Since I heard that sentence, I have followed everything related to defense industries and industry in Germany, with one question in my mind: Will the Germans do it? Will they really be able to solve their problems?

On February 27, 2022, the then-Chancellor Olaf Scholz delivered a famous speech before the Bundestag, in which he announced a historic turning point. It was called that because it was not merely a tactical adjustment or a marginal revision of German security policy, but rather a radical transformation in the nature of the German economy itself.

To grasp the seriousness of the situation at that time, several analysts pointed out that the German army’s ammunition stockpile at that moment would not suffice for more than a day or two in high-intensity combat, while NATO standards require a stock covering roughly thirty days of operations.

Think carefully — we are talking about Germany, which recently was a great military power, which possesses a massive industrial base, and which is the strongest country in the European Union.

That transformation was not merely an increase in the defense budget or signing contracts to buy new weapons; rather, it was a complete reorientation of the civilian industrial base. Factories that used to produce cars, trains, and heavy equipment turned into factories manufacturing weapons and ammunition. And here rises the question we will try to answer: How could Germany convert its civilian factories into military facilities in any critical moment?

On February 24, 2022, the Russian armies crossed the Ukrainian border. Before that day, Germany saw itself as a peaceful democratic country, investing in renewable energy and caring for the environment, while its defense budget was relatively weak.

In his 27 February 2022 Zeitenwende speech, Chancellor Olaf Scholz announced the creation of a €100 billion special fund (Sondervermögen) to modernize the German army (Bundeswehr) and pledged that Germany would aim to spend more than 2 % of its GDP annually on defence.

However, there were deeply rooted structural problems in the German system. There was a fundamental law issued in 1961 known as the War Weapons Control Act (KrWaffKontrG). It is not just an ordinary administrative regulation but a constitutional instrument derived from Article 26 of the German Basic Law.

(Don’t worry, I won’t burden you with legal details or article numbers.)

The core idea is that this law was established in light of the experience of World War II, meaning it was literally designed to restrict Germany and prevent it from becoming engaged again in an arms race.

This law created a strict regime based on a highly complex chain of licenses and approvals, such that any company wishing to produce war weapons must first obtain a permit from the Federal Ministry for Economic Affairs and Energy (BMWK), and then be subject to close supervision and inspection by the Federal Office for Economic Affairs and Export Control (BAFA).

Later, Germany developed a system that relies on using civil standards as much as possible, shifting to military standards only when military requirements differ substantially from civilian norms.

This system is known as DEMAR, derived from a European framework called EMAR.

The concept is that they built an official bridge that starts with dependence on DIN/EN/ISO standards as far as possible — which are essentially civilian — and only when necessary, a special temporary military standard is adopted. Those requirements are then gradually integrated back into the general framework of standards.

This means that a civilian manufacturer adhering to ISO standards automatically becomes part of the military-industrial base, while standards such as AQAP serve as a NATO quality assurance seal.

In essence, Germany began to change its administrative tools themselves. Since 2023, the Federal Office for Export Control (BAFA) has adopted a general licensing system, replacing the old method that required opening a separate file for every shipment or component.

This step may look small on paper, but in reality, it is profoundly significant, because it means that the state has come to recognize that the bureaucracy designed for peacetime cannot remain the same during industrial mobilization. Otherwise, it would cause any factory—no matter how ready for production—to wait endlessly for a signature or an administrative license.

Now, let us move to practical examples, so the idea does not get lost among the paragraphs of legal texts.

In 2025, information emerged about talks between Volkswagen and Rheinmetall—one of Germany’s most important defense manufacturers—regarding the Osnabrück plant, which had been used for assembling civilian vehicles, and the possibility of repurposing it for defense-related activities.

The CEO of Rheinmetall stated that before building an entirely new factory from scratch, it is only natural to first look at existing ones, as that is both more economical and faster.

And we are not talking here about a marginal industrial site, but rather about the backbone of the German economy itself—the automotive industry, which has now become the subject of a fundamental question:

Can it serve national security in times of necessity?

Another example is the Unterlüß ammunition plant. In February 2024, its construction began under Rheinmetall, and by 2025 the facility was already operational.

The construction cost reached around 500 million euros, and the entire site was completed in just fifteen months.

The factory produces 155 mm artillery shells, which—if we may put it this way—are the tragedy of Ukraine, as they represent the primary ammunition used by the German army, European armies, and Ukrainian forces alike.

The plant’s production plan is projected at 25,000 shells in 2025, 140,000 shells in 2026, and from 2027 onward, it will produce 350,000 shells annually.

As for the contract that gave the plant the kiss of life, it was signed in June 2024, valued at 8.5 billion euros, marking the largest contract in Rheinmetall’s history.

The German government, represented by the Federal Office for Bundeswehr Equipment and Technology, concluded this deal not only to meet the needs of the German army, but also to support the Netherlands, Estonia, Denmark, and Ukraine.

The second case, more significant and distinct, is the Görlitz plant, a factory that has existed for 175 years and has specialized in manufacturing train carriages.

In February 2025, the companies Alstom and KNDS Deutschland announced a historic deal, in which KNDS purchased the factory from Alstom.

You might think to yourself, “It’s just a regular acquisition deal.” But I tell you — no, it is not an ordinary deal at all.

The agreement stipulates the conversion of the plant from producing train carriages to manufacturing military vehicles, while retaining 400 employees out of the 700 who had been working there.

This means the transformation of civilian industrial capacity into military manufacturing capability in the fullest sense of the expression.

The factory will produce components for the Leopard 2 tanks, parts of the PUMA armored vehicle, and several modules of the Boxer armored vehicle.

This shift, in particular, is extremely important for two reasons:

First, because when I say that civilian industrial capacity is, in essence, military capacity, this example stands as the greatest proof of that statement’s validity.

Second, because those who in the past signed contracts to import trains and buses from abroad, under the pretext that “it’s not worth local production,” have lost greatly in the long run, for they have lost an industrial capability that could have easily been converted into military capacity in times of necessity.

Another example also came in February 2025, when Rheinmetall announced plans to convert two factories in Berlin and Neuss into hybrid facilities.

These factories had originally produced automotive components, but they now manufacture weapons and ammunition while retaining a portion of civilian production.

And what does that mean?

They explained that mechanical components and protective parts for weapons would be produced in these hybrid factories, while the processing of explosive materials would take place in specialized sites, since that kind of work requires different licenses and extremely sensitive procedures.

That means they are moving intelligently between the lines of the law. As long as Germany remains bound by the legacy of World War II, the military components that can be manufactured in hybrid factories will be produced independently, while sensitive parts will be handled in dedicated military plants.

This allows the overall production capacity to increase, despite the restrictions and bureaucracy imposed on the state.

In addition, hybrid factories feature high flexibility, enabling them to be completely converted into military factories in wartime.

Thus, production efficiency rises by utilizing existing factories without needing to build new facilities.

It also allows for the use of idle resources during downturns, while distributing costs and risks between fulfilling civilian and military needs simultaneously, and drawing on the workforce already employed in those factories.

In this model, the state itself purchases production lines, meaning it ensures that machines keep running even at a low rate, so that they will not have to start from zero in times of crisis.

There is also another idea being discussed — that the state would pay for the readiness of reserve production lines, just as it pays for backup power stations.

And although this system may not yet be fully implemented, there is a clear trend moving in that direction.

The war in Ukraine revealed that the most crucial element is not the shell itself but the gunpowder, propellants, and chemicals—without which any factory would simply come to a halt.

For this reason, Rheinmetall did not stop at expanding its ammunition production plants; it also acquired the Spanish company Expal and invested in the production of explosives and propellant powders.

This means that both the state and the companies realized that leaving the core supply chain outside their control is equivalent to building industrial capability on a fragile foundation.

The global transformation now underway—and which Germany is striving to implement—is about owning the entire production chain, from the raw material all the way to the ready-to-use shell.

And after all that has been said, one highly critical and often-overlooked element emerges in this story: long-term government contracts.

The reality is that no rational private company in the world would spend hundreds of millions—or even billions—of euros to build military production capacity without first ensuring the existence of real and stable demand.

Defense industries, by their very nature, require a state standing firmly behind them and supporting them.

The Rheinmetall contract, worth 8.5 billion euros, is not merely a transaction; it is a long-term political and economic commitment.

The German government is telling the company plainly: “I will purchase from you for years to come, in specific quantities, at agreed-upon prices, and according to a clear production plan.”

This contract means that Rheinmetall can build new factories, hire workers, and undertake long-term investments without living in fear of sudden demand collapse, as happened to companies in South Africa during the 1990s.

Industrial capacity cannot be built on temporary or emergency orders; it rests on long-term planning.

Without such contracts, everything we have discussed so far would have remained mere theoretical talk on paper, without any practical implementation.

In December 2024, the German government adopted a highly important document known as the “National Security and Defence Industry Strategy.”

This document serves as a clear roadmap in which the German state declared that Germany and all of Europe must now take responsibility for their own security, and that there is no longer any room for luxury, delay, or dependence on others.

The strategy laid out a clear framework for transforming the German industrial base, focusing on defining the key technologies that must remain within Germany and Europe, and formally linking the civilian and military sectors in a direct and institutionalized way.

It also pledged to reduce the bureaucracy that had strangled industry for many years, and to make securing supply chains a national security priority, after they were previously treated as a mere commercial issue.

But does all of this mean that Germany has passed through the bottleneck?

The answer is: no.

However, it can be said that it is trying to rise and is working on changing itself after a long period of stagnation; like a person who has left a toxic relationship, started exercising, reading, and fixing their diet, yet still needs time to completely rid themselves of the effects of that former relationship.

Germany began in 2022 with a financing plan in the form of the 100-billion-euro fund we mentioned earlier, which served as the main entry point.

This was immediately followed by talk of an additional fund, expected to be launched in 2025, with a value that could reach 500 billion euros.

By 2029, the projected annual defense budget may reach 160 billion euros per year, equivalent to around 3.5% of GDP.

This increase is not a normal development; it represents a redefinition of the role of the German state itself.

But—as we said earlier—Germany is still under the influence of the remnants of that toxic relationship with the “former partner,” so to speak.

In a previous article titled “The Economics of Military Readiness,” I referred to reports released in February 2025, which revealed that German military readiness does not exceed 50%, meaning that almost half of the army is not ready for combat.

What is even more alarming is that this percentage is lower than it was before the invasion of Ukraine, in addition to a shortage of around 20,000 soldiers and a severe ammunition deficit—despite all the investments we have mentioned and others yet to be discussed.

This leads us to an even more serious idea: the time gap.

The Kiel Institute for the World Economy issued an extremely pessimistic report stating that for Germany to return to the tank levels it possessed in 2004, it would need around 40 years.

As for combat aircraft, it would take 10 years, while artillery might require an entire century—yes, literally 100 years, as the report explicitly stated.

You may spend billions, build factories, and sign contracts—and yet remain unable to recover for a long time. Defense industries are not a switch you can press to suddenly start producing drones and exhibit them at the next “EDEX,” claiming you have joined the club of major powers.

And beyond all of that, there is a real human-resources crisis.

Rheinmetall alone plans to hire about 9,000 new employees by 2028, but the essential question remains:

Where will they come from?

Reports indicate a shortage ranging between 35,000 and 45,000 specialists in the fields of defense maintenance and repair alone—not in missile development or engineering, but in pure maintenance work, nothing more.

And of course, all of this comes in addition to the major disaster: critical raw materials.

In October 2025, China announced restrictions on the export of permanent magnets, which plunged Germany into a genuine crisis, since 92% of the magnets it uses come from Asia. There is not a single domestic facility capable of separating or refining rare earth elements, meaning Germany is almost entirely dependent on China.

These magnets are far from a trivial matter—they are essential to the motors of drones, guidance systems, and radar technologies.

This means that if the supply chain is disrupted, the entire production line could grind to a halt the very next day.

Hence, the crucial question: Is Germany truly ready?

The honest answer: No.

It is not ready now, and perhaps will not be ready for several years to come.

What is happening now is the building of a foundation, but one that has come far too late.

Most of these capabilities will not reach full operational capacity before 2027 or 2028.

A readiness rate of 50% means that half the forces are not fully equipped.

Gaps in short-range air defense mean the army remains exposed.

Then there is dependence on Asia, a shortage of labor, a prolonged time gap, and political instability that could shift priorities in any upcoming election.

But on the other hand, one thing is different this time — there is now a genuine political commitment.

The direction has become clear: Germany is trying to build what is known as a mobilization-based industrial base.

These are not traditional war factories, but rather a comprehensive industrial system that can, in times of crisis, rapidly shift to military production.

This means the state has the right to declare defense order priority and to redirect part of industrial capacity toward military needs.

In other words, the state will no longer stand pleading before companies or wait for lengthy approvals — it will begin direct execution when necessary.

Will it succeed?

No one knows the answer yet.

But what is certain is that the Germany that is emerging will not be the same Germany we have known over the past thirty years.

When I first studied a concept called the economics of readiness, I finally understood the true weight of the phrase “the weapon is awake.” And no, that’s not an exaggeration. Yes, I’m using it as a hook to keep you reading — but I promise, by the end, you’ll understand exactly why I say that.

Let’s begin and uncover some fascinating facts that might completely change how you look at armament and the numerical balance of defense systems among nations.

If I asked you what the most important weapon in the world is right now, your answer would probably be: the F‑35. You’d be right — sharp and well‑informed.

But did you know that it’s also among the least ready weapons in the world? That’s because of the extremely high operational costs borne by the countries that own this system — costs that reach millions of dollars every single year.

I’ll give you an example to show you what I mean — but I’ll ask one thing of you: finish reading this article after you understand the example, and don’t leave before reaching the more important parts ahead…

Imagine this: You’ve bought a Ferrari, but it’s parked in your garage and you can’t drive it because there’s one particular filter that can only be purchased from Ferrari itself. You go down to the local auto workshops asking about it, and everyone tells you: “Sorry, engineer, that filter just isn’t available in the market.”

So you order it directly from the company, and they reply: “Sure.” Then they leave you waiting for months — even though you have an important trip coming up and really need the car.

After a long wait, the filter finally arrives. The company then tells you: “Wait — a Ferrari engineer must come personally to install it.” By the time that happens, you’ve paid for the filter itself, the engineer’s fee, and endured all the waiting in between.

This is precisely what the real economy of defense looks like today.

And why is this topic so important?

Because it completely changes how we measure power — not by the number of aircraft, tanks, or missiles a country owns, but by something far more crucial: its level of readiness. It also forces us to think about operation before acquisition.

For example, the F‑35 program is the most expensive military project in human history. Its total cost has exceeded two trillion dollars.

No, wait a second — stop right there for a moment — because that figure is roughly four times the size of Egypt’s entire economy! Can you imagine that? Tell me honestly — do you really grasp the scale of that number?

Alright, excellent. Now let’s take a closer look at the breakdown of that figure.

Out of the total, 422 billion dollars were allocated for procurement and development, while the remaining 1.58 trillion dollars are dedicated to operating and maintaining the program.

In defense economics, there’s a well‑known pricing framework called the Razor and Blade Model. Why is it called that? The idea comes straight from the name itself: the company sells you the razor at a low price, then later obliges you to buy the blades and the special oil from the same company — at a much higher price.

In the defense sector, the logic is almost identical. The main system is sold at a competitive price, but the spare parts are produced solely by the same company and are extremely expensive. The technical data is owned by that company, the maintenance must be done through it, and the training takes place in accredited institutes under its control. And so, the cycle continues.

That means you are forced into a long‑term relationship with the company — or even the country — from which you bought the weapon. The duration of this relationship equals the operational lifespan of the weapon itself. And that company or country, quite literally, holds you by the hand that hurts the most throughout that entire period.

Even more concerning is that this dependency doesn’t have to be used against you directly. It can come through subtle tactics — like being told “the stock has run out,” or “we’re waiting for a specific component,” or through export and import restrictions imposed either on you directly or on the company you’re dealing with.

And by the way, this isn’t just theoretical talk. In December 2025, just a few weeks ago, the Pentagon’s Office of the Inspector General stated in its report that the readiness rate of F‑35 fighters does not exceed 50%, while the minimum required level is 67%. In other words, you have hangars full of jets — yet only half of them can actually be used.

No, hold on a second… that 50% figure isn’t even for full mission readiness. If we’re talking about complete, operational readiness, the number drops further — down to 30%. Meaning, if you own ten aircraft, only three of them can operate at full capacity.

Now take this surprise — or rather, this shock: did you know that the readiness level for the exact same aircraft in Israel reaches 85%?

While the U.S. Air Force was struggling to raise the readiness of its F‑35A fleet to 51.5%, Israel was operating its 39 F‑35I fighters with a Mission Capability Index of 85%.

During the first phase of the October 2023 war, only five of Israel’s thirty‑nine jets were out of service — yet four of those were repaired immediately, even before the first day of combat officially began.

And on top of that, Israel operates these fighters with a 565% higher average monthly flight hour rate than the U.S. average — without suffering any major drop in readiness.

But the real question is: how did they manage to do that?

I’ll speak here based on the sources I’ve read — though there’s another layer to this story, one I think you’ll grasp without me having to spell it out…

The answer, quite simply, lies in control over the global supply chain for spare parts and technical data.

Israel possesses strategic relationships that allow it to obtain spare parts from U.S. allies in just a matter of days. Wait a second… did you fully catch that? Spare parts for an American aircraft arrive faster in Israel than they do for the U.S. Air Force itself.

On top of that, Israel has developed its own version of the F‑35, featuring local modifications — including an additional fuel tank, domestically produced electronic warfare systems, and advanced weapons of Israeli origin.

And if you think this situation applies only to the United States and the F‑35 program, let’s shift our focus to Germany.

The 2024 report of the German Bundestag’s Armed Forces Commissioner highlighted a persistent shortage of key equipment, spare parts, and ammunition. The deficit became so critical that Germany — a major industrial power — was compelled to dismantle some of its own weapons to use their parts for repairing and operating others, such as the MARDER vehicles that were taken apart to bring other systems back into service.

Consider this point as well: the readiness level of the German Armed Forces today stands at just 50%. Do you know what it was before the Ukraine war? 65%. In other words, it’s declining instead of improving — and forecasts suggest it could drop to 20% by 2027.

As for short-range air defense systems, they’re expected to reach full readiness only by 2029 — and, well… good luck after that.

Please, focus with me here… Germany has been spending on defense at record levels in recent years — yet readiness keeps dropping?

Yes, that’s true. Because the real problem lies in the global supply chains and the local capacity for maintenance and operation. That’s exactly why I told you at the beginning that this dimension is crucial when analyzing defensive capabilities.

And if you’ve made it this far in the article, then you’re truly my friend — and you deserve to know how this dilemma can be solved.

The solution is one most people don’t like to talk about, because it ruins the media shine that usually surrounds every new arms deal. But take this from me — and no one else will tell you this so directly:

Any deal that does not include control over maintenance and data… is an incomplete deal.

Because — if you reflect on everything we’ve discussed — you’ll realize that real transformation doesn’t begin with the question “What will I buy?” — that’s the easy one. It begins with the harder questions: “How will I operate it? At what cost? And who holds the control?”

You must understand that technical data isn’t just paperwork attached at the end of a file. The manuals, testing tools, maintenance center authorizations, and your right to implement local modifications — these aren’t secondary annexes; they are the core.

They are what determine whether you truly own the weapon — or whether you’re merely renting it from the company.

Alright, even if you do manage to obtain the technical data, will you be able to fix everything from day one?

Of course not.

The idea isn’t to turn yourself into a full-scale manufacturer in the first year, but rather to build local maintenance and operational capability gradually. You start with the less sensitive components — the ones that frequently break down and can halt an entire system because of a tiny part — and then move step by step toward the more complex elements… until, eventually, you’ve built a real margin of independence.

And here comes the part that bothers those who care only about appearances: readiness costs money, and its budget must be completely separate from the procurement budget.

The easiest thing in the world is to cut the maintenance budget just to fund a new deal and look impressive in front of the public.

But that isn’t “saving” — it’s sabotaging the entire defense capability.

Readiness must have its own dedicated maintenance and operations budget, just like the salary or electricity items in a company’s accounts.

You can’t cut it in the name of buying a new coffee machine, because by doing so, you’re simply trading real capability for decorative illusion.

The final solution — or rather, the final strategic awareness — is to understand that the stockpile of spare parts is not a luxury; it’s a doctrine.

A country that introduces new weapon systems without calculating a spare‑parts stock for the coming years isn’t solving a problem — it’s buying a delayed one. And it’s not a minor problem either.

It’s a problem that appears on the day of crisis — when you suddenly realize that a component the size of your palm, by merely being absent, has turned your entire system into scrap metal.

Or perhaps the part does exist, but it’s stored far away, or trapped under export restrictions, or you’re simply waiting your turn like any other customer.

At that moment, the number of jets or tanks you possess ceases to have any real meaning.

And it’s precisely for this reason that readiness itself becomes a geopolitical weapon.

A weapon without missiles — built instead on paper, technical specifications, and supply chains.

And it doesn’t need to be used against you in an overt way.

A slight delay in delivery, a shortage in stock, an export restriction, a pause in certifying your maintenance center, or a missing component in a spare‑parts shipment — that’s all it takes.

In that moment, you’ll realize that you may have a weapon, but it isn’t awake.

And the nation that truly understands defense economics knows this truth well: sovereignty isn’t achieved by purchasing arms — but by mastering their operation.

The law states that by the year 2054 the United States will have spent its entire defense budget to buy or develop just one fighter jet. We are still twenty-eight years away from 2054, but the reality suggests that that prophecy is approaching, perhaps more than Augustine himself anticipated at the time.

