Publication: Eurasia Daily Monitor Volume: 5 Issue: 195

Although talks of establishing security in the Caucasus had been underway for months, the crisis in Georgia underscored a sense of urgency at the September 26 trilateral meeting of the foreign ministers of Armenia, Turkey, and Azerbaijan. Eduard Nalbandian, Ali Babacan, and Elmar Mammadyarov met in New York to further discuss a resolution to the Karabakh conflict, which has created obstacles to the normalization of bilateral relations between Turkey and Armenia.

Economically bruised Armenia needs an open-border relationship with Turkey now more than ever. Georgia’s Black Sea ports are Armenia’s main gateways for foreign trade, with 70 percent of its imports and exports carried through Georgian territory. This dependence on its northern neighbor became vulnerable when the damaged Georgian infrastructure caused a cessation of a large share of Armenian trade for more than week in August. After a rail bridge near Gori was destroyed on August 16, Armenia experienced the country’s worst fuel crisis since the early 1990s (, September 5). During a two-week period at the end of August, hundreds of motorists were stranded, causing higher gas prices and long lines at filling stations.

Artur Baghdasarian, secretary of Armenia’s National Security Council, said that the damage to Georgia’s infrastructure had cost the Armenian economy $680 million, mainly in delayed imports and exports (RFE/RL Armenia Report, September 3). After the railway was repaired, about 500 freight cars with 54,000 tons of cargo moved from Georgia to Armenia on September 2 (ARKA, September 2).

Armenia’s economic relationship with Georgia also played an important part in its foreign policy with regard to the crisis. Moscow, according to a senior Russian security official, had hoped that Yerevan would agree to the accession of South Ossetia and Abkhazia into the Collective Security Treaty Organization (RFE/RL Armenia Report, September 3). The CSTO is a Russian-led military alliance of six former Soviet republics that agree to abstain both from the use of force or joining other military alliances. The charter—signed by Armenia, Russia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan—claims that aggression against one signatory would be perceived as aggression against all. Georgia and Azerbaijan joined in 1994 but withdrew in 1999.

Despite its CSTO membership, Armenia, realizing the enormous political and economic risks that acknowledging the breakaway regions would carry, refrained from recognizing the disputed regions. The presidential press office released a statement of neutrality shortly after the crisis broke out, reiterating President Serzh Sarkisian’s position: “The President once again stressed that the Russian Federation is a strategic ally of the Republic of Armenia and Georgia a friendly country, and that Armenia is therefore greatly interested in the conflict’s quick, peaceful resolution.” In an effort to maintain regional stability, Sarkisian reached out to Saakashvili, offering condolences and humanitarian assistance. Sarkisian is also reported to have presented a comparable message of concern to Medvedev (RFE/RL Armenia Report, August 14).

Kevork Oskanian, a doctoral candidate at the London School of Economics and Political Science, is currently researching security in the South Caucasus. “It [neutrality] was, really, the only decision Armenia could make considering its dependence on Georgia for its commercial relations with the outside world and its strategic alliance with Russia,” he said. “Yerevan was basically walking a tightrope.”

Since the trade route was repaired, Oskanian said, the economy had largely returned to normal; but the consequences of Armenia’s heavy reliance on Georgia emphasized the need of establishing another trading corridor to Europe through its western neighbor, Turkey.

The idea of easing tension with Turkey had already been brewing for months, as Sarkisian had extended an invitation to Turkish President Abdullah Gul in July to attend the Turkey-Armenia FIFA World Cup soccer qualifying match on September 6. Gul’s symbolic visit was the first by a Turkish head of state to Armenia and was also in concert with Turkey’s proposal for a Caucasus Stability and Cooperation Platform. The initiative is of utmost importance to Turkey’s Eastern foreign policy, as a greater involvement in the Caucasus, a tenuous region with ties to Europe, could augment Turkey’s credibility with the European Union (Hetq, September 8).

While Turkey stands to benefit from improved relations with Armenia on a political standpoint, Armenia’s advantage would primarily be economic with a more stable trade link to Europe.

“Despite all claims to the contrary, even outside of periods of acute conflict and instability, the Armenian population is paying a high price for the current situation,” Oskanian said, noting that costly imports and a low volume exports had resulted in a significant trade imbalance. An open border would provide Armenia with access to the Turkish Black Sea port of Trabzon, as well as the prospect of connecting Armenia’s rail network with Europe.

“This would open new markets and opportunities for Armenia’s producers and foreign investors and ease price pressures on consumers through dramatically reduced transportation costs and a generally more open and competitive economy,” Oskanian said.

Before any borders are opened, however, Turkey wants the disputed Karabakh conflict resolved, an issue that also influenced Armenia’s decision to remain neutral. Yerevan has yet to recognize the region formally because of its current diplomatic efforts with Azerbaijan under the aegis of the OSCE Minsk Group.