by Richard Giragosian
Independence has not been easy for Armenia. In the wake of the abrupt collapse of the Soviet Union, Armenia was ill prepared for the onset of independence and already was distracted by a costly conflict with neighboring Azerbaijan over Nagorno Karabakh. Yet even though the early hardships of independence have eased significantly, true independence remains both incomplete and insecure in Armenia today.
As with all of the former Soviet countries, Armenia is still very much an infant state. And like its neighbors, the simple act of attaining independence was a profound achievement for Armenia.
But there is a second, more crucial stage of independence, the need, that is, to maintain independence. And it is a stage that encompasses an even more daunting set of challenges.
MAINTAINING A MOVEMENT
While Armenians are rightly proud of attaining independence, far too little attention is paid to maintaining it. In this sense, independence is not static, but rather a dynamic process involving a constant vigilance and defense. With the collapse of the Soviet Union, independence was granted. It will be by Armenia's own will, if independence thrives.
Specifically, there are two fundamental deficiencies plaguing Armenian independence. The first is related to the condition of Armenian independence, or more precisely, the country's growing dependence. This dependence is both deepening and destructive, and imposes serious impediments on the development of Armenia's economic, political and even military institutions of statehood.
The second deficiency is rooted in the very definition of independence, whereby Armenian independence is increasingly constrained and restrained by self-imposed limits. What has been missing is the core concept or definition of independence, the pursuit of true national self-sufficiency.
A shared element of both deficiencies has been the role of Russia and Armenia's inability to escape Big Brother's shadow.
Armenian independence has been driven and defined by two trends. The first trend, which began even prior to the country's independence from the Soviet Union, has been the Nagorno Karabakh conflict. The Karabakh issue has long been a strategic imperative for Armenia, and has served as a key determinant for much of the course of Armenia's political, military and economic development. Yet the securing of territories has not yet been matched by a settlement of the territorial status of Karabakh.
For Armenia, the incomplete and unsettled nature of the Karabakh question has fostered a dilemma of insecurity, as the country remains under threat. This threat environment is significant, ranging from a long-standing trade and transport blockade by both Azerbaijan and Turkey, to a worrisome military buildup in neighboring Azerbaijan.
In this sense, Armenia is the only former Soviet state to face such threats. While other states are challenged by tense relations with Russia or from other neighboring countries, only small, landlocked Armenia is subjected to a trade embargo and transport blockade imposed by its neighbors. Neighboring Georgia has long suffered from separatist conflicts, and continues to be unable to exercise its authority and control over a significant portion of its territory. But unlike the constant threat faced by Armenia, even the tension between Tbilisi and Moscow does not pose a direct threat to the Georgian state.
It is within the context of this threat environment that the second negative trend in Armenian independence has deepened. Specifically, this trend is the nature of the strategic relationship between Armenia and Russia. There is, of course, a natural affinity toward anchoring Armenia firmly in the Russian orbit, evident in both the legacy of the Armenian Genocide and in the proximity of contentious Turkey. It is also exacerbated by the rhetoric of Azerbaijani threats of military aggression.
But there are real limits to the net gains derived from Armenia's strategic partnership with Russia. Generally, the core limitation is rooted in the structural dependence of the relationship, as Armenia serves as less of a partner and more of a platform for Russia. An important factor contributing to this increasingly one-sided relationship has been a crucial mistake by Armenian leaders in underestimating Armenia's strategic importance to Russia while, at the same time, overestimating Russia's strategic significance to Armenia. While this imbalance has tended to distort the overall development of the country, it has also been destructive to the course of independence in Armenia.
The asymmetry in Armenia's relationship with Russia spans three critical areas: economics, politics and military security. Interestingly, of these three areas of imbalance in the Yerevan-Moscow relationship, foreign policy has generally been an exception.
Despite some occasional signs of a shift from one strategic orientation to the other, the stated foreign policy of "complementarity," or of a careful balancing between Russia and the West, has served Armenia well. This complementarity has garnered an impressive degree of flexibility as well, allowing Armenia to steadily deepen its ties with NATO and the West while never seriously endangering its reliance on Russia and the Moscow-led NATO counterpart, the Collective Security Treaty Organization (CSTO).
The economics of the Armenian-Russian relationship have been the most revealing area of Armenia's mounting dependence. The economic inequity of the relationship has been fostered by a period of profound vulnerability.
INDEPENDENT BUT INDEBTED
Armenia's vulnerability can be traced to the effects of the early- to mid-1990s—a period marked by a steady rise of corruption, matched by a serious decline in the rule of law. It was during this period that "asset stripping" and the "pillaging of resources" reached its apex in a series of questionable and dubious privatization deals.
Compared to other former Soviet states, Armenian corruption and the period of wholesale looting of national assets and natural resources in the last decade was not unusual and, comparatively, was neither more destructive nor more destabilizing. But the key difference with the Russian, Ukrainian or Central Asian cases was that ownership and control over key sectors of the Armenian economy were acquired by foreign, or more precisely, by Russian interests.
The most symbolic example of such an unfair exchange of strategic assets for short-term gain was the "assets-for-debt" deal of 2002, whereby Russia forgave less than $100 million in Armenian debt in exchange for control of several of Armenia's relatively few strategic enterprises. And while this deal represented an institutionalized Russian acquisition of key economic enterprises, the takeover of the strategic energy sector has endowed Russia with considerable leverage over Armenia.
