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124THE EURASIAN FUTURE OF THE REPUBLIC OF ARMENIA
Alexey Shanyavsky
Introduction
The Eurasian Economic Union (EAEU) is a new international economic integration alliance, which was founded on January 1, 2015. The Republic of Armenia joined the EAEU on January 2, 2015 according to the agreements signed before [1]. Armenia became the fourth member of this alliance after the Russian Federation, the Republic of Kazakhstan and the Republic of Belarus. By this accession Armenia probably chose its definite course after more than twenty years of independence. Nevertheless, Armenia is also a member in the Eastern Partnership (EaP) of the European Union (EU) that means gradual economical and political integration as well and opens the prospect to join EU. It is notable that decision to turn from gradual EU integration to the Eurasian integration was made in a very short time period. This step was absolutely unexpected and caused broad resonance in Europe and Armenia itself. That is why it is necessary to find the reasons of these political decisions made by the Republic of Armenia.
This paper tracks Armenia’s integration activities from the moment of gaining independence to present days and analyses advantages of Armenia’s accession to EAEU.
The Integration Activities of Armenia in 1991-2013 under the Influence of the Complementary Policy
Armenia became an independent state as a result of referendum on September 21, 1991, which is considered the birthdate of the modern Armenian state. It is important to note that Armenia refused to take part in referendum over the future of the USSR on March 17, 1991. It joined the Commonwealth of Independent States (CIS),
' Master’s degree student at the School of International Relations, Saint Petersburg State University.
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which was the first integration alliance of the post-Soviet area, only 3 months after declaring the independence.
The first integration activities of the fledgling republic should be dated to period of 1992-1994, when Armenia ratified the Belovezhskaya Pushcha and Almaty Accords and accession to the North Atlantic Cooperation Council (NACC) of NATO. Moreover, the Republic of Armenia became cofounder of the Collective Security Treaty (CST) and received additional security guarantees, which was necessary in view of permanent conflict with the Republic of Azerbaijan over the Na-gorno Karabakh.
The specific strategy of the multi-vector policy of Armenia named complementary policy or complementarism appeared in Armenia’s foreign policy since 1993. This was the case when “Yerevan received weapons and military equipment from Russians, the funds for statehood development (and arms purchases in Russia) from Americans, the food and humanitarian supplies from Europeans mostly delivered through Turkey and fuel materials from Iran” [2]. There were several reasons for this policy, the first one being the complicated geopolitical situation in the region resulting from the conflict over Nagorno Karabagh, when Armenia lost some of its allies. The second reason was the presence of three strong diaspora communities in the USA, Europe and Russia. All the mentioned communities tended to help the republic in building an independent state by using the political institutes in their countries of residence.
The Republic of Armenia signed an agreement on creation economic alliance, which was intended for foundation of the Eurasian Customs Union within CIS and deeper integration in comparison with the EAEU in 1993. It came into effect for Armenia on July 26, 1994. According to this document the members of alliance expected to conduct integrated trade and economical policy, create common goods, services and labor market and even to organize the single ruble currency area. This fact was recalled in the National Assembly of the Republic of Armenia as a response to the criticism connected with the country’s accession to EAEU [3]. Nevertheless the provisions of this agreement were failed to fulfill. There are several reasons why Armenia chose to ignore its commitments. The first one was a quick breakup of the alliance because of strong character of its provisions that were not suitable for its
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members. The second reason was the economic crisis in Russia, the most economically advanced country in the alliance. Third, it is important to mention that ruble area ceased to exist in 1993. According to its multi-vector integration policy Armenia joined NATO program Partnership for Peace (PfP) in 1994. It was time when the conflict in Nagorno Karabagh was receding and that was viewed positively by NATO and EU.
The next integration period in the foreign policy of Armenia involves the first decade of 21st century and “connected with a name of Vartan Oskanian, Foreign Minister of Armenia (1998–2008), who was the main creator and ideologist of this political course and the author of the term complementarism” [2]. In our opinion the activities of the government in this period can be explained by the mentioned term.
