Armenia is the bridge linking Moscow and Tehran - October, 2007

Armenia Is The Bridge Linking Moscow And Tehran

October, 2007

Iranian President Mahmoud Ahmadinejad's visit to Armenia will add nothing new to the geopolitical alignment in the region. It will merely restate the obvious. The strategic partnership between Armenia and Iran is an established fact, and this visit is unlikely to be seen as anything of a landmark. Nor will it affect relations between Armenia and the United States. Armenia is effectively under a blockade, and America knows this. One of the indirect agents of the blockade is Georgia - America's closest ally in the region. More direct participants are other U.S. partners - Azerbaijan and Turkey. In this context, friendly relations between Iran and Armenia are only natural. Whether one likes it or not, Armenia will be friendly with neighbors with which circumstances, history and common cultural background force it to be friends.

Until recently the U.S. has displayed some understanding of this fact. True, Anthony Godfrey, the U.S. Charge d'Affaires in Armenia, has occasionally expressed dissatisfaction with expanding Armenian-Iranian relations and growing economic ties between Armenia and Iran, although the U.S. is well aware of Armenia's plight, and it would be most unethical to demand that it go into self-imposed isolation. Armenia therefore looks for understanding not only from America, but also from any other country that has sour relations with Iran. In this sense, an aggravation of American-Iranian relations and, as a result, a possible toughening of the U.S. position would be most unwelcome.

It is to be hoped that there will be no further deterioration of relations between Tehran and Washington, and even if there is, the U.S. has no right and is unlikely to demand anything "extra" from Armenia in its relationship with Iran. It would be a different thing if hostilities were to break out - Armenia's border with Iran would automatically be sealed. That could lead to serious consequences for the Armenian economy. As regards Baku's likely response to the visit, Azerbaijan is in the habit of reacting negatively to any progress in Armenia's relations with any country, let alone Iran.

Azerbaijan has been an active participant in many regional projects with a manifest anti-Iranian and anti-Russian bias. They include communications projects, oil pipelines, gas pipelines, and Caspian oil production. In other words even today Azerbaijan continues to pursue Elchibey's policies of tearing up all possible friendly bonds with a country that has a multi-millennium civilization and culture. Azerbaijan is seeking to integrate into Europe via the Turkic world. Such a policy cannot appeal to Iran and runs contrary to Iran's political and geopolitical ambitions. Therefore, the envy with which Baku eyes Armenia's friendly and allied relations with Iran, is both understandable and incomprehensible.

It is incomprehensible because Azerbaijan itself has done a great deal to antagonize Iran. In turn, Armenia's relations with Iran are a fine example of the fact that Christianity and Islam can co-exist peacefully, and that the religious factor in inter-ethnic and inter-state relations needn't play a decisive role. In any case, the Iranian side will continue to stick to its long considered position on the Karabakh issue. Iran, like China, is happy to wait, and as far as possible safeguard its borders against potential inter-ethnic or inter-state clashes. This centuries-tested policy is unlikely to be subject to change for short-term considerations.

Iran has always had ethnic, cultural and purely strategic interests in the Southern Caucasus. When the Turkic peoples destroyed Caucasian Albania, Armenia was Iran's only remaining ally in the region. An absolute loss of the Southern Caucasus would be a tragedy both for Iran and for Russia. Equally, the preservation of the Southern Caucasus as a friendly region is very important for both Tehran and Moscow. Both countries have historical interests and traditional contacts with the peoples of the region. But today only Armenia and Nagorny Karabakh continue the tradition of Caucasian friendship with Iran and Russia. And while Iran acts as the corridor giving Armenia "access to the wider world", Armenia serves as the bridge linking Tehran and Moscow. This is a worthy role, and Armenia plays it without fault. A Moscow-Yerevan-Tehran axis appears to be crystallizing. It looks as though Iran projects Russia's geopolitical ambitions in this region and vice versa.

Both Iran and Russia are being ostracized from European politics, and in these conditions they have no other option but to seek closer contact with each other and align a geopolitical, energy and economic axis capable of helping them to withstand pressure from Europe. Although the East-West division is nowadays somewhat artificial, classical Oriental countries carry on the ancient traditions of wise and considered inter-state policy. India, China and Iran, for that matter, are all countries with which alliance could only benefit Russia.

