Military spending of Armenia and Azerbaijan – in numbers

Military spending of Armenia and Azerbaijan

Armenia is actively discussing the country’s military spending and compares it with Azerbaijan’s military budget. The FIP.am “Fact investigation platform” reports that in 2020, Armenia was the second most militarized country in the world and the first in the South Caucasus. In 2021, Armenia became the fifth, and Azerbaijan – the third. However, the platform notes that it is necessary to take into account a significant disproportion between the “absolute values of the numbers”, that is, the real costs.

For example, 17% of the budget allocated by Armenia on defence needs in 2020 is a much more modest amount than the 13% spent by Azerbaijan due to the difference between the budgets of the countries.

FIP.am pays special attention to facts and figures since “Armenia’s military spending is often a subject of numerous manipulations and speculations”.

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Both Armenia and Azerbaijan allocate relatively significant portions of the state budget for military and defense expenditures, being among the most militarized countries in the world. According to the Global Militarization Index, in 2020 Armenia was the second most militarized state in the world and the first in the South Caucasus. According to the indicators of 2021, Armenia ranked fifth in the world, while Azerbaijan ranked third, following Israel and Oman.

The main source of information on countries’ military expenditures is the relevant allocations from the state budget. The main source of information on countries’ military expenditures is the relevant allocations from the state budget. In the case of Armenia, these means are allocated to the Ministry of Defense. Azerbaijan allocates funds for military expenditures to the Ministry of Defense, the State Border Guard Service, the State Security Service and the Foreign Intelligence Service.

The main sources of information about arms sales and their prices are specialized organizations, in particular the Stockholm International Peace Research Institute (SIPRI). However, the data are not complete․

Many military transactions and their values can be kept secret for a variety of reasons.

After the second Nagorno Karabakh war, Azerbaijan increased the country’s military budget by about 20%, from $ 2․2 billion to $ 2.6 billion annually for 2021 and 2022.

Armenia significantly increased its military spending after the 2018 revolution, reaching about 5% of GDP, surpassing Azerbaijan in terms of the ratio.

In 2021, Armenia allocated about $ 600 million from the state budget to the Ministry of Defense, and in 2022, it increased military spending by more than 10%, reaching $ 750 million.

In 2021, Armenia’s military spending amounted to 4․4% of GDP, and that of Azerbaijan amounted to 5․3%.

After the first Nagorno Karabakh war, since 1995, Armenia has allocated about $ 9 billion for military and defense expenditures. Azerbaijan’s military expenditures for the same period are about 5 times higher.

Despite the significant disproportion in the absolute values of the numbers, in 2020 Armenia allocated 17% of the budget for military expenditures, while Azerbaijan’s military spending was 13%.

Although the two countries are leaders in the world in terms of relative military spending, Azerbaijan’s rapid economic growth has greatly influenced its military procurement policy. Thus, Azerbaijan significantly increased its military spending in 2006, after the launch of the famous Baku-Tbilisi-Ceyhan oil pipeline, as well as in the years before the April 2016 war. It is also noteworthy that in 2020, just before the war, Azerbaijan again increased military spending by about 17%, while Armenia reduced it by 2.6%.

As we have already mentioned, the only official source on Armenia’s military expenditures is the state budget, broken down into allocations in the main directions. The growth of military spending in Armenia was mainly comparable to the economic growth, although sometimes it also exceeded the GDP growth rates.

Thus, during the last 10 years (2012-2021), the military budget of Armenia has doubled, increasing from AMD 155 billion to about AMD 312 billion. During the same period, the GDP increased from AMD 4.266 trillion to AMD 6.983 trillion, increasing by 1.6 times. Approximately AMD 345 billion were allocated to the Ministry of Defense from the 2022 budget.

Allocations to the Ministry of Defense in the 2018 budget increased significantly (from AMD 209 billion to 247 billion), of which AMD 238 billion were envisaged for meeting military needs.

It can be seen from the infographic that the growth of Armenia’s military spending mainly coincides with the general growth, and, as a rule, the allocations fluctuated in the range of 3-4% of GDP. It is noteworthy that Armenia has reduced allocations to the Ministry of Defense after the four-day war in 2016 and the 44-day war in 2020.

The data on the state budget and military expenditures are incomplete for the period of the tenure of the first president Levon Ter-Petrosyan, when Armenia was at war with Azerbaijan and was in the crisis of the post-Soviet period. Nevertheless, during these years Armenia had acquired a large number of weapons from Russia, which had a decisive impact on the course of the war.

According to the state budget information, during the rule of the second president of the republic Robert Kocharyan (1998-2008), a total of AMD 639 billion was allocated to the Ministry of Defense.

During the decade of Serzh Sargsyan’s rule (including 2018), Armenia allocated AMD 1 trillion 828 billion to the Ministry of Defense, and in the four years following the Velvet Revolution, during Nikol Pashinyan’s rule (2019, 2020, 2021 and 2022), AMD 1 trillion 272 billion were allocated.

However, it should be noted again that the country’s GDP has increased significantly compared to the 2000s, which is reflected in the military spending indicators.

The main, if not the only, major partner in arms trade with Armenia is Russia. Armenia receives more than 95% of its weapons from Russia.

Years ago the situation was the same in the case of Azerbaijan, but in the last decade the country has diversified its arms supply, procuring a huge amount of weapons and ammunition from Israel, Turkey, Ukraine and other countries.

According to SIPRI, Russia accounted for only 31% of Azerbaijan’s military procurements in 2015-2019, compared to 80% in 2009-2013. During the recent CSTO conference on May 16, Armenian Prime Minister Nikol Pashinyan addressed the issue of selling arms to Azerbaijan by Russia and other CSTO member states.

In response to such criticism in the past, Russian President Vladimir Putin described Russia-Azerbaijan military cooperation as “just business.”

During the 2020 war, the Fact Investigation Platform referred to the main suppliers of weapons to Azerbaijan and the main types of weapons acquired.

Among the countries supplying arms or other military equipment to Azerbaijan are the well-known suppliers, as well as other countries of the European Union and Europe, which have sold both arms and technology to Azerbaijan in different years.

Since then, Azerbaijan has not not made new statements about the acquisition of new weapons.

However, Armenia did announce earlier this year about the procurement of new transport helicopters from Russia, the transaction value of which is still unknown. The last big deal was made by Armenia in 2019, when it acquired four SU-30 fighter jets worth about $ 120 million.

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