Research paper
Published 14 March 2019
Updated 11 December 2020
ISBN: 978 1 78413 301 6
This paper explores the evolution of the dilemmas in Armenia’s foreign policy since the 1990s. Its primary aim is to offer an informed background for further discussions, beyond the conventional and stereotypical views that dominate policy thinking on this issue in the West as well as in Armenia.
Armenia’s geostrategic limits have been exacerbated by deficiencies in its policymaking. For a long time, there has been a tendency to take an absence of alternatives as a given. Especially following the 2013 U-turn on the planned association agreement with the EU, the country’s limits have been embraced by many as a fact of life, with most diplomatic efforts focusing on damage control rather than proactive policymaking. Armenia has broadly failed to keep pace with newly emerging challenges, and a strategic rethink is needed. The National Security Strategy has not been updated since it was first adopted in 2007. It is impossible for the country to overcome its vast challenges by reactive diplomacy. At the same time, no external partners can offer clear-cut templates for security and foreign policy diversification. Armenia should not take a lack of convergence with various actors, especially in the West, as predestined; instead, it will need to carve out a manoeuvring space for itself and build convergence where it is absent.
In this context, Armenia’s diplomatic missions often strike observers as strangely passive. In relation to countries that Armenia perceives as having interests divergent from its own, Armenian diplomacy has a reputation for assuming failure before even trying to campaign for its cause.72 The country is transparent and straightforward in interactions with the West and Russia: Yerevan does not employ the practice of pitting one country’s agenda against another’s in the service of expedient self-interest.73 However, this approach has also resulted in a situation wherein Western capitals are not always able to gauge how exactly they could be of more help to Yerevan. For Western partners to be able to offer more support, Armenia needs to formulate more clearly its expectations of them, including in terms of balancing its foreign policy.74
Armenia’s importance for Russia is often overlooked. If Russia is exploiting the country’s predicament to build greater confluence with the latter’s rivals, it also depends on Armenia for that very reason. Armenia might be insignificant in the broader region, but a tilt away from Russia could cause the geostrategic architecture of the South Caucasus to collapse.75 Russia would lose a strategic foothold in the South Caucasus, and could also suffer constraints on its power projection in the Middle East. Armenia has failed to put a higher price on the strategic advantages Russia obtains from its military presence in the country; hence the ‘strategic partnership’ is taken for granted by Moscow. Ultimately, bringing what is currently an asymmetric alliance with Russia into relative balance remains crucial for strengthening Armenia’s foreign policy. Having come into power through the exercise of ‘people power’, the new government is placing special emphasis on sovereignty.76 Russia, often suspected of overlooking Armenia’s sovereignty, will need to adapt to the new reality or risk further decline in its standing among the Armenian public. The Kremlin’s suspicion towards Armenia’s new government and its democratization and anti-corruption agenda is likely to linger. Post-revolution, Yerevan and Moscow are still learning to work with each other.
Although there is a mostly nuanced reading of Armenia in the embassies of Western governments in Yerevan, this often gets lost in high-level policymaking.77 Stereotypical narratives prevail. Armenia has been frustrated that while it is viewed as too pro-Russian in Washington and Brussels, it is viewed as too pro-Western in Moscow.78 The policy of complementarity has not satisfied either side.79 This suggests that Cold War-type thinking persists in Russia and the West, with the self-interest of both sides leaving the countries in-between at an unrewarding crossroads.
In 2015, reflecting the failure of the Eastern Partnership project, the EU overhauled its European Neighbourhood Policy. The EU’s new policy towards Armenia seems to reflect lessons learnt. One outcome is a higher level of differentiation in policy towards the EU’s eastern partners. This has resulted in a one-of-a-kind agreement that offers a compromise between Armenia’s EAEU membership and closer integration with the EU. Negotiations on the new Comprehensive and Enhanced Partnership Agreement (CEPA) were opened in 2015, and the agreement signed in 2017. This is still a ‘second best’ option, as it does not contain the free-trade arrangements of the old EU association agreement and accompanying DCFTA.80 However, it represents an important basis for furthering relations with the EU, and lets Armenia regain its European anchor. Because the EAEU is not a full-fledged economic union, and its political symbolism is more important than its technical rules, there might be some room for Armenia to manoeuvre into closer integration with the EU in the future.81 The Velvet Revolution has brought new opportunities for efficient implementation of CEPA, and for possibly taking Armenian–EU ties further. However, it may also pose a challenge for the EU, as the new government has higher expectations of the EU, which the latter may not be equipped to meet immediately.82
Yerevan is also poised to deepen ties with individual EU member states. Yerevan–Paris ties have received a new impetus after Armenia hosted the 17th summit of la Francophonie in October 2018, while Yerevan may have acquired a new friend in Berlin after Prime Minister Pashinyan and Angela Merkel, the German chancellor, exchanged official visits within six months.
