(Baku Daily) - Azerbaijan will increase military spending by 27 percent next year to 3.78 billion manat ($4.8 billion), Finance Minister Samir Sharifov said.

The minister attributed the sharp increase in the defense budget to the continuing occupation of Azerbaijan’s Nagorno-Karabakh region and seven surrounding districts by Armenia.

“Our army needs better equipment because Armenia continues its occupation policy,” Sharifov said in parliament on Nov. 18.

Armenia captured nearly one-fifth of Azerbaijan’s internationally-recognized territory in a war in the early 1990s, killing 20,000 people and displacing about a million.

Large-scale hostilities ended with a ceasefire in 1994 but no peace agreement has been signed.

Azerbaijan's defense budget for 2014 was $3.75 billion, up from $3.6 billion last year and $3 billion in 2012.