Presented in Romania, conference "State and Society in Europe" (2016)

1. Armenian Foreign Policy:
Between Pragmatism and
Idealism
HRANT MIKAELIAN
CAUCASUS INSTITUTE, YEREVAN

2. Foreign Policy of Armenia: basic circumstances
 Military confrontation over Karabakh
 Sharp economic decline. Poverty
 Lack of own energy resources
 Closed borders and transport isolation
 Transnational diaspora and big migrant flows
Despite very narrow range of options, foreign
policy matters for Armenia

3. Part 1.
Security issues

4. Military confrontation. An asymmetric war
 Armenia is involved into war with Azerbaijan
over Mountainous Karabakh
 Azerbaijan’s manpower and financial
resources exceed Armenia’s capabilities
 Azerbaijan is politically backed by Turkey
 The conflict resolution is not possible yet and
conflict starts to unfreeze

5. Preventing military confrontation
 Azerbaijan’s goal is achieving strategic
superiority using its oil incomes
 Russia is the only player which is able to help
Armenia in keeping military balance with
Azerbaijan by selling armaments at lower
prices
 EU does not offer Armenia any security deal

6. Military spending in the region
Military spending in constant 2014 mln. USD. Src.: SIPRI Military expenditure database
50.5% 60.2% 59.0% 79.8%

7. Part 2.
Economic risks

8. Sharp economic decline
 Post-socialist transformation was stressed by
the war, transport isolation and breakup of
economic ties to main economic partners
 During 1990-1994, Armenia’s GDP has
declined by 77.5%
 Like Ukraine, Moldova and Georgia,
Armenia’s economy has not recovered after
1990’s and 2008 economic crises. Real
official monthly wage is still lower than in
1977
 Armenia is vulnerable to the external shocks

9. Decline in incomes of the population
Real official monthly wage index in Armenia. 1980 = 100. Src.: Armstat, own calculations

10. Drop of the gross domestic product
GDP dynamics in selected countries. Src.: Maddison project, WB, IMF, own calculations

11. Energy and transport
 The only energy suppliers to Armenia are
Russian Federation and the Islamic Republic
of Iran
 Armenia is under the transport blockade by
Turkey and Azerbaijan. The “punishment
strategy” failed to resolve conflict but it is
stressing the economy
 Armenia has only two open borders – with
Georgia and Iran. Railroads in both directions
are not functioning due to the conflicts in
Abkhazia and Karabakh

12. Economy is not isolated at it has believed to be
 Foreign trade includes wide geography –
main partners are EU, Russia, China, Middle
Eastern countries.
 Exports of agriculture and food is highly
dependent on Russian market
 FDIs come mostly from EU and Russia
 One of the main sources for the foreign
currency are migrant remittances from
Russia
 EU assists institutional development

13. Economic risks are mostly external
 Despite wide-spread narrative, the biggest
economic challenges are external
 Military conflict threatens economy: Armenia
has economic decline as a result of the 2016
April clashes
 Weakening of the global economy might
cause a local economic decline. In 2009,
economy has declined by 14.1% (instead of
9.2% predicted growth)
 Global political and economic processes
might lead to decrease in FDIs inflow

14. Part 3.
Foreign Policy of Armenia.
Main objectives

15. Idealistic approach in early 1990s
 In August 1990, leaders of popular protest
with anti-Soviet sentiments came to power in
Armenia
 “Pan-Armenian National Movement” declared
its goal – democratic transition, market
economy and high living standards
 Foreign political agenda included forcing
Turkey to recognize Armenian Genocide
 “PANM” wanted to unite Armenia and
Nagorno Karabakh without war

16. Armenian leadership fails to follow its agenda
 Taking into account very narrow range of
options, Armenia found itself very weak to
follow its own agenda
 Foreign policy switched to complementary to
the most of the global and regional powers
 Russian Federation is a main political partner
 Complementarianism is not welcomed by the
partners and is difficult in many ways (Iran-
US; Georgia-Russia relations)
 Refusal from the Association; joining the EEU

17. Foreign Policy of Armenia: main objectives
Currently, foreign policy of Armenia is rather
pragmatic and is focused on economic and
political survival
 Prevent renewing military confrontation
 Overcome transport isolation
 Boost economic growth
 Ensure energy supply
The “best” (easiest) policy is a policy without an
option and variety of choice: there is no need in
strategic planning.

18. Part 4.
Complementarianism:
a detailed look

19. Complementarianism: a concept
 Complementarianism is a concept of
combining interests of the foreign players
and the “great powers” in Armenian foreign
policy without playing on their contradictions
 Balancing between foreign players is used by
many countries that find themselves weak to
follow their own agenda
 In Armenia, balancing foreign interests has
became a theoretical-practical concept
 Complementarianism has its historical
predecessor – “finlandization” policy

20. Complementarianism: a closer look in practice
 Military and political cooperation with Russia
 Institutional integration with the EU
 Economic diversification
 Transport development (Black Sea ring
project, North-South corridor)
 Normalization of the relation with Turkey
 BSEC is the only inclusive organization in the
region, which is important for Armenia
 Deepening ties with the diaspora

21. Black Sea Ring highway project

22. Is complementarianism dead?
 By 2013 “complementarianism” implied
diversifying foreign policy by deepening the
relations with the West
 Armenia’s choice was to not make a choice
until it was possible
 In 2013, Armenia has been forced to make a
choice both by Russia and the EU. On
September 3, 2013, Armenian president has
declared his willingness to join the EEU
 This has started a debate on death of the
complementarianism

23. Complementarianism at the new stage
 Foreign policy is still highly pragmatic
 Complementarianism is not a measure of
having equal level of relations with the major
foreign partners
 Complementarianism is a framework of
preventing the conflict and keeping the
relations with all important partners at the
highest available level
 Armenia’s foreign policy depends on the
number of active big players in the region

24. Part 5.
Future opportunities
and risks

25. Major challenges
 Armenia’s diplomacy lacks professionalism
and strategic planning capacity. Silence is
not a strategy
 Conflicts between regional and / or global
players
 Weakening and withdrawal from the region of
one of the major partners might threaten
Armenia’s security configuration

26. Domestic changes and the foreign politics
 Radical domestic changes might lead to
complete revising the foreign policy and
decline of the quality of diplomacy
 Unsustainable democratization without
strong supporting institutions might bring
ideology back to the foreign policy
 Rise of ideological approach in foreign policy
will make war almost inevitable

27. Polycentric world and Armenian foreign policy
 Armenia is afraid of withdrawal of one of the
major players in the region, especially, Russia
 New players in the region will fit into the
complementarianism policy
 New players in short-term will be Iran and
China.
 Likely new players in mid- to long-term: India
and Pakistan.
 Turkey has also a potential of increasing its
influence in the region