I am not here to talk about corruption in deals or commissions, as those stories are superficial. But I will take you—if you will—to a journey to understand an economic phenomenon terrifying to any army that seeks to possess the best kinds of weaponry.

This phenomenon is known as “Structural Disarmament,” or “Structural Disarmament,” a process that makes the feverish pursuit of technological supremacy in arming the army a direct cause of shrinking its real capabilities. To the point that there are huge armies in appearance, but in essence they are small, fragile, and unable to wage a long, real war

The core problem in modern defense economics does not lie in the lack of budget, but rather in the fact that the cost of a single weapon unit rises at a logarithmic rate, while budgets increase at a linear rate.

Look—if you truly understand this sentence and its implications in depth, you, literally and without exaggeration, understand more than many officials and military personnel working in sensitive positions related to the defense industry. And this is no exaggeration at all.

If we examine the cost of achieving air supremacy through generations of fighter aircraft, we will discover that we are not advancing militarily as much as we are declining numerically—and in a terrifying way.

During World War II, the legendary P-51 Mustang cost about $600,000 per aircraft to produce, meaning that $1 billion at that time could buy more than 1,600 aircraft — a truly massive air force back then.

Then we move to the 1960s and meet the F-4 Phantom, the symbol of the third generation, which cost roughly $20 million per aircraft. Thus, a billion dollars could barely purchase 20 aircraft.

When we arrive at the golden age of high costs, we find that the most famous and powerful American fighter, the F-35 Lightning II, depending on the production batch, costs around $82.5 million per aircraft. That means one billion dollars today buys only about 12 jets.

Wait a moment—we’re not at the end yet. With the sixth generation of fighters, led by the NGAD, estimates have reached around $300 million per aircraft! In other words, a billion dollars now provides only three aircraft.

You might say: “Hold on, there has been massive inflation over that period.” Yes, that’s true, and that’s precisely why all the numbers we are talking about here are adjusted according to the current value of the dollar. In other words, we are comparing the past and present based on a single, fixed currency value.

Therefore, what we are really saying is that the cost of a single weapon has risen at a rate far exceeding inflation itself. More precisely, defense budgets grow at a natural pace, while the cost per combat unit rises at a far higher rate. This means the number of aircraft, ships, and tanks available is continuously shrinking—even for wealthy nations.

However, the problem is not limited to the cost of procurement alone. The more serious issue is that the modern defense industry has transformed from selling weapons to selling a permanent financial commitment. A fighter jet or a warship is no longer paid for only once; it now comes with a massive ongoing subscription that must be paid monthly throughout its operational life. I discussed this topic in detail in my article “The Economics of Readiness.”

Do you know why this point is of such critical importance?

Because the United States, whose defense budget is literally enormous, decided in 2025 to temporarily suspend the NGAD fighter program, as the mathematical calculations themselves had become absurd, and because the economy now tells them that it is sheer madness to send a fighter worth $300 million into war—no matter how great the potential gains of that war might be.

During the Cold War, the U.S. Air Force possessed more than 8,000 aircraft. Today, despite its budget having doubled, the total number of aircraft stands at about 5,000, and a significant portion of those are not even combat aircraft—they are training, support, or service aircraft.

This means that technology is evolving, but the combat mass is shrinking, and this is precisely my point: higher technology means fewer units, and fewer units mean a weaker capacity for attrition.

So how can you cover an operational theater the size of the Pacific Ocean with a number of aircraft you can literally count on your fingers? And how can you risk sending a plane costing $300 million into an open battle? You are, quite literally, flying your budget in the air.

Thus, the core lesson here is that every new technological generation inevitably reduces the number of available aircraft—not because of corruption or mismanagement, but because of the economic equation itself.

Add to that the factor of logistical fragility, as a significant portion of the components of modern weapons—such as advanced semiconductors, composite materials, and propulsion systems—are produced in very limited regions around the world. This means that any political crisis, trade war, or even the shutdown of a single factory could lead to the suspension of entire armament programs.

This in turn means that the smarter your weapon becomes, the more it transforms into a complex industrial project that is difficult to sustain during times of war. In contrast, simpler weapons—even if not extraordinary—remain adaptable and quickly producible. And here we begin to understand why cheap munitions and drones have become the most influential players in modern warfare.

You may possess an army that appears extremely powerful in form, yet in numbers it is a very small army. The war in Ukraine has provided a clear lesson to everyone about the importance of quantity and production density when confronting high-end weapons.

At the heart of this issue lies a trap known as the “Last Five Percent.”

In military engineering, achieving 95% of combat performance is something relatively affordable. But the problem always begins when the military establishment decides to pursue perfection—to chase that last five percent.

Attempting to extend radar range by just ten more kilometers, or to reduce the radar cross-section from the size of a tennis ball to the size of a bee, doubles the cost of your weapon system. This is where a well-known concept in industrial design appears: “Gold-Plating.” It means, metaphorically, to cover your weapon in gold—to add very small improvements in performance that nonetheless cost billions more.

Let’s take a real example from 2025: the U.S. Navy decided to build a new frigate called the Constellation-class. The original idea was simple and clever—to take an existing, proven design, namely the Italian FREMM frigate, and apply minor modifications for direct operational use in order to reduce costs.

The ship was originally supposed to cost around $800 million, but—as usual—the “last five percent” improvement requests began to surface: higher survivability standards, additional systems, and special American specifications. Suddenly, the cost rose to $1.6 billion per ship, according to 2025 estimates — almost double the initial figure.

In the end, in December 2025, the U.S. Navy was forced to scale down the entire program and cancel a significant portion of it.

The pursuit of perfection had ruined the whole project — not out of bad faith, but because economics itself proves that final-stage adjustments generate costs that surpass all logic.

In the Middle East, this phenomenon takes an even more dangerous form. We continue to follow the old-school approach—purchasing weapons driven by prestige, status, and media display, rather than by economic efficiency in combat.

When an Arab state purchases Rafale or Typhoon fighters at astronomical prices, it is, in effect, draining its operations and maintenance budgets for the next ten years.

The result is that the army may look formidable and intimidating in military parades, but in reality, it suffers from severe combat fragility due to the scarcity of munitions and the high operating costs of the weapons themselves.

The Red Sea crisis of 2024–2025 was an arduous test of this model. Imagine facing a primitive drone worth barely $20,000, and responding by launching a surface-to-air missile costing between $2.1 and $4 million.

This is a logic that simply cannot survive a war lasting even a month—let alone an entire year—because you simply cannot afford it. And even if you could, industry capacity itself cannot produce munitions fast enough to sustain that rate, no matter how much money you have.

Even the United States, with a $900 billion defense budget, could not sustain a long-term war at such a tempo for more than a few months.

At this point, the enemy no longer needs to defeat you militarily—he can simply drain your economy.

What we have learned from Ukraine and the Middle East is that war is no longer fought aircraft versus aircraft, but stockpile versus stockpile.

The state that can produce missiles and munitions continuously and consistently—even simple ones—will ultimately win.

This is why the United States realized that it needed to ramp up production of missiles such as the Javelin and Stinger, after the rate of consumption in Ukraine began devouring inventories far faster than expected.

That means industrial capacity is, at its core, combat capacity.

For this reason, the world has begun shifting toward a new model known as “Affordable Mass.”

In 2025, a new concept emerged within the U.S. Department of Defense (the Pentagon) called “Collaborative Combat Aircraft (CCA).”

The idea is that instead of buying a single manned aircraft costing $300 million and fearing its loss in battle, you have a manned lead aircraft accompanied by a swarm of much cheaper drones that can be sacrificed when necessary—without major financial losses.

Alongside these, modified commercial drones, such as FPV models, are also used, costing as little as $500 to $1,000 each.

Here, the rules of the game change completely. It no longer matters if you possess the best aircraft in existence—what matters is having a large enough number of aircraft that are good enough, even if they are not perfect.

Turkey stands as a clear example of this new direction through its programs like “Kızılelma” and “ANKA-3.”

Therefore, the important question every official and citizen must ask is this:

Are we buying weaponry… or are we buying future incapacity—financially or operationally—when the next conflict begins?

In military science, there is an old rule that remains true to this day: quantity itself is a form of quality.

An army that can endure losses and continue fighting is stronger than an army that possesses exceptional but rare and expensive weapons, because once a costly weapon is lost, it cannot be quickly replaced, and with it, a significant moral and economic capability is also lost.

That is why structural disarmament has become a real and present phenomenon. Every time we celebrate the acquisition of a very advanced and very expensive weapon system, we should ask ourselves: what did we sacrifice in return?

Did we sacrifice numbers? Training? Readiness?

Today, the sound economic decision in defense is not to buy the newest, but to buy the most suitable and locally upgradable.

Because true sovereignty does not lie in possessing technology alone, but in the ability to produce and replace it when it is lost on the battlefield.

Suddenly, para-military forces from the Pakistan Rangers intervened, stormed the court, broke the door, and took Imran Khan into custody, placing him in private detention under the National Accountability Bureau (NAB). This began a series of ongoing trials up to the present. A verdict was issued against him and his wife, sentencing them to 17 years in prison in the state gifts case, and there are still other trials ongoing.

The first time I heard about this story was from a Pakistani friend who hates Imran Khan with an irrational intensity. But fairness is precious. Despite his deep hatred of Imran Khan — so much that he can’t even mention his name without an expletive I can’t write here — he told me more than once that he knows and is certain that the matter has nothing to do with corruption charges. Those who prosecute him for corruption have corruption cases far bigger than what they prosecute Imran Khan for.

What happened to Imran Khan opens a door for us to enter a world completely different from our own — a world where the army is not just a security institution but a economic player, with an economy parallel to the state’s own economy. It owns entertainment ventures, construction companies, civilian factories, and lands that were originally owned by the state, but about which the state knows nothing.

What is even more intriguing is the evolution in the mechanisms of this entity — an evolution that brings security and the market so close together that the boundary between them completely dissolves. You can no longer distinguish what is security-related from what is economic.

There is a well-known system in Pakistan called Milbus, a term discussed by the researcher Ayesha Siddiqa, author of Military Inc. The term refers to capital dedicated to the benefit of the military institution, unregistered officially and not part of the defense budget — which means it is far less subject to oversight and accountability.

Interestingly, most of this economic empire we are discussing began as social welfare institutions for retired officers. Over time, they transformed into vast economic empires worth billions, integrated into the civilian market, and no one can hold them accountable for the state resources that have fallen under their control and management.

We will talk about the Fauji Foundation, the Army Welfare Trust, and the SIFC, and we will understand what exactly these institutions do in the Pakistani economy.

The Fauji Foundation is the backbone of this economic empire we are referring to. It was originally established as a charitable welfare fund (and I can barely restrain myself from making a sarcastic remark here). Founded in 1952 with modest capital to support veterans, it has today become the largest business conglomerate in Pakistan, with a net worth of about 5.9 billion USD in 2025. It owns companies across multiple sectors — fertilizers, cement, food, energy generation, and banking — and even owns a bank known as Askari Bank.

This institution is, quite simply, a massive money-making machine for the Pakistani army. Officially, however, it claims that around 80% of its profits go toward charity and social welfare. In other words, all this success supposedly comes from just 20% of its profits — if we take their word for it. But economists and analysts affirm that the real percentage actually allocated to charitable and social activities does not exceed 5%.

This institution benefits from tax exemptions and official government contracts, which means it has a major influence on the private sector and competition within the Pakistani market.

Now, let’s move to the second institution — the Army Welfare Trust (AWT). This fund was established in 1971 and, in short, is a diversified portfolio that includes more than 24 commercial companies operating in aviation, insurance, real estate, banking, and agriculture. It has extensive influence in both the market and the government, whether through institutions or individuals.

There is also another important institution — the Defence Housing Authority (DHA). In short, it is the largest real estate developer in all of Pakistan. It owns vast areas of land across every major city without exception. It profits from acquiring land from the state at very low prices and then reselling it at high prices, generating enormous profits that no analyst or report has been able to quantify accurately to this day.

The name of this institution in Pakistan has been linked to cases of corruption and illicit gains, yet it remains beyond legal accountability.

There are other institutions as well, such as the Bahria Foundation and the Shaheen Foundation — the former affiliated with the Navy and the latter with the Air Force. Each one has its own projects and private companies, following the same logic we discussed earlier.

In other words, the matter has gone beyond the army as a single institution — it has spread to every branch of the armed forces within the military itself.

Now let’s move on to the latest innovation: the Special Investment Facilitation Council (SIFC) — a council established in June 2023. The Chief of the Pakistani Army is the principal member of this council. Its goal is to serve as a single-window platform to attract foreign investments into Pakistan, particularly from Gulf countries, and especially in the sectors of agriculture, mining, energy, and information technology.

This council has the authority to grant exemptions to any investor and enjoys immunity from accountability and legal prosecution.

Take one example from the council’s programs to understand what we’re talking about. They launched an initiative known as the Green Pakistan Initiative, whose aim is to develop commercial agriculture on millions of acres. So what exactly are they doing?

They transfer land ownership from Pakistani farmers to the government. In other words, farmers who have cultivated their land for hundreds of years are now being forced to transfer ownership of their lands to a new military-affiliated company called Green Corporate Initiative Pvt. Ltd. This company then leases those lands to Gulf and local investors through long-term agreements.

This project has been accused of harming land rights, water security, and food security in Pakistan. It is also said to prioritize export-oriented agricultural production without meeting the basic needs of the local Pakistani market.

And if we try to quantify this economic empire in clear numerical terms, we find that the Fauji Foundation alone reached a market value of about 5.9 billion USD in 2025, making it the largest business conglomerate in Pakistan.

In a classic estimate presented by researcher Ayesha Siddiqa in her 2007 book Military Inc., the size of what is known as Milbus was no less than 20 billion USD at that time — and it has since expanded enormously.

As for land ownership, research estimates indicate that about 12% of Pakistan’s land is directly or indirectly under military control.

This empire continues to expand year after year. In the 2024–2025 budget, its value reached 2.13 trillion rupees, and by 2025 it had risen to about 2.55 trillion rupees, an increase of nearly 20%.

To understand the magnitude of this figure, it is enough to know that Pakistan spends only 2% of its GDP on education and just 1.3% on healthcare, while the inflation rate stands at 38%, and more than 100 million citizens live below the poverty line.

The entire system we have been discussing causes one fundamental outcome — profound harm to the economy as a whole, to fair competition, and to the private sector. The numbers speak for themselves, not me. Foreign direct investment (FDI) in Pakistan has declined sharply in recent years, and investors openly state that they avoid entering the Pakistani market because of the lack of transparency and the military establishment’s direct interference in business negotiations.

The situation has gone so far that some foreign investors have filed international complaints against Pakistan, claiming they were directly intimidated and forced to renegotiate contracts inside Pakistani military facilities.

These figures alone reveal a disturbing paradox: vast resources are directed toward the military institution and its commercial arms, while the education and healthcare sectors are literally suffocating from lack of funding. And this bleeding has been ongoing for a long time.

Research estimates suggest that between 1985 and 2005, senior officers acquired more than half a million acres of land, a clear indicator of the immense wealth accumulated by a very small elite within the military establishment — in a country where millions are literally struggling just to survive.

In 2021, a series of leaks known as the Pandora Papers were released, opening a wide window onto the hidden face of Pakistan’s military economy. These leaks revealed the names of several high-ranking figures, including:

• Major General Asim Saleem Bajwa, whose reports exposed multi-million-dollar investments inside the United States.
• Major General Shafaat Ullah Shah, who was shown to own luxurious real estate in London.

The question any reasonable mind would ask is: How can a government officer, whose income comes from a public salary, accumulate such vast wealth?

And as long as there is no transparency or genuine oversight, the answers — as usual — will be that such matters are “classified information” or “issues related to Pakistan’s national security.”

Here emerges the greatest and most alarming paradox of all that has been said: all this wealth and this vast economic empire have not translated into a stronger or more capable military force.

Reports, for example, indicate that the Pakistani Navy operates only two functioning submarines, while facing persistent shortages of spare parts and fuel.

At the same time, when senior officers retire, they don’t truly retire; they simply move into executive positions within military-owned corporations — staying in the same system, only swapping the uniform for a business suit.

Looking domestically, the security forces pay a heavy price every month — between 55 and 60 personnel are killed in clashes with militant groups, nearly half of them from the regular army itself.

In Balochistan, a poor yet resource-rich province, the insurgency continues to grow, because the people there simply see the wealth extracted from their land, yet what returns to them is only poverty.

This issue has now become international. In February 2025, the International Finance Corporation (IFC) — affiliated with the World Bank — along with other development institutions, issued direct criticism of Pakistan over the forced renegotiation of energy contracts under military supervision. Investors reported that these renegotiations took place inside military facilities, accompanied by clear pressure to force them into accepting new terms.

When we talk about Pakistan today, we face a profoundly deep structural imbalance: millions of Pakistanis struggle with inflation and poverty, while beside them grows a military commercial empire worth tens of billions — protected by countless privileges, completely shielded from market and legal oversight.

And the most serious development in this new phase is that the military no longer merely owns a parallel economy — it has now become part of managing the macroeconomy itself, through platforms like the SIFC, and has begun issuing direct threats to foreign investors.

Algeria…

What we must understand before looking at the figures is that the army in Algeria is not just a military institution. It is an essential part of the political system itself. Algeria’s history since independence is full of moments when the military was the actual ruling power or at least the ultimate guarantor of the regime’s survival.

With a direct regional rival such as Morocco (with which relations have been severed since 2021), military spending has become both internal and external. In other words, weapons here are not just a means of strategic deterrence, but also a means of purchasing internal stability and consolidating alliances within the ruling elite.

Morocco is not just a neighbor to Algeria. It can be seen as a military and political mirror for Algeria. Any arms deal concluded by Algeria is interpreted in Morocco as an intention to deter it, and vice versa, especially with the Western Sahara issue remaining open without a final solution.

This has created a kind of silent arms race. Algeria is upgrading its air and defense capabilities, prompting Morocco to consider strengthening its capabilities in the areas of drones, air defense, and American armaments, even if some of this is still under discussion. This puts us in a vicious cycle. Once you enter it, you find yourself forced to continue even if both sides lose.

Algeria has doubled its defense spending as a percentage of GDP from about 4% in 2022 to nearly 9% in 2025. This expenditure exceeds that of Russia itself during wartime, which spends about 7.2% of its GDP on defense.

The defense budget reached about $25 billion in 2025, up from $21 billion previously, and there is no indication that it will decrease anytime soon.

If calculated according to purchasing power parity (PPP), this defense spending is equivalent to about $75 billion in domestic purchasing power, a figure that puts Algeria at a higher purchasing level than countries such as Italy and Poland, for example.

Well, let’s take a look at the Algerian army.

The army has about 110,000 conscripts, about 1,500 tanks, 1,000 infantry fighting vehicles (IFVs), more than 1,000 armored personnel carriers (APCs), 180 rocket launchers, and more than 600 artillery pieces.

The main tank in service is the T-90SA, alongside updated versions of the T-72. Interestingly, there are approximately 270 older T-55 tanks still in service, but they are now used in fire support roles and are no longer part of the modern tank force.

We can see from this that Algeria has a clear tendency to purchase, or at least prefer, specialized Russian designs that are somewhat unusual compared to the traditional armament lines of other countries, such as the TOS-1A and BMPT Terminator, which, incidentally, are not common systems even among traditional customers of Russian weapons.

This gives the impression that Algerian military thinking is not limited to mere displays of force, but focuses on equipping forces capable of delivering heavy firepower in complex ground engagements. In other words, we are dealing with an army that is thinking in terms of scenarios involving combat between regular forces, and not just counterinsurgency missions.

Algeria is not just an important customer for weapons, but also has local innovations that are worth mentioning.

Interestingly, they have begun converting old tank chassis such as the T-62 into fire support armored vehicles and engineering vehicles, some of which have been fitted with a BMP-2 Berezhok turret equipped with a 30 mm cannon, grenade launchers, and anti-tank missiles.

This means that there is a practical approach based on the principle of maximizing the use of resources. Instead of leaving old equipment in storage, it is reused at minimal cost to increase firepower on the ground.

Although Russia is the main supplier, there is diversity among suppliers, which is no small matter.

For example, Algeria has around 600 German Fuchs transporters, and some sources indicate that there is an agreement to assemble or manufacture them locally in cooperation with Rheinmetall, with a clear condition that they cannot be resold, meaning that what is assembled in Algeria remains exclusively for the Algerian forces and cannot be exported.

In the field of artillery, we see a combination of old Soviet heritage and modern Chinese 155 mm systems.

The Algerian navy includes German frigates with hybrid armament: Swedish missiles, South African air defense, and Chinese ships equipped with European radars.

Air defense is a completely different story.

The Algerian system is extremely heavy, including S-300, Buk, Tor, Osa, and Strela systems, as well as an upgraded version of the Pantsir system that arrived in Algeria before it entered service in Russia itself.

The addition of the S-400 system means that Algerian airspace is one of the most heavily guarded in Africa, and perhaps even in the entire Mediterranean region.

Algeria is one of the very few countries in the world to possess modern Iskander tactical ballistic missiles, the export version of which has a range of approximately 280 kilometers. Estimates indicate that Algeria has at least 12 launchers and approximately 75 missiles.

The Algerian Navy has the capability to carry out long-range attacks from under the sea, as its upgraded Kilo submarines are capable of launching Klub-S cruise missiles, opening the door to precision strikes beyond the coastline.

