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Iranian-Armenian Relations geopolitical reality political statements

Vusal GASIMLI Zaur SHIRIYEV Zulfiyya VALIYEVA

BAKU 2011

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Iranian-Armenian Relations geopolitical reality political statements

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CONTENTS

Introduction ...................................................................................................................... 4 1. Iranian-Armenian political relations ............................................................................. 10

1.1. Iranian-Armenian political relations: Inverse proportionality of geopolitical reality and doctrinal principles ............................................................................................... 10 1.2. The vital importance of Iran for Armenia ....................................................................... 18 1.3 “Strategic” importance of Armenia to Iran..................................................................... 23 1.4. Iran’s position on the Nagorno-Karabakh conflict ......................................................... 26

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Iranian-Armenian economic relations............................................................................ 28

2.1. Syndrome of “lack of electricity” in Iran ........................................................................ 30 2.2. Iran wants to transform Armenia into a gas corridor ...................................................... 32 2.3. Armenia is “a depot” for railways ............................................................................... 34 2.4. Iran helps Armenia even more through decreasing subsidies to its population .................. 36 2.5. “Black roads” to Armenia ............................................................................................ 36 Conclusion......................................................................................................................... 38 Bibliography ...................................................................................................................... 42

Iranian-Armenian Relations geopolitical reality political statements

Introduction
Fundamental changes to the structure of international relations have laid the groundwork for a “new global order” in international affairs. These changes have made it necessary to adapt bilateral and multilateral state policies to handle the new challenges involved. The CaucasusCaspian Sea region, in the geo-political centre of post-Soviet territory, has become an integral part of this new dynamic, which has been in play since the 1990s, running in line with the classic rules of global policy. From this point of view, restoration of independence in the South Caucasian countries and transformation from the “old system” to a new global order have resulted in war, loss of territories and the prevalence of aggressive separatism, and the emergence of the power represented by Armenia hedging the establishment of stability in the entire region. The collapse of the Soviet Union opened up new opportunities and possibilities for the Islamic Republic of Iran, which has deep historical and cultural links with the South Caucasus, to pursue a pragmatic foreign policy. After the Islamic revolution in 1979, Tehran, rejected by the West, had the opportunity to develop its policy in line with the Muslim countries of the former USSR, and in accordance with the ideology of Islamic revolution. While the new environment of the geo-political reality of the 1990s offered new opportunities to Iran, it was a difficult climate for
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the South Caucasian countries. This gave rise to new opportunities and at the same time challenges considering the historical bonds in the example of Azerbaijan. The idea of taking cultural, racial and historical affinity as essential was prevailing, while determining foreign political and associative relations in the Southern Caucasus states restoring their independence in the “new global order.” In this context, Iran was one of the states, which had to become a natural ally of the Republic of Azerbaijan after the collapse of the Soviet Union because of the foreign political interests and geopolitical reality of Iran. Whereas formulating its foreign policy from the background of national interests since 1970, Iran had also defined political targets and strategies serving these interests1. As part of a new foreign policy targeting “leadership in the Islamic front,” this strategic approach was reflected in the constitution of Iran2. Although Iran was claiming, during the Soviet period, to follow a more pragmatic foreign policy and those ideological approaches were not part of its national interests, today Tehran states that “the aim of Shiah ideology is to strengthen Islamic union.”3 The ideological approach
1 Tensions in Iran’s National Security Strategy http://reutinstitute.org/en/Publication.aspx?PublicationId=1769 2 According to the article 11 of the constitution of Iran, “All Muslims are one nation. The Islamic Republic of Iran shall try to ensure political, economic and cultural unity of the Islamic world”. See: http://www.servat.unibe.ch/icl/ir00000_.html 3 See: http://www.shiitenews.com/index.php?option=com_ content&view=article&id=2406:hia-ideology-seeks-to-create-muslim-unity-&catid=58:iran&Itemid=27

Iranian-Armenian Relations geopolitical reality political statements

of Iran supported by religion has been reflected in the “clash of civilizations” theory of the famous scientist in the field of international relations Samuel Huntington. He writes, “Countries will tend to support the ones having similar culture, and protect the balance with the countries with different culture.”4 While Huntington’s ideas do not mirror existing realities at this point, it is true that Iran has made efforts to project a positive national image on the international stage, with peaceful claims such as “innovation”, “ally of cultures” in its foreign policy under the leadership of Seyed Mohammad Khatami, the president of Iran, who won the 1997 elections. However, even though after the collapse of the Eastern block and the Soviet Union, Iran’s policy toward this region reflected the elements supporting “Muslim solidarity,” it displayed dualism as well. In particular, Tehran, which took over the role of a protector of Muslims in the territory of the former Yugoslavia, secretly supported Muslim peoples living there to gain independence. With the visit of the leader of Bosnian Muslims, Aliya Izetbegovic, to Tehran in 1991, Iran’s Balkan policy was soon accompanied with financial and weapon assistance provided to the country. According to the facts disclosed by the U.S. Congress5 and confirmed by Serbian
4 Huntington, Samuel (2006), The Clash of Civilizations and the Remaking of World Order (Medeniyetler Çatışması ve Yeni Dünya Düzeninin Yeniden Kurulması”), Okuyanus Yayınları, p.268. 5 For detailed information see: “Clinton-Approved Iranian Arms Transfers Help Turn Bosnia into Militant Islamic Base,

sources6, Iran has demonstrated material and moral assistance to Muslims of this region with limited resources. Unlike in the Balkans, Iran’s actions demonstrating support to Muslims of the Soviet Union, which defined its South Caucasus policy through Moscow until the 90s, were exceptionally few during this period. Its main reason was discouraging the Soviet Union from giving political support to opponents of Iran’s regime; thousands of people, in particular members of the “Tude” party, were accused with dissemination of communist ideology and were sentenced in the first stage of the Islamic revolution (1979-1983).7 On the eve of the Nagorno-Karabakh war that started with Armenia’s aggressive policy in the South Caucasus neighbouring Iran, the policy of this state against Muslims was quite contradictory. Thus, unlike in the Balkans, by closing its eyes to the execution of Muslims by Armenians during the war and normalizing its relations with Armenia, Iran demonstrated a double standard and a gap in its foreign policy that was supported by ideological foundations, since in reality, the ideology of the Iranian state was established on the policy of protection of Muslims and ensuring the sustainability of security. When viewed as
Congressional Press Release”, U.S. Congress, 16 January 1997; Serb leader: U.S. helped Iran arm Bosnians, http://www.militarytimes. com/news/2009/08/ap_us_arms_bosnia_082609/ 6 Yossef Bodansky and Vaughn S. Forrest, Iran’s European Springboard?, September 1, 1992, http://www.srpska-mreza. com/Bosnia/bodansky1.html 7 Akdevelioğlu, Atay, “İran İslam Cumhuriyeti’nin Orta Asya ve Azerbaycan Politikaları”, Uluslararası İlişkiler, Cilt 1, Sayı 2 (Yaz 2004), p. 132

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destroying the historical Islamic cultural heritage besides the murder of Muslims in the conflict of Nagorno-Karabakh, the situation becomes even sadder. If Iran did not support the aggressive policy of Armenia and instead demonstrate fidelity to their principles, it would be enough for Azerbaijan, which needed Iran’s material and moral support during that period. The confusing pro-Armenian position of Tehran was reflected even in the articles of foreign experts. In the writings of these experts studying Iran, it was noted that Iran supported Armenia during the conflict over Nagorno-Karabakh and wished Azerbaijan to weaken.8 At the same time, foreign experts drew the serious conclusion that during the war of Nagorno-Karabakh, people, who were forced to seek asylum in Iran through the Araz River, were faced with the serious danger of a humanitarian crises.9 This situation and the fighting going on around the Nakhchivan enclave in September 1993 were directly connected with approximately 200 thousand people from Nagorno-Karabakh being forced to flee to the Iranian border.10 After these events, there were sharp statements from Iran’s ruling regime against Armenia’s policy, protest actions were held in front of the Ar8 Iran’s Security Policy in the Post-Revolutionary Era, Impact on Foreign Policy, RAND Report, 2001, http://www.rand.org/ pubs/monograph_reports/MR1320/MR1320.ch6.pdf 9 Olivier Roy, “The Iranian Foreign Policy Toward Central Asia”, http://www.eurasianet.org/resource/regional/royoniran. html 10 Abdollah Ramezanzadeh,Iran’s Role as Mediator in the Nagorno-Karabakh Crisis, Bruno Coppieters (ed), Contested Borders in the Caucasus, Chapter II, VUB University Press, 1996, p. 66

menian embassy in Tehran, and materials were published in printing houses such as “Cahane Islam” with the demand to freeze relations in all spheres with Yerevan.11 As the result of Armenia’s occupation of Nagorno-Karabakh, the historical territory of Azerbaijan, the artificial Iranian-Armenian border was formed in an uncontrolled areas not regulated by law. Iran’s tacit support of Armenia’s actions in Nagorno-Karabakh casts doubt on the doctrinal suggestions and principles in Iran’s foreign policy. Thus, “ensuring solidarity with Islamic countries” considered as doctrine has been ironically characterized as “closing its eyes” to the occupation of a Muslim country’s lands. While taking into account that there is a lack of necessary infrastructure to meet energy demand of the population living in the northern regions of Iran, it is clear that efforts made to develop relations with Armenia in this field were not successful. In general, Iran’s foreign policy, far from pragmatic until the 90s, resulted in the formation of relations with allies that did not meet the interests of Tehran, and moving away from large-scale projects having direct impact on its future. Staying outside of the Baku-TbiisiCeyhan (BTC) pipeline and the projects of the Transport Corridor for EuropeCaucasus-Asia (TRACECA) connecting Central Asia through Turkey with Europe was relevant neither to pragmatism, nor to the national interests of Tehran.
11 Also there, p.67