Source: http://en.rian.ru/analysis/20071024/85342413.html

In related news:

Debating Big Brother’s Presence: Concerns linger of Armenia as “outpost”

Russia continues to expand its presence in Armenia’s economy, buying up infrastructures of national importance. The increased “Russification” of Armenia gives way to concerns that Speaker of Russia’s State Duma Boris Grizlov in 2004, calling Armenia an “outpost” is coming true. Strategic partner Russia owns 80 percents of energy sources and systems of independent Armenia, which has forced Armenia into the state of an “energy colonization”, economists say. One of Armenia’s few remaining infrastructures is now on sale too. With the latest deal Russia took possession of the communication sphere. On September 14th the Russian MTS got 80 percent of International Cell Holding Company, the owner of K-Telecom for 310 million euros. 90 percent of Armenia’s leading communications operator ArmenTel were bought by Russian Vimpelcom Company in November 2006 for 382 million euros. Armenia still owns some infrastructure including the railroad, but the Russian Railroads Company will be the most likely winner in the tender announced on October 15th as it competes with an unknown company from India.

Last year, Andranik Manukyan, Minister of Transport and Communications of the Republic of Armenia stated that the only way to save the Armenian railroad is to hand it over for concession management to Russia, something the RA government is likely to do. The beginning of the Russian policy of getting economic leverages is symbolically chosen to be the year of 2002, when the ‘Property for Debt’ deal was set into circulation; according to the deal Armenia gave Russia 4 enterprises and the most powerful Hrazdan Thermo-Electric Station as a pay for its debt to Russia of $97 million. “Russia intruded into its strategic partner’s home like a bailiff and demanded our strategic entities for just $97 million. This took place in case when Russia had forgiven much larger debts to others: say, $40 billion to Turkey, Syria and had even reconstructed Georgia’s debt in $150 million with the right of privilege to repay in 6 years,” economist Eduard Aghajanov says. In 2001 Putin called the criticism of the deal ‘hysteria over selling the Fatherland’ saying those times have passed and the economy has to go in a different direction. The ‘hysteria’ of opposition and economists became even fiercer, when none of the enterprises was re-launched within the 5 years since then, gave no production and did not bring any use to the economy of the country.

Andranik Mihranyan, Russia-based political scientist of Armenian descent believes the deals have been made by mutual agreement and Russia has never imposed conditions unacceptable for Armenia. “Russia simply has very little interest in those plants. It has even appeared that Russia does not need them, because there are numerous similar factories in Russia itself that do not operate.” A similar opinion was expressed in Yerevan recently by the co-chairman of the Armenian-Russian inter-parliamentary commission Nikolai Rizhkov, saying the plants received particularly by the “Property for Debt” deal were not profitable for them. “Some of our expectations connected with those enterprises did not prove right.” Economic analyst Aghajanov asks who forced the Russians to purchase the enterprises. And answers that the decision on the purchase has not been economic, but rather political aiming to get as much leverage in the Armenian economy as possible. The most powerful leverage is the energy system. Russia bought more than 80 percent of the country’s energy sources and system, including the 5th energy bloc of the Hrazdan Thermal-Electric Station, the Sevan Cascade, distribution network, and took the Metsamor Nuclear Power Plant for licensed management because of a set state monopoly in this sphere. With the exception of thermal-electric and several minor hydro-electric stations, the rest are owned by Russian companies.

