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Key Beneficiary Of Russian-Georgian Border Opening

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  • Key Beneficiary Of Russian-Georgian Border Opening

    ARMENIA: KEY BENEFICIARY OF RUSSIAN-GEORGIAN BORDER OPENING
    Emil Danielyan

    Georgian Daily, Georgia
    March 25 2010

    Russia and Georgia have reopened their main land border crossing
    less than 18 months after fighting their brief, but bitter war and
    severing diplomatic relations. Armenia appears to have been the main
    driving force behind the development, and will likely become the key
    beneficiary of renewed commerce through the Kazbegi/Upper Lars narrow
    pass in the Caucasus Mountains.

    Upper Lars is the only Russian-Georgian border crossing located
    beyond Georgia's Russian-backed breakaway regions of South Ossetia
    and Abkhazia. It served as Armenia's sole overland commercial
    conduit to Russia and Europe until being controversially closed
    by Moscow in June 2006 at the height of a Russian-Georgian spy
    scandal. Armenian exporters of agricultural produce and other
    perishables were particularly reliant upon it, accounting for much
    of the cargo traffic through Upper Lars in the summer and fall each
    year. Its closure, ostensibly due to an upgrading of Russian border
    control facilities, forced them to re-route their supplies through the
    more expensive and time-consuming rail-ferry services between Georgia,
    Russia, and Ukraine.

    Hence, the Armenian government's strong interest in seeing the
    border crossing re-opened as soon as possible. It has for several
    years pressed the Russians to complete the checkpoint repairs on
    their side of the frontier and repeatedly secured corresponding
    reassurances from them. Some pro-government Armenian lawmakers exposed
    Yerevan's frustration with the apparent Russian blockade of Georgia
    in late 2006, when they publicly accused Moscow of disregarding the
    interests of Russia's main regional ally in its escalating standoff
    with Tbilisi. The August 2008 war in South Ossetia served to dash
    Armenian hopes that the border would re-open anytime soon.

    Yet, despite remaining technically at war, Moscow and Tbilisi
    subsequently engaged in behind-the-scenes diplomacy on Upper Lars.

    Armenia is known to have arranged and mediated at least one round of
    the Russian-Georgian proxy negotiations reportedly held in Yerevan in
    October 2009. Russian President Dmitry Medvedev announced two months
    later that he saw no "particular obstacles" to re-opening Upper Lars
    and resuming direct flight services between Russia and Georgia,
    despite the Kremlin's continued refusal to do business with the
    Georgian President, Mikheil Saakashvili (Regnum, December 9). Later
    in December, the Russian and Georgian governments announced that they
    had agreed to resume passenger and cargo traffic through the mountain
    pass from March 1, 2010 (RIA Novosti, December 24, 2009).

    Both sides honored that agreement, drawing praise from not only
    Armenia, but the United States and the European Union. The US
    Ambassador to Georgia, John Bass, hailed the development as "a positive
    step that will further the improvement of international relations
    and the economic status of the region's population." For his part,
    Spanish Foreign Minister, Miguel Angel Moratinos, whose country
    currently holds the rotating EU presidency, inspected the border
    crossing during his March 3 visit to Georgia (www.rferl.org, March 5).

    "I can confirm that [Russian-Georgian] negotiations indeed took
    place in Armenia and with Armenia's mediation," Armenian Foreign
    Minister, Edward Nalbandian, told journalists on March 2. He called the
    resulting agreement "a big success" for all three countries involved
    (www.armenialiberty.org, March 2).

    The deal could not have come at a better time for Armenia, whose
    economy has long been hamstrung by closed borders with Turkey and
    Azerbaijan, and still reeling from the 2009 global financial crisis.

    Local entrepreneurs say that the positive impact of re-opening the
    Upper Lars on the domestic economy and its agricultural sector,
    in particular, will be felt as soon as this summer.

    Arsen Ghazarian, the Chairman of the Armenian Union of Industrialists
    and Entrepreneurs, forecast that transportation costs incurred by
    exporters will fall by at least 25 percent. According to Ghazarian,
    who also owns a cargo shipment company, a single truck laden with
    Armenian agricultural products takes at least 23 days to reach Russia
    through a Black Sea rail-ferry link. Going through Upper Lars will
    reduce shipping time by almost half, he said (Kapital, March 2).

    With Russian-Georgian trade having been reduced by Moscow to a
    trickle in recent years, the border re-opening is of lesser economic
    significance to Georgia, at least in the short term. The Saakashvili
    administration's willingness to restore commercial links with Georgia's
    arch-enemy resulted, among other things, from its warm rapport with
    Armenia's current leadership. Even after the Russian-Georgian war,
    the two South Caucasus neighbors managed to reconcile their differing
    geopolitical orientations and focus instead on common interests.

    Saakashvili said that the Georgian-Armenian relationship is as
    "cloudless" as ever, as he greeted his Armenian counterpart, Serzh
    Sargsyan, in the Georgian port of Batumi on February 27. Their
    two-day informal talks reportedly centered on economic issues,
    with both presidents pledging to foster Georgian-Armenian economic
    "integration." "We are dependent upon each other and we should use
    this circumstance for good," the Georgian leader told journalists
    (Armenian Public Television, February 28).

    The venue of the talks was also symbolic. Batumi and Georgia's other
    major Black Sea port, Poti, process at least two-thirds of freight
    shipped to and from Armenia. Use of Georgian territory by Armenian
    trading companies should expand not only as a result of the Upper
    Lars re-opening, but also the ongoing reconstruction of roads in
    southern Georgia leading to the Black Sea coast. The Manila-based
    Asian Development Bank (ADB) agreed last September to support the
    project with a $500 million loan. An additional $500 million loan
    approved by the ADB at the time will finance the planned expansion of
    Armenian highways stretching from the border with Iran to southern
    Georgia. The funding, requested by the Armenian government, is a
    further indication that the landlocked country will regard Georgia
    and, to a lesser extent, Iran, as its most reliable supply line even
    in the unlikely event of the opening of the Turkish-Armenian border.

    Source: http://www.jamestown.org/

    http://georgiandaily.co m/index.php?option=com_content&task=view&i d=17875&Itemid=132
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