Strained Relations With Neighbors Helps Drive the Azerbaijani Defense Industry, According to a New Study on ASDReports

Monday 4 August 2014, Amsterdam

The growing aggressive stand on conflict with Armenia is expected to drive further military build-up, which in turn will boost its defense imports. Over the forecast period, Azerbaijan is expected to proceed on the path of military build-up with no visible resolution to the Nagorno-Karabakh conflict in the near future.

The country is estimated to increase its defense and security budget at a healthy growth rate of 8.74% in the next five years to reach US$5.3 billion by 2018, according to the new report: Future of the Azerbaijani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018.  Morocco’s defense market is still set to reach a value of US$4.5 billion by 2018.

This report provides in depth analysis of the Azerbaijani defense market, with identification of market drivers augmenting its provision of data on the current industry size and growth expectations to 2018. Together with its investigation of the industry structure and procurement dynamics, with analysis of the competitive landscape of the Moroccan defense industry, and its assessment of the business environment, Future of the Azerbaijani Defense Industry – Market Attractiveness, Competitive Landscape and Forecasts to 2018 should be considered the definitive guide to the Iraqi defense market, and required reading for those serious about capitalizing on the significant opportunities it holds.


KEY MILITARY MARKET DRIVERS

The following factors will drive the country’s defense expenditure over the forecast period:


Strained relations with neighbors:

Azerbaijan has a troubled relationship with its neighbor Armenia over the Nagorno-Karabakh region, with its territory populated primarily by ethnic Armenians, who declared independence from Azerbaijan in 1991. Azerbaijan’s efforts to take back control resulted in a long war during the early 1990s. The ceasefire agreement between the two countries in 1994 has unfortunately not resulted in a peaceful solution to the conflict; both the countries have engaged in military buildups after the cessation of negotiations in 2011. Azerbaijan, ably supported by its oil exports, is in the middle of defense capability building, aimed primarily at establishing its military superiority in the region.

 


Military Modernization:

The country initiated military modernization efforts with a goal of asserting its claim on the disputed region. Azerbaijan has imported weapons heavily over the last five years, primarily from Russia, Ukraine, Belarus, Israel, and South Africa. The imported weapons include armored vehicles, helicopters, aircraft, missiles and missile defense systems, naval vessels, and artillery systems. In the last ten years, the country imported more than 150 tanks, 350 anti-tank missiles, 80 aircraft, and 15,000 missiles and launchers for the purpose of its military build-up. Furthermore, Azerbaijan signed a US$1.6 billion deal with Israel to procure UAVs, missile defense systems and anti-aircraft systems in 2012.

 In addition, the country expressed interest in procuring US$3 billion worth of weaponry from South Korea in 2013. The requested weapons include two submarine boats, naval destroyers, transport ships, T-50 training planes, attack helicopters, K-9 self-propelled artillery vehicle, drones, and fire control systems. Azerbaijan is seeking the help of NATO forces in setting up its logistical framework to improve the efficiency and effectiveness of its armed forces.