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How will leaving CSTO affect Armenia's economy? [ANALYSIS]

26 February 2024 19:50 (UTC+04:00)
How will leaving CSTO affect Armenia's economy? [ANALYSIS]
Fatime Letifova
Fatime Letifova
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Since last year, the Armenian authorities have been making claims about being disintegrated from the CSTO at many events and conferences. The Prime Minister of the country, Nikol Pashinyan, sometimes openly and sometimes covertly, brings the tension between him and his country’s old ally, Russia, to the attention of the world community.

But why does Armenia want to turn its back on Russia today, when for many years, especially during the occupation of the Karabakh region, it was hiding behind the peacekeeping forces and carrying out its insidious plans with ease?

It seems that the Armenian government, which is deceived by the empty promises of its patrons in the West and tries to show itself worthy of them, thinks that after the failure in Garabagh, it will be more prosperous by distancing itself from Russia and under the protection of its allies in Europe.

However, we should not forget that Russia's political and economic network in Armenia can bring an end to Yerevan, which still claims territory against Azerbaijan.

For example, since September 1992, Armenia has entrusted the protection of 345 km of its borders with Turkiye and 45 km with Iran to the border management of the Federal Security Service of Russia.

The 102nd Russian military base established in Armenia in 1995 is of great importance in the relations between the two countries. In 2010, the term of the base's location on the territory of Armenia was extended until 2044. To this day, that base is considered an important element, enabling Armenia to be ruled by Moscow.

Currently, Russia also uses border detachments located in Gyumri, Armavir, Artashat, and Megri for these purposes. At the same time, the departure point of the "Zvartnots" international airport and the "Agarak" departure point on the highway on the border with Iran are also under Russian control. In total, about 5,000 Russian soldiers protect Armenia's borders.

In the smallest confrontation, Armenia can consider 5,000 people who have served for years and are familiar with the country's military system as its executioners.

However, Armenia's dependence on Russia is manifested not only in the country's military sphere but also in its economic and industrial platforms.

Thus, almost all enterprises that produce energy in Armenia and deal with its financial issues belong to Russia.

For example, the country's main producer of electricity is the Armenian Nuclear Power Plant, which accounts for about 40 percent of Armenia's total electricity production. In 2003, the management of this station was entrusted directly to the Russian energy company "Inter RAO UES".

The most humane and safe answer to the cooling of Armenia's relations with Russia can only be related to the operation of this NPP.

However, by insisting on straining relations with Moscow, official Yerevan endangers not only the country's electricity, but also the economic situation of its citizens.

It should be recalled that before the conflict between Russia and Ukraine, about 80,000 people from Armenia used to go to Russia for seasonal work. Armenia's economy is also significantly dependent on labour migrants who send money to their homeland from Russia.

According to the Central Bank of Armenia, in 2021, approximately 865 million dollars were transferred from Russia to Armenia. In 2022, this number increased by almost 4 times and reached 3.6 billion dollars. This is related to the arrival of approximately 100,000 citizens from Russia to Armenia in connection with the Ukrainian war.

The head of the Central Bank of Armenia, Martin Galstyan, said at the annual conference of the International Monetary Fund that Armenia is witnessing a 25 percent increase in human capital in the field of Information Technologies. The reason for this is that talented and educated people come to Armenia.

It seems that the head of the Bank himself admits that Armenia is developing at the expense of Russia, and accepts the fact that the country suffers from the lack of talented and educated personnel.

But migrant workers are not the only reason that the country needs Russia economically.

The only land route for the export of Armenian goods pass through the "Upper Lars" point of the Georgian-Russian border. In the past, this road was called Daryal Pass, and now it is called the Military Georgian Road.

This 208-kilometer road, which usually freezes in winter months and is sometimes closed by special instructions of Russia, makes hundreds of Armenian products, including perishable, fish and fruit trucks, wait for days.

Last year, at the end of November, when the Prime Minister of Armenia, Nikol Pashinyan, refused to participate in the Minsk summit of the CSTO, Russia only tightened phytosanitary control, especially for Armenian products, and reminded with a small nuance how dependent this country is on Moscow.

At present, Armenia's "far-sighted" friends, like itself, think that it will be able to get rid of Russia at some point and are giving courage to Pashinyan's government. Although many countries think that Russia "could not duely punish" Armenia due to the sanctions imposed on it, it is not difficult to understand that our northern neighbour does not simply want to go down to the level of Armenia.

It is true that Russia is currently rapidly descending the list of the world's great superpowers. And if Pashinyan's government relies on this move and continues to irritate Russia by turning to the West, there is a high probability that neither Armenia nor Pashinyan himself will have a better future.


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