Iraq denies cancelling $4.2 bln arms deal with Russia over 'corruption concerns'

RT reports:
 
Iraqi Prime Minister's spokesperson Ali Mussawi told RT that the deal hasn't been cancelled, it is simply under review. He also confirmed it was because of earlier allegations of corruption from the Iraqi side.

Iraqi Defense Minister Saadun al-Dulaimi also confirmed that there was no cancellation of the agreement.

"The deal is going ahead," he said.

Earlier, media reports claimed the deal – which would have made Russia Iraq’s second-biggest arms supplier after the United States – was cancelled.

“When Maliki returned from his trip to Russia, he had some suspicions of corruption, so he decided to review the whole deal. … There is an investigation going on, on this,”Iraqi Prime Minister Nuri al-Maliki's spokesperson Ali Mussawi said.

The deal – which was signed by Russian Prime Minister Dmitry Medvedev and Maliki in October – will either be go through or be cancelled only after the Iraqi anti-corruption committee presents it findings.

Officials in Moscow have not yet commented on the matter. The Russian embassy in Baghdad said it has not received word from the Foreign Ministry, and was not informed about the cancellation by Iraqi officials.

The sale was signed by Russian Prime Minister Dmitry Medvedev and Maliki in October, and would have made Russia Iraq’s second-biggest arms supplier after the United States.

The deal is one of the largest in both the modern history of Russia and for postwar Iraq.

Experts speculated that the package likely would have included shipments of aircraft, helicopters, armored vehicles and air defense weapons.

Though the details of the deal were kept secret, military analysts believe it was competitive enough to spark concerns in Washington, the primary arms dealer for Iraq.

Military experts speculated that the deal may be cancelled due to pressure from Washington, and may result in punitive sanctions.

Director of the Center for Analysis of World Arms Trade Igor Korotchenko told RIA-Novosti news agency that if the deal does get axed, it would be an unprecedented event in the history of Russia's arms trade

“Self-respecting states and governments don’t act this way,” Korotchenko said.

RIA-Novosti also quoted an unnamed arms expert who warned that Iraq may incur harsh sanctions for the move: “If the deals were drawn up in a proper way from the legal point of view, the Iraqi side may suffer multi-million dollar losses by paying off punitive fees.”

The expert went on to add that statements about suspected corruption have never been a legitimate basis for the annulment of contracts, especially in military-technical cooperation.

Why is Saudi Arabia going on a weapons shopping spree in Russia?

Russian media outlets are reporting that Saudi Arabia is negotiating a 2 billion dollars weapons deal with Russia which would include the sale of 150 helicopters (30 Mi-35 and 120 Mi-17), over 150 T-90C tanks, about 250 BMP-3 (infantry combat vehicle) armored vehicles and several dozens of anti-aircraft systems and complexes including the brand new S-400 Triumf missile system. In the meantime, Russia is also clearly delaying the sale of its S-300 missile system to Iran prompting some angry remarks from Iranian Chief of Staff of Iran's Joint Armed Forces Hassan Firouzabad. Is this all a coincidence?

One needs to remember here that Saudi Arabia has often served as the USraelian Empire's banker, providing money in support of US strategic objectives (the best examples of this are the war in Afghanistan and the US support for the Nicaraguan "Contras"). Why would Saudi Arabia, which has always relied almost exclusively on US made weapons systems, suddenly turn to Russia? Most definitely not because Russian weapons systems are better - which they undoubtedly are, by the way - as weapons purchases are almost never decided on the basis of technical capabilities. Three factors decide in such deals: the kickbacks given to the officials involved in the deal, the political pressures and allegiances of the countries involved and the offset agreements provided as an incentive by the parties (including, of course, even more kickbacks).

In this case, the US is as least as corrupt as Russia and can easily match any kickbacks, the political allegiances of the Saudis are clearly with the USA, and there is no way that Russia could offer better offset terms than the USA. Hence - the Saudi shopping spree, if confirmed and finalized, is definitely a reward for Russia's reneging on the S-300 deal with Iran.

The Iranian military Chief of Staff Hassan Firouzabad is, of course, quite correct when he asks the key question: "Don't Russian strategists realize Iran's geopolitical importance to their security?". While I am quite confident that Russian strategists understand this perfectly well, I am also inclined to believe that these strategists do not have the final say in Russian policy making. Call it the almighty Dollar, or Ruble, or Riyal - the bottom line is that the Russian government appears to favor short-term economic interests over long-term national security objectives. If that is true, that is very bad news indeed.

The Saker