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Vestnik Kavkaza, Russia
Aug 28 2014
Armenia at crossroads
28 August 2014 - 10:58am
By Victoria Panfilova, a Nezavisimaya Gazeta columnist, exclusively
for Vestnik Kavkaza
Iran and Armenia are two countries in some form of a blockade. Tehran
is suffering from sanctions imposed because of its nuclear program.
Communications of Yerevan with Azerbaijan and Turkey are blocked due
to the occupation of 20% of Azerbaijani territory in Nagorno-Karabakh
and seven surrounding districts. It seems logical that Tehran and
Yerevan try to help each other improve the situation. Iran has
recently offered Armenia to form a free trade zone (FTZ). The offer
will most likely be accepted. On the other hand, there are some
problems. Creation of a FTZ will have to match with Armenia's joining
the Customs Union (CU) and the Eurasian Economic Union (EaEU).
Washington did express disappointment at the sudden intensification of
Armenian-Iranian mutual interests a few years ago, at the peak of the
anti-Iranian sanctions, but it eventually turned a blind eye to the
developments. The U.S. considered that there would be nothing bad in
realization of projects of Yerevan and Tehran, considering the
complicated situation in Armenia. But there was another explanation to
the serenity in the U.S.: specialists there figured that the two
countries would achieve nothing. Both versions seem legitimate. The
cooperation was not intensive, although important for Armenia. U.S.
experts were right when they said that all the projects would remain
nothing more than projects.
According to the agreements, Armenia and Iran were to build a power
line that would supply Iranian border territories with electricity.
The sides agreed to build an oil pipeline from Iran to Armenia. The
Armenian border territories were to build a refinery with enough
output to make gasoline exports unnecessary for Armenia. As a gesture
of friendliness, Iran declared zero transit fees for Armenian
freighters. For some time it announced zero fees for Armenia at the
ports of Bandar Abbas on the Persian Gulf and Enzeli on the Caspian
coast.
"Unfortunately, things did not get any farther than words, not a
single project has been realized. Not even a single deal has been
signed, just protocols of intention that have remained intentions. But
the projects were interesting indeed," Sevak Sarukhanyan, deputy
director of the Noravank Fund for Strategic Studies, told Vestnik
Kavkaza. In his opinion, the main problem was lack of money. Iran had
the financial burden in all the projects. Opportunities were probably
evaluated incompletely. "The funds needed were not found. Because of
international sanctions, Tehran had no opportunities for investments
abroad. The same sanctions were impeding attraction of investments. As
a result, it was all left on paper," said Sarukhanyan.
In his words, Iran lost interest in Armenian electricity after a
couple of years. Concerning petroleum projects, they looked dubious
from the very start. Building a refinery is a very costly initiative,
in terms of financing and technologies. Pumping gasoline through the
pipeline is not a very clear idea, because Iran needs the fuel itself.
The same problem applies to freighting. The offer to lift fees on
roads and at ports was a good-neighbourly offer. The question is how
much freighting is needed to make a profit. No answer has been found.
"Of all the ideas in the package, I think that only construction of a
railway line to connect the railways of Iran and Armenia was topical.
However, that proposal will probably lose value if the
Qazvin-Rasht-Astara line connecting the railway networks of Iran and
Azerbaijan is implemented," said Sarukhanyan. In that case, Tehran
will lose interest in access to Armenia, especially when the Abkhaz
railway that would give access to Russia through Georgia remains
closed. Iran will get access to Georgian Black Sea ports through
Azerbaijan, then to Russia or anywhere else.
The expert considers the idea to form a FTZ interesting and essential
for both countries. Firstly, Iran is still under pressure of the
sanctions and tries to liberalize trade relations with its neighbours.
Tehran calls it a policy of forming free trade zones and free
terminals, using them to bypass restrictions and barriers caused by
Western sanctions. Secondly, Armenia has reconsidered the situation in
Iran: trade turnover has been dropping in the last years. If they do
not boost trade, Armenian-Iranian economic relations will stay solely
in the energy sector.
"Formation of the FZT does not conflict with Armenia joining the CU
and the EaEU. You should not think that Iranian goods would start
entering the CU market without customs fees. It is a purely
Armenian-Iranian project and any Iranian product entering the CU from
Armenia will be given a fee," supposes Sevak Sarukhanyan. In general,
according to the expert, Tehran and Yerevan need to do something in
the economic sector to make relations in the sector meet at least a
satisfactory level of bilateral political relations. Armenia and Iran
have been supporting each other on the world arena in many issues.