Although Algeria is not a major amphibious power, it does have the capacity to conduct limited amphibious operations. It has an Italian San Giorgio-class amphibious ship that entered service in 2015, in addition to two older ships, which can transport a battalion-sized force including tanks and combat support vehicles.

The air force is the backbone of the Algerian army, with around 60 Su-30 aircraft, as well as very strong air-to-air refueling capabilities, thanks to its six Il-78 aircraft, a number that exceeds that of some major European countries. Its air transport capabilities are also diverse, ranging from Russian Il-76 aircraft to American C-130s.

In 2024, Russia announced that the first export contract for the Su-57E aircraft had been signed with Algeria, and Algerian reports indicate that pilot training is underway and that delivery of the aircraft is likely to take place at the end of 2025. If this indeed happens, Algeria will be the first African country to possess a fifth-generation fighter jet.

Incidentally, there are indications that the Su-35 aircraft, which were intended for Egypt before the deal was canceled, have arrived in Algeria. These reports are based on satellite images and indications from the Algerian Air Force itself.

With all that said, the question remains: what is Algeria’s fundamental problem?

The answer is one word: sustainability.

Algeria’s nominal gross domestic product (GDP) will reach approximately $288 billion in 2025, while its purchasing power parity (PPP) will reach $874 billion. When the primary source of funding is energy revenues, and with youth unemployment at around 30%, very high defense spending becomes an open bet on gas and oil prices.

Any significant fluctuation in these prices could create a gap between the size of the military and the economy’s ability to maintain, operate, and continuously modernize it. At that point, the danger is not only that the military will be weakened, but that it will become an advanced fleet that is expensive to operate and politically difficult for any government to downsize.

Most of this spending leaks abroad because local manufacturing remains limited. Countries that build their defense industries recoup some of the money in the form of jobs, expertise, and technology, while Algeria has so far paid a heavy price for armament without commensurate industrial gains.

This simply means that each modernization cycle must be financed anew and in hard currency, with the risk of sanctions, restrictions, or supply disruptions.

We cannot ignore another highly sensitive point: Russia itself is at war, and any advanced aircraft or system it exports to Algeria is one that does not enter the Russian army’s warehouses, which have enormous needs. This means there is a risk of delays in delivery, or the possibility that Russian domestic priorities will suddenly take precedence over the customer. Therefore, diversifying sources of armament in the future is not a luxury, but a strategic necessity.

It is noteworthy that Algeria did not enter 2022 as a weak army in need of urgent development, but was already one of the best-equipped armies in Africa: modern tanks, multi-layered air defense, Kilo submarines armed with cruise missiles, and a powerful air force with extended range thanks to its air-to-air refueling capabilities.

So what happened after 2022 was not the beginning of armament, but rather an acceleration of an already high pace, an acceleration closer in speed to the logic of a war economy in peacetime.

Therefore, the difficult question that Algeria needs to answer remains:

Can the economy continue with this approach? Or will there come a moment when the commitments become greater than the capacity to bear them? And what is the plan then?

Historically, NATO countries and Western countries in general have focused on technical superiority and the possession of high-quality weapons. However, the war in Ukraine has shown everyone that the depth of stockpiles and the capacity for mass production are no less important than quality and advanced weapons, especially when it comes to long wars. After 2022, we saw that NATO itself needed to rebuild its industrial capabilities, to the extent that TNT itself was not available locally in the US.

However, the common belief I mentioned in the previous paragraph is not always true. Western weapons are not always more expensive than Russian and Chinese weapons, for example. The problem of high prices is real, but it is not the same across all categories and is not constant.

In many areas, we find that prices are similar. For example, Russian missiles such as the Kalibr and KH-101 cost between $1 million and $2 million per missile, which is very close to the cost of the Tomahawk purchased by the US Navy at around $2.2 million per missile.

In some cases, such as the American JASSM missile, the price may even be lower than the Russian one, despite its warhead and superior stealth capabilities. The same logic applies to ballistic missiles; the Russian Iskander ranges in price from $2 million to $3 million, which is roughly the same level as a new American missile such as the PrSM.

However, the gap is more evident in warships. South Korea built three Aegis destroyers for about $3 billion, while the cost of a single Arleigh Burke-class destroyer in the US exceeds $2 billion. As for UAVs, the gap is huge: a UAV costs $6,000 in NATO armies, and a Ukrainian alternative can be made manually for only about $600.

If we think about the factors that control the cost of weapons production, we find the following:

• Production volume: the greater the quantity, the lower the cost. This is the basic principle of economies of scale, as in any other industry.
• Specifications: Demanding advanced performance makes the cost higher.
• The environment in which the weapon is manufactured: This determines labor costs and regulations in the country.
• Confidence: When there is confidence that there will be high demand, it is possible to invest more and reduce waste of resources. The factor that most influences the cost of weapons is certainty of demand. When companies know that they will be producing the same weapon in consistent quantities for many years, they can invest in cheaper and more efficient production lines, which significantly reduces the unit cost. But when demand is intermittent or seasonal, the cost goes up.

So why is defense manufacturing so expensive?

The main reason, if we think about it from an economic perspective, is the word “incentives.”

What does that mean?

It means that there are three parties involved in the defense manufacturing equation, and each has different incentives:

• The military: It wants better weapons, greater protection, and excellent efficiency, regardless of the cost.
• Governments and politicians: They want impressive weapons that are suitable for promoting their projects, and they want defense manufacturing to create high-value jobs and employment opportunities for citizens, even if the projects are ineffective or uneconomical.
• Manufacturers: Their goal is profit. Most defense contracts operate on a “cost + profit margin relative to cost” basis, so companies have no qualms about increasing costs, because that means increasing their profits.

There is another reason, which is that there are indeed technical and administrative obstacles. I have mentioned this before: from the moment it is decided that “we will manufacture a new weapon,” you find that the various forces each request specific specifications, and every technical addition greatly increases the cost.

For example, the design of the American Constellation frigates was changed several times, to the point that the latest modification was 70% different from the original design.

Another reason is that orders for new weapons are not quick, which makes decision-makers reluctant to invest in huge production lines.

After the war in Ukraine, some countries began to think a little differently in order to reduce costs.

There has been a trend toward using civilian components in weapons manufacturing instead of manufacturing each part specifically for military purposes, such as using ready-made and tested parts in the civilian market instead of reinventing the wheel from scratch.

Other countries began to agree among themselves on collective purchasing, so that orders would be large and consistent, giving factories the confidence to invest and increase production.

Another idea has also emerged, which is to combine a limited number of expensive, highly advanced weapons with simpler, cheaper weapons produced in large numbers, such as drones and low-cost smart munitions.

There is another important trend: instead of replacing expensive weapons, supporting them with cheaper weapons that complement their role. This means having a limited number of advanced systems, along with simpler and cheaper systems in large numbers, whether they are drones, guided munitions, or even low-cost torpedoes used against small targets instead of depleting expensive munitions.

The danger lies in the fact that the ability to bear the cost is not only a technical decision, but also the result of the interaction of three different parties: the military, which seeks maximum performance; politicians, who prefer large-scale projects with symbolic and propaganda value; and companies, which by their nature seek profit and risk reduction. Thus, these three parties push the entire system toward greater complexity and higher costs, even if no one directly intends to do so.

It is important to clarify that the goal is not only for weapons to be cheap, but also for combat capabilities to be cost-effective, and for armies to be able to procure, maintain, and replace the necessary number of weapons in times of stress without breaking their budgets.

All the information in this article, and in the articles that will follow, comes from reliable sources with my analyses that may be right or wrong. I am not writing an analysis to criticize Egypt or the Egyptian army. In the analysis, you will find positive points, negative points, and existing problems. I strive to be as objective as possible.

A quick read of the report on Egypt reveals that Egypt’s problem is one of classic strategic divergence. The state acts as a provider of regional security to the outside world, while its ability to finance its army is dissipating. If we look at the real value of the defense budget, we find that it fell by 13.9% in 2023, and then fell again by 17% in 2024.

This means that Egypt spent $5.4 billion on defense in 2022, and spent almost half that amount, $2.79 billion, in 2024.

What does this mean?

Either Egypt is hiding a larger portion of the budget each year — which is most likely a false conclusion, and I will explain why in a moment — or Egypt is actually spending less on defense, which is the more likely conclusion based on the available information.

There are two main reasons for the decline in defense spending in Egypt: the loss of Suez Canal revenues during the period in question and the decline in tourism revenues. These are the two main official sources we rely on to finance defense spending.

As for the army’s civilian projects, where do their revenues go? They go into the 50% of the state budget that the former finance minister said he knew nothing about, and no one knows anything about.

This means, according to the report, that Egypt is at the lowest level of financial readiness to wage war, and that any sudden war would be costly for Egypt and would be an unequal war from the outset.

The report says that instead of focusing on its financial defense problem, Egypt is sending deterrent signals in Libya, Sudan, and the Horn of Africa, and before that in Yemen. The report then explains that this is not a contradiction, but rather a choice made by Cairo itself, as it uses military activity as a means of geopolitical pressure to prevent the marginalization of its strategic role, even at a time when the state’s resources and defense spending are in a state of suffocation.

The gap between financial pressure and military movements poses a great danger to a country the size of Egypt, because Egypt maintains almost full mobilization with a budget of about $25 per capita per year, down from $48 per capita in 2022.

This point needs some clarification.

In Egypt, there are 438,000 soldiers in the armed forces, 479,000 soldiers in the reserve forces, and 397,000 in the Ministry of Interior, of whom 325,000 are in the Central Security Forces. This is a model that relies on manpower, not high-value technology. In other words, this huge number represents a cost that consumes the state’s ability to spend on defense in the areas of procurement or defense technology development.

Egypt relies on two main elements of financing:

The first element is external liquidity, which is limited and unsustainable, and includes funds from the UAE, the International Monetary Fund, the World Bank, and the European Union.

The second element is US aid, which amounts to $1.3 billion. This was subsequently reduced, but we are talking here about the period referred to in the report, as this was the approved figure.

This means that about 32% of Egypt’s total purchasing power comes from aid. In other words, the level of military readiness, the pace of modernization, and military movements are not linked to pure Egyptian sovereignty (the report itself explicitly refers to this).

This financial pressure creates operational risks that affect Egyptian military equipment.

Egypt currently has about 2,430 main battle tanks, including:

• 1,130 M1A1 Abrams
• 850 M60A3
• 300 M60A1
• 150 T-62 tanks

It also has more than 4,200 armored personnel carriers and about 1,000 armored patrol vehicles.

The navy has been upgraded with eight submarines, 16 frigates, and two Mistral aircraft carriers.

The air force has 340 combat aircraft supported by heavy transport aircraft (21 C-130H and 21 C295M) in addition to approximately 174 training aircraft.

All of this creates what is known as quantitative or volumetric deterrence. However, the problem with this type of deterrence lies in sustainability, as Egypt’s armament system is a mixture of old Russian and modern European weapons, which doubles the effort required to secure spare parts chains and increases problems with ammunition compatibility and training requirements.

With reduced defense spending, the main platforms do not collapse, but equipment and maintenance at the warehouse level are affected, and more importantly, the support equipment that makes advanced systems work efficiently. This is precisely what the Egyptian Armed Forces rely on to a large extent.

The Egyptian army has eight E-2C Hawkeye units and four RE-3A SIGINT units, in addition to Beech 1900 ISR/ELINT aircraft and their variants, and other aircraft equipped with ELINT technology. This is what the report refers to when it says that “Egypt may appear strong in terms of inventory, while at the same time suffering from increasing hollow power dynamics in the background.”

Egypt enjoys great diversity in its armament system, and this diversification continues. I have previously written an article on this subject in which we discussed the advantages of this diversification, but there is a serious downside that requires complex management, known in defense literature as supplier veto.

The story of the K9 Thunder illustrates the seriousness of this point. Egypt’s artillery modernization program was halted for two full years due to a ban on German diesel engines, and was only resumed in mid-2024 when Egypt switched to using South Korean STX engines. This was not a one-time purchase, but an ongoing procurement process, meaning that any multi-supplier defense system is highly sensitive to any political or regulatory decision in a single country within the supply chain. Therefore, diversification is not always a guarantee of independence, but may increase fragility if there is no professional management of supply chains and gradual localization of key parts of defense systems.

If we look at the Egyptian Navy, we find that it possesses missiles and subsystems sourced from the United States (Harpoon, SM-1, RAM), France and Italy (Exocet, Aster 15, VL MICA), Russia (Moskit), Germany (MEKO/Type-209 systems), and others. This means that any diplomatic restrictions or shifts could disrupt the capabilities of the Egyptian navy even in times of peace.

Egypt has pursued a policy that has evolved in response to this problem, which is licensed production wherever possible. We can see this clearly in the launch of the Alexandria shipyard for locally manufactured MEKO A200 hulls in December 2023, the replacement of components to circumvent the embargo, as in the case of the alternative solution for the K9 engine, and the addition of new suppliers such as Turkish drones and Turkish fast boats for intercepting targets.

But these solutions come at a heavy cost, as each one increases the problem of heterogeneity in Egyptian equipment and weapon systems. Each new supplier represents a new burden on the entire system — a financial, operational, and administrative burden. Thus, Egypt finds itself between two interrelated problems: flexibility in the face of complexity and long-term sustainability.

The thread that ties this picture together is that Egypt is attempting to compensate for weak defense funding and spending by engineering the military system itself. In other words, rather than increasing the number of weapons, it is attempting to increase deterrence and autonomy for every dollar that comes out of the budget.

This is clearly evident in the model of the Air Defense Forces as a branch completely independent from the Air Force, with a huge number of personnel amounting to about 80,000 active duty personnel and 70,000 in the reserves, distributed across five air defense zones covering all parts of the republic.

This system creates a dense network of low-altitude air defense, comprising more than 136 point defense systems, along with 910 anti-aircraft guns, including about 600 S-60 guns. This is in addition to long-range systems such as the S-300V4, which are used to protect vital sites.

The idea here is that even if air force sorties are reduced for any reason — whether due to funding, maintenance, or operational pressure — there will still be a defensive cover capable of monitoring, observing, and imposing deterrence.

The same logic applies to the expansion of space capabilities. Egypt now has five satellites, including the TIBA-1 communications satellite, as well as satellites dedicated to surveillance and reconnaissance, such as EgyptSat-A, Mirsat-2, and two Horus-class satellites. Egypt thus has an integrated national information loop extending from sensor to actuator — i.e., surveillance, analysis, command, and control — without relying entirely on external intelligence sources. This complements the electronic warfare and aerial reconnaissance capabilities discussed in the report.

Hence, we understand that when Egypt’s defense spending is around 0.73% of GDP, and Egypt accounts for only 1.3% of total military spending in the Middle East and North Africa, at a time when per capita defense spending has fallen to $25 per year from $48 in 2022, the rational decision is not to buy more weapons, but to ensure that existing systems operate at maximum efficiency and are capable of monitoring, coordinating, and imposing a real deterrence cost.

Despite the importance of this strategy, it is not a permanent substitute for direct defense funding and spending. Infrastructure needs constant maintenance and development. If the financial shocks associated with military spending continue, while Egypt takes on regional roles in Libya, Sudan, and the Horn of Africa, this system will continue to function, but it will become more fragile over time.

Any new shock to revenues or supply chains could seriously upset this balance, because what is ultimately being built is an architecturally smart deterrent, but one based on a weak financial foundation.

During my time working in the defense industry, I dealt with small companies, and I believe that was the most important experience that allowed me to understand the secrets of this industry and the side that many people don’t see.

I am talking about a small workshop, or a space no larger than 60 square meters, inside a technology business incubator at a university. For example, the technology zone affiliated with the university where I studied includes nearly 400 start-ups working in the fields of research and development.

They have student interns to reduce costs, and the entire team consists of young people, usually no more than five or ten individuals. Each team is responsible for a specific task in a particular component within a large system produced by a major company.

That is what sets them apart: they specialize in a very narrow sector that serves the Turkish company they work with, while at the same time exporting the same component to other companies outside Turkey.

The idea of looking at a country like Turkey and seeing large companies such as Baykar or Aselsan and then saying, “I will establish a large company like that in my country” is a mistake that indicates a lack of understanding of the nature of the industry or a lack of complete vision of what makes these countries successful.

These large companies are not entities existing in a vacuum, but rather represent the tip of the iceberg, beneath which lie thousands of small and medium-sized enterprises that manufacture sensors, microcircuits, software, composite materials, and testing systems.

The bulk of global technology and exports come from small and medium-sized enterprises (SMEs) that do not appear on the lists of large companies in any country, nor are they mentioned in the news, but are in fact the backbone of the industry.

If you focus on building a giant company from the top down without establishing a base of small companies underneath it, you will create a fragile entity that looks big on paper but depends on the outside world for everything that is essential and sensitive. The right path starts from the bottom up, not from the top down.

As I wrote previously about the UAE’s defense industries: it is true that the figures are very strong, but we cannot say that it has a real defense industry, which is precisely why I said that the UAE’s figures are fragile.

The big, well-known companies are the last link in the chain. Defense industries are not the first stage, but simply the top of the technological pyramid, and you cannot build them if your economic, educational, and industrial base is weak.

Those who dream of missiles, drones, and advanced radar systems without building the foundation on which they rest are like those who want to build a skyscraper on sand. It will collapse at the first gust of wind, if they can build it at all.

The idea is simply that advanced defense industries, especially those with high export value, are not just assembly plants or operating licenses, because in the end, you are exporting technology.

And building technology is a cumulative process that requires continuous learning, specialized training, high competencies, and real investment in small and medium-sized companies that produce innovation and the precision components that go into any defense system.

If no country in the world can build strong defense industries without this foundation, how can you do so?

Singapore, for example, has more than 60 local defense companies other than ST Engineering, focusing on precision areas such as anti-drone systems through small and medium-sized companies such as Flare Dynamics. The government there requires foreign companies to transfer technology to build local capabilities. It also has an integrated industrial ecosystem capable of exporting dual-use products globally.

India, meanwhile, has defense exports of $2.76 billion and more than 16,000 small companies manufacturing electronics. The Make in India programs connect these small companies with large companies. They still face challenges related to quality and product life cycle management, but the most important lesson to be learned is that investing in small companies has doubled exports, rather than building a single large company and relying solely on it to enter the defense industry.

Turkey, which before 2004 relied on the military and limited production, now has more than 3,500 companies in the defense sector. Most of these companies are small and medium-sized enterprises (SMEs), operating within global supply chains, which has led to their defense exports in 2025 exceeding $7.45 billion in just the first 11 months. Five Turkish companies are now among the world’s 100 strongest defense companies, but an analysis of exports shows that the bulk of these come from companies that are neither large nor well-known.

The Defense Industries Agency (SSB) supports small and medium-sized companies through soft loans; last year alone, the agency helped 25 companies with $25 million, in addition to training and integration programs with large companies such as Baykar and Aselsan. As a result, small and medium-sized companies are now manufacturing electronics, radars, and components for drones that are exported to 180 countries.

It is no coincidence that Haluk Gorgun, head of the Turkish Defense Industries Agency, states that one of their main goals is to integrate small and medium-sized companies into global supply chains with high export value, because these companies are simply the solid foundation of any real defense industry.

South Korea, meanwhile, aims to become the fourth largest arms exporter by 2030. What has it done? It has increased its defense R&D budget and launched the Defense Startup Open Innovation Challenge program, which awards 60 million won to each startup, along with training and partnerships with major companies such as KAI and LIG Nex1.

As a result, small and medium-sized Korean companies have begun to enter major exhibitions such as LIMA 2025 in Malaysia, offering fiber optic connectors for missiles at prices 70% lower and with faster delivery times.

The Israeli model is based on small and flexible startups and SMEs. In 2025, the number of startups in the defense sector reached 312, an increase of 95% in one year, and they received billions of dollars in investments for their project ideas.

The Israeli Ministry of Defense has allocated 10% of its research and development budget to support startups, not large companies, and programs such as iDEX allow these small companies to enter the market quickly. For this reason, companies such as UVISION are selling suicide drones to NATO for hundreds of millions of dollars, while small and medium-sized companies are working with the German company Rheinmetall. All of this is based on an education and training system capable of transforming ideas into exportable products within months, not years.

All these countries confirm one economic reality: No country that is weak in education and training and does not have small and medium-sized companies has been able to build an advanced defense industry with export capacity.

Turkey has invested in 2,400 companies and 100,000 trained employees.

Israel has turned war into a platform for innovation through 300 start-ups.

Korea and Singapore have built integrated industrial ecosystems based on training and incentives.

The common factor among all of them is their focus on small and medium-sized enterprises.

Now take this final touch: if you say you will focus on small and medium-sized enterprises, I will tell you that you cannot do so without a strong education system that encourages innovation and produces students who understand both scientific theories and industrial applications.

Education is what creates small and medium-sized enterprises in the first place.

What does that mean?

It means that when you have a strong education system that connects engineering, design, scientific research, and practical application, you will find that young graduates don’t just go looking for a job and peace of mind, but instead start highly specialized small businesses; one company working in the manufacture of sensors, another developing control software, and a third focusing on composite materials or artificial intelligence.

These small companies are the real laboratories of innovation; every experiment, every mistake, and every small project turns into cumulative experience over time, through which you develop a complete industrial ecosystem capable of competing globally.

Without real education, there are no skills, and without skills, there are no small companies, and without small companies, it is impossible to build a sophisticated defense industry from the ground up.

The whole chain is interconnected:

Education gives you skills,

skills create small and medium-sized enterprises (SMEs),

these companies produce technology,

technology opens the door to exports,

and ultimately, giant companies are created that manufacture products with high export value.

