Azerbaijan slashes defence spending as oil revenues fall

By bne IntelliNews October 6, 2016

Azerbaijan's draft budget for 2017 sees defence spending lowered by 27.5% y/y to AZN1.62bn (€890mn), Eurasianet reported on October 3.

Azerbaijan used to make headlines for its large military spending, having acquired some €4bn worth of armament from Russia in recent years. The country is currently at war with neighbouring Armenia over the breakaway region of Nagorno-Karabakh and seven surrounding territories, and Yerevan has watched worriedly as Baku's military capabilities expanded.

However, a windfall in oil and gas revenues since 2014 has forced Baku to cut its spending. Seeing how the Azerbaijani manat lost 50% of its value in two consecutive devaluations in 2015, the spending declined by more than 27.5% in euro terms.

Defence spending used to be disguised under the term “special projects and activities” in the state budget, although the term was scrapped in 2015, Eurasianet reports. Baku has allocated AZN2.9bn to internal security and defence for next year.

Overall, Baku has cut its spending by 10% y/y to AZN18.9bn. 

Related Articles

Opposition cry “farce” and “mockery” while announcing boycott of Azerbaijan’s snap election

Several opposition parties in Azerbaijan have announced that they will boycott the early presidential election scheduled for April, according to local media reports. On February 5, President ... more

Azerbaijan's IBA sees assets fall 29% y/y in 2017 after debt restructuring

The assets of the International Bank of Azerbaijan (IBA), the largest lender in the country, contracted by 28.9% y/y to AZN8.7bn ($5.1bn) in 2017, the state-controlled bank reported on January 10. ... ... more

Nakhchivanis meet Iranians to discuss widening energy trade

The speaker of parliament of the disputed Nakhchivan Autonomous Republic—a landlocked exclave of Azerbaijan—has met with Iran’s economy minister to voice readiness for the securing of more ... more

Dismiss