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Rebuilding Iraq

POSTWAR SCENARIO

No farewell to arms

After the war, US considers letting Iraq join the group of preferred buyers in region

By Ross Kerber, Globe Staff, 04/05/2003

The White House wants to make postwar Iraq a preferred customer for US arms sales, opening another new Asian market to defense contractors.

Military shipments to the volatile region have ramped up since the US lifted sanctions on five countries in the wake of the terrorist attacks of Sept. 11, 2001, even though critics have raised diplomatic concerns about the transfer of radars, transport planes, and other gear.

India, for example, imports a half-billion dollars worth of weapons annually from all sources, and has purchased jet-fighter parts, night-vision sights, and antiaircraft ammunition directly from US contractors lately, according to export records. It's also looking at the Patriot air-defense missile system, made by Raytheon Co. of Lexington.

Meanwhile, India's rival in the region, Pakistan, has bought antimissile systems made by BAE Systems North America and spare parts for its F-16 fighters made by Lockheed Martin Corp.

Last year, the Pentagon gave the two countries permission to buy radar and sensor systems worth as much as $355 million from a joint venture of Raytheon and France's Thales SA, and from Lockheed Martin and TCOM LP, both of Maryland.

Armenia, Azerbaijan, and Tajikistan will each share in about $100 million in annual US aid to the region meant for military training and equipment purchases. While the spending is relatively modest for the US defense industry, foreign sales are often more profitable, because they don't include new development costs.

David Baker, a retired US Air Force general who directs a Charles Schwab & Co. research unit in Washington, said the war in Iraq amounts to an advertisement for US planes, tanks, and command-and-control infrastructure, all of which will be of interest to buyers after the hostilities end.

"I'd be surprised if countries like Pakistan and Jordan weren't stocking up on US gear," Baker said. "There's a real upside here, which is dollars hitting the defense sector that aren't coming out of the US budget."

Iraq might soon be buying American, too.

In last week's proposed supplemental budget, the Bush administration asks for the authority to sell munitions to Iraq "if the president determines that the export of such item is in the national interest of the United States."

Currently, Congress would need to approve any arms deals with Iraq. A House committee has narrowed the bill so that it would apply only to Iraqi purchases of nonlethal military gear, such as chemical-protection suits, but the provision remained in a Senate version. A White House spokesman was not available to explain the administration's thinking.

Iraq spent $1.6 million on US goods in 1990, the last year it could buy US arms, but the country could receive millions of dollars in foreign aid after the war.

Rachel Stohl, an analyst at the Center for Defense Information, a research group in Washington, said she doesn't understand the White House's rush to facilitate weapon sales to Iraq, since it will take years to rebuild the country politically.

"We could be sending them more weapons even before we know who's really on our side," she said.

Stohl and other critics worry the US loses control over any arms it sells. For instance, this week the US State Department sanctioned a Pakistani company it implied had helped the government obtain long-range missiles illegally from North Korea. According to news accounts, the missiles were flown to Pakistan aboard a C-130 Hercules cargo plane made by Lockheed Martin. In July, the Pentagon's Defense Security Cooperation Agency indicated its approval of the sale of six used C-130s and spare parts to Pakistan, worth up to $75 million.

"The problem is, you don't actually know what they're going to be used for once you've sold the system," said Tamar Gabelnick, who monitors arms sales for the Federation of American Scientists in Washington.

Others, generally more conservative, say weapons sales could encourage foreigners to pay more heed to US views and discourage them from pursuing nuclear arms. "It's a tangible form of confidence-building for these governments," said Heritage Foundation analyst Baker Spring.

Lockheed Martin spokesmen referred questions about the C-130 and its radar sales to the State Department, where a spokesman referred questions to the Pentagon's Defense Security Cooperation Agency, which referred questions back to the State Department.

US sanctions were imposed on India and Pakistan in 1998 because of their aggressive nuclear tests, and against three former Soviet Republics, Armenia, Azerbaijan, and Tajikistan, mainly because of human rights concerns. Pakistan faced earlier sanctions.

In February, Raytheon agreed to pay $25 million to settle federal allegations its employees had tried to evade sanctions by selling long-range radio systems to Pakistan. None of these countries were major US customers previously. The State Department estimates arms sales to Pakistan were worth only $70 million annually in the 1990s, mainly in spare parts.

Under export laws, the Pentagon's cooperation agency must consider the security implications of major sales. In its public notices last year, the agency stated the radar and C-130 deals would not affect "the basic military balance in the region."

Outsiders like Gabelnick say they'd like a fuller explanation of why these systems won't contribute to tensions such as those along the India-Pakistan border. The dozen truck-mounted "Firefinder" radars India bought from a joint venture of Raytheon and France's Thales SA, for instance, are called "counter-battery" systems because they quickly pick out the source of artillery fire up to 30 kilometers away. "Friendly fire can then neutralize further fire from those weapons," according to Raytheon's website. Firefinders accompany US Army forces in Iraq.

Jim Beck, a senior vice president of the joint venture in Fullerton, Calif., wouldn't discuss the Pentagon's thinking when it granted the approval but noted that Raytheon sold 19 Firefinder systems to Pakistan about a decade ago, before sanctions were imposed, with a 15-kilometer range.

Beck said the company hopes for more sales in India, though it hasn't completed its market research there. "The market in India was dominated by the Russians for a long, long time, and to break into it for the first time was a big deal for us," he said. He confirmed India has expressed interest in other systems, such as the Patriot, but doubted Pakistan would be allowed to buy advanced gear by the State Department, which he said has been "a little more strict in what they're allowing the Pakistanis to buy."

Will his company now try to sell Pakistan the 30-kilometer-range radars now, to match the range of India's new equipment? "You can figure that out for yourself," Beck said.



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