Armenia–Russia relations

Diplomatic relations between Armenia and Russia were established on April 3, 1992.

Armenia is considered as the only ally of Russia in all of Transcaucasia. The positions of Russia and Armenia in the majority of key international problems are coincident or close. Armenia shares the approaches of Russia, directed toward strengthening of the CIS. Armenia and Russia are both members of a military alliance called the CSTO along with five other ex-soviet countries, a relationship that Armenia finds essential to its security. Among the contracts and the agreements, which determine intergovernmental relations – a treaty of friendship, collaboration and mutual aid of 29 August 1997 are a number of the documents, which regulate bases of Russian military units and liaisons in the territory of Armenia.

Military

Russian–Armenian interaction in military affairs is directed toward providing the safety of both states, of the southern flank of the collaboration of the independent states, and stability in Transcaucasia. The Armenian armed forces participate in the bearing of standby alert within the framework of the integral system PVO – air defense of the CIS. Collaboration between the Defense Ministries of Russia and Armenia is achieved on a regular basis.

The 102nd Russian military base is stationed in the territory of Armenia. United Russian–Armenian troop groups are formed. The boundary group FSB of Russia in Armenia together with the Armenian frontier-guards bears the protection of the boundaries of the republic with Turkey and Iran.

Armenia is one of a small and dwindling number of former Soviet republics that assuages, rather than aggravates, Russia's hurt ego in what used to be its geopolitical backyard. While the special relationship between Russia and Armenia is hardly new, its increasing intensity holds important implications for the smaller country's future, as well as for the balance of power in the Caucasus and throughout what remains of Russia's old sphere of influence.

Goodwill between Armenia and Russia has deep historical roots and is sustained by Russia's recent role as Armenia's protector. Russia is the ace up Armenia's sleeve against feared aggression by Turkey, Armenia's historical enemy, and as a deterrent to a renewal of the war between Armenia and Azerbaijan over the disputed enclave of Nagorny–Karabakh (during which Russia supplied critical military assistance to Armenia). As a consequence of the war, both Turkey and Azerbaijan blockade their borders with Armenia.

Armenia plays eager host to a few Russian bases and a few thousand Russian troops, who patrol Armenia's borders with Turkey and Iran. During the Georgian political crisis in November 2003, the Russian and Armenian defense ministers signed agreements deepening their military cooperation, and, a few days later, then Russian Foreign Minister Igor Ivanov called Armenia "Russia's only ally in the south."

Indeed, Georgia appears increasingly determined to remove itself from the Russian orbit, particularly after the recent invasion of Georgia by Russian troops. And Russian relations with Azerbaijan, never particularly warm, remain dominated by oil concerns. Armenia is one of the relatively few former Soviet republics where Russian troops are welcomed and where they don't have to rub shoulders with the U.S. military, such as in Georgia or Kyrgyzstan.

Energy

On another front, Russia has staged what appears to be a benign takeover of a number of Armenia's economic arteries.

Virtually the entire Armenian energy sector is under Russian control, following the transfer last year of the management of Armenia's critical nuclear power plant, and six hydroelectric plants, to UES as part of a broad equity-for-debt deal. Armenia receives its natural gas from Russia via Armrusgazprom, which is 45 percent owned by Gazprom. Rostelecom is a possible buyer of Armenia's telephone monopoly. Russian financial institutions, often under ethnic Armenian management, are slowly moving into Armenia's banking and insurance sectors. And with Russia one of Armenia's largest trade partners, the health of the Armenian economy is closely linked to that of Russia's, as the slowdown following the 1998 financial crisis demonstrated.

Russia is the gray cardinal of the Armenian political scene, in contrast to the meager influence it exerts on domestic politics in most other CIS countries, with the exception of Georgia, Moldova and Belarus. Prior to Armenia's February 2003 presidential election, President Robert Kocharyan made a pilgrimage to Moscow to receive the blessing of President Vladimir Putin; some analysts viewed the transfer of Armenia's energy assets to Russia as a quid pro quo for Putin's continued support.

Indeed, the Armenian government is highly vulnerable to any disruption ndash inadvertent or otherwise ndash of the flow of energy resources from Russia, and works hard to stay in the good graces of the Kremlin.

Balance of power

The close links between powerful members of the Armenian diaspora in Russia and Putin spurred rumors recently that Putin, now freed from the distraction of getting re-elected, might become more involved in Armenia's domestic political scene to solidify Russia's position in Armenia. In the meantime, Kocharyan seems to be taking a page out of Putin's handbook on authoritarianism, tightening the state's grip on the media, stifling dissent and otherwise trying to limit the scope for the evolution of a credible opposition.

