PSCRP-BESA Reports No 32 (January 28, 2024)
The two major regional conflicts of recent times — the Russian-Ukrainian war and the new war in the Middle East triggered by Iranian-affiliated Islamist movements against Israel — have also had an impact on the redistribution of power in some other regions, such as the South Caucasus. Azerbaijan’s victory over Armenia in the three-decade-long conflict over the Karabakh region, Russia’s reduced presence in the region in favor of military action in Ukraine, and Iranian infiltration into this gradually emptying niche have forced Yerevan, formerly a strong Russian ally, to diversify its foreign and economic policies.
In search of a new foreign policy course
At first glance, by signing military cooperation agreements with France and the United States, Armenia chose the “path to the West” as the most logical substitute for one of the main vectors of Yerevan’s previous foreign policy line. However, Armenia’s alienation from Moscow seems to be taking it in a completely different direction – eastward, toward Iran and India. Moreover, as current events show, Iran turns out to be Yerevan’s main partner in this process in all areas – economic, military and political.
In late December 2023, Iranian Foreign Minister Hossein Amir-Abdollahian, arrived in Yerevan to discuss the strengthening of bilateral trade and economic ties, as well as current and upcoming projects in infrastructure and other sectors. For Iran, these ties are of utmost importance as Western sanctions target the country’s economy. Similarly, for Armenia’s export economy, which relies on agriculture and manufacturing, trade corridors through Iran are crucial.
The Iranian diplomat stated that Iran has historic relations with neighboring Armenia, which continue to develop, deepen and reach a higher level with each passing day. “We have had important discussions with my Armenian counterpart and the Armenian Prime Minister Nikol Pashinyan regarding the necessity of establishing lasting peace in the South Caucasus and the role of Iran in that process, which can be a guarantee of stability and peace. We have a common opinion on various issues of cooperation,”, said the Iranian Foreign Minister during his visit.
“My Iranian counterpart and I have confirmed the aspiration to increase mutual trade volumes first to $1 billion and then to $3 billion a year,” Armenian Foreign Minister Ararat Mirzoyan stated a joint press conference with Amir-Abdollahian, noting that this goal was set by an agreement reached between Armenian Prime Minister and Iranian President.
Another important goal of Iranian-Armenian cooperation is toreduce Armenia’s energy dependence on Russia. In August 2023, Yerevan and Tehran agreed to extend a 2009 agreement under which Armenia supplies Iran with electricity in exchange for natural gas until at least 2030. A major cross-border highway through Armenia’s southern Syunik province is being reconstructed to expand trade. In October 2023, the Armenian government awarded a $215 million contract to two Iranian companies, Abad Rahan Pars Iranian International Group and Tunnel Sadd Ariana. In addition, Iran and Armenia have begun negotiations to build a new border bridge over the Aras River. These developments are intended to streamline the movement of Armenian goods eastward.
Another issue related not only to the economic but also to the military sphere is that of Yerevan moving forward with the signing of a formal economic agreement with Tehran on the use of Iranian seaports for its arms trade with India. Armenian ships will be using Iran’s Chabahar and Bandar Abbas ports freely. Additionally, Armenia signed a contract in 2022 to import Pinaka Multiple Launch Rocket Systems (MLRS), SWATHI radars, anti-tank missiles, and other munitions. The supplies were ferried via Iran in 2023. As Armenian Deputy Foreign Minister Mnatsakan Safaryan noted last November, “Chabahar is an integral component in Armenia’s quest for enhanced access to India and Central Asia via connectivity with the International North-South Transport Corridor (INSTC)”. Armenia’s link to Chabahar and the long-dormant INSTC, originally proposed by India, Iran, and Russia in 2000, can be completed by the end of 2024.
Yerevan certainly views New Delhi as an important economic partner. The conflict in Ukraine has brought substantial benefits to both countries. Armenia has emerged as a key transit center for industrial and technological goods, while India has secured privileged access to energy and essential industrial inputs, significantly enhancing its potential.
