Egypt has asked the United States for a boost in economic and military assistance of almost $1 billion for fiscal 1986, to a total of $3.15 billion, according to Prime Minister Kamal Hassan Ali.
Ali, in an interview yesterday, said Egypt was counting on increased American aid to offset an expected drop in income this year from oil sales, remittances from Egyptians working abroad and tourism.
"Economic cooperation with the United States is one of the main goals and means to compensate for all these difficulties," he said. The three areas are Egypt's main sources of foreign currency earnings, he said, but all are vulnerable to forces beyond its control.
Disclosure of the Egyptian request comes as Israel is pressing the United States for a similarly substantial increase in economic and military assistance. Israel wants $800 million in emergency economic aid this year on top of $2.6 billion already committed, and is asking $4.05 billion for next year.
The two Middle East states far outdistance all others as the top recipients of U.S. aid and they have become increasingly dependent economically on the United States since they signed a peace treaty in 1979. In addition, both are receiving this economic and military assistance as grants now instead of loans.
The two countries keep a close eye on each other's requests. Egyptian President Hosni Mubarak told reporters in October, "We are not against the United States giving aid to Israel, but we shall demand the same amount of aid that Israel receives."
Mubarak is scheduled to visit Washington in the second week of March and Ali indicated that the nearly one-third increase in Egypt's aid request would be one of the main issues raised in the talks with President Reagan and other U.S. officials.
Officials in Washington confirmed the general amounts of the Egyptian request as outlined by Ali, although they said a range of figures had been discussed for both economic and military assistance. A decision is not expected until later this month, when the new budget is due to be sent to Congress, they said.
Egypt earned about $2.8 billion in oil sales and $3.4 billion in remittances from Egyptians working abroad during fiscal 1984, which ended in June. But the world oil surplus and the end to the economic boom in the Arab states of the Persian Gulf, where many Egyptians work, are expected to cut substantially into these key earnings in the coming year.
Egypt is getting about $1 billion in economic and surplus-food aid and $1.2 billion in military assistance during the 1985 U.S. fiscal year, which began Oct. 1. For the first time this year, all of the aid to Egypt is in the form of grants.
Ali said Egypt was asking for $1.2 billion in economic assistance, $250 million for its PL-480 program of surplus grain imports and $1.7 billion in military aid. This would mean a total aid request of $3.15 billion, or a $950 million increase, for the coming fiscal year.
Egypt is determined to continue with the program of economic reforms it has begun, Ali said, and to stick to its policy of progressively reducing government subsidies for basic food items, which last year cost it nearly $3 billion.
He said that as of Jan. 15 the price of bread would be doubled on 80 percent of Egypt's daily consumption, saving the government an estimated $723 million in subsidies for this item alone.
He apparently was referring to a government plan to replace the one-penny flat bread -- the staple of the lower classes -- with a two-penny, better-quality version, a measure that has already been partially implemented. Bread is so cheap here that many Egyptians use it to feed their animals.
Ali said he hoped the growing government deficit, which reached $6 billion during fiscal 1984 and was scheduled to hit $6.5 billion this year, could be largely eliminated by the end of 1985 through cuts in subsidies on food, electricity and oil and the new taxes and fees announced last fall.
He also expressed cautious optimism about measures announced last week establishing a partial floating exchange rate for the Egyptian pound and greater state control over the thriving "free market" in dollars here. This market handles about $3 billion annually outside the regular banking system -- about a third of the total in circulation.
The new rate, fixed daily by a board of state and private bank representatives, initially set the value of the Egyptian pound at $1.24 to $1.25. This applies, however, only to three activities -- workers' remittances, tourism and imports. The government is still maintaining the official rate of 84 for a pound in calculating other transactions and refuses to call the new floating rate a "devaluation" of the pound.
The old free-market rate in dollars, which had reached 1.36 pounds to a dollar -- a value of about 74 for the pound -- has temporarily dropped to about 1.27 and many private dealers have gone out of business.
"There is a now a hesitation in the black market at least," said Ali, "and surely it the new system will stop the black market." France Reportedly Selling Advanced Jets to Egypt Reuter
PARIS, Jan. 9 -- The French aircraft company Marcel Dassault will begin delivery of 20 Mirage 2000 multi-role combat jets, its top performance plane, to Egypt this year, industry sources said today. No value for the Egyptian contract was immediately available.
They added that the company was also in very advanced discussions for the sale of an additional 18 Mirage 2000s to the United Arab Emirates, which agreed late last year to buy an initial 18.
The Delta-wing Mirage 2000, France's top-line combat aircraft, has been used by the French Air Force since July 1984. It can fly at more than twice the speed of sound and reach an altitude of more than 60,000 feet.