This part requires some reflection and calm to understand a little-known aspect of the Turkish defense industry… An aspect that differs from videos of drones and news of military deals. It is an economic and business aspect that gives us a deeper understanding of the nature of this industry and reveals details that are often overlooked.

In 2022, Turkey’s Presidency of Defense Industries (SSB) imposed a requirement on any large company awarded a defense project to award at least 21% of the contract share to small and medium-sized enterprises. These companies are called “KOBİ” in Turkey, which is equivalent to small and medium-sized enterprises (SMEs) in English. This was an important step in activating the role of these companies in the industrial sector. I have previously written about the importance of this category of companies and why they are the real key to the development of the defense industry.

At the same time, there is another mandatory law that requires companies to allocate a minimum of 2% of the value of defense contracts to localize research and development activities. This was one of the reasons why Turkish Aerospace Industries (TAI) implemented more than 125 localization programs and is currently working on 300 new programs in this field. This saves approximately $1 billion annually that would have left the country in the form of imports.

Stay with me, we haven’t gotten to the heart of the matter yet, but we need this explanation first.

TAI has set a goal of producing 1,500 aircraft of various types — including drones, training aircraft, and fighters — by 2034. Among these aircraft are 500 KAAN fighter jets, 350 ATAK and GOKBAY helicopters, and 600 AKINCI and AKSONGUR drones.

ASELSAN achieved 13% growth and a 25% increase in operating profit (EBITDA) in 2024. Baykar is seeking to expand its production lines to meet orders from 36 countries and has increased the proportion of local content in its products from 38% in 2008 to over 70% in 2020.

Major projects such as the MİLGEM warship project rely on local suppliers for about 65% of their needs, and among these suppliers, about 48% are small and medium-sized enterprises.

Taken together, these data indicate that there is great ambition, but current capabilities do not quite match the scale of that ambition. The solution lies in acquisitions, as this ambition, coupled with increased production capacity, despite its importance, could become a major problem. I have addressed this issue before when talking about South Africa and how increased production coupled with weak demand led to the complete collapse of its defense industries.

In Turkey, this ambition requires careful coordination of supply chains, reduction of administrative and logistical costs, and financial stability.

Who can achieve this equation?

Exactly, small and medium-sized enterprises. They have greater ability to obtain financing quickly, have existing markets in which they already operate, and are more flexible in their movement and development compared to large companies such as TAI, which have thousands of employees, complex administrative structures, and long decision-making chains.

For example, in 2024, Baykar acquired the Italian company Piaggio, one of the oldest aviation companies in Italy. Thanks to this acquisition, Baykar was able to manufacture the Italian company’s products in its factories in Turkey, while at the same time, the deal became an opportunity for the company to overcome obstacles related to customs tariffs and international trade restrictions. The acquisition also helped it access European supply chains through an existing company that operates in accordance with NATO and EU standards.

In 2023, the Turkish company SYS acquired the British company AEI Systems Ltd, which specializes in the production of medium-caliber cannons. The Turkish company acquired 80% of the British company’s shares, valued at approximately 1 billion Turkish lira at the time, which allowed for the distribution of production and development work between Turkey and the United Kingdom. This opened up new markets for the Turkish company to enter through the British company, while achieving a balanced distribution of risks and production lines at the same time.

In the same year, 2023, the Turkish company Nurol acquired the German company IndustrieKeramik Hochrhein (IKH), which specializes in the manufacture of ceramic materials used in armored vehicles and tanks. This acquisition expanded Nurol’s activities in the field of ballistic ceramics and gave it greater control over supply chains, both within Turkey and in European markets.

This year, the Turkish company ARCA Savunma acquired the Italian company Esplodenti Sabino S.p.A, which operates in the field of ammunition and explosive disposal services. This company is important to both NATO and the European Union and has ongoing contracts with the Italian Ministry of Defense. Reports indicate that the Turkish company has plans to expand the Italian company’s activities to include rockets and artillery ammunition, thereby entering the European market through this company.

The Turkish company Sarsılmaz had previously acquired the Italian company Vincenzo Bernardelli, which specializes in the manufacture of light weapons.

The Turkish company moved the production lines to Turkey while retaining the Italian brand name, but thanks to this acquisition, it was able to flood the European market with products that were both less expensive and of higher quality.

This month, ASSAN announced its acquisition of South African company Dynaflow Technologies, which specializes in the manufacture of ammunition detonators. This acquisition was made with the aim of supporting the Turkish company’s plan to expand its research and development capabilities, combine its expertise with the technical capabilities of the South African company, and at the same time open up new markets that serve the interests of both companies, both inside and outside Turkey.

These acquisitions are not limited to foreign companies, but also include deals within Turkey itself.

Sarsılmaz acquired Yavaşçalar Av Spor Malzemeleri (Yavaşçalar Hunting and Sporting Ammunition Equipment Manufacturing), with the aim of expanding production and strengthening horizontal control of the domestic market. Then, in 2024, the same company acquired Best Group, a company specializing in the manufacture of remote control towers, thereby entering the field of land and sea systems for the first time.

Finally, in 2024, the Nurol Holding acquired the British company BAE Systems’ stake in the Turkish company FNSS, a leader in the development and production of armored vehicles. This was not a small or medium-sized acquisition, but rather an important strategic acquisition for Nurol, as it enabled it to dominate the market and become the sole owner of FNSS, allowing it to develop the localization of intellectual property for a Turkish product that is among the most important in the defense industry.

What we often overlook in this wave of acquisitions is that Turkey is trying to transform itself from a mere supplier of components to the “architect” responsible for the entire chain.

In other words, the goal is no longer limited to manufacturing and selling a part, but rather to designing the production network itself, determining who enters and exits the market, and who survives and who disappears. When a Turkish company buys an ammunition factory in Italy, a ballistic ceramics production facility in Germany, or a company that manufactures detonators in South Africa, it not only opens up a new market, but also creates a situation of mutual dependence.

Europe needs the technical capabilities of companies that have become Turkish-owned, and Turkey, in turn, needs the European market to expand its production and enhance its competitiveness.

Are these acquisitions a positive development that benefits the industry, or could they harm it in the long run?

This is a question on which experts differ. These operations have many benefits, including opening new markets and controlling supply chains, which I mentioned earlier as being an essential part of the concept of national security itself. These acquisitions also contribute to reducing dependence on imports and opening up more flexible and less restrictive foreign markets, especially in the European market, where Turkey is expanding so rapidly that Greece and Greek Cyprus are repeatedly complaining to the European Union about the growing influence of Turkish defense industries within the continent.

At the same time, however, there are serious drawbacks to acquisitions in general, most notably that they can lead to monopolization, when a limited number of companies come to dominate the market and the entire industry.

A report on the Turkish aviation and defense sector states that this sector in Turkey is organized in the form of an industrial pyramid, with a broad base consisting of a large number of small suppliers, while its apex comprises a limited number of large companies. For this reason, every acquisition always requires a readjustment of this pyramid, because its most important part is medium-sized companies, a category that declines as acquisitions increase, which means weakening the elements of flexibility and innovation within the industrial system as a whole.

Acquisitions also cause the acquired companies to lose some of their flexibility and ability to innovate, as they often transform from independent competitors in the market to internal divisions of the larger company that owns them.

Some European reports indicate that Turkish companies’ acquisitions of their counterparts within the European Union enable those companies to obtain European funding, which creates unequal competition for other European companies and raises concerns in some countries, particularly Greece.

Another negative aspect, which also has a positive side, is that transferring part of the industrial and production capacity outside the country may harm the national industry in terms of job losses and loss of local expertise, but on the other hand, it achieves an important benefit in terms of risk distribution, which is a very important issue in a sensitive industry such as the defense industry.

This raises a very important question:

In the event of a political crisis between Turkey and the European Union, who will have the upper hand? Who will have the ability to put pressure on the other?

Can Turkey use supply chains as a soft political weapon? Or could these companies themselves become leverage within the Turkish system to mitigate any potential clash with Europe?

Because it is a complex network of interests, part of which represents a source of strength, and another part of which may turn into a weakness if there is no conscious industrial policy that sets clear rules of the game and protects medium-sized companies from dissolving into giant entities.

In my opinion, there is a rising wave of Turkish acquisitions, which cannot be viewed as mere isolated news items about unrelated deals, but rather as part of a systematic attempt to move Turkish defense industries from a phase of catching up to a phase of redrawing the map itself.

Turkey seeks to be at the heart of European supply chains and refuses to play a marginal role, using a combination of small and medium-sized companies, acquisitions, and localization policies to build a solid position for itself within a global defense system undergoing a major transformation.

Although this policy has some drawbacks, what will ultimately make the difference is how Turkey handles acquisitions:

Will it treat them as a long-term strategic weapon managed within a clear framework that preserves diversity and innovation? Or will it see them as a quick way to inflate export figures and profits at the expense of the strength of its defense system in the long term?

In my view, the real battle is not with Greece and its repeated complaints to the European Union, but within Ankara itself, in how it manages the Turkish defense industrial pyramid and in its ability to protect the middle tier of companies that form the solid foundation of this industry.

From 2018 to 2024, Saudi Arabia announced that it had increased the percentage of Saudization in the defense industry from 4% to 25%. An impressive figure in such a short period of time, isn’t it? But if you ask yourself a simple question: Does this mean that Saudi Arabia has managed to build a real defense industry? You will find that the answer is no. It has built an improved version of the same trap it fell into nearly 40 years ago.

What does this mean?

Let me explain.

In the 1980s and 1990s, Saudi Arabia developed a strategy to localize its military industries through offset programs. Simply put, the government told foreign companies: If you want to sell us weapons, you are welcome to do so, but on condition that you invest within the kingdom, work with local companies, and transfer technology. In theory, it was a brilliant idea, especially since Saudi Arabia is a huge and important market for any defense company in the world and one of the largest arms importers globally. However, the reality of implementation revealed a major flaw.

Why is this considered disastrous?

Because foreign companies were not transferring real technology. They were only appeasing the Saudi side by transferring a small part of their operations, such as assembly, maintenance, and training, while intellectual property, design, research and development, and everything else that makes the industry real remained outside Saudi Arabia.

If we look at the Peace Shield project with Boeing, we see that it failed. The same is true of the Al-Yamamah project in collaboration with British Aerospace; neither the Americans nor the British created a real national industry in Saudi Arabia.

This raises an important question: Why did the Saudi government not learn its lesson?

The answer is simple: because the government was measuring success with the wrong metrics. It was not measuring the existence of a real industry or the extent of technology transfer, but rather the size of investments, the number of jobs created, and the percentage of “local manufacturing” without verifying the nature and type of that manufacturing.

Now we come to what may upset some people, despite its truth: unfortunately, Vision 2030 is a repeat of the same story.

In 2017, Saudi Arabia established SAMI, the Saudi Arabian Military Industries company, with the goal of localizing 50% of defense spending by 2030. It is a bold figure and a clear plan, but the most important question is: Is the mechanism different this time from previous experiences that ended in failure? Unfortunately, the answer is no.

Looking at SAMI, we see that it is already achieving good results, having entered the top 100 list of the world’s largest defense companies. In 2018, it had only 100 employees, while in 2023, it had 3,600. The company has also entered into important partnerships with Turkish companies such as FNSS, Nurol Makina, ASELSAN, and Baykar, which can be described as highly valuable.

However, when we look deeper into the management structure, organizational culture, and technology transfer mechanism within the company, we find that there has been little change from what it was before.

Upon further reflection on the nature of the company, we can understand what is meant more clearly. SAMI is 100% owned by the Public Investment Fund (PIF), and its board of directors is chaired by Prince Khalid bin Salman, Minister of Defense. In just eight years, the position of CEO has changed three times: the first was a German from Rheinmetall (Andreas Schiefer), the second was an American from Northrop Grumman (Walid Abu Khalid), and the third and current CEO is Thamer Al-Muheid, who comes from a background in general industry rather than defense.

Added to this is a deep structural problem between SAMI and GAMI (the General Authority for Military Industries). Anyone who has dealt with Saudi Arabia in this sector will understand exactly what I mean, but in short: there are two agencies performing almost the same role, and there is competition between them. Although competition may seem positive from a distance, in a sector with limited resources — both human and technical — it becomes a significant burden.

When the relevant authorities attempted to resolve this issue, another problem arose: double bureaucracy. GAMI is the regulatory body, while SAMI is the implementing body, and any private company attempting to enter this sector finds itself in a long maze: licenses from GAMI, imposed partnerships with SAMI, approvals from military authorities, and funding from the Ministry of Finance.

Each entity has a different administrative process, and any delay in these processes kills any ambition for innovation.

All of this raises serious questions about the state of administrative and regulatory stability in this sector, making it seem like a case of “trial and error.”

Let’s compare this situation with what is happening in Turkey. We can take the companies ASELSAN and Baykar as examples. Baykar was founded as a family business in 1975, as was ASELSAN in the same year. If we look at the management structure of both companies, we find it to be relatively stable, and this management stability creates confidence and enables long-term planning.

This does not mean that we are calling for no change in leadership whatsoever, but rather that what we see in SAMI is not just a change in leadership, but a change in the very mindset, in the management philosophy, and in the plans and vision. This aspect needs further elaboration, which we can discuss later.

The second difference is administrative freedom. As I mentioned in a previous article, after 2016, Turkey gradually moved away from a model in which the military ran everything to a new model overseen by technocratic civilian leaders in the management of defense industries. This change has effectively changed everything, and I have previously explained the reasons for the importance of this shift.

In Saudi Arabia, however, to this day, there is still almost complete control by the military, represented by Prince Khalid bin Salman (Minister of Defense), over decision-making and vision. We must not confuse this point with the previous one regarding leadership change and the accompanying change in vision and management philosophy, as they are two completely different things that are not mutually exclusive.

This brings us to the fundamental question: Why is an increase in localization from 4% to 25% not considered a true indicator of success?

Let me start with a simple question: Does simply raising the percentage mean that you have built a real industry? The answer is no. Because not all localization is considered industry.

Imagine, for example, that SAMI contracted with a Turkish company to manufacture a small part for a drone, stipulating that 30% of the production be local in Saudi Arabia. Is this good? I say no, it is not good.

The problem here is that what happened is not building an industry, but simply that Saudi Arabia paid money to a foreign company to operate within it. Once the contract expires, the company closes its doors, takes the technology with it, and leaves. What’s worse is that the part that is actually transferred to Saudi Arabia is usually not the core of the real technology, while the most important part is kept outside the country.

Focus with me on this point.

The percentage calculated by the government — whether through GAMI or SAMI — is the amount of military spending that goes to local companies. But what is not measured is the amount of knowledge that remains within the country, the amount of local innovation that actually takes place, or whether we now have genuine intellectual property in Saudi names.

The difference between these two measures is much greater than you might imagine.

Take the Turkish experience as an example.

When Turkey increased its defense exports from $1 billion to $7.2 billion, it was actually exporting purely Turkish products. The TB2 drone is owned by Baykar, the Atmaka missile is entirely Turkish-made, and the KAAN fighter jet is the result of a purely Turkish design.

As for Saudi Arabia, when it says that it has localized 25% of its defense spending, most of this percentage actually represents foreign assembly plants operating on Saudi soil. These are German, Turkish, or American production lines, but the decision-making, innovation, and intellectual property remain outside the country.

This brings us to the heart of the problem.

In economic terms, it can be said that the wrong incentives create the wrong behavior.

When the incentive is to increase the localization rate, not to build technology, the logical result is that everyone will seek to fill the quota by any means possible: employing more people in local companies, even if they are less competent or more expensive, or focusing on operations rather than research and development. In this case, the goal becomes a number rather than development.

And if local companies are only motivated to engage in assembly projects because they count as “local,” they will have no real incentive to invest in research or develop innovation.

Simply put: the metric set by the government is what drives behavior, and current behavior is geared toward achieving numbers rather than building industry.

But the problem runs deeper than that.

You may now say, “Okay, what’s the solution? Or are you just good at listing problems?”

In fact, the solution lies in the previous lines themselves, but in reverse.

The measurement method itself must be changed, the military and civilian sectors must be separated, SAMI must be given real decision-making powers, the relationship between it and GAMI must be restructured within clear and effective institutional frameworks, and space must be made for calculated risk-taking.

Saudi Arabia has all the ingredients that enabled Turkey to advance in this sector, but the decisive difference lies in the existence of a wise administrative environment versus a turbulent administrative environment, which determines the fate of the industry.

The opportunity still exists, but change must come from the essence, not the numbers.

If you are the type of person who looks for easy answers, such as saying that Israel and the United States do not want the Arabs to cooperate with each other, then this post is not for you. I am here to talk based on facts, reality, and reasons that are far from conspiracy theories and convenient answers.

In 2024, the Middle East spent $243 billion on defense. Saudi Arabia alone spent $80.3 billion, making it the seventh largest country in the world in terms of defense spending, by the way. If we add the UAE, Iraq, Egypt, Kuwait, and Qatar, we find that the total is approximately $150 billion spent on defense by these countries alone in one year. That’s a huge number, isn’t it? So where’s the problem?

To understand the current situation, let’s go back to 1982, when the Gulf Cooperation Council decided to establish a joint defense force. It was a great and important decision, and without going into political details, the result of this joint force was… zero. It had no impact, either technically or militarily, in the region.

In 2014, the Gulf states once again decided to establish a unified intelligence apparatus with a single command center. But, once again, the idea failed, mainly because each country was unwilling to relinquish part of its sovereignty or its priority, dominance, and right to make decisions within the region.

The problem we are talking about here is not military at all, but rather economic and institutional. It is natural that everyone would benefit militarily if there were a unified army or a joint defense industry in which we all participated.

Economically, however, the situation is different. When we look at the issue from an economic perspective, we find that Arab defense cooperation is the worst option for each individual party, even if it is the best for the group as a whole.

This problem is known in economics as the “collective action problem.” The idea is simply that there is always a difference between short-term individual interests and long-term collective interests. When each player makes a completely rational decision without any ill will, they find that the best option for them is not to commit to cooperation, even if they know for sure that full cooperation from all parties will lead to a better outcome for everyone.

The problem is that the collective return is distributed among everyone, while each party bears the cost directly and immediately. For example: relinquishing part of sovereignty, losing control, disclosing sensitive information, or participating in decision-making. Therefore, each country enters the game believing that if it cooperates while others do not cooperate to the same extent, it will be the loser. So it chooses to withdraw, obstruct, or set conditions that prolong negotiations, and the end result is that everyone loses, even though no one intended to sabotage the cooperation.

This is not betrayal or weakness, but simply cold economic calculation within a game designed to fail unless there are real institutions to break this equation.

Incidentally, this same thing is currently happening in defense cooperation within Europe.

We can look at the problem from a different economic angle.

In any defense project, there are several stages. The first stage occurs before the project even begins, when political decision-makers meet with military leaders and defense industries. The decision-maker says: “We need to enter into a partnership with such-and-such country,” but the military and defense companies respond with refusal, fearing the loss of their technical capabilities or the sharing of sensitive sovereign information.

Then we start the project, which includes different countries, and Saudi Arabia says, “I have the most influence,” and the UAE says, “No, I have the best technology.” This leads to disagreement over each country’s share and scope of responsibility within the project. Add to that the fact that each country enters the project with different motives; some want to develop specific technology, some seek to increase sales and profits, and others aspire to train their engineers technically. This diversity of objectives makes managing incentives and expectations a very complex and difficult process.

But let’s assume that the project has actually started and is up and running. Here comes another problem: not the cost of the project itself, but the cost of coordination within it. Defense industries have certain standards, and some countries may operate according to different standards than others, and trying to unify these standards at the technical and administrative levels is a daunting task. There is also the cost of monitoring and enforcement: who ensures that each country implements what it has committed to? Who monitors that technology or information is not leaked? Managing all of this is extremely difficult.

This brings us to another point. A recent study by PwC indicates that the unregulated rush to purchase defense systems in the Gulf states costs them billions more annually due to the complexity of supply chains and maintenance. This is true and important, but it is also very superficial, because trying to reduce these costs will cost countries more than leaving them as they are.

This means that the defense spending of the countries we mentioned amounts to about $150 billion per year, but what is spent locally on internal development does not exceed $6 billion. This means that most of this spending is directed toward imports, and each country has its own supply chains, from different suppliers and companies, which leads to increased costs for everyone. However, the cost of avoiding or reducing this increase is very difficult.

For example, someone might say: instead of each country buying five fighter jets on its own, if we all bought a single deal for 50 fighter jets for all of us, the price would of course be lower for everyone. But the problem here is that not all of these countries need the same type of fighter jet, and even if they all did, each country would likely request completely different specifications to suit its own needs. This is in addition to the political constraints imposed by relations between countries, which makes the issue much more complicated than simply saying, “Let’s unite and buy together.”

In Europe, Europeans do not face most of the obstacles that the Gulf or the Arab world suffers from. They have stable institutions, clear laws, and effective accountability mechanisms. However, when they attempted to implement a relatively simple joint defense project such as the Eurodrone drone project, the story quickly turned into a harsh failure in the economics of cooperation.

The project began between France, Germany, Italy, and Spain — four major industrial countries with strong armies and advanced defense industries. In theory, all the ideal conditions were in place, but in practice, each country entered the project thinking like an individual player rather than as part of a team.

Germany said, “We need a drone that can operate in bad weather and storms for our domestic needs.”

France responded, “That will make the system heavier and more expensive and will not be exportable, thus undermining the economic viability of the project.”

This was not purely a technical problem, nor was it even a political disagreement; it was a problem of economic incentives. Each party tried to maximize its national gains within a project that was supposed to be collective.

