A Blog by the Editor of The Middle East Journal

Putting Middle Eastern Events in Cultural and Historical Context

Wednesday, September 5, 2012

The Arab Organization for Industrialization

The Egypt Independent has a "Profile" of the Arab Organization for Industrialization, a major component of Egypt's defense-industrial complex. In an earlier incarnation, writing about indigenous Middle Eastern defense industries in the 1980s, I had considerable familiarity with AOI. Based on the article, things haven't changed all that much.

AOI had its origins in the 1970s, when the idea of a joint Arab defense industry seemed feasible, and the Gulf states (Saudi Arabia., Qatar, and the UAE), fueled with money from the oil price spike in the 1970s, decided to fund a joint industry based on Egypt's industrial base. After Sadat made peace with Israel the inter-Arab component vanished, but the organization remained a separate (though state-owned) entity from Egypt's Ministry of Military Production. I'm not sure even most Egyptians know why it's a separate entity anymore, though it retains the "Arab" in the title.

As the article notes, a great many of its products are for civilian use; the military manufacturing sector makes lots of non-military products. Sometimes it makes sense (jeeps for both military and civilian markets); more often, it's just a way for the military to have its own sector of the consumer market.

As the article notes, AOI has always had a head from a military background, and President Morsi last month named the forcibly-retired head of the Air Defense Forces as its latest chief. It also enjoys the perk the rest of the military sector enjoys: its budget is not public and is not voted by Parliament. There are moves to change that in the new Constitution, but the military will fight to keep it.

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