An Unreasonable U.S. Concern: Armenian-Iranian Cooperation

By Michael G. Mensoian

August 4, 2007

Recently, the United States Charge d’Affairs in Yerevan, Anthony
Godfrey, indicated that Washington had concerns regarding the degree
and direction of Armenian-Iranian cooperation, especially relating to
energy resources. For the past 30 years Iran has been the principal
adversary of the United States in the Middle East and its client state
Israel. Its determination to develop nuclear technology for peaceful
or alleged non-peaceful purposes or, again, its support of what is
described in the Western media as radical Islamic groups is beyond
the purpose of this discussion. However, what is important is that
Armenia and Iran enjoy a symbiotic relationship that both nations
have assiduously nurtured since Armenia’s independence. It should
be noted that there are several hundred thousand Armenians in Iran;
most having lived there for generations.

Although the United States has a right to question Armenia’s
relationship with Iran, that concern must be evaluated within the
context of the close economic and military ties Washington maintains
with Turkey, Azerbaijan and Georgia. Both Turkey and Azerbaijan,
which loom large in the strategic interests of the United States, have
adopted policies whose sole purpose is to weaken Armenia. Georgia,
a third recipient of United States military and economic largess,
maintains a cooperative stance in its relations with Armenia, yet it
does not hesitate to enter into agreements with Turkey and Azerbaijan
that are inimical to Armenia’s economic interests. Far out weighing any
economic and humanitarian aid Armenia receives from the United States
are the close ties that bind Ankara, Baku and Tbilisi to Washington’s
policy of challenging Russia and Iran for the energy resources of
Central Asia and the Caucasus. As a result, Armenia has been left,
literally, to its own devices. So much for that.

As one of 44 land-locked countries in the world, Armenia’s relationship
with its neighbors must be placed in a special category. Georgia’s
interest in Armenia is primarily pragmatic; the type and volume of
trade, transit concerns, the degree and purpose of Armenia’s military
cooperation with Russia and the political interaction between Yerevan
and the Javakhk Armenians. Its economic and political viability
does not depend on Armenian cooperation. Armenia, however, has a
strategic interest in Georgia. That country represents the only land
route to the Black Sea ports of Batumi and Poti through which most
of Armenia’s imports and exports pass. Similarly the pipeline that
delivers gas from Russia to Armenia transits Georgian territory. It
is obvious that there is no parity in their relationship. This lack of
symmetry emboldens Georgia to participate in economic ventures without
regard for their adverse impact on Armenia. With Armenia excluded,
Georgia’s strategic importance to Turkey increases exponentially
as the only practical land connection to Azerbaijan and ultimately
to Central Asia across the Caspian Sea. One only need look at the
route of the Baku-Tbilisi-Ceyhan pipeline as well as the proposed
Kars-Tbilisi-Baku railroad which will replace the existing line that
passes through Gyumri in Armenia that Turkey boycotts. Both of these
Turkish sponsored ventures were meant to harm Armenia and exclude her
from the potential economic benefits that the region will experience.

Paradoxically, economic development in which all countries share is
a goal that the United States claims is vital to creating political
stability within the region. Yet the pipeline route was supported
by the United States knowing that it would have an adverse impact
on Armenia. As for the projected railroad, the United States again
exerted no pressure on Turkey to reopen the existing line through
Gyumri. The tepid response from Washington was that no financial
aid would be provided if it by-passed Armenia. With the wealth that
Turkey and Azerbaijan have at their disposal, financial support from
the United States was never a determining issue.

The geostrategic interest of the United States in the Caucasus and
Central Asia not only benefits Turkey and Azerbaijan, but paradoxically
has elevated the importance and strategic role of Iran vis-a-vis
Armenia’s national objectives. In March of this year, ceremonies
were held at Agarak, Armenia, to inaugurate the opening of the gas
pipeline from Iran to Armenia. From Agarak the pipeline connects to the
Armenian gas distribution net at Kajaran. This is a major development
that should have greater significance in the future. Presently, any
gas that is imported from Iran must be used to generate electricity
which will then be "sold" to Iran. An ancillary benefit is that the
villages in the southern Syunik district will have access to gas
for domestic purposes for the first time. In an emergency situation,
should deliveries from Russia via Georgia be cut-off, Armenia will
be able to draw on this new supply of gas.

On the main highway north from Megri in southern Armenia, any casual
observer will notice a steady stream of Iranian trucks which carry an
estimated 500,000 to 600,000 tons of goods annually. At an economic
summit in Yerevan this July, Armenian and Iranian officials met to
discuss a wide range of economic issues. As reported by Armenpress,
Iran’s foreign minister Manouchehr Mottaki indicated that several joint
ventures were being considered. These included building a hydropower
facility on the Arax River, a refinery in Armenia to process Iranian
oil to gasoline for export to Iran, and a new railroad link between
the two countries. He reported that trade between Armenia and Iran
had reached $200 million annually with the potential for reaching $1
billion annually.

Although it doesn’t have a contiguous border with Armenia,
its fifth neighbor is Russia. Both countries do depend upon
each other, but Armenia is the "junior partner" so to speak in
this relationship. Presently, Armenia is a "captive" of Russia’s
Gazprom: a quasi-state run enterprise that supplies a significant
part of its energy needs at prices that are not set at "arms length"
negotiations. One can seriously question the desirability of join
ventures by the two countries or, especially, the ownership of any
segment of Armenia’s economic infrastructure by Russia. The Russian
garrison in Armenia does provide a stabilizing influence along the
Turkish-Armenian border. Armenia reciprocates by providing Russia
with its last foothold south of the Caucasus.

