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Iraq: starting from scratch

Iraq's ongoing attempt to rebuild its security forces virtually from scratch makes it the most dynamic market for military aircraft in the Middle East. Iraq must be ready to take full responsibility for its domestic and international security needs by 2012, and as a consequence boasts the fastest-growing arms budget in the entire region.

Iraq could spend about $9.5 billion this year on military and security procurement, says Dan Darling, Middle East analyst at Forecast International. That level of spending ranks behind only Iran and Israel in the Middle East market, and reflect as broad a portfolio of weapons systems as Iraq's acknowledged security needs suggest.

The regime in Baghdad has identified three phases of procurement starting after 2012 as it rebuilds what until 2003 ranked as the Middle East's largest military power.

Currently, the balance of spending is still focused on restoring the health of the country's internal security structure. At least half of the $9.5 billion budgeted this year is assigned for this purpose, Darling says.

The first phase of the military build-up begins in earnest after 2010, and allows the country to start absorbing heavier platforms, such as a light-attack fighter. After 2015, the government will catch up on the requirements that are inevitably delayed from the first phase.

Finally, a third wave of spending after 2020 will rebuild Iraq's superiority systems, including advanced fighters and command and control capabilities.

The pace of the build-up is intentionally slow. As Darling notes, the Defense Security Cooperating Agency notified Congress last year of potential arms sales to Iraq amounting to $16 billion, but most of that spending will not take place for several years.

Part of the problem lies with Iraq's fledgling acquisition system, also being rebuilt after decades of neglect. But the main barrier to even faster growth is Iraq's ability to provide the funds.

By US law, foreign military sales cannot be signed unless the purchasing government pays for the items upfront. The DSCA then holds the payments in escrow until the equipment is delivered.

Darling expects that cash shortages will drive Iraq into the secondhand equipment market in the near term.

Several "countries in Europe would be a place they can go to", Darling says, noting that some former Eastern Bloc nations are "shedding all their Cold War-era platforms. That could be a cheaper and quicker alternative for Iraq to fill out their equipment needs."

Thus, Baghdad is reportedly in discussions with Serbia about repurchasing RSK MiG-21s that once belonged to Saddam Hussein's air force. However, Iraq's air force may still prefer buying new or even used Lockheed Martin F-16s, as well as advanced jet trainers that could also serve in the light-strike role.

US suppliers are likely to remain Iraq's chief source of equipment, as Washington continues to provides billions of dollars in military aid to Baghdad.

But Iraq is also recultivating relationships with previous arms benefactors France and Russia, with France negotiating terms for 24 Eurocopter EC635s and is in talks with Russia over Mi-17s.

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