The Geopolitical Dynamics of Armenia: Balancing Relations with Russia and the West

The Geopolitical Landscape of Armenia: Navigating Between West and Russia

The Geopolitical Landscape of Armenia: Navigating Between West and Russia

Armenia’s historical geopolitical position has always been precarious, caught between the conflicting ambitions of Western nations and Russia. In light of Moscow’s ongoing military engagement in Ukraine, Armenia’s role has transformed, as the nation seeks to utilize its unique relationship with Russia to navigate Western sanctions and stimulate its own economy. Although Armenia is not directly involved in the conflict, its economic ties with Russia have drawn significant scrutiny, especially concerning the re-exportation of goods and the facilitation of trade between sanctioned Russian entities and global markets.

In the wake of Western sanctions imposed on Russia due to the Ukraine invasion, Armenia’s economic relationship with its northern neighbor has flourished remarkably. Russia has reported a substantial increase in trade with Armenia, which reached approximately $7.4 billion last year and has seen a further escalation of 2.5 times in the first half of this year, exceeding $8.3 billion. If the current trajectory continues, trade volume could soar to between $14 billion and $16 billion by year-end. This rapid growth could be interpreted as Armenia positioning itself as a crucial re-export hub, enabling Russia to circumvent Western sanctions. Consequently, Armenia is likely engaging in the re-exportation of Russian gemstones and precious metals, with exports of diamonds in 2023 alone amounting to 4.5 million caratsā€”30 times the amount produced domestically.

Not a Passive Observer

Armenia’s elevation to a significant role in the geopolitical arena has, perhaps unintentionally, fortified Russiaā€™s economic resilience amidst sanctions. While Armenia is primarily focused on pursuing its national interests, this development raises pressing concerns regarding the potential undermining of global efforts aimed at isolating Russia. By facilitating re-exports and maintaining strong trade relations, Armenia diminishes the impact of sanctions, thereby allowing Russia continued access to restricted goods and technologies.

As the war in Ukraine continues, Armenia will likely encounter intensified scrutiny, particularly from the international community, as it evaluates the implications of Armenia’s continued economic ties with the Russian Federation.

On 8 October 2024, Russian President Vladimir Putin engaged in discussions with Armenian Prime Minister Nikol Pashinyan at the Kremlin, underscoring the complexity of their relationship.

Western Reactions and Lobbying Dynamics

Armeniaā€™s close ties with Russia have not gone unnoticed, although the Western response has remained relatively muted. Behind the scenes, well-organized lobbying effortsā€”likely propelled by influential elites and bolstered by major public relations and communication firmsā€”appear to play a significant role. This successful lobbying campaign highlights a broader issue: Armenia’s adeptness at maintaining critical relationships with both Western nations and Russia, effectively shaping Western perceptions of its economic interactions with Moscow. Consequently, it becomes increasingly challenging to discern whether Armenia’s diplomatic efforts are genuinely earnest or rather opportunistic maneuvers designed to exploit global instability, particularly in the context of the ongoing Ukraine conflict.

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Armenian politicians, particularly Prime Minister Nikol Pashinyan, have made concerted efforts to distance Yerevan from Moscow following the onset of the war in Ukraine. However, the nationā€™s deep-rooted economic links suggest a more intricate reality. Armenia’s economic growth, fueled by trade with Russia, appears to be indirectly subsidized by the ongoing conflict. Critics argue that Armenia is not merely a passive observer but an active participant in a network that supports Russia’s wartime endeavors. By utilizing its territory and economy to sidestep sanctions, Armenia has managed to strengthen its own economy while potentially undermining global stability.

Soured or Just Strained?

Historically, Armenia has relied heavily on Russia for both security and economic support, especially given its ongoing tensions with Azerbaijan. Nevertheless, relations between the two countries have soured over recent years. The 2018 Armenian Revolution, which ushered Pashinyan into power, marked a pivotal shift as Armenia began to distance itself from Moscow’s grasp. This strain was exacerbated by the 2020 Nagorno-Karabakh War and the clashes with Azerbaijan in September 2022, during which Russia, despite being a nominal mediator, hesitated to intervene decisively in Armenia’s favor.

Moreover, Russia’s preoccupation with its invasion of Ukraine has left Armenia feeling increasingly isolated. The lightning-fast military operation by Azerbaijan in Nagorno-Karabakh in 2023 and the subsequent exodus of Armenians from the region have only deepened Armenia’s disillusionment with Moscow, which faced criticism for its failure to prevent Azerbaijan’s aggressive actions.

Armenia’s relationship with Russia is undoubtedly complex. Yet, Armenia’s stance during the Ukraine invasion exemplifies the difficult choices smaller nations must navigate when trapped between major powers. As the war continues, Armenia will likely face further scrutiny, especially as the international community assesses the broader implications of its economic connections with the Russian Federation.

Vlad Olteanu is the founder of i3pact EU and an expert in EU affairs.
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