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The Armenian and Azerbaijani authorities failed to finalize a peace agreement in 2024. On December 18, 2024, prior to his more recent maximalist conditions, which included setting limitations on Armenia’s military capabilities, Azerbaijani President Ilham Aliyev, in an interview with Dmitry Kiselev of Russia Today, highlighted two unresolved points in the agreement: (1) refraining from filing international lawsuits against each other, and (2) the non-deployment of representatives of other countries along the border. Aliyev emphasized the “amendment” of the Armenian Constitution and the dissolution of the OSCE Minsk Group as additional conditions for signing a peace agreement.
These points are complex and important, making consensus difficult to achieve in 2025. A thorough analysis of each element is crucial to understand their short- and long-term implications for Armenia, particularly if a peace agreement incorporates some iteration of Azerbaijan’s demands. Azerbaijan continues to maintain and amplify these contentious issues, deliberately keeping bilateral relations unresolved and the future uncertain. This strategy allows Azerbaijan to escalate border tensions whenever advantageous. The critical question remains: How can Armenia prevent another escalation while protecting its strategic interests?
While social sciences often deal with uncertainty, we can still consider reasonable policy recommendations by utilizing international relations theories and concepts. As Stephen Van Evera outlined, policy prescriptions need theoretical foundations as they offer forecasts based on established patterns in the international order––patterns that demonstrate the applicability of specific theories. This analysis will use Kenneth Waltz’s neorealist paradigm as its framework, examining concepts like internal and external balancing, causes of war, the security dilemma, offensive realism, and preventive war.
In this article, I argue that Armenia, guided by the Waltzian imperative “to take care of yourself,” must strengthen both its internal and external balancing mechanisms to deter Azerbaijan. Given the significant disparities in military spending and alliance capabilities, Armenia should prioritize quality over quantity in its defense strategy. To deter Azerbaijan, Armenia needs to raise the potential costs of renewed conflict. I also highlight the risks of signing a peace agreement without enforcement mechanisms. Additionally, I examine how the Azerbaijani president frames his policies within the “security dilemma” framework and propose strategies for Armenia to counter this narrative by emphasizing the defensive nature of its military preparations. Finally, I argue how Aliyev’s rhetoric seeks to legitimize a potential “preventive war” against Armenia, while Azerbaijan’s post-war actions reflect offensive realism principles.
According to Waltz, the international system is anarchic due to the absence of a central authority—a condition where self-help becomes the primary means for states to ensure survival. Waltz sees the balance of power as the main mechanism through which states ensure their security. He distinguishes between two types of balancing: internal balancing (where states build up in their own capabilities) and external balancing (where they form alliances). In such a system, as Waltz emphasizes, the imperative is “to take care of yourself.”
The early 2020s reveal a troubling state of international affairs: great power competition has intensified, regional conflicts have escalated, and international organizations struggle to bring conflicting parties together. This situation highlights the anarchic nature of international relations and the need for self-reliance. Small states like Armenia are especially vulnerable during such power shifts and must develop appropriate strategies to navigate these changes with minimal loss.
Internal and External Balancing: Armenia’s Strategy to Deter Azerbaijan
In international relations, the realist school of thought holds that states ensure their security primarily through power maximization within the balance of power doctrine. To prevent future conflict, Armenia must work consistently to narrow the power gap with Azerbaijan, that is, it must address the asymmetry in relative power. This requires focusing on both internal and external balancing mechanisms. Internal balancing involves strengthening economic and military capabilities, while external balancing means developing and bolstering alliances with partners.
Armenia’s military strengthening must address both quantity and quality––from updating its military doctrine to improving border fortifications. One metric that can be utilized to measure progress is to compare Armenia’s military spending against Azerbaijan’s.
In 2020, Armenia allocated $634 million (4.98% of GDP) to defense, followed by $619.4 million (4.47%) in 2021, $795.2 million (4.08%) in 2022, and $1.33 billion (5.45%) in 2023. During this same period, Azerbaijan’s defense spending was $2.24 billion (5.24%), $2.70 billion (4.93%), $2.99 billion (3.80%), and $3.57 billion (4.60%). For 2024, Azerbaijan’s defense budget is estimated at $3.77 billion, while Armenia’s is projected at $1.38 billion. By 2025, Azerbaijan plans to increase its defense budget to a record $4.94 billion, compared to Armenia’s expected allocation of $1.7 billion.

