IRAN-IRAQ: BUYING WEAPONS FOR WAR

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00283R000500120005-5
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 22
• Document Creation Date: December 22, 2016
• Document Release Date: September 2, 2010
• Sequence Number: 5
• Publication Date: May 1, 1984
• Content Type: REPORT

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Directorate of Seeret
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Iran-Iraq:
Buying Weapons for War
GI 84-10082
May 1984
Copy 436
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Intelligence 25X1
Iran-Iraq:
Buying Weapons for War
An Intelligence Assessment
This paper was prepared by
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[International
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Securities Issues Division, Office o Global Issues.
Comments and queries are welcome and may be
directed to the Chief, Communist Activities
Branch, OGI,
Secret
GI 84-10082
May 1984
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Iran-Iraq:
Buying Weapons for War
Key Judgments Iran and Iraq have both developed sufficient sources of arms since their
Information available war started in September 1980 to continue the conflict over the next year
as o115 April 1984 or two at current levels. In that time Iraq has agreed to purchase $22 bil-
was used in this report.
lion worth of arms while Iran has signed some $4.6 billion in agreements.
The large imbalance in arms purchases is primarily the result of Iraq's
upgrading its armed forces with expensive weapon systems, but the initial
decline of Iranian purchases because of Western embargoes also played a
role. The ability of both countries to pursue the war at its current level de-
pends more on their financial outlook than on suppliers' willingness or
ability to deliver
Despite some problems early in the war, Tehran has been able to line up
suppliers to provide ammunition and spare parts for its Soviet ground
forces equipment and has been able to replace some of its US inventory
with Soviet-style equipment:
? China and North Korea are now Iran's main suppliers of military
equipment.
? Eastern Europe, Syria, and Libya are also important, but secondary,
sources of this materiel.
? West European suppliers have recently become more forthcoming in
supplying Iran with spare parts.
? Efforts to obtain spare parts and ammunition for US equipment have met
with limited success.
Iraq has been able to meet its war requirements through both traditional
and new suppliers:
? After a short-lived embargo at the beginning of the war, Moscow has re-
emerged as Iraq's main supplier.
? East European arms sales filled an important need early in the war.
? China is supplying arms which complement Soviet equipment.
? West European suppliers, led by France, are a source of modern
equipment.
? Third World arms suppliers-particularly Brazil, Egypt, and South
Korea-are cashing in on Iraqi needs by providing a variety of materiel.
iii Secret
GI 84-10082
May 1984
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If the war continues at present levels, procurement patterns will be
determined largely by the ability of the belligerents to pay. Collectively,
the suppliers who have entered the market are willing and able to provide
whatever the two belligerents can pay for. Iraq will continue to purchase
from China, the USSR, and France, while Iran will continue to depend on
North Korea and China. Iran's purchases through the gray arms market
will most likely diminish as West European countries increase their sales.
A significant upsurge in the fighting could change the arms supply picture.
Iraqi disruption of Iranian oil production facilities would sharply curtail
revenues. Tehran's foreign exchange reserves would be drawn down
quickly, and its attractiveness as an arms-for-cash purchaser would
decrease accordingly. On the other hand, sharply increased fighting
probably would benefit Iraqi arms procurement. Baghdad's oil-rich Arab
allies would increase financial support to assure Iraqi defenses, and, we
believe, the USSR and France would provide necessary war materiels on
concessionary terms.
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Key Judgments
Iraq: Relying on Traditional Suppliers 3
Supply Patterns Ahead
Western Suppliers 9
Communist Suppliers 10
B. Western Europe: Arms Sales to Iraq and Iran
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Iran-Iraq:
Buying Weapons for War
Introduction
Despite initial problems, both Iran and Iraq have,
developed viable arms procurement networks. Their
demand for weapons has resulted in new opportunities
for a number of arms suppliers, several of which have
sold arms to one or both countries. North Korea and,
more recently, China have emerged as Iran's main
suppliers of Soviet-style ground forces equipment.
China, the USSR, and France continue as Iraq's
major suppliers, while a number of other countries
have sold arms to one or both sides to earn hard
currency.
This assessment reviews the evolution of, and pros-
pects for, Iranian and Iraqi arms procurements. It
discusses the degree of success both belligerents have
had in obtaining arms and suggests some problems
they may have in the future. Particular attention is
paid to the motivation of individual suppliers as they
have reacted to the escalation in the war.
