By Natalia Konarzewska
September 15th, 2015, The CACI Analyst
Armenia’s economy is currently experiencing a significant decline, which is primarily caused by spillover from Russia’s recession. At the end of 2014, Armenia’s national currency, the dram, saw rapid depreciation, which boosted inflation. Falling remittances from Russia are putting additional pressure on the dram, negatively affecting the livelihood of many ordinary citizens. Additionally, export volumes to Russia, which is Armenia’s top export destination, have decreased significantly. Armenia currently has few options to boost its faltering economy due to a falling number of foreign direct investments, high national debt and a shortfall of budget revenue. Economic forecasts for Armenia remain grim and since June the country has seen a wave of protests over the price hike on electricity.
By Erik Davtyan (19/08/2015 issue of the CACI Analyst)
July was a productive month for bilateral cooperation between Armenia and Georgia. Firstly, the two states expanded their dialogue in the military sphere. On July 16, a delegation headed by Armenia’s first Deputy Minister of Defense Davit Tonoyan visited Tbilisi. A subsequent meeting between representatives of the two defense ministries took place on June 24-25 within the framework of the North Atlantic Council (NAC) Defense Ministers meeting in Brussels, during which Armenia’s and Georgia’s Defense Ministers Seyran Ohanyan and Tinatin Khidasheli discussed bilateral military ties. Khidasheli later explained that the parties agreed “to find new areas of cooperation.”
By Armen Grigoryan (19/08/2015 issue of the CACI Analyst)
The Iranian nuclear deal may create new opportunities for Armenia. However, whereas Armenia’s Ministry of Foreign Affairs and other governmental agencies should consider the opening prospects of energy cooperation with Iran seriously, their traditional pro-Russian attitude reduces the chance for taking advantage of the changing geopolitical situation and, at the same time, increases the risks for Armenia’s own security and regional stability in general.
By Eduard Abrahamyan (05/08/2015 issue of the CACI Analyst)
On June 18-20, 2015, NATO’s Parliamentary Assembly held the 89th Rose-Roth seminar in Armenia’s capital Yerevan. It mainly covered the current status of the Armenia-NATO partnership, security issues and challenges that recently emerged in the post-Soviet region and the Middle East. It was declared that the seminar would be unprecedented and firmly reflect positive developments in contrast to the setback in Armenia’s EU integration. The three-day meeting brought together a range of experts, representatives of alliance members and officials from different states, but was conducted against the backdrop of Armenia’s consistent albeit implicit “vassalization” by Russia.
Though Yerevan stressed practical cooperation and its contribution to various missions in Kosovo and Afghanistan through Partnership for Peace (PfP), it kept a certain distance from the intensive political dialogue that is a constitutive part of IPAP. The apogee of the deepening ties between NATO and Armenia came in the period 2010-2013, when Yerevan aimed to sign an Association Agreement (AA) and a Free Trade Agreement (FTA) with the EU, pursuing wide-ranging reforms in both its political-economic and defense sectors. In this light, the promising EU-Armenia relations were inevitably reflected in the ties between NATO and Armenia.
There is no formal institutional link between the EU integration process and NATO’s Euro-Atlantic Partnership for the eastern neighbors, although the advance in partnering with the EU reflects positively on relations with NATO and vice versa. Therefore, there was an expectation in several segments of Armenia’s civil society and among some policymakers that despite its failure to integrate more closely with the EU, Yerevan still had a real scope for consolidating its partnership with NATO even following its engagement with the Eurasian Economic Union (EEU). However, it soon became clear that Moscow’s strong objection to Armenia’s deepening integration with the EU would also seriously deteriorate the country’s relations with NATO, hence negatively affecting Armenia’s security.
The choices made by Armenian officials under heavy pressure from Moscow clearly impaired the country’s reliability in the eyes of the EU to the extent that the EU’s pledge to keep its door open for Armenia has become little more than a phrase.
Likewise, Armenia’s unexpected U-turn away from European integration in September 2013 implied a departure from the path of democratization, instead prioritizing its membership in organizations forged by authoritarian regimes like the Russia-led CSTO and EEU. Consequently, Armenia’s current policy is consistent with Russia’s interests, something NATO could not afford to ignore, and requiring a review of NATO’s relations with Armenia in light of the mounting standoff between the West and Russia.
Amid NATO’s gradually toughening stance vis-à-vis Russia’s belligerent policy, Armenia has taken a set of political steps which were at odds with NATO policy, most blatantly by voting against the UN resolution declaring Crimea’s referendum on joining Russia invalid, and hence for legitimating Russia’s occupation, along with few non-democratic states. This decision was apparently dictated by Russia, but it is noteworthy that it met little protest either from Armenian authorities or Armenian society at large. Moreover, groups of Russia-backed activists in Stepanakert and Yerevan managed to celebrate Crimea’s “self-determination,” placing the region in the same category as Nagorno-Karabakh.
By voting against its resolution, Armenia partly broke the PfP document signed in 1994, where Yerevan committed to the preservation of democratic societies, the maintenance of international law, and to fulfill in good faith the obligations of the Charter of the UN. Moreover, Yerevan damaged its relations with Ukraine, which is in the same NATO partnership framework as Armenia.
