Iraq has ordered more than $5 billion in U.S. platforms, including
aircraft, helicopters and main battle tanks. But officials acknowledged that
deliveries were being delayed by the poor credit rating of the Baghdad
government.
"This issue must be resolved if the United States wants to keep Iraq as
a defense client," an official said.
Officials said Iraq has been hampered by the U.S. Foreign Military Sales
program. FMS sets strict requirements for credit by a U.S. defense client,
which has forced Baghdad to pay cash in advance.
"When the price of oil was high, Iraq could come up with the cash," the
official said. "Now, it can't."
Iraq has already relayed more than $1 billion to the U.S. Federal
Reserve Bank as a downpayment for a $2.1 billion project to procure the M1A1
MBT and related vehicles. Officials said the Abrams MBTs were expected to
arrive over the next few months.
U.S. defense companies have lobbied the Obama administration and
Congress to relax credit rules for Iraq. Executives have warned that Iraq
has been signing agreements with France and negotiating defense deals with
Russia and South Korea.