Babken Dergrigorian
Upon reading Harut Sassounian’s latest article “The West Must Offer Armenia Incentives Rather than Decry its Ties with Russia,”
I have been compelled to write a response addressing its shortcomings
and inaccuracies, increasingly common also within the broader narratives
regarding Armenia’s accession into the EEU in the Armenian community.
On September 3rd, 2013, after Armenia completed nearly three years of
negotiations with the European Union on an Association Agreement, which
included years of European-funded legislative reforms, President Serzh
Sarkisian was summoned to Moscow for a meeting with President Vladimir
Putin. After just an hour, Sarkisian emerged to announce a U-turn in
Armenia’s policy, stating his intentions to pull out of the EU
Association Agreement process, join the Russian-led Customs Union, and
become a member of the eventual Eurasian Economic Union. This decision
was made against the backdrop of Russian pressure on all Eastern
Partnership countries engaged in the Association Agreement negotiation
process, including Georgia and Moldova, and most notably Ukraine. It is
important to note that from the onset, the EU had made it clear that
that its Association Agreement, and specifically its Deep and
Comprehensive Free Trade Agreement (DCFTA) component, was incompatible
with membership in the Customs Union. As membership in the Customs Union
results in loss of the ability to sign bi-lateral trade agreements,
this was a technical incompatibility not a political one.
Regional integration is an extremely important decision for Armenia.
As a small state, Armenia needs to expand its access to markets and
lower the cost of imports. Furthermore, regional integration can help
Armenia develop and modernize its various political and economic
institutions. Not all regional integration projects are created equal,
however. The type of regional integration Armenia adopts will determine
its long-term growth and sustainability as a state. Harut Sassounian’s
article glosses over many important factors in Armenia’s choosing the
EEU over the EU’s Association Agreement, and in so doing, paints an
inaccurate description of the Russian-Armenian relationship.
Firstly, there were never any “lengthy heated debates” on the merits
of joining the EEU vs. the EU – not in Parliament, and not in the
mainstream Armenian or Diasporan press. Even as late as the morning of
September 3rd, 2013 – the day Sarkisian announced the U-turn — Galust
Sahakyan, then head of the Republican Party faction in Parliament, was quoted in an interview with Azatutyun Radio
saying that Armenia was on track to initial the Association Agreement
in Vlinius in November. President Sarkisian’s announcement a few hours
later caught many by surprise — even those in his inner circle. For more
than three years, all statements by Armenian government officials, from
Sarkisian himself, to then Prime Minister Tigran Sargsyan, as well as
numerous statements by the Foreign Ministry, pointed towards Armenia’s
initialing of the EU Association Agreement. Moreover, for over three
years Armenian legislators had drafted and passed reforms aimed at
increasing compliance with the EU’s Association Agreement requirements —
reforms that were already being undertaken. On September 3rd, this was
all undone during a brief meeting with Putin.
Mr. Sassounian’s article also states self-evident facts with regards
to a long history of Russian influence in Armenia. What he fails to
mention is Russian presence in the region has from its onset been
imperialistic and colonial in nature. Armenia did not voluntarily join
the Soviet Union. Instead, on December 2nd 1920, the first Republic of
Armenia, under Simon Vratsian, was forced to Sovietize against the
wishes of the country’s leadership. While the merits of Sovietization of
Armenia can be argued, it still remains a fact that for 70 years
Armenia was governed by policies developed in Moscow. More importantly,
in doing so, Armenians lost the opportunity to build an independent
state that would be governed in its own interests. Imagine what sort of
country Armenia would have been, had it remained independent in 1920. As
benevolent as Moscow may have been during the 70 years of Soviet rule,
Armenian governance was not primarily in the interests of the Armenian
people.
Mr. Sassounian raises three essential questions surrounding Armenia’s
membership in the EEU. I would like to address them in turn, and also
pose questions of my own.
1) Mr. Sassounian insists that Armenia’s membership in the EEU is
crucial for continued sales of advanced weapons to mitigate the growing
threat from Baku, stating that it is Russia, not the United States,
Great Britain or France, that can provide this. This claim fails to take
into account exactly where this threat is coming from. In fact, it is
Russia, Armenia’s “strategic military partner” that has been selling billions of dollars of advanced weaponry to Baku,
as recently as this past summer. It is Russia that is fueling the arms
race in the region and profiting from increased tensions, both
financially, through the sales of weapons, and politically, by
maintaining a leverage on both Armenia and Azerbaijan. I am not
suggesting that the US or Europe would be more willing to come to
Armenia’s aid in the event of a renewal of conflict. However, any state
that sells weapons to a state with whom Armenia is at war surely does
not deserve the title of “strategic military partner.” If Russia’s sale
of weapons to Azerbaijan was to increase pressure on Yerevan to commit
to the Eurasian Union, as many in Armenia quietly concede, that is
called blackmail, not partnership.
