Armenia’s upcoming election pivotal for the U.S.

Washington Times
Mar 16 2026

It could determine whether the country turns west, or back to Moscow

 Monday, March 16, 2026

Armenia’s June 7 election will determine whether the country continues its cautious westward shift or drifts back into Moscow’s orbit.

The election is a test of whether Western political and economic partnerships can compete with Russia’s long-standing influence on its own doorstep.

Over the past several years, Yerevan’s government has strengthened ties with the U.S. and Europe while pursuing normalization with neighboring Turkey and Azerbaijan. It recognizes that Armenia’s security dependence on Russia failed to deliver stability. Moscow’s unwillingness to prevent Azerbaijan’s 2023 takeover of Nagorno-Karabakh was a decisive blow.

Yet Armenia’s geopolitical reorientation remains fragile. The central figure is Prime Minister Nikol Pashinyan, who has been attempting a balancing act since coming to power after the 2018 Velvet Revolution. His political standing is not secure. Armenia’s defeat in the 2020 war with Azerbaijan and the 2023 displacement of about 100,000 Armenians from Nagorno-Karabakh dominate domestic politics; they are a profound national trauma.

Mr. Pashinyan committed Armenia to a controversial but pragmatic path toward a peace agreement with Azerbaijan. Yet despite the finalization of a treaty text earlier this year, implementation remains uncertain. Azerbaijan demands constitutional changes in Armenia before signing.

Critics accuse Mr. Pashinyan of conceding too much, while supporters say normalization offers Armenia its best chance to escape decades of economic isolation. It’s fertile ground for political challengers.

The fragmented opposition is largely rooted in the political networks that governed Armenia before 2018. Most prominent is the Armenia Alliance, led by former President Robert Kocharyan. It’s the largest opposition bloc in parliament, and it advocates closer alignment with Russia.

Other opposition figures associated with former President Serzh Sargsyan and business networks that once dominated Armenian politics also seek a restored security partnership with Moscow.

A defeat for Mr. Pashinyan would not necessarily begin a sweeping ideological shift in Armenian society. Rather, it would signal a convergence of grievances: frustration over Nagorno-Karabakh, economic anxieties and the enduring influence of political and business networks tied to the previous political order.

A Pashinyan loss would create opportunities for external interference. Russia retains considerable leverage through economic ties, media influence and politics, and it possesses a well-established playbook for shaping political environments in neighboring states.

Under Vladimir Putin, the Kremlin has repeatedly used disinformation, covert financing and digital manipulation to weaken pro-Western governments across Eastern Europe.

Recent elections in Moldova and Romania offer clear examples. Moldovan authorities say Russian-linked networks spent hundreds of millions of dollars on vote-buying and propaganda during the country’s recent election cycles. In Romania, the Constitutional Court annulled the country’s 2024 presidential election after intelligence services warned that coordinated digital influence operations had distorted the outcome.

In Armenia, similar tactics could prove effective. Narratives portraying Mr. Pashinyan as having “surrendered” Nagorno-Karabakh could be amplified across media and social platforms. Claims that Western partners offer rhetoric but few meaningful security guarantees could resonate.

The objective would not necessarily be to install a loyal proxy government but rather to generate enough political fragmentation and uncertainty to derail the reorientation away from Moscow.

That reorientation expanded significantly in recent years. European Union investments are expected to reach roughly $2.87 billion under its Global Gateway initiative, along with a $310 million Resilience and Growth Plan to accelerate economic reforms and infrastructure development.

The EU has also deployed a civilian monitoring mission along Armenia’s border with Azerbaijan, an unprecedented European presence in the country’s security landscape.

Washington also has begun exploring deeper economic and strategic cooperation with Yerevan. President Trump’s Trade and Regional Infrastructure Partnership Program — a U.S.-supported framework aimed at expanding Armenia’s connectivity, energy integration and access to global markets — is key.

Last year, the U.S. and Armenia signed a Strategic Partnership Commission Charter, formalizing cooperation in economic development, democratic governance and security. Over the past three decades, the U.S. has invested more than $3 billion in Armenia to support economic reform and institutional development.

Armenia will hold its election while global geopolitics are shifting in ways not seen since the end of the Cold War. The assumption that smaller states could operate largely outside great power rivalry has eroded. Russia’s invasion of Ukraine and rising geopolitical tensions across Eurasia have underscored the return of hard geopolitical competition.