Figure 1: Military Spending Trends of Armenia and Azerbaijan (2020–2025)
Although Armenia’s military spending doubled between 2021 and 2023 and is expected to triple by 2025, Azerbaijan’s military expenditures remain significantly higher. While both countries allocate 4–5% of their GDP to defense, Azerbaijan’s spending was 3.5 times higher in 2020, 4.4 times higher in 2021, 3.8 times higher in 2022, and 2.7 times higher in 2023. For 2024 and 2025, projections show Azerbaijan’s spending will continue to be 2.7 to 2.9 times higher in 2024 and 2025. This significant gap highlights Armenia’s need for efficient resource allocation and strategic partnerships.
Regarding external security arrangements, the Russia-led Collective Security Treaty Organization (CSTO) remains the only military alliance which Armenia is still formally a member of. However, relations between Armenia and the coalition have deteriorated to an unprecedented degree, with Prime Minister Nikol Pashinyan declaring Armenia’s frozen membership––significantly weakening the CSTO’s role in Armenia’s security. The CSTO’s refusal to recognize Armenia’s border with Azerbaijan, and to meet its minimal treaty obligations, have further compromised Armenia’s security environment. Similarly, the 1997 Agreement on Friendship, Cooperation, and Mutual Assistance with the Russian Federation has proven ineffective, as Russia maintained neutrality during Azerbaijan’s aggression and abdicated its responsibilities within the said treaty.
Armenia has been rapidly diversifying its military cooperation, particularly with France, the U.S., India, and a growing number of European countries. Military collaboration with France, including arms procurement, culminated in the signing of the Armenia-France defense cooperation program for 2025. On July 15, Armenian troops participated in the joint Armenia-U.S. Eagle Partner 2024 military exercise, and on December 5, 2024, Minister of Defense Suren Papikyan met with the U.S. Secretary of Defense Lloyd J. Austin at the Pentagon. By summer of 2024, Armenia had become India’s top arms importer.
In addition, periodic announcements by the U.S., France and EU officials—often at high levels—supporting Armenia’s sovereignty and territorial integrity have considerably strengthened Armenia’s external balancing capacities. Political scientist Dr. Nerses Kopalyan has described this process as the “Diplomatization of Security”. He explains: “Lacking military deterrence capabilities, Armenia has relied on the diplomatization of its security by coordinating diplomatic pressure with the United States, the European Union, and France to deter Azerbaijan from further interstate militarized activities.”
The deployment of the EU Mission in Armenia (EUMA) demonstrates Armenia’s external balancing efforts. Since the mission began on February 20, 2023, Azerbaijan has not occupied any additional Armenian territory, and border incidents have decreased significantly. The mission has effectively deterred Azerbaijan from launching new provocations and escalating border tensions. This success highlights why Aliyev’s demand to remove foreign representatives from the Armenian-Azerbaijani border raises concerns—it could significantly heighten the risk of renewed aggression.
Western actors—particularly the U.S., EU, and France—have played an essential role in safeguarding Armenia’s security through collective pressure and the EUMA’s presence on the Armenian-Azerbaijani border following the 2022 Jermuk escalation. Unlike Azerbaijan, which has signed the Shushi Declaration with Turkey committing both countries to mutual assistance in matters of independence, sovereignty, and territorial integrity, Armenia lacks a comparable alliance.
Given the disparities in military spending and alliance capabilities between the two states, Armenia’s ultimate goal is deterring Azerbaijan from escalation. What policies and tactics from the realist school of thought could Armenia adopt to achieve this?
How to Deter Azerbaijan: Analyzing War’s Causes and Costs
States launch wars for various reasons, from irrational leadership to miscalculations due to incomplete information. Rationalist theories suggest that war becomes more likely when the aggressor believes the potential gains outweigh the costs.