Iran: New Suppliers Emerge
In contrast to Iraq, which had a major military
modernization program under way before the war,
Iran had to rebuild its arms procurement apparatus
completely after the start of the war in 1980. When
he assumed the leadership, Ayatollah Khomeini
slashed arms spending and suspended or canceled
many of Tehran's military procurement and construc-
tion agreements with the United States, France, and
the United Kingdom. The seizure of the US hostages
in November 1979 resulted in an embargo on most of
the remaining arms on order from the major Western
suppliers. These actions not only halted shipments of
contracted Western armaments but also substantially
reduced shipments of Western spare parts and ammu-
nition. As a result, Iran was forced to turn to a variety
of nontraditional sources-including Eastern Europe,
China, North Korea, Syria, and Libya-for spare
parts, ammunition, and replacement equipment to
maintain its Soviet armored personnel carriers, artil-
lery, antiaircraft guns, and antitank weapons. At the
same time, Iran attempted to purchase ammunition
and spare parts for its US equipment from smaller
West European and Third World countries. In addi-
tion, it turned to independent arms brokers for a
variety of ancillary equipment and supplies such as
spare parts, communications gear, support vehicles,
quartermaster goods, ammunition, and small arms.
By building a network of purchasing agents and
independent arms brokers, Iran has been able to
purchase some $4.6 billion worth of arms over the
course of the war (see figure 1). Almost $3 billion
worth of these arms have been received by Tehran.
Most Iranian arms purchases are to support infantry
operations and have included large quantities of am-
munition, spare parts, and some support and ground
forces equipment. Initial orders covered badly needed
Soviet-style support equipment and munitions from
other Soviet client states. Sales agreements reached a
peak of more than $1.8 billion in 1983 as West
European and Chinese suppliers-driven largely by
the desire to increase hard currency earnings and oil
imports-demonstrated an increased willingness to
provide Iran with materiel.
North Korea has become the principal supplier of
Soviet-model crew-served weapons, small arms, and
munitions that Iran uses to conduct its infantry
operations. We estimate that North Korea has sold
almost $1 billion worth of military equipment to
Tehran since September 1980. In addition, P'yong-
yang has sent more than 50 military technicians to
teach Iranians how to use and maintain the equip-
ment.
We believe North Korea probably initiated its sales to
Iran with Soviet acquiescence. Attache reporting from
South Korea suggests that some items-AT-3 anti-
tank guided missiles and SA-7 antiaircraft missiles-
were of Soviet origin, and Moscow presumably ap-
proves the export of items that North Korea produces
under Soviet license such as T-62 tanks and BM-11
rocket launchers.
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Iran's Arms Procurement Network
Since the beginning of the war with Iraq, Iran has
developed an extensive arms-buying network. This
Figure 1
Arms Agreements With Iran,
22 September 1980-83
system-which utilizes official, commercial, and pri- ? All Western countries
vate channels-extends to nearly every corner of the North Korea I Eastern Europe
international arms market. Although often compli- 0 China
cated and expensive, this network has enabled Iran to
conclude numerous military contracts for materiel z.5
needed to prosecute the war:
? Iran's main arms procurement efforts are directed
by the Ministry of Defense, which maintains several
purchasing offices in Europe and the Far East.
These offices seek out supplies, sign contracts, and
make payments for arms purchased. The director of
this network is Deputy Minister of Defense for
Logistics, Col. Mehdi Azizi.
? Other official government channels-such as em-
bassies and Iran's UN Mission in New York-have
often complemented the purchasing offices. Al-
though their use has decreased recently, diplomatic
establishments still act as liaison channels in cases
where foreign governments-such as Syria and
Libya-serve as arms purchasing and transship-
ment agents for Tehran.
? Although most arms purchases for the Revolution-
ary Guards appear to be conducted through the
procurement channels established by the Ministry
of Defense, Revolutionary Guard offices have begun
operating more independently. The Guard appears
to be developing a parallel arms-buying network for
its exclusive use.
? Besides these official channels, private Iranian im-
port-export firms scour the international gray arms
market for weapons, which they then resell to the
Iranian Government. In addition, some Iranian
cover organizations in Europe and the Far East
also purchase arms for Tehran.
China has become Iran's second-largest supplier of
Soviet-designed equipment, with sales of more than
$500 million since the war began. Initial sales were
small, consisting of some ammunition and explosives.
They increased dramatically in 1983 when Beijing
agreed to provide Iran with $445 million worth of
tanks, self-propelled artillery, radars, and motor vehi-
cles, according to attache reporting. Much of this
equipment is scheduled to arrive by this summer.
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Syria and Libya have been willing suppliers of arms
to Iran. Together they have provided more than $500
million worth of Soviet-style ground forces equipment
to Iran. Tripoli provides arms at a discount on credit,
while Damascus is using most of its sales to offset oil
debts. Syria has supplied artillery, mortars, and small
arms. Libya has transferred T-55 tanks, 130-mm
artillery, and AT-3 antitank missiles to Iran from its
inventory of Soviet equipment
Iran also turned to Eastern Europe, which was rapid-
ly becoming a major supplier of Iraq, for some
military supplies. East European countries agreed to
several deals with Iran at Moscow's behest because of
Soviet desires to maintain some political connection
with Tehran, according to foreign attache reporting.
