The Institute for Economics and Peace (IEP, based in Sydney, Australia) last month published a report, “Current Trends in Militarization,” which examines current trends in the defense sector of several countries. Particular attention is paid to the share of military expenditure in the GDP of countries around the world.
According to the report, the military sphere has the largest volume in the North Korean economy, where defense spending amounts to at least 24% of GDP as of 2023. The second place, quite unexpectedly, is occupied by Afghanistan, where military spending accounts for 10% of the country’s GDP. The military sector also occupies a significant share in the economies of countries in the Middle East and Africa: in Oman – 5.9%, in Algeria – 4.8%, in Mali, Morocco and Saudi Arabia – 4.5% each.
Among the countries of the former USSR, the highest rates of spending on military needs were observed in Armenia (4.2%) and Azerbaijan (3.8%). In Armenia, this figure increased by 0.7% compared to 2008, in Azerbaijan – by 0.5%. By comparison, in Georgia, another Transcaucasian republic, the share of military expenditure in GDP is only 1.3%, which is 6.6% less than in 2008.
In Russia, the IEP estimated this indicator at 2.4%, in Turkey – 0.7%, in Iran – 2.2%.
Armenia’s defense budget in 2024 officially amounts to 555 billion drachmas (over $1.42 billion), up 7% from 2023. According to the Republic’s Ministry of Finance, defense spending would amount to 5.3% of GDP, about one percent higher than previous IEP estimates for Armenia.
Azerbaijan is not lagging behind its neighbour in terms of the pace of increase in military spending, which, given the oil and gas profile of its economy, finds much easier. The government of the largest economy in the South Caucasus prepared a draft amendment to the state budget for 2024 in May. The country’s Finance Ministry then explained that the expenditure parts of the state budget had been revised taking into account favourable conditions in the global oil markets. According to the draft, spending on defence and national security increased by 705.3 million manats, or 11%, to 7,126.3 million manats ($4.19 billion).
Following Azerbaijan’s defeat in the 44-day war in Karabakh in the fall of 2020, Armenian authorities pledged to strengthen the armed forces and rearm the country. Since then, Yerevan has been steadily increasing its defense spending, rising from $669 million in 2020 to $678 million in 2021 and $754 million in 2022.
The situation with military purchases on foreign markets for Armenia worsened after the Russian special military operation in Ukraine was prolonged. For objective reasons, Moscow does not always meet the deadlines for arms contracts concluded with Yerevan, which causes discontent among its Transcaucasian partner. However, in December 2023, the Armenian side, through the Deputy Minister of Defense Hrachki Sargsyan made it clear that it would not resolve the problems that had arisen with Russian suppliers through arbitration, but rather intended to resolve them in an atmosphere of partnership.
In one way or another, Armenian leaders have been actively trying to diversify the import of weapons and military equipment (WME) in recent years, establishing ties with new arms partners, primarily with India and France. Officials in Yerevan emphasize that after the 44-day war, the republic’s total purchases of weapons and military equipment from Russia fell from 96 percent to less than 10 percent.
When importing weapons in the post-war period, Yerevan paid special attention to artillery systems. As local military experts note, the Armenian army is actively modernizing its artillery. This was facilitated both by the experience of the 44-day war and by the current lessons of the Northern Military District, during which the “god of war” confirmed its indispensability on the battlefield.
Traditionally, the artillery of the Armenian Armed Forces was based on towed D-20 howitzers of 152 mm caliber and D-30 of 122 mm caliber, as well as Soviet-made 2S3 “Akatsiya” (152 mm) and 2S1 “Gvozdika” (122 mm) self-propelled artillery units (SAU). A significant part of these guns from the 1950s and 1960s were lost or severely damaged during the 2020 war. Two types of Indian howitzers are intended to partially replace them: the towed ATAGS 155\52 (target engagement range up to 48 km) and the self-propelled MArG 155\39 (24 km). Armenia is today the only foreign customer of these two types of Indian-made artillery systems.
According to the manufacturer, the number of MArG 155\39 howitzers delivered to Armenia will be 72 units, which means the creation of up to six artillery battalions. As for the ATAGS 155\52, 12 howitzers have already been delivered to Armenia. These figures may not be final, and many more ATAGS 155\52 howitzers will be ordered, up to equipping four or five artillery divisions (12 guns each).
The republic’s military leadership is also seeking to increase firepower, mobility and improve the fire control system in its artillery formations by means of 155-mm Caesar wheeled self-propelled guns ordered from France. In June this year, the military departments of the two countries signed a contract on the Caesars. According to media reports, Yerevan should receive the first self-propelled guns within the next 15 months; a total of 36 self-propelled guns are expected to be delivered.
