EVN Security Report: February 2024

The Road From Security Diversification to Procurement Diversification

The relationship between Armenia’s security and foreign policy diversification and the relative enhancement of its hard power capabilities has now become exceedingly evident, as the previous reliance on Russia, and Russia’s refusal or inability to deliver armaments sufficient for Armenia to be able to maintain parity with Azerbaijan, has become the dominant causal variable in accounting for Armenia’s incapacity for deterrence. In a region where hard power capabilities supersede all other factors shaping inter-state relations, the state with the least hard power remains the state with the least capabilities, and by extension, the most vulnerable. In this context, Russia ensured Armenia’s vulnerability vis-a-vis Azerbaijan by simply tying-up Armenia’s hands: as a Russian ally, Armenia was not able to access hard power capabilities from the Western-dominated international arms market, and at the same time, Russia would not provide to Armenia the hard power capabilities it needs to deter Baku. Moscow’s well-designed catch-22 completely ruptured Armenia’s already-weak security architecture, while Azerbaijan capitalized on Russia’s handicapping of Armenia by aggressively consolidating the asymmetry. 

The diremption from Russia’s dependency structure, and the institutionalized decoupling from Moscow’s security architecture, allowed Armenia to diversify its access to arms, and more so, to co-align its security needs with capable Western partners. Thus, for the first time in 30 years, Armenia now has access to Western armament, permission to acquire Western weapons systems, and more specifically, to engage in the procurement game that the Western-dominated international arms market offers. An important part of the arms procurement strategy, however, and considering the fact that Armenia is a new player in this domain, is understanding the complex relationship between procurement, the domestic and institutional procurement and decision-making process, and the large body of problems associated with military procurement. This month’s security briefing will introduce the research on international arms trade and procurement procedures, while offering empirically-based recommendations on how Armenia should navigate this new arena. 

Navigating the Process of Defense Procurement

As a general definition, defense procurement is the process through which authorities in the field of defense acquire the various goods, systems, hardware, technology and services they need in order to perform their duties. Large body of research demonstrates that military procurement processes, in both developing and developed countries, are susceptible to waste, corruption, inefficacy, severe delays, and cost overruns. Borrowing from the literature on best practices and principles for processes of defense procurement, and noting Armenia’s active and growing engagement in defense procurement from the international arms market, Yerevan’s strategic procurement policies must account for the general problems that persist in this arena, and thus formulate proactive solutions. 

One of the major structural and systemic reasons for the difficulties and problems inherent to arms procurement is the concept of “national security exception,” a modality of thinking and policy implementation that permits military and security issues to be treated with special privileges. The concept of national security is used extensively by most governments as a blanket justification for avoiding scrutiny for security issues, far beyond the justifiable needs for confidentiality. In the case of Armenia, and pretty much the entire post-Soviet space, this institutional culture and bureaucratic modality of thinking still dominates, albeit to different degrees. The problem with blanket secrecy, of course, is that it allows for underperformance, instances of corruption, and system-wide inadequacy or negligence to be hidden from the ability of civil society, parliament, and the public in general to hold government accountable. In this context, the perception that security is a forbidden area of debate or transparency leads to the concentration of high policy-making squarely in the hands of the executive. This, both systemically and politically, impedes proper scrutiny of the security sector from the other branches of government and the rest of society.  

Another characteristic of the “national security exception” is the extent to which the military, as an institution, is specifically privileged and deemed partially immune from the general shortcomings that if other institutions produced would otherwise be robustly scrutinized. As an institution, even in developed democracies, the military has a penchant for enjoying considerable public leniency for underperformance, but more than that, it also enjoys a certain level of autonomy to pursue its own policies, exercising political influence on issues of spending and procurement. This overarching phenomena produces two general outcomes: anti-corruption bodies, for example, become constrained or do not have the adequate institutional capital to sufficiently scrutinize cases of waste or negligence; and, other branches of government, such as parliament, or parts of civil society, such as journalists, limit the rigor of oversight or criticism if such cases of shortcomings were discovered with other state institutions. 

In the case of Armenia, even before Armenia has properly entered the arms procurement game, the “national security exception” has cocooned the military establishment from rigorous accountability. A discussion, or transparent assessment, of concrete systemic failures, waste, or corruption within the Armed Forces remains a highly sensitive subject. While general or blanket statements and criticisms are made, the actual process of accountability and scrutiny remains exceedingly poor. This specific Soviet-type legacy of a “national security exception” may have concealed the failures of the procurement processes in the past, since the process, for all intents and purposes, was singular: buying whatever Russia told Armenia to buy. But as Armenia diversifies its security policies and enters the arena of international arms procurement, the “national security exception” will prove to be immensely harmful to the country’s national interest if it is not curtailed and limited through rigorous oversight and accountability.    

With respect to more concrete considerations of problems that are specific to military procurement, principles for best practices concentrate on four main areas: policy and planning, budgeting, procurement decision processes and implementation, and oversight and auditing. 

