The Arab world has witnessed more than its fair share of turmoil in the last 10 years, bringing about paradigm shifts that ravaged the Arab national security system and leaving a strategic, security, and political vacuum in the region.
Long-established regimes were overthrown, several countries fell into the clutches of chaos and ended being failed states or fell into the hands of radical groups that pushed them into a vicious circle of crises, and non-state actors became active, including primarily terrorist groups that took over large swathes of Arab lands for long periods. That is in addition to disintegration and divisions that hit national armies, which gave regional powers with expansionist ambitions the opportunity to achieve their aspirations on the ashes of the Arab world’s fractured landscape.
The Egyptian army soon realized the repercussions of the collapse of the Arab national security system, the magnitude of the threats to Egypt’s national security at the four strategic levels, and the scale of the historical, moral, and security responsibility it assumes towards filling the strategic vacuum resulting from the downfall of the Iraqi and Syrian armies. From this perspective, the Egyptian army realized the importance of early preparedness to adequately respond to all the challenges facing Egypt by modernizing all branches and units of the military and equipping them with state-of-the-art armament systems, establishing integrated military bases, and introducing new military formations in the armed forces, including, for example, rapid deployment forces.
The Target of Egypt’s Defense Industries Program
Given the volatile security situation in the Arab region and towards meeting the Egyptian Armed Forces’ (EAF) needs of weapons, ammunition, and military hardware necessary for maintaining stability and security, Egypt’s military industries ushered in a new era of development focused on achieving several goals. These are:
Addressing the Precarious Security Situation and Protecting the State’s Economic Capabilities and Comprehensive Development Plans. In this connection, three direct security challenges arise, namely addressing the political instability and security turmoil in Libya which pose Egypt’s western borders to the threat of smuggling and infiltration of terrorists and weapons, countering the terrorist operations by takfiri elements in Arish, Rafah, Sheikh Zuwaid, and Bir Al-Abd in northeastern Sinai, and providing security to securing natural gas digging, excavation, and extraction operations in fields of the Eastern Mediterranean amid escalation of the destabilizing Turkish activities in the region.
Responding to Emerging Internal Security Changes. Locally-produced weapons are usually adapted to the combat needs of the police and military forces and armored vehicles are manufactured to operate in desert environments in the Sinai Peninsula, fulfilling the security forces’ needs which imported weapons may fail to meet.
Promoting Exports. Egypt doesn’t only aspire to achieve self-sufficiency in military hardware. Its industrialization plans also aim at exporting Egyptian weapons to the African and Arab countries, given Egypt’s pivotal role in combating terrorism in the region, the growing threats surrounding regional countries, and the heightened competition with regional powers that capitalize on their defense exports for asserting their control over Africa, primarily Turkey and its endeavors to dominate this broad market by producing state-of-the-art weapons in line with the harsh geographical nature of African countries.
When it comes to Africa as a market for Egyptian weapon, there is a convergence of interests where Cairo seeks to consolidate its military and political presence and African countries, correspondingly, aspire to acquire Egyptian weapons given their high quality, low prices, and suitability to the African geography, amid the growing challenges of confronting terrorist groups and weapon shortage in Africa given the high prices of weapons coming from the West. In this vein, Egypt organized an exhibition to showcase weapons and military products on the sidelines of the meeting of the Specialized Technical Committee on Defence, Safety and Security (STCDSS) of the African Union in December 2019, with the participation of Egyptian military companies and attendance of African defense ministers, chiefs of staff, and military experts. Further, Cairo signed a cooperation agreement with Senegal to supply it with military hardware, weapons, and ammunition.
Additionally, the Arab world seems to be a promising market for Egyptian defense products, particularly given the fact that the Middle East accounted for one third of global arms imports, according to the 2018 report of the Stockholm International Peace Research Institute. In that connection, Egypt managed to enter into contract with the UAE to export 1,000 ST-100 armored vehicles. Saudi Arabia also plans to import ST-100 vehicles after the vehicle passed all standard tests. Furthermore, Cairo looks forward to contributing to the development of the Iraqi defense industry through construction of new production lines in Iraq and revival of the Iraqi military companies. Similarly, as part of Egypt’s efforts to develop the multifaceted strategic partnership relations with Iraq, Iraq looks for acquiring Egyptian weapons, , particularly given Prime Minister Mustafa Al-Kadhimi aspiration to diversify his country’s foreign relations, finding his way back into the Arab fold and moving away from the “axes’ policy” that long weakened the Arab national security.
Promoting Independent Political Decision-Making and Consolidating Egypt’s Regional Stature: The military production capacity is a key determinant of the degree of political independence of the state and a means to avoid foreign pressures. The decision of the United States, Britain, France, and Germany to freeze or suspend several arms deals and disrupting the supply of some military hardware, such as F-16 repair and maintenance technology system and several Apache aircraft following the 30 June Revolution of 2013 served as a catalyst for developing defense industries program with a view of accessing to the maintenance technology of imported military hardware, developing Western weapons to fit theatres of operation in Egypt and the Middle East, nationalizing small arms and light weapons industry, and restricting arms’ imports to state-of-the-art weapons with advanced military technologies that ensure balance of power in the region.