East Germany has been the largest East European
supplier with sales of more than $215 million, includ-
ing vehicles, spare parts, and ammunition. Bulgaria
also agreed to deliver some $84 million worth of
ammunition, and Czechoslovakia, Poland, and Roma-
nia have signed smaller contracts for ammunition and
spare parts.
To circumvent the US embargo, Iran established an
elaborate network of purchasing agents and brokers to
procure the materiel needed to maintain its large
inventory of US equipment. Iran has had only limited
success, because of US efforts to stem the flow, in
obtaining sufficient equipment to keep its inventory of
US weapons operational. To date, Iran has been able
to obtain:
? US aircraft spare parts from Israel.
? Spare parts for CH-47 helicopters from Italy.
? Communications equipment and ammunition from
South Korea.
? Communications equipment and ammunition from
Spain.
? Ammunition from Portugal.
Iran's procurement network also has been able to
purchase some indigeneously designed and manufac-
tured equipment from West European manufacturers.
For example:
? Switzerland has concluded two large contracts for
50 trainer aircraft and 92 Skyguard air defense
guns.
? Greece sold recoilless rifles, small arms, and
ammunition.
? Belgium has provided artillery and ammunition.
? The United Kingdom sold tank engines, ammuni-
tion, and support equipment.
? Italy has sent spare parts and ammunition.
? Other suppliers have provided electronic equipment,
spare parts, and ammunition.
In addition to purchasing military equipment from
major European arms manufacturers, Tehran has also
sought to acquire Western materiel on the interna-
tional gray arms market. Not all of Iran's dealings
with independent arms brokers have been successful,
however. Many of these brokers are disreputable,
operate under the cover of several front firms, and
often cannot deliver what they promise. They usually
offer unrealistically high quantities of virtually unob-
tainable equipment, often hoping to abscond with
large downpayments or substitute less sophisticated
ordnance at a later date. Although we do not know
how much money Iran has lost as a result of these
gray market arms deals, we believe that the amount
was at least several hundred million dollars through
the end of 1982. As a result, Iran's procurement
officers have become more discriminating when deal-
ing with gray market brokers.
Iraq: Relying on Traditional Suppliers
Iraq has been more successful than Iran in securing
military supplies. Baghdad has received a steady
stream of materiel to wage war and has been able to
continue to modernize its armed forces by introducing
new, more advanced equipment into its inventory.
Initially embargoed by the Soviet Union-its major
supplier-Iraq turned to Eastern Europe and China
for ammunition, weapons, and spare parts to support
its Soviet inventory, and to Western Europe-particu-
larly France-for new equipment. After six months
the USSR resumed arms shipments to Baghdad,
presumably because it decided its embargo was not
buying additional political influence in Iran
Over the course of the war, total Iraqi arms purchases
have reached $22 billion-five times the Iranian
orders-because Baghdad has sought to expand and
modernize its armed forces (see figure 2). Deliveries
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Gray Market Arms Acquisition
Iran acquires large quantities of small arms, artillery
ammunition, and replacement parts-some of which
are either manufactured in the United States or
produced under US license-on the European gray
known arms dealers seeking to sell unrealistically
large quantities of so histicated weapon systems at
exorbitant prices.
arms market. Because of the paucity of detailed
information on such contracts, the data in this paper
reflect only some of these deals. We believe, however,
that gray market sales amount to no more than a few
percentage points of government-to-government sales.
Iranian procurement of such materiel is facilitated by
large established arms manufacturers who are willing
to serve as middlemen in the flow of military goods to
Iran.
since the start
of hostilities with Iraq, Tehran has received hundreds
of offers from West European entrepreneurs seeking
to broker arms sales between Iran and suppliers in
the Far East, the United States, Western Europe, and
the Soviet Bloc. We do not know how many of these
offers ever result in an actual delivery. Indeed, we
believe many of them are fraudulent, involving little-
since September 1980 of more than $13 billion in-
clude at least $3 billion worth of weapons ordered
before the conflict began. Communist countries are
Iraq's largest and most important suppliers,, providing
more than $10 billion in equipment. West Europe-
ans-led by France-are the next largest group of
suppliers, providing some $9.8 billion. Third World
suppliers-spearheaded by Egypt, Brazil, and South
Korea-have also cashed in on the war, signing
agreements with Iraq for nearly $1.5 billion of West-
ern arms. Sales agreements in 1983 have dropped,
possibly because of financial constraints.