The outcome was predictable for most researchers and specialists: costs spiraled out of control and doubled, schedules were delayed for years, and in the end, France itself withdrew after finding that the calculations no longer made sense for it. The project remains to this day halfway through — neither fully completed nor officially canceled.

This is a European example among countries with strong institutions, similar economies, and long experience in military cooperation. If this failure occurred in such a strong and stable environment, the question should not be: “Why can’t the Middle East build a joint defense industry?”

The real question is: “How do we imagine that it will be easier for us?”

The problem is that countries view national security as a matter of sovereignty rather than economics, so the rational choice is for the state to spend more to preserve its sovereignty, even if the cost is high.

When the economic equation is calculated rationally, we find that entering into complex cooperation is more costly than continuing to import ready-made equipment from the United States, France, or Russia. This is because achieving defense cooperation requires starting with a long series of problems, the last of which is determining what needs to be manufactured jointly.

That is why I will give you two economic words to always keep in mind: Organized failure is sometimes more rational than joint success, as long as each party has adapted to the status quo and prefers its stability to the risk of an uncertain joint future.

Let’s talk about a very important aspect that concerns everyone who aspires to work in this field, an aspect that no one will tell you about the reality of working in this industry, and how it is causing Europe and America to face a deep problem that is difficult to solve and will require many years and radical changes.

I will explain to you in the end how management sciences and humanities play a crucial role in the defense industries, as there are problems that military science or technology alone cannot solve.

We all know that Europe and America, as well as all countries, spend billions on defense, but what we don’t know is that they face a talent crisis that threatens their ability to turn that huge spending into real products.

Europe alone needs to fill about 1.5 million jobs in the defense and aerospace sectors, which is a huge number.

To understand the scale of this problem, let’s look at it from this angle: you have great defense ambitions, you face threats on your borders, you are pumping in huge investments, and you have a strong industrial base, but despite all that, you have a deep problem, which is that you don’t have enough talent to manufacture those products.

In fact, the opposite is true: people are leaving the defense industry, not necessarily because of low salaries (although that is one reason), but because the work environment itself is repellent to talent. Anyone who works in human resources will understand how difficult and dangerous such a problem is for an entire industry.

A study by McKinsey and the Aerospace Industries Association indicates that the attrition rate in the defense and aerospace industries has reached 15%, meaning that one in seven employees leaves their job each year.

To understand how serious this figure is, it is enough to know that the normal rate in the United States in general is only about 3.8%, which is about four times lower than the attrition rate in the defense industry.

And the problem does not stop there; there are much worse figures. For example, about 25% of the defense and aerospace workforce has reached or is very close to retirement age, which means that in just five years, this industry will lose a quarter of its human resources, along with 20 or more years of experience.

On the other hand, where is the younger generation that will replace them? So far, there is none.

This problem is essentially an economic one, because it represents a gap between what the industry actually needs and what countries and companies offer individuals.

This brings us to the most important question: Why are people leaving defense industries?

Many superficial analyses attribute the reason to salaries, i.e., wages are low, so workers resort to sectors that offer higher salaries. But in reality, this is not the root of the problem.

Major defense companies such as Lockheed Martin and Raytheon offer reasonable salaries—not the highest compared to major technology companies such as FAANG, but still good—yet the real problem remains in the organizational culture and work environment itself.

There is a phenomenon known as ossified culture, a work environment that belongs intellectually to the “Stone Age” and still carries all its old flaws: harsh bureaucracy, overly long chains of command, intense fear of making mistakes, and other manifestations that stifle creativity.

While reading about this topic in preparation for writing about it, I found a popular forum for engineers on Reddit, where someone wrote that they had worked in the defense industry for about two years.

This person says that the prevailing image of freedom, innovation, and working on great projects is completely misleading; the internal culture systematically kills innovation. Even if you have an excellent idea, you have to go through a long series of approvals from about ten different parties, and in the end, the idea is usually rejected.

Another person mentioned that he worked for a large defense company and said that they reused old designs instead of developing new ones because any new project requires a lot of time, money for testing, and complex regulatory approvals. That’s why companies prefer the safe and proven route rather than embarking on development adventures — even if the new is much better than the old.

But the worst figure of all, which surpasses any other in its shock value, is related to security clearance delays.

These clearances are a prerequisite for working on classified projects. In the United States and Europe, anyone who wants to enter the defense sector is subject to a thorough and complex security screening process.

Since 2024, the duration of these processes has begun to lengthen significantly. For example, it now takes a minimum of 146 days to obtain a Top Secret Clearance, the highest level of security clearance.

The process is extremely complex, involving a thorough background check that examines friends, family, bank accounts, and every little detail of a person’s life. Anything suspicious discovered during the screening results in the candidate being immediately rejected without discussion.

Even if the screening is passed successfully, waiting 146 days is enough time for the company to lose a talented employee, as most of them find another job during that period—one that is faster, easier, and perhaps similarly or better paid—in an environment that is more supportive than the defense industry.

So instead of waiting anxiously and bored for that long period, the employee simply says, Why not start working at Google or Meta today? The talent shortage is not just a hiring problem, but part of a deeper management problem.

The focus is always on the known and proven: predetermined specializations and traditional backgrounds, such as mechanical engineering, military electronic engineering, military maintenance, and so on.

But the world has changed, while this logic remains the same.

Today, defense industries are no longer based solely on traditional manufacturing, as new specializations such as additive manufacturing have emerged. These specialists are extremely rare, and even when they are found, they often have no previous experience in the defense field. Sometimes, there are no departments available in the first place to accommodate this type of expertise.

Defense companies today point to a shortage of artificial intelligence and machine learning engineers, a shortage of software developers—who are attracted by much higher salaries at large civilian companies—and a significant shortage of engineers in advanced industries such as 3D printing and materials engineering.

However, the core of the problem lies not so much in the scarcity itself as in the structural imbalance that has allowed this crisis to escalate.

Defense companies are now asking themselves the question, too late:

How can we not attract AI engineers when we are working on the latest technologies and the largest defense programs in the world related to artificial intelligence?

The answer is simple:

A young person who has studied artificial intelligence and graduated from university has three clear options:

• Work at OpenAI, Google, or Amazon, and earn a very high salary and, more importantly, intellectual and spatial freedom at work.

• Work at a defense company for the same or lower salary, in exchange for severe bureaucratic restrictions, complex security clearances, and procedures that take months, without any real freedom of movement or innovation.

• To join a startup in Silicon Valley.

The choice here is quite clear, and it doesn’t take a genius to know which path this engineer will take. Naturally, he will not choose the second option, i.e., working for a defense company.

As for Europe, its problem is much deeper than that of the United States, because salaries there are lower—according to statistics, they are about one-third of American salaries—in addition to a bureaucracy that is much more complex than its American counterpart.

Consequently, in most cases, Europe’s top talent in the fields of technology and defense simply leaves for America, because the incentives there—both financial and professional—are incomparable.

There is a phenomenon in Europe known as reverse brain drain.

After World War II, Europe was suffering from difficult economic conditions that drove large numbers of young Europeans to emigrate to the United States. This wave began to subside in the 1960s and 1970s when Europe stabilized economically.

However, the wave has returned today, especially in the technical, defense, and space sectors.

German engineers are emigrating to America, as are British and French engineers.

If you browse LinkedIn and look at the profiles of engineers working in the United States, you will find that many of them studied at a European university, then worked briefly for a European company, and then moved to an American company.

This means that the problem is not limited to a particular company or even the defense sector alone, but is a much deeper structural problem; European countries themselves have put themselves in a position where they cannot retain talent.

This brings us to the third problem:

European and American countries spend billions on defense, space, and armaments, but at the same time, they invest very little in human resources, education, and the real development of talented workers and cadres.

A 2024 study by McKinsey indicates that 48% of employees in defense and aerospace companies stated that the tools and resources available to them are insufficient to perform their work with the required efficiency.

Worse still, 60% of mid-level and junior employees say they do not feel empowered to improve the way they work, meaning that employees go to work every day without even daring to suggest changes in methods or mechanisms to improve their work.

Furthermore, 60% of companies themselves confirm that they face a fundamental problem in retaining their staff.

When these companies and countries began to think about a solution, the only response was almost always to increase salaries by a small percentage.

However, these increases did not solve the problem, because the essence of the crisis is not only financial, but also structural and cultural within the economy itself. As we said earlier, salary has never been the root of the problem; rather, the root causes are culture, freedom, appreciation, and the opportunity for innovation.

Hence, it can be said that these countries are currently stuck in a difficult trap, a trap that is simple to describe but extremely complex to solve.

The trap is that you realized the problem too late.

Talent is not lost suddenly without warning, but erodes gradually.

As soon as a person feels that the company or system they work for is unable to accommodate their development or appreciate their innovation, they begin to look for another place that will give them greater respect, greater freedom, or faster achievement.

This is where companies make the same mistake, attributing the cause solely to material factors, because they do not want to admit that the crisis is essentially psychological, institutional, and cultural before it is financial.

The final problem is that universities are not equipped with educational programs tailored to the needs of the defense and aerospace sectors, and defense companies do not cooperate effectively with universities to guide them on what to teach young people or to provide the necessary support for these programs.

The end result is that graduates lack the skills that the industry actually requires.

Furthermore, the number of graduates in vital defense-related disciplines is very low each year.

A study conducted in 2024 indicated that less than 100,000 students worldwide graduate annually in technical fields related to semiconductors, while the global demand for employees in these fields exceeds one million people annually!

Think about it: we are talking about a military industry facing a deep crisis, but the solution is neither military nor political, but rather purely administrative.

Imagine if the company’s management itself consisted entirely of retired officers with a strict military leadership style! Then you could say goodbye to cadres and talent.

Some decisions have recently been made to try to address these crises, but there is still a long way to go, and the problems are piling up day after day.

In my opinion, one of the most important decisions that should be made is to give defense companies the freedom to make reasonable profits and convert them into private companies operating under government supervision or sponsorship.

The reason is that what is currently happening is that governments have reduced the profit margins of these companies on the pretext of preserving public funds, so that companies are now operating with extremely low margins, making them unable to hire more, raise salaries, make necessary structural changes, or even invest sufficiently in research and development and human resources.

I have elaborated on this topic because the goal is not only to explain, but also to draw a very important lesson—in addition to the immediate lessons.

That lesson is that the defense industry suffers from deep problems that require radical changes, and that the solution lies more in the civilian and human sciences than in military science or technology.

The only real solution is to recognize that defense engineering, technology, and innovation are not purely military responsibilities, but are first and foremost administrative, economic, and cultural responsibilities.

Take this important observation: these problems are much less prevalent in emerging countries—such as China, India, Turkey, and Brazil—because these countries follow a completely different model; they focus seriously on education and human resource development, allow room for experimentation and failure, and grant greater freedom for initiative and innovation.

It is essential to understand that human resource problems are the most serious of all, because they require many years of investment, education, culture, and freedom.

When a great country loses a generation of talent, there is no guarantee that it will be able to regain it in the next generation.

So, is the Emirati defense model truly as successful as it is claimed to be?

The UAE represents a unique case in defense economics; it is a country that combines success in numbers with significant underlying challenges, to the point that there are widespread campaigns to boycott Emirati defense products. These boycotts are not due to ethical concerns, but rather market-related reasons, with accusations that the UAE’s practices have harmed several companies and industries in countries that entered the same market.

Let’s take a comprehensive look at the story of the UAE in the defense industries.

The UAE stands out as one of the few nations that decided to build its defense sector not from the standpoint of “an army that needs weapons,” but from the standpoint of “an economy that seeks industry.” In other words, it approached defense industrialization through a purely commercial and strategic lens, seeing it as an opportunity to assert regional and international influence.

Put differently, the defense industry in the UAE is not merely an arm of the military; it can also be viewed as a tool within a broader strategy to diversify the economy beyond oil. This represents a fundamental and important distinction in the administrative and economic philosophy driving the UAE’s defense industrial sector.

The story of the UAE’s defense industries began only about a decade ago, more precisely eleven years ago. If we look at the sector’s development from 2014 to today, we can understand why the Emirati experience deserves serious study.

In 2014, the country established the EDGE Group, which is not a single company as many might think, but rather an umbrella organization bringing together more than twenty-five firms working in defense, security, and advanced technology fields.

This group can be viewed as a holding company managed with an investment-oriented mindset and funded by sovereign wealth funds - meaning it is not affiliated directly with the military, nor was it established to fulfil its immediate needs. This becomes clear from its civilian and technical management structure, which includes a board of directors featuring financial and industrial experts from outside the military field. The UAE follows a clearly commercial model, based on Performance Indicators (KPIs) and annual budgets subject to rigorous financial audits, without any direct military intervention in management.

What followed was one of the fastest institutional transformations in the Arab world - perhaps even globally.

Companies such as Tawazun, NIMR, Industrial Offset, ADASI, Yahsat, and HALCON were merged into a single entity operating according to global market logic - focusing on development, manufacturing, and export, following the same approach as major international firms like BAE Systems (UK) and Leonardo (Italy).

This consolidation moved the UAE from the stage of importing ready-made weapons to the stage of possessing operational knowledge in fields such as satellites, aerial munitions, and command-and-control systems. It is important to emphasize that what is meant here is “operational knowledge ownership,” not “technological ownership” or “advanced manufacturing” - as the UAE has not yet reached that stage.

Economically, the Emirati experience is significant because the country did not try to compete with the United States or France in the same technologies. Instead, it focused on market gaps and worked to exploit them - such as short-range air defense systems, light drones, smart munitions, and tactical electronics. These are precisely the areas that major companies often consider “minor details” not worth dedicating their resources to - and they are exactly the niches the UAE chose to target.

Thus, the UAE has advanced according to a “niche specialization” strategy, with a clear and deliberate approach: to offer a product tailored for a specific market, of medium quality, providing high returns and fast delivery.

What makes the UAE’s model distinct is that the EDGE Group did not operate as a closed government defense company, but rather as an open international partnership platform. Its logic is simple: “I am here, I have vast financial resources, and if you wish to collaborate on producing a specific product, you will find me ready to participate.”

Companies like BAE Systems, Raytheon, Leonardo, and Baykar have all entered into partnerships with the UAE for joint development, component production, or system testing - and these, by the way, are some of the largest defense industry corporations in the world.

In 2024, the value of Emirati defense exports reached around 3 billion dollars. This figure might seem modest when compared to global defense markets, yet it is remarkably large considering that the sector itself is barely ten years old.

Here’s an interesting fact - though it may seem anecdotal, it’s noteworthy: EDGE’s exports are now more diversified than the UAE’s oil exports, when measured by the number of importing countries.

But beyond the numbers, what truly matters is that the UAE is building its defense sector as a knowledge-producing industry. The country uses defense not merely as an instrument of military power, but as a technological laboratory that supports fields like artificial intelligence, robotics, aviation, and space in the civilian economy. This is what economists call the dual-use spillover effect, a concept I have previously explained in depth.

From a governance standpoint, the UAE has managed to achieve a balance that many nations have failed to strike: executive civilian leadership, sovereign control by the state, corporate-style financial governance, and a reward culture based on innovation and quality execution.

In other words, the UAE has succeeded in establishing a quasi-market management system within a sovereign framework - something rarely accomplished elsewhere.

This has made it one of the few cases to realize that defense power is not measured by the number of tanks, but by the number of engineers who test those tanks and create patents that benefit other industries.

However, the UAE is not a defense paradise; there are three main challenges.

First, developing local capabilities takes decades, not years, especially given the clear shortage of Emirati engineers in advanced technology fields. Despite intense campaigns to “Emiratize” the workforce (similar to “Saudization” in Saudi Arabia), the proportion remains limited: only 20% of the workforce in the sector are Emiratis, and about 50% of the engineers are Emiratis - while the rest are foreigners.

Second: Despite this great leap, the UAE still depends on imported critical components such as microchips, advanced sensors, and software coming from the United States, Europe, and South Korea. There is no announced plan to localize the production of these components.

Economically, this situation is known as the technological dependency trap, where most Emirati products are assembled or superficially developed goods, not fully sovereign innovations. Therefore, in the event of sanctions or a trade war, production could stop immediately.

This limits the resilience of the industry and makes the actual value of its exports low-to-mid tech, rather than truly high-end technology.

Third: The biggest and most serious issue concerns international accusations directed at the UAE for engaging in monopolistic behaviors and interference or manipulation in foreign markets.

The UAE is accused of posing a threat to the economic sovereignty of countries in which it operates, as it imposes contractual terms that reduce local companies to secondary suppliers under its control, often involving partial technology transfers to the UAE.

In markets such as Kenya, Poland, Brazil, and Spain, EDGE faces accusations of market distortion, due to its governmental backing, which is said to suppress local competition.

This has taken place through exclusive contracts and acquisitions that weakened smaller companies in those countries, sparking international boycott campaigns against the group, which is described as a state-backed entity dominating supply chains and threatening the economic sovereignty of importer nations.

Economically, this allegation rests on a model known as predatory acquisition. Critics argue that the group is sovereignly funded, with annual revenues of about 5 billion dollars, and backed by sovereign wealth funds such as ADQ. This gives it the ability to acquire companies at very high prices without needing short-term profits, and to rapidly attract expertise.

As a result, the situation is not considered a level playing field, because this model reduces local innovation in the countries it enters - especially in those where small and medium enterprises rely heavily on limited defense contracts.

Since 2023, the UAE has acquired significant stakes in European and South American companies, such as Milrem Robotics in Estonia, which, by the way, was the largest investment in the history of Estonia’s defense industry.

The European Union launched a five-month investigation fearing that EU-funded technology might leak to the UAE, similar to what happened earlier in the iMUGS project for robotic tanks.

The UAE also purchased a large stake in Anavia, a Swiss company specializing in drone manufacturing, and acquired 50% of SIATT, a Brazilian company working in precision munitions. It also bought part or all of Flaris, a Polish company specializing in light aircraft, and took over Condor, another Brazilian defense firm.

Several reports indicate that while these acquisitions are effective in the short term - mainly for technology transfer - they tend to cause problems in the long run. In many cases, the Emirati company withdraws after achieving its objective, repatriating the technology and sometimes even absorbing engineers from the acquired firm. This often leaves behind a country that gains little genuine benefit from the deal.

This issue has also emerged within the UAE itself, not just abroad.

The EDGE Group dominates the Emirati defense market almost entirely, which reduces competition, puts pressure on small and medium local companies, and creates what could be described as an innovation bubble - innovation driven by government support that is unsustainable in the long term.

Based on these facts, it can be said that the Emirati model is brilliant in terms of speed, but fragile in terms of dependability and the balance between profitability and autonomy.

From an economic perspective, the model remains successful so far, but if international campaigns intensify or if the European Defence Agency tightens legal restrictions on the UAE’s activities in Eastern Europe, EDGE could lose everything it has achieved so far.

This offers an important lesson for the UAE itself and for other countries such as Saudi Arabia: rapid growth is not always an advantage, because real growth requires balance between capabilities and objectives, and the building of international trust and partnerships that yield mutual benefits for all parties involved.

The important thing is that he told me about an American company founded by Palmer Luckey after he sold his previous company, Oculus VR, to Meta for $2 billion in 2014, and then founded a new company called Anduril Industries. Believe me, this company is not going to change the shape of the global defense industry… it has already changed it.

I will talk about it later, but today I would like to address a topic related to the future of defense economics and artificial intelligence.

Let’s think together about the next stage in the evolution of defense economics. Many of us view artificial intelligence as a new tool that increases the efficiency of weapons, but the truth is that its importance lies in the fact that it fundamentally changes the nature and shape of the defense economy.

To understand this transformation, we need to answer an important question: What does it mean to have an “algorithm-based defense economy” instead of an “economy based on iron and nail factories”?

In traditional defense industries, value was created inside the factory; the factory that manufactures the aircraft, tank, or missile. Today, value is created in the code, data, and algorithms that make an aircraft or drone think smarter or perform a completely different task from others, even if they are of the same model. This is a radical economic shift, because you are no longer selling a piece of iron, but selling a knowledge system.

If we go back just ten years, the term “autonomy” meant a decision-making support system. Today, the world has moved toward systems called “human-out-of-the-loop systems,” meaning that decisions to kill or engage are made autonomously without direct human intervention.

This development is effectively creating a new economic class within the industry that we could call the defensive artificial intelligence class.

The most important aspect is that the companies that control defensive artificial intelligence are not the same ones that manufacture aircraft or radars, but rather new, independent companies that have entered the equation. Therefore, we can consider them a new class in the industry, such as Palantir, Shield AI, Helsing in Germany, or Anduril, which we have already mentioned. We are talking about software and cybersecurity companies that have become competitors to traditional arms manufacturers themselves.

You may now be wondering: Why don’t the old big companies do this work This is a valid and difficult question, and departments such as technology and innovation management at many universities have been trying to answer it for years.

Let’s get back to the heart of our topic: this shift is causing what economists like me (damn my modesty) call the unbundling of the defense value chain, i.e., the separation of the physical industrial system from the digital knowledge system, which is a field of research and development in itself.

A country that recognizes this early on (listen up, countries!) can create technological and economic advantages for itself at the same time.

To understand the importance of this change, let’s look at some numbers.

In the United States, more than 70% of defense AI contracts went to companies that were never part of the traditional defense bureaucracy, but rather to startups. Goodbye to the old industry giants and established companies in the market; today we are talking about companies that are only five or ten years old. This is really serious.

In Europe, the European Defense Agency has launched the AI4DEF program to reduce dependence on American technologies in smart applications, a massive program focused on sensor fusion algorithms and autonomous control - also through startups.