So Armenia is a test case: Can democratic alignment and economic partnership compete with the coercive tools authoritarian powers deploy?

A regression risks restoring a political and economic system shaped by oligarchic patronage networks and Moscow-linked influence.

In an era when the geopolitical choices of small states increasingly shape the balance of power, Armenia’s voters are about to make a decision that could echo far beyond the Caucasus.

• Nerses Kopalyan is an associate professor-in-residence of political science at the University of Nevada, Las Vegas.

https://www.washingtontimes.com/news/2026/mar/16/armenias-upcoming-election-pivotal-us/

Israel expands travel warnings to Armenia, Georgia and Azerbaijan

Mar 8 2026

The National Security Council urges Israelis to avoid travel to three additional countries and warns of heightened Iranian efforts to target Israelis and Jews abroad since the launch of Operation Roaring Lion 

Moran Azulay
As the war with Iran enters its second week, Israel’s National Security Council (NSC) has expanded its travel warnings to additional countries, advising Israelis to avoid visiting Armenia, Georgia and Azerbaijan.
The announcement follows earlier warnings urging Israelis to avoid travel to the United Arab Emirates and to refrain from nonessential stays in Egypt and Jordan.

The NSC said the new guidance comes amid growing concerns that terrorist groups may attempt to carry out attacks against Israelis abroad.
At the start of Operation Roaring Lion, Israel’s campaign against Iran, the NSC warned Israelis to avoid travel to the United Arab Emirates due to concerns that terrorist organizations might attempt attacks targeting Israeli citizens.

“At present, the Israeli public staying in the UAE is advised, where possible, to return to Israel using commercial flights,” the NSC said at the time. “In addition, the NSC recommends avoiding travel to the UAE at this time and refraining from transit flights through the UAE to or from other destinations.”
Regarding Egypt and Jordan, the council said Israelis returning to Israel should do so only via flights landing in Taba, Aqaba or Amman, and not through other airports.
It also recommended that Israelis avoid remaining in Egypt or Jordan, where Level 4 travel warnings remain in effect, and instead travel directly from the airport to the nearest land border crossings with Israel.

Warning of Iranian attempts to target Israelis abroad

The NSC said Israelis abroad should remain especially vigilant amid concrete concerns that terrorist actors are attempting to harm Israelis overseas.
“Since the start of Operation Roaring Lion, an increased motivation and expansion of hostile terrorist activity and threats by Iranian security bodies against Israeli and Jewish targets worldwide has been identified,” the statement said.
The council also warned of potential Iranian kinetic attacks in countries in the region and around Iran, including the United Arab Emirates, Bahrain and Jordan.
Officials said there is growing concern that Israeli targets could be attacked, particularly in these areas.
In recent days, several attempted attacks against Israelis abroad were reportedly thwarted, according to the NSC.

Safety recommendations for Israelis abroad

Israeli authorities issued several guidelines for citizens traveling overseas.
These include avoiding transit flights through the United Arab Emirates, concealing visible Jewish or Israeli symbols in public spaces and exercising heightened caution in all destinations worldwide, particularly in countries surrounding Iran.
Israelis were also advised not to share personal information in real time on social media and to avoid visiting locations identified with Israeli or Jewish communities, such as Chabad centers and synagogues.


Simon for Armenia at Eurovision 2026?

The Eurovision
Mar 9 2026
 By Giwrgos Oiko 


Armenia may have already chosen its representative for the Eurovision Song Contest 2026, according to new reports in Armenian media.

Internal Selection Reportedly Used

According to Armenian outlet Hraparak, singer, dancer and showman Simon Hovhannisyan, known professionally as Simon, is expected to represent the country at the contest in Vienna. The report claims that Armenia’s public broadcaster has decided not to organise a national selection this year, instead opting for an internal selection to choose its Eurovision act.

An official announcement of the country’s representative is reportedly expected in the coming days, while the song may be released shortly afterwards. Simon previously took part in “Depi Evratesil” last year, Armenia’s national selection for Eurovision, where he finished in second place.

Armenia’s Eurovision History

In 2006, Armenia made their debut in the Eurovision Song Contest, where André represented the nation with his entry “Without Your Love”, placing 8th overall. Since their debut, Armenia has participated 16 times, 13 of which saw them make the Grand Final. Their best result, in 2008 and 2014, was 4th place; in 2008, Sirusho and “Qélé Qélé”, and in 2014, Aram MP3 with “Not Alone”.

