Armenia Plans Significant Increase in Defense Spending Due to Regional Tensions

The Armenian government is preparing to increase its defense budget by 20% next year, bringing total defense spending to nearly 665 billion drams, which is about $1.7 billion. This increase is part of Armenia's draft state budget that was approved by the government on Thursday. The planned defense budget will account for 6% of the country's expected gross domestic product (GDP).

During a cabinet meeting in Yerevan, Finance Minister Vahe Hovannisyan emphasized the importance of the increased defense spending to enhance Armenia’s ability to handle potential threats to its national security. He stated that the rise in funding is necessary to improve “the country’s resilience to possible risks.

The Armenian government has not provided a detailed breakdown of how the funds will be allocated within the Defense Ministry. As a result, it remains unclear how much of the defense budget will go towards purchasing new weapons and military equipment.

The decision to boost the defense budget follows a pattern of rising military expenditures in Armenia over recent years. Officials have often cited Azerbaijan’s ongoing military buildup as a key factor for this increase, especially in light of the conflict in Nagorno-Karabakh that erupted in 2020. Following that war, tensions between Armenia and Azerbaijan have remained high, prompting Armenia to strenghten its military capabilities.

Azerbaijani President Ilham Aliyev has reiterated his commitment to expanding and strengthening his country's armed forces. Earlier this week, Aliyev threatened Armenia with potential military action. His government has plans to allocate over $3.9 billion for defense and national security in the upcoming year. This figure shows a significant disparity between the defense budgets of the two nations, with Azerbaijan investing heavily in its military.

Despite this spending gap, Azerbaijan has consistently raised concerns about the new military equipment that Armenia has acquired. Earlier this month, a top advisor to President Aliyev called for "restrictions" on the size of the Armenian army and its military arsenal. 

For many years, Russia was the primary supplier of weapons and military equipment to Armenia. However, due to growing tensions between Armenia and Russia, the South Caucasus nation has sought to diversify its sources of military supplies. In the past two years, Armenia has begun to look towards other countries, with India and France emerging as significant suppliers of arms.

This shift in military procurement shows Armenia’s need to adapt to a changing geopolitical landscape, particularly as it navigates its relationship with its traditional ally, Russia.v