The Armenian geo-political situation is an extremely complex one. For a country that has two closed borders – one in the West, with Turkey, and one in the East with Azerbaijan – it is normal for the foreign policy to be a multi-directional one.
In 2004, ten new members joined the European Union, which lead to a new geo-political situation and opened up new avenues of communication and relations between Europe and its eastern and southern neighbors. The European Neighborhood Policy (ENP) establishes, for the 16 partnered countries, ambitious objectives in terms of governing, economic development, increased responsibility in preventing and resolving conflicts in the region. The EU acts at the level of reforms and democratic policy, aiming to create a neighborhood of states where human rights are respected and in which safe regions exist where conflicts do not occur over night.
The Armenian geo-political situation is an extremely complex one. For a country that has two closed borders – one in the West, with Turkey, and one in the East with Azerbaijan – it is normal for the foreign policy to be a multi-directional one. The conflict with Azerbaijan which involves Nagorno-Karabakh means that Armenia has close relations with the big political players in the region such as: the EU, Russia and the United States. Traditionally Russia has been Armenia’s closest ally. On top of the defense strategic partnership, Russia also plays an extremely important economic role. In order for Armenia to pay its debts it sold most of its energy infrastructure to Russia, and in 2003 the nuclear plant in Meszmour was taken over by a Russian state-led company. Georgia, situated to the North of Armenia, remains its most important access route to the world. Armenia has also made efforts to develop its relations with Iran. 20% of commercial exchanges take place with Iran and since 2004 a natural gas pipe has existed between the two countries. In this context, the EU is the most flexible donor, its agenda being one which is much more democratic as opposed to a political one like all the other major power in the region tend to have. Between 2007-2009 Armenia received from the EC over 98 million Euros.
The earthquake of ’88, the economical consequences of breaking off from the former USSR and the Nagorno-K conflict are all still major reasons for Armenia’s economy being one in which unemployment is high, salaries are low and corruption is widespread. Industry is relying on various mining-related investments and lately, on diamond polishing. Over 15% of the nation’s budget goes towards defense, while education receives only 6%. The number is justified when you consider that from a total population of 3 million Armenians, 450.000 of them are part of the military. On the other hand, Azerbaijan invests more into its defense than the entire budget of Armenia.