Leaving the ‘Post-Soviet’ Behind: Redefining Armenia’s Deterrence Strategy

After the collapse of the Soviet Union, newly independent Armenia became one of Russia’s closest allies, joining the Collective Security Treaty Organisation (CSTO) and aligning its economic integration with Moscow. Armenia’s alignment was based on the understanding that Russia would act as its security guarantor against hostile neighbours. The need for fundamental changes to Yerevan’s deterrence strategy became apparent with the shift in regional geopolitics following the 2020 Nagorno-Karabakh War and the global changes exacerbated by the Russo-Ukrainian War. Today, Armenia is actively pursuing a deterrence strategy that balances the realities of its geography with an evolving world order.

Leaving the Post-Soviet Security Architecture Behind 

After gaining independence from the Soviet Union, Armenia’s foreign and security policies closely aligned with Russia. However, the 2020 Nagorno-Karabakh War, Azerbaijani incursions into Armenian territory in 2021 and 2022, and the military takeover of Nagorno-Karabakh by Azerbaijan – coupled with the inaction of the Russian peacekeeping mission – exposed the risks associated with Armenia’s overdependence on Russia and the CSTO for its security. While Russia may have had its reasons to avoid fulfilling its security guarantees, such as its focus on Ukraine and increasing economic ties with Azerbaijan and Turkey, these events underscored the fact that the Russia-dominated security framework was no longer reliable and that Armenia’s military capabilities were insufficient.

Recognising that reliance on a single security partner poses substantial risks – a reality also felt by other European countries – Armenia has begun to intensify its engagement with a broader range of external powers and to strengthen its military capacity.

Towards a New Two-Pronged Deterrence Strategy

Armenia’s defence expenditure doubled between 2022 and 2024, with $1.7 billion earmarked for 2025. This marked increase follows the severe setbacks faced by the Armenian Army in 2020 and subsequent years, stemming from chronic underfunding and its inability to respond to Azerbaijan’s aggressions adequately. The risk of military escalation remains significant, even after the September 2023 military takeover of Nagorno-Karabakh, the coveted enclave that was once an autonomous oblast inside Soviet Azerbaijan with a heavy majority of Armenians, and despite the ongoing peace negotiations between Armenia and Azerbaijan. Notably, in both 2021 and 2022, Azerbaijan attacked Armenia amid similar negotiations. While Baku has now achieved its long-held ambition of ‘liberating Karabakh’, peace remains elusive, with Azerbaijan’s consistent threats of force and its state-driven agenda of reclaiming ‘Western Azerbaijan’ casting doubt on its willingness to foster peaceful relations.

To effectively bolster its armed forces as part of a two-pronged strategy to strengthen its deterrence, Armenia must develop a robust strategy for military enhancement, accelerate training and education, increase procurement and further develop its domestic defence sector. The government is already actively addressing these areas, supported by a diversified array of security partners.

In the past two years, Armenia has notably pivoted to new security alliances, opting for a EU civilian monitoring mission along its border with Azerbaijan instead of the CSTO's alternative. The Armenian Armed Forces have transitioned procurement and training activities towards new partners, made possible by substantial economic growth since 2022. Ironically, this growth has been partly driven by an influx of Russian immigrants and businesses – including prominent Western companies – fleeing Russia, along with a heightened demand for Armenian exports. These factors, coupled with Western sanctions on Moscow, have created additional income streams that have allowed Armenia to fund a security framework that no longer relies solely on Russian guarantees, although economic dependence on Russia has deepened at the same time.

Armenia’s bolstered defence budget has enabled Yerevan to secure contracts with India worth more than $1.5 billion in 2022–2023 and with France totalling at least $250 million in 2023–2024 (APRI Armenia estimate, based on open-source data on different contracts). Security partnerships with these countries include deploying French military instructors and a permanent French adviser within the Armenian Ministry of Defence, as well as training initiatives led by India. 

Concurrently, Armenia maintains positive relations with Iran, which – along with Georgia – shares one of Armenia’s two open borders (the others, with Turkey and Azerbaijan, remain closed). Relations with Iran are important for Armenia’s security, with Tehran openly supporting Armenia’s territorial integrity. Additionally, some military equipment from India reaches Armenia via Iran. 

Importantly, if the war in Ukraine concludes – a possibility that may increase with Donald Trump’s return to office – Russia may refocus its attention on the South Caucasus. Under such delicate circumstances, Yerevan must balance geographical and geopolitical realities to shape a viable deterrence strategy.

Armenia’s new deterrence strategy must be based on realistic diversification, which includes an array of partners including those mentioned above and Russia. While the Russian base in Gyumri remains, its presence provides – rightly or wrongly – a perceived protection against Turkish involvement in a renewed Armenia–Azerbaijan conflict. Without stronger guarantees from other security partners, a more radical departure from this emerging, diversified architecture can only occur if regional tensions decrease significantly, such as through a mutually acceptable peace agreement between Armenia and Azerbaijan or normalisation of relations with Turkey. However, given current political trends, this scenario appears unlikely in the short term.

Economic Dependencies: A Different Landscape

In the economic sphere, Armenia’s dependency on Russia is more pronounced. Russia has long-term concessions in Armenia’s strategic sectors, including railways, nuclear power, natural gas distribution and wheat. For Russia, since 2022, economic relations have become the preferred instrument for maintaining its influence in the region. While Armenia has complied with Western sanctions against Russia and banned exports in categorised products, its Eurasian Economic Union membership has been advantageous. In light of geopolitical shifts and the reality of its geography, Armenia requires a long-term economic reconfiguration to avoid overreliance on a single partner and underinvestment in its resources. This economic diversification will likely necessitate support from European and Arab partners. The Armenian government has thus promoted its ‘Crossroad for Peace’ initiative, advocating connectivity as an agenda for cooperation with all its partners, including Moscow, Ankara, Tbilisi, Tehran and Brussels.

Conclusion 

Armenia has successfully reduced its security dependency on Russia over the past two years by engaging a broader range of partners while simultaneously bolstering its national military capabilities. Nonetheless, regional imbalances persist, necessitating greater deterrence measures against Azerbaijan and continued efforts to lessen Armenia’s dependence on Russia. While the changes in Armenia’s security architecture are evident, substantial and equally delicate work based on realistic diversification is required in the economic domain.

© Anahide Pilibossian and Leonid Nersisyan, 2024, published by RUSI with permission of the authors

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