Defense Industry

Egypt is the most important manufacturer of weapons and military components among the Arab countries. State-owned enterprises, under control of the Armament Authority headed by a major general, were the main domestic producers of Egypt's defense systems. The Armament Authority was responsible for selecting, developing, and procuring military systems. Acting on behalf of the military's branches, the authority assigned production to domestic factories or contracted with external suppliers.

As early as 1949, Egypt unveiled plans to develop its own aircraft and armaments industry with the industrial base that emerged during World War II when British and American forces placed orders for equipment. Egypt entered into a number of joint venture projects to produce European-designed aircraft. The most successful of these led to the Jumhuriya basic flight trainer, of which about 200 were eventually made. In 1962 Egypt undertook a major program with the help of West German technicians to design and build a supersonic jet fighter, but the government terminated the project because of financial strains caused by the June 1967 War. In a separate program assisted by West German scientists and technicians, the air force built prototypes of three SSM designs. These designs, however, were never put into operational use.

During the 1970s and 1980s, Egypt expanded and diversified its production of arms to achieve partial self-sufficiency and to develop an export market in the Middle East and Africa. In addition to manufacturing small arms and ammunition, Egypt had begun producing or assembling more advanced weapons systems through licensing and joint venture agreements with companies based in the United States and Western Europe. Egyptian technicians and scientists developed several indigenous weapons systems.

The National Organization for Military Production within the Ministry of Military Production supervises a number of manufacturing plants, which were usually named after their location. These plants included the Abu Zaabal Company for Engineering Industries, which produced artillery pieces and barrels; the Abu Zaabal Tank Repair Factory, which overhauled and repaired tanks and would eventually become the producer of Egypt's main battle tank; the Al Maadi Company for Engineering Industries, which produced light weapons, including the Egyptian version of the Soviet AK-47 assault rifle; the Hulwan Company for Machine Tools, which produced mortars and rocket launchers; the Hulwan Company for Engineering Industries, which produced metal parts for ammunition, shells, bombs, and rockets; the Heliopolis Company for Chemical Industries, which produced artillery ordnance, bombs, and missile warheads; and the Banha Company for Electronic Industries, which produced communications devices.

As of 1990, Egypt did not manufacture its own aircraft, but it assembled Tucano primary trainers from Brazil, Chenyang fighters from China, and Alpha Jet trainers designed in France and West Germany. Egyptian technicians had also reverse engineered and modified two Soviet SAMs--the Ayn as Saqr (a version of the SA-7) and the Tayir as Sabah (a version of the SA-2). Egyptian shipyards had produced eight fast attack naval craft fitted with British armaments and electronics.

The only armored vehicle in production was the Fahd four-wheeled APC, although the United States and Egypt planned to coproduce 540 Abrams M1A1 main battle tanks over a ten-year period beginning in 1991. The project would be funded largely through United States military aid; the United States would also supply the engines and fire control systems. According to some reports, Egypt was reconsidering the project because of its high cost. But as of late 1989, Egypt appeared to be going forward with the plan.

In September 1989, Egypt dropped out of the Condor II project, cosponsored with Argentina and Iraq, to develop an intermediate-rage (800-kilometer) SSM. Earlier that year, officials in the United States had arrested several persons, including two military officers attached several persons, including two military officers attached to the Embassy of Egypt in Washington, in connection with the illegal export of missile technology and materials needed to produce rocket fuel and nose cones.

In March 1989, United States and Swiss officials claimed that Egypt had imported from Switzerland the main elements of a plant capable of manufacturing poison gas. Mubarak denied that Egypt had either the facilities or the plans for producing chemical weapons.

The main purchaser of Egyptian defense products had been Iraq. In the early 1980s, Iraq was desperate to replace Soviet military equipment lost during the early stages of the war with Iran. Iraq blunted Iranian attacks with the Saqr 18, the Egyptian version of the Soviet BM-21 122mm multiple rocket launcher.

Egypt sold a smaller volume of weapons to Kuwait and other Persian Gulf states. In 1988 Kuwait was reported to have ordered about 100 Fahd armored personnel carriers; Oman and Sudan ordered smaller quantities of these carriers. Because Egypt considered the value of its military exports confidential, it omitted this information from its published trade statistics. According to ACDA, Egypt exported US$340 million worth of military equipment in 1982, declining to an average of US$70 million annually in the years from 1985 to 1987. The ACDA data was considered conservative. Other estimates have placed Egyptian defense exports as high as US$1 billion in 1982 and US$500 million annually in 1983 and 1984, when deliveries to Iraq were at their peak.

U.S. military aid finances most of Egypt's big-ticket defense procurements--$1.3 billion annually for several years. Large projects underway include the M1A1 Abrams tank manufacturing facility, M88A2 coproduction program, IFF, the HAWK rebuild program, and Peace Vector V. Such projects can be expected to continue, although improvements to and maintenance of existing force capabilities are perhaps more likely targets of future spending than entirely new systems.

Military production plants are not scheduled for privatization and are unlikely to be sold. Twenty--six of these plants produce both military and civilian goods, and many managers of these plants are interested in licensing arrangements with foreign firms to enhance their production mix and improve quality.

Examples of civilian products currently manufactured at 26 of Egypt's military factories include: medical and diagnostic equipment; domestic appliances; fire extinguishers; ammunition; machine shop equipment such as lathes, drills, and grinders; generating and welding sets; electric motors; television receivers; computers; batteries; electric and water meters; agricultural machines; kitchen equipment; mobile water purifiers; circuit boards; calibration equipment; Chrysler Jeep-brand vehicles; laser alignment instruments; and microscopes.

Military goods produced in Egypt include: small caliber and heavy ammunition, mortars, mines, grenades and other explosives, antitank rockets, rocket motors, radars and electronic equipment, smoke and pyrotechnic devices, rifles, pistols (Beretta licensee) and machine guns, jet trainer aircraft (Alpha and Tucano), armored personnel carriers, Alpha jet engines, field and aircraft communications equipment, Gazelle helicopters and engines, gyroscopes, weapon sights, binoculars, periscopes, tanks, MLRs, and artillery pieces.