In 2025, PARG represented Armenia with his song “Survivor”. He would go on to finish in 20th place, earning 72 points; 30 of which coming from the televote, while 42 came from the juries.

What do you think about Simon representing Armenia? Do you see him as a strong contender for the Eurovision trophy? As always, please let us know what you think by getting involved in the comments below. Also, be sure to follow ‘That Eurovision Site’ on Facebook, Instagram, Twitter, TikTok, Threads, Tumblr, and Bluesky for more information about Eurovision 2025!

News Source: Hraparak

Also read

Crude oil prices spike above $115 amid escalating Iran war

Read the article in: فارسی, Armenian, Русский, Türkçe:

Oil prices spiked near $120 per barrel before falling back slightly on Monday as the Iran war intensified, threatening production and shipping in the Middle East and pummeling financial markets, The Associated Press reports.

The price for a barrel of Brent crude, the international standard, surged to $119.50 per barrel but later was trading at $112.98.

West Texas Intermediate, the light, sweet crude oil produced in the United States, spiked at $119.48 per barrel but fell back to $110.17.

Aluminum soared to its highest in four years as ⁠supply concerns due to the Middle East war intensified. Benchmark three-month aluminum on the London Metal Exchange hit its highest since March 2022 at $3,544 per ton, according to Reuters.

Published by Armenpress, original at 

Central Bank of Armenia: exchange rates and prices of precious metals – 13-03-

Economy16:50, 13 March 2026
Read the article in: ArmenianRussian:

YEREVAN, 13 MARCH, ARMENPRESS. The Central Bank of Armenia informs “Armenpress” that today, 13 March, USD exchange rate up by 0.1 drams to 377.54 drams. EUR exchange rate down by 3.55 drams to 432.7 drams. Russian Ruble exchange rate down by 0.0786 drams to 4.6847 drams. GBP exchange rate down by 4.89 drams to 500.62 drams.

The Central Bank has set the following prices for precious metals.

Gold price down by 618 drams to 62270 drams. Silver price up by 10 drams to 1056.4 drams.

Read the article in: ArmenianRussian:

Published by Armenpress, original at 

168: Israel can nuke Iran, Iran can nuke Israel

March: 13, 2026

Armenia can get involved in the war against Iran only if Azerbaijan gets involved. if Azerbaijan got involved in military operations against Iran, Armenia cannot avoid that conflict. Expressed this opinion 168TVof Revue on the air of the program Hayk Nahapetyan, colonel of the RA Armed Forces Reserve, expert on military and security issuesanalyzing the course of Israel-US-Iran war operations and the dangers for Armenia.

“Armenia is not a subject. Nobody asks our opinion. Unfortunately, it is. The danger is that our territory will become a theater of military operations. If, however, the geography of this war increases, and Azerbaijan is theoretically involved in that geography, Armenia will certainly appear in that geography as well. Do not doubt. Only in that case, otherwise, bombs will not fall here, as they say. If Azerbaijan got involved in that conflict in one way or another, Armenia cannot avoid that conflict,” commented Hayk Nahapetyan.

And the colonel sees a real possibility and prospect of Azerbaijan joining the military operations of the Israeli-American coalition against Iran, taking into account Aliyev’s long-term plans and close relations with Israel.

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The military expert is convinced that the March 5 incident with anti-aircraft strikes in Nakhichevan was an Azeri provocation, organized by Aliyev in order to create an occasion for war against Iran, but then the Baku dictator “dropped the bullet”, as the Central Headquarters of the Iranian Armed Forces officially spoke on March 7 about the Israeli presence in the territories under the control of Azerbaijan, calling on neighboring Azerbaijan, as a Muslim country, to withdraw the Zionist forces from its territory. and not to endanger their own people and the security of Iran.

“I think he was warned, and Aliyev’s ears were stretched by Erdogan on the phone, saying, ‘Keep calm, this is not your fight.’ I suppose. There are two impulses on Aliyev: the statement of the Iranian headquarters and Erdogan, who is a more heavyweight player,” the military expert believes.

According to Hayk Nahapetyan, “if necessary, Mehriban and Ilham have a tea party in the bunker in the evening, an Iranian drone will come, enter the room through the window, land at Ilham’s feet and explode at his feet.”

