Neighboring states Armenia, ranked third, and Azerbaijan, 10th, both belonging to Europe, show very high levels of militarization and have initiated major increases in their military expenditures over the past few years, according to a statement released by the organization to announce index results.

Military expenditure in 2013 by Armenia reached $427 million, while expenditures in Azerbaijan grew to $3.4 billion, demonstrating the countries’ focus on the Nagorno-Karabakh conflict in the South Caucasus.

While Azerbaijan has enjoyed economic prosperity thanks to a drastic increase in its oil revenues and boosted its military spending as well, Armenia showed only relatively moderate economic growth resulting in a comparably slow growth in military expenditures.

However the report still adds that "Azerbaijan and Armenia aim at comprehensive modernization activities for their outdated weapons systems for which they are highly dependent on Russian support, and that support is provided to both countries.”

The report says "the high levels of militarization in these two countries must be seen in the overall context.” 

Russia, which was ranked fifth, delivers arms to both South Caucasian republics and has been pursuing a comprehensive military reform since 2008.

Apart from Armenia, Russia and Azerbaijan, the top 10 countries include Israel, Singapore, Syria,  Greek Cyprus, South Korea, Jordan and Greece.