ARMENIA-RUSSIA RELATIONS UNDER STRAIN
March 16 2015
16 March 2015, 17:49 (GMT+04:00)
By Laman Sadigova
Previous expectations that Armenia’s economy would benefit from its
accession to the Russia-led Eurasian Economic Union have not become
a reality, leaving Yerevan reeling.
Armenia which has suffered economically from quite some time, now,
pinned much of its hopes on the new economic alliance, anticipating
its membership would boost trade and power its economic recovery. Only
it did not happen.
Foreign Minister, Edward Nalbandyan was too optimistic when it came
to his country’s future in the union. And indeed, it appears his
predictions completely missed the mark.
Fully dependent on its giant neighbor – Russia, both financially
and economically, Armenia has crashed under the weight of Moscow’s
Armenia was one of the first countries to be largely affected by
western-sanctions against Russia.
The country’s export operations tremendously failed as deals with
cheapened ruble hit investors significantly. Now manufacturers have
seen their export decline, plagued by devaluation.
Ultimately, January saw the sharpest fall of export yet.
Armenia, being the most loyal ally of Russia, incidentally pinned
its every hope on the northern giant, but to avail.
This small country of the South Caucasus will likely strain under
great financial stress. With no energy resources to speak of and an
economy solely reliant on Russia, Armenia is a walking, breathing
catastrophe in the making.
And these Russian investments are unlikely to materialize in view of
the economic downturn; Yerevan finds itself in a pickle.
Russia has its own problems — shrinking economy, ruble devaluation
and sanctions — Nobody wants to invest in Armenia, especially Russia
as it needs to wisely utilize its resources to save its economy.
The negotiations on the gas price cut between Armenia and Russia
have not given any result. On the background of current processes,
Armenia could seek to distance itself from Russia.
And although Russia has proven unwilling to “release” Armenia from
its sphere of influence, Yerevan is trying to expand its borders of
cooperation. Armenia strives to revive the Association Agreement with
the European Union that was previously frozen.
The Armenian-Russian alliance is melting before the eyes. On the
background of the latest geopolitical events Yerevan is trying to
play a double game – just as it did while Russia was deprived of a
voting right at the PACE by simply abstaining.
Armenia’s dependence on Russia appears more visible than ever. But
as Armenia finds itself in an economic impasse Yerevan will attempt
to claim its political freedom in the hope to extract itself from
under Moscow’s gravitational pull.
What will Yerevan do now? Will it remain a satellite of Russia or
open its arms to the European Union?