At Risk: Sanctions in Georgia reveal Armenia ‘s regional vulnerability
ArmeniaNow.com
March 19, 2004

By Julia Hakobyan
ArmeniaNow reporter
An agreement was reached late yesterday (March 18) that should ease
concerns that Armenia would suffer as a result of political unrest in the
autonomous republic of Ajaria on Georgia ‘s Black Sea coast.
The presidents during last weekends meeting in Yerevan..

Long-standing tensions between Georgia and Ajaria increased early in March,
when Ajaria leader Aslan Abashidze expressed concern that the central
authorities seek the “total control of Ajaria.”

Last Tuesday, President Mikhail Saakhasvili imposed sanctions on the
autonomous republic in retaliation after armed loyalists of Abashidze fired
upon a presidential motorcade as Saakhasvili attempted to visit Ajaria last
Sunday. The Georgian president had just completed a weekend meeting in
Yerevan with President of Armenia Robert Kocharyan.

Saakhasvili called the incident “a serious challenge for Georgia “.

Merchants and officials in Armenia feared that the sanctions would cripple
trade in Armenia , which – suffering from blocked borders with Azerbaijan
and Turkey – relies on sea trade through the Ajaria port city of Batumi .

But following a five-hour meeting with Abashidze yesterday, Saakhasvili
lifted sanctions, effective today.

As the sanctions were announced, Armenian officials scrambled to organize a
secondary route from the Ukraine , utilizing the Georgian port of Poti .

More than 90 percent of Armenia ‘s imported and exported goods go through
Georgian ports, with more than 1,000 freight cars of food and fuel per month
coming from Batumi . And, while some trade could still be accomplished via
Poti, that port does not have a petroleum terminal, leaving Armenia reliant
on the Batumi access.

As sanctions were imposed, Flesh Company, one of Armenia ‘s large oil
traders announced that it has petrol reserve for 20 days and did not rule
out the possibility of price increases if the situation remained.

The events in neighboring Georgia made Armenian officials talk of the
necessity of strengthening relations between countries.

“Armenia is for constructive dialogues and peaceful solutions not only
because of its trade interests, but first of all because of the stability in
the region,” says Stepan Margaryan, the Armenian Prime Minister’s advisor
for regional issues.

“Events like this only underline the necessity of elaborating and deepening
relations. We are independent states, but we are small states and economic
or political crisis in one country immediately affect the stability in
another country,” he says.

Bozoyan says the two nations share common economic concerns.
Margaryan says neither Armenia nor Georgia has a strong enough economy to
ignore each other’s interests.

Presently, trade between Georgia and Armenia amounts to about $20 million
per year, “which is very low for neighbors,” Margaryan says. The advisor
proposes that Armenia and Georgia consider developing a single economic and
trade zone which would be attractive to international investors and
partners.

During 12 years of independence, no mutual venture has been established
between Georgia and Armenia , even though the countries have friendly
relations.

“Today Georgia cuts rates for Armenian goods 24 percent for oil products and
17 percent for the rest,” Margaryan says. “But it makes a 50 percent
discount for Azerbaijan . Besides, Georgia maintains a $1,500-$2000 tariff
per freight car coming to Armenia , which also affects business.”

During Saakashvili’s weekend visit to Armenia , the leaders of both
countries vowed to promote regional cooperation and bilateral ties.
Saakashvili described Armenia as an ideal partner, saying that his country
has much to learn from Armenia .

Yervand Bozoyan, political analyst of the Media Center non governmental
organization describes Saakashvili as a strong leader and also shares the
opinion that Armenia ‘s economic success is directly connected with the
situation in its neighboring countries.

Bozoyan says that Saakashvili’s sanctions on Ajaria were also conditioned by
the upcoming parliamentary elections in Georgia and Saakashvili’s intention
not to allow Ajaria’s leader’s party to enter the parliament.

“Ajaria is a state within the state with the totalitarian leader Abashidze,
who represents the strong and old Ajarian clan which ruled Ajaria for
several centuries. In fact Abashidze wants to gain total autonomy from
Georgia , despite it participated in Georgia’s presidential elections,”
Bozoyan says.

A Georgia-Ajaria border check point..
The Autonomous Republic of Ajaria, with a population of about 300,000, was
created in 1921, populated by Muslims in the primarily Christian country.

Bozoyan says that on the one hand Saakashvili has to allow the autonomous
republic certain independence. But on the other hand Georgia risks raising
tensions with the rest of its minority-populated regions, including
Abkhazia, South Osetia , the Armenian populated Javakhk and Azeri populated
Marneuli.

The analyst says it is difficult to predict future developments in
Tbilisi-Batumi relations, but it is apparent that the image and rating of
the Georgian leader will be much conditioned by his ability to resolve the
conflict within his country.

And Bozoyan hopes the events in Georgia , which demonstrated the
vulnerability of Armenia ‘s landlocked economy, will push Armenian
authorities to promote developing a regional economical zone and elaborate
new projects.