China, on the other hand, is doing the exact opposite. It is integrating the civilian and military sectors into a single framework known as civil-military integration, and is focusing on linking artificial intelligence to missile and drone systems through national supply chains. In other words, China is systematically weaponizing any civilian artificial intelligence technology.

From an economic perspective, this means that the defense sector has entered a new phase that could be called “the commodification of knowledge.” This phase may be familiar in other sectors, but it is the first time in history that defense has entered this phase. We used to view defense as a “heavy industry” requiring giant companies and huge investments, but now we are talking about a new reality: Every line of code and every machine learning model has become a real monetary value in the defense market.

This will change the balance of power in the defense industry and also change the nature of defense financing itself, because you no longer need huge industrial capital to build a tank or an ammunition factory; instead, you need human and knowledge capital.

Putting all this together, it can be said that the defense industry is gradually shifting from a mineral economy to a knowledge economy.

This brings us to a more serious question - one that could be the subject of master’s and doctoral theses:

How are countries that are still building their defense industrial bases dealing with this shift?

Do they start with iron and electronics? Or do they jump straight into software, smart control, and integrated systems? My view is that the shortest route for any country outside the big league is to enter directly through the door of defense artificial intelligence.

Not because smart weapons are easier - in fact, they are much more complex - but because the capital barrier is much lower. You don’t need factories worth billions, but rather laboratories and scientists, data, and flexibility in thinking, which are the resources that enable a new generation of countries to create a digital comparative advantage instead of a traditional industrial advantage.

Countries that have not yet realized the significance of smart defense economics will look at the world in just five years and discover that their pursuit of steel was a wrong and costly decision, and that those who preceded them were the ones who began building algorithms and codes.

We are witnessing a truly amazing scene: Artificial intelligence began as a civilian technology, then was adopted by the defense industry, and is now being developed to be transferred back to civilian sectors for their benefit.

Those who understand this logic are building defensive artificial intelligence systems today, not only for war, but because these systems will later extend to all civilian industries.

I hope that developing countries will recognize this change and bring about a real transformation, bringing back their children scattered around the world to build an industry with their minds, not with giant factories and huge investments. 

The opportunity is truly there, and even the very poor can take advantage of it.

Although it is one of the most important keys to understanding the boom in the Turkish defense industry over the past 15 years, there is one aspect that is rarely discussed.

It Wasn’t About Technology, It Was About Governance

To put it in academic terms, this issue concerns the changing civil-military relations in Turkey and the impact of this transformation on the governance of the defense industry.

Simply put, when management moved away from the traditional military approach and adopted a civilian-technical approach, the entire sector changed.

The idea here is not that soldiers are monsters or civilians are smarter, but that you cannot manage a sophisticated, high-risk technology industry geared toward the global market with the same mindset as a hierarchical military institution whose primary goal is to meet the needs of the domestic army.

The Industry Born After the Embargo: The Dominance of Military Logic

To understand this transformation, we need to go back a little.

Major companies in the Turkish defense industry, such as Aselsan and TAI, were established in the 1970s, entirely within a political context, following the shock of the US arms embargo after the 1974 Cyprus crisis and the Turkish awareness that being completely dependent on the West was a strategic risk.

Aselsan was established in 1975 as a direct response to this embargo. From the outset, it was affiliated with the Turkish Armed Forces.

TAI was established slightly earlier, but it acquired a larger industrial structure in the 1980s when it partnered with American companies to produce and assemble F-16s.

In other words, both companies were part of the defense industrialization project, but this project was closely linked to military institutions and the urgent needs of the armed forces.

These companies were under the influence of institutions controlled by the military, and the presence of retired military personnel on the companies’ boards of directors and in senior positions was evident.

Low Risk, Low Innovation, Closed Ecosystem

This situation naturally manifested itself in the management culture: conservative management, low risk, a focus almost entirely on meeting the needs of the Turkish military, and a heavy reliance on licensed production or limited development.

Why Can’t Military Institutions Be Global Players?

This is not my personal opinion. In management and innovation studies, there is a well-known logic that governance and decision-making styles directly affect the level of innovation, risk-taking, and long-term commercial thinking.

When managing a defense company with a closed, sovereign institution mindset, it is natural to produce for the domestic market, but it is difficult to remain a global player that exports, innovates, and negotiates.

Therefore, although Turkey’s defense industry structure has existed for approximately 50 years, the growth of this sector has remained limited for a long time. Until the beginning of 2010, exports in the defense and aerospace industry were still below $1 billion and progressing very slowly compared to the country’s goals at the time.

The State’s Transformation from Sole Buyer to Strategic Actor

The real transformation did not happen overnight, but it began to gain momentum rapidly from 2004 onwards.

The state became not just the sole buyer of this sector, but its strategic buyer. It increased research and development spending and opened the door for private and semi-private companies to enter a sector that had previously been almost closed.

2016: A Turning Point for the Defense Industry

However, the failed coup attempt in 2016 became a turning point in accelerating this process, as it allowed for a radical realignment of the balance of power within the state, including the defense industry sector.

After 2016, a crucial step was taken to reattach the Defense Industry Presidency (SSB) directly to the Presidency.

This decision achieved three things simultaneously. It decentralized the decision-making process by removing it from traditional military institutions.

It accelerated the ability of decision-makers to change leadership within companies and institutions.

And it created a kind of harmony and understanding between the defense industry, foreign policy, and the state’s geopolitical goals.

New Generation Manager Profile: Not a Soldier, but an Industrialist

This paved the way for a new generation of civilian-technical leaders with experience in management, economics, engineering, and aviation.

The most obvious example of this transformation is Temel Kotil from Turkish Airlines, a global civilian company. He has been involved in competition, marketing, efficiency, and profitability, achieving great success in these areas.

When he took over the leadership of TAI after 2016, he thought not about what the army needs today, but about what the army needs today and tomorrow and what the global market can buy.

This transformation turned the sector from a closed sovereignty program into a strategic and exportable defense product.

After that, a new discourse began to emerge in Turkey, and an official slogan defining defense as an export industry emerged: defense industry for export.

During the same period, annual spending on research and development in the defense sector reached approximately $3 billion. Companies became more flexible. The focus was on efficiency, profitability, and time. A clearer network was established with the global market.

The Truth Told by Numbers and Products

All of this was reflected in the numbers. Turkey’s defense and aviation exports, which were below 1 billion dollars, reached approximately 7.2 billion dollars in 2024.

However, more important than the figures is the quality of the products: the Kaan fighter jet, the Atmaç anti-ship missile, and armed unmanned aerial vehicles that shift the balance of power on multiple fronts.

These products are certainly not a coincidence or merely a technical achievement; they are a direct result of the change in management philosophy and the state’s relationship with industry.

Four Dynamics Making Turkey an “Emerging Arms Exporter”

Many analyses classify Turkey today as an emerging country in the defense industry and attribute this transformation to four main factors that have had a combined effect.

• The marginalization of the military’s direct political role

• The rise of a central civilian leadership (SSB) controlling the strategic decision-making process

• The use of the defense sector as a hard and soft power tool in foreign policy

• Encouraging private and semi-private companies to enter the market and not limiting the market to organizations linked to the armed forces

This is a lesson for many countries that dream of reaching the level Turkey has achieved. It is not a matter of technical skill. Turkish engineers have been in this field since 1974. However, it is the management style itself that has enabled this explosion. All you have to do is leave the bread to the baker.

Why Does Military Hierarchy Kill Innovation?

From an economic perspective, why do traditional military leadership and hierarchical command structures not encourage innovation and development in the defense industry?

I previously wrote that the acceleration and development experienced in the Turkish defense industry occurred alongside a change in management philosophy. Military leaders gradually withdrew from the management of defense companies and were replaced by civilian-technical leaders with a completely different mindset.

However, to address the issue from an economic perspective and understand why the military’s hierarchical style hinders innovation, we need to understand a few simple concepts from organizational economics.

Rational Inefficiency: When No One Wants to Make Mistakes

The first theory is the principal-agent theory, which explains why people engage in behavior that is contrary to the interests of the organization.

At the core of this theory, we can view any organization as consisting of principals (top management) and agents (engineers, managers, program managers). However, the interests of these two groups are not entirely aligned.

In the traditional defense industry, the principal (management) wants innovation, speed, calculated risks, and new products.

However, if the principals (management) have a rigid military background, the agents (engineers) prioritize avoiding mistakes and punishment. They do not want to attract attention, they follow the rules, and they make zero mistakes, even if it means zero innovation.

Economically, this is called rational inefficiency, meaning representatives (engineers) work less efficiently but rationally, because incentives encourage them to conserve energy and focus solely on avoiding mistakes. This means there is literally no incentive to succeed, but making mistakes is punished.

The “Fear of Making Mistakes” Stifling Innovation

This brings us to the second concept: the theory of the Zero-Error Culture. This is the number one enemy of innovation. It is a culture that develops very naturally in any organization that punishes mistakes rather than rewarding successes. Agents (engineers) refuse to take risks… They choose the safe path, even if it is slower and weaker…

This has been the case for years in many defense companies around the world, including Turkey, since before 2004…

Imagine an organization with 300 steps for approval… and 50 signatures… and even the smallest mistake is severely punished… of course, no one will try anything new… no one will say, “Let’s try this idea, it might work…” No engineer will take a risk on an idea that might fail… even if that idea could change the industry…

Getting Lost in Pursuit of Perfection

This brings us to Incentive Theory. According to this theory, if there is no reward for innovation, innovation will not happen. In other words, people do not do what they should do, they do what the system rewards.

If military management rewards discipline, avoiding mistakes, obeying orders, and completing procedures, then you will see projects that follow only a slow bureaucratic philosophy, where engineering teams are afraid to experiment, with outdated ideas and slow progress.

Innovation requires an environment that fosters risk-taking and experimentation. However, the military system is designed not to manage risk but to minimize it.

This brings us to the logic of perfect optimization, or the Perfect Optimization Trap. In the traditional defense industry, there is a well-known disease: we want the best thing in the world. A flawless first version. Economists call this the pursuit of perfection under bureaucratic constraints, and it is the main reason why 80% of European armament projects are delayed.

Because you want every project to be perfect, every specification must meet the highest international standards, and every change must pass through 10 review committees. As a result, reaching the final product takes 10 years instead of 2.

This is completely contrary to innovation, because innovation happens step by step and through iterations, but traditional military thinking demands success on the first try.

Innovation Comes Not from Orders, but from Freedom

In any technology industry, risk is part of the game. Innovation does not come from fear, discipline, following orders, long reports, and sequential approvals. Innovation requires freedom to make decisions, take responsibility for experiments and failures, and reward success. It requires a culture of learning through trial and error, which is the opposite of the traditional military environment.

Therefore, when civilian leadership entered the Turkish defense industry, the margin for initiative increased, and innovation quickly followed.

This wasn’t the first such appeal in Egypt’s political history; others before him had used direct speech to summon the public in moments of political transformation. But what happened at that moment wasn’t just another passing statement — it was an implicit announcement of the beginning of a new phase in the relationship between the state and society. A phase that would reshape the very notion of security and the dialectic of power and fear in the public sphere. And it is a phase that continues to this day.

The uprising that toppled Hosni Mubarak in 2011 had, if only briefly, sparked hope for a possible transition to a civilian democratic system in a country long ruled by the military establishment. However, by the summer of 2013, that path had gradually reversed. The public discourse was reorganized around a central idea: preserving the state, not reforming it. At that juncture, Sisi redefined political repression as a “popular war on terrorism,” and supporters of the democratically elected president Mohamed Morsi were demonized as an existential threat.

What occurred wasn’t merely a rephrasing of terms, but rather a strict return to the security mindset upon which Egypt’s governance had been built for decades. The national political discourse quickly shifted — from talk of “stability” during Mubarak’s era, to rhetorical chaos after the revolution, to rigid security firmness after the coup. In this way, security was no longer invoked as an institutional function, but as a political ideology.

This article seeks to trace the transformation of Egypt’s security narratives, before and after the 2013 coup, and to deconstruct how fear of terrorism and chaos became a central justification for an authoritarian regime that was re-established with a new face beginning in 2014.

Security under Mubarak: Stability vs. Freedom

For three decades, Hosni Mubarak’s regime succeeded in entrenching a central security narrative: stability is the highest goal — no matter the cost. Since the assassination of Anwar Sadat by Islamists in 1981, Egypt was ruled under a near-permanent state of emergency. Under this condition, a logic took hold: the country was under constant internal threat, and thus legal exceptions became the rule.

The Muslim Brotherhood — at the time the largest opposition organization — was effectively banned and persistently portrayed as a threat to national unity. Based on this alleged danger, the emergency law was justified for many years, and the fight against “terrorism” became a broad umbrella under which systematic violations of rights and freedoms were carried out. The powers of the security apparatus expanded, exceeding those of the regular judiciary. Military courts became the institutional face of repression, where the state made no distinction between peaceful and armed opposition.

Mubarak’s security discourse was marked by its almost exclusive focus on internal threats. After the peace treaty with Israel, official rhetoric ceased emphasizing external enemies and shifted its focus to internal dangers, foremost among them the Islamist movements. During the 1990s, the state did face an actual armed insurgency. Yet the regime exploited this threat to widen its repressive scope — targeting civil movements, human rights activists, and independent journalists.

Over time, the definition of “terrorism” in official and legal discourse became so vague and broad that political activism itself was conflated with security threats. In this sense, the security narrative no longer targeted Islamists alone, but also extended to democratic currents, human rights organizations, and anyone who challenged the state’s logic.

Amid this expansion, Mubarak crafted an image of himself as the “protector of the nation,” an image reinforced by state media, which propagated a message warning that any loosening of the security grip would inevitably lead to total chaos. Thus, the state became centered around a core security concept, where public freedoms were seen as latent threats that must be controlled in the name of order and stability. Even civil society — though present — was besieged by a narrative that accused it of treason or endangering national security whenever it criticized the authorities.

With the turn of the millennium, Mubarak’s security discourse solidified into a kind of unspoken contract: acceptance of a minimum level of stability in exchange for giving up demands for political freedoms. National identity was framed within a narrative under siege by “extremist forces,” requiring decisive leadership to protect it from collapse. Domestically, this narrative granted Mubarak ongoing legitimacy for his rule. Internationally, it enhanced his position as a reliable ally in the war on terror — particularly with the United States, which continued to support him politically and economically despite the authoritarian nature of his regime.

Yet the great paradox was that this “exceptional state,” which lasted for decades, was gradually generating the conditions for its own demise. In January 2011, when people chanted, “Bread, freedom, social justice,” it wasn’t merely a social protest — it was a clear rejection of the equation: security in exchange for rights. In that moment, the discourse of fear collapsed in the face of a popular promise for a new reality — one in which the political community reclaimed the initiative, even if only temporarily.

Competing Narratives under Morsi

In the aftermath of the 2011 revolution, a rare window of time opened up, allowing for divergent visions of Egypt’s identity and future trajectory. For a brief period, it seemed the public sphere had opened to competing narratives, each offering a different conception of the state, the relationship between power and society, and the limits of security. While the Supreme Council of the Armed Forces, which oversaw the transitional phase, initially maintained the emergency law, it was ultimately forced to lift it in 2012 under popular pressure. Thus, Egypt experienced around thirteen months without emergency law — a rare moment marked by expanded political discourse and the loosening of long-standing red lines that had constrained the media and public life.

In this context, Mohamed Morsi, the candidate of the Muslim Brotherhood, won the country’s first free presidential elections. However, his short presidency — lasting less than a year — was a tense transitional period that failed to fundamentally redefine Egypt’s security narrative. Instead, it revealed deep structural tensions within the state.

From the moment he assumed office, Morsi found himself surrounded by deep suspicion from the entrenched institutions of the state — the military, security services, and intelligence agencies — which had remained untouched for decades and showed little willingness to accept a civilian president with an Islamist background. In his rhetoric, Morsi attempted a conciliatory tone, signaling a commitment to democratic transition and refraining from immediately resorting to traditional tools of repression. He did not reinstate the emergency law nationwide and only used it briefly in specific cities during waves of unrest in early 2013.

But this restraint was not enough to stabilize the scene. The media machine, beyond his control, quickly transformed into an open space for harsh criticism — and even open mockery — in a way that would have been unthinkable under Mubarak. This media openness revealed a liberatory dimension not seen in Egypt for decades. However, it also deepened polarization, as clashing political narratives emerged, each claiming to hold the truth about who threatened the country’s future.

On the security front, Morsi’s government faced real challenges, particularly in Sinai, where jihadist activity surged after 2011. A turning point came with an attack in August 2012 that killed 16 soldiers, prompting the president to launch a military operation targeting armed groups. Simultaneously, he sought to address the developmental dimension of the crisis by allocating resources to infrastructure and improving living conditions. But these efforts ran into a wall of mutual distrust between the Brotherhood and the military establishment. Morsi, as a civilian president, found himself compelled to delegate sensitive security files to the very agencies that had long ruled without civilian oversight. As a result, there was no genuine transformation in the state’s security doctrine. The old structure remained intact, including its policies in Sinai and its relationship with Israel.

In response to this reality, Morsi and the Brotherhood tried to offer a political narrative portraying themselves as protectors of the 2011 revolution’s achievements, claiming to be cleansing the state of remnants of the old regime. This approach reached its peak in November 2012 when Morsi issued a constitutional declaration granting himself temporary exceptional powers, claiming it was to protect the parliament and constitutional assembly from interference by Mubarak-era judges. Yet rather than being seen as a defensive measure, this move was interpreted by his opponents as a sign of authoritarian intent, cloaked in religious rhetoric. This perception quickly took hold in public discourse, as his critics recast him as an Islamic autocrat seeking to “Brotherhoodize” the state and impose a religious identity that excluded others.

In this climate, Egypt fractured. The Brotherhood’s narrative clung to the idea of “legitimacy,” presenting Morsi’s presidency as a prerequisite for institutional stability and democratic transition. Opposing this was a counter-narrative shaped by diverse opposition forces and amplified by private media, which claimed that the state itself was in danger under the rule of a group with a vague ideological project that rejected the pluralism of the modern state and might drag Egypt into regional and international isolation. Amid this polarization, narratives emerged blaming Morsi for every security and economic crisis, linking him to foreign alliances — whether with Qatar, Hamas, or even the United States — portraying him as advancing agendas that were not in Egypt’s national interest.

Thus, the Mubarak-era formula of “security vs. opposition” was flipped and used this time against a democratically elected president. Rather than being a tool in the hands of political authority, the security apparatus acted as an independent actor, resisting a leadership it did not accept and repurposing the discourse of “state protection” to justify sidelining civilian governance.

In this polarized environment, military intervention became a matter of time. When Sisi, then Minister of Defense, announced a “roadmap” after the June 30 protests, he presented himself as responding to the people’s will. But what was framed as a response to popular demands was, at its core, a return to a familiar security logic: the country is on the brink of collapse, and the army is the last savior.

Following Morsi’s ouster, the new regime quickly revived the discourse of a “war on terror.” The Brotherhood, who had been at the center of power just a year earlier, were recast as an existential internal enemy. Within weeks, this narrative turned into bloody action: the Rabaa massacre in August 2013, in which hundreds were killed, was not presented as a national tragedy, but as a necessary step in “cleansing” the country of existential threats.

Egypt’s experience with political pluralism lasted no more than two years. Yet the irony is that the security doctrine — supposedly up for reconsideration — did not just return; it became more deeply entrenched in the fabric of the state after 2014. This return was not only institutional but narrative: security was once again pitted against politics, and the public sphere was redefined — not as a space for debate and negotiation, but as one subject to comprehensive security management.

Fear as a Foundation of Rule: Sisi’s Security Model

When Abdel Fattah el-Sisi officially assumed power in 2014, it became clear that his legitimacy would not be built on electoral mandate or political program, but on a tightly constructed security narrative. At the heart of this narrative was a stark binary that left no room for ambiguity: either order or chaos, either the state or collapse. There was no alternative to a strong security state under his leadership to guarantee the first option. This logic was carefully crafted from the earliest days of the coup and was later entrenched through a calculated mix of propaganda, legal frameworks, and systematic use of force. Security was no longer just a tool to control the public sphere — it became the only language the state spoke, one that demanded all citizens to position themselves in one of two camps: the “honorable Egyptians” or the “enemies of the nation.”

This logic was present from Sisi’s July 2013 speech, in which he clearly distinguished between the people and what he called the “camp of violence and terrorism.” Since then, this dividing line has only widened. By the end of 2013, the Muslim Brotherhood was officially designated a terrorist organization — despite its long history as a prominent social and political force in Egypt. By early 2014, a wave of arrests had reached its peak, with tens of thousands imprisoned, most of them Islamists, charged under vague accusations related to terrorism or incitement against the state.

But this expansion did not stop with one group. It soon extended to liberal and secular activists, even those who had once championed peaceful change and human rights. Opposition in all its forms was now framed as a “security threat,” and the state began to portray every act of political dissent or civic engagement as part of a grand conspiracy aimed at destabilizing the country. Human rights organizations documented this trend, noting the growing control of intelligence services over the media, using it as a platform to spread the idea that an intertwined network of enemies — from Islamists to journalists to civil society groups — were all working in sync with agendas hostile to the Egyptian state.

This narrative reached a peak in 2018, when the Ministry of Interior produced a propaganda film titled Spider Webs. The film lumped together ISIS, the Muslim Brotherhood, international human rights organizations like Human Rights Watch, and even local civil society groups into one cohesive storyline portraying them all as parts of a single subversive network. This narrative — blatantly Orwellian in character — eliminated any distinction between political opposition and sabotage, transforming the public sphere into a closed arena where all independent voices were treated as direct threats to national security.

