Some Egyptians Fault Use of Multibillion-Dollar Annual US Aid

IN the farming community of Mit Kadoum, within sight of the Great Pyramid, a new gray cement structure is the pride of the village. In the cool, open rooms of the primary school, little girls make tapestries, sew, and paint. Over the school's entrance is a primitively painted emblem of two hands shaking and a message in English - thanking American friends for this building, constructed with US government aid dollars. But if the building is new, the teaching methods are not. Pupils jump to attention whenever an adult enters the classroom. The students answer quiz-like questions - having learned by rote. No one has trained the teachers in new concepts on how children learn and new methods to motivate them, say Egyptian intellectuals who criticize the school construction program.

``A teacher can teach even in the shadow of a tree,'' says Ismail Sabri Abdallah, a prominent economist and former minister of planning who negotiated one of the first aid packages with the Americans in the mid 1970s.

``The aid program pays attention to the hardware of development rather than to the software,'' he said. ``It's not because you've built an opera house that you'll have an opera.''

Dr. Abdallah's criticism is not the only negative heard here of the annual $2.3 billion of American aid disbursed to Egypt mostly in project grants.

Despite the size of the program, the second largest American aid allotment after Israel, criticism can be heard from almost every quarter.

Government officials say that a larger percentage of the aid should be in outright cash so Egypt can repay its $44 billion foreign debt or buy needed commodities.

Islamic fundamentalists accuse the US of trying to stamp out Egypt's population because Washington is funding counseling on family planning.

But the most serious criticisms come from establishment intellectuals who say that the US aid has not helped to foster economic production, Egypt's topmost priority.

According to Dr. Heba Handoussa, an economist at the American University of Cairo who has researched extensively US aid, only 17 percent of monies committed have been ``earmarked for directly productive investments in agriculture and industry.'' US aid projects, she wrote, have done ``relatively little to promote employment, production, or exports.''

``The basic aim of the aid program was not increasing the productivity of the Egyptian economy. It has enhanced the dependence of our economy,'' says Tahsin Bashir, a former ambassador and government adviser.

American officials here defend the US government's approach to aid in Egypt. They point out that soon after the program became massive in 1979 the US government eliminated project loans and turned the bulk of the program into outright grants for development.

At the outset of the program, they say, the US undertook huge infrastructure projects that Egypt direly needed but couldn't afford. Among them were the modernization of Cairo's telephone system and sewer system, and the construction of power plants.

``We've done six million telephone lines for exchanges,'' said a US official, ``and since 1980, 50 percent of all new power generating capacity is funded by AID.'' The Agency for International Development shapes US foreign aid projects and disburses the funds.

Criticism has even come from within AID. In July, AID Inspector General Herbert L. Beckington reported that not a single family benefited during the first 10 years of a $134-million program to provide low-income housing near Cairo. Since his report, 205 families have moved into the project.