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Eastern Europe

Will Russia serve the old wine in a new bottle?

Anzhela Amirjanyan

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Nowadays, one of the main features of global political developments are non-violent or color revolutions. These revolutions are brought about by wide-spread corruption, poverty, unemployment and a deep gap between masses and the ruling elite with the latter being the biggest political risk for the ruling party. Most analysts argue that these factors are combined also with outside support, which can culminate in the revolution. However, what happened in Armenia after a few weeks of peaceful demonstrations, the Velvet revolution, that brought down the regime and has exercised true people power, is considered to be unprecedented for it didn’t owe its origin to the external assistance or wasn’t an attempt by ‘‘US to export democracy’’ in Armenia. The geopolitical factor was initially excluded.  In fact, Russia has traditionally had negative attitude towards color revolutions and has seen them ‘‘as a new US and European approach to warfare that focuses on creating destabilizing revolutions in other states as a means of serving their security interests at low cost and with minimal casualties’’.This means that Russia, desperate to maintain its own standing in the Caucasus, was likely to intervene in the events unfolding in Armenia. However, the Kremlin didn’t view turmoil in Armenia as a Ukraine-style revolution. Asked if Russia would intervene, Kremlin Spokesman Dmitry Peskov said the matter was “exclusively an internal affair” and Russian action would be “absolutely inappropriate”. Moreover, after Armenia’s unpopular leader Serzh Sargsyan’s resignation, Russian Foreign Ministry spokeswoman Maria Zakharova called Armenians “a great people” and wrote, “Armenia, Russia is always with you!”

The prospect of a Russian intervention was low for 2 key reasons

One of the possible reasons behind Russian inaction was that Moscow didn’t regard the revolution in Armenia as a threat to its geopolitical prerogatives, but rather as an opportunity to make a strategic move through a global panic over Russia’s continued warlike behavior. Satisfied that this is genuinely an internal Armenian issue directed at an incompetent and ineffective government, Russia proved with its muted response to Armenia’s color revolution that Kremlin embraces the policy of non-interventionism.

Secondly, a rapid spread of pro-Western sentiment among local journalists, civil society representatives and youth was prevalent in Armenia in the past decade. This process only accelerated after Armenian President Serzh Sargsyan unexpectedly decided in 2013 to join Russian-led Eurasian Economic Union (EAEU) over EU Association Agreement.Yerevan’s decision of September 3, 2013 to involve in Eurasian Economic Union (EAEU) was mostly conditioned by Moscow’s ultimatum imposition, which left a deep track in the perception of Armenia-Russia relations and formed a comparatively new cliché. Anti-Russian sentiments were on rise in Armenia in recent years due to major levers of influence that Russia maintained over Armenia: Armenia’s corrupt oligarchic system and the military threat coming from Azerbaijan. Civil society and the opposition in Armenia viewed Russia as the sponsor of the autocratic, oligarchic system of governance in Armenia. They have traditionally criticized the government for having closest ties with the country which provides 85 percent of arms export to Azerbaijan-a country which is in continuous conflict with Armenia over the disputed territory of Nagorno Karabakh.  This anti-Russian sentiment reached its apex in 2016 when the intense fighting broke out in Karabagh known as Four-Day War. This drew the public attention to the Russian-supplied arms which played a role in the deaths of dozens of soldiers.

Both opposition leaders and civil society members demanded not only Armenia’s exit from the EAEU, but also an end to the Russian military presence in the country. The anti-Russian rhetoric was useful for both the Armenian government and the opposition to alert Russia not to take Armenia for granted.Hence, in one way the April Revolution in Armenia was a test for Russian-Armenian relations, and Russia viewed it as a new impulse for mutually beneficial relations aimed at restoring the damage of Russia’s protective image among Armenians.Needless to say,Armenia is important to Russia, as losing Armenia would cause fundamental changes in Moscow’s influence in the South Caucasus. Furthermore, Armenia can’t cherry-pick among its closest allies because its landlocked position limits the freedom to maneuver in its foreign policy and its economic and defense imperatives dictate a close alignment with Russia. This was reaffirmed by new prime minister and protest leader of Armenia, Nikol Pashinian, who not only supported maintaining the current Russian-Armenian relationship but also suggested a “new impulse” for political and trade relations during the meeting with Russian president Vladimir Putin in Sochi on May 14. During another meeting a month later, Armenian PM expressed his hope that ‘’the relations will develop more effectively on the basis of mutual respect for the best interest and sovereignty of the two States’’.

On the whole, Armenia will continue to pursue its “Complementarian” or multi-vector foreign policy, which means that no radical change in the realm of foreign policy is expected to take place.  Yet there is no strong anti-Russian current in Armenian political and society rhetoric. The recent civic movement was significant in realizing the potential of Russian-Armenian mutual relations for economic development and security. Undeniably, Russia should adopt new approaches towards Armenia and it should realize that under new circumstances the backward-looking policies are destined to be counter-productive. In Armenia people hope that Kremlin wouldn’t serve the old wine in a new bottle.

