Deciphering the Geopolitics of the South Caucasus: Armenia (I)

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Deciphering the Geopolitics of the South Caucasus: Armenia (I)

Deciphering the Geopolitics of the South Caucasus: Armenia (I)

Abel Riu Asia, Russia and Central Asia 02/02/2018 Comments

For centuries, the South Caucasus was a civilizational fault between the Russian, Ottoman and Persian empires. Located at one of the crossroads where the European continent meets Asia, with the new geopolitical reality that emerged at the beginning of the 90s as a result of the end of the USSR, and the emergence of three new independent states (Armenia, Azerbaijan and Georgia), the South Caucasus returns to the dynamics of instability and conflict that had historically characterized it. Its large ethnic diversity, together with the complexity of the relations between the different groups that inhabit this region – a matter that was “frozen” during the seven decades of existence of the Soviet giant – broke out at the end of the 80s and prompted three of the six five territorial conflicts that erupted with the fall of the Soviet Union. From then on and despite the respective ceasefires, these have become unresolved conflicts, with major outbreaks of violence in 2008 in the case of South Ossetia and Abkhazia, and in 2016 in the case of Nagorno Karabakh.

At the same time and with the achievement of their independence, the new states of the South Caucasus have acquired their own agenda in international and security affairs. This fact allows the return to the region of several actors such as Turkey and Iran, and the emergence of new ones like the United States (USA), the European Union (EU), Israel and, lately, China, causing a competition for the control and influence over this territory located between the Black Sea, the Caspian Sea and the Middle East, in which Russia plays a prevailing role.

In such a way, this analysis is a part of a trilogy that aims to introduce the current situation regarding the different conflicts, the regional division and existing political disagreements, alliances, and balances with the external powers that take place in the South Caucasus region.


More than two decades after its end, the Nagorno-Karabakh war of 1991-1994 and its legacy continue to define Armenia’s economic and security relations with its bordering countries. The Armenian victory in that conflict allowed Armenians to take control over the disputed territory of Karabakh, as well as seven contiguous regions that Azerbaijan claimed as its own. Owing to this, Armenia is paying a high price in a long-term confrontation with Baku government and with Turkey too. Both countries have closed their borders with Armenia since the beginning of the 90s. In addition, there is a militarized zone in the border with Azerbaijan, and these two countries impose an economic blockade on Armenia (partial in the case of Turkey), reducing its foreign projection capacity and causing a serious damage to its economic development.


Consequently, the main infrastructure projects of the South Caucasus launched during the last two decades have avoided Armenian territory due to this isolation. As a result, Armenia has lost several transport connection opportunities associated with the transformation of the region into an increasingly important east-west corridor.

During 2008-2009, a series of negotiations between Armenia and Turkey, known as the Zurich protocols, were held in order to explore the possibility to normalize diplomatic relations and to open the borders between the two states. Ankara did not ratify these agreements, eventually, because of Azerbaijan’s pressure. Baku claimed that any attempt to normalize bilateral relations had to include a resolution for the Karabakh conflict. In addition, Azerbaijan asserted that the improvement of Armenian-Turkish relations could reduce the price that Armenia “pays” for the control of that territory in terms of regional isolation.

Besides, the bilateral relations between Armenia and Turkey are determined by the legacy of the Armenian Genocide of 1915 and the non-recognition of it by the Turkish authorities. Turkey is perceived by many Armenians as a threat for their national security, not only because of the Genocide issue, but also for the territorial blockade it carries out, for its support to Azerbaijan, and for the role Turkey could play in a large-scale Azerbaijan’s offensive to recover the Karabakh. This combination of past and present factors turns Turkey into an existential threat for the survival of Armenia in the eyes to many of its citizens.

Since the beginning of the 90s, the Yerevan government, faced with this situation of geopolitical vulnerability and hostility from its eastern and western neighbors, has not had other option than to strengthen its ties and dependence on Russia, the regional power that not only guarantees the security of Armenia, but also plays a key role and becomes de facto guarantor of the status quo in the Nagorno-Karabakh conflict.

In this sense, Moscow has a significant military presence in Armenian territory. Specifically, the 102nd base located in the town of Gyumri with approximately 5,000 troops, near the border with Turkey, and the 3624th airbase at the Erebuni airport, with approximately seventeen MiG-29S fighters. Besides, Russian forces carry out the surveillance of the Armenian border with Turkey and Iran. As a result of the 2015 crisis in Russia-Turkey relations, this military deployment was increased, causing the outrage of Ankara government.

At the same time, Moscow and Yerevan have reached a joint military defense agreement that since 1997 guarantees military assistance in the event of an external aggression (technically, it does not apply in the Karabakh territory). In 2016 Armenia and Russia agreed to build up a military force and set up a joint air defense system in the region. They also carry out joint military drills almost every year, both bilaterally and in the framework of the Collective Security Treaty Organization (CSTO), in which Armenia and Russia are member states.


Russia holds a monopoly as the main arms supplier to the Armenian Armed Forces. These are sold at a bargain price in order to partially balance the high expenditure made by Azerbaijan in the acquisition of weapons during the last decade – almost all of them also provided by Russia -, trying to keep a certain balance of forces in that territory. The weapons supplied to Armenia by Russia include anti-aircraft and missile defense systems S-300 and, more recently, the highly feared Iskander short-range ballistic missiles. With a range to reach any part of the territory of Azerbaijan, the acquisition of the Iskander missiles increases Armenian deterrence power against warmongers within the Azeri government, which reignited an open military conflict in Karabakh during the so-called April War in 2016, causing hundreds of casualties. All the factors mentioned previously, turns the Armenian territory into a de facto advanced position of the Russian Armed Forces in the South Caucasus.

