Last week, the presidents of Russia and Armenia met in Moscow. According to official information, they discussed security issues in the South Caucasus, including the Nagorno-Karabakh settlement, prospects of deep cooperation within the CIS and within Eurasian integration processes, international problems, bilateral relations and economy.
One of the key issues was possibility of Armenia’s accession to the Eurasian Union. Regarding this issue, Armenian expert society is rather skeptical. The expert of the Armenian Center of Political and International Research, Ruben Megrabyan, is sure that Moscow will force Yerevan to make a choice between the EurAsEU and the EU, but “it is dangerous to put all eggs in one bowl.”
The head of the Analytical Center of Globalization and Regional Cooperation, political scientist Stepan Grigoryan also considers pressure on Armenia by Russia: “The idea of the Eurasian Union initiated by Putin has one aim: Russia wants to improve its influence in the post-Soviet area and reconstruct links with close neighbors. However, we should analyze whether it is beneficial for Armenia. What can the EurAsEU give to Armenia? We have no ground boundaries with any possible EurAsEU country. In this case I don’t see any sense in joining this union.”
Meanwhile, within Sargsyan’s visit to Moscow presidents agreed on establishing a special commission which will consider possibility of participation of Yerevan in integration processes within the Customs Union and the Common Economic Area. According to Putin, the peculiarity is that Russia and Armenia have no common borders, that is why “implementation of instruments agreed by three countries (Russia, Belarus, and Kazakhstan) might be considered.”
At the same time, issues connected with increase of prices on Russian gas exported to Armenia were not settled, as well as the issue on giving $1 billion credit to Armenia. Russia is the main Armenian trade counter-agent and the leading foreign investor to the Armenian economy. Today mutual turnover is $1 billion.
“Today we are speaking about an important topic – prices on natural gas exported to Armenia. I think we have found mutual understanding in principles of price forming,” Serge Sargsyan stated. He indirectly confirmed that he didn’t manage to stop increase of gas tariffs.
The Moscow position is not a surprise. Russia is speaking about market gas price for its partners for several years. As for Armenia, it usually succeeded in postponing of price increases or its partial implementation due to giving to Russia some facilities of Armenian infrastructure. Last time Russia agreed to divide the price increase into two stages in 2010: in April 2010 and in October 2012.
According to the opposition, the Armenian side should prepare for buying Russian gas on market prices. For example, money gained from gas sales within the country should be allocated to purchasing of modern non-energy-intensive equipment and technologies, as well as to modernization of the existing industrial equipment to make gas sphere more money-saving, but it wasn’t done.
It appears the Russian side cannot be accused of pressure on Armenia, and the Armenian government should blame itself. The fact is that Russia didn’t postpone price increase one more time due to some reasons.
Probably the Armenian President didn’t manage to get $1 billion Russian credit as well. Putin reminded on transfers from Russia to Armenia which are estimated up to $1 billion. And it is a significant part of Armenia’s GDP. The Russian leader spoke about the sum in the context of Armenia’s expectations for a credit on this sum.
In 2009 Russia gave Armenia a half of a billion. But the Armenian side didn’t use money effectively. A significant part of this credit was allocated by the government not for economic reforms or support of socio-economic projects, but for implementation of dubious projects with participation of dubious companies. Russia is concern about using of its money.
As the result, two important issues for Armenia were not settled. Gas prices will be increased ahead of the presidential elections in February 2013.