Paul Goble
Staunton, Aug. 24 – In the wake of the agreement on the text of a peace treaty, Azerbaijani President Ilham Aliiyev says that his country will increase defense spending because of continuing uncertainty in the region while Armenian Prime Minister Nikol Pashinyan says his country views the future with greater optimism and will not boost such spending.
Their divergent positions on defense spending, Armenian security analyst Aik Khalatyan says, reflect their differing views on the consequences of the peace treaty which is as yet to be signed. But economic conditions in the two countries are also driving this divergence (ng.ru/cis/2025-08-24/1_9322_armenia.html).
Azerbaijan is larger and wealthier thanks to its export of oil and gas, has a variety of challenges including from Iran and Russia, and thus is committed to spending more on defense in order to be in a position to defend itself against any challenges. Armenia, smaller and poorer, is in a very different position.
Yerevan boosted defense spending by 20 percent between 2021 and 2025, faces serious budgetary stringencies and hopes to get a peace dividend from its accord with Azerbaijan. As a result, senior Armenian officials have indicated that there won’t be any growth in defense spending in the coming year.
That could change, however, if Azerbaijan’s defense buildup alarms Armenians or if there is any change in the status of the Russian military base at Gyumri, something that is already a subject of controversy in Armenia (windowoneurasia2.blogspot.com/2025/08/armenians-demonstrate-to-demand-moscow.html).
At a minimum, Azerbaijan’s moves in this direction will likely prompt Armenia to seek additional help from Iran, Russia or Western countries. How these countries respond will likely play a key role in the direction Armenia takes in the future.
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