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Despite troop exit, Iraq likely to be prime customer for U.S. weapons

Ali Al-Saadi / AFP - Getty Images

A pilot climbs into a U.S. F-16 jet fighter at the al-Asad Air Base in Baghdad, on November 1, 2011.

What started more than eight years ago as a hotly debated attack on Saddam Hussein’s regime is ending as a strategic and business relationship. Even though American troops are leaving Iraq in three weeks, the Iraqi government looks likely to be a good customer for American-made military hardware for years to come, joining other oil-rich governments such as Saudi Arabia and the United Arab Emirates in keeping U.S. manufacturing lines humming.

“The Iraqis are going to have a lot of money and invariably in this somewhat dicey neighborhood, having a lot of money means buying a lot of military equipment. So they are going to be a significant market,” said Gordon Adams, an expert on military budgets who is a professor of international relations at American University.

“The recent decision by the Iraqis to purchase U.S. F-16s, part of a $7.5 billion foreign military sales program, demonstrates Iraq's commitment to build up its external defense capabilities and maintain a lasting military-to-military training relationship with the United States,” Defense Secretary Leon Panetta told the Senate Armed Services Committee last month during a hearing on the future of Iraq.

The Baghdad government has agreed to buy 18 F-16 fighters, made by Lockheed Martin in Fort Worth, Texas.

The sale, worth about $3 billion to the company, illustrates the long time horizon that weapons manufacturing has: the production line for the F-16 started operating in 1976 and with the Iraqi contract and other work will be extended into 2015.

Although first developed for the U.S. Air Force, the F-16 has been sold to and is now flown by air forces in foreign counties from Taiwan to Denmark.

“We're continuing production with the F-16, of course, and that continues to outstrip many people's expectations for more than 30 years in production,” said Lockheed Martin executive Ralph Heath, in a recent conference call for investment analysts. “The end is almost in sight but not quite … .”

“The F-16 program was a program that was developed with the international market in mind from the get-go,” said Adams. “There’s no question from the company’s point of view the international sales of the F-16 and its sister and more expensive F-15 aircraft have always been important. The classic way for them to extend the production line is to get foreign customers and they get a lot of support from the government for trying to seek out those foreign customers.”

The Pentagon announced last week that foreign military sales overseen by the Defense Security Cooperation Agency totaled nearly $35 billion in fiscal year 2011, which ended on Sept 30. The top three customers: Afghanistan, Taiwan and India.

“There is no question that foreign sales are important to the production run” of a plane such as the F-16, Adams said. “The Air Force likes the company to do foreign sales for a couple of reasons: over time it can reduce the cost to the Air Force of buying an airplane.” The other reason the Air Force likes such sales is that it allows for interoperability with foreign militaries during joint exercises and allows the Pentagon “to keep an eye on what other people are doing with equipment…. It allows the U.S. to know what the capabilities of another country are.”

Iraq needs not just fighter aircraft, but an array of other military hardware. “The Iraqi military inventory is pretty thin; most of it we beat the crap out of during the invasion and subsequent hostilities,” Adams said. “Most of the Iraqi inventory is basically gone and they are going to have to re-stock from start to finish. Most of their former Soviet inventory is either gone or wasted, so they are going to have to buy. Being as we were the occupying power and the training power, it is at one level quite logical that we would be maneuvering to sell them our equipment.”

Despite the Dec. 31 exit of American combat troops, the United States will continue to operate ten Office of Security Cooperation base camps in Iraq to deliver military hardware and oversee the foreign military sales program.

“So F-16s get delivered, there's a team there to help new equipment training and helping Iraq understand how to use them to establish air sovereignty, “ Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff told the Armed Services Committee. “Or there's 140 M-1 tanks right now generally located at a tank gunnery range in Besmaya east of Baghdad and the team supporting that training stays on Besmaya.”

Iraq will also need military trainers which U.S. firms such as DynCorp provide to foreign governments. The required training of the Iraqis “does not require U.S. troops. There are numerous firms that will be happy to respond to any requests for proposal from the Iraqi government for properly skilled trainers. The market will respond quickly to Iraqi petro dollars,” said Douglas Ollivant, a former National Security Council official in charge of Iraq policy in both the Bush and Obama administrations.