China committed itself early to resupplying Iraq.
Over the course of the war, Iraqi-Chinese contracts
totaled about $3.8 billion-more than any other
Communist country. Some 90 percent of these were
concluded in 1981 and 1982. Beijing has used Arab
intermediaries as brokers to sell:
? Seventy F-7 jet fighters (equivalent to the Soviet
MIG-21).
? As many as 2,000 Type 69 tanks (based on the
Soviet T-54 model).
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Figure 2
Arms Agreements With Iraq,
22 September 1980-83
Other Western countries China
France USSR
Italy Eastern Europe
sales, however, declined in 1982 and 1983.
22 Sep-
31 Dec 1980
military hardware, twice as much as in the preceding
six years. Iraq placed more than $1 billion worth of
orders with East European suppliers from late Sep-
tember 1980 through March 1981, mainly for tanks,
air defense weapons, artillery, and antitank missiles.
Most of this hardware was delivered soon after it was
purchased. East European suppliers maintained a
brisk sales pace even after the resumption of Soviet
deliveries in March 1981, with another $1.4 billion in
sales during the remainder of the year. East European
The USSR, convinced by March 1981 that its embar- 25X1
go on Iraq had become counterproductive, resumed
arms deliveries worth more than $1 billion under
prewar contracts. These shipments included:
? MIG-23s and Iraq's first MIG-25 jet fighter
aircraft.
? Sixty-four T-62 and 156 T-72 tanks.
? Some 80 radars of various types.
? Spare parts and ammunition.
The Soviet arms supply commitment to Iraq gained
momentum in late 1982. New accords totaling
$3 billion were signed to replace ground force equip-
ment, fighter aircraft, and air defense equipment lost
in combat. By the end of 1983 arms shipments
included:
? About 135 jet fighters, including additional
MIG-23s and MIG-25s.
? More than 400 tanks, of which 300 were T-72s, and
375 armored vehicles.
? About 200 artillery pieces, air defense guns, and
multiple rocket launchers.
? Several thousand field artillery pieces, mortars, and
air defense guns.
Large quantities of ammunition.
We have limited intelligence on the delivery of Chi-
nese weapons to Iraq, but can confirm the arrival of
10 F-7s, and more than 300 tanks and 3,000 crew-
served guns
East European countries, led by Hungary, Romania,
Poland, and Yugoslavia, immediately benefited from
the Soviet embargo. Since the beginning of the war,
these countries-apparently with Moscow's compli-
ance-have sold Iraq more than $3.2 billion worth of
Iraq's search for arms also widened opportunities for
West European and Third World suppliers. France,
already a major supplier to Iraq, successfully capital-
ized on Baghdad's requirements, selling almost
$5 billion worth of military equipment through the
end of 1983. Half of these sales occurred in the last
quarter of 1980. The equipment, about 60 percent of
which has been delivered, included:
? Twenty Mirage F-1 jet fighters and five advanced
Super Etendard attack bombers.
? Two-hundred Roland surface-to-air missile systems.
? Eighty-five 155-mm self-propelled guns.
? At least 100 Exocet air-to-surface missiles.
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Other West European suppliers also were able to European countries-including most major arms pro-
expand arms sales to Iraq. The $2.5 billion in Italian ducers-sold another $2.5 billion worth of materiel to
sales purchased 11 ships, some ground forces equip- Baghdad, primarily support equipment.
ment, helicopters, and naval mines.' Other West
' Negotiations for the ships-four frigates, six missile patrol boats,
and a support ship-were started in 1978 but not concluded until
late 1980. The ships are not expected to arrive in Iraq until at least
1985 because of lengthy construction schedules and checkout
The war provided a unique opportunity for Third
World countries to expand arms sales to Iraq. Egypt's
willingness to provide Soviet and indigenously made
weapons and other materiel-in part based on a desire
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to reestablish relations with other Arab countries-
led to sales worth at least $500 million. Key.-equip-
ment included 200 T-55 tanks, FROG rockets, SA-7
missiles, and possibly MIG-21 and SU-7 jet fighters.
Egypt also has provided training for Iraqi military
peronnel and has repaired damaged Iraqi equipment.
Among other Third World suppliers:
? South Korea sold Iraq $425 million worth of ammu-
nition, jeeps, and quartermaster supplies; about half
has been delivered.
? Brazil signed $870 million in new accords for
armored vehicles and development of rocket launch-
ers. We have no evidence of any rocket launcher
deliveries to date,
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Supply Patterns Ahead
Both Communist and Western suppliers reacted to
the Iran-Iraq war for a variety of economic and
political reasons. Western suppliers initially embar-
goed Iran for political reasons. Over the past year,
however, these suppliers have attempted to increase
their sales in a soft world market and have increasing-
ly turned to Iran for sales, ignoring US demarches.