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Iranian-Armenian Relations geopolitical reality political statements

Taking the aforementioned into account, one can see, that even though the foreign policy course of Iran in the 90s was sometimes disastrous, Tehran and Yerevan shared a special relationship, more as a good opportunity in the background of unfavorable affairs with other neighbors. For instance, after the signed ceasefire agreement on Nagorno-Karabakh in 1994, one can see increased efforts from the West, specifically the U.S., in regard to Armenia’s place in a western security orbit. To be precise, there was an idea that after the 90s Armenia was about to move away politically from Russia’s sphere of influence closer to Turkey, as well as the West. Even though there was a thought that Armenia would not make this choice because of its closeness to Russia, the factor of Iran was forgotten. Thus, since the 90s the reason of Armenia to become independent from the West (Turkey) was the existence of an Iran alternative. 12And in this context, it was clear that Turkey was the only country that could limit regional strength and leadership claims of Iran. The relations with Iran were of key importance for Armenia and were providing the following: - Strategic – the opportunity to escape isolation in the region as a result of its aggressive policy; - Geographical – the chance to have access to the seas;
12 Nikolay Hovhannisyan, “Hayasdane AnderkafkasyanMercavor Arevelyan Aflharhakagakagan Darazaflercani Gorzon”,The Countries and Peoples of The Near and Middle East XVIII, Yerevan, 1999, p. 16-39.

- Geopolitical – the opportunity to ensure neutrality by separating Iran from Azerbaijan. From the view of historical development, Armenia having closer relations with Iran coincides with the period of the U.S. intervention into Afghanistan through anti-terrorist operations in 2001 and the August war between Russia and Georgia in 2008. If Iran was acting as the party most interested in the development of relations after the year 2001, Georgia, which was for years the support point of Armenia with Russia in its “self-isolation” policy, played an important role through changing the geopolitical reality after the August war in 2008. An examination of the trade turnover between Iran and Armenia, shows that even though Armenian exports to Iran stay stable, an increase has been observed in the investments Iran made to Armenia. Looking at the events happening that relate to Iran from Azerbaijan, which declared neutrality in regard to military actions regarding Iran and Turkey, supported Iran for its policy and blocked NATO’s strategic concept to use Iran as a threat, from this perspective Iran-Armenian relations are not optimistic. And when Turkey protected the use of nuclear energy by Iran for peaceful purposes through its intermediary role at negotiations between the West and Iran, even by blocking the indication of Iran by the West as an element of threat through open diplomatic fighting at the adoption of the new NATO strategic concept.
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When taking these serious steps, Turkey faced negative reaction in the West13. In response, the vice-president of Iran Hamid Bagai labeled the events of 1915 as “genocide” in its statement of August 201014, and this, of course, was contradict-

And even if Armenia pretends, in its turn, to implement a complementary foreign policy, it openly obtained the status of outpost of Russia, which is not a pleasant image for a sovereign state.
ing the efforts of Ankara to establish peace in the region. Even though since the 90s Iran has been accepting Turkey as a competitor and Azerbaijan as a danger in the region, it needs these countries. And even if Armenia pretends, in its turn, to implement a complementary foreign policy, it openly obtained the status of outpost of Russia, which is not a pleasant image for a sovereign state. Some Armenian experts characterize Armenian-Russian relations
13 In his newspaper article in the “New-York Times”, Thomas Friedman criticised these relations in a sharp form and used the expression “as ugly as it gets”. Role of liberal, democratic Turkey in these relations was not welcomed by the West. See: Thomas Friedman, As Ugly as It Gets, New York Times, 26 may 2010 http://www.nytimes.com/2010/05/26/ opinion/26friedman. html?hp=&pagewanted=print# 14 Iran-Armenia relations and the ‘genocide’, http://www. hurriyetdailynews.com/n.php?n=iran-armenia-relations-andthe-8216genocide8217-2010-08-29

as declining from partnership to a position of dependent15. Today there is a new trend in IranianArmenian political relations. Iran’s officials and former civil servants frequently make statements to support the development of Iranian-Armenian relations. In these statements there is anxiety, in particular, about the arms build-up in the region and the risk that the Azerbaijan-Armenian conflict will result in a new war. In statements made by a third party, there are accusations against Azerbaijan for developing its military industry.16 At this point, the economic aspects of the development of Iranian-Armenian relations generate interest. However, it is impossible to explain shared economic efficiency as the reason for political relations. The share of Iran’s exports to Armenia is less than 0, 05% of their gross domestic product (GDP). So, the importance of the Armenian market for the Iranian economy is about 0.05, i.e. it does not have statistical importance. These bilateral relations are vital for Armenia. Undoubtedly, it raises questions about the efficiency of Iran’s investment interests in Armenia with the smallest economy in the world ranking at 30th place for its internal market and 10th place for its foreign market. Thus, taking all these into account, it
15 Minassian, Gaidz, 2008. Armenia, a Russian Outpost in the Caucasus?Russie.Nei.Visions, No.27, 15 February, 2006, http:// www.ifri.org/files/Russie/ifri_RNV_minassian_Armenie_Russie_ ANG _fevr2008.pdf p.13 16 Former Iranian Ambassador to Armenia: Azerbaijan appeared in isolation, Panarmenian, 09 September 2011, http:// www.panorama.am/en/politics/2011/02/09/ ambassador-iran/

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is possible to evaluate according to their development speed and adaption of bilateral relations to clearly benefit economic relations - Iranian-Armenian relations have had three stages: 1991-2001, 2001-2008 and the period after 2008 . In this short evaluation, the Iranian-Armenian relations will be approached from geopolitical and economic perspectives, and will focus on the question “Which party wins, and which loses,” as well as, on the failure of “complementarizm” in the foreign policy of Armenia and inefficiency of trade relations between the countries.

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Iranian-Armenian Relations geopolitical reality political statements

1. Iranian-Armenian political relations
1.1. Iranian-Armenian political relations: Inverse proportionality of geopolitical reality and doctrinal principles
The above mentioned analyses of relations between Iran and Armenia clearly show that these relations are formed not on the basis of strategic interests, but as a response to events happening in the region. Thus, the new geopolitical reality that emerged after the collapse of the Soviet Union opened short and long-term strategic opportunities for the Islamic Republic of Iran to ensure security and to emerge from isolation. Thus, during the Soviet Union, the evaluation of communism and export its Islamic revolution by Tehran, contributed to forming its policy towards South Caucasus over Moscow, and as Moscow as a threat to their security, created conditions for development of their relations in the environment of “sensitive security”. Even though new opportunities were created for the pursuit of a pragmatic policy by Iran with post-communist realities changing since the beginning of 90s, the “Iranian model” of these opportunities, i.e. the export of political Islam in the Central Asia-Caucasus region, was evaluated as a threat by the West. From the strategic view, the damage in the amount of 160 billion17 USD done to both parties in the war with Iraq made it necessary for Iran to develop
17 CIA Analysis, Iran’s economy: a survey of its decline, (1991), http://www.foia.cia.gov/, p iii.

trade relations with the recently independent South Caucasus countries in order to normalize its economic situation. And besides preventing the interference of third parties in the region and facing a complex and changing foreign environment from the security point of view, Iran prioritized emerging from isolation by filling power gaps arising in the South Caucasus. At the same time, some political powers in Iran evaluated the new geopolitical environment as “chauvinistic,” considered the South Caucasus as “a region occupied by Russia and departed from Iran” and had thoughts that this region would again be under the influence of Iran.18 In addition, the expression “Irane bozorg” reminiscent of the mighty Persian emperorship, has again become one of the most used terms in today’s press. The study of Iranian-Armenian relations from the perspective of the 90s gives rise to an idea of “doctrines” and “principles” in the foreign policy of both countries to be directed with the interference of third parties.19 While dividing the relations between the two countries into three stages, we can see a direct correlation between the
18 Abdollah Ramezanzadeh, mentioned work, p.68 19 Fred Halliday, “Condemned to React, Unable to Influence: Iran and Transcaucasia”, John F. R. Wright, Suzanne Goldenberg, Richard Schofield (der.), Transcasucasian Boundaries, New York, St. Martin’s Press, 1996, pp. 71-88