The Republic of Armenia became the member of the European Council in 2001 that opened up the path for gradual integration for the country. The Republic of Armenia and other member-states of CST decided to transform it into real international alliance named the Collective Security Treaty Organization (CSTO) in 2002. Next year Armenia joined international integration processes and received observer status of the Eurasian Economic Community (EAEC). After that Armenia became a participant of the European Neighborhood Policy (ENP) in 2004.
During the Great Recession of 2008-2009 the Republic of Armenia took part in foundation of the Anti-crisis Fund (ACF) for the members of EAEC based on the Eurasian Development Bank (EDB). After signing the agreement on creation EDB and payment for the part of bank shares in 2009 the Republic of Armenia became its co-founder. It is interesting to note that the main area of activity of EDB besides the overcoming the global financial and economic crisis was “creating the conditions necessary for encouraging sustainable economic development and promoting integration between EDB member states” [4]. The Republic of Armenia continued its cooperation within CIS and signed the CIS Free Trade Zone Agreement in 2011. Next year this convention was ratified by the National Assembly of the Republic of Armenia. “Tigran Davtyan, the Minister of Economic Affairs, who presented this agreement to the Armenian Parliament stated in a debate that the CIS Free Trade Zone Agreement will affect favorably on the economical system of Armenia and boost GDP growth and export” [5].
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In this period Armenia continued to cooperate with EU using complementary policy. It is important to remind that according to ENP convention the new integration project named the Eastern Partnership (EaP) was established during the Prague Eastern Partnership Summit in 2009. “The main goal of the Eastern Partnership is to create the necessary conditions to accelerate political association and further economic integration between the European Union and interested partner countries. <...> With this aim, the Eastern Partnership will seek to support political and socioeconomic reforms of the partner countries” [6]. Through this cooperation it became possible to start negotiations between Armenia and EU about the European Union Association Agreement (AA). The talks about the creation free trade zone within AA took place in 2012. According to this goal “it was planned that Yerevan will sign Association and Free Trade Agreement on the EaP Vilnius Summit. Nevertheless it was recognized that the Republic of Armenia decided to join the Eurasian Custom Union and then to take part in creation of EAEU. It was the result of the talks between the President of the Russian Federation Vladimir Putin and the President of Armenia Serzh Sargsyan on September 3, 2013” [7]. This event was the start point for the accelerated period of integration of the Republic of Armenia into economic area of the future EAEU.
Integration U-Turn of the Republic of Armenia in 2013-2015: the Advantages of the Accession to EAEU
Drastic change of the development path by the Republic of Armenia from the cooperation with EU to the accession to EAEU was unexpected and caused astonishment in the foreign press and even some opposition within the country [8]. It is notable that during the Armenian press briefing on March 18, 2013 President of Armenia Serzh Sargsyan gave the following answer to the question about Association with EU: “We have almost concluded works on the Deep and Comprehensive Trade Zone Agreement and God help us to finish and sign it at the end of this year.” [9]. Nevertheless the situation in which government of Armenia made its choice shows us that this decision in that moment was the most promising for the future of Armenia’s statehood. The main reasons that had impact on the final decision and acceptance Eurasian pattern of the integration development are presented below.
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The first reason is the problem of railway connection. True hope for the country in solution to long-standing transportation problem appeared in January, 2013 during the formal visit of Bidzina Ivanishvili, the Prime Minister of Georgia. “In a joint press conference together with his Armenian counterpart Tigran Sargsyan, Ivanishvili stated that opening of railway through Abkhazia is possible. “We have to work on immediate solution of this problem”, stated the Prime Minister of Georgia. Bidzina Ivanishvili emphasized that Tbilisi tries to do it as soon as possible despite the difficulties between Russia and Georgia. The Prime Minister said that Georgia is ready to start a dialogue with Abkhazians for that.” [10]. It was recognized that “Russian Railways may invest about 15 billion rubles in development of Armenia’s railways” after the talks between Russian and Armenian presidents in Moscow on September 3, 2013 [11].