The expert believes that Iran will attack the Israeli facilities located in the occupied Artsakh territory or in Nakhichevan, if it feels a physical threat from that side, and if the air force and missiles work from that direction.

In this context, the military expert emphasizes that the change in the status of Nakhijevan by the central authorities of Azerbaijan, from the preamble to the constitution of the Autonomous Republic of Nakhijevan in 1921. The removal of references to the Moscow and Kars treaties is also related to these events.

“Azerbaijan is trying to annex that territory, which it does not have the right to, because according to the agreement, two states (Russia and Turkey) guarantee any change in the status of Nakhichevan. Now Ilham’s ambition, as they say, reaches the stars, he says: “I want to do it.” It violates the order of the law, it violates the contract. Tomorrow, Russia or Turkey will stretch their ears and say. “What have you done?” Who left it to you to make a unilateral decision to change the status of that autonomy?” When the United States leaves here, then the leaders of Iran and Russia will call Aliyev and say: “Boy, why were you making decisions on your own, changing your status?” By what law is that, “with panyatk”? Well, now we will cut off your old man’s ear with a panyatk, and there are still some things left to do.

And in general, the military expert considers the worst scenario of the Iranian-Israeli-American war, which has been going on for almost two weeks now, to turn into a nuclear or atomic war.

“The calculation of the United States, which is a military superpower, was illogical, according to which if the elite of Iran is beheaded on the first day, then Iran surrenders. Don’t you think it’s illogical? In fact, Iran did not surrender, and the United States and Israel found themselves in a difficult situation. Now it either turns out that the “second coming of the savior” or “Armageddon” was a bluff, if they are convinced, they take a step back, if they are not convinced, then they will go to the end, and the end is nuclear war, that is, the use of nuclear weapons.

If Israel fires, in principle the State of Israel may no longer exist because Iran has hypersonic missiles that can hit Israel’s two power plants, two large chemical plants, a nuclear reactor in the desert, and nuclear storage facilities that Iran can also hit.

If the United States launched a nuclear strike, I don’t know how long Iran’s arms are. If America hits, I don’t know what will happen to the planet Earth. Of course, it is unlikely that the United States will take this extreme step, but I do not rule out Israel’s option.”

According to Nahapetyan, the United States and Israel actually lost the war, and now a “resource war” is going on.

“This fight will stop. It’s an illogical fight,” adds the military expert.

Full interview in the video.




Azerbaijan and Turkey are trying not to aggravate the situation with Iran, caution

March: 10, 2026

While the USA and Israel continue the unprovoked war against Iran, Iranian President Masoud Pezeshkian has telephone conversations with the leaders of neighboring countries.

According to “Anadolu”, Pezeshkian had a telephone conversation with Turkish President Erdogan, they discussed the latest regional developments, including the shooting down of an Iranian ballistic missile in Turkish airspace.

Erdogan, according to the report, told Pezeshkian that the violation of Turkish airspace “cannot be justified for any reason” and that “Turkey will continue to take all necessary measures against it.” According to the Turkish side, the telephone conversation took place at the request of Pezeshkian after the Ministry of National Defense of Turkey announced that a ballistic missile launched from Iran, which had entered Turkish airspace, was shot down by NATO air and missile defense systems located in the Mediterranean Sea.

On March 4, the Ministry of Defense of Turkey announced that it had shot down a ballistic missile launched from Iran. Erdogan said that Turkey is “negatively affected” by the conflicts in which he is not a party. The Turkish president also emphasized that Ankara does not approve of “illegal interventions” against Iran and Iran’s targeting of countries in the region, adding that targeting brotherly countries “is not in anyone’s interest” and “these actions must be stopped.”

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  • “COLIN POWELL SAID TO ME, LARRY, LOOK AT EUROPE, AT NATO. THEY WILL DISAPPEAR.” LAWRENCE WILKERSON

Erdogan emphasized the need to reopen the door of diplomacy and said that Turkey is actively working to promote diplomatic involvement in the region. Iranian Foreign Minister Abbas Araghchi also had a conversation with Turkish Foreign Minister.

The day before yesterday, Pezeshkian had a conversation with the leader of Azerbaijan, Ilham Aliyev, clarifying that Iran has nothing to do with the attack of Iranian ATS in Nakhichevan. Parallel to all this, Iran maintains a tough rhetoric.