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development dynamics and regression of these relations and the interventions by the West and Russia. From this context, the first stage of Iranian-Armenian relations covers the years of 1991-2001. In particular the Nagorno-Karabakh conflict and Iran’s relations with Russia and the West can be considered the determinants influencing the relations between the two countries in this stage. Also Iran considered the interests of the West in the region’s energy resources and its willingness to develop relations with the South Caucasus countries as a potential danger for its national security. Notwithstanding its irredentist policy starting with the occupation of Nagorno-Karabakh, Armenia received from the West necessary financial aid, and, thanks to the activity of the Armenian Diaspora in the United States, even prevented issuance of the financial aid allocated for Azerbaijan within the “ Freedom Support Act.” 20In this context, the formulation of Iranian-Armenian relations and its dynamic development gave rise to an idea that the ideological principles in the national security and foreign policy of Tehran are contradicting each other, and there is even a disparity in the approach itself which is on two opposing poles. Thus, as to the conclusions of parties claiming that national interests are prioritized in Iran’s foreign policy instead
20 The Freedom Support Act of 1992 (Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act [1], FSA, HR 282) is an act passed by the United States Congress. It is not to be confused with the Iran Freedom and Support Act of 2005 (S 333).

of ideological principles, there is reason to state that Tehran cannot meet national interests, because Armenia receives more support from the West, and follows an aggressive policy. In the geopolitical reality of the 90s, according to the parties claiming that Iran follows a foreign policy that is based on religious ideology, the occupation of the territories of Azerbaijan, which is the only Muslim country in the South Caucasus, the destruction of the cultural heritage of Muslims and violence perpetrated against them contrasted with the Islam religion and its cohesive role in Iran’s foreign policy. The abovementioned shows that the arguments of parties, which have been used in describing the dynamic development of the Iranian-Armenian relations, are weak. The support for these two countries’ relations corresponds to the following geopolitical interests: 1. Efforts to balance the relations developing between Turkey and Azerbaijan; 2. Fight against the increase of the West’s activity on the ground of economic interests in the South Caucasus region; 3. Vision of Tehran to use on the global stage the Armenian lobby against the Jewish lobby in the United States; 4. Vision of Tehran to get a chance to increase its political power in the region through using the policy of Armenia against Turkey and Azerbaijan; 5. The prolongation and lack of a solution in the Nagorno-Karabakh conflict are
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hampering the efforts of Turkey and Azerbaijan to permanently deal with this issue and to strengthen their role in the region. During this stage, economic relations with Iran were of significant importance for Armenia. In the Nagorno-Karabakh conflict, Tehran demonstrated political “will” in the direction preferred by Armenia. The diplomatic relations between the two countries started with Iran’s recognition of the independence of Armenia on 25 December 1991. Iran demonstrated political support for Armenia and took over the role of the second biggest protector of this country after Russia. The actions taken by Armenia were

Hovanisyan, visited Tehran and two weeks later a delegation under the leadership of Iranian Minister of Foreign Affairs Vilayeti visited Yerevan. Official meetings were held, and the first steps were taken in the field of diplomatic relations. In November 1992, the Commission for Development of Armenian-Iranian Relations was established in Yerevan with the Decree signed by the President of Armenia Levon Ter-Petrossian. In order to increase the efficiency of this entity, a forum of Iranian and Armenian businessmen was established under the Iranian-Armenian Chamber of Commerce which managed by Levon Aharonyan, an Iranian Armenian. The main objective of both entities was to prevent the increase of Turkey’s

an incentive for the development of relations at the initial stage. Thus, on 9 February 1992 a delegation headed by the Armenian Minister of Foreign Affairs Rafi
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activity in the region, and the growth of Azerbaijan’s economic potential.21 In or21 Iran’s Security Policy in the Post-Revolutionary Era, Impact on Foreign Policy, RAND Report, 2001, http://www.rand.org/ pubs/monograph_reports/MR1320/MR1320.ch6.pdf

Iranian-Armenian Relations geopolitical reality political statements

der to strengthen this political objective, a bridge was constructed over the Aras River as the main link for trade between the two countries. This bridge saved Armenians from economic isolation during the Nagorno-Karabakh war. Later, the construction of the Mehri-Gacharan tunnel and a bridge over the Aras River were projected as an indicator of the development of relations between the two countries, and in 1996 they were put into operation with the financial support of the Australian Armenians.22 The main indicator of the rapid development of bilateral relations was when Iran took first place in trade relations with Armenia. Iran, who anxiously faced U.S. support in the construction23 of the BakuTbilisi-Ceyhan oil pipeline, stayed outside of regional projects because of its fears. Notwithstanding all these, through giving shares in the “Shahdeniz” project, Azerbaijan still tried to develop bilateral relations with Iran and to help to normalize relations of Tehran with the West. The main specific feature of this period was the development of the Iranian-Armenian relations, which were based on Iran-Russia relations. The second stage in the Iranian-Armenian relations covers the years of 20012008. In this period the interest of the West in the South Caucasus increased in the context of the international/U.S. fight against terrorism, and in its turn, this was an incentive in the integration of regional countries to the West. One of the main elements of
22 Also there, p.12 23 Svante E. Cornell, “Iran and the Caucasus”, Middle East Policy (Jan 1998, v5, n4), p. 59

the Iranian foreign policy in this period was in respect to outside interference and foreign intervention in regional affairs, including the issue of regional security. In 2001, there was tension in bilateral relations with Iran’s intervention into the Azerbaijani Caspian sector. During that period Armenia fixed the speed of the development of its relations with Iran relative to Russian-U.S.

Ambassador of Iran in Yerevan Mohammed Fahrad Koleyni stated to the former Minister of Foreign Affairs of Armenia Vardan Oskanyan, “Don’t you think it would be more correct to use the word “multilateral relations” instead of “complementarizm” when describing your foreign policy?”
relations. The development of Russian-U.S. relations in the field of anti-terrorism impacted negatively the relations of Armenia with Iran. Thus, it drew special attention in 2002 when the U.S. State Department imposed sanctions24 on Armenia accusing it of selling chemical equipment to Iran, and the Government of Armenia took a step back.25 Armenia drew back immediately as a result
24 US imposes sanctions on Armenian entities, 5/9/2002,http:// www.nti.org/db/nisprofs/armenia/excondev.htm 25 Armenia: Westward Foreign-Policy Shift Brings Unease in Iran http://www.eurasianet.org/departments/insight/articles/ eav100502.shtml

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of the pressure, and put in danger its “effective relations. Namely after this event, the Ambassador of Iran in Yerevan Mohammed Fahrad Koleyni stated to the former Minister of Foreign Affairs of Armenia Vardan Oskanyan, “Don’t you think it would be more correct to use the word “multilateral relations” instead of “complementarizm” when describing your foreign policy?”26 As seen, Tehran understood that not Armenia, but Russia was the party defining the strategy in its “strategic” relations since 2001.

in the region, that Armenia was looking for alternative ways to balance this power in the South Caucasus and that it would evaluate the Iranian-Armenian natural gas pipeline as an alternative project.27 Obviously, the reason for Iranian-Armenian relations to get closer and to develop more rapidly since 2004 was based on having a “joint fight” against the increase of Azerbaijan’s economic power in the region. Notwithstanding the steps taken in this “joint fight” between the parties, Russia

However, since 2004 the transformation of the Baku-Tbilisi-Ceyhan project from “a legend into reality” stimulated the development of Iranian-Armenian relations. On 26 May 2005, the Prime Minister Andranik Margaryan explained in his interview with the press in the Armenian parliament that the Baku-Tbilisi-Ceyhan pipeline shattered the balance of power
26 Also there

kept its means to neutralize the impact of Iran over Armenia. The impact of Moscow over Armenia was in two forms. 1. The cooperation developing between the two countries in the field of energy with the participation and control of the Russian “Gasprom” as the most obvious example demonstrating that Iranian-Ar27 Nana PETROSYAN, ‘Bakü-Tiflis-Ceyhan Bölgede Güç Dengesini Bozuyor’, http://www.azg.am/&num=2005052604

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menian relations are not based on independent foreign policy28. According to the energy agreement between Iran and Armenia signed in 2004, the total project value was fixed in the amount of 120 million USD. But at the completion of the pipeline the financial value of the project reached 220 million USD. In addition, Iran was expecting to export to Armenia 36 billion cubic meters of natural gas. With a length of 141 kilometres, 41 kilometers of the pipeline would be constructed within the borders of Armenia and Iran would allocate to Armenia a loan of 30 million USD. Then President of Armenia Robert Kocharyan, who could not get a positive response from Moscow when the project was in the forefront, decreased the diameter of the pipe to be constructed from 1400 mm to 700 mm, which diminished its economic efficiency for Armenia. Thus, Armenia was deprived
28 Kaweh Sadegh-Zadeh, Iran’s Strategy in the South Caucasus, Caucasian Review of International Affairs Vol. 2 (1) – Winter 2008 , p. 37.

of the opportunity to sell natural gas of Iran to markets of third countries, and limited itself with appreciating the natural gas it got in electricity generation. 2. The increase of Armenia’s economic dependence on Russia, in other words, “Kaliningradation”29 of Armenia gave Russia the opportunity to manage at will the speed of development of the IranianArmenian relations. In particular, the main sectors of the Armenian economy passed to the supervision of Russia since it gave or sold to the latter the economic properties of strategic importance at a low price as a result of Russia’s demand to pay back the debts.30 The absolute majority of properties purchased by Russia with
29 Even though Kalinigrad is the territory of Russia, it does not have any geographical relation with it. Here “kalinigradation” is used not as a geographical adherence, but in the meaning of “owning”. 30 Danielyan, Emily. “Russia Tightens Grip on Armenia with Debt Agreements.” Eurasianet.org. 6 May 2003. http://www. eurasianet.org/departments/ business/articles/eav050703. shtml.

