Georgia and Azerbaijan have the fastest growing defense budgets in the world. Their smaller neighbor Armenia lacks the cash to match them but devotes a large amount of its budget to the military and has a strong military alliance with Moscow. This arms build-up is happening in a region still blighted by three unresolved conflicts, over Abkhazia and South Ossetia (the breakaway regions of Georgia) and Nagorno-Karabakh, the disputed territory that is now de facto part of Armenia despite being internationally regarded as part of Azerbaijan.
All three disputes are potentially dangerous but the festering Armenian-Azerbaijani dispute is arguably Eurasia’s most dangerous flashpoint. In its unresolved state, it literally cuts the South Caucasus in two.
The new military spending is aimed at shifting the status quo of these frozen conflicts. In June, Georgia virtually doubled its defense budget overnight to a new level of $575 million. The Georgian government justifies this, saying it is building a professional army from scratch in order to qualify for NATO membership. It is also sending one of the largest international military contingents—around 2000 soldiers—to Iraq. But the purchase of tanks and planes and a lack of transparency about spending are naturally alarming the Abkhaz and Ossetian minorities.
Azerbaijani president Ilham Aliev recently announced that defense spending in his country—now nearly one billion dollars annually—had increased eight-fold in the last four years. This has been made possible by vast oil revenues from the new Baku-Tbilisi-Ceyhan pipeline. The president and senior figures around him are already making it clear that they want to use this strength to force the Armenians to surrender Nagorno-Karabakh.
Armenia lags behind but still has a defense budget of $271 million for 2007, or around 3.5 percent of GDP. The victor in the 1991–4 conflict with Azerbaijan over Nagorno-Karabakh, Armenia is still a very militarized society in which the army plays a leading role and its prime minister and president-in-waiting, Serzh Sarkisian, is former defense minister.
This arms race is diverting money from social spending in societies that are still extremely impoverished and have high unemployment. It also threatens to wreck the Conventional Forces in Europe (CFE) treaty, which is already on its last legs after Russia suspended its involvement in July. Azerbaijan is exceeding its CFE treaty quotas and although Armenia keeps to its limits within its borders, Yerevan is accused of breaking them because of the amount of weaponry it maintains unmonitored in Nagorno-Karabakh.
NATO in the Caucasus
At the same time, over the brow of the Caucasian highlands is riding a new player, whose impact no one is quite certain of—NATO. All three countries have Individual Partnership Action Plans with NATO, and Georgia, strongly encouraged by the United States, is moving toward a Membership Action Plan next spring that will put it in the queue for eventual membership. Armenia and Azerbaijan are ambiguous about NATO and there is little prospect of them joining the alliance in the medium-term. Armenia is closely allied to Russia and a member of the CIS Collective Security Pact, while also pursuing a foreign policy that seeks to make as many friends as possible, including both Iran and the United States. Partnership with NATO enables it to professionalize its army and build a useful set of new relationships. Rather than go much further down the NATO path, Azerbaijan, growing wealthier and more confident by the day, is also more likely to prefer a self-sufficient foreign policy that does not offend Russia and bind it to tiresome reform commitments.
Georgia, which is both poorer and more pro-Western, is a different matter. The issue of its future in NATO is already contested within the alliance. The optimistic view is that NATO will help transform Georgia’s institutions and make it more democratically accountable. It will provide a framework in which the Abkhaz and Ossetian disputes can be settled peacefully. The optimists also say that discouraging Georgia from joining NATO means giving Russia a veto and virtually inviting Moscow to destabilize the unresolved conflicts in order to prove its case.
The pessimistic view is that NATO membership will reignite the conflicts in Abkhazia and South Ossetia. This being the Caucasus, scene of so many tragedies over the last two decades, the worst scenarios need to be anticipated. Devoting a lot more international attention to this overlooked region would be a good start.
Thomas de Waal is Caucasus editor at the Institute for War and Peace Reporting in London and author of Black Garden: Armenia and Azerbaijan Through Peace and War.
This article is presented as an excerpt from a longer essay published in the Global Edition of Internationale Politik, Germany’s foremost foreign policy journal and a collaboration partner of the Atlantic Community.
Arms Race in the Caucasus, IP Global Edition Fall 2007
Related Materials from the Atlantic Community:
- Elizabeth Pond on Kosovo: It’s Not as Bad as You Think
- Egon Bahr on Europe Must Say No to Globalizing NATO
- Robert Kagan on The World Divided Between Autocracy and Democracy
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