26 January 2019

What the Chill in Russian-Armenian Relations Means

Tight ties between Armenia and Russia have long been a mainstay in the Caucasus, but rising tensions between Yerevan and Moscow could significantly undermine their relationship. 

The tensions especially threaten Armenia's military ties with Russia, although they could also impact natural gas flows between the countries.

If the Russian-Armenian relationship continues to fray, other powers, including the United States, Iran and Turkey, could make inroads in the Caucasus country and weaken Russia's position. 

This, in turn, could force Russia to focus more on bolstering ties with one of Armenia's biggest nemeses, Azerbaijan, raising the prospect of greater instability in the region. 

When it comes to former Soviet countries, few states have remained closer to Russia than Armenia. The Caucasus country hosts 5,000 Russian troops at the 102nd military base in Gyumri, while Russia wields substantial influence over most of Armenia's strategic economic sectors, from energy pipelines to telecommunications. Russia is also Armenia's largest trade partner — accounting for 25 percent of total trade — and it is the largest destination for Armenian migrant workers, whose remittances account for 10 percent of their country's gross domestic product. Yerevan is also a member of both the Eurasian Economic Union and the Collective Security Treaty Organization (CSTO), Moscow's primary mechanisms for integrating the countries of the former Soviet Union. Recent political shifts in Armenia, however, have thrown the traditionally strong relationship between Yerevan and Moscow into question – raising the possibility that other powers near and far could step in to fill any breach.

The Big Picture

Growing frictions between Russia and Armenia could weaken a traditionally strong relationship and open opportunities for other regional powers to boost their ties with Yerevan. And given the tight web of relationships in the strategic Caucasus region, such tensions could have important ramifications for many regional states. 

The Tensions Testing an Alliance

Armenia's political system experienced a dramatic political shift when the so-called Velvet Revolution – large-scale protests led by opposition leader Nikol Pashinian – forced long-serving Armenian leader Serzh Sargsyan to resign in April 2018. As a result of the tumult, Armenia held early parliamentary elections last month, and Pashinian's Yelk bloc emerged as the country's dominant political force with 70 percent of the vote. 

Russia has observed Pashinian's emergence warily. Moscow staunchly supported Sargsyan's government, and the Kremlin views popular demonstrations both at home and in its immediate vicinity with a great deal of skepticism. Nevertheless, Russia did not intervene in Armenia's mass protests. In part, the Kremlin chose not to do so because Pashinian carefully restricted his criticism of the Armenian government to the domestic issue of corruption, while repeatedly emphasizing his support for Yerevan's alignment with Moscow on strategic and security affairs.

Nonetheless, tensions between the two have grown since Pashinian's rise to power. One reason is his decision to target former Armenian leaders for repressing protests during the 2008 presidential elections. Already, the prime minister has filed criminal charges against former Armenian President Robert Kocharyan and former army chief Yuri Khachaturov. The latter became chief of the Moscow-led CSTO in 2016. But the charges have forced his resignation – angering Russia in the process.

Elsewhere, tensions have grown over Russia's military presence in Armenia. In July 2018, Russian military forces conducted snap drills near the Armenian village of Panik, precipitating protests by residents and drawing a reprimand from Pashinian, who chided Moscow for not giving locals advance notice of the exercises. Since then, demonstrations against Russia's military activities in the country have become increasingly frequent, particularly after a Russian soldier was accused of killing an Armenian woman in Gyumri early last month. (The killing sparked specific protests in front of the Russian Embassy in Yerevan on Dec. 25, 2018, as well as another demonstration in Gyumri on Jan. 12.) Although the rallies have drawn only a couple hundred people at most — a far cry from the tens of thousands who took to the streets with Pashinian last year — they nevertheless reflect a growing concern among ordinary Armenians over Russia's military presence. 

