Eurasianet has a story on Azerbaijan’s arrogant war rhetoric and Armenia’s response.

EU officials touring the South Caucasus this week were confronted by heated words from President Ilham Aliyev, who told them Azerbaijan is ready to “wage war” with neighboring Armenia over the disputed territory of Nagorno-Karabakh.

Azerbaijan’s recent windfall of oil and gas revenues appears to have persuaded Aliyev that he could turn the tables on Armenia, which has long held the military upper hand in the dispute over Nagorno-Karabakh, a predominantly ethnic-Armenian territory located within Azerbaijan.

In talks on February 4 with Slovenian Foreign Minister Dmitrij Rupel, who was representing the current EU Presidency, Aliyev indicated Baku was contemplating waging war for control of the disputed territory, which together with a strip of adjacent Azerbaijani territory has been under Yerevan’s control since a 1988-94 war between the two countries.

Benita Ferrero-Waldner, the EU’s external relations commissioner, tells RFE/RL that Brussels firmly rejected Baku’s “inflammatory” rhetoric. “I clearly said, not only to the authorities, but also at the press conference, that I think it is highly important that they avoid any inflammatory speech at the moment of presidential elections,” she says.

Both countries are holding a presidential vote this year — Armenia on February 19, and Azerbaijan in October. The Organization for Security and Cooperation in Europe (OSCE), which has spent more than 15 years mediating talks between the two sides, has indicated an election year is not likely to see major progress on the issue.

Baku, however, appears impatient. The Azerbaijani leadership, Rupel said, appears to feel that “time is not on Armenia’s side.” Nor is money. Azerbaijan’s defense budget this year will exceed $1 billion; Armenia’s is just one-third of that figure.

Azerbaijan has enjoyed spectacular economic growth over the past few years. The country’s GDP grew by 25 percent in 2007, almost exclusively on the strength of oil and gas exports.

Azerbaijan’s minister for economic development, Heydar Babayev, says he expects his government to generate upward of $150 billion in oil and gas revenues by 2015.

Armenia, meanwhile, has no lucrative natural resources. It is landlocked, blockaded by neighbors Turkey and Azerbaijan, and — at Baku’s behest — bypassed by oil and gas pipelines, as well as rail and road projects, which originate in Azerbaijan.

’Winning The Peace’

But, as Rupel notes, Armenia has “alliances that speak for it.” This is a reference to Russian backing. Throughout the Nagorno-Karabakh conflict, Russia is rumored to have given Armenia military equipment worth $1 billion. Russia provides for most of Armenia’s energy needs and has bought up most of its energy infrastructure.

The Armenian government did not appeared cowed by Baku’s fighting words. Foreign Minister Vartan Oskanian tells RFE/RL that Armenia is confident of its military capability. “No matter how strong the Azeris will be in the next 15 years, even with this kind of spending, even [if it] doubled every year, to catch up with Armenia’s commitment to defend itself and Karabakh, that will require [as a] minimum 15-20 years,” he says.

Oskanian says that Armenia would not be intimidated in any event. More importantly, he adds, he does not believe there can be a military solution to Nagorno-Karabakh. “We fought twice with the Azeris, we prevailed, but we never claimed that we won the war,” he says. “Unless we win the peace, we will never claim that we won the war.”

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