Moreover, to the Armenian’s military dependence on Russia it should be added the economic one. Russia is Armenia’s main trade partner, being the origin of 33% of total Armenian imports in 2016, while the Russian market received 20% of total Armenian exports in the same year. Besides, Russian state companies hold control over key sectors of the Armenian economy, reducing its sovereignty and capability to maneuver in different areas. For instance, Gazprom Armenia (subsidiary of Gazprom) holds the monopoly in the Armenian system of distribution of natural gas, being the owner of 100% of this sector. Exactly the same situation applies to the electricity distribution system, which is in the hands of the Russian state-owned company RAO-UES, which also operates the Metsamor nuclear power plant. It generates 40% of the energy produced in the country. In addition, the Russian state railway company (RZhD) has a concession until the year 2038 to manage the whole Armenian rail system.


Furthermore, Armenia is the only South Caucasus state that is member of the two international organizations promoted by Moscow in the field of collective defense (the Collective Security Treaty Organization) and in the sphere of trade and economic integration (the Eurasian Economic Union).

Despite its alliance with Armenia and the fact that it is also Azerbaijan’s main weapons supplier, Russia holds one of the three co-presidencies of the Minsk Group – together with France and the USA – and is in charge of leading the negotiations for the resolution of the conflict in Nagorno Karabakh, playing a leading role within it and keeping a balance in its diplomatic stance between the two parties. It is therefore evident the value that this unresolved conflict has for the Kremlin, as it allows Russia to maintain its high influence over the two rival states. In this sense, the future of Armenia will remain linked to Russia until the Karabakh conflict is solved and Armenia have the opportunity to fully reintegrate into the geostrategic area that surrounds the country, opening the doors to reduce its dependence on Russia.

Likewise, with its eastern and western borders closed, it is precisely in its north and south where Armenia has two vital partners for its economy and in order to reach global markets: Georgia and the Islamic Republic of Iran. Regarding the former, 75% of Armenian exports leave their country through Georgian territory, becoming a key and strategic transit route for Armenian goods to Russia and the Black Sea, especially through the Georgian port of Poti. Since the 1990s, Yerevan has sought to establish friendly relations with its northern neighbor, and currently Georgia represents the third largest market for Armenian exports.

On the other hand, there has been a steady improvement of Armenia-Iran relations since 1991. In terms of energy security, one third of the gas consumed in Armenia comes from Iran (the other two thirds are supplied by Russia). At the same time, the Iranians have built up power plants in Armenian territory that produce electricity which is exported to Iran. Likewise, Teheran provides diplomatic support to Armenia in relation to the Nagorno-Karabakh conflict. Additionally, both states have plans to build up a north-south connection between the Georgian and the Iranian railway systems through Armenia. This project known as Southern Armenia Railway requires an investment worth of 3.2 billion USD.


From an Iranian point of view, Armenia, as a member of the Eurasian Economic Union together with Belarus, Kazakhstan, Kyrgyzstan and Russia, is the gateway to get access to this market. The polarization of the South Caucasus region and the Yerevan’s goal to decrease its dependence on Russia do ease the influence of Iran in Armenia. Therefore, Iran has become a key partner in terms of trade, energy and the tourism sector. This approach is not well perceived by Moscow, as this bilateral relation between Armenia and Iran could weaken its position as a major power in the region and, especially, in Armenia.

Regarding the role of the U.S., Washington established a foothold in Armenian territory on the early 90s through several development projects financed by programs such as USAID. In addition, the Armenian diaspora in the U.S., one of the most powerful in the world and one of the most influential “ethnic” lobbies in Washington, turn out to be very active politically, and acts as an important actor to foster bilateral relations, in the military field as well. In this way, Armenia has actively joined and engaged in NATO-led operations in Afghanistan and Kosovo (KFOR).

Armenia also seeks to promote its ties with its main trade partner and source of investment overall: the European Union. Armenia and the EU signed a new and expanded cooperation agreement in November 2017, the Comprehensive and Enhanced Partnership Agreement. This agreement marks a milestone in their bilateral relations, and the beginning of a new period that focuses on improving the quality of governance, the control of monopolies and the fight against corruption, among other issues. However, this is a limited version of the Association Agreement that was negotiated by both parties in 2013, which included the creation of a free trade zone. In that occasion, the Armenian government did not sign it due to severe pressure from Russia, and eventually chose to join the Eurasian Economic Union led by Moscow.

Abel Riu


Photo 1: Parade of the Armenian Armed Forces in Yerevan showing the BUK anti-aircraft defense system and the S-300 system, 21/07/2016 (Source: Asbarez.com).

Photo 2: Map of the South Caucasus (Source: www.mappery.com).

Photo 3: Joint military drills of Armenian and Russian Armed Forces in Armenia (Source: The Armenian Weekly).

Photo 4: Meeting between the President of Armenia, Serzh Sargsyan (L), and the President of Russia, Vladimir Putin (R), in Sochi (Russia), 23/08/2017 (Source: Kremlin website).

Photo 5: Meeting between President Serzh Sargsyan (L) and the President of the Islamic Republic of Iran, Hasan Rouhani (R), in Tehran, 06/08/2017 (Source: website of the President of the Republic of Armenia).