The Executive Director of the Center for Analysis of Economic Reforms and Communication (CAERC), Vusal Gasimli, held a press conference on the topic “Armenia’s lack of prospects in a resource-based war with Azerbaijan.”

The head of CAERC stated that the counter-offensive of the Azerbaijani Army has been extremely costly for Armenia:

“Within the first four days, as a result of strikes inflicted on the enemy, Armenia lost military equipment and ammunition with an estimated value exceeding USD 1.2 billion. Most importantly, military infrastructure has been destroyed, the creation of which took the opposing side decades. The financial scale of Armenia’s losses in military equipment and ammunition is twice the volume of military expenditures envisaged in its state budget. At the same time, the value of the military equipment and ammunition destroyed in just the first four days is equal to half of Armenia’s strategic foreign currency reserves and one third of its state budget. It should be taken into account that Armenia’s losses are not limited to military infrastructure, equipment, and ammunition alone. The Armenian side is also facing the necessity of financing the war and losses in manpower.”

According to Mr Gasimli, Armenia’s state budget is insufficient to finance such a resource-intensive war:

“A country with public debt at 60 percent of GDP and a budget deficit at 5 percent of GDP is inevitably bound to face defeat in a resource-intensive war in the short term. It is enough to cite just one comparison: in terms of strategic foreign currency reserves, Azerbaijan exceeds Armenia by more than 20 times, and by up to five times in terms of the size of the state budget.”

Mr Gasimli also noted that Armenia is already facing threats such as the devaluation of its national currency, the dram, and food shortages:

“The successful counter-offensive of the Azerbaijani Army further increases Armenia’s already high level of risk and accelerates capital outflows from the country. Investing in or lending to this country has now become even more risky. If these processes continue, the number of people living in poverty in Armenia will rise sharply. As a result, the enemy country will first face an economic crisis, followed by social and political crises.”

In conclusion, Mr Gasimli stated that the Center for Analysis of Economic Reforms and Communication has submitted appeals to leading international think tanks regarding the situation that emerged following Armenia’s provocations along the frontline.