Stratfor: "Baku is much readier for the war than before"

According to APA, the information says that the situation has been tenser because of regular violation of cease-fire in Azerbaijan-Armenia firing-line.

"Fragile cease-fire has existed since 1994 but mutual shootings have been observed in the frontline lately. France meeting of Azerbaijan and Armenian presidents failed to bring the countries to common agreement on conflict settlement. Meanwhile, Baku-Tbilisi-Ceyhan main oil export pipeline is expected to carry the Caspian Sea oil to the Mediterranean Sea shortly. According to the calculation, Azerbaijan will gain revenue of $800mln and these funds will most probably be allocated to military budget. Azerbaijan can purchase weapons and military equipments from France, the US or former Warsaw Pact countries by the oil revenues. Besides, Azerbaijani military men may be qualified by the US."

Stratfor concludes that Armenia’s small military budget would be enough to maintain the status quo but unequal incomes to the budgets can cause imbalance.

"Armenian budget constituted $930mln in 2005 and Azerbaijan’s was $2bn 986mln. Azerbaijan allocated $300 to military expenditure. At the same time, President Ilham Aliyev stated that Azerbaijan’s military budget should exceed Armenian state budget shortly. Armenia’s military budget constituted $100mln and it is planed to raise the budget to $160mln this year. Baku-Tbilisi-Ceyhan oil pipeline is being filled with oil. The part of the pipeline in the territory of Azerbaijan and Georgia has already been filled and Turkish part is about to have been filled. Oil export will increase at considerably speed in 2007. The pipeline will carry 1 mln barrel of oil a year and that will bring very much revenue to Azerbaijan in 2008."

Stratfor thinks that Azerbaijan’s attempts to free its occupied lands are inevitable.

"But some factors can soften Azerbaijan’s position. These factors include so many international corporations engaged in energy sector of Azerbaijan. Any threat to industry and energy sector or oil pipelines can cause dissatisfaction of transnational corporations. Nearness of Baku-Tbilisi-Ceyhan oil pipeline and Southern Caucasus gas pipeline to Nagorno Karabakh and separatism-full regions of Georgia causes deep concern in spite of the highest security measures.

All separatist regimes in the region are supported by Russia and Russia can allow the terror acts as the pipelines don't go through its territory."

Stratfor thinks Armenian side looks stronger against the background.

"Armenians living in the US are more than those living in Armenia, Armenian Diaspora has influence in Washington. There exist a fragile balance between the US-Azerbaijan alliance and pressure of the US on Armenia. This balance enables Washington to do anything in order to prevent intensification of the conflict. But no force can prevent the tension in the region. Any standoff can cause bloodshed in the region. The conflict is getting tenser and tenser gradually but Azerbaijan looks much readier for the war than before. Azerbaijan will get more armed and well off soon."