Egypt Defence and Security Report Q4 2008 - http://www.companiesandmarkets.com adds new report

2008-11-25 21:29:04 - Egypt Defence and Security Report Q4 2008 - a new market research report on www.companiesandmarkets.com

www.companiesandmarkets.com/Summary-Market-Report/Egypt-Defence- ..

On the domestic front, Egypt is witnessing its share of turbulence. The rise of the Muslim Brothers as a major political force, following success parliamentary elections in 2005, continues to test the Mubarak regime’s stomach for a liberalisation of the political process. This is highlighted by the fact that, using state of emergency regulations, the authorities continue to hold around 18,000 people in prison without charges. The government says the state of emergency law is used only to target terrorism suspects and drug dealers. Opponents and human rights groups have claimed that the state of emergency has been abused and used to shield the systematic use of torture by police. The US government said it was ‘disappointed’ with the extension of the emergency law and urged the Egyptian parliament to replace it with new counter-terrorism legislation instead. This is compounded by the pressure the government is feeling as a result of rising inflation and commodity prices combining with ongoing high levels of unemployment and low wages for many sectors of the economy represent formula for domestic political turbulence. Although GDP has continued to grow at rates well above 5%, economic conditions have not improved for many Egyptians, and shortages in bread production lead to food riots erupted earlier in the year.



Egypt continues to be a major recipient of US foreign military aid, which it uses to acquire largely USmade military equipment as part of Cairo’s bid to modernise its armed forces. The latest acquisition of M1-A1 Abrams tanks is example of the ongoing importance of this relationship. Egypt boasts what is for the region extensive manufacture of military equipment, however, it still has no armaments design industry to speak of: its defence industry remains largely dependent on co-production deals, again, primarily with the US. Egypt’s military expenditure are likely to remain constant providing Cairo remains in Washington’s favour, and providing the US does not reprioritise substantially its defence subsidisation priorities within the region.



This appears unlikely, however: Cairo and Washington share many of the same beliefs regarding Egypt’s security concerns. US pressure for political reform in Egypt is likely to remain limited because the US does not want another Islamist government to emerge in the region. This rationale has seen the US continue to bolster the Mubarak government through explicit support and extensive financial and military aid. This valuable political and financial relationship maintains the need for the regime to continue to subdue groups such as the Muslim Brotherhood, despite its apparent legitimation at the hands of the Egyptian electorate.



As has been noted previously, European companies have been increasingly breaking into the Egyptian defence market over the last few years, and stronger ties with China could see the end of dependency on the US.