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big promises have never been put into operation. These are mainly mobile communication operators, gas and power distribution networks and banks which refer to the production sphere. It should be noted that the U.S. aid to Armenia was 1.6 billion USD during 1992-1995 in contrast to Russia owning strategic properties in

planned for 2017 with the development of the “Mezamor” Nuclear Power Station (NPS) and signature of the second agreement with Russia, there was another unsuccessful attack on Yerevan’s plans to use nuclear power in the region that Iran could not obtain for the time being. The Armenian experts note with irony that

return for the debt in the amount of 93 million USD. At the same time, there was no decrease in the aid provided by Washington and the achievement of economic efficiency was not considered as a priority in answer to that31. Thus, Moscow demonstrated that Armenia’s policy, which claimed to be “independent” and mutual with Iran and other countries, was in reality under the supervision of Russia. And at the same time, even though the use of new Nuclear Power Station was
31 Mainville Michael. “Second-Largest Recipients of U.S. Aid, Armenians Fight To Get Ahead - August 9, 2005”. The New York Sun. 9 Aug. 2005

the management of the planet of Mars depends on the management of Mezamor.32 These indicators and the trade volume between Iran and Armenia let to state that Russia was the most winning party in answer to financial aids and investments of Iran. The third period in the Armenian-Iranian relations covers the period after the year 2008. In August 2008, the incident of
32 Alkhazashvili, M. “TBILISI: IAEA Chief Visits Armenian Nuclear Power Plant Metsamor”. Armenian News for Diaspora. 3 Aug. 2005. 09 Nov. 2010. http://www.armeniandiaspora. com/ showthread.php?33864-TBILISIIAEA-chief-visits-Armeniannuclear-power-plant-Metsamor.

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the Russian-Georgian war increased Iran’s importance for Armenia and its economic interest primarily. In particular, recognizing the independence of Abkhazia and South Ossetia and stopping peacemaking operations, Russia changed the vector of its military power; as a result the relations of Tbilisi with Moscow were complicated. This, first of all, resulted in the closure of the Georgian “door,” which is the only way out for Armenia. Namely, the start of the Turkish-Armenian normalizing process was directly connected with the plan of Yerevan to get free from the “geopolitical pincers” and try to prevent the impact of the global economic crises through foreign investments in the country. It should be noted that the loss of the efficiency of Armenia’s economy since 2000 has resulted in a generation of shadow economy and its concentration in the hands of 44 oligarch families.33 One of the results of the global economic crises is the increase in poverty in Armenia’s population. Even though the official figures presented by Armenia show that it includes 25% of the population,34 according to calculations of the World Bank, it covers more than 50% of the population.35 As a
33 Khachatrian, Haroutiun. “Competitive Edge: The pitfalls of monopolies, and the challenges of a business influenced parliament”. ArmeniaNow.com. 04 Jan. 2008. http://www. armenianow.com/special_issues/agbumag/8033/ competitive_edge_the_pitfalls_of_m. 34 Griffin, Kieth, Thomas Kelley, Terry McKinley, Bargat Asatryan, Levon Barkhudaryan, and Armen Yeghriazarian. Growth, Poverty, and Inequality in Armenia. Rep. United Nations Development Programme, 2002. Print. 35 “Armenia Data”. Data of the World Bank. Web. 29 Nov. 2010. <http://data.worldbank.org/country/armenia>.

result of the failure in economic policy, the share of Armenia’s foreign trade deficit to GDP was 20%. Iran, which did not achieve the expected results in Iranian-Armenian relations and whose plans to get political power over Yerevan through economic support were unsuccessful stepped into a new “quality” stage in its relations with Yerevan. In this stage, the efforts of Iranian officials to demonstrate political support to Yerevan with

The Armenian experts note with irony that the management of the planet of Mars depends on the management of Mezamor.
their statements36 and speeches, which clearly for political gain, geopolitical benefit perspective, are seen as uncertain in the foreground. It is clear that Tehran gains neither political, nor economic profit in return for lack of mutual economic efficiency in the relations between the two countries in the present stage, and it’s mainly benefitting Yerevan. However, the conflicting issues arising from growing interests of big powers in the region strengthened this cooperation. The Karabakh problem and the magnitude of the national revival movement
36 These statements are outburst of interference into internal affairs of Azerbaijan. See: Former Iranian Ambassador to Armenia: Azerbaijan appeared in isolation http://www. panorama.am/en/politics /2011/02/09/ ambassador-iran/; Azerbaijan’s accumulation of weapons unpleasant, Iranian ambassador says http://news.am/eng/news/47316.html

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among Azerbaijanis in the south made Iran and Armenia strategic partners. Thus, Iran strengthens Armenia with economic and political steps taken in the South Caucasus and sacrifices its relations with Azerbaijan for this policy. At the same time, in this “new stage,” the Armenian and Iranian officials try to gloss over religious difference of Persians and Armenians in their speeches about historical affinity. In this respect, in February 2011, the congratulations by the Armenian Patriarch Sibve Sargsyah on the 32nd anniversary of the Islamic revolution in Iran attracted attention.37 It is known that religion is the key factor in the formation of a nation. Nations feel affinity to each other not only because of their racial features, but mainly for the community of religious belonging. In this context, the Islamic religion is the main factor uniting Turks and Persians in the power of Muslim Turks who ruled the state of Iran periodically. When taking all these points into account, in order to clarify the relations serving new bilateral benefits, there is a need to analyze how both parties see the relations from the perspective of geopolitical importance.

1.2. The vital importance of Iran for Armenia
In light of economic difficulties faced in respect to the non-constructive policy pursued in the region, the gap of doctrinal principles in Yerevan’s foreign policy, and
37 Tehran Armenian patriarch felicitates supreme leader and president, 8/2/2011 Islamic Republic News Agency/IRNA NewsCode: 30232861

contradictions in the practical application of theoretical principles are obvious. Armenia appears to be a “weak state”38 in respect to following principles and doctrinal inspiration in their foreign policy. After gaining independence, there were efforts to follow Western-Russian interests on the one hand, and relations were regulated with the regional countries such as Iran, on the other. However, the absence of the “complementarism” policy of Yerevan, which became gradually the “orbit” of Russia through selling its state property, was clear in 2003. Meanwhile, even though the geopolitical features that create Armenia’s “blockade-like-feeling from geographical and political sides increase its fears, it cannot provide the necessary means to protect itself. Yerevan, which is afraid of its neighbours with its fears rapidly becoming a “phobia,” accepts non-hostile countries as competitors, and this increasingly works against Armenia. Thus, Armenia in this situation openly falls under the influence of, first of all, the Russian and Armenian Diaspora and other actors. It is possible to state that Armenia, whose geographical position cannot be changed, is more anxious about feeling it inevitably must take defensive and foreign political decisions and be directed from outside this environment, than to choose these decisions. The importance of Iran for Armenia has been reflected in the steps taken in the de38 Richard Giragosian, Toward a new concept of Armenian National Security, Prepared for third Annual AIPRG International Conference 15-16 January 2005 The World Bank Washington DC, p.2-3

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velopment of bilateral relations and in the strategic documents adopted since 1992. In the National Security Concept of Armenia that has been in force since February 2007, it is stated that the rationale for relations with Iran are developed within “common borders, historical affinity, cultural relations and economic interests” and are characterized as strategic objectives.39 The strategic paper openly states that Iran’s role is essential for Armenia to get free of isolation and get access to the Middle East. Taking into account all these issues, the following opinion of the president of Armenia in respect to the importance of Iran clarifies once more these relations: “Iran is a very important country for Armenia; it is not because we have been neighbours for ages and are still neighbouring countries. There are other reasons as well. Actually, Iran is one of two countries in the world that we have relations with. If we have problems with Iran, it means that the pipe for Armenia to breath gradually narrows.”40 It is possible to state that the following approaches defined in the National Security Concept of Armenia are not applied in reality or have failed: Even though Iran tried to have alternative to the energy corridor through cooperating with Armenia in the field of energy, it is obvious that the effort of Armenia
39 National Security Concept of Armenia, pp.19-20, http:// www.natoinfo.am/eng/publications/documents/NationalSecurity_eng.pdf 40 Эхо Москвы / Передачи / Интервью / Четверг, 27.01.2011: Серж Саргсян, президент Армении http://www. echo.msk.ru/programs/beseda/744902-echo.phtml

failed to create “independently” alternative means taking into account that it sold strategic properties to Russia in 2003 and “Gasprom” had big share in energy projects. 1. The claim that relations between the two countries are supported by economic efficiency:

Even though Iran tried to have an alternative to the energy corridor through cooperating with Armenia in the energy field, it is obvious that the effort of Armenia failed to create “independent” alternative means taking into account that it sold strategic properties to Russia in 2003 and “Gasprom” had a big share in energy projects. At the same time, the hopes of Iran to “manage” Armenia through economic projects were in vain.
The projects implemented in the region, but bypassing Iran and Armenia have an impact on both countries’ approaches to each other. Notwithstanding that the crossing of the Baku-Tbilisi-Ceyhan pipeline through the area of Armenia is economically favourable, Armenians stepped
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aside from this project because of current relations with Azerbaijan. Besides not depending on the existence of the Gars-Gumru railway, the building of the Baku-TbilisiAkhalkalaki-Gars railway destroyed the hopes of Armenia to participate in regional infrastructure projects and to be a transit country. Even though Iran tried to have an alternative to the energy corridor through cooperating with Armenia in the energy field, it is obvious that the effort of Arme-