Besides, no cash money has been given for the majority of these structures. The first energy infrastructure that became Gazprom’s was the 45 percent of ArmRosGazProm. Russians paid in gas instead of the $148 million over several years. According to official data the Russian RAO UES paid $25 million for the Sevan-Hrazdan cascade; however, some sources mention the RAO UES took the cascade in exchange for the Armenian debt for nuclear fuel. The Hrazadan Thermal-Electric Station went into Russian possession as a result of the ‘Property for Debt’ deal. An exception is the Electric Network of Armenia as RAO UES has to pay $70 million in exchange – though not to Armenia but to the owner of the network – the British Midland Resources. The most controversial deal further empowering the economic leverages of Russia and deepening the disproportion of the Yerevan-Moscow relations was signed in 2006, when the 5th bloc of the Hrazdan Thermo-Electric Station, the last significant energy system, was ceded to Russia (the other four blocs already belonged to the Russian company). Under Russian pressure the initial length of Iran-Armenia pipeline was also drastically minimized, thus preventing its competitiveness to the Russian energy companies. This new deal was called ‘Property for Gas’, which, Aram Sargsyan, chairman of the oppositional Republic Party says should in fact be called ‘Everything for the Post.’ The necessity in ‘Property for Gas’ deal appeared after Russia decided to increase the price for the gas for 2.5 times ahead of parlamentary elections in Armenia; and coincided with time when Armenia was making attempts to diversify its energy sphere. After protracted negotiations, the government of RA gave preference to Iranian Mar and Sanir companies in both tenders for the construction of the Iran-Armenia gas pipeline and the modernization of the Hrazdan Thermal-Electric Station the same year. “Russia realized quite well that this cooperation with Iran is a serious alternative and blackmailed Armenia by increasing the price for gas,” former Prime Minister, and presidential candidate Vazgen Manukyan says insisting the latest deal is a new leverage in the hands of Russia to be used for political purposes.

“In the presidential election in 2008 Russia may say: ‘If my proxy does not come to power I will make the price for the gas $250, if he does – it will remain at $110’,” Manukyan told Armenianow. The 5th bloc of Hrazdan station was given to Russia for $60 million in cash, while the remaining nearly $189 million will be paid to the ArmRosGazProm as subsidy. For three years the citizens of Armenia will be getting relatively cheap gas; however, another highly important energy entity of the republic will go into Russia’s possession. According to the agreement the prices may go up beginning 2009. Radical opposition political analyst Suren Surenyants is confident the authorities agreed to the economically unprofitable gas deal to prolong their stay in power and to fulfill all the ‘directives’ of the Kremlin. Vahan Hovhannisyan, deputy speaker of the National Assembly, member of the Armenian Revolutionary Federation insists Armenia-Russia relations are a strategic partnership in nature and include mutual obligations of the sides: “We may frequently dislike those obligations, but they are unavoidable.” “After the Soviet years it’s natural that the relations with Russia are viewed as colonial. However, the situation has changed and I don’t see a threat that Russia may use its economic leverages for political purposes,” a co-chairman of the Armenia-Russia Inter-Parliamentary Commission Vahan Hovhannisyan said.

Source: http://armenianow.com/?action=viewAr...0&IID=&lng=eng

Armenia In Talks With Russia Over New Nuclear Plant

Russia is ready to help Armenia build a new nuclear plan and is currently discussing the ambitious idea with its government, a top executive of a Russian atomic energy firm said on Thursday. “We are discussing the issue of building a new 100 Megawatt unit in the territory of the Armenian nuclear plant [at Metsamor,]” Aleksandr Glukhov, vice-chairman of the state-owned Atomstroyexport company, told the Itar-Tass news agency. “Armenia has unique legislation which allows foreign companies to acquire shares in [local] nuclear plants, which creates new opportunities for them,” he said. The Armenian parliament enacted the government-drafted legislation early last year in what was widely seen as the first step toward the eventual construction of the new plant estimated to cost at least $1 billion. The authorities in Yerevan hopes to raise the sum from foreign governments or companies interested in financing the project. President Robert Kocharian reaffirmed in late April Armenia’s intention to replace Metsamor’s sole Soviet-era reactor, which is due to be decommissioned by 2016, by a new, modern facility meeting Western safety standards. “I think that as early as in 2012-2013 active work will be implemented for a new nuclear power plant,” he told university students in Yerevan. Sergey Kirienko, head of Russia’s Federal Agency on Atomic Energy (Rosatom), visited Yerevan around that time and discussed the matter with Kocharian and other Armenian officials. Deputy Energy Minister Areg Galstian said afterwards that the Russian-Armenian inter-governmental commission on economic cooperation has set up a working group tasked with looking into the project. A senior American diplomat said in June that the United States is also ready in principle to help Yerevan put the project into practice. "We are working with the Armenian Ministry of Energy to develop a feasibility study as to just what would be the best replacement for this capacity," Anthony Godfrey, then U.S. charge d’affaires in Armenia, said. The Armenian authorities have said all along that Metsamor, which meets about 40 percent of the country’s electricity needs, will be shut down only they find an alternative source of cheap energy.

