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Armenia in Russia's Embrace

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  • Armenia in Russia's Embrace

    The Moscow Times
    Wednesday, Mar. 24, 2004. Page 10

    Armenia in Russia's Embrace

    By Kim Iskyan

    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 crisis in Adzharia. 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.

    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

    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. 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 --
    inadvertent or otherwise -- of the flow of energy resources from Russia, and
    works hard to stay in the good graces of the Kremlin.

    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

    Armenia's official foreign policy is to foster amicable relations without
    picking favorites -- 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 -- 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 -- compared with the
    official, and inflated, figure of 3.2 million inhabitants of Armenia
    proper -- 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 -- for better or for worse -- 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.

    Kim Iskyan, a freelance journalist and consultant based in Yerevan, Armenia,
    contributed this comment to The Moscow Times.