Exactly why is Armenia Borrowing Another 100 Million US Dollars From Russia? Interestingly, this is basically the loan that is second of kind Armenia has gotten from Russia since 2015.

On October 12 the government that is armenian authorized a proposition to signal an understanding “between the us government regarding the Republic of Armenia as well as the federal federal Government for the Russian Federation to produce a situation export loan.” Armenia is by using the mortgage, which values 100 million US bucks, to acquire contemporary hands from Russia.

Based on the contract, the mortgage will be paid back over fifteen years (2023-2037) at a 3 percent rate of interest. Armenia should be able to make use of the loan throughout the period 2018-2022.

Interestingly, this is actually the 2nd loan of the kind Armenia has gotten from Russia since 2015. The loan that is previous for 200 million US dollars and ended up being utilized to shop for sophisticated Russian tools.

Although the brand new contract clarifies it must certanly be utilized for buying contemporary hands from Russia along with the function to further develop friendly relations involving the two nations, it will not offer a summary of what to be bought.

The specialist community differs in its viewpoint as to how the mortgage may be utilized, supplying a broad selection of recommendations. Most agree, nevertheless, that artillery, anti-tank tools, high-tech reconnaissance and interaction facilities, along with contemporary atmosphere protection systems could be on Armenia’s grocery list.

The main question is why Armenia has sought a new loan now, given that the full amount of the previous loan has not yet spent (30 million US dollars remains unspent) from this perspective.

The arms that are ongoing between Azerbaijan and Armenia. In belated June 2017 Azerbaijan announced the purchase of the large batch of tools from Russia which, relating to officials in Baku, had been prepared to be utilized against Nagorno-Karabakh. Significantly less than per month later on the Armenian Minister of Finance Vardan Aramyan declared that Armenia is speaking about a fresh loan contract to get Russian equipment that is military.

The approval of this loan contract because of the government that is armenian spot fleetingly prior to the Armenian President Serzh Sargsyan came across their Azerbaijani counterpart Ilham Aliyev conference in Geneva on October 16. The timing of the announcement could be seen as a counterweight to Baku as the Azerbaijani side largely apply the principle of “use of force or threat of use of force” in negotiations with Armenia.

Relating to some professionals the balance of energy between Armenia and Azerbaijan ended up being restored through the earlier purchase of army equipment (into the framework for the earlier in the day 200 million US dollar loan). With this viewpoint the further modernisation of Armenia’s military abilities is seen within the logic of further enforcement of Russia’s just army ally in the area, situated regarding the frontline for the constantly destabilising Middle East.

Continuing the earlier concept, it really is notable that on September 23 Mr Sargsyan finalized a legislation to ratify the establishment of a Armenian-Russian joint armed forces team. A militarily strong Armenia could be a necessary ally in times of global uncertainties in this context.

Last but most certainly not least will be the “Chinese element.” In September, Armenian Minister of Defense Vigen Sargsyan visited Asia and consented together with his Chinese colleague to deepen army ties involving the two nations. Because of the gradual increase of Asia, this loan could possibly be made to make sure Armenia will not expand its armed forces cooperation beyond current parametres.

As a result, the 100 million US buck loan to buy contemporary hands must certanly be regarded as a multi-faceted mixture of numerous elements, being a stability of energy and local security when you look at the Southern Caucasus, as counterweight to threats through the center East, along with the modernisation of this army that is armenian.

The more fierce the armaments race between Armenia and Azerbaijan, the more dangerous the situation, which could lead to the destabilisation not only of the South Caucasus, but of a much wider Eurasian region at the same time.

The views expressed in this viewpoint editorial would be the author’s own and never fundamentally mirror growing Europe’s editorial policy.