Among the Communist suppliers, the USSR is back-
ing Iraq, long a key client, but is apparently also
supporting East European and North Korean sales of
Soviet-style equipment to both combatants. China has
also sold to both sides, implementing its new policy of
selling arms for hard currency.
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Western Suppliers. Western arms suppliers have re-
evaluated their relations with Iran and Iraq over the
past six to nine months. The apparent durability of
the Khomeini regime has prompted some Western
and Third World countries to consider establishing
normal diplomatic and economic relations with Iran.
The desire of Western arms suppliers to preserve ties
with Baghdad's conservative Arab allies will probably
lead to continued arms sales.
We believe France is likely to remain a firm supporter
of Iraq because of its overall military and economic
ties to Baghdad and the Arabian Peninsula kingdoms.
Iraq owes France more than $4 billion and Paris
hopes that its continued support for Iraq will lead to
repayment through concessionary oil deliveries and to
further Arab purchases of French military and eco-
nomic goods. Saudi Arabia's recent $4 billion pur-
chase of French air defense weapon systems has been
cited in European press reports as an example of the
preference being given to France because of its sup-
port for Iraq
We believe France's willingness last fall to sell five
Super Etendard naval strike aircraft from its own
inventory demonstrated the lengths to which it was
willing to go to meet Iraqi requests. The French
reaction to Iraqi use of chemical weapons also illus-
trates their commitment to the Saddam regime. Ac-
cording to Embassy reporting, France made a de-
marche to Iraq on the issue, but also led efforts in the
UN Committee on Disarmament to block an investi-
gation of the incidents.
Most other Western suppliers, while continuing sales
to Iraq, have also increased their military sales to Iran
over the past six to nine months. The United King-
dom, for example, has shown a greater willingness to
supply military-related equipment to Iran. According
to Embassy reports, London has characterized its
release of ocean tugs and an oil replenishment tanker
for the Iranian Navy in early 1984 as consistent with
its polic of sellin "nonlethal" items to both Iran and
Iraq.
espete considerable opposition rom
of the noted States and the Foreign and Common-
wealth Office, British firms have begun to sell spare
engines for Chieftan tanks to Iran. We believe Brit-
ain, however, will probably not jeopardize relations
with other countries in the Gulf-particularly Oman
and Saudi Arabia-by selling major weapon systems
to Iran at this time.
Italy, which until recently turned aside most Iranian
arms orders, appears to be yielding to Iranian pres-
sure. State Department reporting suggests that this
may be prompted by Italian concerns for existing
commercial interests in Iran and for the fate of the
3,000 Italian citizens there. Since last fall Italian
firms have signed four arms deals for at least $195
million. Italian armaments firms continue to negotiate
Other Western suppliers continue to see the war as an
opportunity to expand foreign sales in order to use
their underutilized production capacity:
? Brazil, having sold large amounts of arms to Iraq
over the past three years, is now exploring sales to
Iran
? Argentina, unsuccessful in its attempt to sell TAM
tanks to Iran, may be considering the sale of two
Type 42 destroyers to Tehran for $500 million,
according to Embassy reports.
Recent US demarches to US allies on curbing trans-
fers of US-licensed equipment will probably reduce
unauthorized sales. In response to US pressure, sever-
al countries-Israel, Italy, South Korea, and Spain-
have already cut back sales to Iran of US weapons
produced under US license:
? Available evidence indicates that the last Israeli
transfer of US-licensed equipment occurred in Jan-
uary 1983. US demarches since then appear to have
been effective.
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? According to Embassy reporting, Italy has refrained
from completing the sale of CH-47 helicopters to
Iran. To protect Italian expatriate workers and
economic interests in Iran, however, Rome is keep-
ing the door open for eventual delivery of the
helicopters.
? South Korean transfers of embargoed US-licensed
equipment have decreased since Seoul's reluctant
decision in October 1983 to restrict arms sales to
Iran. That decision came after more than $100
million worth of licensed munitions had been sold to
Tehran. According to an attache report, small deliv-
eries of materiel previously contracted for have
continued, but Seoul recently refused to issue an
export permit for the sale of 100,000 rounds of
155-mm ammunition to Iran.
? Spain has discontinued sales of US-licensed artillery
ammunition to Iran, but continues to sell 106-mm
recoilless rifles. Madrid disagrees with Washington
over the interpretation of sales restrictions, arguing
that they apply only to the production technology
and not to the rifles themselves)
We believe that, over time, the effect of past and
future demarches will diminish. Excess production
capacity and a generally soft international arms mar-
ket will make sales to any customer, including Iran,
attractive. Portugal, another recipient of US de-
marches, would like to expand sales to Iran in order to
develop its embryonic arms industry. Lisbon is appar-
ently willing to allow Portugese firms to transship
foreign-made weapons to Iran provided that Tehran
purchase an equivalent amount of Portugese-made
equipment. In our judgment, however, the effect of
these transfers on Iran's war effort will be minimal,
especially as Tehran begins to rely more on Soviet-
style weapons obtained from China and North Korea.