James D. Fearon identifies two key dimensions: private information and commitment problems. A lack of information is seen to lead some leaders to overestimate their capacities and underestimate their opponents, fostering unrealistic expectations of victory. They may also misjudge their adversary’s resolve to fight, incorrectly assuming they can avoid war. The commitment problem arises from mutual distrust—neither side believes the other will honor negotiated agreements. Aliyev’s behavior demonstrates Fearon’s insight that parties often exaggerate their willingness or capacity to fight, either to deter challenges or gain concessions.
Building on these theoretical insights, Armenia’s grand strategy requires a multilayered approach to address existing risks effectively. Armenia should pursue three key objectives: continue diversifying its military partnerships, increase investment in defensive armaments, and clearly communicate its red lines and demonstrate resolve to defend them. Aliyev’s characterization of Armenia’s rearmament as “revanchist” reflects a deeper concern: as Armenia recovers from the 2020 war, Azerbaijan’s ability to achieve political aims through threats and pressure diminishes.
Armenia should communicate to the international community that its rearmament is not driven by “revisionist ambitions” but by defensive needs. Through all available channels, Armenian officials should continue emphasizing the following key points in constructing a consistent narrative: (1) Azerbaijan continues to occupy 200 square kilometers of Armenian territory; (2) Azerbaijan continues to detain Armenian prisoners of war; (3) Azerbaijan consistently impedes peace agreement negotiations; (4) Azerbaijan’s military spending surpasses Armenia’s by three to four times; and (5) Azerbaijani President Ilham Aliyev repeatedly threatens Armenia with renewed conflict if his demands are not met in full. Armenian leaders should maintain a balanced tone that is neither appeasing nor confrontational.
To address the commitment problems, the Armenian side should ensure the peace agreement includes sufficient guarantee mechanisms that will compel Azerbaijan to honor the provisions of the treaty. Without such mechanisms, the agreement risks merely cementing the current status quo—the takeover of Nagorno-Karabakh by Azerbaijan, the ethnic cleansing of Armenians, the occupation of Armenian territories, the partially delimited border, and the ongoing blockade of Armenia—while failing to provide adequate security guarantees for Armenia.
The Security Dilemma: Implications for Armenia and Azerbaijan
The “security dilemma” is an important concept in realist international relations theory. It occurs when a country’s efforts to enhance its security—through military spending, border fortification, or new alliances—are interpreted as a threat by another country, who assumes these measures target it.
The Azerbaijani president and his advisors frequently invoke the “security dilemma” framework to contextualize their policies within established international relations discourse. In the interview with Dmitry Kiselev, Aliyev expressed alarm over Armenia’s military buildup as justification for Azerbaijan’s response—increasing its 2025 military budget to an unprecedented $5 billion.
One of the main consequences of the security dilemma is the inevitability of an arms race—a point Aliyev addressed in his interview. While this topic warrants separate analysis, Armenia must clearly adopt a well-defined defense strategy that accounts for both states’ economic and demographic capacities. Rather than attempting to match or surpass Azerbaijan in an arms race, Armenia should focus on making any new escalation costly for Azerbaijan through prioritizing quality over quantity in its security capabilities.
Azerbaijan’s Offensive Strategy: Building a Case for Preventive War
A key concept related to the security dilemma is “preventive war”. States may launch such wars to avoid facing the same enemy that could become stronger in the future. When one state perceives another’s military growth as a threat, it might decide to strike first, believing that the costs of war would be lower now than later.
In his interview with Kiselev, the Azerbaijani president made several statements that could be interpreted as warnings and attempts to justify a potential “preventive war” against Armenia. He stated that Azerbaijan could not remain passive while Armenia receives military support from France and the United States. He concluded: “This must stop. But if it continues, it will mean there should be no further claims against us afterward.”
After the 44-day war, Azerbaijan acted according to the logic of offensive realism rather than defensive realism.
Azerbaijan pursued an expansionist policy by entering Armenia’s sovereign territory to maximize its power, thereby enhancing its security and negotiating position at Armenia’s expense. Understanding Azerbaijan’s adoption of offensive realism can help Armenian authorities better anticipate its ambitions and future actions.
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