BACKGROUND: The most important factor in Armenian politics is the continuing primacy of the Nagorno-Karabakh issue. While annexation of this territory commands mass support, it should be clear to more dispassionate observers that Armenia can only sustain this policy at the cost of its economic future and independence. These costs make their presence felt in several ways. First of all, this annexation still does not command international legitimacy. Azerbaijan refuses to accept it even though it is clearly unable to recover the territory by force. This stance denies legitimacy to Armenia’s possession of those lands, makes it something of an international outcast, and precludes a settlement. Because Armenia is holding onto disputed territory that it won by conquest, it has aroused fierce Turkish opposition and Ankara’s diplomatic support for Baku. The entire Turco-Armenian agenda therefore remains stalled. Turkey has embargoed Armenia’s land border, preventing land and rail traffic, and has refused to discuss the charge that the Armenian massacres of 1915 constituted a genocide. Therefore Yerevan’s obduracy has brought about unrelieved major constraints on Armenia’s economic development. The World Bank has estimated that lifting the embargo in return for concessions to Azerbaijan would lift Armenia’s GDP by 14 percent. Other studies suggest that transport costs would fall by 30-50 percent. Naturally these figures suggest the immense importance of the Turkish embargo in inhibiting Armenia’s economic development and international integration. The embargo has other costs. It deprives Armenia of access to the other rail, road, and pipelines that are developing in the region, meaning that it will likely be bypassed by future developments in regional infrastructure unless it changes its stance on Nagorno-Karabakh. Thus it will also incur future costs beyond those already in existence. The absence of openings to the West or to the sea have also forced it into reliance on Georgian Black Sea Ports and on Russia by rail link through Abkhazia. In view of the tense state of Russo-Georgian relations and the unresolved Abkhaz situation, these routes are always subject to interruption and there is also tremendous corruption all along these routes whether by Georgians harassing Armenian traders or by Russian officials.

IMPLICATIONS: Armenia has nowhere to turn but to Russia. It depends on Russia for weapons, for trade, and for diplomatic support on Nagorno-Karabakh and other issues. Naturally this comes at a severe cost. Russian businesses and defense industry have been steadily buying up shares in Armenia’s industry in debt for equity swaps. And in alignment with this strategy of “liberal imperialism”, these firms and behind them the Russian government are gaining the commanding heights of Armenia’s economy and a permanent position in Armenian economics and politics. In turn Armenia has had to perform services for Moscow, e.g. being a dispatch point for weapons that Moscow does not care to admit it is shipping to rogue states or other unsavory actors across the world. It can only approach NATO and the United States within limits, despite clear efforts to improve relations with both. Armenia is now sending 56 soldiers to Iraq and even sending officers to study at American military colleges. Nonetheless its room for maneuver is severely circumscribed. And in view of Moscow’s worsening position in the CIS as a result of the Georgian and Ukrainian revolutions, Moscow will fight hard to maintain control over Armenia. As long as Armenia is marred by the hijacking of its politics by factions aligned with an unyielding position on Nagorno-Karabakh; externally imposed and permanent economic underdevelopment and international isolation, and corrupted and violent politics, Armenia’s standing in the world remains precarious. Its interacting foreign and domestic developments provide a textbook example of how war and internal misrule combine to bring about an entrenched but unstable structure that keeps it and its neighbors in a state of permanent tension and instability. Armenia is vulnerable to changes imposed by external events over which the Armenian government has only limited control or influence. If the rigidity of this brittle ruling structure inhibits or even precludes internally generated change, external forces are not so frozen and are already acting to transform the Caucasus as a whole. Even if Turkey’s negotiations with the EU will lead to pressure upon it to remove the embargo of Armenia, Turkey would not make this concession gratuitously. Armenia too will have to pay a price, and this requirement also tallies with both the EU’s and NATO’s rising interest in stabilizing the entire Black Sea and Caucasus areas as well as their interest in bringing Turkey into the EU. Either or both of these two Brussels-based organizations may hence compel change in the “externalities” that surround the Nagorno-Karabakh issue. Specifically, they may not only induce Ankara to remove the embargo, they may also coerce Yerevan into making major concessions to Azerbaijan as a quid pro quo. These organizations’ continuing pressure for democratization, especially reinforced now by Kyiv’s and Tbilisi’s prior examples may also come into play. Once the logjam on Karabakh breaks, the consequences of misrule and of economic deprivation may quickly become clearer to the Armenian population as a whole which faces dire socio-economic challenges, not least a declining population. While Moscow and the ruling elite may bridle at the idea of democratization; they ultimately cannot deliver a solution to the ongoing issues connected with the war or to Armenia’s profound socio-economic challenges. A deeper analysis of Armenia’s political deformations suggests that not only does the continuation of its obdurate position on the war inevitably entail economic poverty and subservience to Moscow, they also prevent the regime from acting to overcome these crises, ultimately pushing Western security organizations to take the initiative in overcoming the war.

CONCLUSIONS: The longer Moscow proves unable or unwilling to resolve these frozen conflicts in the Caucasus, the more likely it is that European security organizations, increasingly concerned by the security costs and threats that these frozen conflicts impose, will act unilaterally to transform the regional status quo. When that happens, this transformation will clearly be against the interests of those who now benefit from the status quo and may well provoke another round of Russian irritation and fulminations against the West. But by making the continuation of a perverse status quo in the Caucasus the sign of successful policy, the Russian and Armenian governments are rapidly foreclosing all other options to regional progress. In the end Europe may have to step in because the Muscovite approach and its replication in the domestic structures of rule in Armenia are not viable solutions. As in the Georgian and Ukrainian cases, those bringing pressure to bear upon an unstable situation will necessarily look to the West for support, progress, and security, not to Moscow or to its discredited satraps in Yerevan or other capitals.

AUTHOR’S BIO: Professor Stephen Blank, Strategic Studies Institute, U.S. Army War College, Carlisle Barracks, PA 17013. The views expressed here do not represent those of the U.S. Army, Defense Department, or the U.S. Government.