1Whatever the official figures may say, the Egyptian economy has two particular features: the extent of the “informal” economy, which is typical of a developing country, and the heavy involvement of the army, which is present in every sector including the civil and is accumulating a vast economic empire.

The booming "informal" economy

2The informal economy refers to activities that are legal and socially tolerated but generally unregistered in order to escape, if only partially, official taxation. It mostly involves service activities (street traders, private lessons and classes, caretaking, domestic work, etc.) including undeclared employees of official companies. It also encompasses manufacturing workshops and factories: roughly 45,000 factories were unregistered in 2015.

3While the informal economy is the norm in Egypt and is ever-present in everyday life, it has expanded since the 1990s because of unemployment and the shrinking of the job market. It experienced a boom after 2011, growing from roughly 30% of GDP in 2010 to 40% in 2018, according to government sources. Statistics released by the African Development Bank suggest that the informal sector represented 45-70% of jobs in Egypt in 2012. This post-2011 growth is due to a number of factors: the economic crisis, with loss of employment and a rising cost of living, encouraged individual work, in addition or otherwise to an existing activity (such as driving for Uber or Careem); intensive use of the internet and social media have widened the distribution potential of private services and projects; the temporary loosening of control on public spaces following the withdrawal of the police in January 2011 allowed vendors to occupy streets and pavements, especially in the centre of Cairo and in the Metro. Eviction of these vendors from 2014-2015 onwards has not been uniformly applied to all places.

4Given the informal sector’s importance as a provider of work and even survival opportunities, especially for women, the State has regularly attempted to “formalise” it, both for tax reasons – the value of unpaid taxes was estimated at LE150 billion in 2012 –, and for reasons of hygiene and public health (the problem of street food), as well as to ensure better social and legal protection for workers. At least, these are the arguments put forward. In April 2018 parliament adopted a law obliging street food vendors to obtain a licence, the annual cost of which can reach LE10,000 (€500).

5The informal economy differs from the black economy, which involves illegal, often clandestine activities of a criminal nature or otherwise (the traffic in drugs, arms, and human beings; the abduction of children etc.). However, in a worsening socio-economic context, different forms of smuggling intermingle, especially in port cities and border regions. In Sinai, the smuggling of ordinary goods (cigarettes, foodstuffs, medicines etc.) runs alongside human trafficking (migrants, prostitutes, organs etc.) into Israel and is rooted in historic trade networks. The particular geography of the peninsula, underdevelopment and conflictual relations with the State have combined to produce a resurgence of organised criminal trafficking since the beginning of the century.

6.9 Selling bread in the street, Cairo, 2018

The army, at the heart of the economy

6The army has been a central actor within the national economy since the 1980s even if its actual weight is difficult to evaluate because of a lack of data (25% of GDP according to certain sources). Its involvement in the manufacture of civil goods began under the Mubarak regime within a context of economic liberalism and a lessening of its prominence in political and security matters. The military establishment took advantage of a cheap labour force (national service conscripts) and exemption from taxation to build a vast empire touching all sectors: agri-food, construction, real estate, textiles, hotel business, petrol stations, cement plants, petrochemicals etc. The army also manages the distribution of subsidised staples to those most in need. Many retired officers and generals are directors of public companies and authorities (harbours, free zones, the Suez Canal etc.)

7The army’s hold over the economy has increased under Sisi’s presidency, particularly in the area of presidential megaprojects (widening of the Suez Canal, and the New Administrative Capital), control of television (purchase of private channels) and in the building of roads, bridges, hospitals and housing. A dozen new companies have appeared since 2014 that are owned by the Ministry of Defence, the Ministry of Military Production and the Arab Organisation for Industrialisation (a governmental body). Accompanied by patriotic pronouncements of supporting development, the army’s interventions leave little space for any competition.

6.10 The army and tax exemptions

6.11 Powdered milk formula imported and distributed by the army, 2018: an inscription on the tin reads Tahiya Misr (Long Live Egypt) next to the national flag

6.12 Distribution of food aid by the army, Port Fuad, 2017