Boosting the Economy: Military industrialization contributes to building up confidence in the Egyptian military industry, particularly given the direct link between armament industries and the complementary industries that could boost the Egyptian economy and provide new job opportunities. Further, having an exportable surplus will help generate foreign currency and lead to growth of growth national product (GNP) amid sustained growth in global armament markets, which would promote Egypt’s military and economic position, let alone defense industries that remain a driving force for innovations that serve the civil and military sectors in all branches of the economy.
The Reality of Egypt’s Defense Industries
The history of military industrialization in Egypt witnessed two leaps, the first of which was by Muhammad Ali who established military and gunpowder factories, and the second was in 1949 when plans for developing the aircraft and weapon industries were first revealed, culminated in President Gamal Abdel-Nasser’s inauguration of 27 military factories that produced the first bullet on 23 October 1954, in practical application of a basic principle of the 23 July Revolution, i.e. establishing a strong national military building on a national military industry. Afterwards, developments in military industries followed, particularly after the October War of 1973 revealed military development becoming increasingly imperative. As such, in 1975, the Arab Organization for Industrialization (AOI) was established, encompassing the Aircraft Factory 36, the Armored Vehicles Factory 72, the Missile Factory 333, which helped bring about a considerable development in military industries to include production of heavy weapons, advanced launchers, and electronic warfare equipment, causing Egypt to become the only producer of heavy arms in the Middle East.
• Military Products: Military production factories and the AOI locally manufacture arms, tanks, and aircraft, whether using purely local materials, as is the case with the armored personnel carrier Fahd 300, the upgraded cannon M-46, the armored vehicle Temsah-3, the upgraded Temsah-1 and Temsah-2, and the mine-resistant ambush-protected armored vehicle ST-100, as well as its smaller variant ST-500, or through joint manufacturing with friendly countries. All of this equipment has been manufactured with needs of the EAF and the police in mind given the new security variables and their mandated missions at home and abroad.
At large, Egyptian defense industries are characterized by horizontal diversification, encompassing air, naval, land, and air surveillance and defense weapons, including, for instance, the light attack aircraft Alpha Jet, the Tucano T-27 basic trainer, the Cairo-300, Jian-6, and Jian-7 light fighters, the ASN-209 and Wing Loong drones, the multi-mission armored vehicles Qader and EIFV, Jeep TJL, Jeep J8, and Panthera F9 vehicles, Fahd 240 and SIFV armored personnel carriers, as well as radars and a wide range of ammunition and arms ranging between light, medium, and heavy arms that can be used alone or mounted on military equipment. Further, there are the non-conventional weapons that are commensurate with the new security challenges such as terrorism, multi-purpose equipment that have military and civilian uses such as the ESR-32 the bi-dimensional early warning system and aerial surveillance radar that can be used for monitor and direct civilian air traffic.
• Developing Military Industries Infrastructure: This includes four paths that should be developed in parallel, i.e. building new specialized industrial facilities, developing the existing companies, collaborating with the EAF research bodies to develop and produce new weapons, ammunition, equipment, and armored vehicles, and developing the human resources system through providing specialized technical training, culture change, and building capacities in accordance with the most up-to-date training, research and marketing systems.
• Organizing and Participating in Defense Conferences: The year 2018 marked a significant milestone in the history of Egypt’s defense industries, with Egypt launching the first edition of the Defense and Military Industries Expo, EDEX 2018, which saw the participation of 10,000 visitors from more than 40 countries and 350 defense companies. EDEX was supposed to be held biennially; however, the 2020 edition has been postponed due to the outbreak of the novel Covid-19 pandemic. This year, EDEX was held in the period from 29 November to 2 December with the participation of 400 major international and local military companies, enabling Egypt to penetrate into regional and international markets, keep up with the state-of-the-art armament technology, conclude military cooperation agreements, exchange experiences and perspectives on important issues, and demonstrate its ability to develop military products tailored to forces’ needs and missions, underscoring Egypt’s leading role in the region. On another level, Egypt took part in several international defense exhibitions, the latest of which were the 2021 IDEX and NAVDEX in the UAE.
• International Cooperation to Develop Defense Industries: Egypt’s military industrialization strategy is based on an approach that promote collaboration with other countries and specialized defense countries with the aim of opening up opportunities for investment with Egypt, through partnership between these companies and the IOA, being one of the largest military industrialization entities in the Arab world and Africa, transferring and nationalizing modern technology, benefiting from advanced foreign expertise, introducing the latest state-of-the-art manufacturing methods, and promoting joint manufacturing activities.
In this vein, Egypt collaborates with several countries including the United States on manufacturing military equipment, e.g. M1A1 tank, Russia on air defense systems, and China on unmanned aerial vehicles and air vehicles, e.g. the K-8E jet trainer , Germany on naval manufacturing and light weapons, Italy through an agreement between Rheinmetall and companies of the Ministry of Military Production, Spain where a memorandum of understanding has been signed between the Egyptian IMUT and the Spanish ESCRIBANO for collaboration on manufacturing arms, equipment, and surveillance systems, Britain on joint manufacturing of the howitzer D-30 gun, and France on manufacturing of the Gowind frigate in Egypt.
