Friction among friends. Egypt's Mubarak pushed to keep US distant

THE Egyptian intellectual explained almost apologetically that living in the United States last year has changed her mind about America. ``I didn't understand American attitudes about the Middle East before,'' she said. ``Now I think I do, and I like the United States. It is causing me problems with my friends here, because nobody likes America.''

It is an exaggeration to say that nobody in Egypt likes the US. The first question from every taxi driver is ``Where are you from?'' If the answer is America, the response almost invariably is a broad smile and a cheerful ``America is very, very good. Welcome.''

But in the salons and newspaper offices and university classrooms, or in the mosques at Friday prayers, anti-American sentiment runs deep. It is Egypt's intellectuals, a good chunk of its growing middle class, and the politicized Islamic fundamentalists who tell you, forcefully, that they don't like America's policies and they don't like America's influence on their government or America's intrusion into their intellectual and cultural lives.

It is these groups that pressure President Hosni Mubarak to distance himself from the US and from the US-brokered Camp David peace treaty that Egypt signed with Israel in 1979.

And US actions through much of 1986 did not help Mr. Mubarak walk that fine and shifting line between keeping American support and satisfying the demands of a highly nationalistic domestic polity, analysts here say.

``The US doesn't understand that for Mubarak, it is his relationship with the United States that is part of his problem in governing this country,'' said a British analyst who is a longtime resident of Cairo.

In 1985 and '86, Egyptian opposition newspapers gave front-page coverage to allegations that American institutions were seeking to ``infiltrate'' Egyptian institutions with huge donations of money. Money from the Ford Foundation has on occasion been spurned by organizations who say they are convinced the foundation's funds come from the US Central Intelligence Agency, a charge repeatedly denied by the foundation. The US Agency for International Development's (AID) birth-control program is attacked as a Western attempt to limit the number of Muslims in the world. The American decision to force down an Egyptian jet that was carrying the hijackers of the Italian cruise ship Achille Lauro to Tunis in 1985 is still talked about in Cairo as an unforgivable assault on Egyptian sovereignty.

Why is there so little understanding between the Egyptian and US governments and so much friction in relations between two nations that at least appear to share several common interests?

``The Americans and the Egyptians assumed there were three areas for cooperation between the two nations in the early '70s,'' said Yahya Sidowsky, a political science instructor at the University of California at Berkeley. Dr. Sidowsky is also a fellow at the Washington-based Brookings Institution.

``They thought they both shared the goals of keeping the Soviet Union out of the Middle East, of pursuing the peace process, and of strengthening Egypt. But it is like speaking a language where you share a common vocabulary, but not a common grammar,'' said Dr. Sidowsky, whose area of expertise is Egypt.

US policy in the Middle East rests on three pillars. The first is Israel, the second is Egypt, and the distant third is Saudi Arabia.

The US regards the Camp David peace treaty as the greatest accomplishment of American foreign policy in the region. The treaty made the US the indispensable mediator between Israel and its Arab neighbors.

Camp David was to have been the cornerstone for a series of US-brokered peace treaties between Israel and the Arabs, and from 1977 to 1979 Egypt and the US seemed to share a very similar vision of bringing peace to the Middle East.

But the same treaty that established the base line for US-Egyptian relations created some of the tensions between the two nations, Egyptian and American analysts said. With the treaty, former President Anwar Sadat won America's support. But he also isolated Egypt from the Arab world, robbing it of its position of leadership and making it increasingly reliant on American financial and political support.

After Israel's June 1982 invasion of Lebanon, the Egyptians felt they had been tricked by the Israelis and the Americans into removing their 500,000-man Army from the United Arab Front, the alliance of front-line Arab states (Egypt, Syria, and Jordan) that had fought Israel in 1948 and again in 1967. Arab critics were quick to blame Egypt for making Israel feel it could risk invading an Arab country. Many Egyptians still believe that Israel would never have launched the invasion without at least tacit US support.