Another factor playing an important role in the closer relations of Tehran and Yerevan is that the relations intended for important and mutual strategic support did not meet expectations for the provision of awaited aid and political support. Yerevan’s approach “as political ally” to the sanctions imposed against Iran’s nuclear activity may inhibit his alliance in all respects. It is known that, at present, financial and economic sanctions of the West (U.S.) are

nia failed to create “independent” alternative means taking into account that it sold strategic properties to Russia in 2003 and “Gasprom” had a big share in energy projects. At the same time, the hopes of Iran to “manage” Armenia through economic projects were in vain. 2. The claim that relations between the two countries express strategic and mutual support:
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applied against Iran based on the resolution of the UN Security Council. For this reason, Tehran makes efforts to normalize its relations with close neighbors, tries to keep them from joining the sanctions and is forced to enlarge cooperation with them41. Even though Armenia considers, in doctrinal papers, the sanctions imposed against Iran as an economic danger to its
41 Harout Ekmanian, Armenia-Iran Relations In Light Of Recent Developments, Armenian Weekly – 24/11/2010

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national security, it does not have strength to meet the demands of Iran. The fact that Yerevan follows Moscow in the nuclear issue clearly shows the failure of “complementarism,” or rather that the term does not correctly express the foreign policy of Armenia. Thus, Russia’s position, that was close to Tehran’s in the nuclear programme of Iran, is important. According to the latest discussions on the nuclear problem, Russia interfered with Iran’s plans on uranium concentration. The Russian officials stated their regret for the ineffective completion of the meeting of the “group of six” (Five plus one – big states) about this issue held in Istanbul on 21-22 January 2011. The most obvious example is the statement Russia President Medvedev made at the international forum in Davos, “Iran should convince the world that it develops atomic power for peaceful purposes.”42 Iran wants the Armenian lobby to balance to some extent the Jewish lobby, which supports the application of even stricter sanctions and has definite influence in the definition of the U.S. policy in respect to this country, and influence to some extent on the policy of Obama’s ruling party to prefer discussions with Iran. Even though Armenia was helpless to officially support Iran, it helped Tehran through the Iranian financial entities in implementation of the nuclear programme. The “Bank Mellat” of Iran has been providing financial means for Iran’s nuclear pro42 Медведев: «Иран должен убедить мир, что развивает мирный атом», РИА Новости 27.01.2011, http://1news.az/ region/Russia/20110127120447791.html

gramme since 2003. Millions of USD was transferred to Iran from the branch office of the bank in Yerevan (Mellat Bank SB CJSC).43 Contrary to these two approaches, the important role of Armenia for Iran was confirmed in the following issues: 1. Arms sale On the basis of recently revealed “Wikileaks” documents, it is possible to say that arms transferred by Armenia to Iran resulted in the death of U.S. soldiers in Iraq. The following notes are reflected in the documents leaked to the press in connection with this:

The “Bank Mellat” of Iran has been providing financial means for Iran’s nuclear programme since 2003. Millions of USD was transferred to Iran from the branch office of the bank in Yerevan
“In 2003, Iran purchased rockets and machine guns from Armenia. In 2007, these weapons were used in two Shia militant attacks in Iraq. A United States soldier was killed and six others were injured in these attacks.” The United States was especially concerned about the direct participation of high-level Armenian officials in the transfer
43 Iran’s Dirty banking- How the Islamic Republic skirts International Financial Sanctions, p.3, http://www.redcellig.com/ media/Irans_Dirty_Banking.pdf

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of arms to Iran44, and in 2008, the United States even wanted to impose sanctions on Armenia. It became evident that antitank rockets RPG-22 were manufactured in the Vazovski Machine-building plant and machine guns were produced by the “Arsenal” company of Bulgaria. The agreement was

2. Drug trafficking One of the areas of “strategic” importance to Iran-Armenia relations is drug trafficking. As stated in the reports of the United Nations Office on Drugs and Crime, drug trafficking is carried out throughout the 132 kilometer territory under occupation. After the disruption of the “Balkan Route,” this was the main international narcotics transit route until the end of the 90’s, drug mafia opened new transit routes. In this regard, Azerbaijan’s territories occupied by Armenia have turned into a profitable sphere of trade for the Armenian ruling elite. The facts illuminated in Armenian sources also prove that former President Robert Kocharyan and current President Serj Sargsyan created favorable conditions for the plunder of natural resources of Azerbaijan’s occupied territories, as well as use of these territories by international drug mafia. Armenia’s ruling elite has links with the international drug mafia. Part of the profit gained from the transit of drugs through Nagorno-Karabakh is being spent for maintenance of armed forces of the separatist regime and its provision with weapon and food. The “International Narcotics Control Strategy Report” prepared by the U.S. Department of State on March 2, 2010 states that especially Iran and Afghanistan are the main transit countries in transport of drugs to Europe. Azerbaijan shares a 611
sargsyan-hakobyan-did-not-deny-armenias-arms-transferto-iran-wikileaks/

The facts illuminated in Armenian sources also prove that former President Robert Kocharyan and current President Serj Sargsyan created favorable conditions for the plunder of natural resources of Azerbaijan’s occupied territories, as well as use of these territories by international drug mafia.
signed by the “Zao Veber” company of Armenia (part of their shares are state-owned) and the “Abdi Asjerd” arms company of Iran. According to American claims, the Iranian government paid money for arms, but did it secretly through an Armenian bank. It should be noted that the documents were signed by then-Defense Minister and current President Serzh Sargsyan. This fact was widely disseminated and confirmed in the Armenian press.45
44 US embassy cables: US fury at Armenia over arms transfers to Iran, Guardian 28 November 2010, http://www.guardian. co.uk/world/us-embassy-cables-documents/184879Vazovski 45 Sargsyan, Hakobyan Did Not Deny Armenia’s Arms Transfer to Iran: WikiLeaks, http://www.epress.am/en/2010/12/07/

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km frontier with Iran and its law enforcement agencies face difficulty in the fight against illegal trafficking of drugs because of the inability to control the occupied regions (132 km of the border)46. At the same time, the report notes that 95 percent of drugs originating in Afghanistan are transported through Iran and uncontrolled areas in the conflict zone. Nagorno-Karabakh, which is identified as an “uncontrolled area” in most international reports, is open space for the transit of drugs and activities of terrorist groups. It has already been confirmed that these “uncontrolled” gray zones are one of the main places of development of cooperation between Iran and Armenia and activities of clan groups. The 132 km border between Azerbaijan and Iran, which is under the de facto control of Armenia, has been actively used for production, transit of and trafficking in drugs, arms and human beings, illegal migration, concealment of terrorists, money laundering and other dangerous types of transnational crime. The facts and the proof about international threats posed by the occupied regions and transit of drugs from Iran to Europe with the help of Armenian clans as stated in the speech of the Azerbaijani delegation in the First International Meeting of high officials responsible for security issues held in Sochi on October 5-6, 2010, confirm this once again: “Because it is beyond the sphere of national and international law, this zone remains inaccessible for adequate and timely
46 http://www.state.gov/p/inl/rls/nrcrpt/2010/index.htm

response to the aforementioned threats. Therefore, we regard the issues connected to the settlement of the Nagorno-Karabakh conflict as a key part of the work to ensure national and regional security and prevent terrorism and other threats.”47 Information on participation of Armenian officials in the drug trade with Iran shows that transfer of drugs between the two states is carried out through the occupied Nagorno-Karabakh and Armenian political elite, including Levon TerPetrossian, personally profit from this trade.48

1.3 “Strategic” importance of Armenia to Iran
The study of Iranian-Armenian relations reveals that Yerevan has a specific status in foreign policy concept and regional policy pursued by Tehran after the Islamic revolution of 1979. This distinct status is not about historical foundations and rationality of relations between the two states; on the contrary, it is about the shaping and development of relations contradicting both Iran’s foreign policy concept and its national interests. Arguments of this can be found in the doctrinal principles existing in Iran’s foreign policy.
47 «Международный терроризм наряду с оккупацией территорий Азербайджана Арменией - угроза национальной безопасности страны», http://www.1news.az/poli://www.1news.az/poliwww.1news.az/poli.1news.az/polinews.az/poli.az/poliaz/poli/polipolitics/20101012012848473.html 48 WikiLeaks: former President Ter-Petrossian was personally profiting from narcotics trade to Iran, http://www. panarmenian.net/eng/world/news/60585/WikiLeaks_former_President_TerPetrossian_was_personally_profiting_from_ narcotics_trade_to_Iran

