Iraq is spending $8 billion on security and defense this year. The major source of military equipment and services remains the United States. Currently, the two nations have an agreement whereby Iraq is purchasing $5 billion worth of equipment (weapons, munitions and other gear) and services (mostly training). About 30 percent of the $5 billion has already been delivered. One reason the Iraqis are spending so much on American goods and services, is because, overall, the American goods are inexpensive. A lot of American equipment and bases are being left behind as U.S. troops levels decline, and these are being sold to the Iraqis at bargain prices.
Meanwhile, the declining price of oil has forced the Iraqi national budget to be cut from $80 billion to $62 billion in the past few months. But defense has not been cut, because there are still a lot of terrorists and criminals running around loose. While most of the country has been at peace since 2003, those areas in central Iraq that have not, are keen on calming things down so that they can catch up economically with the rest of the country, particularly the Kurdish north. There has been peace up there for over fifteen years, and the prosperity of the Kurds is the envy of the rest of the country.