Source: http://www.armenialiberty.org/armeni...7FD232E2F0.ASP

Russian Defense Chief Visits Armenia

Armenia’s leadership and Russia’s visiting Defense Minister Anatoly Serdyukov pledged to step up the already close military cooperation between their nations as they held talks in Yerevan on Tuesday. Serdyukov’s one-day visit to Armenia involved separate meetings with President Robert Kocharian, Prime Minister Serzh Sarkisian and Defense Minister Mikael Harutiunian as well as a visit to Russian troops stationed in the country. “The two sides discussed issues pertaining to military-technical cooperation between the two countries, expressing their satisfaction with the level and quality of their partnership in this sphere,” Kocharian’s office said in a short statement. According to the Armenian government’s press service, Serdyukov told Sarkisian that his visit “will give new impetus” to the development of Russian-Armenian military ties. Sarkisian was quoted as saying that those ties “stem from our national interests” and that Yerevan “will do everything to further deepen and develop them.” A separate statement by the Armenian Defense Ministry said Serdyukov and Harutiunian approved a “plan of cooperation” between their ministries for next year. They also discussed preparations for the next Russian-Armenian military exercises to be held in 2008, the statement said. Serdyukov, accompanied by Harutiunian, visited the northern city of Gyumri earlier in the day to inspect facilities of the Russian military base stationed in the area close to the Armenian-Turkish border. “I wanted to personally familiarize myself with how our servicemen live here, what problems they face,” he told reporters there. “Those are primarily social and logistical.” “I think that we will draw certain conclusions after the trip and take measures to improve the condition of the base,” the Russian minister said. The Russian base has been reinforced in the last few years with military hardware and other equipment that belonged to Russian troops which are currently being pulled out of neighboring Georgia.

Source: http://www.armenialiberty.org/armeni...E4EE768975.ASP\

RF Defense Ministry to continue equipping Russian military base in Armenia

The Russian Ministry of Defense will continue equipping the 102nd military base in Gyumri, Defense Minister Anatoly Serdyukov told reporters. “Extra measures will be taken,” he said. “I wanted to learn about the problems our servicemen and their families face.” He also informed that the Ministry intends to find sponsors for reconstruction of a 19-century Orthodox Church situated on the base’s territory, Novosti Armenia reports.

Source: http://www.panarmenian.net/news/eng/?nid=23906

SOARING TRADE BOOSTS RUSSIAN-ARMENIAN ECONOMIC TIES

Armenia’s trade with Russia has increased dramatically this year, paralleling the growing Russian economic presence in the country, which has sparked concerns about Armenia’s economic independence and even national security. The almost 62% year-on-year rise in Russian-Armenian trade registered in the first eight months of 2007 comes despite Russia’s continuing transport blockade of Georgia, Armenia’s main commercial conduit to the outside world. According to the most recent data posted by Armenia’s National Statistical Service (NSS) on its website, www.armstat.am, the volume of bilateral trade totaled $404 million in January-August 2007, up from $250 million registered during the same period last year. Much of the gain resulted from an almost 100% surge in Armenian exports to Russia, most of them alcoholic beverages and prepared foodstuffs. Even so, Armenian imports of Russian commodities and goods (notably natural gas) continued to account for most of the bilateral commercial exchange, rising by 50% to about $280 million.