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It has been confirmed that political Islam stands at the center of Iran’s foreign policy in the region. The process of the emergence of political Islam in this country coincides with the period of a strained relationship between religion and politics after the Islamic revolution. There was need for a strong, unifying ideology, based on radicalism in some respect, against a reactionary policy pursued by big states in the region. This vacuum had gradually been filled with ideology of political Islam feeding on “Shia solidarity.” Consequently, the political environment of the Middle East totally changed, becoming rich with radicalism, terrorism and extremism, and close cooperation of the region’s electorate with political Islam began. Considering the aforementioned, incompatibility of Iran-Armenia relations with the nature of Teheran’s foreign policy could also be seen in its foreign policy principles: - Thus, the first principle of Iran’s foreign policy is that it has the nature of Islamic revolution49. Taking into account that every revolution has a revolutionary theory in its foundation, the revolutionary feature of Iran’s foreign policy can be seen in the motto of “Neither the East, nor the West – Islamic Republic”50 proclaimed in 1979. - The second principle is that it has a totalitarian nature. In other words, all
49 Mehdi Mozaffari, Iranian Ideological Foreign Policy, Centre for Studies in Islamism and Radicalisation (CIR), Denmark, April 2009, 50 The article 151 and 152 (as well as 3, 5 and 11) of the constitution of Iran are also based on these theses on independence. The aim of Imam Khomeini was to create an independent state free from both the west and the east.

economic, political and military issues should be in conformity with the requirements of Islam. The totalitarian nature of the regime can be seen from the concentration of political leadership in the hands of the religious elite and the reference to this point in Article 110 of the state’s constitution.51 - The third principle is that it opposes the “Westphalian system.” That is to say, the Iranian regime rests upon Islamic Umma (Ummat-e Islam). This, in turn, lies in the opposite pole of a frequently expressed idea of “Iranian nation” (“Mellat-e Iran”) based on ethnicity.52 The ideology of the state can be described by the term “Islamic Land” (“Vatan-e Islam”) and this principle requires defending not the land, but Islam and umma.53 Protection of Islam should be shaped on the basis of protection of all Muslim countries and their citizens. - The fourth principle is Persian chauvinism and its character of imperialistic ambition in foreign policy. While Iran had been portrayed as the leader of the Islamic world during the reign of Khomeini, in subsequent periods, it became limited only to the Shia world.54 Tehran, which fears the negative influence of this on the role of Iran in the region, accused the United States of using this moment to turn Iran against
51 The Constitution of the Islamic Republic of Iran, Article 4, p. 20. 52 Mohammad Reza Djalili, Diplomatie islamique: stratégie internationale du Khomeynisme (Paris: PUF, 1989), pp. 58-63. 53 Mehdi Mozaffari, the given work, p. 12 54 Karim Sadjadpour, Reading Khamenei: The world view of Iran’s most powerful Leader (Washington DC: Carnegie Endowment for International Peace, 2008), p. 25.

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Sunnite Arabian countries. However, Iran’s leadership role in the Islamic world is not accepted by Sunni Arab states and this claim seems unrealistic. At the same time, Iran should maintain its hegemony in the region through schematic combination of political, cultural and non-traditional military methods and find such a security system that it becomes impossible without Iran to reach an optimal solution in Iraq, Afghanistan, Lebanon, the Arab-Israeli conflict and generally in all states of the Persian Gulf. In considering the application of the aforementioned principles of Iran’s foreign policy relative to Armenia, it becomes evident that the development of relations contradicts the doctrine. At the same time, a similar picture comes to the fore after the systematization of relations of the two countries in geopolitical reality: 1. Strategic – even if it is claimed that Armenia plays an important role in helping Iran to overcome isolation in the region, it is clear that this is not a strategic criterion; in order to overcome an economic decline after the Iraqi war in 1991 and the isolation imposed by the West, Iran needed to expand financial resources and develop trade relations with the newly independent states. In comparison, the present trade turnover between Iran and Armenia has not yet reached the level of turnover in the first years of Iranian-Azerbaijani economic relations. This proves once again that as a strategic criterion, it is beneficial to Armenia, not Iran.

2. Geographical – Armenia received access to the seas; if Iran gives Armenia access to the seas, then Armenia cannot give any incentive to Iran to extent its cooperation with Russia, which is considered to be strategic for Tehran, since it has become impossible for Armenia to access the seas without Georgia.Taking into account that Armenia is the “outpost” of Russia, it is important for Iran’s for interest to consider the geopolitical reality not of Yerevan, but of Moscow. In this case, Tehran is aware that the “neutrality” of Armenia or its response when the West imposed sanctions, is not its free choice. 3. Geopolitical – Taking into account that Armenia is the “outpost” of Russia, it is important for Iran’s interest to consider the geopolitical reality not of Yerevan, but of Moscow. In this case, Tehran is aware that the “neutrality” of Armenia or its response when the West imposed sanctions, is not its free choice To the question of whether relations between the two countries have strategic importance for both parties, the answer given in today’s reality is distinctly in favour of Yerevan. This fact will result in strengthening relations of Armenia and Iran long term. The bilateral relations between Armenia and Iran are regulated based on more than 200 papers signed at high levels. Among them, there are agreements for cooperation in the military field as well. As mentioned before, recently Iranian officials made statements expressing sup25

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port of Yerevan, and interference into the affairs of “third” countries, which is not relevant to ethnic-diplomatic values. The majority of these statements are directly connected with the “concern” in respect to the rapid arming of the region around the Nagorno-Karabakh conflict. At this time, it is interesting to examine the role of Iran in the Nagorno-Karabakh conflict and its attitude towards the solution of the conflict.

1.4 Iran’s position on the Nagorno-Karabakh conflict
In its foreign policy principles, Iran claims to be the leader state of the Islamic world, but it becomes evident that the policy pursued by Iran with regards to the conflicts of the Muslim world is in contradiction with its ideological and doctrinal principles. Proceeding from the claims of the Sunni world that the leadership of Iran in the Islamic world is real only for the Shia, then it also becomes clear that Iran’s leadership in the Islamic world is paradoxical. From this standpoint, Iran, which indicates the issue of “Palestine” as the factor of Islamic solidarity in its foreign policy, in reality, aims at gaining political benefit – creating an anti-American frame of mind in the Arab world by symbolizing this problem. But it is not obvious that Iran is interested in the resolution of the problems of the Muslim world. The paradox in Tehran’s policy becomes more evident with regards to the Nagorno-Karabakh conflict. On the one hand, in their statements Iranian officials consider Karabakh as the territory
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of Azerbaijan; on the other, they try to portray the conflict as a war between Azerbaijan and the Armenians of NagornoKarabakh. Even though they declare that Karabakh is a historical territory of Azerbaijan, in practice, they want the problem to remain in the present condition without turning into a hot war. Especially, against the background of the declarations of Iran defending the interests of Yerevan in the Nagorno-Karabakh conflict, Iran’s role in the resolution of the conflict is interesting. Since 1991, Iran’s position on the Nagorno-Karabakh conflict has been as follows: First, Iran strengthened Armenia with its economic aid during the period of the conflict and turned a blind eye to the occupation of the Azerbaijani territories. Armenia’s continuation of occupation during this time, after the official visit of Iran’s Foreign Minister Ali Akbar Vilayati to Baku for mediation in the Nagorno-Karabakh conflict in December 1991, and the occupation of the Shusha city by Armenian forces while the leadership of Azerbaijan was negotiating with Armenia in Tehran laid down the foundations of this disloyalty.55 Second, even though Iran does not want the Nagorno-Karabakh conflict to turn into an active military operation, it is interested in the maintenance of the status quo from two aspects: 1. It is considered that as long as the conflict continues, it will have a negative effect on the economic development and the
55 Iran-Azerbaijan relations, see: http://library.aliyev-heritage.org/az/6163780.html

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strengthening of statehood of Azerbaijan. To put it in the words of Zbigniew Brzezinski, former U.S. national security advisor: “If Azerbaijan achieves a political stability and economic development it needs, Iranian Azerbaijanis will fight for the realization of the idea of “Great Azerbaijan”.56 From this standpoint, even though it does not impose any danger, the “preventionism” of Tehran shows that it considers the weakness of a Muslim state as its reason for existence (raison d’être), which is contrary to its ideological foreign policy principles. 2. One of the issues discussed within the resolution package is the deployment of the peacekeeping forces of the West, to be more precise, of a third party in the region after the signing of a political agreement. In the case of peacekeepers, Iran, which is concerned about the deployment of the United States in the region, opposes the implementation of this idea through various means and emphasizes this as a threat to its national security.57 Thirdly, the “neutrality” of Tehran, which has been claiming to be interested in mediation of the settlement of the Nagorno-Karabakh conflict since the middle of 2010, raises suspicions. Especially, Iran’s military cooperation with Armenia and the nature of the signed agreement give rise to this. Thus according to the memorandum of cooperation signed between Armenia
56 Zbigniew Brzezinski. The Grand Chessboard American Primacy And It’s Geostrategic Imperatives, 1998, p.143 57 Tehran says will oppose ‘American forces’ in Karabakh, http://www.armenianow.com/karabakh/23799/iran_karabakh_us_peacekeepers

and Iran in Yerevan in 2002, in the areas of defence and security , the two sides are mutually cooperating starting with the exchange of military school students to the establishment of joint enterprises that will produce products for defensive purposes. Under the agreement signed between the ministries of defence of Iran and Armenia, the two states will cooperate on the provision of the home front. According to the experts, the agreements signed in the field

The 132 km border between Azerbaijan and Iran, which is under the de facto control of Armenia, has been actively used for production, transit and trafficking of drugs, arms and human beings, illegal migration, concealment of terrorists, money laundering and other dangerous types of transnational crime.
of defence are directed straight against Azerbaijan.58 Under such conditions, it becomes clear that there are no diplomatic grounds for the recent efforts of Iranian officials to promote the negotiations on the resolution of the Nagorno-Karabakh problem between the parties to the conflict as a “neutral” power.
58 Şabanov Gündüz, İran: siyasət milli maraqlarla ziddiyyətdə, http://www.525.az/view.php?lang=az&menu=10&id=26015

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To put it in the words of Tatul Hakobyan, the expert on foreign policy of the Civilitas Foundation of Armenia, “In 1992-1994 official Tehran was the main supporting point for Armenia in its integration into the world at the most difficult times,” 59and today the peaceful efforts of Tehran can be evaluated as attempts to help Armenia overcome difficult situations. At the same time, the fact that Iran turns a blind eye to trafficking in drugs and human beings in the occupied territories of Azerbaijan is an example of the creation of “gray zones.” The 132 km border between Azerbaijan and Iran, which is under the de facto control of Armenia, has been actively used for production, transit and trafficking of drugs, arms and human beings, illegal migration, concealment of terrorists, money laundering and other dangerous types of transnational crime. All of these factors make it possible to say that Iran adheres to a “hypocritical” position on the settlement of the NagornoKarabakh conflict. Iran’s policy, groundless claims and declarations with regard to the conflict show that Yerevan prefers the logic of the proverb “the enemy of my enemy is my friend.”

