168: The courtship ends. what price will Armenia pay?

The foreign policy adopted by Nikol Pashinyan and his team is experiencing a fiasco, creating serious threats for Armenia and the Armenian people. In the context of the reckless steps and statements of today’s rulers to change foreign orientations, Russia has started to warn openly and at a high level about the challenges that the Armenian people may face on that road.

Armenia is a member of EAEU and receives great benefits as a result of its membership. The high economic growth of recent years, of which they are so proud, is also a result of this.

However, ignoring all that and the advantages that EAEU membership gives to Armenia, the CP administration, paying tribute to the aspirations of its European patrons, has decided to lead the country down the path of turmoil, knowing full well that the EAEU and the EU are absolutely incompatible with each other. And along the way, Armenia will have to make a choice, which Nikol Pashinyan was once again reminded of during his regular visit to Russia, this time through the mouth of the Russian President.

In its aspirations for European integration, the Armenian authorities will have to make a choice, but if this continues, they may not even have time to make a choice. In Russia, they have already started talking about the fact that Armenia is very close to the critical point when Russia will have to rebuild its economic relations with it.

What is meant by the reconstruction of economic relations with Armenia is very clear and understandable, especially when the country is completely unprepared for such turning changes.

It is not the case that Armenia is forced or obliged to depend on Russia all the time and simply has no way to go elsewhere. But before that, you have to be ready for it first. As for how ready Armenia is today, there is nothing to even discuss.

The fact that Armenia’s economy has always been connected with Russia’s economy by key ties: export and consumer markets, imports of many vital goods, cooperation in various sectors of the economy, etc., is not new.

Russia accounts for 30-35 percent of Armenia’s foreign trade, and up to 40 percent in some years. It is expressed both in the form of exports and imports.

What is very important for the economy of Armenia itself, almost a third of Armenian products are consumed in the Russian market.

In recent years, Armenia’s foreign trade dependence on Russia has deepened even more. Aiming to lead the country on the path of European integration, the authorities did not even take steps to weaken this dependence.

Under such conditions, if Russia decides to unilaterally review economic relations with Armenia, it means not only being deprived of the opportunities to consume the Russian market, but also to import a number of vital products, and import them under preferential terms.

First of all, we are talking about Russian gas, on which not only the energy system of Armenia, but also the entire economy is based.

As before, Armenia receives Russian gas on preferential terms. Without further ado, Nikol Pashinyan was reminded of this in Russia, at the level of the Russian President.

“As of today, you know, the prices of energy carriers, let’s say gas, in some places in Europe exceed 600 dollars per thousand cubic meters. Russia sells gas to Armenia for $177.5 per thousand cubic meters. The difference is big,” said the Russian President.

The hint is very simple. Armenia receives Russian gas on preferential terms, and that is the political price given to Armenia. That price reaches several hundred million dollars only for gas.

If you are in the EU, you should be ready to buy gas at the price at which it is sold in international markets. In that case, Russian gas can be at least twice, if not three times more expensive for Armenia, with serious consequences. Even at today’s gas prices, Armenia’s economy is unable to compete in the foreign and domestic markets in many cases. It is difficult to imagine how it will compete even in the event of a doubling of gas prices.

Today, Armenia receives more than 2.2 billion cubic meters of gas from Russia annually. This is more than 82 percent of the gas entering Armenia. Armenia pays a preferential price for that gas, but even at that price it amounts to 390-400 million dollars annually.

Now imagine how much it will be in the event of a double or even triple price increase.

The increase in gas prices, in addition to the fact that it will destroy many branches of the economy, will also lead to widespread price increases. In turn, the citizen will have to pay a much higher price for gas consumption.

The hopes of importing gas from other countries, including Azerbaijan, with which the authorities have been trying to feed the public in recent years, are in vain. Even if Azerbaijan is able to supply gas to Armenia, it will not be cheap gas. Not counting how dependent Armenia will be on the enemy country.

Iranian gas, which is much more expensive, cannot be an alternative to Russian preferential gas. It is not surprising that once the former authorities were accused of deliberately not importing Iranian gas, after coming to power, today’s rulers of Armenia quickly forgot about buying gas from Iran.

Gas is just one commodity that Armenia may face in case of revision of economic relations with Russia. But the list of those products is not only limited to gas. No less important is the Russian market, which is irreplaceable for Armenian products. To be suddenly deprived of all this, for the sake of what the hearts of the authorities and their European patrons want, is something other than deliberately dragging the country into another catastrophe, it is difficult to call it.

HAKOB KOCHARYAN

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