While it’s clear in theory that defense procurement must be clearly linked to established defense policy goals, in practice, many countries lack a clear defense policy that spells out its concise security needs. Unfortunately, for a wide range of reasons, both institutional and structural, Armenia is one such country. Thus, for these types of countries, procurement decision-making is generally ad hoc, based on interpersonal relations of individuals within the military brass, vulnerable to errors and negligence, and quite conducive to waste and mismanagement. Further, even if defense policies are clearly elucidated, procurement decisions generally fail to follow policy structures.

With respect to budgeting, a large set of case studies point to the need of defense procurement to be coordinated with the state’s budget process in order to ensure that procurement plans are not only affordable, but that they also meet budgetary priorities. The biggest problem facing best practices in adhering to budgetary priorities remains the overarching lack of transparency in defense budgets. In many countries, including Armenia, very few details of the defense budget are made public, and as research in the developing world shows, the use of “confidentiality” as an intrinsic precept for military budgeting prevents the public or civil society from accessing information that is crucial for transparency and accountability. 

Procurement decision-making and implementation, in this context, while cognizant of the budgeting and planning areas, generally falls outside of regular frameworks. The bureaucratic process is not always clear, institutional responsibilities are not always followed, top-level political decisions tend to override due diligence, and government-to-government arms deals made by heads of state generally overpower any bureaucratic pushback. Further, arms procurement generally displays far greater tolerance for sole-sourcing of contracts, secrecy surrounding tender requirements, and absence of sufficient oversight for these specific institutional engagements. As an example, there has been much discourse on the process and procurement decision-making that led to Armenia’s purchase of four Russian-made SU-30 fighter jets in 2020, yet the efficacy of these jets, not to mention that they were sold without missiles and as such lacked any relevance to the country’s security needs, has neither been addressed nor clarified. When applying this example to the last 15 years of military procurement and decision-making, the problem not only becomes multiplied, but so do chronic problems of waste, corruption, mismanagement, and lack of cogent policy.

The consensus in the broader research contends that parliamentary scrutiny of the military sector in general, and budgeting and procurement processes in particular, remain consistently weak and purposefully lenient. And this is due to a variety of reasons. For many legislators, it may not be deemed politically feasible to challenge or expose shortcomings in the military; in many cases, institutional obstacles limit the ability for oversight; the existence of an ingrained cultural belief that the military is sacred and must not be scrutinized reinforces lack of oversight; and the general relationship between the ruling party in parliament and its refusal to hold the head-of-government fully accountable. The confluence of all of these factors remain inherently problematic for the procurement process of any country, but more so, remains especially acute for “newly democratized systems.” This will be a subject of immense importance for Armenia, as it transitions from lack of access to a proper procurement regime to one of much intensity and complexity.  

With Armenia conceptualizing, developing, and implementing a wide range of procurement projects, and having had limited experience in the past in navigating this arena, the critical body of scholarship on this topic offers three frameworks of guidance to Armenia:

1. Addressing the “national security exception”: Armenia must implement reforms that will constructively challenge and responsibly question the automatic assumption of privileged status for the military sector. Indeed, while secrecy is crucial, it should only be invoked when there is a clear security justification, and not the default institutional position without substantive justification. In this context, the defense sector must, as a rule, be subjected to the same oversight institutions, under the same rigorous standards, as other sectors of government.  
2. Collaborative relationship between parliament, civil society, and defense sector: the modality of thinking, institutional impediments, and a culture of self-censorship that keeps away relevant actors whose responsibility it is to scrutinize defense issues must be mitigated by developing a functional system of oversight and collaboration with the legislative branch as well as with civil society. In this context, an important component of reforms is to encourage and strengthen greater parliamentary and civil society participation, as this supports both the transparency and accountability of procurement decision-making and implementation, while at the same time providing the defense sector another layer of expert support and opportunities of self-correction. 
3. Rigorous structuring of all stages of the procurement process: from policy-making to planning, from developing budgetary priorities to the tender and contracting process, from implementation and operationalization of procurement policies, and from the oversight and accounting necessary of parliament and civil society to public transparency, the strength and coherence of Armenia’s arms procurement program will depend on the correct and consistent execution of each stage of the procurement process. 

Conclusion

As Armenia proceeds to diversify its access to armaments and advanced weapons systems, the development of a comprehensive, well-structured, and expert-driven procurement program will not only strengthen Armenia’s initiatives, but also support the strengthening and democratization of its defense sector. With endeavors now revolving around such countries as the Netherlands, Greece, Belgium, Germany, and the United States, with also the potential of seeking access to countries such as South Korea, Canada, and Japan, Armenia’s entry into the global arms market must have structure, bureaucratic discipline, and strong policies and procedures. India and France have been first steps, albeit very important ones, but diversification cannot revolve around only two actors, and as Armenia expands its horizons and navigates new partners, the strength and resilience of its procurement process will pay immense dividends.     

Examining the Context

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