The second reason is energy security. In his election campaign 2013 named Towards a Secure Armenia, Serzh Sargsyan promised to finish in time the construction of the second nuclear power plant unit [12, p. 14]. It has to be noted that this unit is constructed by the Russian Rosatom State Atomic Energy Corporation. “Meanwhile, in the infamous EU Association agreement there was nothing about the Armenian Nuclear Power Plant. Europe offered different programs for conservation the plant after the end of its operating period and Turkey and Azerbaijan actively lobbied this process. It is obvious that in case of the Association with EU Armenia will receive neither technology, nor funds, nor even more importantly, political assistance” [13]. It is also has to be mentioned that there was a gas agreement signed by Armenia and Russia on August 29, 2013 with a provision to maintain discount prices for a period of five years. “According to the new agreement the gas price for Armenia will be 189 US dollars per TCM instead of 270 US dollars. Moreover, Gazprom’s share in gas monopolist company of Armenia ArmRusGazprom will increase to 100 percent from 80 percent” [14].
The third reason is the national security. It is well known that the Russian Federation is a guarantor of the Armenia security and this fact had valuable influence on Serzh Sargsyan’s attitude to the Eurasian integration: “Today our CSTO membership creates new base of economic interconnection. I told several times that it is not possible to isolate ourselves from a certain geo-economical area within a single system of military security.” [15]
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The fourth reason is closely connected with economical factors. To prove this let us use the statement of Serzh Sargsyan, which he made after signing the agreement on accession to EAEU in Minsk on 10th October, 2014. “We come to this decision in order to speed up the progress of our economical system. The new opportunity to increase competitive ability effectiveness of economic system will appear by the movement of goods, services, funds, man power, availability of energy sources and using integrated transport solutions”[16].
It is notable that government’s decision to join the Eurasian Customs Union and to cooperate with the Russian Federation, the Republic of Kazakhstan and the Republic of Belarus coincided with the opinion of the Armenian people, as it was shown by a survey conducted in Armenia on October 5-10, 2013 [17, p. 25].
• In case of free will, overwhelming majority (67 percent) chose the cooperation with Russia and only 17 percent preferred cooperation with the EU;
• In case of forced choice between cooperation either with Russia or with the EU, 75 percent chose the former and only 19 percent the latter;
• Population of Armenia is inadequately aware of the Eurasian Customs Union between the Russian Federation, the Republic of Kazakhstan and the Republic of Belarus. About 40 percent do not know anything about it, and 30 percent have heard about it, but have no idea what it is. This means 70 percent of the country population have little to no information about this union;
• After the clarifying what is the Eurasian Customs Union and its main ideas, 86 percent approved Armenia’s accession to it. This is even higher than the number of those who preferred cooperation with Russia in case of free will.
The Republic of Armenia made its integration choice in 2013 and after that the government signed the agreement on accession to EAEU with the Presidents of the Russian Federation, the Republic of Kazakhstan and the Republic of Belarus. This event took place in Minsk on May 24, 2014. The National Assembly of the Republic of Armenia ratified this agreement in December, 2014 and on January 2, 2015 Armenia became a full member of EAEU. According to the prior statements “share of Armenia in distribution of the customs duty for import of goods into EAEU area is 1.13 percent. In the service industry Armenia accepted all common obligations of the EAEU members. In the trade of goods Armenia will harmonize its customs tariffs
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gradually to become equal with the common EAEU tariffs by 2022.” [18]
The future projects of Armenia in the light of its accession to EAEU are the main reason of the decision to join the Eurasian integration. For example about 150 million US dollars from anti-crisis foundation of EDB were earmarked for the special project named North-South which aims at solution of the transportation problem in Armenia [19]. Moreover, the modernization of the second nuclear power plant unit is in process, planned to be finished in 2019 [20]. The free movement of goods, services and labor within the union and related investments will help grow the GDP of Armenia by 2 percent annually [21, p. 6].
Conclusions
The mentioned facts suggest that the choice made by the Republic of Armenia in 2013 was not inconsiderate or faulty. Using complementary foreign policy Armenia has maintained good neighborly relations with Russia and Europe for twenty years. Nevertheless, when the Government of the Republic came to a decision point, it considered all pros and cons and chose Russia, having the common historical past of the two countries in mind. Moreover, the Russian Federation defined the new integration project for Eurasia as high-priority [22].
