The West Must Offer Armenia Incentives Rather Than Decry Its Ties with Russia

Harut Sassounian

BY HARUT SASSOUNIAN

On October 10, after lengthy heated debates, Armenia signed a treaty to join the Eurasian Economic Union (EEU), composed of Belarus, Kazakhstan and Russia. The agreement goes into effect on January 1, 2015, subject to ratification by parliaments of the four countries. Kyrgyzstan and Tajikistan have also expressed an interest in joining the Union.

The intended objective of forming EEU is to facilitate the free movement of goods, services, capital, and labor across member states, and to implement a coordinated policy in the energy, industrial, agricultural and transport sectors.

Views of analysts on the merits of Armenia’s membership in EEU diverge depending on whether they are proponents or opponents of the country’s leadership. The arguments advanced by opponents of EEU include the possible loss of Armenia’s independence and isolation of Artsakh (Karabagh) through the establishment of customs checkpoints at the border. EEU proponents, on the other hand, are stressing Armenia’s geostrategic and economic interests. It remains to be seen which of these arguments will eventually prevail.

Meanwhile, there are some basic facts that are self-evident. Armenia has had long-standing and multifaceted links to Moscow going back to the Tsarist era, the Soviet Union, and today’s Russian Federation.

It is imperative to recall that the livelihood of hundreds of thousands Armenian migrants in Russia will be impacted by Armenia’s EEU membership, in terms of their ability to reside and work in that country. Furthermore, Armenian businesses would be able to expand their small domestic market, exporting their products with favorable tax terms to over one hundred million potential consumers in Belarus, Kazakhstan, and Russia. Armenia would also serve as an easy gateway for foreign investors interested in entering the vast and complex EEU markets.

In the final analysis, three essential questions need to be raised on Armenia’s membership in EEU:

1) Given the ongoing Artsakh conflict and Azerbaijan’s multi-billion dollar military spending spree, which country has sold and will continue to sell Armenia advanced weapons to mitigate the growing threat from Baku? Not the Unites States, Great Britain or France, but Russia!

2) Which country can provide Armenia with desperately-needed natural gas at any price, let alone at subsidized prices? Russia and Iran to a lesser extent through a small pipeline.

3) Since Russia is Armenia’s largest trading partner, it makes more economic sense to have favorable tax terms with that country than with Europe. Not joining EEU would place Armenia at a serious tax disadvantage with devastating economic consequences.

While these are compelling reasons for Armenia’s decision to join EEU, no one should conclude that Yerevan has to remain exclusively in the Russian economic zone. Clearly, it is in Armenia’s interest to develop multilateral ties with the rest of the world, including Western Europe, North America, Middle East, and Asia. Armenian officials have repeatedly stated their interest in developing closer economic, political, and even military relations with Western countries, but not at the expense of Armenia’s historical ties with Russia.

Meanwhile, it would be far more productive if Western countries, particularly the United States, rather than urging Armenian leaders to cut off vital relations with Russia, would actually offer tax privileges and other incentives to their investors in Armenia, thus reducing Yerevan’s exclusive dependence on Russia. Similarly, U.S. criticism and warnings issued to Armenia for its commercial ties with Iran are manifestly counter-productive. It would be far more helpful if the Obama administration could muster the courage to press Turkey and Azerbaijan into lifting their joint blockade of the Armenian Republic which has been in effect for over 20 years.

In the light of the foregoing existential strategic and economic realities, Western countries would be better served to use carrots rather than sticks to help steer Armenia toward a more balanced relationship between East and West.

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10 Comments

  1. Janapar said:

    As if they had any choice at all! To divorce Armenia from Russia will be very difficult. Armenia has nothing the west wants and so they do not care. To be a friend of the west like Georgia risks the wrath of Putin.

  2. Avetis said:

    Well Said, Mr. Sassounian. You continue to remain one of the few public voices of sanity in the American-Armenian community.

  3. Random Armenian said:

    I don’t see western countries using the stick against Armenia because they don’t have the leverage that Russia has. Armenia does not depend on the west for natural gas or military ties. These are points of control that Russia has on Armenia that no-one else has!

    I don’t see anything in what the EU was doing to Armenia to join it in economically that can be seen as a stick.

    Also, I think the total trade between EU countries is at the same level or more with Russia. The latter may be the single largest country as a trade partner but the trade Armenia has with individual EU countries add up. The difference is that Russia can put pressure on Armenia that the EU and the US cannot.

    • raf said:

      And most of the stuff that Armenia sells to EU states are simply raw material which can be sold to any other country. If Germany doesn’t buy our copper then china will do it. But when it comes to food stuff or alcoholic beverages, Russia is our single economic partner.

      • Random Armenian said:

        I’m no economist but wouldn’t the EU trade agreement helped in increasing exports to Armenia?

        • Avetis said:

          Basing my humble opinion on your question, you are obviously not an economist nor do you understand international-relations.

  4. Gurgen said:

    Short but well balanced analysis, however one point was a little unrealistic:

    “…the Obama administration could muster the courage to press Turkey and Azerbaijan into lifting their joint blockade of the Armenian Republic which has been in effect for over 20 years..”

    The US govt is too busy apologizing to Turkey. They can’t even get Turkey to agree to let them use the Incirlik air base which was built by the US. In fact the whole Turkish military is nothing but an appendage of NATO, financed but the US tax dollar. As far as Azerbaijan is concerned, the western greed for more oil/gas supplies make that country immune to western criticism.

  5. GeorgeMardig said:

    …”The West Must Offer Armenia Incentives Rather Than Decry Its Ties with Russia” …The West should understand that Armenia is a small and weak country, not to mention they have gone through a Genocide because of their betrayel and inaction in world war I. It is time to make some noble gestures towards the Armenians instead of bashing them.

  6. Seto said:

    Armenia was betrayed when the West (contrary to the promises to punish the criminal Turkish government) embraced the genocidal and criminal regime of Kemal Ataturk that “finished” the Armenian Genocide. Armenia was betrayed and ABANDONED by the West in 1920. This is simply the historic reality. Yet, Armenia and Armenians are still not bitter and have not developed anti-Western sentiments which are RAMPANT in Turkey from ordinary people all the way up to the government! As long as the West DENIES the Armenian Genocide and continues to support the criminal Turkish government (which is criminal because it continues to deny and cover up the Armenian Genocide), the West has zero moral authority to speak of such things. Recognize the Armenian Genocide, punish the criminals who committed it by holding them accountable so it NEVER happens again. The ISIS-supporting Islamic government of Turkey will continue to challenge and even mock the United States and other Western powers because it sees how unprincipled and duplicitous its leaders are. It has bitten the hand that fed it and kept it afloat! And will continue to do so, as long as genuine concepts of humanitarianism and human rights do not triumph. A principled stance goes a long way not only with Armenians and Armenia, but the International Community also.

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