Communist Suppliers. Among Communist suppliers,
the Warsaw Pact countries are selling primarily to
Iraq; North Korea is a major supplier to Iran; and
China has recently sold to both sides. The USSR has
sided with Iraq-long a traditional client-but has
attempted to keep its options open with Iran by
supplying small amounts of spare parts and munitions
and by allowing Eastern Europe and North Korea to
sell materiel to Iran. Eastern Europe, the PRC, and
North Korea are all taking advantage of the war by
selling what they can to either country to earn hard
currency and increase oil imports.
Since the start of the war, the USSR and Iraq have
signed arms agreements valued at more than $3
billion, most of them concluded in 1982. Equipment
delivered under these agreements includes spare parts
and ammunition to allow Baghdad to continue the
war as well as advanced Soviet weaponry for the
modernization of Iraqi forces. A measure of Moscow's
long-term commitment to Iraq is its willingness to
refinance Baghdad's current military debt. F_
The other Communist suppliers, Eastern Europe and
China, appear willing to continue arms sales to both
belligerents as long as they can afford to pay. Eastern
Europe will continue to supplement Soviet sales to
Iraq and also provide Iran with the materiel needed to
continue to operate their Soviet ground forces equip-
ment. While Chinese sales to Iraq have decreased in
the past year, probably due to the availability of
increased Soviet and East European supplies, Beij-
ing's sales to Iran have increased. Selling to both
combatants reflects Beijing's new policy of supplying
any client who can pay in hard currency. Indeed,
future Chinese sales to Iran may show a further
increase.
,);v i
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North Korea has become one of Iran's principal
suppliers, receiving oil and as much as one-third of its
to :al 1983 hard currency earnings in payment.
P'yongyang has sold Soviet-style arms manufactured
in Korea as well as Soviet ground forces materiel
phased out of its inventory. This relationship will
continue as long as Tehran can pay and as long as
Moscow perceives that such sales offer political ad-
vantages. P'yongyang has sought to take advantage of
its strengthened ties with Iran to bolster political
relations with other radical Middle Eastern states, but
we believe any gains achieved on this front are
probably outweighed by the breach in diplomatic
relations with Baghdad.
Outlook
In the absence of a war-induced disruption of oil
supplies from the Gulf, we do not see financial
constraints leading to a reduction in current levels of
arms imports over the next 12 to 18 months. Iran will
have sufficient oil revenues to continue arms imports
to pursue the war at its current level. Iraq is in a
tightening economic vise but will manage to obtain
the required arms with the help of its major suppliers
and Arab allies:
? Iran's financial position has improved during the
course of the war. The value of Iranian oil exports
has risen from about $11 billion in 1981 to $19
billion in 1983. Tehran is bartering some of its oil
exports directly for arms.
? Iraq's financial status has deteriorated somewhat.
The huge costs of the war-$600-700 million a
month-and the 75-percent drop in oil revenues
because of the closing of its Gulf terminals and the
Syrian pipeline, have crimped Baghdad's financial
options. Still, the USSR and France have been
willing to reschedule arms debts, and Iraq's wealthy
OPEC backers will undoubtedly continue to finance
a large portion of its military purchases.
Future procurement patterns will depend largely on
the course of the war and the ability of each combat-
ant to pay for arms imports. If the current ground war
of attrition continues at near current levels and oil
supplies from the Gulf are not disrupted, both Iran
and Iraq should be able to obtain sufficient levels of
materiel to pursue the war. Supplier constraints will
not hinder the flow of arms. A number of major and
secondary arms producers as well as independent
brokers have entered the market and are willing and
able to sell a variety of materiel as long as each
country can pay:
? Iraq will continue to depend on the USSR and its
allies and China for the bulk of its equipment. West
European suppliers-especially France-will con-
tinue to play an important, but secondary, role.
? Iran will continue to rely on North Korea and China
to provide spare parts and munitions for its Soviet
ground forces equipment. As West European gov-
ernments allow their arms manufacturers to deal
directly with Iran, Tehran's involvement in the gray
arms market may diminish.
If the war escalates, procurement patterns could
change significantly:
? If the flow of Iranian oil is disrupted-for whatever
reason-Tehran's ability to acquire arms would be
quickly reduced. It is unlikely in this event that
arms suppliers would be willing to extend credit.
