Today’s Zaman, Turkey
Sept 7 2013
Armenia’s bombshell
AMANDA PAUL
Last week during a visit to Moscow, Armenian President Serzh Sargsyan
announced that Armenia would be joining the Russian-led Eurasian
Customs Union (CU). The price tag for membership is ditching a trade
agreement that Yerevan had been planning to initial with the EU in
November at Vilnius, as the two tariff systems are not compatible.
While Sargsyan is reported as stating it was a `rational decision
based on Armenia’s national interests,” nobody really believes this
was a free choice but rather a consequence of the significant leverage
that Russia has over Armenia, which clearly includes deciding
Yerevan’s foreign policy. If this were not the case, then why did
Yerevan waste so much time negotiating with the EU, given these same
national interests existed when talks kicked off? While Armenia may
have talked (or dreamed) about having a balanced policy, the reality
is very different. Not surprisingly, most Armenians reacted with
outrage, with protests outside the presidential palace declaring
Sargsyan’s betrayal to the nation, which led to several arrests.
Armenia spent three years negotiating an association agreement (AA),
which included a Deep and Comprehensive Free Trade Agreement (DCFTA)
with the EU. The DCFTA would allow Armenia to diversify its export
opportunities as well as improve the regulatory and legal standards of
the country by aligning with the EU. However, as Yerevan inched toward
completing the talks (negotiations were finalized in July), Moscow
turned up the heat — even though such an agreement with the EU would
in no way jeopardize Russia’s dominant role in the country. Russia had
been squeezing Yerevan for months, including on issues related to gas
prices and restricting Armenian labor migration to Russia. An arms
deal with Azerbaijan was also clearly aimed at Armenia.
Unfortunately, Armenia is reaping what it has sown. Its deep-rooted
security and economic reliance on Russia has resulted in Armenia’s
sovereignty being increasingly eroded. Armenia is entirely dependent
on Russia for security. Yerevan is a member of the Collective Security
Treaty Organization (CSTO), Russia maintains a military base in
Armenia and Moscow is the key force in Armenia’s conflict with
Azerbaijan over Nagorno-Karabakh, with the power to leave Armenia high
and dry if they so wish. Russia also has a significant stake in the
country’s economy, including in the transport sector — with Russian
railways running the Armenian railway — and related to the energy
sector — with Russia having a significant stake in the electricity
and nuclear market as well as Gazprom being a majority owner of
Armenia’s pipeline system. As well-known Caucasus expert Thomas de
Waal states, `Both the administration of Sargsyan, and Robert
Kocharyan before them, embraced a Russian take-over of the economy,
which left them political control and did not expose them to
European-style competition.’ While Armenia is small, Russia’s presence
there is important in terms of having an outpost between Turkey and
Azerbaijan, including from the south of Georgia.
The agreement still needs to be signed and ratified by the Armenian
Parliament. Questions have also been raised over whether it is legal,
with some analysts, such as David Shahnazaryan, saying Armenia’s
constitution does not allow full-membership of the CU; then there is
the issue that the two countries have no common customs territory.
Armenia apparently still wants to initial its AA with the EU at
Vilnius, although without the DCFTA element it is rather an empty
document. Armenia’s boundaries have been set, and this was made clear
during a meeting between EU European Neighborhood Policy Commissioner
Stefan Füle and Armenian Foreign Minister Edward Nalbandian on Sept.
5, when Nalbandian stressed Armenia’s readiness to continue broad
cooperation with the EU as long as it would not contradict Armenia’s
membership of the CU.
The EU is clearly disappointed and frustrated. It represents a blow to
the EU’s Eastern Partnership policy, which is still lacking a success
story; its ability to succeed when faced with serious challenges in
its neighborhood; and its influence and ability to play a key role in
the South Caucasus.
The game is not yet over. Three `prey’ remain: Moldova, Georgia and,
the topic prize, Ukraine. We can be sure that between now and Vilnius,
Moscow will be pulling out the stops to keep these states in its
`sphere of influence.’