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Georgia looks west, Armenia east

Arm-Geo flags [courtesy of Armradio] crop.jpg

This summer, Georgia signed an Association Agreement with the EU, but its southern neighbour, Armenia, has opted for the rival Russia-led Eurasian Economic Union.

Johnny Melikyan
3 September 2014

On 27 June 2014, at a summit of EU leaders in Brussels, Georgia, Moldova, and Ukraine all signed Association and Free Trade Agreements with the European Union, in defiance of any hostile reaction from Moscow. This development rekindled discussion among Armenians about whether their country’s decision to throw in its lot with the Eurasian Union was the right one, as well as the possible implications for Georgian-Armenian relations.

The South Caucasus

After the breakup of the Soviet Union, its former republics had to not only rebuild themselves as viable independent states, but also consider their international relations and how best to conduct them. Central to this process was the new rulers’ hostile attitude to their former masters in Moscow, who at the end of the 1980s had been in dispute with the elites in the various Union republics in an attempt to keep the USSR together. Meanwhile, internal ethno-political conflicts that would previously have been suppressed by central government blew up in the republics themselves – Nagorno-Karabakh, South Ossetia, and Abkhazia. All this, as well as the involvement of the Russian Federation in the negotiation and peace process in these conflicts, created conditions which led to the countries of the South Caucasus going their separate ways in their external affairs.

Under President Mikheil Saakashvili, Georgia's political orientation shifted West. (c) RIA Novosti/Alexei Kudenko.

Under President Mikheil Saakashvili, Georgia's political orientation shifted West. (c) RIA Novosti/Alexei Kudenko.

The USSR’s former republics had to not only rebuild themselves as viable states, but also consider their international relations.

Georgia’s foreign policy moved from an initially anti-Russian (anti-Soviet) position in 1991 under Zviad Gamsakhurdia to a more neutral attitude to both Russia and the West, in the late 1990s and early 2000s under Eduard Shevardnadze. In 1993, Georgia, along with its neighbours Armenia and Azerbaijan, became a member of the Commonwealth of Independent States (CIS), only to later leave the CIS after its war with Russia in 2008; and subsequently building closer bilateral relations with the EU.

The so-called ‘Rose Revolution’ in November 2003 that overthrew the Shevardnadze administration, and brought Mikhail Saakashvili to power, strongly influenced Georgia’s external relations. This, on top of worsening relations with Russia over Abkhazia and South Ossetia, led to an announcement by the new government that it had no alternative but to pursue EU membership – a development that ultimately led to the 2008 war, and a break in diplomatic relations with Russia.

Good neighbours

A decade or so ago, the EU started focusing its attention on its relations with its neighbours; and in 2004, the states of the South Caucasus were included in its European Neighbourhood Policy. A five-year Action Plan followed in 2006, designed to enable these countries to benefit from the greater stability, security and prosperity afforded by links with the EU, and to prevent the emergence of new dividing lines between the enlarged EU and its neighbours.

The EU backed up its Neighbourhood Policy with considerable financial and technical aid, conditional on its new partners introducing real economic and political reforms as they moved closer to Brussels, including socio-economic development, democratisation, anti-corruption measures, public sector reform, and a cleaner environment. Between 2007 and 2013, €4 billion (£2.4 billion) was allocated to the Action Plan.

EU aid was conditional on its new partners introducing real economic and political reforms.

After the Russo-Georgian War and the new interest in the South Caucasus it aroused among global power brokers, a further EU initiative in 2009 established the Eastern Partnership between the EU and six post-Soviet states – Armenia, Azerbaijan, Belarus, Ukraine, Moldova and Georgia. Negotiations on Association Agreements between the EU and both Georgia and Armenia began in 2010, with an assumption that they would also include provision for a Deep and Comprehensive Free Trade Area (DCFTA).

After elections in 2012, the new government of Georgia continued to pursue its European ambitions; and on 22 June 2013, Brussels announced that after seven rounds of talks lasting 17 months, agreement on a DCFTA had been reached, leaving the way open for the signing of an Association Agreement in June 2014, which created a new legal basis for further cooperation between Georgia and the EU.

Armenia changes course

Armenia has taken a different course. From the very start of its independent existence, the country’s foreign policy has been characterised by pragmatism and the prevailing mood of the time. In 1991, it joined the CIS, and in 1992, given its involvement in the Nagorno-Karabakh conflict, it became a member of the Russian-led Collective Security Treaty Organisation (CSTO). As such, it sees military and political cooperation with Russia as a key element in its defence and security policy; and the two countries have signed treaties on friendly cooperation. Armenia is Russia’s only CSTO ally in the South Caucasus – its second largest city, Gyumri, has the only Russian military base in the region. Russian border troops also support their Armenian colleagues on its frontiers with Iran and Turkey.

The Unity Cross, a monument built in 2013, dedicated to Armenian-Russian friendship. Yerevan, Armenia. (c) Maxim Edwards

Armenia’s foreign policy has been characterised by pragmatism and the prevailing mood of the time.

At the same time, however, these increasingly close links with Moscow have not meant that Armenia has neglected its contacts with Western countries and organisations: it has always had a good working relationship with the EU, Council of Europe, NATO, and other international bodies, as well as bilateral relations with individual EU members.

