Worsening relations between Georgia and Russia continue to pose a difficult problem for Armenia, as it tries to maintain some form of balance in its relations with the two sides.
The effect of these tensions for the Armenian economy remains a paramount concern. [For background see the Eurasia Insight archive.] Armenian President Robert Kocharian's October 30-November 1 state visit to Russia, which included meetings with Russian President Vladimir Putin and Prime Minister Mikhail Fradkov, was a case in point. In remarks to reporters, Kocharian noted that while Russia's transportation blockade with Georgia could pose difficulties for bilateral trade between Russia and Armenia, "serious [Russian] investment projects" would help compensate Yerevan for any economic damage done by the Georgian embargo, the ITAR-TASS quoted Kocharian as saying. [For additional information see the Eurasia Insight archive.]
Those investments appear to be growing. Russian energy giant Gazprom's acquisition of a controlling stake in the country's gas distribution network and, through this, potential control over an Armenian section of an Iranian gas pipeline, its recent takeover of the fifth unit of the Hrazdan electricity plant, and Russian company Rusal's modernization of aluminum manufacturer Armenal are among the most prominent of these "serious" investment projects. Unlike neighboring Georgia, Armenia will see its current $110 per 1,000 cubic meters price for Gazprom gas frozen until 2009 in return for transferring ownership of the Hrazdan unit to the Russian company, the government has announced. [For background see the Eurasia Insight archive.]
On November 3, announcement was also made that the Russian firm VimpelCom has purchased a 90 percent stake in ArmenTel, the country's main mobile telecommunications carrier. The government will retain the remaining 10 percent stake in the company.
Despite these signs of robust business ties, concerns about Russia's position toward Armenia have been growing since mid-October, when nationalist Russian parliamentarian Konstantin Zatulin, a member of the pro-Kremlin party United Russia, protested at an October 17 meeting of the Russian-Armenian inter-parliamentary commission in Yerevan that Armenia "does not support its strategic partner [Russia]" in its conflict with Georgia. Zatulin, who has previously cast himself as pro-Armenian on the issue of the disputed territory of Nagorno-Karabakh, called on Yerevan to choose between "normal relations" with Russia or Georgia, the daily newspaper Haykakan Zhamanak reported.
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Zatunin's statements met with almost unanimous protest by the Armenian political elite, although some, like Armen Ashotian, a member of the governing Republican Party, have stressed that the remark is the view of one politician, not the official position of the Russian Federation.
Nonetheless, Armenian officials have continued to address the Russian-Georgian dispute cautiously. "Current Russian-Georgian relations are these countries' internal problem," Prime Minister Andranik Margarian said at a joint press conference on October 24 with Belarusian Prime Minister Sergei Sidorski. "Armenia
Haroutiun Khachatrian is a Yerevan-based writer specializing in economic and political affairs.
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