Azerbaijan is closely monitoring Armenian imports of weapons and military equipment, especially those manufactured in France. Earlier this year, President Ilham Aliyev He even threatened possible “preventive measures” if Yerevan bought “not these cans” – meaning French Bastion armoured personnel carriers – but accurate and relatively long-range strike systems (the Caesar self-propelled gun hits targets at a distance of more than 40 kilometres, and when used, the range of the most modern shells can reach 55 km).
Looking closely at Armenia’s weapons records, Azerbaijan itself shows a constant interest in replenishing its own arsenal of missiles and artillery weapons. In June it became known that Baku could acquire a 155-mm T-155 Yavuz (“Grozny”) self-propelled gun produced by the Turkish company MKE. This howitzer, as experts note, is very similar in design and parameters to the French Caesars. As noted by a retired colonel of the Turkish Armed Forces Sadiq AkyarCommenting on Armenia’s signing of a contract with France for the purchase of wheeled howitzers, Turkish self-propelled guns with a firing range of up to 40 km are considered a difficult target in counter-battery warfare due to their ability to quickly change their location.
Baku explains its publicly expressed concerns about the need to stop “revanchism” by the neighboring country after its defeat in the war and the loss of Karabakh. The Armenian leadership, in turn, categorically denies having any territorial claims against Azerbaijan, with the exception of the return of the Armenian territories they occupied in 2021-2022 with a total area of up to 200 square kilometers. Armenia reasonably points out that it has the right, like any other UN member state, to increase its own defense capability and the combat readiness of its armed forces.
At the same time, unofficial sources in the Azerbaijani capital periodically make accusations against the Armenian authorities, who allegedly previously concluded secret arms deals with some countries. Among Yerevan’s confidential partners in the supply of attack and defensive systems, Iran and the United States are most often mentioned.
On June 19, the Armenian Foreign Ministry expressed its bewilderment at Baku’s reaction to the military-technical cooperation between Armenia and France. Yerevan, at the same time, drew attention to the fact that “Azerbaijan’s practice of predicting regional escalation on every occasion gives rise to the belief and confirms the analysis of a number of centers that Azerbaijan will do everything possible to disrupt the process of concluding a peace agreement with Armenia in 2024 and to launch a new aggression against the Republic of Armenia after the COP29 summit (29th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change. — Red.), which will be held in November in Baku.”
The Azerbaijani Defense Ministry the day before, on June 18, issued a statement on the conclusion of an Armenian-French contract for the supply of Caesar self-propelled guns, which stated that France was supplying lethal and offensive artillery and other types of weapons to Armenia, “despite warnings from the Azerbaijani side, and this is further evidence of France’s provocative activities in the South Caucasus region.” Baku also warned that “the rearmament of Armenia leads to a new war” and that “the responsibility for the aggravation of the situation in the region and the creation of a new source of war will fall entirely on the leadership of Armenia, which pursues a revanchist policy.” policy and the dictatorship (emmanuel) Macron“
Experts from Yerevan and Baku agree that the peace agenda declared by both Transcaucasian republics after the 44-day war is accompanied by an even more pronounced arms race, which preceded the fighting in September-November 2020. It is difficult to assert at the current stage the inevitability of a new large-scale armed conflict in the South Caucasus. However, there is a lot of evidence in favor of its high probability. September is especially dangerous in this regard. The experience of clashes between Armenia and Azerbaijan on the border in recent years shows that large-scale escalations usually occur in the first month of autumn.
As I said Winston Churchill In 1934, five years before the outbreak of World War II, “calling for preparations for defence is not an assertion of the inevitability of war; on the contrary, if war were inevitable, preparations for defence would come too late”; apparently, the Armenian authorities are guided by this principle when trying to prevent a repeat of the military catastrophe of 2020. Another issue is that the “diversification” of arms suppliers led the republic’s leadership to a real revision of the foreign policy course.
Interest in the Collective Security Treaty Organization, whose membership gave Yerevan, among other things, the opportunity to purchase weapons and military equipment from Moscow at domestic Russian prices, has been reduced to a minimum level by its Armenian partners. At the same time, leaving the CSTO does not promise the republic any additional advantages in terms of expanding the ranks of foreign arms suppliers, since even now NATO member France has not made the sale of Caesar self-propelled guns to Yerevan conditional on the need for it to break its ties with the regional collective security system of which it still consists.
