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General Stanley McChrystal’s abrupt dismissal as Commander of US Forces Afghanistan (USFOR-A) has complicated matters in the near-term for the US campaign in the country. McChrystal’s dismissal (officially a resignation) became a political necessity after his derogatory comments regarding civilian government officials were published, but this made his removal no less inconvenient for Obama. The view that victory in Afghanistan is insurmountable grew stronger on the back of the unanticipated change in leadership.
As a seasoned military leader, General David Petraeus’ selection as the replacement for McChyrstal was a natural choice for Obama. The general was formerly the US Central Command (Centcom) commander and as such had a hand in Obama’s reworked policy on the Afghan campaign, which was revealed in late- 2009. However, Petraeus has been known to be critical of a drawdown of US forces from July 2011. Petraeus’ perceived scepticism was the focus, as his candidacy was questioned during a Senate Armed Services Committee hearing in late-June 2010. The general has openly supported the pullout timeline, although he equivocally emphasised that a satisfactory balance must be found between providing a sense of urgency for US and allied forces and emboldening counter-insurgency forces by stating a withdrawal deadline.
Despite the uncertainty, BMI expects total military expenditure in the coming years – excepting supplemental requests – to decline to levels not seen since 2007. After the drawdown of US troops in Afghanistan, expenditure should ease to US$616bn in 2012, down from US$708bn in 2011. However, BMI expects spending to increase in the subsequent two years, although it will not take a greater share of GDP. Expenditure in 2013 should reach US$632bn, 3.45% of GDP, and US$648bn by 2014, representing 3.35% of GDP.
In one of the most important developments for the US defence industry, Defence Secretary Robert Gates said in April 2010 that the country’s export controls ought to be overhauled. Gates said that the controls were more suited to the Cold War environment and now served only to constrain supplies to allies while easing market penetration by foreign defence companies. The notoriously cumbersome International Traffic in Arms Regulations (ITAR) spreads the export process over a number of agencies goods lists. The result is a far more opaque and laborious trade environment than exists in comparable countries. Under pressure from the domestic defence industry as well as foreign governments, Gates built on efforts by the previous two administrations by announcing the most comprehensive ITAR reform programme yet. The reform overhauls the current system of controls by creating a single new agency to interpret and implement the regulations. Moreover, one new list will replace the existing multiple lists of defence items controlled by ITAR. This streamlining is no less dependent on Congressional cooperation, however.


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