Anzhela Amirjanyan, Graduate, International Relations, Yerevan Former stagiare at European Parliament's Directorate General for External Policies

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Eastern Europe

Quality of Life in Latvia is not a priority

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Four presidents, 14 governments and eight Seimas have changed in Latvia over the past 20 years. The country joined the European Union and NATO, and then switched to the euro. But have Latvians become better off? Has their quality of life improved? Statistics shows that the general well-being of population remains very low. Political turbulence only worsens the situation.

Thus, according to Numbeo.com portal, one of the largest databases on the cost of living and quality of life worldwide, Lithuania and Latvia are the worst Nordic countries for quality of life.

Quality of Life Index by Country 2019

The leaders of the rating are Denmark, Finland and Iceland. Latvia showed the lowest result, the quality of life index here is 149.15 points. In Lithuania, the result is slightly higher – 156.36 points.
Numbeo experts took into account the purchasing power of the population, safety, health care, the cost of living and some other factors.

It is noted that the world ranking of countries for the quality of life is led by Denmark, Switzerland and Finland. Estonia took 11th place, Lithuania – 29th, and Latvia – 34th.

The more so, experts said that the proportion of shadow economy in Latvia rose by 2.2 percentage point last year to 24.2 percent.

The shadow economy proportion in Latvia has risen for the past two years in a row.

EU-SILC survey gives another frightening indicator. According to eurostat.ec.europa.eu, Latvia, as well as Estonia and Lithuania are top three EU countries in terms of poverty risk among pensioners.

Political and economic short-sightedness has lead to the state when the Baltic States have become the first battlefield in case of war between NATO and Russia.

The United States is preparing for the use of nuclear weapons in Europe along with non-nuclear countries, said Vladimir Ermakov, director of the Department for Non-Proliferation and Arms Control of the Russian Foreign Ministry. Experts point out that military airfields in the Baltic States and Poland have already been prepared to receive NATO aircraft that can carry tactical nuclear weapons. If take his words seriously, this means the end of the Baltic States’ existence.

The behavior of the authorities guaranteed Latvia, Lithuania and Estonia the status of the first battlefield, despite the fact that in the event of war, economy would be completely destroyed and population would disappear.

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Eastern Europe

How the Caspian Sea joins the Black Sea

Asim Suleymanov

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In the development of international cooperation and the deepening of industrial cooperation, the leading role belongs to the formation of a network of international transport corridors. It has a special place in solving transport problems associated with the expansion of interstate transportation, economic, cultural and other ties, with the creation of an international transport infrastructure that has common technical parameters and ensures the use of a single transportation technology as the basis for the integration of national transport systems into the global transport system.

Developing corridors are to play a system-forming role in the economic and social development of the territories along which they pass. Their creation is directly related to projects for the development of sectors of the economy and social sphere.

If a modern transport corridor connects the Caspian Sea and Black Sea, it will lead to uninterrupted cargo transportation between Asia and Europe. New opportunities for the regional states will be opened up. This was confirmed by the first meeting of the foreign ministers of Azerbaijan, Romania, Georgia and Turkmenistan, held in mid-March 2019 in Bucharest.

According to its results, a political declaration was signed. The document reflects the determination of the four states to implement the project of an international freight route between two seas by joint forces.

As expected, the corridor between the two seas will have a real impact on the standard of living in the participating countries and cause a sharp surge in business activity in neighboring regions.

The idea of the project is to make full use of the geographical proximity of Romania, Georgia, Azerbaijan and Turkmenistan, as well as the capabilities of the ports of Constanta in Romania, Poti in Georgia, Baku in Azerbaijan and Turkmenbashi in Turkmenistan.

New transport route will allow establishing a direct connection between the port of Constanta and the Danube River, and then the rivers and canals on the European continent, that will open access to Central and Northern Europe.

In general, the Caspian-Black Sea region is becoming links of a single Eurasian transport network.

The main question is how to direct the necessary volumes of cargo along this route, which would make its work profitable and profitable. To meet these challenges, in the near future four countries have planned to create an expert working group, optimize working procedures, harmonize tariffs, identify remaining infrastructure and legal constraints, and jointly promote the project at the international level, including in the course of interaction with the European Union. But it will not be easy for them to achieve all these ambitious goals.

The closest allies of Azerbaijan, Turkey and Russia, support all the projects aimed at strengthening economic cooperation between Baku and other countries of the Caspian-Black Sea region. Moscow and Ankara are lobbying for the creation of a transport corridor between the two seas.