2) Next, Mr. Sassounian turns to the issue of energy dependency.
Here, I must agree, we are overly dependent on Russia for our energy
needs, and if membership in the EEU leads to lower rates for natural
gas, then that is a clear benefit. The broader issue here is why exactly
is Armenia overly dependent on Russia for its energy needs, especially
with an oil rich neighbor to its south. Firstly, over the past 15 years
Armenia has sold practically its entire energy infrastructure to Russia
in a deal where assets were traded for debt. The fact of the matter is
that Armenia is capable of diversifying its energy supply. This year, Iran stated that it is ready to offer gas and oil to Armenia for a lower price than it currently pays for Russian gas. Furthermore, with the questionable quality of Russian gas, Iranian gas can be incredibly beneficial and is an option that deserves greater attention.
3) Mr. Sassounian’s claim that Russia is Armenia’s largest trading partner is patently false. Armenia’s largest trading partner is in fact the EU.
In light of this reality, it would make more economic sense for Armenia
to sign the EU Association Agreement, simultaneously giving Armenia
open access to its number one trading partner and largest economy in the
world, while lowering the cost of imports. Furthermore, it would
facilitate the modernization of Armenia’s institutions and regulations,
easing the way toward trade deals with the US and beyond.
Political Considerations
Mr. Sassounian states “The intended objective of forming EEU is to
facilitate the free movement of goods, services, capital, and labor
across member states.” This is only half accurate. While the Customs
Union, which was founded in 2010, was primarily an economic project, the Eurasian Union is a political one.
By ignoring this fact, Mr. Sassounian fails to discuss the political
implications of joining the EEU, such as national security,
constitutionality, and path dependency of state institutions.
The first point to consider is the structural differences between the
EEU and the EU Association Agreement. The EEU is a formal union,
whereas the Association Agreement is a bilateral framework for
cooperation between two parties. To date, the EU has signed Association Agreements with countries
as far away as Chile and South Africa, as well as with Lebanon, Syria,
and Egypt. This does not imply membership in the European Union, nor
does it sacrifice a state’s sovereignty.
By contrast, membership in the EEU means handing over crucial parts
of economic policy making, such as customs regulation and trade policy,
over to a body called The Eurasian Economic Commission,
based in Moscow. Decisions of the Commission are binding for all member
states. Member states have voting rights in the Commission, two per
state. Essentially, what this means is that Kazakhstan, an ally of
Azerbaijan, will have equal say in key areas of Armenia’s economic
policies as Armenia. As Artur Ghazinyan, head of the European Studies
Department at Yerevan State University eloquently put it,
“The difference between the EEU and the Association Agreement is that
in the case of the Association Agreement, Armenia holds the pen when
writing economic policy, whereas with the EEU, Armenia gives the pen to
someone else to write”.
The broader issue here however, is that under the Constitution of the
Republic of Armenia it is unconstitutional to formally hand over any
portion of policy making to another entity, as this, strictly speaking,
undermines de jure sovereignty. Essentially, by joining the EEU, Armenia
is losing the sovereignty it gained 23 years ago, after generations of
its absence. Is sovereignty of our State a value we wish to uphold, or
are we comfortable with being relegated to a vassal state?
The next political consideration is based on the development of
Armenia’s institutions. For over 23 years, Armenia has made significant
progress in many of its political institutions, from the establishment
of an administrative (misdemeanor) court and human rights defender’s
office to its various ministries. To be fair, there is still a great
deal of work to be done in this realm, especially in elections, and
increasing judicial independence. Armenia’s choice of regional
integration will affect the development of its state institutions and
the values they uphold. The graph below plots the level of corruption
against governmental effectiveness among EU states and EEU states. Where
do we wish to see Armenia on this graph?
Figure 1.
The political component of the EU Association Agreement would
help Armenia’s institution reforms processes with programs for
increasing the independence of its judiciary, decreasing institutional
corruption, improving health and safety regulations, increasing
transparency of elections, and ensuring fundamental human rights. These
of course represent values that are not only European, but I would
argue, are intrinsically Armenian and as such, are enshrined in the
Armenian Constitution and personified within our Armenian communities
throughout the world.