Armenia's official foreign policy is to foster amicable relations without picking favorites ndash a rational policy for a small, isolated nation flanked by unfriendly neighbors in an unstable region. Armenia leverages the political clout of the Armenian diaspora in the United States and, to a lesser degree, the European Union, to win governmental aid and assistance. It also hedges its military bets by participating in NATO Partnership for Peace exercises and lending quiet support to the American war on terror.

U.S. and EU concerns in the region are focused on the politics of oil and pipelines in Azerbaijan and the Caspian area more generally ndash with changes in Georgia now also jockeying for the limited attention that the West allots to the Caucasus. Meanwhile, efforts to deepen relations with southern neighbor Iran (such as through the construction of a natural gas pipeline) receive frosty glares from the West and a mixed reception from Russia.

Russia is home to roughly 1.8 million Armenians ndash compared with the official, and inflated, figure of 3.2 million inhabitants of Armenia proper ndash who send home remittances of roughly $110 million every year (equivalent to 4 percent of GDP), according to the Armenian Foreign Ministry. Not surprisingly, there is no stigma attached to speaking Russian in Armenia, unlike elsewhere in the former Soviet bloc.

Armenian dependence on Russia is steadily deepening, binding Armenia's future ndash for better or for worse ndash all the more tightly to Russia. And as Russian influence in the CIS continues to erode, its role in Armenia serves as a pleasant, if Lilliputian, reminder of what it once had.
Serzh Sarkisian, whose controversial election as president of Armenia precipitated political violence in Yerevan, is hoping closer ties with Russia can hasten a return of stability in the South Caucasus country.

Sarkisian ndash the current prime minister who is scheduled to be inaugurated as President Robert Kocharian’s successor on April 9 ndash flew to Moscow on March 24 for meetings with Russia’s presidential tandem, outgoing chief executive/incoming prime minister Vladimir Putin and president-elect Dmitry Medvedev. [For background see the Eurasia Insight archive] .

Already Russia’s closest ally in the region, Sarkisian said he was committed to "deepening and expanding" Armenian–Russian ties. He also expressed gratitude for Moscow’s support of the Armenian government’s handling of the political crisis in Yerevan. [For background see the Eurasia Insight archive] . "We always felt your assistance in the election process," Sarkisian said during a meeting with Putin. "To be honest, we never expected such clear-cut" support.

Putin and Medvedev seemed happy to take the Armenian leader up on his offer of closer relations. "This is your first visit after the elections, and, of course, we see special symbolism in this fact," Medvedev said.

Putin, meanwhile, clearly indicated that Armenia’s current domestic difficulties would not hamper the Kremlin’s ability to do business with Sarkisian. "I know that political processes in Armenia are complicated," Putin acknowledged. The Russian leader then expressed confidence that "no matter how the internal political process in Armenia unfolds, what has been built in the past years in relations between the Russian Federation and Armenia will be maintained and will develop in the future."

Sarkisian indicated that his incoming administration would seek to quickly restore a sense of stability in the country, pledging to create "an atmosphere of tolerance." The centerpiece of his emerging stabilization program is an initiative to boost social welfare and economic opportunity. [For background see the Eurasia Insight archive] .

Trade

The two countries have been doing a lot of business in recent years. Trade between Russia and Armenia reached $800 million in 2007, marking a 60 percent increase over the previous year, according to the Russian official statistics. Moscow voiced expectations that bilateral commerce would top $1 billion in the near future.

Trade between Russia and Armenia has been hampered by transportation bottlenecks. For over a year, Sarkisian has been lobbying Russian officials to expedite the opening of ferry service connecting Russian Black Sea ports and the Georgian city of Poti, a move that would ease Armenia’s transport woes. Moscow’s recent decision to ease transport restriction with Georgia could revive hopes that ferry service could begin soon. [For background see the Eurasia Insight archive] .

One notable bilateral trade development occurred February 6, when Atomredmetzoloto, a uranium mining subsidiary of Russia’s nuclear monopoly Rosatom, created a joint venture in Armenia to develop uranium reserves estimated at 30,000–60,000 tons. The deal was clinched during a visit to Armenia of the Prime Minister Viktor Zubkov, who was accompanied by Sergei Kiriyenko, head of Rosatom.

In Yerevan, Kiriyenko pledged to participate in a tender to build a new nuclear power plant in Armenia. The initial estimated cost of the project is $1 billion. Zubkov and his Armenian counterpart Sarkisian also inked an agreement covering Armenia’s participation in the International Enrichment Center in Angarsk, in Russia’s Irkutsk region.