The American response to Cairo's complaints that Egypt has never been fully appreciated as a partner by the US is to point to the tangible benefits Egypt has enjoyed since signing the peace treaty. US aid has poured into Cairo faster than the Egyptians can absorb it.

TODAY, US officials estimate that about $2 billion in aid remains ``in the pipeline,'' as yet unspent by the Egyptians. US grants to Egypt last year totaled $2.5 billion, and an equal amount has been set aside for Egypt for the coming fiscal year. Only Israel receives more.

Hundreds of US employees administer the largest US AID program in the world in Egypt. Cairo, a longtime Western resident says, has been ``transformed'' in the past 10 years by American-financed projects to construct roads, rebuild sewer and water systems, and revamp the telephone system.

And yet Egyptians tend to shrug off these benefits, or resent them for the manner in which they are dispensed. Egyptian officials point out that most of the aid the US transfers to Egypt comes with strings firmly attached, while Israel's aid consists of straight bank-to-bank transfers. The Israelis are free to spend their aid as they see fit, while the Egyptians are subjected to seemingly endless restrictions.

``The Egyptians have realized that they will always be second best to Israel as far as the Americans are concerned,'' a Western diplomat said. ``And that galls them, because they see themselves as being so much bigger and more important than Israel.''

Part of the resentment felt toward the US is inevitable, according to some Egyptian and Western analysts. Its roots are found in Egypt's long and bitter colonial experience.

COLONIALISM and imperialism are not just catchwords for Egyptian intellectuals, they are part of a painful experience the nation endured first under the Ottoman Turks and then under the British. For many Egyptians, the relationship between Egypt and the US sometimes appears uncomfortably similar to the hated colonialist relationship Egypt had with Britain.

``It is not in the best interest of the US that our relations with the Arab world should be rebuilt,'' said Ismail Fahmy, who resigned as Mr. Sadat's foreign minister in protest against the Camp David process.

``If our relations improved, our dependency on the US would diminish a great deal. Such dependency on a superpower affects the decisionmaking process here.

``The Americans should remember that in Egypt, superpowers come and go; there is no problem. The Russians were here, now they are out completely. Now the Americans are here,'' said Mr. Fahmy, with an expressive shrug of his shoulders.

``Biting the hand that feeds them is almost a national characteristic,'' concurred one longtime British resident regarding Egypt.

``There is a self-acknowledged inadequacy that is linked to arrogance, or at least to resentment that they're in this position of dependence on the United States.''

Sadat is blamed by many Egyptians for having built the relationship of dependency with the US. It was Sadat who borrowed millions of dollars at high interest rates to pay for expensive US military equipment after he kicked out the Soviets in 1974. Those loans are haunting the Egyptians now, as part of a huge $38 billion foreign debt that is bleeding the economy.

The military debts Sadat accrued are the source of the latest friction between the US and Egypt, and the two governments' differing views on how to handle them are illustrative of their differing expectations in the relationship.

In essence, the Egyptians want interest on the loans lowered, and the Reagan administration believes it cannot get any lowering of the rates through a Congress that is worried by the US budget deficit.

After studying the problem for months, the US last month offered to reduce interest payments on the loans until the year 2009, on condition that the deferred interest would be repaid between 2009 and 2014 in a massive balloon payment.

``There was almost literally blood in the corridors of Washington to get this deal,'' said a knowledgeable Western diplomat. But the offer was rejected by the Egyptians as not good enough.

``Our President said no,'' according to Tahsin Bashir, a retired Egyptian diplomat who still informally advises the Mubarak government, ``because they were asking us to accept lower payments now in return for mortgaging our children.''

``The real problem,'' explained the Egyptian intellectual who said she had come to understand the US, ``is that the Americans think that we are a clear-cut ally like Israel, and we are not. And we want the US to be a great friend of ours like they are to Israel, and they cannot. We are nationalists, we are nonaligned, and we also want them to give us debt relief.''