Azerbaijan once again demonstrates that it is becoming one of the most important transport hubs of Eurasia – a transit hub in which the East and the West are tightly tied.

This country is interested in East and West, not conflicting with each other, but driven forward by the single energy of partnership.

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Eastern Europe

China’s changing interests in South Caucasus

Orkhan Baghirov

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President Ilham Aliyev and Chinese leader Xi Jinping in Beijing Photo: Azertac

On April25-28,“Second Belt and Road Forum for International Cooperation” took place in the capital city of China. From South Caucasus region only Azerbaijan leader Aliyev was in the list of 36 top-Level attendees (Diplomat, April 27).As the Azerbaijan was participating first forum in 2017 on ministerial level, visit of President in second forum demonstrates intention of both sides for close cooperation within the framework BRI.

Despite fact that China’s strong ambition to enter European market through BRI makes Georgia one of the most important players in the region (it has FTA both with China and EU) its high-level officials did not attend the forum (Emerging-Europe, January 3, 2018).

Generally, South Caucasus region was not in the Chinese focus when the BRI project was unveiled in 2013.Its attitude to the region has changed afterwards. Being part of the Central Asia-West Asia Economic Corridor, South Caucasus has strategic importance for China. At the same time, transportation projects such as Baku-Tbilisi-Kars railway and Anaklia Deep-Sea Port has increased significance of the region.

From geopolitical point of view stability in Azerbaijan and Georgia’s political problems with Russia creates ground for Chinese presence in Caucasus. It is clear that having political problems with West Russia is not willing to confront China. Therefore, using these opportunities and establishing good relations both with Georgia and Azerbaijan China is able to avoid its biggest rival in Eurasia and use shortest way to European markets (Trend.az, April 10).

Importance of South Caucasus countries within the BRI framework is not same. Armenia has less potential for BRI. It does not have enough transportation infrastructure and its borders with Azerbaijan and Turkey closed. Armenia has a potential to become a corridor to markets of Eurasian Economic Union (EEU) and Iran. However, it does not have borders with the members of EEU and  railway project between Armenia and Iran is not viable due its high costs ($3.2 billion) and less importance in commercial means (Vestnikkavkaza, August 25, 2018).Also, China has borders with two biggest members of EEU and could easily reach EEU markets through them. 

In the case of Georgia, China is the biggest foreign investor. China’s Hualing Group controls Kutaisi free industrial zone (FIZ), owns Basis Bank, hotels, wine export enterprise. It also constructs “Tbilisi Sea New City” near Tbilisi Sea in which company has already invested around 150 million dollars (hualing.ge).Another Chinese company CEFC Energy owns 75% of Poti FIZ (Cbw.ge, March 20).

Unlike the Georgia, mostly state-owned Chinese companies have invested in Azerbaijan. One of these companies CTIEC Group constructed biggest cement factory in Azerbaijan in 2014.China also has a great interest on Baku International Sea Trade Port as it is one of the main ports within BRI. Based on intergovernmental grant agreement China transferred $2 million worth equipment to the port (Azernews, April 4, 2018).

Despite fact that Azerbaijan is China’s key trade partner in the South Caucasus (it accounts 43 percent of China’s trade turnover in the region) it has massive investments in Georgia (Azernews, April 25). It mostly related to political orientation of these countries. Georgia follows more western orientation that made it more attractive for China while Azerbaijan implements balanced strategy and it does not want to feel China’s pressure. Besides, Azerbaijan is not in need of financial assistance like Armenia and Georgia as it has enough financial reserves.

However, recent developments of Sino-Azeri economic relations within the framework of the Second Belt and Road Forum creates new perspectives for China’s presence in South Caucasus. During the forum 10 agreements worth of 821 million USD has been signed  (Azvision.az, April 24). These contracts cover different economic spheres of non-oil sector including the construction of a tire factory in the Sumgayit chemical-industrial park, the creation of a 300-hectare greenhouse complex in the Kurdamir region of Azerbaijan, and the construction of agrological industrial parks in the Guba, Goychay and Khachmaz regions (Turan.az April 24).If we take in account that Chinese investors have invested800 million USD in the economy of Azerbaijan since independence, obtained agreements in the forum worth of same amount shows China’s growing interest in Azerbaijan.

Nevertheless, it does not mean that China’s preference of Georgia has changed. Within the BRI project both Azerbaijan and Georgia are of geopolitical importance for China. It is in China’s interest to boost bilateral relations with both of countries. It is apparent that China already has considerable investments in Georgia and now it is time to deepen cooperation with Azerbaijan. At the same time Azerbaijan is not going to cross limits of its balanced policy. Chinese companies that signed agreements in second forum are government affiliated companies as well. It again shows that Azerbaijan is willing to deepen cooperation without creating room for pressure in its domestic economy.

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