According to some experts, while getting close to signing a historical peace deal with Azerbaijan, Armenia simultaneously does not reject a possibility of another round of confrontation with the former and looks for additional arms supplies from India and other countries. The last military conflict has proven the inability of Russian-made weapons to counter Israeli and Turkish technologies of the Azerbaijani army. “Beyond buying (weapons) from India, Armenia wants to pursue a similar strategy of diversification away from singular dependence on Russian platforms. And in that respect, our cooperation goes beyond defense procurement and extends into training and systems’ interoperability. India is an expert in evolving Russian platforms and integrating platforms of varied providence, a know-how very much needed by Armenia», claims Prof. Gulshan Sachdeva from the School of International Studies at Jawaharlal Nehru University (JNU), New Delhi.
The BRICS option
As for the diversification of foreign policy, Iran holds an additional significance for Armenia, since on January 1st, 2024 it became a member of BRICS, an interstate economic association of nine states — Brazil, Russia, India, China, South Africa, the United Arab Emirates, Iran, Egypt, Saudi Arabia, and Ethiopia. This quite literally brings this bloc created at Russia’s initiative to challenge “the Western economic and political hegemony” to Armenia’s doorstep. “Within Armenia’s renewed efforts to diversify its foreign and economic policy, India, UAE, and Saudi Arabia are among the top destinations. They are now members of the BRICS; all have complicated relations with Turkey and are not interested in seeing the additional expansion of Turkish influence into the South Caucasus. The same applies to Iran”’, notes Benyamin Poghosyan, a Senior Fellow on foreign policy at APRI Armenia.
Another point of growing cooperation between Yerevan and Tehran is related to the general situation in the Middle East. “In the regional conflict and proxy war of Iran and Israel, besides Israel using Azerbaijan as an important ally, Iran uses Armenia. Iran wants to use its good relations with Armenia to harm Israel in certain ways on a regional level. In addition to the conflict with pro-Israel Azerbaijan, one of them is the Iranian air corridor through Armenia to Lebanon and Syria. Iran’s intelligence service Quds Force conducts military-intelligence operations in Armenia with the aim of transporting weapons, military equipment, and information warfare. After Iranian airlines were exposed in 2018 as arms and personnel carriers for the Iranian Revolutionary Guard Corps and related organizations in Syria and Lebanon, the Armenian airline Flight Travel LLC was founded with the same intent. Iranian military commanders, weapons and equipment were often transported from Afghanistan and Pakistan via Armenia to Lebanon and Syria. Such activities are a thorn in Israel’s side”asserts geopolitical analyst Matija Šerić.
Armenia was also used as an additional proving ground for Iran’s loitering munition Shahed 136, which is widely used by the Russian military in Ukraine. The same drones that were delivered to Moscow through Yerevan, were used by the Armenian military against Azerbaijani positions in 2023. The purpose was to test how Israeli technology, used by the Azerbaijanis, might counter the Shaheds. The collected data was used to enhance the drones and the tactics of using them on the battlefield.
Speaking of weapons, another event must be noted: the disappearance of 17,000 Russian-produced assault rifles from Armenian military warehouses. It is highly probable that they were sold to Tehran and supplied to its proxies. Russian-made assault rifles have an additional value — they are untraceable. If they fall into the hands of Houthis, Hezbollah or Hamas, it does not implicate Iran in the deliveries, since Russian-made assault rifles can be found in many places around the world.
All this suggests that if the West wants Armenia (which seems to have and prefers the “Eastern alternative”) on its side, it should redouble its efforts to promote normalization of relations with Azerbaijan. Thereby, it will gain a belt of pro-Western countries (including Georgia). Otherwise, the West risks, in addition to the Eastern European and Middle Eastern region of instability, creating a new hotbed of tension in the adjacent zone, which will require attention and resources that are not infinite.