Armenia’s balancing act has achieved some results in the defence and security field. It is the only CSTO member that also contributes to NATO operations. It has contributed to NATO’s peacekeeping operations in Kosovo (since 2004), Iraq (in 2005–08) and Afghanistan (since 2009). Armenian peacekeepers are also involved in UN missions in Lebanon (since 2014) and Mali (since 2015). These contributions not only fit within the rationale of security prioritization for Armenia, but also highlight its transformation from consumer to provider of security assistance.83 The country’s peacekeeping operations are also an integral part of defence capacity-building and reform. Despite reliance on Russian arms deliveries, Armenia is carrying out military reforms according to Western models of development, with help from the US and European partners. Armenia has prioritized quality over quantity in the development of its defence capabilities, a strategy that also reflects its constraints in human and material resources.84
Armenia’s bilateral defence cooperation with individual NATO members compensates for those areas where cooperation with NATO as a whole might be limited. Security ties with the US are closer than those with NATO, with the former helping to strengthen Armenia’s defence capabilities through military education and training; the provision of defence weaponry, communication and night-vision equipment; and institutional support for tackling corruption in the defence sector. Armenia also cooperates with Germany and Greece, and has established defence-industry cooperation with Poland. Participation in peacekeeping operations and bilateral security partnerships allows it to do ‘more with less’.85
Russia is watching Armenia’s expanding military ties with NATO and the West with unease. Even under the previous administration, the defence establishment had become bolder in diversifying military ties. Since Georgia often serves as a physical location for cooperation activities with NATO, it is important that such activities are not in any way framed as directed against Russia. Armenia is also resisting Russia’s attempts to frame the CSTO as a counterweight to NATO; hence, it is trying to prevent polarization between the two blocs. For Armenia, the red line in its cooperation with NATO is membership.86
There is potential for much greater economic cooperation between Armenia and the US, as the two countries undergo an ‘aid to trade’ transition. With Armenia’s more substantive efforts to combat corruption and liberalize its economy, the prospects of the 2015 Trade and Investment Framework Agreement offering greater economic benefits will grow. A potential sore point concerns the recently reactivated US sanctions against Iran; Armenia might have to navigate this challenge again. Yerevan should proactively engage with Armenia-savvy officials in the Trump administration, the State Department and Congress to ensure that the new US–Iran fallout does not disturb Armenia’s relations with either the US or Iran.
Georgia and Iran have always been important partners for Armenia, but the new government is further prioritizing relations with both countries. Prime Minister Pashinyan’s first official visit, in May 2018, was to Georgia, where he offered to take relations to the next level. Given that the two countries are allied to each other’s rivals – Armenia to Russia, and Georgia to Azerbaijan and Turkey – the working formula Armenia offers to Georgia is to not allow third-party interests to impede the deepening of bilateral ties.87 This puts the onus on Georgia to reciprocate.
Iran’s potential in Armenia’s foreign policy diversification remains untapped. In the South Caucasus security architecture, the two countries’ interests are often naturally aligned; Iran plays a security-balancing role for Armenia even absent formal arrangements between the two.88 Part of the problem for furthering relations with Iran is the complexity of the latter’s state apparatus. Its diplomatic style is sometimes hard to decipher; it does not always clearly articulate its interests in the region. But the biggest problem is Russia, which is wary that if Iran opens up further to Armenia, this will diminish Moscow’s clout. Armenia has been trying to bring Iran closer by pushing for a free-trade agreement between Iran and the EAEU; a deal was signed provisionally in May 2018. A free-trade zone in Meghri, Armenia’s border region with Iran, was established in December 2017. The zone is meant to bring Iranian, European, US, EAEU and Chinese businesses together to benefit from Armenia’s preferential trade regimes and links with third parties.
Negotiations for pumping more Iranian gas to Armenia and possibly further to Georgia continue. One of the highlights of Pashinyan’s official visit to Iran at the end of February 2019 was his announcement that Armenia is ready to be a transit country for Iranian gas. If ongoing talks between Russia and Georgia to open communications via Abkhazia and South Ossetia are successful, the intended Iran–Armenia railway might become economically more viable. But an Iranian breakthrough remains dependent on other factors, and Armenia will need to be bolder in eliminating obstacles. Iran might also need to demonstrate that it is ready to offer a balance to Russia’s role in the region in order to render Armenia’s overtures less risky.
Since 2015, Armenia has been expanding ties with China. Bilateral trade has grown in the last couple of years, and recorded a 40 per cent year-on-year increase between January and April 2018.89 China is Armenia’s third-largest trade partner after Russia and the EU. It is building a new embassy in Yerevan, which will reportedly be its second-biggest in the post-Soviet space after the one in Moscow.90 Armenia is interested in boosting military ties, having previously acquired Chinese weaponry and, as recently as September 2017, having secured Chinese military aid worth $1.5 million.91 The rationale is that while Russia may be uneasy about Armenia’s expanding ties with the West, it does not have formal reasons to obstruct military cooperation with China.
Overall, the emphasis on expanding ties with Georgia, Iran and China (as well as possibly with India) marks an attempt to break away from the trap of the Western–Russian dilemma, which is so inconvenient for Armenia’s efforts to balance its foreign policy. These are all potential avenues for further development, underpinned by the pursuit of flexibility as an essential tool for improving its security environment. Furthermore, the effects of the recent Velvet Revolution are likely to increase the space for Armenian foreign policy balancing.