Current Iranian foreign assets of about $11 billion
would last only about six months at the 1983 rate of
outlay.
? Relative to Iran, Iraq stands to gain on the arms
procurement front from an escalating war scenario.
Iraq would probably continue to receive aid from
other Arab states. Also, we believe Moscow would
continue to reschedule Iraq's war debts, and France,
heavily dependent on Iraqi oil, has offered similar
concessions. In addition, even though Iraqi oil ex-
ports are currently limited by the closure of its Gulf
terminals and the Syrian pipeline, the expanded
pipeline via Turkey is scheduled for completion by
late summer. This pipeline will allow Baghdad to
increase oil exports by 100,000 b/d and add as
much as $1 billion annually (at current oil prices) to
its hard currency earnings.
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Appendix A
Arms Sales and Deliveries
to Iran and Iraq
Table A-1
Arms Sales to Iran and Iraq,
22 September 1980-1983
Suppliers
Iran
Iraq
Total
22 Sep-
31 Dec
1980
1981
1982
1983
Total
22 Sep-
31 Dec
1980
1981
1982
1983
Total
4,576
146
1,535
1,059
1,835
21,999
5,725
7,242
7,474
1,558
Communist countries
2,126
131
888
291
816
10,229
388
4,320
4,770
751
USSR
239
224
11
4
3,195
11
68
3,003
113
Eastern Europe a
398
NEGL
51
207
140
3,212
377
2,048
431
356
China
502
50
7
445
3,822
2,204
1,336
282
North Korea
987
131
563
66
227
...
...
...
Western countries
2,450
15
647
768
1,020
11,770
5,337
2,922
2,704
807
Western Europe
1,414
6
400
247
761
9,759
5,279
1,927
2,253
300
Austria
7
5
2
...
...
242
210
...
...
32
Belgium
136
...
...
3
133
243
14
228
1
France
3
2
1
4,854
2,461
650
1,722
21
Greece
219
...
119
100
NA
...
...
...
...
...
Italy
210
15
195
2,534
2,016
90
195
233
Portugal
70
69
1
99
45
54
Spain
94
2
92
93
93
NA
NA
Sweden
123
123
180
146
31
3
Switzerland
295
NEGL
50
128
117
19
...
19
...
...
United Kingdom
189
1
138
50
268
170
81
17
West Germany
50
NEGL
NA
50
735
13
706
6
10
Others
18
...
3
15
...
492
170
322
...
...
Arab and non-Arab Islamic
573
9
85
364
115
569
2
236
196
135
Egypt
...
...
...
...
...
489
...
193
196
100
Libya
376
2
70
244
60
...
...
...
...
...
Syria
152
7
...
120
25
35
...
...
...
35
Others
45
...
15
...
30
45
2
43
...
...
Others
463
NEGL
162
157
144
1,442
56
759
255
372
Brazil
18
...
...
...
18
868
8
522
38
300
74
NEGL
50
...
24
...
...
...
...
...
South Korea
275
NEGL
72
137
66
423
152
199
72
Others
96
...
40
20
36
151
48
85
18
e Yugoslavia is included in the Eastern Europe total, although it is
not a member of the Warsaw Pact.
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Table A-2
Arms Deliveries to Iran and Iraq,
1 July 1980-1983
Total
1 Jul-
31 Dec a
1980
1981
1982
1983
2,860
183
861
1,302
514
Communist countries
1,395
152
428
571
244
USSR
326
52
124
100
50
Eastern Europe b
79
1
4
60
14
China
130
NA
50
80
North Korea
860
99
300
361
100
Western countries
1,465
31
433
731
270
Western Europe
557
7
285
250
15
Austria
7
5
2
...
...
France
20
19
1
Greece
119
...
...
119
...
Italy
135
NA
115
20
NEGL
Portugal
68
...
2
66
...
Spain
2
2
NA
Sweden
1
...
...
...
1
Switzerland
50
1
13
36
NA
United Kingdom
139
1
131
7
West Germany
I
NEGL
1
Others
15
...
...
1
14
Arab and non-Arab Islamic
551
13
74
379
85
Egypt
...
...
...
...
...
Libya
376
2
55
259
60
Syria
152
7
...
120
25
Others
23
4
19
...
...
Others
357
11
74
102
170
Brazil
??.
. . .
?..
...
74
...
50
...
24
South Korea
233
4
93
136
Others
50
11
20
9
10
a Because of data limitations, total includes some shipments in the
months leading up to the war.
b Yugoslavia is included in the Eastern Europe total, although it is
not a member of the Warsaw Pact.