Iranian Foreign Minister Abbas Araghchi has stated that the discussion of negotiations with the United States is unlikely under the new supreme leader of the Islamic Republic, Mojtaba Khamenei. Secretary of Iran’s Supreme National Security Council, Ali Larijani, also responded to the threat of US President Donald Trump regarding the Strait of Hormuz.

“The Iranian people are not afraid of your empty threats, because those more powerful than you could not eliminate them… So, be careful so that you are not the ones who disappear,” Larijani wrote on the X social network.

Russian analyst Alexander Khramchikhin 168.amtold that Tehran is clearly trying to show that despite the military pressure and the difficult situation, it is ready to maintain the stability of relations with its neighbors and prevent the opening of new fronts, the attempts of which are noted.

According to him, the regional developments show that the South Caucasus is gradually getting involved in the field of influence of the big conflict going on in the Middle East.

“It is also noticeable that Turkey and Azerbaijan, trying to save face after the incidents, are still trying to maintain balance. on the one hand, not to aggravate relations with Iran, on the other hand, not to disrupt their ties with the Western bloc and Israel. Under these conditions, Iran, feeling the military-political pressure, is trying to reduce the tension with its immediate neighbors so that the conflict does not spread to the northern borders,” said Alexander Khramchikhin.

According to him, these developments have a direct impact on Armenia as well. “On the one hand, for Iran, the border with Armenia remains an important strategic direction, which can increase the importance of Yerevan for Tehran. On the other hand, if the conflict between Iran and the Western bloc deepens, the South Caucasus may come under strong geopolitical pressure, where Turkey and Azerbaijan will also play an active role. In those conditions, naturally, Armenia’s political opportunities will become even more limited,” he expressed such a view.

As for the course of the war, the analyst believes that every subsequent war changes the rules of warfare.

According to Alexander Khramchikhin, unfortunately, currently the rules of waging war do not recognize moral taboos, which means that the countries that are waging such a war can no longer blame others for waging war.

“And the role of the US in this matter became significant with its actions against Iran. We already see how the USA behaves, not only military and political objects are being targeted in Iran, but also civilian objects, no matter what the American officials say,” he said. Despite Western assessments, in his opinion, Iran continues to resist effectively. “To put it mildly, the statements about the great successes of the USA on the battlefield do not correspond to reality. The US president talks about ending the war soon, but in reality, after this attack, such a situation has arisen that Iran’s position has hardened, there is no room left for negotiations, and it will be difficult for the US to leave the Iranian front without really great successes. A rather complicated and desperate situation has been created, so I think the situation will continue, but maybe at a certain point it will stop like in the case of the 12-day war,” he said.

Tsarukian Acquitted In ‘Political’ Trial

March 11, 2026



Armenia – Prosperous Armenia Party leader Gagik Tsarukian meets with young supporters in Yerevan, Febraury 6, 2026.

Gagik Tsarukian, a wealthy businessman leading a major Armenian opposition group, was acquitted on Wednesday of what he sees as politically motivated charges brought against him nearly six years ago.

Tsarukian was charged with vote buying and held in detention for a month shortly after demanding Prime Minister Nikol Pashinian’s resignation in 2020. Law-enforcement authorities claimed that he had tried to buy votes for his Prosperous Armenia Party (BHK) ahead of parliamentary elections held in 2017. He strongly denied the accusations before and during his subsequent trial.

A court in Yerevan acquitted Tsarukian but found one of his longtime collaborators, Sedrak Arustamian, guilty of vote buying at the end of the long trial. One of the defense lawyers, Yerem Sargsian, said he is “pleasantly surprised” by Tsarukian’s acquittal despite what he described as prosecutors’ failure to come up with any evidence in support of the charges.

The ruling came less than three months before Armenia’s parliamentary elections in which a new bloc which is being set up by Tsarukian is expected to be one of the main opposition contenders. In recent weeks, senior representatives of Pashinian’s Civil Contract party have signaled concerns that the bloc as well as two other opposition groups led by former President Robert Kocharian and billionaire Samvel Karapetian may collectively win a majority in the new parliament. They have said that the Armenian authorities “will not allow” such an outcome.

In what Tsarukian’s political allies see as a related development, law-enforcement officers raided the 69-year-old tycoon’s private compound outside Yerevan on February 19 as part of a criminal investigation in which he had been questioned as a witness years ago. Tsarukian seems undaunted by the possibility of another criminal case against him.

