Author: Ani Kharatian

In early October, Armenian Defense Minister Vigen Sargsyan announced a 17 percent boost to the defense budget for 2018, marking a substantial increase after several years of mostly flat spending.

While the defense minister refused to specify exactly how the budget growth would be allocated, he did suggest the increase would be utilized for new weapons systems for the Armenian military.

According to one assessment, the 2018 budget would represent as much as a 1.5 percent GDP increase in defense spending, which would bring Armenian defense spending to approximately 5.5 percent of GDP.

While the Azerbaijani press has been quick to downplay the significance of the Armenian budget, the contrast between a sharp Armenian increase and years of declining Azerbaijani military expenditures is hard to ignore. Azerbaijan remains mired in extended economic doldrums, which has squeezed the country’s lavish defense spending after years of oil-fueled growth.

Nevertheless, Azerbaijan’s defense spending still easily outstrips Armenia’s; Azerbaijan’s official 2017 budget will still be almost twice that of Armenia’s 2018 allocation, and Azerbaijan has yet to reveal its own 2018 defense spending plans, though its budget discussions are already well underway.

The typical Armenian retort to Azerbaijani military-related financial and material dominance is that not all spending is equal. Such declarations are usually couched in paeans to “superior” Armenian military culture, organization, esprit de corps, and other such intangibles. That aside, Armenia does genuinely enjoy some recognizable advantages, such as its favorable geographic position in and around the disputed territory of Nagorno Karabakh.

Armenian troops not only control the de facto republic itself, but broad swaths of occupied Azerbaijani “buffer” territories, offering significant strategic depth protecting Karabakh as well as Armenia itself. Although both sides have established expansive defensive fortifications along their Line of Contact, Azerbaijani military objectives depend on the ability to go on the offensive. In the event of a large-scale conflagration, a preservation of the status quo would likely count as a victory in Yerevan, whereas Baku could only be satisfied with significant territorial gains.

This was evident in April 2016’s “Four Day War,” in which Azerbaijani forces successfully wrested territory from Armenian troops for the first time since the 1990s. Although the fighting represented a major moral victory for Azerbaijan, it did so at a steep cost in casualties and ultimately did little to change the overall strategic landscape—despite Baku’s widely perceived advantages in numbers, hardware, and the element of surprise. It is unlikely Azerbaijani forces could count on such advantages indefinitely in an extended shooting war.

In its defensive posture, Armenia does not need to possess the same level of offensive capabilities being stockpiled by Azerbaijan, which has spent many millions of dollars on developing a full-spectrum, combined arms military capability. Still, Yerevan has significant capabilities of its own at its disposal, including an advanced S-300 air defense system (which Azerbaijan also fields), as well as the short-range Iskander-M missile system (which Azerbaijan notably does not)—the latter likely being much more useful for deterrence than in the event of open war.

And although Russia sells advanced weapons to both sides—a practice seemingly at odds its treaty obligations to Armenia—Armenia benefits from favorable terms and rates. One common saying in the region is that by buying Russian arms at a premium, Azerbaijan indirectly subsidizes the Armenian military, which tends to buy the same weapons at cost.

It should come as no surprise, then, that Armenia’s defense budget announcement roughly coincided with news that Yerevan had recently come to terms with Moscow for a soft $100 million loan for purchasing Russian-made weaponry. The deal appears to be coming on the tail end of a similar $200 million agreement from 2015, which the Armenian government reportedly utilized to purchase a variety of Russian arms.

Although the urgency of renewed conflict between Armenia and Azerbaijan may have found a moment’s reprieve following a recent summit in Geneva, Yerevan’s big defense increase and new Russian credit line would seem to show some momentum swinging in Armenia’s favor. This change of affairs may be welcome in Armenia, where anxiety over the threat of war and advanced Azerbaijani arms stockpiles have long been a fact of life. However, any sense of optimism may only be temporary ahead of Baku’s budgetary announcements, and Azerbaijan is usually never too far away from a blockbuster arms deal of its own.

Either way, even more weapons in a region already bristling with destructive implements and ever teetering on the brink of war is hardly welcome news for peace.