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U.S. Concerned About Armenia’s Ties With Iran

“Iran is planning massive investments into the economies of Georgia and Armenia. We’re talkingof 1 billion dollars for Tbilissi and a analogous offer to Yerevan. For your consideration: the total amount of Russian investments in Georgia in 2006 did not exceed 30 million dollars, as to Armenia, after arrangements made by Vladimir Putin will total to 1,5 billion dollars. In case this plan of capital expansion is put to action Iran may become the most influential actor in the region[i.e. South Caucasus] ” writes Kornelij Glas (ru) following reports about US concerns about Armenia’s energy ties with Iran.

Elaborating on the situation, whereby a senior American diplomat has voiced concerns, that Armenia’s deepening economic relations with neighboring Iran might run counter to international sanctions imposed on Tehran over its controversial nuclear program Armenia Blog comments:

Iran has always been our neighbor and if the U.S. wants greater support for its actions, perhaps it can only be warranted by further aid to Armenia to help offset the natural losses that would occur by turning against our friend. Then again, should a conflict arise in the future, Russia and Iran are Armenia’s two true allies and the United States could not be counted upon, in my opinion, to help matters in our favor.

The world is flat, reiterates Thomas Friedman’s concept Nazarian, looking for Armenia’s place in the globalized world.

I am still unsure of Armenia’s role and contribution to the global economy. It’s a tiny market. Yerevan is a small city of 1 million people; there are dime a dozen of such cities around the world. Add to that the middle class is a small segment of the population that can afford a lifestyle of a Western citizen, and you see why a foreign corporation may not be interested to have an official presence in Armenia let alone have manufacturing operations.

Notes from Hairenik is even more concerned about Armenia’s economy, despite continuous growth rates recorded here, ensuring annual average real GDP growth rates of more than 10% since the late 90’s, quoting the June 19 edition of ArmeniaLiberty.org about statements by the European Bank for Reconstruction and Development (EBRD) on continued appreciation of the Armenian national currency (dram) and the dire consequences it will have on the economy sooner or later:

I have concluded, although I do not claim to be an economist by any means, that Armenia’s economy is dollar based and probably always has been. Even though dram is being exchanged on the street people still think in dollars and even quote figures keeping the US currency in mind. In the meantime, money I suppose will keep pouring in from foreign remittances but it won’t circulate here. The continued shortage of dollars on the market is a clear indication that something is dreadfully wrong somewhere. And I would not be surprised if Armenia sees a depression in its “booming” economy in the short-term, God forbid. In fact I am expecting it.

Not all Armenian bloggers are pessimistic however. Levon who has just arrived in Armenia after a couple of years of absence, is deeply impressed upon arrival with rapid changes at the aiport as well as in the center of capital Yerevan.

Narjan has reposted extracts from the Reuters article on “tiny Armenia” being the world leader in natural gas vehicles.

Well, even in a “tiny” country people want to live well, and with all these international pressures on Armenia, when all the big guys, including US, Russia, EU and Iran have too much interest in strengthening their influence on this highly strategic location, all we can do is sit and watch our country being tossed about… or is there something we can actually do?

8 comments

  • It is really interesting that I read recently in Global Voices that Iran invests in Tajikestan too.It seems Iran invests its petro dollars in different countries.

    We should remember that during Armenia -Azarbaijan conflict,Iran supported “christian Armenia” in its war against “Shi’ite” Azerbaijan.

  • David

    If the US really wants us to have lesser relations with Iran, they should put pressure on Turkey to open its borders with Armenia, so that economic exchanges with Europeans become easier. The US should also ask the Azeris to stop whining over their defeat in Karabagh, and open the borders. That way, if Armenia gets some breathing space, economic relations wouldn’t only be with the Iranians and the situation in Southern Caucasus would vastly improve.

  • Greg

    David, that only makes too much sense. Besides the US loves the Turks because…

    you got me.

  • John

    The United States federal govt. must be insane if it thinks a country, Armenia, which has 2 closed borders will close a third. Armenia and Iran have a 2500 year excellent relationship, not getting the differences of religion involved.

  • Hamid – as far as I am aware, Iran has serious political problems with Azerbaijan because of its 20 million strong Azerbaijani minority.

    There were speculations, that with the urging of US, Azerbaijan was ready to incite the ethnicly Azeri minority in Iran for an uprising against Iran in case of a US military aciton against that country.

    Of course what I am saying is the distorted and twisted version of truth that we get here in Armenia, so I’m sure, that at least 50% of this is a lie and a propaganda tool. However, be aware, that there are also such points of view on Azerbaijan-Iran relations, something, that makes Armenia, the big enemy of Azerbaijan, a closer ally with Iran.

  • David

    Greg, obviously the Americans and Turks do have a close relationship. The US has needed Turkey in the past for the American base (or bases?) located in its territory, in Incirlik more precisely. The Incirlik Air Base is located near the Syrian border, and has been used by Americans to patrol northern Iraq. Moreover, the US considers secular Turkey an “example” of how other Middle-Eastern nations should be. Not only that… The US denies the Armenian genocide just to preserve Turkish-American relations.

  • Daniel

    David, why would Turkey opening its borders to Armenia change anything? It would make economic exchanges with Turkey easier, but Europeans don’t have to route their economic interaction with Armenia through Turkey and so EU-Armenian relations would likely be unaffected. And even if trading relations with Azerbaijan resume, Azerbaijan is a much smaller country than Iran and Armenia’s economic interdependence with Iran would be much more significant. That economic interdependence would therefore be much more likely to align Armenia with Iran than with the vaguely pro-Western Aliyev administration in Baku.

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