In the late 2000s, growing European attention to the South Caucasus was paralleled by a loss of Russian interest in the region, especially after Dmitry Medvedev became President in 2008. At the same time, Moscow began to supply state-of-the-art military technology to Azerbaijan, which has had strained relations with Armenia. In this situation, Yerevan, despite its continuing cooperation with, and economic dependence on, Russia, decided to broaden its options by exploring closer links with Europe – a decision seen by political commentators as an attempt to minimise its risks and stabilise the balance of power in the region.

Vladimir Putin returns

Vladimir Putin’s return to the presidency, however, saw a change in Moscow’s priorities, including those concerning the South Caucasus. In a pre-election newspaper article, Putin had already floated the idea of a Eurasian Economic Union (EEU); and many people believed that this association, based initially on a Customs Union of Russia, Belarus and Kazakhstan, could grow into a powerful global rival to the EU. It was equally clear that at some point Yerevan would have to make a choice between the two blocs. 

The decisive factor was Yerevan’s need for Russian arms and military technology.

Despite good progress in the talks that would have led to an Association Agreement with the EU, Armenia, unlike Georgia, decided to withdraw from the process, and ally itself with the Eurasian idea. One important factor was Armenia’s dependence on Russian investment, and on Russia as a market for its goods and natural resources, not to mention a labour market for its citizens. But the decisive factor was the still unresolved Nagorno-Karabakh conflict, and Yerevan’s need for Russian arms and military technology to preserve the balance of power, and avoid a renewal of armed hostilities.

These were the reasons behind President Serzh Sargsyan’s announcement on 3 September 2013 that Armenia would apply to join Russia, Belarus and Kazakhstan in the EEU, whose launch took place on 29 May this year. At present Armenia is awaiting a decision on its membership. 

Georgian-Armenian relations  

Georgia and Armenia have been in different political camps since the early 1990s.

As a result of the various ethno-political conflicts in their region, Georgia and Armenia have been in different political camps since the early 1990s, with Armenia supporting the principle of the right of ethnic groups to self-determination, while Georgia (like Azerbaijan, Ukraine and Moldova) prioritises states’ territorial integrity. Notwithstanding their divergent paths, relations between Armenia and Georgia are good, particularly in the economic sphere.

Anti-Russian postcard on sale in Tbilisi 2013. (c) Maxim Edwards.

But a realignment is taking place: a few days after its October 2012 elections, Georgia’s new government announced it would be reassessing some of its foreign policy, and dropping its previous anti-Russian line and rhetoric, while maintaining its traditional strategic relations with the USA, and neighbourly relations with Armenia, Azerbaijan and Turkey. This gives some hope for the development of active cooperation on a Yerevan-Tbilisi-Moscow axis, as a counterweight to the ever-expanding one of Baku-Tbilisi-Ankara.

However, Yerevan is concerned about Georgia’s current politics, and growing dependence on its two main trading partners Turkey and Azerbaijan. In January-June 2014, Georgia’s trading turnover with Turkey reached $940m (£566m), 17% of its total foreign trade turnover, while turnover with Azerbaijan was over $580m (£350) or nearly 11% of its total. Trade with Armenia, its sixth largest trading partner, constituted only 5% of its international turnover. During the years of the Armenian-Azeribaijan conflict over Nagorno-Karabakh, and the blockade of Armenia by Azerbaijan and Turkey, Georgia has become a crossroads between north and south, east and west. This has allowed the completion of the Baku–Tbilisi–Ceyhan pipeline, taking oil from the Caspian Sea to the Mediterranean; the Kars-Akhalkalaki-Tbilisi-Baku railway from Turkey to Azerbaijan, and other major infrastructure projects routed through its territory, when a route through Armenia would have been shorter. All these projects are seen by Yerevan as a means of intensifying the blockade.

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Georgian stamp commemorating the Baku–Tbilisi–Ceyhan pipeline (which notably bypasses Armenia). CC Wikimedia Commons.

The key issue for Armenia is that its transport communications and energy supplies – in fact, 80% of all its imports – also have to pass through Georgia. For Georgia, Armenia is an important source of investment, and increasingly of tourism. In 2013, 1.28m Armenians visited Georgia, taking second place only to Turks. Georgia is also home to more than 250,000 ethnic Armenians, who are concentrated in the Samtskhe-Javakheti region in the south of the country, bordering on Armenia. While there are fears that Yerevan might encourage ethnic separatism, the consensus is that stable relations between the two countries will neutralise that threat, or indeed any threat that Russia might exploit the situation to destabilise the region further.

Both sides have the opportunity to reap economic benefits from the other’s choice of international alliance.

In spite of local tensions, over the past decades, Georgia and Armenia have proved good neighbours and reliable partners who have no problem with one another’s foreign policy priorities and choices. Both Georgian President Giorgi Margvelashvili and his Armenian counterpart Serzh Sargsyan made this clear in recent visits to each other’s capitals. Both sides have the opportunity to reap economic benefits from the other’s choice of international alliance. Tbilisi can use its EU Association to access the Russian market once Armenia is a member of the EEU; and Yerevan can in turn access European markets through Georgia’s membership of the EU Free Trade Area. During a recent meeting in Yerevan, the prime ministers of both countries were at one in expressing willingness to further develop bilateral ties. 

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