By contrast, membership in the EEU Armenia’s institutions can be
expected to build path dependency towards a different set of values,
where corruption is rampant, elections are blatantly falsified, and
fundamental human rights and freedoms are continuously violated, as is
the case in Russia, Kazakhstan, and Belarus today. Do we want to see an
Armenia that becomes increasingly authoritarian and restricts the rights
of its citizens, or one that upholds the values of democracy, human
rights, and justice, as outlined in the Armenian Constitution? As the
graph below illustrates, EEU member states are extremely deficient in
providing political rights and civil liberties to their citizens. Does
the Armenian citizen today not deserve to live in an open society that
respects the rule of law, the electoral process, and the freedom of
expression? These are, after all, the same rights and liberties we
exercise as a community through our various lobbying efforts in
Washington and Brussels, and throughout our local political and social
outreach activities.
Figure 2.
Finally, an issue that has not yet been resolved is whether
Armenia will be forced to establish customs check points at its border
with Nagorno-Karabakh. Kazakhstan, having relayed concerns from its ally
Azerbaijan, stated in May of this year
that Armenia could only join the Eurasian Union through its
internationally recognized border; in other words, without Karabakh. By
contrast, the EU Association Agreement held no such pre-condition. Do we
want to see a border check point between Armenia and Nagorno-Karabkh,
manned not by Armenian and Karabakh soldiers but customs officials from
the EEU? How will this impact the national security of Karabakh and
Armenia? Moreover, why does the prerequisite of “internationally
recognized borders” apply to Armenia with regards to Karabakh, but not
to Russia with regards to Crimea? Even before Armenia’s membership takes
effect, we are seeing the lack of fairness and equality in this union.
Economic Considerations
Many, including Mr. Sassounian, have touted the economic benefits of
membership in the Eurasian Union. Here too, however, the facts do not
add up. Economic opportunities would have been much greater with the
Association Agreement than in the Eurasian Union. For example, the
combined GDP of the Eurasian Union member states stands at nearly 1/6th
the GDP of the EU. This means that the Association Agreement would have
given Armenia access to a much larger market, first of all to sell its
own goods and services, but also to import greater goods at lower rates.
Next, we look at GDP per capita, where Eurasian Union member states
are also dismally low compared to their EU counterparts. This translates
into, on average, less money in people’s pockets to purchase the
Armenian goods and services in the Eurasian Union.
Figure 3.
We next turn to the issue of customs control. While it is true
that Armenia will now be able to sell its goods in the Russian, Kazakh,
and Belarussian markets, membership in the Eurasian Union will also impose higher customs taxes
on goods from outside the EEU. Since the EU is Armenia’s largest
trading partner, many of the goods Armenia now imports from Europe –
from cars to building materials, will have an additional customs tax,
making many of these goods either unattainable for the Armenian
population, or making their import economically unsustainable. Indeed,
there is precedence here: since its membership in the Customs Union, Kazakhstan has seen prices for goods skyrocket.
Finally, there is the issue of economic freedom, a problem that has
been plaguing Armenia since independence. As the chart below
demonstrates, economic freedom in the EU is much higher, meaning there
is more opportunity for new businesses to establish themselves and
operate. With the signing of the EU’s Association Agreement, Armenia
would have gradually come into compliance with regulations that could
curb economic monopolies and create an even playing field for
businesses. It would reform state institutions, increasing judicial
independence to combat economic corruption. By contrast, the economic
conditions within the Eurasian Union, especially in Russia and Belarus,
can be expected to reinforce and consolidate the oligarchic tendencies
in Armenia, making it less attractive for new investments and start-ups
than it otherwise could be.
Figure 4.
Conclusion
While Armenia has already signed the Treaty on accession into the
Eurasian Economic Union, its membership is pending ratification by the
three member states as well as by the Armenian Parliament. Initially,
the changes will be modest, but membership into the EEU sets Armenia on a
trajectory that puts into question its sovereignty, its national
security, its economic development, and its overall sustainability. It
may well be that Armenia simply had no choice, given the geopolitical
realities of the region and those imposed by Moscow. Nevertheless, it
would behoove the proponents of the Eurasian Union within the Armenian
Diaspora to speak with more clarity on the matter, rather than tout a
project that is far from beneficial and may potentially be disastrous in
the long run. Let us be frank. Armenia did not join the Eurasian Union
because of a lack of proper incentives by the West, as Mr. Sassounian
suggests. Armenia did not join the Eurasian Union because of a clear
political or economic benefit to the country. Armenia joined the
Eurasian Union because it had no other choice. Armenia joined the
Eurasian Union because Moscow left Armenia with no choice. This is
merely a continuation of the colonial relationship between Russia and
Armenia. Let us admit that fact bluntly, and work towards increasing
Armenia’s agency on matters of existential importance. To do otherwise
would be tantamount to shuffling the deck chairs of the Titanic.
"Asbarez," October 17, 2014
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