Armenia, it is possible to describe this cooperation as the relations as one-sided. Otherwise, the fact that the aforementioned historical-political relations are not “deep” is more evident in the economic indexes. Diagram 1. Disproportion in Iran’s economic relations with Azerbaijan and Armenia

Source: Data on the volume of domestic and external market are collected from “The Global Competitiveness Report. 2010-2011”, data on foreign trade turnover with Iran are taken from the State Statistical Committee of Azerbaijan and National Statistical Service of Armenia

2. Iranian - Armenian economic relations
Paying attention to the economic indexes of the relations between Iran and
59 Harout Ekmanian, Armenia-Iran Relations in Light of Recent Developments, 24 November 2010, http://www.armenianweekly.com/2010/11/24/ekmanian-armenia-iran-relations-in-light-of-recent-developments/

According to 2009 data, Iran has a 4.7% share in total exports and 4.9% share in imports with Armenia, which ranks it respectively 9th and 6th among trade partners of Armenia.60 Iran’s exports to Armenia amount to less than 0.05% share in our southern neighbour’s GDP. It means that the importance of Armenia’s market for Iranian economy is about five hundredths
60 Export and import of the Republic of Armenia by countries, 2010, http://www.armstat.am/file/doc/99461633.pdf

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of one percent, which does not have statistical significance. Conversely, these economic relations are of vital importance to Armenia. Iranian officials make statements about their wishes to increase trade turnover between the two states to 500 million61 and even 1 billion US dollars.62 Thus, Iran pursues an unrealistic goal of reaching and surpassing Russia in foreign trade turnover with Armenia. As a comparison, Russia’s trade turnover with Armenia in 2009 reached 900 million US dollars63, which is less than the figure aimed at by Iranian officials. Moreover, Iran’s trade relations with Armenia are restricted within the framework of Russia’s interests and are unpromising. Russia would agree with the development of trade relations with Armenia and Iran only on the basis of the unfavorable trade regime for the Islamic republic. It is no coincidence that the volume of Iranian-Armenian foreign trade between 1996 and 2009 increased just by 1.7 million US dollars. Taking into consideration the exchange devaluation, in real terms, it is a decrease. Such circumstances once again prove that Russia has accepted Iran’s participation in the Armenian economy within narrow limits and Iran’s wish to strengthen trade in Armenia is “tilting at windmills”. There is no logic in Iran’s inter61 Иран намерен наращивать преимущественно экономическое сотрудничество с Арменией, http://www. regnum.ru/news/1181385.html 62 Ирано-армянская дружба, или Пара слов о «моральном» праве судить соседей, 2011, http://1news.az/ analytics/20110124012408830.html 63 Export and import of the Republic of Armenia by countries, 2010, http://www.armstat.am/file/doc/99461633.pdf

est in establishment of economic relations with Armenia under unfavorable conditions and at Russia’s bidding. According to the calculations of the World Economic Forum, while Azerbaijan ranks 84th in the world on GDP Armenia occupies 111th place. On the volume of

It is no coincidence that the volume of Iranian-Armenian foreign trade between 1996 and 2009 increased just by 1.7 million US dollars. Taking into consideration the exchange devaluation, in real terms, it is a decrease.
foreign trade Azerbaijan is 60th and Armenia is 129th among countries. In reality, Iran should have been more interested in foreign turnover of commodities with Azerbaijan, whose scale of domestic and foreign markets is relatively bigger. For example, Iran’s foreign trade turnover with Armenia made up 195 million US dollars in 2009, turnover of commodities with Azerbaijan would have much more potential than this. In truth, Iran’s trade turnover with Azerbaijan in 2009 made up 86% of the volume of foreign trade with Armenia, totaling 169 million US dollars. Iran’s establishment of increased trade with Armenia rather than Azerbaijan, which possess29

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Table 1. Dynamics of export and import operations from Armenia to Iran (in million US dollars)

Source: National Statistical Service of Armenia es a developed infrastructure that would ensure a larger market and better economic relations, as well as religious, historical, linguistic and cultural affinity with Iran, is irrational from an economic point of view. In comparison, Azerbaijan’s trade turnover with Turkey, which has closed its borders with Armenia and cut off economic relations, exceeded 1 billion US dollars in 2009, more than 4-5 times than the volume of foreign trade between Iran and Armenia. It is noteworthy that Iran and Turkey have similar economic potential. The experience of Turkey shows that it is more beneficial to refuse economic relations with Armenia and cooperate with Azerbaijan. Iran should not overlook a country with economic power such as Azerbaijan for the sake of reaching the limited market of Armenia.

According to the calculations of the World Economic Forum, while Azerbaijan ranks 84th in the world on GDP Armenia occupies 111th place. On the volume of foreign trade Azerbaijan is 60th and Armenia is 129th among countries. In reality, Iran should have been more interested in foreign turnover of commodities with Azerbaijan, whose scale of domestic and foreign markets is relatively bigger.
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2.1. Syndrome of “lack of electricity” in Iran
The efficiency of investment interests of Iran in Armenia are questionable, as

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Armenia has the smallest economy in the world, which ranks 30th for its domestic market and 10th for its foreign market.64 If Iran, which has the 2nd largest natural gas resources in the world, is forced to import natural gas because of lack of investment, then what is the economic efficiency of investments planned to be made in Armenia? Which “feasibility study” supports the investments made in the 186 kilometer gas pipeline to Armenia and promises a daily supply of 6.3 million cubic meters of natural gas, while Iran needs Azerbaijan in order to supply the northern regions with “blue fuel”? It is not possible to explain, based on economic principles, the investment of 323 million USD by Iran, which is 19th for electricity production and 20th for consumption, for the construction of the Mehri Hydro Power Station (HPS) over the Araz River and its agreement to hand over the power station to Armenia after 15 years. If Armenian officials try to explain the efficiency in the purchase of electricity in return for the sale of gas to Armenia, they will have difficulties in providing a logical explanation. If a raw material (natural gas) is sold and a ready product (electricity) is purchased in return, then it means that something economically valuable in this production chain is gifted voluntarily to Armenia. It should be taken into account that the Development and Export Bank of Iran allocated 30 million USD for the first
64 The Global Competitiveness Report 2010-2011, World Economic Forum

part of the gas pipeline to Armenia, plus the transportation of gas and electricity is accompanied by relevant expenditures and losses. Finally, this transaction damages the energy security of Iran. It should be noted that Iran is among countries using energy most inefficiently, 18.5% of electricity is lost before it reaches consumers.65 The act of importing electricity to Armenia increases losses because of the distance, and it is not good for Iran. Thus, Iran only loses from an economic and energy security point of view when it sells gas to Armenia instead of electricity. And if we add negative reactions of Azerbaijan, Turkey and Russia as well, this transaction is a disadvantage for Iran, and in favor of Armenia. Notwithstanding economic inefficiency, Iran continues its efforts to supply Armenia with electricity. It is not possible to explain, based on economic principles, the investment in the amount of USD 323 million allocated by Iran, which is at 19th place for electricity production and 20th 66 place for its consumption, for the construction of Mehri Hydro Power Station (HPS) over the Araz River and its agreement to hand over the power station to Armenia after 15 years. When this third line will be put into operation in 2013, the energy swop operations between the two countries will double.67 In this case a question arises: What
65 http://www.iran-daily.com/1388/3374/html/economy. htm 66 https://www.cia.gov/library/publications/the-world-factbook/geos/ir.html 67 Power Swap With Armenia Will Double, http:// w w w. i r a n - d a i l y. c o m / 1 3 8 9 / 1 0 / 2 / M a i n Pa p e r / 3 8 5 2 / Page/4/?NewsID=32317

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By constructing a gas pipeline to Armenia, Iran wanted to transport natural gas through this country to Georgia, Ukraine and even Europe in future. However, the Iranian regime miscalculated the situation and especially overlooked the fact that Armenia was actually the post of Russia and this led to a total failure of Iran’s intention. The point is that Russia understood Iran’s purpose and immediately took possession of the Razdan Heating Power Station and “ArmRosqazprom”, which controls Armenia’s gas network (80% of shares belongs to Russia’s “Gazprom”, 20% owned by the government of Armenia).
does Iran gain from this transaction? First of all, taking into account that the demand for electricity in Iran has increased by 10% annually and subsidies have decreased68, it is more important to create new energy sources in the country than to
68 http://www.entrepreneur.com/tradejournals/ar ticle/197642455.html

support the invader, Armenia, in this field. Secondly, while annual electricity production in Armenia is 1800 kW/hr per capita, this indicator is about 3000 kW/hr in Iran. Thus, Iran spends its population’s money for the energy security of Armenia. Thirdly, the aridity in 2007-2008 demonstrates that there are breaks in the activity of the HPS in the region..69 In this case, what is the interest of Iran, which is a country rich with energy, in the construction of a HPS? All of the abovementioned points do not explain Tehran’s support to Armenia that is relevant to neither material, nor moral principles.

