US to sell $26 billion worth of weapons to debt-hit Iraq

It's payback time for Iraq. After the U.S. spent hundreds of billons of dollars on the Iraqi occupation, the hunt of Saddam, the institution of a fledgling democracy and then on rebuilding the war ravaged, strife-torn country, the Iraqis are now buying weapons worth $26 billion from the U.S.

A Baghdad-based newspaper, Al-Ittihad, said in a report the heavily indebted country will now buy warplanes, helicopters, tanks and other armored vehicles, warships and missiles from the U.S. in two phases.

Mohammed al-Askari, spokesman of the Iraqi Ministry of Defense, told the newspaper that Baghdad has already signed a contract worth $13 billion under which weapons will be bought before 2013. A similar sum will be spent on U.S. weapons subsequently.

With Iraq coughing up billions of dollars on weapons, the external debt of the country will further inflate, it has been pointed out. According to Exotix, a London-based frontier market debt trading firm, Iraq's external debt was between $103 billion and $129 billion.

The country's debt obligations are already causing a strain on its efforts to rebuild the economy reeling from the war. Iraq last year launched an ambitious plan to massively lift its crude production to emerge as a crucial OPEC player.

Iraq is rich with petroleum resources, and boasts of the world's third-largest oil reserves while its gas reserves are 10th largest in the world. But years of international sanctions have crippled investment in the sector, an anomaly Baghdad is determined to correct by boosting foreign investment in the oil sector.

For the U.S., however, the Iraqi plan to buy billions of dollars of weapons will only be small consolation for the dismal turn of events in the last week. Muqtada al-Sadr, one of the fiercest anti-US warlords in Iraq whom the U.S. failed to annihilate, returned to Iraq after years and called for intensification of the war against Washington.

That despite the hundreds of billions of dollars spent and thousands of lives lost defending an intangible moral high ground as if it were!