Although the support has not played a decisive role in resolving
issues, it established good-neighbourly relations. Now they need an
economic filling. "That is why we can assume that other offers will
appear after the proposal to form the free trade zone," said
Sarukhanyan. The question of whether they will be implemented remains
open.
http://vestnikkavkaza.net/analysis/politics/59352.html
Aug 28 2014
Armenia at crossroads
28 August 2014 - 10:58am
By Victoria Panfilova, a Nezavisimaya Gazeta columnist, exclusively
for Vestnik Kavkaza
Iran and Armenia are two countries in some form of a blockade. Tehran
is suffering from sanctions imposed because of its nuclear program.
Communications of Yerevan with Azerbaijan and Turkey are blocked due
to the occupation of 20% of Azerbaijani territory in Nagorno-Karabakh
and seven surrounding districts. It seems logical that Tehran and
Yerevan try to help each other improve the situation. Iran has
recently offered Armenia to form a free trade zone (FTZ). The offer
will most likely be accepted. On the other hand, there are some
problems. Creation of a FTZ will have to match with Armenia's joining
the Customs Union (CU) and the Eurasian Economic Union (EaEU).
Washington did express disappointment at the sudden intensification of
Armenian-Iranian mutual interests a few years ago, at the peak of the
anti-Iranian sanctions, but it eventually turned a blind eye to the
developments. The U.S. considered that there would be nothing bad in
realization of projects of Yerevan and Tehran, considering the
complicated situation in Armenia. But there was another explanation to
the serenity in the U.S.: specialists there figured that the two
countries would achieve nothing. Both versions seem legitimate. The
cooperation was not intensive, although important for Armenia. U.S.
experts were right when they said that all the projects would remain
nothing more than projects.
According to the agreements, Armenia and Iran were to build a power
line that would supply Iranian border territories with electricity.
The sides agreed to build an oil pipeline from Iran to Armenia. The
Armenian border territories were to build a refinery with enough
output to make gasoline exports unnecessary for Armenia. As a gesture
of friendliness, Iran declared zero transit fees for Armenian
freighters. For some time it announced zero fees for Armenia at the
ports of Bandar Abbas on the Persian Gulf and Enzeli on the Caspian
coast.
"Unfortunately, things did not get any farther than words, not a
single project has been realized. Not even a single deal has been
signed, just protocols of intention that have remained intentions. But
the projects were interesting indeed," Sevak Sarukhanyan, deputy
director of the Noravank Fund for Strategic Studies, told Vestnik
Kavkaza. In his opinion, the main problem was lack of money. Iran had
the financial burden in all the projects. Opportunities were probably
evaluated incompletely. "The funds needed were not found. Because of
international sanctions, Tehran had no opportunities for investments
abroad. The same sanctions were impeding attraction of investments. As
a result, it was all left on paper," said Sarukhanyan.
In his words, Iran lost interest in Armenian electricity after a
couple of years. Concerning petroleum projects, they looked dubious
from the very start. Building a refinery is a very costly initiative,
in terms of financing and technologies. Pumping gasoline through the
pipeline is not a very clear idea, because Iran needs the fuel itself.
The same problem applies to freighting. The offer to lift fees on
roads and at ports was a good-neighbourly offer. The question is how
much freighting is needed to make a profit. No answer has been found.
"Of all the ideas in the package, I think that only construction of a
railway line to connect the railways of Iran and Armenia was topical.
However, that proposal will probably lose value if the
Qazvin-Rasht-Astara line connecting the railway networks of Iran and
Azerbaijan is implemented," said Sarukhanyan. In that case, Tehran
will lose interest in access to Armenia, especially when the Abkhaz
railway that would give access to Russia through Georgia remains
closed. Iran will get access to Georgian Black Sea ports through
Azerbaijan, then to Russia or anywhere else.
The expert considers the idea to form a FTZ interesting and essential
for both countries. Firstly, Iran is still under pressure of the
sanctions and tries to liberalize trade relations with its neighbours.
Tehran calls it a policy of forming free trade zones and free
terminals, using them to bypass restrictions and barriers caused by
Western sanctions. Secondly, Armenia has reconsidered the situation in
Iran: trade turnover has been dropping in the last years. If they do
not boost trade, Armenian-Iranian economic relations will stay solely
in the energy sector.
"Formation of the FZT does not conflict with Armenia joining the CU
and the EaEU. You should not think that Iranian goods would start
entering the CU market without customs fees. It is a purely
Armenian-Iranian project and any Iranian product entering the CU from
Armenia will be given a fee," supposes Sevak Sarukhanyan. In general,
according to the expert, Tehran and Yerevan need to do something in
the economic sector to make relations in the sector meet at least a
satisfactory level of bilateral political relations. Armenia and Iran
have been supporting each other on the world arena in many issues.
Although the support has not played a decisive role in resolving
issues, it established good-neighbourly relations. Now they need an
economic filling. "That is why we can assume that other offers will
appear after the proposal to form the free trade zone," said
Sarukhanyan. The question of whether they will be implemented remains
open.
http://vestnikkavkaza.net/analysis/politics/59352.html