance and discourage a Russian offensive. These efforts are hardly new. Since Russia’s annexation of Crimea in 2014, the NATO alliance has attempted to dissuade Russia from further attempts to encroach on the territory of neighboring countries. These attempts have included the creation of a “Very High Readiness Joint Task Force” capable of deploying to crisis areas within 72 hours, as well as the “Enhanced Forward Presence” consisting of four multinational battalions stationed in Estonia, Latvia, Lithuania, and Poland on a rotational basis. Additionally, NATO members have conducted a variety of military exercises with members around the alliance’s eastern flank, as well as some with Ukraine itself.
Topic:
NATO, Deterrence, Vladimir Putin, Joe Biden, and Military
Political Geography:
Russia, Europe, Ukraine, United States of America, and Baltic States

157. ARE RUSSIA’S THREATS CREDIBLE?

Author:
Stephen Shulman and Stephen Bloom
Publication Date:
02-2022
Content Type:
Commentary and Analysis
Institution:
Political Violence @ A Glance
Abstract:
The current crisis in Europe is a head-to-head battle of policies of coercive diplomacy: compellence by Russia and deterrence by the West. Russia’s demands focus on permanently reversing the expansion of Western military power into Ukraine, backed by the threat of military attack on Ukraine in the absence of compliance. Western policy seeks to deter such an attack by threatening painful economic sanctions and arming Ukraine to make such an attack more costly to Russia. How credible is the Russian threat?
Topic:
NATO, Diplomacy, Sanctions, Crisis Management, and Military
Political Geography:
Russia, Ukraine, and Eastern Europe

158. The Military Use of Small Satellites in Orbit

Author:
Mariel Borowitz
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Institut français des relations internationales (IFRI)
Abstract:
The number of small satellites in orbit has increased rapidly over the last decade, and the growth of this sector is expected to accelerate even more in coming years. Small satellites offer unique economic opportunities, due to their shorter development time, their lower cost as well as their manufacturing in assembly line style processes. Many small satellite applications envision systems comprised of constellations of hundreds or thousands of satellites, which offer a number of advantages, such as the increase in temporal resolution, or revisit rate, as well as formation flying. Military users can take advantage of commercial systems for military purposes - leveraging existing capability without the need to develop new systems internally. Militaries must look for ways to harness these trends to their advantage, both by making use of commercial offerings, and by examining military-specific opportunities. Military leaders envision a time when battlefield imagery could be requested and received by commanders on the ground and used for real-time decision-making. The U.S. Army's Project Convergence experimented with this capability in October 2020.
Topic:
Science and Technology, Satellite, and Military
Political Geography:
North America, Global Focus, and United States of America

159. Debunking the Korean Peninsula "Arms Race": What's Behind South Korea's Military Force Development?

Author:
Markus Garlauskas and Axel Catellier
Publication Date:
06-2022
Content Type:
Working Paper
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Following a record number of North Korean missile launches, as well as tests by South Korea, assertions have been widely and uncritically made that Seoul is participating in an inter-Korean arms race. This paper challenges that paradigm by arguing that South Korea’s military acquisitions, displays, and testing of new weapons are better explained as proactive efforts to build military capabilities to support national security priorities in a broader context, rather than reactions to the threat from North Korea. While North Korea’s reasons for weapons testing are well-documented, South Korea’s military buildup in recent years has received far less attention. This paper examines drivers behind South Korea’s military investments and makes recommendations for how the Republic of Korea (ROK)-United States alliance could incorporate these capabilities into alliance military operations beyond simply deterring or defeating North Korea. To do so, it examines how broader drivers affect ROK strategic thinking, the demands this puts on the ROK military, and how those demands translate to specific defense acquisitions. With the start of a new ROK presidential administration, it is an opportune time for Seoul and Washington to coordinate approaches on capabilities development in ways that would benefit both countries in the years to come.
Topic:
Security, Armed Forces, Arms Race, and Military
Political Geography:
Asia, South Korea, and North Korea

160. The UK's First Comprehensive Space Strategy

Author:
Aleksandra Kozioł
Publication Date:
05-2022
Content Type:
Special Report
Institution:
The Polish Institute of International Affairs
Abstract:
The development of a comprehensive space strategy that encompasses civil and military aspects is in line with the British global strategy adopted last year. Its main goal is to strengthen the domestic space sector in the face of increasing competition on world markets and to make the United Kingdom one of the leaders in this field. The implementation of the strategy will be supported by increased funding, but without setting investment priorities and establishing closer cooperation with allies, including European countries, it will be difficult to achieve the objectives.
Topic:
Markets, Space, Strategic Competition, and Military
Political Geography:
United Kingdom and Europe