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Egypt Defense Industry
Egypt was 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 supervised 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.
In 1975 Egypt, Qatar, Saudi Arabia, and the United Arab
Emirates founded the Arab Organization for Industrialization (AOI)
and capitalized the new organization with more than US$1 billion.
These countries set up the AOI to establish an Arab defense
industry by combining Egypt's managerial ability and industrial
labor force with the Arab countries' oil money and foreign
technology. The bulk of the arms manufacturing was intended to take
place in Egypt. But the AOI foundered before it could become a
major arms producer because the Arab states broke relations with
Egypt over Sadat's peace initiatives with Israel. Egypt kept the
AOI functioning in spite of a 1979 proclamation by Saudi Arabia
dissolving the body. Some of the AOI's members have renewed
military contacts, but as of 1989, the AOI had not been restored to
its original status.
The AOI had operated as an independent enterprise since 1979
and was exempt from Egyptian taxes and business restrictions. The
AOI consisted of nine companies, five wholly owned by Egypt and
four joint ventures. The Egyptian plants manufactured missiles,
rockets, aircraft engine parts, armored personnel carriers,
electronics, radar, communications gear, and assembled aircraft. A
joint venture with French firms assembled Gazelle combat
helicopters and helicopter engines. A joint venture with the
British manufactured the Swingfire antitank guided missile, while
another venture with the Chrysler Corporation produced jeeps.
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 had reportedly 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.
International observers believed that Egypt has not engaged in
efforts to develop a nuclear weapons capability. Egypt had a small
nuclear research reactor that was built with Soviet assistance, but
the Soviets controlled the disposal of the facility's spent fuel.
In any event, the facility was not capable of producing a
significant amount of weapons-grade material. Egypt signed the
Treaty on the Non-Proliferation of Nuclear Weapons (NPT) in 1968
but delayed ratifying it, presumably because the government had
evidence that Israel had embarked on a nuclear weapons program. In
1975 the United States agreed in principle on a program to supply
Egypt with power reactors. The plan was subject to a trilateral
safeguards agreement signed by the United States, the International
Atomic Energy Agency, and Egypt. Although financing problems
stalled construction of power reactors from the United States,
Egypt ratified the NPT in 1981, in order to be able to conclude
agreements with other countries for the construction of atomic
energy-production facilities.
Data as of December 1990
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