What Baku and Yerevan may bring Putin

What Baku and Yerevan may bring Putin

Next week, on September 25, Vladimir Putin travels to Baku, after which he will fly to Yerevan. The activity of the top Russian leadership in the Caucasus has become more noticeable lately. On September 1, the Russian president held a meeting with Ilham Aliyev in Sochi, and a week later he received Armenian Prime Minister Nikol Pashinyan in the Kremlin. The meetings were very different, just like the latest trends in Moscow's relations with Baku and Yerevan.

The meeting of Putin and Aliyev in Sochi was the third in the last three months - in June they met in Moscow on the eve of the World Cup, and in August - in Kazakhstan. In Sochi, the presidents agreed on an action plan for the development of key areas of cooperation, which included road maps for increasing trade and counter investments, creating transport routes, expanding humanitarian cooperation, including cultural and tourist exchanges.The Russia-Azerbaijan trade grew by nearly 35% in 2017 to reach $2.5 billion. Russia’s direct capital investments in Azerbaijan have amounted to $1.5 billion. There are around 700 joint enterprises operating on the Azerbaijani market, and around one third of them have 100% Russian capital. Russia's Gazprom, Transneft, and LUKOIL are working successfully in Azerbaijan, and the energy systems of both Russia and Azerbaijan are functioning in an integrated mode. Cooperation in the industrial sector is deepening: KAMAZ has set up the production of license trucks and their maintenances at Ganja Auto Plant; Russian company R-Pharm invested $74 million in the construction of an enterprise in Azerbaijan that will produce pharmaceuticals, which will open in 2019; Gazprombank is taking part in the development of Sumgayit Chemical Industrial Park, the investments amount to about $750 million.

The North-South transport corridor, which will connect Western European markets with Asian producers, is considered by both Moscow and Baku to be one of the most important projects. This will allow substantially increasing the speed of freight transportation from South Asia and the Middle East through Iran to Europe. 

Russia Azerbaijan’s top partner in terms of imports and is number one recipient of Azerbaijan’s non-oil exports, while the military goods bought by Azerbaijan from Russia are worth over $5 billion and continue to grow because Azerbaijan continues to modernise its armed forces.

Military-technical cooperation looks especially relevant for Azerbaijan in the context of the unresolved Nagorno-Karabakh conflict. The internationally recognized territory of this state is occupied by Armenia, more than a million Azerbaijanis became refugees and internally displaced persons as a result of this conflict. Both Baku and Yerevan count on Moscow's support in settling the conflict. But if the Russian-Azerbaijani relations are crystal clear, after Prime Minister Nikol Pashinyan came to power, the relations with Armenia look uncertain and confusing.

On September 8, there were no victorious reports at the meeting between Putin and Pashinyan in the Kremlin. Very little information was provided on the negotiations - the Armenian prime minister came to Moscow on a working visit, and numerous accumulated problems should be solved in the working environment. Meanwhile, characterizing Russian-Armenian relations, Putin said that they "are of a very special, specific nature." The Russian president recalled that Russia ranks first among Armenia's economic partners: "We are the largest investor in the Armenian economy ... These are energy, including hydrocarbons energy, gas supplies at the lowest prices for global gas deliveries by Gazprom - $150 per thousand cubic meters, nuclear energy and thermal generation. Relations are also developing in the metals sector and in machine-building. In general, we have a lot of things to discuss."

They had a lot to talk about indeed. The Kremlin is really worried about the new Armenian prime minister's statements and actions, which do not fit into the "strategic partnership" canvas. It's about anti-Russian rhetoric, about Yerevan's interaction with the integration structures in the post-Soviet space within the framework of the Eurasian Economic Union and the Collective Security Treaty Organization, about the persecution of political opponents by the new Armenian authorities, and the new Armenian leadership's tough stance in the Karabakh settlement process.

However, Pashinyan believes that "in spite of some pessimism, which now exists in the Armenian and Russian press, as well as social networks," there are no unsolvable issues between Russia and Armenia. He proposes to solve the issues "relying on mutual respect for our allied relations, the interests of our countries, respect for the sovereignty of our countries and principle of non-interference in each other’s affairs."

These words can be regarded as another hint of Moscow's interference in the affairs of Yerevan. (as Yerevan is not the one to interfere in the affairs of Moscow). Proceeding from this, it is possible to predict with certainty that Putin's meetings with the Armenian leadership will be really difficult.

The situation is aggravated by the fact that last week Armenia held command-and-staff exercises, during which the scenario of war with Azerbaijan was worked out. Experts fear that maneuvers will lead to increased tension in the conflict zone, maybe even the resumption of the war. Especially since Azerbaijan is holding large-scale operational-tactical military exercises these days, which are used to work out the strategy and tactics of the crushing defeat of armed groups and forward units of Armenia in the territory of Nagorno-Karabakh and the liberation of the occupied lands. In theory, the Russian president should act as a peacemaker at meetings in Baku and Yerevan. We will see the result of it, in view of Armenia's "specific" policy, in a week.

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