Egypt

Defense Spending

United States Air Force A-10 Thunderbolt shares an Egyptian airfield with a Soviet-built Egyptian Armed Forces "Hip-C" helicopter.
Exercise Bright Star
Courtesy United States Department of Defense

Unavailable

United States Army paratrooper works with his Egyptian Army counterpart prior to a simulated combat air assault.
Exercise Bright Star
Courtesy United States Department of Defense

The burden of defense expenditures on the economy was difficult to assess because the military did not make this information public and did not provide details to the People's Assembly as part of the annual budget. The last time defense outlays were made public was in 1983, when the minister of finance stated that the military would receive £E2.1 billion (about US$3 billion at the 1983 rate of exchange) in fiscal year (FY--see Glossary) 1983. The amount was 22 percent higher than the amount for the preceding year and equaled 13 percent of total central government expenditures. In early 1989, Abu Ghazala indicated that military expenditures amounted to £E2.4 billion or 10 percent of total government spending.

According to estimates published in The Military Balance, 1989-1990 by the London-based International Institute for Strategic Studies, Egypt's actual military expenditures were much higher than official figures. According to the institute, defense outlays amounted to about £E4 billion in FY 1988 and £E4.7 billion in FY 1989. The institute's estimates, however, did not include funds received directly from other sources, such as the United States, which contributed US$1.3 billion each year. The military also received an undisclosed amount from Saudi Arabia and earned foreign exchange from exports of domestically manufactured military equipment. The military reportedly produced as much as 60 percent of its consumable requirements (food, uniforms, and other goods) at its own farms and factories, but it was not clear whether the value of this production was fully reported in the budget.

According to estimates compiled by the United States Arms Control and Disarmament Agency (ACDA), Egypt's military expenditures fell to about US$4 billion annually between 1979 and 1981 because of Sadat's decision to cut the military budget by half in the wake of the peace accord with Israel. In 1982, the year after Abu Ghazala took office, defense expenditures rose sharply to US$7.4 billion, according to the ACDA. Defense expenditures tapered off during the subsequent five years to US$6.5 billion as the nation's mounting financial difficulties necessitated retrenchment in all budget categories. The ACDA estimates, calculated in constant 1987 dollars, included arms imports and foreign military aid.

The ACDA data also indicated that military expenditures as a share of gross national product (GNP--see Glossary) had fallen from 22.8 percent in 1977 to 9.2 percent in 1987. Military expenditures as a share of all central government expenditures had fallen from more than 40 percent in 1977 to 22.3 percent in 1987. Annual per capita military expenditures fell from US$229 in 1977 to US$126 in 1987 (expressed in constant 1987 dollars). Repayments on military credits extended by the United States, France, West Germany, Spain, Britain, and other countries amounted to about US$1 billion a year- -Egypt's total foreign debt-servicing obligations amounted to US$4 billion a year.

Compared with the Middle East as a whole, Egypt's defense expenditures were relatively modest. In 1987 average military expenditures in the region amounted to 11 percent of GNP and 32 percent of total central government expenditures. Per capita military expenditures in the region totaled US$396 (Syria, Iraq, and Iran were on a wartime footing when these figures were compiled).

Data as of December 1990

Egypt - TABLE OF CONTENTS