Armenia Plays a Dangerous Game, Flirts with Customs Union

Armenia recently signed a memorandum of understanding with the Eurasian Economic Commission (also known as “Russia and its satellites) in which Yerevan promised to do little more than talk with Moscow about trade issues. The immediate import of this is not, as some have suggested, that Armenia is drifting closer to Moscow’s orbit. If it drifted any closer, it would crash. The concerns are longer run.

Armenia is playing the same game as Ukraine — easing toward the EU while placating Russia — with a minor advantage that Kiev does not have and without Kiev’s largest advantages.

Russia could not truly care less at this exact moment about Yerevan’s entry into the Eurasian Customs Union. To call the tiny country’s economy an underperformer is to be charitable. Despite recent growth, the country lives in grinding poverty, outside of its self-perpetuating ruling class. (Western reporters, who tend not to understand any of this, know that Armenians experienced a genocide just like Jews did, and ergo Armenia must be as democratic and meritocratic as Israel, a perception neither Armenia nor its diaspora works to replace with reality.) Armenia’s trade is largely based in and around Moscow, and the continued ineptness of the peace talks around Nagorno-Karabakh mean that both Yerevan and Baku are more or less on a constant war-footing.

Vladimir Putin has enough underperforming satellites at the moment.

However, Armenia lacks many of Ukraine’s critical strengths to resist Russia. Because of the Nagorno-Karabakh conflict, it has willingly hitched itself to Russia’s strong right arm, and so really cannot say no very well. Where two Ukrainian Presidential administrations have made European integration their foreign policy lodestar, Armenia’s political class has not made a determined push toward Europe for many reasons, not least being the symbiotic relationship the country has accepted with Russia. Cross-border trade flows have dwindled over time, and capital investment remains cripplingly low, meaning that the threat of leaving for the European Union does not concern Moscow in the short run.

Culturally, Armenia is closer to Russia than it is to Europe as a whole, and proximity and the relationships of their respective ruling classes make a closer union between the old Soviet states more likely than not in the long run. Unless something changes in Europe’s greater economy soon, it is unlikely that there will be a concerted push to bring in another sick man culturally tied to Moscow — Cyprus and Greece are headaches enough.

If the current path continues, meetings and consultations and conferences with Russia will stop being placation and will instead be the terms of accession.

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