Armenia/Russia politics: Quick View – Armenia to buy more Russian weapons with yet another loan

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Economist Intelligence Unit
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International Relations, Politics, News Analysis, Forecast
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Russia, Armenia


On November 16th the Armenian government approved a new US$100m loan from Russia to finance the purchase of Russian-made weapons for Armenia's armed forces.


Under a Russian-Armenian draft agreement formally approved and made public by the government, the loan-carrying a 3% interest rate-will be repayable in 20 years. The announcement comes two years after the Russian government provided Armenia with a US$200m loan for the same purpose. The Armenian defence minister, Vigen Sargsyan, announced on October 2nd that arms supplies stemming from that loan would be completed by the end of this year. According to other Armenian officials, 18 supply contracts were signed with Russian defence firms as part of the 2015 allocation, covering a long list of items.

At a September 2016 parade in Armenia's capital, Yerevan, the Armenian military demonstrated at least two of these items: Smerch multiple-launch rocket systems and Infauna electronic warfare vehicles. The army has also reportedly used the Russian loan to acquire TOS-1A thermobaric rocket systems and Kornet anti-tank systems, as well as shoulder-fired Igla and Verba surface-to-air rockets. According to the UN Register of Conventional Arms, Russia delivered 300 such air-defence weapons to Armenia in 2016. In what seems a related development, a Russian manufacturer of military communication equipment, RTI Systems Concern, has reported that it has started the delivery of a "large batch" of army radios to Armenia.

The latest Russian loan underscores Armenia's close military ties with Russia, which have enabled it to receive large quantities of Russian weapons (including sophisticated Iskander missiles) for free. The new loan was approved after the Armenian parliament ratified a Russian-Armenian agreement on a joint military force of the two states stationed in Armenia.

Russian funding for more arms supplies to Armenia may also be a response to strong Armenian criticism of large-scale sales of offensive Russian weapons to Azerbaijan in recent years. Many in Armenia blame the Russian-Azerbaijani defence contracts worth at least US$4bn for the April 2016 fighting in Nagorny Karabakh that nearly escalated into an all-out Armenian-Azerbaijani war. Like the US and the EU, Russia is clearly trying to avoid another flare-up of violence in the conflict zone. It may have calculated that continued military aid to Armenia will reduce the risk of renewed heavy fighting there.

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