Total
I Jul-
31 Dec a
1980
1981
1982
1983
13,246
894
3,598
4,623
4,131
7,444
316
2,197
3,053
1,878
4,158
1,135
1,716
1,307
2,610
316
794
1,119
381
676
268
218
190
5,802
578
1,401
1,570
2,253
4,658
577
1,265
642
2,174
84
...
42
42
...
3,486
430
927
233
1,896
...
...
...
...
371
46
16
137
172
98
...
17
27
54
142
14
34
79
15
31
NEGL
...
31
...
43
14
14
15
232
66
118
48
93
7
74
12
26
...
23
3
314
36
261
17
271
...
8
246
17
...
...
...
...
...
...
...
...
...
43
...
28
15
...
830
1
100
667
62
573
1
34
538
...
...
...
200
19
120
61
57
...
47
9
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Appendix B
Western Europe: Arms Sales
to Iraq and Iran
Table B-1
Western Europe: Arms Sales to Iraq,
22 September 1980-1983
Value
(million US $)
Equipment Covered
Construction of munitions plant, 100 to 200
155-mm howitzers.
Belgium
243
Construction of airfield, various munitions.
Denmark
176
Support ships.
France
4,854
20 Mirage F-1 jet fighters, six Super Frelon
helicopters, 200 Roland surface-to-surface missile
systems, 24 AMX-10 armored vehicles, 05
155-mm self-propelled guns, Exocet and Matra
missiles.
Super Frelon helicopters armed with the Exocet
missiles have been used for attacks on ships near
Khark Island. Some of the Roland systems have
been delivered, after being taken from active
French Army units.
11 ships-four Lupo frigates, six CNR-600 guid-
ed missile combatants, and one support ship; 230
Fiat APCs, antitank and antipersonnel mines.
The ship contract was negotiated in the two years
prior to the war, and deliveries are scheduled to
begin in 1985.
Optical equipment, including night vision devices
for ground force equipment.
Deliveries are partially complete.
Norway
16
Fire and rescue vehicles.
Deliveries are partially complete.
Portugal
99
54 105-mm artillery pieces, 81-mm mortars,
ordnance.
Iraq is Portugal's largest arms customer (40
percent of total sales), but delivery problems
jeopardize further deals.
Air Force housing facility, 106-mm recoilless
rifles, ordnance, and fire control systems.
20 BO-105 helicopters, produced under a West
German license, were delivered completing a
contract signed in 1979.
Sweden
180
Volvo trucks, communications equipment.
Deliveries are partially complete.
Switzerland
19
5,000 RPG-7 rocket launchers, artillery fire con-
trol systems.
Over 30 Bravo and Pilatus trainer aircraft,
ordered before the war, were delivered.
120-mm mortars, ammunition, trucks, quarter-
master supplies.
The mortars reportedly were manufactured in
Belgium.
12 tracked APCs, 105-mm artillery, radars, land-
rover and tank recovery vehicles, bomb, electronic
gear, spare parts for Chieftain tanks.
Hovercraft were delivered to complete a 1978
order.
West
Germany
735
Electronic countermeasure systems (ECM), 1,500
truck and turnkey service and spare parts depot,
300 tank recovery and construction vehicles.
The $600 million ECM contract calls for com-
plete modernization of Iraq's ECM capability.
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Table B-2
Western Europe: Arms Sales to Iran,
22 September 1980-1983
Value
(million
(US $)
Equipment Covered
Austria
7
Communications equipment.
Deliveries completed.
Belgium
136
Artillery shells and other ammunition.
Deliveries are partially complete.
France
3
60 106-mm recoilless rifles.
Deliveries completed.
Greece
219
135 106-mm recoilless rifles, 90-mm/155-mm/175-
mm shells, other unspecified military equipment.
Deliveries of recoilless rifles completed; other
contracts under way.
Italy
210
Unspecified artillery shells and other ammunition,
explosives, spare parts.
Most of the contracts signed since October 1983.
Netherlands
14
Four support boats.
Deliveries completed.
Norway
1
Explosives.
Deliveries completed.
Portugal
70
100 106-mm recoilless rifles, 170 81-mm mortars,
ammunition.
Deliveries completed.
Spain
94
200 106-mm recoilless rifles, ammunition.
Deliveries probably completed.
Sweden
123
40 13-meter fast patrol boats.
At least 11 of the boats ordered in 1983 arrived
by early 1984.
Switzerland
295
50 Pilatus trainer aircraft, Oerlikon antiaircraft
guns, 16 Super Fledermaus radar sets.
Some of the trainers arrived in late 1983; delivery
schedules announced for the antiaircraft guns.
United Kingdom
189
Westland helicopters, Chieftain tank engines, artil-
lery shells.
All contracts except the $50 million helicopter
order have been completed.
West Germany
50
Communications equipment, small arms, ammuni-
tion.
Deliveries are partially complete.
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