Other security matters have added to the tension between the countries. During a visit to Yerevan in October 2018, U.S. national security adviser John Bolton said the United States would consider the possibility of selling weapons to Armenia, declaring that such a consideration was "fundamental to Armenia exercising its full sovereignty and not being dependent on or subject to excessive foreign influence." The identity of the country alluded to in Bolton's remarks was lost on no one — least of all Russia, which promptly condemned the statement and called on the United States to refrain from interference in its affairs. Pashinian, meanwhile, told Bolton that Yerevan was open to discussing an arms deal.

Naturally, an Armenian-U.S. weapons deal would compromise Russia's monopoly on arms sales to Armenia and force Moscow to rethink its role as Yerevan's security guarantor. Russia plays a key role in protecting Armenia from Azerbaijan over their Nagorno-Karabakh conflict, whose primary arbiter is Moscow. The Kremlin already supplies certain weapons to Azerbaijan, but Russia could certainly ramp up such support if Armenia actually purchased U.S. arms. This, in turn, could lead Azerbaijan to take a more aggressive line over the disputed territory of Nagorno-Karabakh at a time when Russia is more likely to turn a blind eye, given Armenia's perceived disloyalty.

Disagreements are also brewing in other traditionally strong areas of Russian-Armenian cooperation, including the energy sector. Following recent negotiations over natural gas, Russia increased the price from $150 per thousand cubic meters (tcm) in 2018 to $165 per tcm in 2019, disappointing Armenian officials who had previously expressed hope that Russia would actually lower the cost of natural gas. A likely factor in Russia's price hike was the Armenian State Revenue Committee's recent decision to audit Gazprom Armenia. The inspection revealed numerous violations, ultimately prompting prosecutors to press charges of tax evasion against the Russian gas giant. Pashinian subsequently indicated his interest in expanding natural gas imports from Iran, noting that his government would do its best to defend the country's interests.

These tensions notwithstanding, Pashinian has repeatedly emphasized Armenia's desire to maintain close ties with Russia, endorsing Yerevan's continued membership in the Eurasian Economic Union and the CSTO in several meetings with Russian President Vladimir Putin. In the end, Armenia's continued dependence on Russia for security support and its nonexistent relations with both Azerbaijan and Turkey due to Nagorno-Karabakh means Yerevan is unlikely to make any sudden moves to end its strategic alliance with Russia. Moscow, too, is likely to avoid disrupting ties, since Armenia represents Russia's primary foothold in the Caucasus. Russia could be amenable to some Armenian initiatives to diversify its economic and energy links, yet both countries have a vested interest in retaining a tight military and security relationship.

The divergence between Moscow and Yerevan is one that others can exploit in their bid to improve ties with Armenia and the wider region.

Room for Opportunity

Nevertheless, the divergence between Moscow and Yerevan is one that others can exploit in their bid to improve ties with Armenia and in the wider region. In addition to the U.S. offer of arms sales, Iran could increase its natural gas exports to Armenia, while the European Union has also made more economic and political overtures to the country. This is something that Yerevan could consider more seriously down the line — although that would only exacerbate the standoff between Russia and the West. In the meantime, Turkey could even return to the stage and make a serious push to normalize ties following the failure of similar bilateral efforts in 2009, though any such detente would depend on a settlement in Nagorno-Karabakh. Whatever the case, the more tensions simmer between Russia and Armenia — thereby attracting others eager to take advantage of the rift – the more Moscow and Yerevan's long-standing relationship could unravel over time.

In the Caucasus, Russia's alignment with Armenia continually reaffirms the close bond between Turkey and Azerbaijan, while Georgia is a key economic and energy transit state between the two and participates regularly in joint military exercises with Ankara and Baku. Georgia is also aligned with — though not a member of — the European Union and NATO, while Russia supports the breakaway territories of Abkhazia and South Ossetia to undermine Georgia and hinder this alignment. Iran has long enjoyed strong economic ties with Armenia but has a complex relationship with its coreligionists in Azerbaijan due to its own substantial Azeri minority in northern Iran. Given the number of interconnected and volatile relationships in the region, it's no wonder that any extended rift between Russia and Armenia would send ripple effects throughout the Caucasus – and farther beyond.

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