Accession of Armenia to EAEU will lead in the immediate future to reconstruction of the disrupted economic relations after the dissolution of the USSR and increasing the market presence of Armenian companies in the EAEU area. It also should be mentioned that Armenia’s membership to EAEU will provide an opportunity for more effective protection of Armenian business interests in Eurasian states. Furthermore, it will help increase the quality of life and social prosperity of the Armenian citizens. Nevertheless, the absence of railway connection between Armenia and EAEU members (first of all with Russia) is the most serious barrier for the implementation of the EAEU program. That is why the Eurasian future of the Republic of Armenia depends on the quick solution of the mentioned problem by the members of the Eurasian Economic Union.
Maich, 2015
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References and Literature
1. Armenia joins the EAEU // http://itar-tass.com/ekonomika/1681738.(in Russian)
2. Minasyan S. To the question of some conceptual bases of the Armenia’s foreign policy // http://www.noravank.am/rus/issues/detail.php?ELEMENT_ID=1999. (in Russian)
3. Armenia joined the predecessor of EAEU as long ago as 1994 states Armenian parliamentarian // http://www.regnum.ru/news/1872322.html. (in Russian)
4. About the bank // http://www.eabr.org/eZabout/. (in English)
5. Armenia ratified Free Trade Zone Agreement // http://file-rf.ru/news/9428. (in Russian)
6. Joint Declaration of the Prague Eastern Partnership Summit // http://www.consilium.euro-pa.eu/uedocs/cms_data/ docs/pressdata/en/er/107589.pdf (in English)
7. EU and Armenia renovate the strategy within EaP // http://ria.ru/world/ 20131129/980658100.html. (in Russian)
8. The Armenian decision to join the Eurasian Customs Union drawn to misunderstanding and the protests in Armenia// http://dw.de/p/19c2r. (in Russian)
9. The President of Armenia Serzh Sargsyan on the Armenian press briefing // http:// www.president.am/en/interviews-and-press-conferences/item/2013/03/18/President-Serzh-Sargsyan-press-conference/. (in English)
10. Ivanishvili promises to open the railway from Armenia to Russia // http://dw.de/p/17LuM. (in Russian)
11. Russian Railways may invest 15 billion rubles in development of Armenia’s railways // http://ria.ru/economy/20130903/960488091.html. (in Russian)
12. The President of Armenia Serzh Sargsyan election campaign program 2013 // http:// www.hhk.am/ru/election-program/#sthash.4gKhUBrU.dpuf. (in Russian)
13. If Armenia did not join to EAEU, it would lose its nuclear power plants // http://inosmi.ru/ overview/20141230/225255877.html. (in Russian)
14. Serzh Sargsyan states that agreement with Russian will give opportunity to curb the gas prices for Armenia’s citizens // http://www.kavkaz-uzel.ru/articles/234533/. (in Russian)
15. Armenia joins the Eurasian Customs Union // http://www.vedomosti.ru/politics/news/ 15925511/armeniya-svernula-na-sever. (in Russian)
16. Armenia joins EAEU for the development of national economic system // http://www.ng.ru/ news/481903.html. (in Russian)
17. The survey Attitudes of Armenia’s society to the European and Eurasian integration // http://www.soyuzinfo.am/upload/pdf/UNKNOWN_PARAMETER_VALUE.pdf. (in Russian)
18. Armenia became a full member of EAEU // http://lenta.ru/news/2015/01/02/armenia/. (in Russian)
19. The construction of the North-South Transport Road Route Corridor in Armenia // http:// acf.eabr.org/r/projects/Sever-Ug/. (in Russian)
20. Russia and Armenia signed government agreement on cooperation in the field of prolongation the economic life the second nuclear power plant unit // http://www.atomic-energy.ru/ news/2014/12/23/54000. (in Russian)
21. Effectiveness assessment of Armenia’s integration in the Eurasian Customs Union. EDB Centre for Integration Studies, 2013. 48 p. (in Russian)
22. The new integration project for Eurasia. The future which is born today // http://izvestia.ru/ news/502761. (in Russian)
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