In the heyday of Iranian military spending under the Shah, Iran had access to the most sophisticated arms in the world, and heavily leveraged U.S. suppliers in a major arms-buying surge. The military was rapidly turning into one of the best equipped in the region. However, after the Shah fell in 1979, most of the billions of dollars of arms procurement programs were canceled. When the war with Iraq erupted in the 1980s, the Iranians had to scramble for arms. But as the bloody war dragged on, they were much more restricted in their access to arms due to embargoes and funding problems. Iran lost a major portion of the arms it had purchased under the Shah and was largely unable to replace them with comparable weapons, often having to settle for less sophisticated systems.After the war ended, Iran's ability to rearm remained restricted well into the 1990s, as financial problems made it difficult for the country to buy even cheaper and less capable systems. By this time, its U.S.-supplied equipment was becoming increasingly difficult to operate. The situation was made worse by the continuing U.S. embargo, which even included spare parts. Thus, during the 1990s, Iran intensified the development of an indigenous arms industry with the intent of supplying as much of its own equipment as possible. However, this effort has experienced only limited success, and remains heavily dependent on the reconfiguration of Chinese and Russian equipment into domestic variations of these legacy designs. The industry has also been engaging in a great deal of reverse-engineering of its existing U.S. equipment, particularly helicopters and, more recently, drones.
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