He was already indicted in December 2025 for selling his bottling plant in Bulgaria for 23 million euros ($26.7 million) despite an Armenian court’s decision to freeze his assets worth hundreds of millions of dollars. Prosecutors moved to confiscate them in late 2023, invoking a controversial law that allows the state to seize money, property and companies deemed to have been acquired illegally. The court issued the injunction at the time pending a ruling on the case.

Tsarukian’s BHK had the second largest group in Armenia’s former parliament. But it failed to win any parliament seats in the last general elections held in June 2021. The tycoon kept a low profile in the following years.

Trade as Leverage: Russia’s Enduring Economic Role in Armenia

Special Eurasia
Mar 11 2026

Trade as Leverage: Russia’s Enduring Economic Role in Armenia

Executive Summary

This report evaluates Armenia’s trade relationship with Russia, focusing on economic interdependence and its strategic implications.

Moscow remains Yerevan’s principal trading and investment partner, accounting for over 35% of external trade in 2025, with cooperation concentrated in consumer goods, food production, and key industrial sectors.

Political distancing between Yerevan and Moscow contrasts with sustained economic integration. The situation reflects a structural gap between Armenia’s economic realities and its foreign policy repositioning.

Key Takeaways

  1. Russia continues to exercise significant economic influence through trade dominance and sectoral investment.
  2. Armenia’s economic cooperation with Russia persists despite political mistrust and security disagreements.
  3. Economic interdependence limits the speed and scope of Armenia’s geopolitical reorientation.

Background Information

According to Armenia’s Deputy Minister of Economy Narek Hovakimyan, Russia accounted for over 35% of Armenia’s total external trade in 2025, confirming its role as one of the country’s most important trading partners.

Economic ties between the two nations have grown lately, especially in food and consumer items. These areas stimulate job creation, boost local spending, and improve the economy. Armenian officials emphasise cooperation in the food industry, pharmaceuticals, and agricultural production chains, supported by state and private modernisation programmes aimed at expanding output and improving quality.

Russian Ambassador to Armenia Sergey Kopyrkin reaffirmed Moscow remains Yerevan’s major trade, economic, and investment partner. The Russian capital maintains a firm presence in mining, energy, metallurgy, transport and logistics, banking, and information-communication technologies.

The current situation underscores a history of economic interdependence, according to the Russian diplomat, amplified by Armenia’s eleven years within the Eurasian Economic Union, which has facilitated increased trade and industrial partnerships through its established frameworks.

Why Does It Matter?

Strategically, Russia views Armenia as a key geopolitical foothold in the South Caucasus, rather than an ideological partner. As part of its blizhnee zarubezhe (near abroad), the Kremlin views Yerevan as structurally dependent because of geography, infrastructure links, and economic integration.

Russia’s aim is not absolute dominance but preventing hostile regional consolidation that could exclude Moscow’s influence from transport routes, mediation processes, and security arrangements.

Armenia’s economy remains closely tied to Russia, even when its leadership seeks diversification toward Western partners. Because disrupting economic ties with Russia would have a direct impact on jobs, investment, and industrial output, concentrated trade makes it difficult to enact swift policy changes. Moscow maintains influence via its capital’s involvement in key industries and through economic frameworks associated with the Eurasian Economic Union.

For Russia, maintaining economic primacy supports broader strategic goals without requiring overt political alignment. Economic integration maintains access to logistics networks, financial channels, and regional influence despite deteriorating military and political relations.

Politically, Armenia attempts to reduce dependence while avoiding economic shock. Deterioration of confidence in Russia-dominated frameworks has occurred after the capitulation of the Republic of Nagorno-Karabakh/Artsakh under an Azerbaijani military offensive, though economic divestment presents prompt internal hazards.

A two-pronged policy emerges, characterised by a divergence between political pronouncements and economic implementation. The imbalance increases exposure to pressure from external actors, including Azerbaijan and Turkey, which monitor Armenia’s strategic positioning during this transition.

Indicators to Monitor

  • Share of Russia in Armenia’s total external trade volume.
  • Russian investment levels in Armenian strategic sectors.
  • Development of joint agricultural and industrial cooperation chains.
  • Policy signals regarding Yerevan’s participation in Eurasian Economic Union mechanisms.
  • Changes in logistics, banking, or commercial programmes supporting bilateral trade.