This transformation was not limited to rhetoric; it extended into the very structure of the law. At the outset of the new regime, the legal framework was reshaped to reflect the regime’s security priorities. The 2013 protest law effectively banned all forms of peaceful demonstration, while the 2015 anti-terrorism law introduced a broad and ambiguous definition of “terrorist activity,” allowing the criminalization of journalistic or political actions that fell outside the state’s control. In 2017, a new law on NGOs was passed, almost completely restricting civil society activities, based on the presumption that such organizations might serve as foreign arms seeking to destabilize the country.

In April 2017, a nationwide state of emergency was declared, ostensibly in response to terrorist attacks. What stood out, however, was that this state of emergency was repeatedly extended every three months, effectively reinstating Egypt’s emergency law regime — one that had unofficially guided governance for years. Many observers pointed out that the continued security discourse around “Islamic terrorism” served as a pretext for broad authoritarian measures and for tightening control over political and civil life in line with an old-new security doctrine.

The parallels between Sisi’s model and Mubarak’s are undeniable — but the difference lies in scope and severity. While Mubarak maintained a limited political façade — with a narrowly tolerated space for civil society and media — what occurred after 2014 was a systematic closure of even that narrow margin. Security was transformed into a comprehensive doctrine through which the state is governed, and through which the relationship between citizen, politics, and nation is entirely redefined.

Reframing the “War on Terror” Narrative

At the heart of the security narrative that took shape after 2013, terrorism was not portrayed as a temporary danger or a limited security threat — it became a sweeping framework used to redefine politics itself. The war on terror was not presented merely as a military campaign, but as an existential struggle against anything that might threaten the stability of the state — including, and perhaps foremost, the very idea of opposition. In this context, Abdel Fattah el-Sisi did not hesitate to place himself at the center of this war, not just as president, but as a field commander leading a long battle against a deeply rooted threat in Egypt’s modern history.

In his official speeches, Sisi’s image was constructed as that of the man of the moment, capable of confronting an interconnected web of dangers: terrorism, chaos, sabotage, and foreign interference. From the early days of his rule, he broadened the scope of threat perception to include historical depth — declaring that Egypt had been facing terrorism “since the 1920s,” a clear reference to the founding of the Muslim Brotherhood in 1928. Through this symbolic expansion, the Brotherhood was not only blamed for what happened after the revolution, but cast as the original sin from which the nation’s historical trajectory had gone astray — as though it were the root of all subsequent violence and extremism.

This historical framing, while coherent within the logic of the security state, entrenched the Brotherhood’s position as the “absolute enemy” — beyond any prospect of reconciliation. By 2014, the group was no longer just demonized in official rhetoric but had been placed, with the help of media narratives, firmly outside the bounds of any possible political settlement.

At the same time, the field reality was not devoid of actual violence. The country — especially North Sinai — witnessed a notable escalation in armed operations after the coup. Jihadist groups that had previously focused on confronting Israel turned their weapons inward, targeting the army and police. By late 2014, the main armed group in Sinai declared allegiance to ISIS and rebranded itself as “Wilayat Sinai” (Sinai Province). With major attacks like the downing of the Russian plane in 2015 and the massacre at Al-Rawda mosque in 2017, the threat no longer seemed symbolic — it became physical, bloody, and shocking to the public.

Regardless of the context behind these attacks, the regime capitalized on them fully. Every incident became an opportunity to amplify the security message: terrorism was not just at the periphery, but everywhere. In early 2018, the government launched a large-scale military campaign named “Comprehensive Operation Sinai 2018,” involving land, air, and naval forces, and geographically spanning from Sinai to the Nile Delta and the Western Desert — deliberately mapping out the boundaries of a nationwide war with no fixed geography.

The official language accompanying the operation was less military than existential. The enemy was framed as lurking within, everywhere, demanding total mobilization. Practically, the campaign involved highly aggressive security measures: curfews across large areas, forced evictions, heavy use of weaponry, and complete media blackout. This was a war not fought on open battlefields but within the internal space where the relationship between state and society was being rewritten.

Though the war on terror was framed as a national necessity, the timing of the 2018 campaign carried clear political undertones. It coincided with the run-up to presidential elections, which featured no real contenders. One retired general even described the campaign bluntly as a “preemptive strike” against terrorist groups, at a moment when the regime sought to generate a wave of national mobilization behind the leadership — wrapping the tightly controlled election in a cloak of patriotic urgency.

In this sense, the war on terror was not merely a security policy managed by state agencies — it became a political theater whose function was to justify the regime’s continuation and deflect attention from deeper structural crises: from economic decline to the absence of political competition. “Security” had become the raw material through which the public sphere was re-engineered, and the only language through which legitimacy could be understood — not in its past, nor in its future, but in its continuous present as a permanent state of emergency.

Expanding the Scope of the Security Threat Beyond Islamists

What came to define the security discourse after 2014 — compared to previous phases — was not only its severity or repressive nature, but its totalizing character and expansive scope in both time and meaning. This discourse moved beyond its traditional framework, which had focused primarily on armed Islamist groups, into a more abstract realm where all opposition was reduced to a continuous and complex threat. The list of supposed “enemies” grew dramatically — not only those who carried weapons, but anyone suspected of contributing, even symbolically or rhetorically, to undermining the state’s authority or questioning its narrative.

Within this framework, the regime began promoting the concept of “Fourth Generation Warfare” — a term that, while imprecise, proved symbolically powerful. It refers to a form of unconventional warfare waged not only through weapons but through rumors, public incitement, and the weakening of collective awareness. Sisi has repeatedly invoked these ideas, warning that “awareness” itself is the true battlefield, and that the threat is no longer external, but internal — found in ideas, in speech, and in those who listen to voices other than the state’s.

This theoretical shift quickly translated into concrete practices. The regime’s warnings evolved into a mobilizing discourse addressed to the entire society: the state is besieged from within, and the threat lies not only in explosives, but in a tweet, a livestream, or a piece of unlicensed information. School curricula, talk shows, and Friday sermons began treating rumors and “false information” as tools of strategic sabotage. Religious discourse gradually merged with the state’s rhetoric, criminalizing criticism and delegitimizing information unless it originated from official sources. Thus emerged what could be described as the “securitization of knowledge,” where freedom of expression was no longer a right, but a potential contagion.

Multiple analyses indicate that this theory — “Fourth Generation Warfare” — has been used as a comprehensive framework to delegitimize all forms of dissent and to justify surveillance, censorship, and prosecution. A journalist reporting on a security violation, or an activist calling for a peaceful protest, is portrayed in official narratives as part of a “network” conspiring against the state, or as tools of underground terrorist organizations. No longer does it depend on ideological affiliation or clear political activity — it’s about how any action is interpreted. And under this expansive security discourse, no interpretation is innocent.

By conflating political opposition with treason, the boundaries of the public sphere were redrawn in a way that made public criticism — or even satire — a criminal act. By 2018, prisons were filled with individuals with no known ties to Islamists: journalists, actresses, influencers, and even icons of the 2011 revolution. Their charges ranged from “spreading false news” to “joining a terrorist group” — elastic accusations that allowed the state to fit everyone under a single legal framework.

One prominent example illustrating the scope of this discourse is Case №441 of 2018, which involved journalists and intellectuals with no links to the Muslim Brotherhood — many of whom had actively opposed the group. Still, they were labeled as the Brotherhood’s “media wing” merely for discussing topics that displeased the state. Here, the goal was not just to silence voices, but to stain them, stripping them of any political or moral legitimacy.

This security mindset was not confined to the domestic sphere — it was embedded in an expanded regional narrative as well. Local opponents were often portrayed as extensions of foreign powers, whether Qatar, Turkey, or Western organizations. In this sense, the logic of “national siege” was revived, long used by the regime as a tool for rallying the public in moments of crisis. When Egypt joined the blockade against Qatar in 2017, it was framed as a defensive step against a threat to the nation. Even Turkish President Recep Tayyip Erdoğan’s criticisms of Sisi’s coup were not treated as diplomatic disagreements, but as further proof of a regional network conspiring to bring down the Egyptian state from within.

Western human rights and media organizations were not spared from this narrative either. Groups like Human Rights Watch and the BBC were accused of spreading disinformation as part of a “conspiracy” to destabilize the country. The infamous video Spider Webs, produced by the Ministry of Interior, embodied this security fantasy: ISIS, the Muslim Brotherhood, and Western human rights organizations were all woven together into a single network, carefully illustrated to deliver a simple and direct message — Egypt is under siege.

Under this vision, the very definition of citizenship was reshaped. To be a “good citizen” now meant embracing the official narrative, fearing the “other,” avoiding criticism, and rallying around “the leadership,” the military, and the flag. Any deviation from this formula was automatically classified as treason. Thus, political disagreement was no longer treated as a difference of opinion or perspective, but as an existential threat requiring exclusion — and possibly imprisonment.

The Media and Elite Complicity

The formation of the new security discourse after 2013 was not a random process or a spontaneous reflection of political unrest — it was a deliberate project led from the top by the state, expanded and entrenched with the participation of various state institutions and segments of influential social elites. The media — both state-run and private — was one of the main pillars of this structure, not merely as a messenger, but as an engine for generating and reproducing political meaning.

In the months following the coup, media channels and platforms that opposed military intervention or dared to offer an alternative narrative were swiftly shut down. By September 2013, all Brotherhood-affiliated channels had been closed, as well as the Cairo office of Al Jazeera, which the authorities viewed as the media arm of a regional adversary. From that point onward, the state’s influence over the media expanded systematically, eventually reaching near-total control.

Between 2015 and 2017, companies linked to sovereign entities acquired stakes in major media outlets, effectively placing the entire media sector under security administration. The goal was not merely to suppress criticism, but to produce a unified discourse that reinforced the state’s narrative. In newsrooms, it became implicitly understood what topics were acceptable and what were off-limits. There was little need for direct censorship — self-censorship had become internalized among journalists, as criticism of the military or the president was now professionally inconceivable.

In exchange for this suppression, daily doses of glorification and scripted rhetoric were permitted: praising military operations, vilifying the opposition, and portraying mega-projects as national salvation epics. Talk show hosts turned into unofficial state spokespeople, regurgitating the language of the “war on terror” and the fight against “traitors and agents” — a vague label that encompassed anyone expressing dissent, from Islamists to liberals.

Whenever armed attacks occurred, media coverage would shift into full mobilization mode, recycling the same imagery and phrases: dramatic music, flag-waving scenes, battlefield reports, and commentary portraying the state as engaged in a decisive battle. Conversely, when it came to civilian casualties or documented reports of security violations, coverage was either entirely suppressed or filtered through the official narrative. In this context, media control was not just a tool of political support — it became part of the architecture of the security state itself.

The production of this discourse was not limited to the media. The military establishment — now the most dominant institution in the state — played a key role in shaping it from within. Sisi, as a former general, brought the military’s logic into the political sphere, surrounding himself with fellow officers across the ranks of power. The Interior Ministry and General Intelligence — longstanding internal power centers — participated in managing media campaigns, each promoting narratives that painted the country as under constant threat, requiring perpetual vigilance. Public occasions — from soldier funerals to national celebrations — were transformed into political spectacles highlighting “ongoing sacrifice” and reinforcing the legitimacy of force.

In parallel, the military institution’s political and economic privileges were restored and openly celebrated as a mark of the “superiority of the national model.” There was no longer any hesitation in appointing former officers as governors, ministers, or heads of public companies. They were presented as the ideal citizens: competent, loyal, and capable administrators in times of uncertainty. This gradual blending of the military and civilian spheres helped reshape political consciousness, making military values — discipline, hierarchy, decisiveness — seem like the natural model for good governance.

Other elite segments of society were also involved in this project to varying degrees. The Coptic Orthodox Church, for instance, explicitly expressed support for Sisi from the moment the roadmap was announced. Pope Tawadros II appeared alongside him in a scene meant to send a clear message: the new regime was a more secure guarantee for minorities than any Islamist alternative. This message was directed not only inward, but also to the international community, within a narrative positioning Sisi as the “guardian statesman” in contrast to “ideological chaos.”

Al-Azhar, for its part, did not oppose the crackdown on Islamists, despite expectations of institutional concern. Instead, it adopted a cautious stance, participating in awareness campaigns against “intellectual extremism,” thereby affirming its position as a religious institution aligned with the broader conception of national security — even if some of its figures occasionally expressed mild criticisms of performance.

Business elites who had lost influence under Morsi’s presidency also found in the new regime an opportunity to reclaim their positions. They helped finance pro-government media, supported endorsement campaigns, and in return received contracts for state-led projects. Some went further, helping to build a symbolic image of Sisi through products that embodied the idea of the “indispensable leader”: chocolates with his face, posters filling the streets, and newspaper features depicting him as a mythical hero — his armor forged of steel, his feathers made of reassurance, his eyes ever-watchful.

This personal glorification, reminiscent of Gamal Abdel Nasser’s symbolism in the 1950s, was not merely sentimental — it was an organic extension of the security narrative. Within this discourse, the homeland could not be defended without the leader — not as a civil servant, but as an existential symbol of survival and stability.

Power, Identity, and Consequences

By the end of Sisi’s first term in 2018, Egypt’s political landscape had been radically reshaped according to security narratives that were not merely rhetorical covers, but had become the underlying infrastructure governing the relationship between the state and society. This experience offers a clear application of the theory of “securitization” — the use of a perceived existential threat to justify permanent exceptionalism in governance and to expand executive power without accountability. In Egypt’s case, securitization was not limited to terrorism in Sinai but extended to encompass all forms of public action that should be normal in any pluralistic system: from protests to civil society organizations, from press freedom to party participation. All were absorbed into a web of “compound threats,” enabling the regime to enact measures that would be difficult to pass under ordinary political conditions.

The result was a deepening of authoritarianism — but this time, without needing to borrow from the past. Unlike Mubarak, who controlled the public sphere with a degree of pragmatism, allowing for limited criticism as long as it didn’t challenge the rules of the game, the dominant discourse under Sisi acknowledged no nuance within the opposition. The logic of power became preemptive: any space not already closed could be exploited by “the enemy,” and thus it was better to shut it down in advance.

This was reflected in the real structure of politics in Egypt. From 2014 onward, the country entered a phase that could be described as the gradual disappearance of serious opposition. Parties that identified as liberal or leftist and had supported the ousting of the Brotherhood later found themselves facing an authority that didn’t even allow symbolic representation of dissenting views. Youth movements that had been at the heart of the January 25 revolution — like April 6 — were later classified as terrorist groups, with their leaders either imprisoned or forced into exile. Streets that once echoed with cries of defiance were forcibly silenced: protests were no longer possible without prosecution, nor even public gatherings, as laws now equated unauthorized assembly with assaulting the state.

The media landscape, once relatively flexible, was systematically tightened. Hundreds of news and human rights websites were blocked under the pretext of national security. The digital space was brought under surveillance, with users operating under constant threat of legal action. Censorship no longer targeted institutions alone — it extended to individuals, who were now expected to self-monitor at all times, within a public discourse that equated dissent with betrayal and criticism with siding with “the other side.”

As the official narrative built a wall of suspicion around anyone who dissented, the relationship between the civilian and the military was restructured in a way that left no room for ambiguity. The military was no longer just a sovereign institution — it had become the core of governance, even above it. In 2019, constitutional amendments were passed through a token referendum, formally declaring the armed forces as the “protector of the constitution and democracy” — a vague formula that granted the military the right to intervene politically whenever it deemed the national balance threatened.

These amendments also extended Sisi’s term, allowing him to remain in power until 2030, effectively entrenching personalized rule within a fabricated constitutional framework. The amendments, accompanied by a heavy-handed media campaign, were not just a technical update of the system’s rules — they were a clear demonstration of how the security narrative was leveraged to reshape legitimacy around a singular authority.

Notably, the “stability versus chaos” narrative was not only aimed at the domestic public but also served as a powerful tool in foreign relations. The regime, to varying degrees of success, convinced a significant portion of Egyptians — exhausted by the post-revolution years — that the alternative to the current state was state collapse. Repeated references to Syria, Libya, and Yemen were invoked in every speech — not just as warnings, but as justifications for the continuation of the status quo, presenting the current leadership as the only alternative to the abyss.

However, this totalizing security logic is not without cost and is rife with structural contradictions. Treating all opposition as an existential threat produces, over time, political and moral stagnation. In Sinai, for example, years of opaque military operations have undermined relations with local communities and created a more fragile context than before. Instead of building trust, a purely security-based approach was implemented — repressive without meaningful developmental accompaniment. Analysts — and even some voices within the establishment — have acknowledged that this policy has failed to win hearts and minds, despite occasional tactical successes.

The same problem is replicated in the regime’s handling of Islamists. Excluding the entire Islamic spectrum, including moderates, has effectively eliminated all non-violent political outlets for expression. This vacuum leaves only two options: extremism or silence — neither of which promises long-term stability. A national identity rebuilt on exclusionary foundations, which labels large segments of the population as potential enemies, remains inherently fragile. No society can remain mobilized against itself indefinitely.

To this day, the state has not succeeded in fully eliminating the terrorist threat. Attacks still occur, albeit less frequently, but the real victory the regime has achieved is internal: silencing nearly all public opposition and asserting control over the public sphere through a form of constant pressure on a potential explosion valve.

Internationally, the “war on terror” narrative has given the regime considerable room to maneuver. Despite repeated human rights criticisms, security alliances and economic deals have continued — and even strengthened. The United States under Trump offered clear support, going so far as to directly praise Sisi. European countries such as France and Germany adopted a “stability first” approach, signing massive arms deals and justifying them by Egypt’s role in controlling migration and combating extremism in the Eastern Mediterranean.

The regime also leveraged its diplomatic tools to present itself as an indispensable mediator in complex regional issues — from intra-Palestinian reconciliation to managing ceasefires in Gaza. In international forums, Egypt’s rhetoric has been dual: a declared commitment to fighting terrorism on one hand, and a theoretical affirmation of respect for human rights on the other — even as everyday practices contradict that claim.

Thus, Egypt has come to be portrayed abroad as a necessary actor in the regional stability equation — even if the domestic cost is high. While human rights observers highlight glaring contradictions between rhetoric and reality, several Western capitals view the Egyptian regime as an indispensable partner. As one commentator put it: “Yes, Egypt is fighting terrorism — but its definition of terrorism includes peaceful opponents, journalists, and human rights defenders — all folded into a security map that leaves no room for revision.”

The Price of Security

In just a single decade, Egypt has completed a near-full cycle in its security narratives — but it hasn’t returned to its starting point. Instead, it has slid into what might be described as a more extreme and tightly controlled version. Before 2011, Mubarak’s regime built its authority on a narrative of silent fear: that his fall would inevitably lead to state collapse or the rise of a totalitarian religious project. Egyptians at the time lived under an emergency law, adapting to restrictions in the name of stability, while a courageous few managed to shake this logic and briefly open a window onto another horizon.

But that window — widened momentarily between 2011 and 2013 — was violently shut after the coup, not merely by a return of the old security discourse, but through a new narrative that expanded and reproduced itself as a comprehensive system — one that closes the political imagination to the vocabulary of security alone.

Since then, the concept of an “existential threat” has become the central theme in every speech, decision, and dialogue — seeping into classrooms, news broadcasts, religious sermons, and legal statements. The state no longer presents itself as an administrator of public affairs, but as a besieged entity in constant need of full mobilization. Within this framework, the shooting of protesters or mass death sentences are not viewed as legal exceptions, but as national necessities to prevent collapse. In this way, questions of proportionality and justice have been replaced by the myth of security, which redefines politics entirely.

Within this fantasy, media institutions have become megaphones repeating that those killed or imprisoned were “enemies of the people,” while many citizens have withdrawn into a stance of cautious endorsement or fatigued acceptance — preferring this “new normal” over a chaos no one wants to relive. But behind this solid façade, cracks have begun to appear — quietly.

The truth is, no matter how tightly constructed, a fear-based narrative cannot on its own address the structural challenges that grow more acute year after year. Youth unemployment, rapid inflation, an economy reeling from the pandemic, and unresolved regional unrest — these are crises that can’t be contained by mobilizing rhetoric or repressive measures. When a blogger or a doctor is imprisoned merely for pointing to a living crisis or health system failure, the state may silence the voice — but it cannot erase the cause.

Here, the internal contradiction of the security approach becomes clear: the wider its scope, the less effective it becomes. To imprison tens of thousands, ban protests, and drain the public sphere of any plurality is to rule over a suffocating void, not a vibrant society. Modern history offers countless examples of how fragile this mode of governance is. Surface cohesion may conceal an invisible boil — but it continues to build pressure.

As for the national identity currently being shaped — hyper-nationalistic, militarized in its structure, intolerant of diversity and allergic to debate — it is not just narrow-minded but dangerous in its capacity to perpetuate exclusion and tension. A society like Egypt’s — diverse in composition, youthful in demographics, and rich in traditions and history — cannot be ruled by a fortress mentality. Even fortresses fall when they lock their gates against their own people.

As I write these words, the paradox at the heart of this narrative remains: security, as it is portrayed, becomes a source of threat itself when used to suppress plurality, silence dissent, and disable expression. The regime has succeeded in containing the public sphere, calming the tremors that once roared from the squares of Cairo and Alexandria — but it did so by turning all difference into treason, all opposition into danger, and every citizen into a suspect. That may delay an explosion — but it won’t prevent it.