One potential trouble spot in relations centers on energy supplies. Armenian officials have hoped to ensure, through their expressions of loyalty to Moscow, that the Kremlin-controlled energy conglomerate Gazprom would give Armenia a preferential price for gas. Armenia currently pays $110 per thousand cubic meters (tcm) and this contract price remains effective till January 1, 2009. That price is far lower than what some other former Soviet states pay Gazprom. Yet, even if Gazprom was inclined to maintain Armenia’s favorable rate, events now seem to mandate that Yerevan will face a substantial price increase in 2009. Gazprom’s recent pledge to pay "European market" prices to Central Asian producers means that the gas that it obtains from the region will cost the Russian company upwards of $300/tcm. It will have no choice, then, but to pass costs on to its customers. [For background see the Eurasia Insight archive] .

Growing Armenian discontent over the state of the relationship with Russia can be partially explained by a set of specific events that have taken place over the past two years. The first of these, which had wide public resonance, was the so-called “debt for equity” deal. This deal, which involved handing over several major industrial enterprises in Armenia to Russia in exchange for Russia forgiving Armenia’s $100 million debt to Russia, caused considerable displeasure in Armenia. It was widely discussed and condemned in the media and in public rallies organized by the opposition. The widespread perception was – and remains – that the deal was grotesquely unfair, and that Russia was exploiting Armenia’s weakness and dependence to establish control over the country’s most valuable assets. There were criticisms of this deal in Russia as well, but there critics argued that those enterprises were not worth as much as Armenia’s debt to Russia.

The second important event was the conclusion of Russia’s observer mission to the presidential elections of 2003 that the elections were free and fair. Those who did not support Kocharian saw this as proof of Russia’s willingness to support any government in Armenia as long as it does its bidding. Public displeasure was so strong that some demonstrators expressed it by first marching to the Russian embassy in protest, and then marching to the embassies of Western countries that had refused to certify Kocharian’s election to express gratitude.

Implications

More recently, Russia decided to close the border with Georgia following the terrorist act in Beslan, which also meant not allowing goods headed to Armenia to cross the border. Armenian pleas to allow these goods to cross the border were ignored, and soon enough the talk in Yerevan was that Russia had joined the Turkish and Azerbaijani blockade of Armenia. A veteran Armenian politician even stated in a private conversation that closing the border with Georgia was retribution for Armenia’s decision to send troops to Iraq. Whether or not that is true is irrelevant: what is interesting is the claim itself. Finally, Russia raised objections to building a pipeline through Armenia that would transport Iranian natural gas to Georgia with the possibility of later exporting Iranian gas to Europe. Armenia and Iran seem to have grudgingly acquiesced to the Russian objections, but the episode has not gone unnoticed in Armenia.

These events are the predictable result of excessive dependence on Russia, which some segments of the Armenian political spectrum have always been concerned about. That concern is being articulated with increasing frequency with a growing perception in Armenia that the country’s tight relationship with Russia is being taken for granted and exploited by Russia. But that is not the only reason. It seems also that the Armenian political elites are starting to think that a certain adjustment in Armenia’s foreign policy orientation is inevitable given the increasingly confrontational tone of U.S.–Russian interaction in the post-Soviet space, combined with a shifting balance of influence that is not in Russia’s favor. This was exemplified most vividly by the Orange Revolution in Ukraine, but the Ukrainian events were only the last in a longer chain of similar, if less dramatic, defeats for Russia. There is a definite, and one might add reasonable, fear at least in some circles in Armenia that maintaining the same relationship with Russia may amount to betting on the wrong horse in the long run.

Conclusions

How deep are the cracks in the armor of the Russian–Armenian alliance, and will they get deeper? The short answer is that they are likely to get deeper, because the trends that created these cracks in the first place are likely to continue in the foreseeable future. But whether Armenia will be able to carry out a serious readjustment in its foreign policy will ultimately depend on two interrelated things. First, if the concessions the West demands from Armenia for settling the Nagorno–Karabakh conflict are seen there as more costly than continued dependence on Russia, a serious reorientation of Armenia’s foreign policy is unlikely. This, of course, assumes that Russia will be able and willing to continue to support the current status quo in Karabakh. Second, and even more importantly, Armenia will be able to reorient its policy only if the relationship with Turkey is normalized. As long as the border with Turkey remains closed, and as along as no diplomatic relations between the two countries exist, Armenia will see Turkey as an existential threat and Russia as the most credible protector against that threat. There are almost certainly other important issues that will affect Armenia’s long-term foreign policy orientation, but these two issues are definitely the heart of the matter.

See also

*Russian 102nd Military Base

External links

* [http://www.panorama.am/en/economy/2007/08/06/alrosa/ Armenia signs a cooperation agreement with Russia Alrosa]