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ARMENIA - CUT OFF BUT SURVIVING9
There are not many countries that have closed borders. The fact that Armenia has two and yet maintains double-digit growth makes it unique. With its eastern and western frontiers closed, Armenia has been excluded from the development of energy pipelines and transport networks in the South Caucasus, but has kept its economy afloat with massive remittances from the Armenian diaspora community, foreign aid, diamond processing and foreign direct investment (FDI) -- particularly from good friend Russia.
irect investment (FDI) -- particularly from good friend Russia. Armenia is the fastest growing economy in the Commonwealth of Independent States (CIS), but at the same time suffers from massive unemployment, corruption and poverty, with large numbers of people emigrating abroad.
Armenia’s geographical position is challenging and Yerevan has pursued a “complementary” foreign policy maintaining good relations with the West, Russia and Iran. However, with growing tensions between these nations, it seems doubtful that Armenia will be able to continue playing this game and difficult choices will have to be made. Armenia claims to have made a clear European choice and the country is part of the EU’s European Neighborhood Policy (ENP), aligning with 95 percent of EU foreign policy decisions. But difficulties arise. For example, Armenia did not align itself on the Alexander Litvinenko case or regarding sanctions on Iran. Given that the borders with Azerbaijan and Turkey remain closed, Georgia is Armenia’s “lifeline” and 85 percent of Armenia’s trade passes through the country. But this route leaves Armenia vulnerable to foreign policy disputes between Georgia and its neighbors as was the case when Georgia’s relationship with Russia reached crisis point last year, resulting in the border closing. Armenia has close political and economic ties with both Russia and Iran, viewing the latter as a major counterweight to its traditional foes Turkey and Azerbaijan.
A priority of Armenia is to see its border with Turkey reopened. The border has been closed since 1991 when Turkey cut off diplomatic relations and placed an economic embargo on Armenia following its war with Azerbaijan over Nagorno-Karabakh. But where there is money to be made you will find Turkish businessmen and the political deadlock has not stopped Turkish goods from flowing into Armenia. Only 25 kilometers from the Turkish border, Yerevan should be a short drive for Turkish truckers. But with the closed border and embargo they have to follow a long route through Georgia. At the main border crossing, the queue of Turkish trucks headed for Yerevan can often stretch for more than a kilometer. Business gets around the trade embargo as the goods officially change hands in Georgia through middlemen or companies established by Turkish exporters. Given this, many business leaders on both sides are pushing the two governments to end the embargo and reopen the border. It would give Armenian exporters easier access to Western markets and increase the export routes of Turkish companies targeting the Southern Caucasus and Central Asia. It would also facilitate people-to-people contacts and ease the dire economic situation of border towns such as Kars.
Turkey has always attached three conditions to the opening of the border: resolution of the Nagorno-Karabakh conflict, recognition of Turkey’s eastern border and removal of the international recognition of genocide from Armenia’s constitution. Nagorno-Karabakh should be a bilateral issue between Armenia and Azerbaijan and it is difficult to understand why Turkey continues to involve itself in a conflict in which it has no role other than being Azerbaijan’s “friend,” particularly now that the Baku-Tbilisi-Ceyhan pipeline is up and running. On the recognition of the border, this would become irrelevant once diplomatic relations were established given that both parties would have to sign a protocol that would automatically commit Yerevan to recognizing Turkey’s eastern border. The Armenian genocide question is highly sensitive, but again Turkey’s current policy on Armenia is not helping them. Although the Turkish government has called for a dialogue on the genocide, the gesture is questionable given that, while Article 301 of the infamous Turkish Penal Code (TCK) exists, it makes it an offense to discuss it. Although the genocide issue is deeply rooted in the psyche of the Armenian people, it should not become an obstacle to having better relations. Nobody is winning anything from the current standoff and such a gesture from Ankara should empower Turkey internationally.
Armenia has great expectations of the EU. They say the EU is their last hope given that the US tried and failed for 10 years to make Turkey change its policy. There is increasing optimism that now Turkey is embedded in membership talks and, with the Justice and Development Party (AK Party) having a “power monopoly,” there may be some change in policy toward Armenia. However, at the same time, Armenia is not happy with the EU pushing Turkey’s role in the Black Sea, which it sees as “exclusionist” with a narrow ethnic approach. Foreign Minister Ali Babacan will meet with his Armenian counterpart in New York in early October. There is much anticipation and hope that this meeting will result in the first steps to a new window opening in Armenia-Turkey relations. Let’s wait and see.