PanARMENIAN.Net

Stratfor: expectations of renewed fight between
Armenia and Azerbaijan rising
04.07.2007 15:21 GMT+04:00

/PanARMENIAN.Net/ Expectations of a renewed fight
between Armenia and Azerbaijan over the Nagorno
Karabakh region are rising, since Azerbaijan has
started using the huge windfall of cash from its new
pipeline to quintuple its defense budget. This time,
the conflict could serve as a spark for the larger
struggle between the United States and Russia, said
the experts of Stratfor intelligence center.

The conflict between Armenia and its neighbor
Azerbaijan over the disputed Nagorno Karabakh region
has crescendoed in recent months, since Azerbaijan has
started seeing the enormous cash windfall from its new
pipeline and Armenia has scrambled to secure a
protective Russian presence within its borders. But
the conflict between Azerbaijan and Armenia is about
more than the two states and their disputed territory;
the United States and Russia are using that conflict
as a foothold to strengthen their positions in the
region as they try to expel each other, the experts
say.

Armenia and Azerbaijan have long been deadlocked over
the small sliver of land between the two states,
though the conflict has been relatively dormant since
the 1994 cease-fire. Technically, Nagorno-Karabakh is
within Azeri territory, though it is controlled by
Armenia. International pressure, lack of support from
every nation but Russia and Iran, and fear of Azeri
retaliation have kept Armenia from annexing the
territory. Azerbaijan has been held back from retaking
the land due to international pressure and the Azeri
military’s relative weakness. Russia has maintained a
shaky and controversial balance by supporting both
sides.

However, Azerbaijan began to see the possibility of
change in 2006 with the completion of its
Baku-Tbilisi-Ceyhan (BTC) oil pipeline, which Western
companies developed to feed oil to Europe. Azerbaijan
not only became increasingly pro-Western, but it also
saw tremendous new income. Azerbaijan’s president has
already decided how he wants to spend his country’s
newfound wealth: on defense. In 2004, Azerbaijan’s
defense spending was approximately $175 million, but
by the beginning of 2008, the country will begin
spending at least $1 billion on defense. Armenia
recently increased its defense spending by 20 percent
— from $125 million to $150 million, which obviously
pales in comparison to Azerbaijan’s increase.
Azerbaijan’s spending will go mostly toward air
offensive capabilities, with Armenia’s going to air
defense, though both now are looking to expand their
ground capabilities.

Armenia simply lacks the influx of energy income that
Azerbaijan has. The enormous Armenian diaspora inside
the United States has ensured that Armenia is one of
the largest recipients of U.S. foreign aid, but
Armenia’s neighbors — Azerbaijan, Georgia and Turkey
— have shunned it economically and politically,
leaving it with little opportunity for trade or
expansion. The one neighbor Armenia has an open
relationship with is Iran. In March, Iran and Armenia
opened the Iran-Armenia natural gas pipeline; Iran
ships natural gas north and Armenia converts the
natural gas to electricity to export back south to
Iran. The pipeline itself is owned by Russia, as is
much of Armenia’s energy infrastructure, the experts
note, reports.