In the long term, Russia and Iran are adversaries both in the Caucasus
as well as in Central Asia. However, in the short term their objectives
coalesce to prevent Turkey from dominating the Caucasus and extending
its influence into Central Asia. Present United States policy
seeks to exploit the energy resources of Central Asia and control
its movement into international markets. For the present at least,
Turkey and Azerbaijan are willing partners.

Armenia has a crucial if passive role to play in thwarting this
expansion of Turkish influence. As mentioned earlier, Russian
military units stationed in Armenia represent a major deterrent to any
ill-advised Turkish military venture. The presence of Russian forces
is a reminder that she has not abdicated her historic interests in
the region or her support of autonomy for Abkhazia and South Ossetia
in Georgia. Additionally, Armenia represents the only route for a
potential pipeline for the delivery of Iranian gas to Georgia–an
important bargaining chip in future Georgian-Armenian cooperation. An
alternative source of gas would lessen Georgia’s future dependence on
Russia as well as on Azerbaijan, whose ability to meet her increasing
demands is questionable.

Present United States policy is a direct response to the disintegration
of the Soviet Union and the transformation of the several Soviet
republics into independent nations. To fill the resulting political
vacuum, the U.S. Congress passed the Freedom Support Act in 1992. Its
underlying purpose, shorn of its altruistic rhetoric, was to challenge
Russia in the Caucasus and to extend U.S. influence into Central
Asia with its vast deposits of oil and natural gas. Turkey was a
key component of this strategy. However, the official objective of
the Freedom Support Act was to provide economic and humanitarian aid
and to promote democratic institutions in these recently independent
countries. This objective ran counter to Russia’s official policy,
which was to regain hegemony over its Near Abroad, the former soviet

In recognition of Armenia’s position vis-a-vis Azerbaijan, Title 9,
Section 907 of the Act stated that "United States assistance…may
not be provided to the government of Azerbaijan until the President
determines and so reports to Congress that the government of Azerbaijan
is taking demonstrable steps to cease all blockades and other offensive
uses of force against Armenia and Nagorno-Karabakh."

In every year since its passage, President Bush has waived Section 907
which lifted restrictions on U.S. assistance to Azerbaijan. According
to the Office of the Press Secretary, U.S. Department of State, the
waiver was necessary "…to support United States efforts to counter
international terrorism" [and] "…to support the operational readiness
of the United States Armed Forces…to counter international terrorism;
[it] is important to Azerbaijan border security; and will not undermine
or hamper ongoing efforts to negotiate a peaceful settlement between
Armenia and Azerbaijan or be used for offensive purposes against

Coupled with these annual waivers, it is instructive to look at
President Bush’s latest recommendations for the fiscal year 2007
budget as reported in a press release by the ANCA. Contrary to
an agreement struck with Congress in 2001 to maintain parity in
U.S. military aid to Armenia and Azerbaijan, the President proposed
"…cutting…economic aid to Armenia from…[the 2006] appropriation
of $74.4 million to $50 million, a nearly 33 per cent reduction." For
Azerbaijan, the figure was $28 million and $58 million for Georgia. The
Foreign Military Financing proposals were $3.5 million for Armenia,
$4.5 million for Azerbaijan and $10 million for Georgia.

With respect to the President’s recommendations for International
Military Education and Training the figures are $790,000 for Armenia,
$885,000 for Azerbaijan and $1,235,000 for Georgia. The President’s
fiscal year 2008 budget seeks 20 percent more in military aid to
Azerbaijan than to Armenia. So much for parity.

The Congressional Caucus on Armenian Issues formed in 1995 has been
instrumental in protecting Armenia’s interests. However, the role of
the present administration should indicate the importance it places
on the Turkish-Azerbaijan-Georgia triumvirate. United States influence
within these countries is the key objective in its attempt to counter
Russian influence and to achieve its goal to control the exploitation
and movement of energy resources to global markets. The $1.5 billion
in humanitarian and technical aid received by Armenia since 1992 from
the United States masks the inequity between the aid given to the
"triumvirate" and Armenia when Armenia is added to the equation.

During this same period, Armenia has endured the adverse economic
effects caused by the blockade imposed by Turkey and its ally
Azerbaijan, contrary to the requirement that the waiver will
not be granted "…until the President determines…that the
government of Azerbaijan is taking demonstrable steps to cease all
blockades…against Armenia and Nagorno-Karabakh." Failure to meet
this requirement has not dampened the President’s enthusiasm to waive
this prohibition each year.

For the United States to ignore the effect of its pro-Turkish policy
begs the question as to what should Armenia’s response be with
respect to Iran? A key component of Armenia’s economic and political
viability depends on maintaining a mutually beneficial relationship
with its southern neighbor. Its cooperation with Iran in no way affects
United States interests. It could well be that the ideological and
strategic objectives of the United States and Iran are so great as
to defy any immediate meaningful accommodation. However difficult
that may be for the United States, Armenia must be left to develop
its relationship with Iran in a manner that enhances its legitimate
national objectives. Rather than question Armenian-Iranian cooperation,
the United States should reconsider the aid given to Azerbaijan and
Georgia and increase its support to Armenia if only because it is
the one emerging democratic nation in the Caucasus region, a key
objective of the Freedom Support Act.

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