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Armenia Is Dead-End In South Caucasus

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  • Armenia Is Dead-End In South Caucasus

    ARMENIA IS DEAD-END IN SOUTH CAUCASUS
    By Ali Mammadov

    Today.Az
    http://www.today.az/news/politi cs/57996.html
    07 December 2009 [15:44]

    Armenia will remain a dead-end in the region without resolving the
    Nagorno-Karabakh conflict.

    Armenia in the person of its President Serzh Sargsyan tries to freeze
    settlement of the Armenian-Azerbaijani conflict over Nagorno-Karabakh
    for a while. This tactical move is primarily aimed at preserving
    political stability in the country. Sargsyan keeps a simple logic
    - he is well aware that Bolivar will not be able to stand the two
    under current difficult political situation. That is, Sargsyan will
    hardly be able to stay in power in event of a parallel solution to
    the Nagorno-Karabakh conflict and normalization of Armenian-Turkish
    relations.

    That is why Sargsyan is trying to gain time as it is impossible to
    achieve a solution to the Nagorno-Karabakh which will fully suit the
    Armenian community. Any other settlement options will be used by his
    opponents including his former allies, the Dashnaks and ex-President
    Robert Kocharian to replace the regime.

    However, the problem is that except for certain foreign dividends in
    terms of national interests attempts to normalize the Armenian-Turkish
    relations without resolving the Nagorno-Karabakh conflict will fail.

    In this case, Armenia will remain a deadlock country in the South
    Caucasus. One can change nothing about it.

    So, lets suppose that Ankara, despite the promises made by top
    officials, ratifies the Armenian-Turkish protocols to normalize
    relations without resolving the Nagorno-Karabakh conflict. Optimists
    argue that normalization of relations with Turkey will enable Armenia
    to break communication blockade and improve socio-economic situation
    in the country to a great extend. But an in-depth analysis into the
    situation after normalization of relations between the two countries
    makes it clear that all these claims are no more than a bluff.

    First, lets start with border trade which is much more debated. This
    immediately arises a question - what the parties will trade? Armenia
    has nothing to offer Turkey with its current economy. Purchasing power
    of population of Armenia's border regions is so low that Turkey is
    less likely to have serious interests about this market.

    Second, the optimists argue that Turkish investments and goods will
    flow in Armenia. Once Azerbaijan also thought the same. However,
    as Azerbaijan's experience shows, Turkey's investment opportunities
    are limited and usually designed for quick recompense. As a rule,
    Turkey does not implement long-term investment projects overseas,
    with the exception of regional communications and energy projects. In
    the meanwhile, Turkey usually holds minimal share in regional
    communications and energy projects.

    We will talk about regional communication and energy projects below.

    Now it is worth paying attention to the following circumstances.

    1. Nothing has prevented Turkish businessmen to invest their capital
    in Armenia's economy so far even in absence of diplomatic relations
    and border closures. There were no statutory prohibitions in this
    respect. But, they did not invest. This means that Armenia's economy
    is not of particular interest to Turkish capital.

    2. Spheres of the Armenian economy favorable for investment have
    already been taken over by Russian companies in exchange for the
    debts. So, today Armenia offers nothing to invest in.

    3. The trade between the two countries is less likely to increase.

    Today, trade between the two countries amounts nearly $500 million. To
    be precise, it is Turkey that supplies consumer goods of this amount
    to Armenia via Georgia. The opening of borders will lead to some
    reduction in cost of these goods in the best case as they will go
    from Turkey directly to Armenia bypassing Georgia. In other words,
    Armenia will not benefit from it because consumer market of this
    country is unlikely to "digest" more goods. Georgia, which earned
    from transit of Turkish goods to Armenia, will lose in this case.

    Thirdly, Turkey is less likely to become a haven for Armenian labor
    migrants.

    1. Turkey has quite large number of unemployed people. They themselves
    have nothing to eat especially after the crisis. Currently, there is
    a flow of labor migrants from Turkey to Azerbaijan.

    2. In case the Armenian-Turkish protocols are ratified without a
    breakthrough in resolving the Nagorno-Karabakh conflict, Turkey
    will certainly try either to slow down their actual implementation
    or to implement them in full. One of such measures will be visa
    restrictions. Moreover, in case they are applied against Armenian
    citizens, no one can accuse Turkey of violating the agreements as
    Turkey has not yet announced a visa-free regime even with Azerbaijan.

    Fourthly, the Kars-Gumri is the only communication project which can
    be effectively implemented. But the point is that implementing this
    project has no prospects on a regional scale without resolving the
    Armenian-Azerbaijani and Georgian-Russian conflicts. Because, there is
    nowhere to further transport goods via this railroad. In other words,
    Armenia will never become a regional transport hub without resolving
    the Armenian-Azerbaijani conflict.

    Armenia needs to be actually interested in resolving the
    Nagorno-Karabakh conflict in order to participate in all communication
    and energy projects. Even in absence of diplomatic relations with
    Armenia, Turkey has never officially opposed Armenia's involvement
    in regional communications and transport projects. Azerbaijan will
    further block Armenia's participation in these projects at least till
    the Nagorno-Karabakh conflict is resolved.

    Fifthly, supply of cheap electricity from Armenia to Turkey is the
    only real and mutually beneficial project that can be implemented.

    However, the project will require to synchronize energy systems of
    the two countries and to build new power lines that will take time.

    Finally, the sixth, one should not expect an increase in foreign
    investment from other sources as the opening of borders with Turkey
    will not impact the extent of Armenia's regional integration. Because,
    Armenia's investment attractiveness depends on extent of a regional
    integration which will remain at zero without resolving the
    Nagorno-Karabakh conflict.
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