Armenia has also been an occasional victim of Russian policies toward other former Soviet states, with Russia displaying little or no preferential treatment for its Armenian ally. The first example of this was the December 2005 Russian decision to nearly double the price of natural gas supplies to Armenia. After Russian officials first unveiled plans to impose a sweeping increase in gas prices for many former Soviet states, Armenian officials were only able to negotiate a three-month delay in the introduction of the new tariff. At its introduction in April 2006, the new tariff brought the price of natural gas from $56 to $110 per 1,000 cubic meters, sparking an immediate 25 percent rise in production costs in the Armenian manufacturing sector.
And only days after the price rise, the Armenian government reached a new deal granting Russia's state-run Gazprom energy monopoly control over a key Armenian power plant in exchange for cheaper gas. That agreement ceded ownership of the fifth unit of the Hrazdan thermal power plant, of which Gazprom already owned four units, over a three-year period, in return for $188 million in gas supplies and some $60 million in cash. Most revealing, Russia was able to pressure and influence the bilateral project between Armenia and Iran for the construction of a natural gas pipeline between the two countries. It was, in fact, Russian pressure that succeeded in reducing the actual size of the pipeline, thereby ensuring that Armenia would be unable to compete with Russian energy firms and incapable of re-exporting gas beyond Armenia. More recently, executives of the Russian state-owned Gazprom energy firm have expressed interest in acquiring the Armenia-Iran gas pipeline outright.
A second example of Armenia being subject to the negative impact of Russian foreign policies was the impact of the closure of Russia's border with Georgia, in July. In light of the existing East-West blockade, the Armenian economy is already highly vulnerable to any disruption to the northern trade route through Georgia. Thus, the Russian closure of its border crossing point with Georgia, implemented with no advance warning given to Armenian officials, halted Armenian commerce and left dozens of Armenian trucks transporting agricultural produce stranded in Georgia.
As important as these energy - and trade-related vulnerabilities are for Armenia, the most significant longer term element of Armenia's growing economic vulnerability vis-a-vis Russia is posed by remittances. For Armenia, the flow of remittances, or cash sent home from Armenians working abroad, accounts for a critical proportion of the overall economy, more than 80 percent of which came from Russia last year.
While official estimates report that annual remittances represent some 10 percent of overall Armenian GDP (gross domestic product), other independent studies have assessed them as accounting for as much as 25 percent of GDP. With remittances for 2005 having reached $940 million and forecast to surpass well over $1 billion in 2006, there is a dangerous reliance on Russia as both a source and a conduit for these critical financial transfers. This reliance on jobs in Russia is compounded by the dangers from the wave of recent attacks in Russia specifically targeting Armenians and others from the Caucasus and Central Asia. It is also potentially vulnerable to any move by Russia to limit or even curtail these financial transfers, perhaps under the guise of combating corruption or money laundering.
AS RUSSIA GOES, SO GOES ARMENIA?
Aside from the more visible example of the deepening of Armenia's economic dependence on Russia, the second area of the asymmetrical Armenian-Russian relationship is exhibited in the political dimension. It is, in fact, the political aspect of the relationship that presents a particularly understated threat to the development of democracy and the rule of law in Armenia.
The threat stems from the traditional reliance by Armenian political leaders on following a Russian model of governance in what may be termed "good governance gone bad." By actively emulating a Russian political model, Armenian politics has come to resemble the Russian system, adopting specific tactical and strategic lessons, including little or no tolerance for an independent media and even less patience for political opposition. Specifically, this Russian model of a strong authoritarian presidency, free of effective checks and balances or oversight, has appealed to much of the Armenian political elite.
Armenian democracy is increasingly in danger of being diminished by a tendency for authoritarian power, and for governance by individual strong leaders over an institutionalized strong leadership. In many ways, the coming Armenian election cycle, with parliamentary elections set for May 2007 and the presidential contest set for 2008, offers Armenia an important opportunity to demonstrate the difference between the fundamentally stable Armenian democracy and the autocratic regimes of many of its neighbors.
The third area constituting the imbalance of the Armenian-Russian relationship is in military security. Since joining the NATO Partnership for Peace (PfP) program in 1996, the Armenian military has gradually deepened its role with the NATO alliance, even to the point of deploying troops as part of multinational peacekeeping forces in Kosovo and Iraq. Still, nearly all aspects of Armenian defense policy and military planning remain dependent on its alliance with Russia.
This relationship is rooted in an Armenian-Russian "Friendship Treaty," which includes a provision promising mutual assistance in the event of a military attack, and which provides Armenia with Russian military equipment, spare parts, supplies and training. The Russian military presence in Armenia is based on an agreement that allows Russian troops to stay in Armenia through 2025 and that grants Russia preferential arrangements for its military facilities in Armenia. In fact, Armenia is the only case where the host nation has to pay the costs of the Russian military presence.
Russian troops are seen as a visible assurance of Russia's commitment to Armenian security. For Yerevan, the Russian presence provides a defensive "tripwire" that consolidates the mutual defense treaty and serves as a significant deterrent. Additionally, the Russian air defense forces stationed in Armenia are seen as vital elements in the country's national air defense. In reality, however, the Russian military has assumed almost complete command and control over some aspects of Armenian military capabilities. One present concern is that Russian forces are now in almost total control of Armenian air defense systems and much of the Armenian air force.
The asymmetry of the Armenian-Russian strategic relationship has, in effect, contributed to a mortgaging of Armenian national security over the long term. Complicit in this crisis is a blind and mistaken acceptance that Armenia has no choice.
While many only see Armenia as safe when anchored ever firmly within the Russian orbit, the implications of such a course for Armenian national security fail to realize that true Armenian independence can only be attained, and maintained, when based on its own national interests.
Only when Armenia addresses the imbalance in its relations and imprudence in its dependence on Russia, can real independence be celebrated.
Richard Giragosian is a Washington D.C.-based analyst specializing in Caucasus and Asian policy and foreign affairs.