Is Pashinyan’s friend Zelensky, not Putin?

(Difficult times lie ahead for Armenia’s economy)

Despite loud public assurances during the pre-election period that Vladimir Putin was his friend, and that all disagreements arising in relations with Russia and the EAEU would be fully resolved after the elections, Nikol Pashinyan has found himself in an extremely difficult situation. In practice, the accumulated problems cannot be resolved, sanctions keep multiplying, and as a result Armenia’s leadership is choosing a path of direct pressure tactics and a steady raising of the stakes in its confrontation with Moscow. Yerevan is acting on the calculation that at some point the Russian side will prefer not to escalate the conflict further and will take a step back. This logic explains the sharp statements surrounding the concession of the South Caucasus Railway (SCR), the intensifying pressure on major Russian business, as well as the ostentatious display of contacts with Kyiv.

Immediately after his reappointment, key Armenian officials held a series of phone calls with their Ukrainian counterparts. Nikol Pashinyan himself held talks with Volodymyr Zelensky, Ruben Rubinyan, Speaker of Parliament, discussed intensifying inter-parliamentary ties with Ruslan Stefanchuk, Chairman of the Verkhovna Rada, and Ararat Mirzoyan, Head of the Foreign Ministry, spoke with Andrii Sybiha, Minister of Foreign Affairs of Ukraine. Such synchronized and deliberately emphasized contact with the Ukrainian leadership, amid the ongoing geopolitical crisis, looks like a conscious signal to Moscow. Yerevan is demonstratively showing its readiness to seek new partners, even ones at war with Russia, setting itself the goal of achieving Moscow’s strategic defeat and building alternative axes of engagement, disregarding traditional allied logic.

At the same time, the Armenian authorities are increasing pressure on the economic sector linked to Russia. A vivid example is Pashinyan’s public instruction to law enforcement to “invite for coffee” the owners of Luding, a company engaged in exporting alcohol to Russia, over allegedly unfair competition. No less telling is the rhetoric surrounding the SCR, a subsidiary of Russian Railways. Armenia’s Prime Minister has floated scenarios for transferring the concession to private companies, under which Russia would remain only a minority shareholder, or for splitting the license by function. And although such statements are accompanied by caveats about a desire to resolve the matter “amicably,” the very raising of the issue, including mentions of possible financial claims of $2 billion, points to an intent to unsettle the underlying agreements.

Practical experience shows, however, that banking on Moscow’s compliance is deeply mistaken. Each successive proposal from Putin turns out tougher than the last (Volodymyr Zelensky can attest to that), while Armenia’s room for maneuver continues to shrink. At the same time, the resolve being shown by the Russian side clearly indicates that the political trick of 2018 will not work again. Moscow understands perfectly well that when one political figure is replaced by another, but both, consistently, carry out the same geopolitical project of pushing Russia out of the South Caucasus, there can be no talk of genuine partnership.

Yerevan’s attempt to play a dangerous game on contradictions and shift the vectors of its foreign policy will inevitably lead to severe consequences for Armenia itself. Russia’s countermeasures may be not emotional but pragmatically economic in nature, ranging from a revision of preferential energy prices to a tightening of conditions for Armenian exports and labor migration. Given the country’s deep economic dependence on the Russian market and infrastructure, such a scenario means the inevitable onset of extremely difficult times for the Armenian economy, responsibility for which rests personally with Nikol Pashinyan.

Think about it…