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Egypt's True Defense Expenditures – 2.7 or 14 Billion Dollars?

Shawn Pine
Policy Paper No. 6, 1997


A country’s capabilities to threaten are assessed in relation to strategic, military and political goals (as far as these can be estimated), according to a worst case scenario. Egypt’s medium and long-term threat potential has tended, mistakenly, to be ignored by Israeli analysts who have focused more on Syria and Iran.

Since 1985 Egypt has embarked upon an extensive and unprecedented military build-up, quantitatively and qualitatively approaching IDF levels. It may depend upon $2.1 billion in US aid of which $1.3 billion is military assistance. Examination of the resources spent on the defense budget, the military expenditures, may be expected to reflect the overall social, political, and economic problems of Egypt. However, official budget sources may produce very different figures to those statistics derived from independent detailed analysis.

Egypt’s Military Build-up

Conventional Build-up

Conventional parity with Israel, notwithstanding the 1978 peace treaty, has been pursued such that Egypt fields the 13th largest military in the world and is one of the largest arms importers in the world, the only Middle East country to have increased its arms purchases annually since 1990.

Air Force

Up to 80% of US military aid goes on the air force which is enjoying the third of three five year plans for modernization and growth. Egypt may have as many as 190 F16s with more than half its 550 planes of Western origin. Technological and missile sophistication has also been sought and yet advances are not simply in equipment acquisition but also in terms of western command and control and attack and support techniques; and aerial combat roles. A modern helicopter fleet is being acquired. Pilots are being trained to western standards with facilities for maintenance and repairs of the F16s being expanded.

Air Defense

This, based on the Soviet separate command structure, is one of the most complex systems in the Middle East. It has a number of modern radar and missile batteries.


11 out of 12 divisions are now mechanized or armored, involving 4,500 armored personnel carriers; its tanks are in many cases some of the most modern in the US inventory. Even the ageing Soviet tanks are to be upgraded by greater armor penetrating ammunition.


Steps have been taken to upgrade the navy including 8 submarines acquired from China. Egypt aims to add to its frigates and holds joint maneuvers with the French, British, American and Italian navies.

Weapons Development

Egypt is expanding its own domestic production of military armaments: about 20 military arsenals are under the Egyptian Military Factories, managed by the relevant ministry.

Factory 200

This program has assembled one of the finest tanks in the world, the US-made M1A1, since the Gulf War - part of an attempt at limited self-sufficiency. The 120-mm cannon and an increasing number of parts will be produced, making Egypt self-sufficient in tank production.

Egyptian Military Fighting Vehicle Program

This is being designed to complement the M1A1 and involves working with United Defense LP of the USA and will use a twin launch for the TOW anti-tank guided system.

Sakir Factory

This produces artillery and missile systems of several different types including multiple rocket launchers. This also forms part of the development of an indigenous production capacity.

Al Zaabal Engineering Industries

An arms manufacturer producing automatic guns and artillery pieces with a caliber up to 203mm.

Heliopolis Company

This manufactures SA-7 warheads and 100mm and 115mm tank ammunition, 122mm rockets, 100 AA ammunition, aerial bombs, depth charges and associated products.

Arab American Vehicle Co. (AAVCO)

A joint venture founded in 1977 producing military jeeps and other light vehicles, employing 17,000 workers.

Arab-British Defense Co. (AB-DCO)

A joint project formed in 1978 producing more than 1000 Swingfire ATGMs under British license and developing a new warhead with greater armor piercing capability than its modernized Soviet 9M14M Malyutka Sagger ATGM. It has also worked with China or North Korea in a joint venture manufacturing SA-2 guideline SM missiles.

Non-Conventional Weapons


A small research reactor was purchased from the Soviets in the 1960s and efforts may remain focused on conventional and chemical and biological weapons but a 300MW Chinese made reactor currently being built will be able to produce 4 nuclear warheads a month. Egypt is believed to be seeking joint nuclear weapons research with Syria and Saudi Arabia.

Chemical/Biological Weapons

Before the Gulf War Egypt was believed to have been producing and stockpiling chemical weapons, working with Iraq. It has a plant and regards such weapons as "standard issue".

Ballistic Missiles

Egypt has had missiles since the 1960s but production capacity is now very advanced (second only to Israel’s). It is working with North Korea to extend the range and accuracy of Scud Bs. Financed by Iraq, conceived by Argentina, and developed further by German scientists, the Badr/Condor missile project provided technological know-how although it was never fielded.

Egypt's Defense Expenditures

The officially stated decline in annual defense budget and the actual decade-long arms build up do not tally: the westernization and modernization means a transformation of over 440,000 personnel, 3,500 main battle tanks, and over 550 combat aircraft; yet expenditure is said to have been reduced by over 60% (1970s-1990s trends). Its bureaucracy is not known for thrift or efficiency. Operational and Maintenance costs for construction, training etc. for various units may be calculated especially as suppliers’ and manufacturers’ charges are known. Costs for fielding, training and maintaining show up the discrepancies between the official and calculated figures.


Heavy Divisions

Based on US estimates, Egypt may be reckoned to be spending on yearly operational costs: four armored divisions: $584.1 million and for eight mechanized divisions $1122.7 million, a total of $1706.8 million a year, which represents 46.3% of Egypt’s total officially reported annual defense expenditures. Taken together the equipment for 12 heavy divisions per annum (average) totals $2220. This means a total overall of $3926.8 million which represents 133% of the total officially reported annual defense expenditures. There is also at least one armored and mechanized division in the form of independent brigades adding $853 million to the total annual costs (excluding personnel).