By pressure from the Kremlin and as spill-over effect of propaganda addressed to Armenian society, Armenia is being converted into a NATO opponent. Armenia is gradually turning into an isolated tool for Russia in its confrontation with the West, and in its strategy to as far as possible shield the South Caucasus from integration with the West in terms of security, communications, politics and values.
These developments vividly illustrate that Armenia can no longer be considered a prospective political partner of NATO, despite ongoing practical cooperation that will nevertheless likely be reduced after the Armenian peacekeepers leave Afghanistan.
In its effort to reverse Armenia’s relations with NATO, Moscow may finally compel Armenia’s Ministry of Defense to simply suspend its IPAP and PfP programs with NATO.
Moscow has successfully leveraged the political imperative of Armenia’s security, by which Armenia was induced to become a CSTO member. This military quasi-block on its own poses a threat to stability in the South Caucasus, serving Russia’s revisionist policy. It is also becoming clear that the CSTO, which is formally committed to bolstering Armenia’s security, has little capacity to fulfil such a function in practice. Moreover, the main military CSTO partners, Russia and Belarus, continuously contribute to arming Armenia’s main rival Azerbaijan.
The events surrounding Ukraine indeed had dramatic implications for Armenia’s relations with the EU and NATO. Yet the Ukrainian crisis also gave rise to a sense of hope in Armenian society and there is an increasing understanding that a collapse of Russian policy in Ukraine could help Armenia regain its sovereignty. However, by opting to remain in Russia’s orbit, Armenia has in all likelihood lost its potential to foster a democratic and prosperous state with a flourishing economy and simultaneously bolster its security. Armenia’s government still does not comprehend that security is better served by building a closer relationship with NATO.
(Image attribution: NATO)
By Erik Davtyan (05/08/2015 issue of the CACI Analyst)
On July 20, the President of the European Council (EC) Donald Tusk launched his regional trip to the South Caucasus, starting with high level meetings in Yerevan, Armenia. Tusk’s first visit to Yerevan took place in 2010 when he was the Prime Minister of Poland. During the one-day visit, Tusk met with Armenia’s President Serzh Sargsyan. Tusk and Sargsyan discussed EU-Armenia relations and their current cooperation, as well as the Nagorno-Karabakh peace process. They also discussed regional issues, especially the Iranian nuclear deal which was reached on July 14. Regarding the Greek financial crisis and its relevance to the European Union, Sargsyan expressed hope that the problems will be resolved quickly and confirmed that “Armenia favors both stability in the EU, a key partner of our country, and the normal development of Armenia’s centuries-old friend, Greece.” In turn, Tusk appreciated the initiation of the process of constitutional reform in Armenia and asked the President to present the goal of the amendments.
During the joint press conference, Sargsyan stressed that “we [Armenia] are keen on broadening relations with the European Union, one of our key partners, during Mr. Tusk’s tenure, which, I am sure will contribute to the long-lasting constructive dialogue existing between us.” The EC President welcomed the progress on mobility partnership and stated that the EU fully respects Armenia’s decision not to sign the Association Agreement, including the DCFTA (Deep and Comprehensive Free Trade Agreement). Moreover, Tusk reaffirmed that the EU is ready to continue the bilateral cooperation in a myriad of spheres of mutual interest. At the same time, the EC President touched upon the possibility of a visa-free regime with Armenia as a “final goal”. Answering questions raised by journalists, Tusk declared that the main goal of his visit was to reiterate that “the EU wants to strengthen cooperation with Armenia in all areas of mutual interest,” despite Armenia’s membership to the Eurasian Economic Union (EEU).
After the successful conclusion of the first phase of negotiations, the parties stated their expectation that in the near future a new comprehensive agreement will regulate EU-Armenia relations. Tusk did not exclude the possibility of a new free trade agreement, which may open new opportunities for the bilateral economic relations. In May 2015, the economic aspect of the future format of EU-Armenia relations was also highlighted by Morten Enberg, Swedish chargé d’affaires in Armenia. Regarding the Nagorno-Karabakh conflict, the European official confirmed the EU’s support for the OSCE Minsk Group.
Tusk also met with Prime Minister Hovik Abrahamyan, as well as representatives of opposition parties. The Armenian Prime Minister mentioned that “the EU has been and remains a major partner of Armenia due to the fact that our cooperation is first and foremost underpinned by shared values. Armenia is prepared to continue cooperating with the EU in a bid to promote reforms, efficient governance, democracy, human rights, as well as to boost economic exchanges and cooperate in other fields of mutual interest.” During the meeting Tusk confirmed that the EU “will continue to provide reform-targeted financial assistance to Armenia.” During Tusk’s meeting with Armenia’s political opposition, the parties generally discussed the project of constitutional reforms. Representatives of five political parties expressed different approaches toward the project. For example, Mher Shahgeldyan, the secretary of the “Rule of Law” Faction of Armenia’s National Assembly, criticized the project and said that it would strongly increase the functions of the Prime Minister and lead to a monopolization of power. Shahgeldyan also informed Tusk that the opposition parties of the National Assembly have prepared a program on electoral reforms and submitted it to the Venice Commission.
Tusk’s regional visit to the South Caucasus relations follows the Eastern Partnership Summit in Riga on May 21-22. Summarizing all issues of the Yerevan agenda, Donald Tusk left for Tbilisi and Baku and held respective meetings with high officials of Georgia (July 21) and Azerbaijan (July 22).
The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.