DETERMINING EGYPT'S DEFENSE EXPENDITURES

By Shawn M. Pine

[Authors note: The following paper is an extract of a larger investigation currently being conducted to develop an accurate estimation of Egypt's annual defense expenditures.]

Strategic planners, when formulating a threat assessment, rely on two basic criteria to determine a potential strategic threat. These two criteria are: ascertaining the intentions of any potential threat; and assessing the capabilities of the potential threat to achieve it strategic goals. Historically, strategic planners, recognizing the difficulty in determining a country's intentions, make a worst case scenario, assuming the worst intentions of a country, and increasingly rely upon their assessment of the country's capabilities as the primary determinate of the probability of hostilities. However, in the case of Egypt, it appears that Israel strategic planners are making two critical errors in their strategic threat assessment of Egypt and the potential threat that it poses to Israel. They are failing to incorporate a worst case analysis of Egyptian intentions, and are failing to accurately gage Egyptian military capabilities. Instead, it appears that Israeli strategic analysts have discounted Egypt as a potential threat and have focused their attention on the short and medium-term threats posed by Syria and Iran.

There is little question, that one of the most daunting challenges facing Israeli strategic military planners is accurately determining the potential strategic threat posed by Egypt. However, it should be remembered that the euphoria accompanied by the signing of the 1979 Egyptian - Israeli peace treaty is a forgotten memory as Egyptian - Israel relations have steadily deteriorated since the assassination of former Egyptian President Anwar Sadat. Given the historical adversarial relationship between the two countries, coupled with Egypt's regional strategic hegemonic ambitions, it is time for Israeli strategic planners to take a serious look at the decade long massive Egyptian military build-up.

The starting point for any such analysis would be to accurately determine Egypt's defense budget and it's yearly military expenditures. Traditional sources of military information have generally published third-world countries military expenditures based upon data provided by the countries in question. However, when independent sources conduct detailed analysis of these budgets, they frequently find significant discrepancies which have led to estimations far higher than those officially disclosed. However, for the most part, acknowledged sources for foreign military expenditures, such as: The Military Balance; The Jaffee Center's Middle Eastern Military Balance; and the SIPRI Military Expenditure Database, continue to publish officially stated figures without independent verification or analysis.

A cursory review of published figures indicate that there exists serious anomalies between the decade-long Egyptian arms build-up and its officially stated annual defense budget. Egyptian officially stated figures have reflected a dramatic decline in its yearly defense budget from a high of $7.17 billion (FY 87) to a defense expenditure rate of $2.71 billion (FY 95). However, Egypt, contemporaneous with it's declining expenditures has been in the midst of transforming its military from a 1970's Soviet-based military to a modern 1990's Western-based military. For example, in 1985 only 20 percent of Egyptian armor and some 50 percent of Egyptian aircraft were of Western origin. Today, over 85 percent of Egyptian armor and almost 85 percent of Egyptian aircraft are of Western origin.

This presents a serious anomaly since militaries generally experience increased costs during transition periods, as more funds are needed for training, familiarization, and maintenance costs. In this respect, it is worth noting that Egypt is not only absorbing Western equipment but is also adapting Western war-fighting doctrines and command and control techniques. Consequently, it is incongruous to believe that a country can transform a military consisting of: over 430,000 personnel; 3,500 Main Battle Tanks; and over 550 Combat Aircraft, in so dramatic a fashion, while simultaneously reducing its expenditures by over 60 percent. Especially, a third - world country lacking a history of fiducial discipline and one that is hardly imbued with the traditions of thrift and efficiency when it comes to its bureaucracy.

While ascertaining accurate Egyptian annual defense expenditures is a challenging task, given the unavailability of accurate data from the host country, it is by no means impossible. Given the relative availability of open sources in the West, it is possible to obtain general information of the costs incurred in training, fielding, and sustaining various military units. From this information, it is possible to extrapolate how much it would cost Egypt to construct, train, field, and sustain its military.

For example, Egypt currently fields and maintains 4 active armored divisions and 8 mechanized divisions. The majority of the hardware of these weapons are US made M-60 A1/3's tanks, M1A1 tanks, and M-113 armored personnel carriers. According to a published Total Force Policy Report To The Congress (December 31, 1990), the annual cost to field and maintain a active US Army Armored/Mechanized) division is $976 million dollars. Of this amount: $617 million is spent on personnel; $184 million on operations; and $175 million on equipment avg/yr. Even ignoring personnel expenditures, in recognition that Egypt devotes a fraction for personnel support over what the US does for it's soldiers, we are left with a yearly expenditure of $359 million per active heavy division.

Three important considerations need to be noted. First, unlike the Egyptian military, US forces logically should not have to devote as much resources (per unit), on training as compared to the Egyptians. This is due to the fact that US training doctrine has not undergone the extensive evolution of changing its war-fighting doctrine to the extent of the Egyptians. Notwithstanding the constant state of transition of the US military, as it integrates particular nuances of its doctrine into the system, it is hardly of the revolutionary nature that is current taking place within the Egyptian military establishment as it transforms it's military from a Soviet-based to a Western-based military.

Second, the Egyptian military, as it adopts and integrates Western war-fighting doctrine, has to reorganize and retrain much of its military. Since sustainment operations are relatively less costly than training costs, it stands to reason that the Egyptians operation and maintenance (O&M) expenditures (per unit of measure) to train its forces, should not substantially deviate from what it costs the US military to sustain their forces. A typical US Armored Division trains about 12 to 15 weeks annually. This training includes "train-up" time spent to prepare for, and participate in, one or two major deployments such as to The National Training Center. Egypt also conducts two or three major deployments annually, such as Bright star and Badr exercises. Consequently, given the relative small amount of time US forces actually spend training, it is hard to imagine the Egyptians training substantially less.