Light/Airborne Divisions

There are two more divisions in the form of three independent infantry, two airmobile brigades and a parachute brigade and these give rise to total operating costs for maintaining them of approximately $678.8 million (excluding personnel costs).

Field Artillery

15 independent artillery brigades involve annual operational costs per year, excluding personnel and equipment costs (average per annum) of $298.95 million.

Air Defense Command

Considering the independent command structure $369 million seems a likely figure, excluding personnel and equipment costs (average per annum).

Air Force

The operational total for attack helicopters and fighters, excluding personnel and equipment costs (average per annum), is $585.3 million.


A conservative estimate based on similar craft running costs per hour produces a figure of $150 million yearly operational costs, excluding personnel and equipment replacement costs.

Personnel Costs

Salaries, clothes, food, housing and medical costs, traditionally the largest expenses incurred by a military, represent substantial amounts for Egypt: with costs taken at an average of only $25 per day, excluding direct pay, and career soldiers earning $689 average a year and conscripts earning $120 average per annum, the total salary bill is $146.685 million; overall personnel expenditure is therefore $4,161.685 million.


Only 150,000 of the more than 600,000 reserves receive any meaningful training. If this averages 30 days at an average of 60% the cost of an active duty soldier and another 150,000 have 15 days training at 40% the cost of an active duty soldier, the total figure is $225.5 million; (yearly average per soldier is then $752).

Since the official reported figure for the military budget is $2.7 billion and the above total $11,249.0 million, then the expenditure is a minimum of 4 times the officially reported amount.

These are, furthermore, conservative estimates as they do not include smaller components and equipment costs (on an average/year basis). The Egyptian army at 60% of the USA’s by size and thus expenditure for just its active duty components would cost $12.84 billion, and this misses out the logistical side such as import duties and transport costs which tend to be more in third world countries than the USA has to spend on overheads. Also:

  1. Egypt has had to revise its war-fighting doctrines from Soviet-based to Western with all that that costs in training and money.
  2. This affects Operation and Maintenance expenditure and means that sustainment costs will not be substantially less than the USA’s. In a time of transition, the Egyptians may need to train more than the American soldiers.
  3. US military planners say that current levels of spending (as have been used for this study) represent the minimum necessary to sustain their forces. Egypt must therefore either have a hollow army or be spending similarly.

The above calculations do not include figures for civilian support staff and omitted from these figures are:

  1. Egypt’s defense industry
  2. Non-conventional weapons research and development programs
  3. The military intelligence network

These are critical and extremely expensive components, traditionally among the most costly elements of military expenditure. Given their size and magnitude, the amounts spent may be estimated at $4-6 billion. These would mean annual Egyptian military expenditures of between $15 and $17 billion. Since, moreover, the military-industrial complex pervades all aspects of Egyptian society, the distinction between military and civilian expenditures is blurred. Most published sources put Egyptian military expenditure at 7-10% of GNP but this is a great underestimation and the reality is between 20 and 30%, a figure historically only reached when countries are involved in full-scale war. Analysis of Sudan’s and Libya’s military capabilities shows that they are little threat at all to Egypt; and the three countries have shown a willingness to rally over perceived pan-Islamic issues. Therefore the Israeli strategic planners need to ask themselves towards whom the current military build-up is directed. The quantitative and qualitative size of the Egyptian military means in the medium term it could remilitarize the Sinai and give Israel a serious problem countering such a move.


In weapons, manpower and integration of war-fighting technologies Israel still has a discernible qualitative advantage over neighboring Arab forces but the decade-long influx of Western weaponry has eroded Israel’s qualitative edge while widening the quantitative gap in favor of the Arabs. Ramifications are:

  1. The technological difference will therefore lessen between Israel and the Arabs.
  2. Deployment of ‘smart weapons’ means that the common Arab combat soldier has a dramatically increased ability.
  3. The fact that target acquisition and destruction has been made so much easier has meant that the human qualitative advantage has been eroded to Israel’s disadvantage, an element further exacerbated for her by the growth in numbers of Arab engineer and natural science graduates over the last 20 years.
  4. Greater costs for Israel to maintain ever more technologically superior systems - such as may act to limit her capacity to maintain a lead but also demanding expenditure at the cost of quantitative aspects.

The IDF has been reported as having declining motivation and military preparedness in a process derived from the political debate during the 1982 invasion of Lebanon and misuse of forces in the intifada; as well as from the broadening of the ideological schism between supporters and opponents of the peace process and unrealistic expectations by the previous government, which made the morale problem worse. If these trends continue to the point where Israel’s qualitative advantage is so eroded that it cannot make up for the Arab quantitative one, then a tactical military defeat in a future war would become distinctly possible. The prospect for future war increases exponentially as more and more weapons flood into the region unless there is deterrence through Israel maintaining a perceived superiority in the balance of forces. The peace process cannot succeed unless the Islamic states recognize that Israel must maintain strategic parity with the collective might of all potential enemies. Since Israel has not recently maintained the necessary superiority in the balance of forces and the Islamic countries are not prepared to concede this issue, prospects for avoiding war do not look good. Middle East countries look set to lead the world in arms purchases, and Saudi Arabia in arms imports, for the rest of the decade, and these weapons are likely to find their way to any future battlefield. Since capabilities tend to be the primary determinate of the probability of hostilities, Israel’s strategic planners would be well advised to pay closer attention to Egypt.

For the complete article (in English), click here.