Additionally, Egypt is pursuing collaboration with Belarus for technology transfer of six armament systems, namely the 300-km Polonez artillery system, the EM UAS balloon, a 50-km unmanned aerial system that allows for close surveillance at a speed 40 km/h, the Adunok remote-controlled weapon stations that can be fitted with either a 12.7 mm heavy machine gun, unmanned aerial vehicles, a missile artillery fire management system, or the medium range Buk-MB3K air defense missile system, offering Egypt a cheaper alternative to the Russian BuK-M3 and S-350 medium-range air defense systems, causing its air defense system to become bigger, and allowing Egypt to phase-out of older Cold War missile systems, e.g. the US MIM-23 Hawk and the Soviet S-75.
Furthermore, Egypt is looking forward to collaboration with Bulgaria and South Korea for joint military industrialization and transfer of state-of-the-art military technology. There is talk about Egypt’s collaboration with leading Korean defense companies, e.g. Hanwha Takween and LIG Nex1, especially with regard to developing the KM-SAM medium-range air defense system, a key weapon in the Korean missile defense systems. Besides, there is a potential collaboration opportunity between the Heliopolis Company for Chemical Industries (Factory 81) and Pakistan Ordnance Factories (POF) on joint manufacturing and transfer of the manufacturing technology of anti-tank mines, industrial explosives, and mortars. Egypt is also looking for exploring opportunities for joint military industrialization with Cyprus and Brazil.
Challenges Facing Defense Industries in Egypt
While Egypt took great strides on the road to building a national military industry, there are some challenges that still need to be addressed for its military industry strategy to achieve the desired goals. These challenges include:
• Lack of Technology: Egypt’s strong scientific base depends on experts comprising masters and PhD holders working in factories of the National Organization for Military Production (NOMP) and the AOI and hundreds of workers who are sent on educational missions abroad, along with several research projects carried out annually by the Military Technical College, the Technical Institute of the Armed Forces, and the City for Scientific Research of the armed forces, let alone innovations and inventions by active-duty officers, as well as the work of the institute of advanced technology and centers for developing capabilities in fields of management, engineering, technology, and information systems affiliated with the AOI.
Nevertheless, Egypt lacks advanced technology that would allow for the development of independent Egyptian military systems. While Egyptian companies assemble advanced military systems, Western companies simply supply Egyptian companies with assembly tools while retaining the technology used. As such, the AOI and the Military Production Ministry have strived to raise the share of domestic inputs in products assembled under foreign licenses as a means to acquire knowledge and production techniques. Yet progress in this respect has been slow. For example, since obtaining the license for the production of Fahd armored vehicles in 1985, it took Egypt 30 years to have 68 percent of the vehicle’s components manufactured in Egypt, up from 25 percent. Additionally, Egypt relies on the United States to supply it with the engine of the M1A1 tank.
• Reliance on Foreign Production Inputs: This is related to the preceding point. Lack of technology needed to establish an independent military industry means relying on imports from abroad. Perhaps, this explains why Egypt’s defense industries are largely focused on equipment with unsophisticated technology and ammunition. The 26 military factories also rely on imported production machinery and intermediate goods.
• Financial Difficulties: Budget allocations to the military production sector are still below par. In the fiscal year 2021-2022, military production allocations amounted to about EGP 1.369 billion, while in the late eighties, investments needed for the sector were estimated at $4-6 billion, and this figure was supposed to double a dozen times but this never happened.
• Unskilled Labor: The workforce in military factories is estimated at 40,000 workers, a big figure compared to the volume of productivity. For example, General Motors estimated the workforce needed for Factory 200 at only 1200 workers instead of 6000, yet the number was eventually reduced to 2500 workers. The dilemma lies in the inability of workers to deal with the complex technology and AI applications, which means more financial resources are needed for training.
• The Inadequate Response to Security Challenges: The Egyptian military industrialization focused more on developing land, aerial, and air defense capabilities rather than naval armaments capabilities. Despite the comprehensive modernization the Navy has recently witnessed in response to the emerging challenges in the eastern Mediterranean and while the Egyptian navy is ranked the seventh worldwide, this hasn’t been reflected in naval military industries where modernization relied heavily on the purchase of naval systems, ranging from submarines to helicopter carriers and frigates from France and Germany. In terms of efforts to promote local manufacturing, these were restricted to a collaboration program with France to build three Gowind corvettes at the Alexandria Shipyard Company, to be the first naval first Egyptian-made naval weapon.
In conclusion, the unstable political and security environment in the region has posed new challenges to Egypt’s national security and imposed additional burdens on the armed forces, necessitating a comprehensive modernization process. Hence, there has been a move towards building a military industrial base that contributes to achieving self-sufficiency in military equipment. However, Egypt still imports a great part of its military needs due to several challenges facing the local military industry.