What has happened since 2014 is not mere security enforcement — it is a re-engineering of politics itself: a restructuring of legitimacy, a redefinition of nationalism, and a reshaping of citizenship. But this engineering does not produce real cohesion — because it allows for no plurality, acknowledges no compromise, and builds on no mutual recognition between state and society. What it produces is obedience, not belonging; submission, not loyalty; silence, not consensus.

This fantasy has also shaped Egypt’s international positioning. Traditional allies, who long spoke of democracy and human rights, have reverted to so-called “political realism.” Open U.S. support under Trump, hesitant European positions, and continued arms deals all signaled a redefinition of security in the international discourse: security as stability — not justice; as the prevention of chaos — not as empowerment of society.

The regime was quick to integrate itself into this framework. From mediation in Gaza, to migration control, to counterterrorism speeches at international forums, Egypt rebranded itself as an indispensable regional pillar — even if the domestic cost was steep. While reports of abuses pile up and human rights condemnations continue, the decisive metric in global decision-making circles remains Egypt’s ability to control its region — not represent its people.

Thus, the security narrative has successfully redefined politics — not as a space for debate and accountability, but as a permanent battle against a lurking threat. Over time, the state has begun to convince itself — and perhaps part of its population — that whoever controls the narrative controls the state.

But the question remains: Can this mode of governance last forever? Security politicization, by its very nature, exhausts its tools over time. Fear does not build a project. Surveillance does not create belonging. Repression does not prevent crises — it compounds them. Egypt may appear stable on the surface today, but it lives beneath a charged silence, under which everything unresolved continues to simmer.

The security narrative, forcefully resurrected after 2013, succeeded in suppressing aspirations that were once legitimate — but it did not eliminate them. The real challenge now is not in summoning the past, but in reconstructing the present — in other words, in rewriting the narrative. When Egyptians are able to tell their future story in the language of freedom and accountability, not fear — then a new cycle can begin. One that doesn’t return to square one, but moves beyond it.

Antoine Bousquet (a scholar focusing on society and technology) draws attention to exactly this point. He says that in the 20th century, especially after World War II, there was a shift in the way people thought. It started with scientists like Claude Shannon (founder of information theory), who was working on purely technical problems — like how to send a message from one place to another with the least amount of distortion. No philosophical or human depth in that. But then came people like Norbert Wiener (the father of cybernetics), who expanded these ideas and applied them to much broader topics: how the brain works, how humans behave, even how society functions.

The problem isn’t that they expanded the idea — the problem is that people started believing in it as if it were a fact. We began hearing things like: “Humans are just information systems,” or “The brain calculates, takes inputs, gives outputs.” And in doing so, we forgot about feelings, about consciousness, about the soul, about irrational decisions. We began treating human beings like Excel sheets — and if your numbers don’t add up, then you’re the problem.

That same logic also entered politics and warfare. During the Cold War, a concept called “Game Theory” emerged — basically treating states like players in a game of chess or poker, where every move is calculated in terms of gains and losses. The U.S. actually applied this in Vietnam: they said, “If we hit them hard enough, they’ll back down.” But they forgot something: the Vietnamese weren’t thinking the same way. These were people who had been fighting for their independence for decades. For them, resistance wasn’t just war — it was dignity, it was history, it was about the future of their children.

So you can’t use the same measuring stick for everything. It’s like assuming your enemy will think exactly like you — that if you apply pressure, they’ll surrender. It’s like saying, “If we raise salaries, people will work harder,” without asking: where do people want to work? How do they feel about their work

Do they feel any value in what they’re doing? These models often forget: we’re not just numbers. We’re people.

Antoine also points out something crucial: war itself has changed. In the past, the soldier would go to the battlefield, look the enemy in the eye, and make life-or-death decisions. Now? A soldier might be sitting in an air-conditioned room, operating a drone, hitting a target thousands of kilometers away — without ever seeing the enemy, without even feeling like they’re in a war. Where’s the courage in that? Where’s the sense of risk? Where’s that heart-driven decision-making?

What’s strange is that even armies aren’t united on this. Some high-ranking military officials are thrilled by the idea of “smart war,” where you achieve results with no losses. But there are still those — like the U.S. Marines — who believe the real battlefield is what reveals the true character of a soldier. For them, the essence of combat isn’t in the software, it’s in the sweat, the mess, the chaos.

And perhaps the most dangerous thing Antoine says is this: The way technology has entered the military has caused a crisis of identity. Is the army still the institution that defends the homeland with blood and honor? Or is it just a team of engineers and analysts tracking performance metrics on screens?

This leads us to a bigger question: How do we think? What are our decisions based on? Do we really understand humans, states, and battlefields — or are we just building entire theories on old metaphors we forgot were just metaphors?

The problem isn’t just that we believed in scientific analogies — it’s also that we started applying them to everything without asking if they even fit.

Like in politics…

We hear a lot about “smart governance,” “digital states,” “technological solutions.” But here’s the real question: Is a state really a company? Is a citizen just a data point?

Or are we fooling ourselves — trying to force the human world, with all its depth, emotion, and history — into neat mathematical models that are comfortable, but ultimately not real?

We see this in many of the political decisions made around us. They look rational on paper, but fail dramatically in reality — because they assume the public is a single, logical unit.

Take, for example, the idea that “if you apply economic pressure, people will adapt.” But in reality, what happens? People may stay silent… but anger builds. And one day, unexpectedly, it explodes.

The model-makers forget that humans have pride, frustration, broken spirits — emotional layers that don’t fit in spreadsheets. Sometimes, one person crossing the street, saying the right thing at the right time, can ignite a whole nation.

Even in education, we reduce students to numbers in a system. We measure their “quality” by test scores and forget that maybe that kid has a hidden talent that exams don’t show. Or maybe that girl thinks outside the box, but doesn’t have a space to express it. We end up producing generations who memorize but don’t understand, who are educated but not creative. All because we believed humans can be put in a single “category” — and that intelligence = results.

And in war? Same logic. A country thinks: “If we strike hard enough, the enemy will submit.” So they bomb, detain, destroy — thinking it’s all about deterrence. But years later, they realize the opposite happened: repression increased anger, not fear. Because people don’t always get scared. Sometimes they explode.

Just look at Palestine, Iraq, Syria… Their homes were destroyed, their families displaced, they were told “this is to teach you a lesson.” But what happened? They became fiercer, braver, more defiant — even knowing they might die. Because in their eyes, dying with dignity is better than living in humiliation.

And all this brings us back to Antoine Bousquet’s original warning:

We took tools that were made for technical problems… and used them to understand human beings.

And in thinking we were getting closer to understanding — we actually moved further away.

A human being is not an equation. Politics is not an assembly line. Society is not an algorithm.

So we need to ask ourselves: Why are we so eager to believe the easy stories? Why are we so comfortable with the idea that “the world can be understood by logic alone”?

And maybe, just maybe… It’s time to start again. To put the human being back at the center — and rethink everything from there.

Bundestag 2025 Election Results

Bilateral Monopoly and the Core: An Examination of the CDU/CSU’s inability to Dominate

In cooperative game theory, the formation of coalitions relies on the core, which is a collection of stable imputations in which no coalition of players will have the incentive to deviate. Since CDU/CSU + Greens can’t pass the minimum and CDU/CSU + AFD is simply politically not possible, the CDU/CSU and the SPD are the sole coalition possibility, their coalition is in the core, and no other rival coalition can credibly pose a takeover threat. If BSW and/or FDP would have made it to the minimum of 5%, multiple coalitions were possible, but in the current situation, there is no alternative for both parties, resulting in a bilateral monopoly in the classical sense. While the CDU/CSU has more seats, the intrinsic value of the SPD neutralizes this and makes both parties equally powerful when negotiating. This fact is consistent with Nash bargaining theory, which argues that the lack of alternatives pressures each party to make concessions in a bid to reach an agreement. 

The SPD has an equal Shapley value to the CDU/CSU despite its fewer seats because their marginal contributions towards coalition stability are inseparable - both parties are equally necessary to exceed the 316-seat majority threshold. 

In multi-player bargaining, Shapley value of a player is calculated taking into account their value in every potential coalition; in the scenario presented though, as just one such viable coalition can be formed, both players are of equal strategic significance. From the perspective of Rubinstein bargaining theory, delay in negotiations costs both sides. Though the CDU/CSU has a higher number of votes, their inability to govern without the SPD puts them in a weak position time-wise. The SPD is able to leverage this and negotiate for more policy concessions - such as attaining important ministerial posts or shaping economic and social policies in their favor. In a standard bargaining game with alternatives, CDU/CSU could use other parties as an outside option to threaten SPD, but with no external options available, SPD has the same bargaining power when negotiating.

What If? Alternative Scenarios and Their Impact on Coalition Stability

Had BSW been admitted to the Bundestag and FDP remained outside, the left coalition (SPD, Greens, and BSW) would have had 269 members - still short of a majority. This, however, would have given SPD the bargaining power to threaten to form a left-leaning coalition, even an unstable one, giving them a better fall-back option. In cooperative game theory, this would have been a case where the core would have been expanded to include multiple stable coalitions with diverse Shapley value distributions. The SPD might have increased its bargaining power by positioning itself as the “swing player” in a position to negotiate with either the CDU/CSU or the Greens-BSW alliance. However, the ideological differences within this left coalition may have led to internal instability, making it a less cohesive bargaining unit. If FDP and BSW had also won seats, the coalition-building process would have been much more complicated, altering bargaining power ratios and negotiation dynamics. The Union + SPD combination (293 seats) would no longer be enough to secure a majority, forcing CDU/CSU and SPD to include either the Greens (for a 378-seat majority) or FDP (for a 326-seat majority). The change in coalition options fundamentally alters the political calculus, placing minor parties - such as the FDP, the Greens, and BSW - in the crucial contributor position instead of the ancillary participant position. Their bargaining power significantly improves, as they now possess the decisive capability to create a government, thereby rendering them kingmakers instead of subordinate allies.

Coalition Options for Bundestag 2025

In a game theory context, this expansion of coalition opportunities reshuffles power. Considering the Shapley value, CDU/CSU and SPD no longer hold exclusive control, but the FDP, BSW, and Greens have a say in various potential winning coalitions, and their policy-making and ministerial appointment influence rises. The 326-seat Union, SPD, FDP coalition would provide a more balanced and pragmatic majority, where negotiations among centrist forces are easier.

Conversely, the Union + SPD + Greens (378 seats) coalition would be the most stable but ideologically complicated, with more profound differences on economic and social policy. Bargaining set theory states that a larger coalition space means more possible agreements but also makes conflict more likely and coalition management harder. At the heart of this situation lies the issue of who holds power in the negotiating table. The CDU/CSU wields great power without the FDP and BSW, forcing the SPD and the Greens into an inferior negotiating position. When FDP and BSW are added, the equation changes, the Union loses some of its dominance, as it can no longer dictate terms freely. 

Game theory forecasts more options mean more competition, making the negotiations more complex, messy, and less predictable. The most practical outcome would be the Union + SPD + FDP coalition (326 seats), a majority without excessive instability. But in the event of deadlock, the Union + SPD + Greens coalition (378 seats) would be the safest fall-back option, highlighting the degree to which FDP and BSW representation would have altered the process of coalition-building.

However, because neither FDP nor BSW was involved, the current two-player situation precludes any possibility of strategic maneuvering, forcing CDU/CSU and SPD to negotiate on an equal footing.

The Limitations of a Two-Player Coalition Game

As opposed to previous elections, where coalition bargaining was a multi-party game, the 2025 Bundestag election has reduced bargaining to a bilateral monopoly, where CDU/CSU and SPD must come to an agreement, or there can be no government. Despite CDU/CSU’s numerical majority, SPD’s indispensability reduces the situation to an equal power-sharing arrangement, according to Shapley value theory. With no alternatives, both parties are locked in negotiations where neither side can afford to walk away from the table.

Had FDP or BSW won entry into the Bundestag, bargaining would have been more competitive and yielded a number of alternative power-sharing combinations. This would have expanded the core, increased strategic flexibility, and shifted bargaining influence toward the largest party with the most coalition options - in this case, CDU/CSU. As it stands, the situation eliminates bargaining complexity but enhances the CDU/CSU-SPD tug-of-war for power, as neither is in a position to dominate the negotiations.

In terms of game theory, this election represents a peculiar example of bilateral monopoly coalition, where bargaining strength is not based on numbers of seats, but on sheer necessity. The absence of smaller parties removes strategic flexibility, forcing CDU/CSU and SPD into a power-sharing agreement where the only real debate is how much each side can extract before conceding.

Ireland’s involvement in PESCO is noticeable at a noteworthy moment of strategic significance for small countries vis-à-vis the assumption of collective security challenges; the protection of critical infrastructure, such as undersea cables, upon which global communications and trade depend, rises capably to certain high-consequence challenges. The participation shapes closer unity and solidarity within the EU and proves that the size of a country is not an indicator of the contribution one can make to collective security. Moreover, Ireland’s involvement points out the capability of smaller countries in providing added strength to Europe’s security framework.

The structure of PESCO offers a platform for collaboration, but actively prioritizing smaller nations ensures their unique strengths are fully utilized. Smaller states often have more specialized capabilities than their larger ones. Take for example Malta’s contribution to strategic oversight in the Mediterranean: this helps with the monitoring of migration and maritime security. Estonia’s excellence in cybersecurity reinforces the digital defenses of Europe. Emphasizing these contributions will make PESCO even more capable, hence further balancing out the resilience and agility of the defense ecosystem in response to all kinds of security challenges.

It is necessary to include small nations with the aim of balancing possible over-centralization in defense projects. Every time bigger states lead the projects, PESCO may be perceived by the small countries as an excluding force, weakening its cohesiveness. This may cause fragmented support and destroys the credibility of PESCO as a unifying force. Equitable participation gives smaller states a stake in the success of this framework and reinforces shared responsibility and trust between the member states. This is particularly important since Europe is exposed externally to challenges that can only be met completely through such a response.

Eventually, PESCO’s focus on including smaller countries strengthens the EU’s collective defense and showcases Europe’s ability to innovate through collaboration. The EU can design a defense that is inclusive and forward-looking by capitalizing on the geographical advantages, specialized skills, and perspectives of smaller nations. This approach not only grows Europe’s capacity to deal with emerging threats but also fosters a sense of unity and a common purpose for all member states. In reality, if PESCO is to really work, it must go beyond token inclusion and empower smaller nations to lead and shape its defense initiatives, ensuring that Europe remains secure and cohesive in an increasingly volatile global landscape.

Introduction

The decline of industrial centers and the marginalization of poor areas do not only have wide-ranging implications but also go beyond the issue of economic indicators. Such development affects the social structures, the cultural narratives, and the political stabilities of the communities involved and widens the gaps while nursing dissatisfaction. The research performed by Alice Mah, Andrés Rodríguez-Pose, and Stuart W. Leslie explains in detail the multi-dimensional impact of deindustrialization or economic abandonment on social cohesion, collective memory, and political relations. Taken together, such factors provide a rich understanding of the challenges facing disadvantaged regions and important insights into successful ways to address regional disparities. In this paper, the attempt is made to analyze in detail their respective contributions to how management of issues such as industrial decline and regional abandonment could be strategically handled with an all-inclusive approach.

The Social and Cultural Consequences of Industrial Decline

The disappearance of industrial activities fundamentally reconfigures the identities of communities through the losses affecting the collective memory and the ties that people maintain with their places. An ethnography by Alice Mah, carried out in Niagara Falls, Newcastle, and Ivanovo, illustrates how deindustrialization still is influencing community solidarity and cultural memories. Abandoned industrial sites are long-term legacies of economic decay and shared psychological trauma-no simple physical remains of the past. In the case of Niagara Falls, ecological decay prompted through industry intersects with the collective memory of a community in a culminating moment of ambivalent sense of nostalgia. While the residents take pride in their industrial heritage, they still have to face the environmental and health conditions brought about by the release of toxic legacies like the Love Canal.

Bleeding of its population was given to Newcastle by the disappearance of shipbuilding and steelworks. These industries had not only sustained the local economy but also defined the region’s social identity. It was this fracturing in community cohesion-from industrial identity into socio-economic uncertainty-which was both resilient and disconnected. Similarly, Ivanovo, once celebrated as the “Russian Manchester” because of its thriving textile industry, is still deep-set culturally in its industrial heritage while it undergoes a lot of economic adversity. Ivanovo citizens stand at an ideological crossroads: pride for historical heritage and discontent with the stagnation of the local economy, visually and symbolically overshadowed by abandoned textile production facilities. Using these case studies, Mah demonstrates how industrial decline changes communities through embedding loss and resilience into the collective memory, hence complicating the effort of rebuilding one’s identity in the face of socio-economic challenges.

Economic Marginalization and Political Dynamics

Deindustrialization and economic marginalization do not only fracture communities but also beget political disaffection and territorial conflict. Rodríguez-Pose indicates that the absence of interest for the catching-up regions in economic and innovative policies further strengthens spatial chasms and nurtures outrage and an abandonment complex. It is not only a question of economic problems but merely one of such a region not being important to both the national and global system. Poles of neglect-those “places that don’t matter”-have begun to make their frustrations known through political populism. In this way, the political outcomes of regional inequality can be seen in Brexit and the election of Donald Trump. These responses go beyond an issue of economic woe, but rather they represent broader socio-political frustrations with governance structures that favor urban prosperity at the expense of rural and industrial recovery.

It fosters spatial disparities that are undermining trust in institutions and sharpening territorial conflicts between prosperous cities and poorer peripheries. According to Rodríguez-Pose, this process undermines the national cohesion of countries, with peripheral communities either opting for full political independence or sheltering behind protectionist rhetoric. The rise of populism in these regions makes it key that policies tackle not only economic disparities but also the sociopolitical alienation brought about by regional decline. By linking economic marginalization with political fragility, Rodríguez-Pose has succeeded in explaining the intrinsic interlinking of economic and political factors and underlined the relevance of promoting inclusive governance frameworks.

Innovation Policies and Regional Inequalities

While innovation policy is designed to further economic development, policies often exacerbate regional disparities when one-size-fits-all solutions are imposed without regard for the nuances of the local environment. Leslie serves criticism at the tendency to mirror successes elsewhere in underdeveloped regions, claiming such endeavors exclude unique economic, cultural, and institutional conditions in those areas. In New York’s Capital Region, major investments in high-technology industries and educational institutions did not result in the expected regional economic growth, due to the lack of an adequate industrial base able to absorb and exploit innovations. The result was what has been described as “exported innovation,” whereby qualified people and technological advancement migrated to other, more successful locations such as Silicon Valley, thereby denying the area of origin considerable benefits.

Leslie points out that the absence of intermediary organizations-those that would link the research efforts to industry-is a major impediment to successful innovation in laggard regions. Without such structures, the output of scholarship and technological advances remains confined to the research institutions, with very little effect on the economic output of regional economies. Additionally, innovation policies often focus on high-technology industries at the expense of traditional ones, and hence often neglect the diverse economic needs of lagging regions. Leslie’s analysis is bound to signal the necessity of more sophisticated approaches within innovation policy: taking into consideration the regional industries, addressing systemic barriers, and advancing equitable economic development.

Strategies for Mitigating Regional Disadvantages

Works like those by Mah, Rodríguez-Pose, and Leslie suggest that corrective regional disparity requires an overall customized strategy to achieve development equity. First, policies with a regional dimension must adequately consider the peculiar needs and strengths of every area in developing its local productive base, cultural patrimony, and human capital. Empowerment of local authorities and communities in devising and executing plans on their part means that policies reflect peculiarities of each area, avoiding standardized solutions.

Other relevant strategy is a development of the local industrial base. Such organizations at the interface between academia and industry may strengthen the commercialization of regional innovations, with a consequence of limitation of leakages of brains and ideas. Further financial and technical support for the SMEs would contribute to local economic activity and creation of jobs. At the same time, every redevelopment of post-industrial landscapes should be oriented with regard for the needs of the community and the industrial heritage, integrated into the structure of economic and cultural activities.

In integrating peripheral territories into larger economic systems, infrastructure and connectivity are important aspects of development. Investment in transport and digital infrastructure could reduce geographical isolation, enabling regional involvement with markets, resources, and opportunities so much more effectively. Rebuilding social cohesion and promoting resilience in these former industrial areas requires programs for social and economic inclusion, such as skills training and community building.

Regional development requires sustained policy commitments over the long haul. These multisectoral comprehensive plans should be sustainable and equitable, accountable through ongoing monitoring and community feedback. Similarly, policies that clean up those industrial sites polluted by environmental legacy will therefore turn into an opportunity for community and economic development.

Conclusion

Industrial decline and economic marginalization are not just purely economic processes but significant social and political problems that call for comprehensive and context-aware solutions. With this compelling case, the work of Mah, Rodríguez-Pose, and Leslie has evidenced that deindustrialization hits at the very heart of community identity, collective memory, and political stability, providing at the same time much-needed insights into systemic failures in traditional innovation policies. It is within the policymakers’ powers to reduce regional disparities and promote sustainable, equitable development by implementing strategies that strengthen local community competencies, reinforce frameworks for industry, and foster inclusive governance. These approaches are critical for bridging growing divisions within society and ensuring opportunities are available for all regions to thrive.

References

1. Mah, A. (2012). Industrial Ruination, Community, and Place: Landscapes and Legacies of Urban Decline. University of Toronto Press.

2. Rodríguez-Pose, A. (2018). The Revenge of the Places That Don’t Matter (and What to Do About It). Cambridge Journal of Regions, Economy and Society, 11(1), 189–209. https://doi.org/10.1093/cjres/rsx024.

3. Leslie, S. W. (2001). Regional Disadvantage: Replicating Silicon Valley. Working Paper.