The increase in the military budget is connected to economic growth and credit expected from the Russian Federation to buy military equipment
The Armenian government will allocate 647 million dollars to defence in the 2019 budget.
This is more than 25 per cent higher than the defence budget of 2018. This is the second year in a row that the defence budget has increased, with the 2018 budget amounting to 518 million dollars, or 17 per cent larger than in 2017.
What is the increase in military spending connected to?
The increase in the defence budget can be partially attributed to the growth of the Armenian economy. In 2018, the country’s GDP grew by 6.5 per cent, and 5 per cent growth is forecast for 2018. In 2019, 4.5 per cent of the GDP will be spent on defence. In developed countries such as the US, the military budget is no more than 2 per cent of the GDP.
The decision to increase the defence expenditure is connected to a continuing arms race between Armenia and Azerbaijan. The situation on the line of contact is tense. While action does not reach levels of outright warfare, the ceasefire agreement is consistently violated.
The sharp increase in the defence budget of Armenia may also be connected to credit expected from the Russian Federation which would be extended to Armenia to buy new weaponry. Current information states that negotiations between Yerevan and Moscow concern a 100 million dollar credit line. Should the two sides come to an agreement, this will be the third line of credit extended by the Russian Federation to Armenia to buy weapons. Armenia has already received 300 million USD in credit from Russia.
What weaponry does Armenia buy from Russia?
Armenia buys weaponry from Russia to keep its arsenal up-to-date. In particular, Yerevan has already received Iskander tactical ballistic missiles and Smerch multiple rocket launchers.
Local media reports that Armenia may buy SU-30SM fighter aircraft. It is possible that the increase in the defence budget may also be linked to an attempt to strengthen the country’s air force.
Is it possible to reduce tension on the line of contact?
Several days ago, Armenian PM Nikol Pashinyan and Azerbaijani President Ilham Aliyev agreed to decrease tension on the line of contact and to take measures to prevent violations of the ceasefire agreement.
Whether or not both sides will abide by this undertaking has yet to be seen.