Outlook

Armenia is likely to maintain deep trade relations with Russia in the near term because of structural economic dependence and existing industrial integration.

Political distancing will continue, especially if the current Prime Minister Nikol Pashinyan wins the parliamentary elections in June 2026, driven by security concerns and diversification efforts, yet economic disengagement will remain gradual. Moscow expects to tolerate political friction while preserving economic footholds and awaiting clearer signals from Yerevan’s domestic political cycle, including the 2026 parliamentary elections.

The most probable scenario involves sustained economic cooperation and controlled geopolitical competition, rather than a rapid strategic rupture.

Caucasus: The credit outlook for the region is generally good – ratings agency

eurasiaet
Feb 27 2024
Feb 27, 2024

Fitch Ratings is cautiously optimistic about the creditworthiness of the South Caucasus states of Azerbaijan, Armenia and Georgia. But in a recent call with reporters to discuss the regional outlook, Fitch analysts acknowledged that geopolitics is a wildcard when it comes to predicting the region’s financial future.

According to Fitch, the three countries are not in danger of defaulting on their obligations, but neither are they seen as particularly safe investment opportunities. 

Azerbaijan enjoys the highest Fitch rating among the three South Caucasus states with a BB+/positive outlook, just one notch below investment grade. Fitch analyst Erich Arispe Morales applauded the government’s “fiscal prudence” as it strives to reduce its dependence on hydrocarbon export revenues. The country’s key task in the coming years is developing non-energy sectors of the economy, he said. 

Morales told reporters via Zoom that the need to generate comparatively high levels of revenue will remain strong as the Azerbaijani government proceeds with the reconstruction of Nagorno-Karabakh. Baku completed its reconquest of Karabakh in 2023. At present, a significant drop in energy prices could upend Baku’s efforts to maintain fiscal discipline.

Georgia and Armenia have been “unexpected beneficiaries” of the war in Ukraine, due to “large” inflows of capital and migrants, mainly from Russia, Fitch analyst Arvind Ramakrishnan said. Even so, the two countries continue to grapple with geopolitical uncertainty, due mainly to extensive trade ties that both countries have with Russia.

Fitch currently gives Georgia a BB/positive outlook rating. While Ramakrishnan offered general praise for the Georgian Dream government’s management of the economy, he noted that the country’s political climate is “quite divisive.” Pointing to parliamentary elections scheduled for this fall, he added that there is a wide expectation that the country will maintain fiscal continuity, given that the Georgian Dream coalition is widely expected to secure reelection.

In its latest ratings assessment, Fitch expressed concern about the International Monetary Fund’s decision in late 2023 to suspend a lending program due to concerns about a governmental move to reorganize the Georgian Central Bank’s operating structure. The changes appeared to pose a threat to the bank’s policy-making independence. 

“The fiscal impact of the suspension of the IMF program … remains limited, but questions over policy credibility remain unresolved,” the Fitch assessment reads.

Ramakrishnan also said geopolitics “does weigh on [Georgia’s] rating,” going on to acknowledge that there is “no getting away from the fact” that Georgia maintains “very strong” trade relations as it strives to gain European Union membership. As for Tbilisi’s EU membership bid, Ramakrishnan said there are a “lot of complications” and it will be a “slow process.”

Armenia enjoys a BB-/stable outlook from Fitch. Ramakrishnan said the sudden influx of roughly 100,000 ethnic Armenians from Karabakh will have a “short-term negative impact” on the government’s budget, requiring increased state outlays for refugee resettlement. But he predicted that “fiscal consolidation” over the medium- and long-term will not be undermined by the refugee crisis.

The big question mark hanging over Yerevan is the country’s relationship with Russia. In the wake of Azerbaijan’s retaking of Karabakh, Armenian officials have moved to distance themselves from Russia and build stronger relationships with the West. But any westward pivot will be complicated by Armenia’s trade dependency on Russia, Ramakrishnan indicated. He said the possibility of Armenia successfully decoupling trade ties from Russia was “unlikely.”   

Fitch Ratings, along with Moody’s and Standard & Poor’s, comprise the Big Three global credit rating agencies. A BB rating in Fitch’s system indicates that a sovereign government has the means to meet debt obligations, but nonetheless has “an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time.” 

https://eurasianet.org/caucasus-the-credit-outlook-for-the-region-is-generally-good-ratings-agency