Consequently, Russia saw its share in Armenia’s external trade grow from 13.1% to 15.2%, solidifying its status as the South Caucasus state’s single largest trading partner. The NSS reported similarly strong gains in Armenia’s trade with Georgia, Ukraine, and Kazakhstan. As a result, the share of non-Baltic former Soviet republics in its trade reached 32.6%, up from 28.4% recorded in January-August 2006. The European Union, by comparison, accounted for 38.2% of the January-August 2007 turnover. Officials in Moscow and Yerevan have welcomed the growing commercial ties between their countries, which they say will reach a new high of $700 million in the full year 2007. Speaking after talks in Moscow on September 25, the Russian and Armenian prime ministers said they would try to ensure that Russian-Armenian trade hits $1 billion next year (Armenian Public Television, September 25). Armenian Prime Minister Serge Sarkisian instructed his ministers to closely work with their Russian counterparts to meet this target (Statement by the Armenian government, September 27). Nikolai Ryzhkov, a Russian lawmaker co-chairing a Russian-Armenian inter-parliamentary commission, came up with a more conservative estimate during a mid-October visit to Yerevan, predicting bilateral trade will likely pass $1 billion mark only in 2009 (Interfax, October 19).

Russia-Armenian trade is growing strongly despite Russia’s decision in June 2006 to close its main border crossing with Georgia. Moscow cited the need to conduct repairs on Russian border guard and customs facilities. The move, whatever its real motives, hit hard Armenian companies that heavily relied on the Upper Lars crossing in shipping goods to Russia and other parts of the former Soviet Union. Armenian government officials and lawmakers have since been lobbying their Russian counterparts to reopen Upper Lars. According the Armenian ambassador in Moscow, Armen Smbatian, the Russians have promised to do that some time in 2008 (RFE/RL Armenia Report, September 28). Armenian exporters, meanwhile, appear to have quickly adapted to the new situation through an even greater reliance on a rail-ferry link between the Georgian Black Sea port of Poti and Ukraine’s Ilyichevsk. A similar ferry service, designed to primarily cater to Armenia, was launched in April 2007 between Poti and the Russian port of Port-Kavkaz. However, the service has yet to become regular and frequent enough to process substantial amounts of freight. Sarkisian reportedly raised the issue with his Russian counterpart, Viktor Zubkov, during their Moscow meeting.

Zubkov told journalists after the talks that Russian companies would invest $1.5 billion in Armenia “in the near future.” He gave no details, saying only that much of those investments will be channeled into the construction of an oil refinery in southeastern Armenia that will process crude from neighboring Iran. The ambitious project featured prominently during Iranian President Mahmoud Ahmadinejad’s October 22 visit to Armenia. Speaking at a joint news conference with Ahmadinejad, Armenian President Robert Kocharian said Yerevan and Tehran agreed to press ahead with the project’s implementation. Another top Russian official, Transport Minister Igor Levitin, said in Yerevan on September 14 that Russian investments in the Armenian economy will reach a record-high level of $500 million in 2007 (Azg, September 15). He did not specify whether the figure includes $430 million that the Russian telecommunications operator MTS paid to purchase Armenia’s largest mobile phone network, VivaCell, from a Lebanese-owned firm. The deal, officially announced in Yerevan on September 14, came almost a year after the $500 million acquisition of Armenia’s national telephone company and its wireless network by another Russian telecom operator, Vimpelcom.

The Armenian government is believed to have played a key role in both takeovers that left another sector of Armenia’s economy under Russian ownership. It has also been instrumental in Russian control of the Armenian energy sector. That control has become near total since the signing of a controversial April 2006 agreement that enabled Armenia to avoid a doubling of the price of Russian gas until January 2009 in return for handing over more energy assets to Russia. It was officially confirmed on September 12 that those assets include the entire Armenian section of an under-construction gas pipeline from Iran (Haykakan Zhamanak, September 13). It will now be owned by the Armenian national gas company in which Russia’s Gazprom conglomerate has a controlling stake. The tightening of Russia’s economic grip on Armenia is widely attributed to Kocharian’s and his preferred successor Sarkisian’s obvious desire to ensure the Kremlin’s continued support for their regime. The two men, who single-handedly make all key decisions affecting the nation, are poised to cede more industries to Russian companies ahead of next spring’s Armenian presidential election. Those include Armenia’s rail network and largest gold mining company.

Source: http://jamestown.org/edm/article.php?article_id=2372546