Finally, U.S. military planners believe that the current levels of spending are the minimum required to sustain their forces. The Department of Defense has been arguing since the beginning of its draw down in the late 1980's that any significant reductions would make U.S. forces "hollow" and incapable of fulfilling U.S. national strategic objectives. Consequently, either the Egyptians are spending a similar amount on O&M or they are fielding a very hollow army. Whatever the case, the task of the strategic planner is to assume the worst.

Nevertheless, even including a 25 percent reduction from US O&M figures, to account for possible differences in management and training emphasis that may result in less maintenance costs than one would find in American units, leaves a annual total of $269.25 million for O&M costs per division. Egypt fields a total of 12 active heavy divisions. Consequently, its estimated O&M expenditures for its active heavy divisions is approximately $2961.75 million or some 120 percent of Egypt's total officially stated annual military expenditures.

It is important to remember that this amount does not include the myriad personnel expenses such as: salaries; clothing; food; housing; and medical costs. Most western forces incur the majority of their expenses on these items. Using the example of the US heavy division, $617 million or 63 percent of its annual budget is devoted to these expenses. Consequently, while recognizing that Egyptian personnel expenses would not approach US levels, it would be reasonable to assume that Egyptian expenditures on personnel approaches at least 30 percent of its O&M budget. This results in an additional annual outlay of $80.775 million per division or a total of $969.3 million for Egypt's 12 active heavy divisions.

Consequently, a conservative estimation of the associated costs for fielding, training, and sustaining its 12 active heavy divisions would be approximately $3931.05 million or over 150 percent of Egypt's official budget. Moreover, this figure does not even to begin to take into consideration the score of civilian administrative and support tasks that are needed to sustain divisional unit such as: non-divisional training support services; civilian support services; and O&M costs for non-divisional support facilities.

Moreover, Egypt fields and maintains the equivalent of at least 2 additional divisions in the form of independent brigades. These include: a Republican Guard armored brigade; 2 armored brigades; and 4 mechanized brigades. Using the same figures for O&M and personnel costs, notwithstanding the fact that the overall costs of these units should be higher given their independent command structure, we need to add an additional $700 million to Egypt's heavy division costs. This would bring the total cost for Egypt's heavy forces to $4631.05 million.

Additionally, Egypt fields and maintains 3 infantry brigades, 2 airmobile brigades, and 1 parachute brigade. The U.S. costs for maintaining divisional units of these types range from $582.5 to $950.58 million per year. A conservative estimate for Egypt to maintain these separate brigades would be around $800 million, thereby putting the minimum Egyptian defense expenditures to maintain its heavy and light army forces at $5431.05 million or over twice its official budget. Again, it needs to be reiterated that these figures are conservative estimates and that the actual figures could be higher. In this respect, it is worth noting that the U.S. O&M budget for it's 510,000 troop army is $17.8 billion and that Egypt fields an army over 60 percent (310,000 troops) the size of that of the United States. This would put Egyptian O & M expenditures around $10.68 billion. Indeed, given the fact that the Egyptians are integrating totally new force doctrine and command structures, their training costs should be substantially higher than U.S. forces. Moreover, the daily logistical costs of doing business i.e. transporting equipment, fuel, oil, etc..... tend to be more expensive in third-world countries than in the United States.

It is important to note that these figures do not include the bulk of Egypt's military including: a 550 plane air force; 60 vessel navy; a 100 battalion air defense command; 15 independent artillery brigades; 1 Scud brigade; 1 FROG-7 brigade; 2 heavy mortar brigades, 7 commando groups, a military intelligence infrastructure, and it's military R&D and non-conventional weapons programs. Additionally, the Egyptian government has approximately 20 military arsenals under the Egyptian Military Factories (EMF), which are managed by the Ministry for Defense and Military Production/National Organization for Military Production (NOMP). In 1994, Egypt surpassed the United States to become the second largest arms importer, behind Saudi Arabia, in the world. Egypt, in a region that leads the world in the import of weapons, is the only Middle East country to have increased its arms purchases yearly since 1990.

There is little doubt that when the same analysis is applied to the rest of the Egyptian military we will see that annual Egyptian military expenditures are really 5 to 8 times higher than officially published figures. This would put actual Egyptian military expenditures at 20 to 35 percent of its gross national product (GNP).. Historically, only countries engaged in a full-scale war have devoted such a large percentage of their GNP to defense. Since Egypt is not currently engaged in a conflict, Israeli strategic planners should be asking themselves for whom is the current, historically unprecedented, Egyptian military build-up directed towards.

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Shawn M. Pine is a career military and intelligence officer who writes frequently on security affairs. He is currently residing in San Antonio. He is a candidate for Doctor of Philosophy Degree In International Relations (Ph.D.), The Hebrew University in Jerusalem, Israel. Dissertation Subject: Offensive and defensive realism. He is developing a model of expectations of state behavior within the theoretical framework of offensive and defensive realism. These models of expectations will facilitate the identification of aggressive tendencies in states which will enable status quo states to undertake efforts to ameliorate potential sources of conflict or take the requisite precautions to deter aggressive intentions. The Arab - Israeli wars and current peace process will be used as case studies.


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