ARMENIA COMES COURTING
by Sergei Blagov
Transitions Online
March 31 2008
Czech Republic
Armenia’s president-elect nudges closer to Moscow amid political
uncertainty at home. From EurasiaNet.
MOSCOW | Serzh Sarkisan, whose controversial election as president
of Armenia precipitated political violence in Yerevan, is hoping
closer ties with Russia can hasten a return of stability in the South
Caucasus country.
Sarkisian — the current prime minister who is scheduled to be
inaugurated as President Robert Kocharian’s successor on 9 April —
flew to Moscow last week for meetings with Russia’s presidential
tandem, President Vladimir Putin and President-elect Dmitry Medvedev.
Already Russia’s closest ally in the region, Sarkisian said he was
committed to "deepening and expanding" Armenian-Russian ties. He also
expressed gratitude for Moscow’s support of the Armenian government’s
handling of the political crisis in Yerevan. "We always felt your
assistance in the election process," Sarkisian said during a meeting
with Putin. "To be honest, we never expected such clear-cut" support.
Putin and Medvedev seemed happy to take the Armenian leader up on
his offer of closer relations. "This is your first visit after the
elections, and, of course, we see special symbolism in this fact,"
Medvedev said.
Putin, meanwhile, clearly indicated that Armenia’s current domestic
difficulties would not hamper the Kremlin’s ability to do business
with Sarkisian. "I know that political processes in Armenia are
complicated," Putin acknowledged. The Russian leader then expressed
confidence that "no matter how the internal political process in
Armenia unfolds, what has been built in the past years in relations
between the Russian Federation and Armenia will be maintained and
will develop in the future."
Sarkisian indicated that his incoming administration would seek to
quickly restore a sense of stability in the country, pledging to
create "an atmosphere of tolerance." The centerpiece of his emerging
stabilization program is an initiative to boost social welfare and
economic opportunity.
The two countries have been doing a lot of business in recent years.
Trade between Russia and Armenia reached $800 million in 2007,
marking a 60 percent increase over the previous year, according to
the Russian official statistics. Moscow voiced expectations that
bilateral commerce would top $1 billion in the near future.
Trade between Russia and Armenia has been hampered by transportation
bottlenecks. For over a year, Sarkisian has been lobbying Russian
officials to expedite the opening of ferry service connecting Russian
Black Sea ports and the Georgian city of Poti, a move that would ease
Armenia’s transport woes. Moscow’s recent decision to ease transport
restriction with Georgia could revive hopes that ferry service could
begin soon.
NUCLEAR ENERGY COOPERATION
One notable bilateral trade development occurred 6 February, when
Atomredmetzoloto, a uranium mining subsidiary of Russia’s nuclear
monopoly Rosatom, created a joint venture in Armenia to develop
uranium reserves estimated at 30,000 to 60,000 tons. The deal was
clinched during a visit to Armenia of Prime Minister Viktor Zubkov,
who was accompanied by Sergei Kiriyenko, head of Rosatom.
In Yerevan, Kiriyenko pledged to participate in a tender to build a
new nuclear power plant in Armenia. The initial estimated cost of the
project is $1 billion. Zubkov and his Armenian counterpart Sarkisian
also inked an agreement covering Armenia’s participation in the
International Enrichment Center in Angarsk, in Russia’s Irkutsk region.
One potential trouble spot in relations centers on energy supplies.
Armenian officials have hoped to ensure, through their expressions of
loyalty to Moscow, that the Kremlin-controlled energy conglomerate
Gazprom would give Armenia a preferential price for gas. Armenia
currently pays $110 per thousand cubic meters (tcm) and this contract
price remains effective till 1 January 2009. That price is far lower
than what some other former Soviet states pay Gazprom.
Yet, even if Gazprom is inclined to maintain Armenia’s favorable rate,
events now seem to mandate that Yerevan will face a substantial
price increase in 2009. Gazprom’s recent pledge to pay "European
market" prices to Central Asian producers means that the gas that
it obtains from the region with cost the Russian company upwards of
$300 per tcm. It will have no choice, then, but to pass costs on to
its customers.