The Myth about Doubling Azerbaijan’s Defense Budget

Azerbaijan – A military parade in Baku, 26Jun2008

News agencies around the world carried Azerbaijan’s Finance Minister Samir Sharifov’s words about doubling military spending next year, without questioning the validity of those claims. 

I was especially disappointed to find sources like Reuters and AFP do this kind of dumb repetitions. Luckily, truth started to surface.

Here’s a comparative table, showing defense spending in Armenia and Azerbaijan in millions of dollars as posted by journalist Mark Grigorian on his blog. I don’t know where he took the figures from, but looks right from what I was able to check.

Year Azerbaijan Armenia
2004 175 81
2005 300 136
2006 700 166
2007 1300 273
2008 2000 370
2009 2460 495.3
2010 2150 560
2011 3100

“There’s no point in comparing these figures, of course,” Mark Grigorian has written, “Because arms are sold at different prices to the two parties (Armenia, for example, is a member of CSTO and buys Russian arms at a discount rate). But the amounts are impressive.”

I’ll add to this, that Armenia’s Defense spending for the next year is going to be about $400 mln.

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7 thoughts on “The Myth about Doubling Azerbaijan’s Defense Budget

  1. These numbers cannot be reflective of the real balance of power not only because of the prices paid and resources spent but also because of the manipulation of the exchange rates and also fuzzy money being used. Add to that misappropriation of funds and the picture is not as pretty.

    I am more concerned about the amount and type of munitions and human resources involved.

      1. It’s reflective of intentions and it’s also a psy-op activity to demoralize us. What they forget is that they have always had an advantage in terms of resources and still lost.

  2. who cares about what and who they are buying or how much they spend
    we do know is that azerbaijan is spending more than us on their defenses
    their army is not only larger than ours, but more powerful in terms of financial, physical/infrastructure, and man power. only reason they have not resumed WAR with us is because of the obvious….RUSSIA. if azeris wanted to wipe us out, they can easily do it, although our defenses are stronger now 10 fold than before and we can hold them back for a temporary, but we still don’t have the financial and infrastructure to completely push them back. russia is key player in our region, putin pulls the strings for all 3 states in south Caucasus as well as other former soviet states. if azeris was to disobey russia and move in on us now, russia would immediately intervene and slap our enemy as they did to georgia in summer 2008 (s. ossetia)

    1. to Antranik– Actually, Azeri army might be bigger and have more weapons, but when it comes to maintaining combat operations, they’re worse even than georgia. They can waste all the money they want, it wont change the fact their army isn’t capable of maintaing a successful large scale invasion.

      1. to ara – why do you think so, it is really too much looks as official propoganda – they cannot. how we can prove, that? nobody here gets normal information on issue. i agree with Andranik – Russia is only power, that preserve us from big problem.

  3. Arms Race has historically been and still is, primarily, a function of psychological and media warfare. Being a founder of khosq.com and also active in various web projects and often monitoring Azerbaijani web activity, I can tell that sometimes it seems that there is a whole department of “web-info warfare” operating within the Azerbaijani Ministry of Defence.

    Frankly, I’m a quite disgusted with the way that Azerbaijani authorities use these tactics: propaganda and psychological warfare, coupled with racist rhetoric.

    Over the years I have been keeping a spreadsheet log of Azeri and Armenian military spending – amounts and the nature of spending (I’m a political scientist, so I keep track of these kinds of data). I can tell that Mark Grigorian’s table is more-or-less correct (at least these are the officially declared amounts), but then again as nazarian says, you’ll need to take into account exchange rate manipulations, fuzzy Azeri deals, which initially make great media headlines and later don’t materialise, as well as the fact that Armenia gets its arms at discount prices or for free, etc. Just as a small example, an estimated $700,000,000 in Azerbaijan’s 2011 military budget is earmarked for the purchase of two S-300 systems, which are likely to be used for protection of pipelines and oil rigs against air-strikes, while Armenia already has these. For more precise officially declared indicators have a look at http://data.worldbank.org/indicator/MS.MIL.XPND.CN , but, again, look at that data critically.

    To get a better picture of the military balance and combat effectiveness between the 3 countries (Az, Arm, NKR) one needs to read research papers produced by strategic analysts in Stockholm, London, Oslo etc, most of which still attribute a higher level of battle readiness and defence capabilities to the Armenian side. I don’t think that Azerbaijani attack is likely even if their budget has tipped over the $3bn mark.

    International Crisis Group paper called “Nagorno-Karabakh: Risking War” in 2007 suggested that Azeri attack may be likely in 2012 – the year when their oil revenues will start to decline. If it happens, it won’t be because by then Azerbaijan would have achieved an absolute battlefield and firepower superiority, but because the dwindling oil revenues (given its structural significance for Azerbaijani economy) are likely to result in a set of serious social and economic backlashes and political upheavals, while waging war may be the only plausible way left to keep Aliyev’s regime in place. By comparison, even now, after several consecutive years of military spending Azerbaijan still does not possess the kind of firepower that it had in 1992 when it inherited arms of Soviet 4th Army along with an equivalent of 7,000 trainloads of munitions, thus making it proportionally the most militarised country on earth.

    It is also worth noting the different styles in which Armenian and Azeri leadership prefer to conduct their policies (noted in one of the cables in WikiLeaks). Azerbaijan likes to show off its armaments in its propaganda warfare and make headlines with its spending figures. Armenia, on the other hand, prefers to do things a lot more quietly and in secret. Some analysts even estimate the real worth of Armenian military spending to be over $1bn mark. I wouldn’t be surprised if Iskander missile systems are already secretly stored somewhere on Armenian soil.

    What is quite interesting, however, is the sudden change in the size of the portion of overall budget that is dedicated to military spending – from 10.7% in 2010 to 19.7%-20.1% in 2011. What does it tell us? What’s happening? Azeri oil production is said to plateau between 2010 and 2012, after which it is expected to rapidly decline. But that plateau is at the level 1.2mln bbl/day, which Azerbaijan was expected to reach in 2009, and still has not reached that! By the end of 2010 Azerbaijan’s annual oil production is expected to total 50mln tons (an average of 1mln bbl/day) – a far cry from 57 or 59 million tons that Azeri authorities have been promising. And now we see that the percentage of Azeri military budget is nearly doubling, just to facilitate Aliev’s caprice 3 years ago of wanting to see Azeri military budget to be more than Armenian whole state budget and to keep it that way; just to show a continuation in a steady growth in its military budget. Could it be that Azerbaijan has reached its production plateau already and is now making its final bets hoping for a final push in NKR process? These could well be the beginnings of the last stages of their dangerous bluff, which given the socio-economic backlash resulting from soon-to-come dwindling oil revenues, could spill over into a proxy war that could seriously destabilise Azeri statehood at its core.

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