2.2. Iran wants to transform Armenia into a gas corridor
By constructing a gas pipeline to Armenia, Iran wanted to transport natural gas through this country to Georgia, Ukraine and even Europe in future. However, the Iranian regime miscalculated the situation and especially overlooked the fact that Armenia was actually the post of Russia and this led to a total failure of Iran’s intention. The point is that Russia understood Iran’s purpose and immediately took possession of the Razdan Heating Power Station and “ArmRosqazprom”, which controls Armenia’s gas network (80% of shares belongs to Russia’s “Gazprom”, 20% owned by the government of Armenia). It was enough for Russia just to dictate its will to Armenia. Thus, Iran’s intention to transport gas
69 Энергетичекие интересы Ирана в �аспийском Регионе, Альберт Зульхарнеев, Индекс Безопасности, №2, 2009

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to Europe through Armenia passed under the control of Moscow with timely interference of Russia. In the face of the strong reaction of Russia, which did not want to have a rival (such as Iran, with 29 trillion cubic meters of gas reserves) in the gas markets of Georgia, Armenia and Ukraine, Iran’s economic diplomacy directed at Armenia ended in failure. Even if today Iran clears the “Gazprom hurdle” in Armenia, it will not be able to overcome the “Chinese Wall” created by the West in Georgia. The Iranian regime has already understood that its gas agreements with Armenia did not achieve both regional economic and long term geopolitical goals and only played into Russia’s hands in Armenia. In addition to this, Azerbaijan, with its flexible diplomacy in this area, is on the eve of realizing what Iran failed to gain in the territory of Georgia. Azerbaijan occupies a dominant position in Georgia’s natural gas infrastructure and even the State Oil Company of the Azerbaijan Republic (SOCAR) intends to buy a gas pipeline through Georgia that supplies Russian natural gas to Armenia. The Mullacracy should now think about whose words Georgia is going to speak: Azerbaijan’s, which is a friend, or Armenia’s and Russia’s, which are hostile countries? Or maybe the Mullacracy, which is enemy number one of the West, thinks that Iran will have any serious influence on Georgia – the closest partner of the West in the region? If Tehran intensifies its cooperation

with Azerbaijan in the gas sector, it can meet its wasted expectations. For this, Iran should unthread the gas labyrinth set up by Russia in Armenia. If Iran rejects Armenia, there is a big potential for the development of Azerbaijani-Iranian cooperation in the gas sector. In January 2011, the main terms of the contract on Azerbaijani natural gas transaction were signed between the SOCAR and National Iranian Gas Export Company. Under the main terms, the contract will be signed for 5 years, Azerbaijan will supply 1 billion cubic meters of gas to Iran in 2001 and the volumes to be supplied will be reviewed each year.70 The point is that even though Iran’s main gas reserves are concentrated in the south of the country, the northern part is more industrially developed. Therefore, there is more need for natural gas (according to the calculations of the US Energy Information Administration (EIA), the south of the Caspian Sea, i.e. Iranian sector holds 0.1 billion barrels of proven reserves and 15 billion barrels of estimated reserves). In these circumstances, Iran can buy natural gas from Azerbaijan without any additional investment and supply it to the northern regions rather than transport a limited natural gas to Armenia and work for “Gazprom”. In January 2009, Iranian deputy oil minister Hossein Shirazi stated that Iran was ready to invest 1.7 billion US dollars in the development of Phase 2 of the Shahdeniz field.71 It should be noted that Na70 http://socar.az/3004-news-view-az.html 71 Энергетические интересы Ирана в �аспийском Регио-

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tional Oil Company of Iran has a 10% share in Shahdeniz field. Thus, for the first time, Iran can closely participate in a large scale development of hydrocarbon resources of the Caspian Sea through involvement in the field owned by Azerbaijan. It would be more beneficial for Iran to approach Azerbaijan and participate in Phase 2 of a globally important Shahdeniz field rather than its fruitless cooperation with Armenia.

There are arguments that Georgia will receive dividends as a transit country after the construction of the North-South railway, but these arguments are counteracted by the West, which is against the dominance of Russia and Iran in the region, and seeks to influence the policy of Tbilisi.

2.3 Armenia is a “depot” for railways
Another form of ineffectual IranianArmenian economic relations reveals itself in the efforts to establish railway corridor between the two states. Even Armenia’s Minister of Transport and Communication, Manuk Vardanyan, stated that they were searching for financial resources for the feasibility study of the North-South railway72, which has been discussed for years. How can Tehran agree to this project, when Armenia cannot even finance the feasibility study of Iranian-Armenia railway? The creators of the North-South railway concept through Armenia, which is planned to connect Russia and Iran in the long-term perspective, forgot one nuance: the factor of Georgia. Georgia’s national interests are against the growth of Russia’s influence in the region and especially the realization of the process by Armenia, which has territorial claims against Georgia.
не, Альберт Зульхарнеев, Индекс Безопасности,№2, 2009 72 http://www.arka.am/rus/transport/2011/01/25/23616. html

Russia accepts Iran’s right to participate in the Armenian economy within a restricted framework: Tehran plays a technical service role for Armenia in force majeure circumstances.

Thus, the North-South railway line that is going to connect Iran and Armenia will have the same fate as the gas pipeline that links the same points. The North-South is the railway going to depot: there is no sense to spend 2 billion US dollars for this. Because Russia accepts Iran’s right to participate in the Armenian economy within a restricted framework: Tehran plays a technical service role for Armenia in force majeure circumstances. The Georgian events of 2008 also showed that in order to prevent a total blockade of Armenia, Russia should always leave open “the vent-light” from its post to Iran. Considering Russia’s imposing limits

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as well as Armenia’s restricted domestic market, the construction of a railway for 2 billion US dollars cannot make any economic sense. The cost reimbursement ratio of the railway at the cost of 2 billion US dollars is very low in order for Iran to carry out foreign trade relations with Armenia,

If Iran wants to become a transit country in the North-South corridor, it should cooperate with Azerbaijan, which is in more a favorable position because of shortness of distance, lower transportation costs and available transport infrastructure.

worth on average 200 million US dollars annually, and this project is also unprofitable. In reality, first vice president of Iran Mohammad Reza Rahimi declared his country’s intention to construct the railway: “This railway will link Armenia to other states through Iran”.73 As evident, in circumstances of a lacking investment environment, Iran agrees to the railway project for establishment of Armenia’s relations with outside world. If Iran wants to become a transit country in the North-South corridor, it should cooperate with Azerbaijan, which is in more a favorable position because of
73 Joint Economic Commission With Armenia, http://iran-daily.com/1389/8/5/MainPaper/3811/Page/4/?NewsID=28565

shortness of distance, lower transportation costs and available transport infrastructure. It is intended to construct an Astara (Azerbaijan)-Astara (Iran) railway line and railway bridge on the Astarachay river to connect Azerbaijan and Iran’s railway networks. The new Qazvin-RashtAnzali-Astara railway, line with a length of 370 kilometers, should be constructed in the territory of Iran to connect an IranAzerbaijan-Russia railway network on the corridor. In line with reports, construction of this new railway has been included in the development plan of Iranian railway network and an initial feasibility study has been carried out.74 According to the conducted analysis, the volume of expected transportation of goods in the Azerbaijani part of the corridor will increase up to 2 million tons in the first 3 years, 5-6 million tons in the second phase and 15 million tons in the third phase, when the direct railway connection will be established. Thus, Azerbaijan’s contribution to the development of the North-South corridor will be considerably higher in comparison with Armenia, the regional back street. While all economic calculations are in favor of Azerbaijan, Iran’s preference in the construction of the North-South railway for Armenia, which is disadvantageous with respect to transit, is hard to understand. Even Armenian authors agree that the construction of the Kars-Akhalkalaki or the Batumi-Rize, as well as Qazvin-ReyAstara railways, the establishment of road
74 Şimal-Cənub beynəlxalq nəqliyyat dəhlizi, http://www. azerbaijan.az/_Economy/_Ways/ways_04_a.html

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and railway connection between the main part of Azerbaijan and Nakhchivan through the territory of Iran will result in Armenia’s isolation.75 When Armenians themselves admit that they have reached a deadlock, Iran’s attempts to help them overcome this deadlock by investing millions of US dollars is like raising the dead, and this policy does not have any economic grounds.

2.4. Iran helps Armenia even more through decreasing subsidies to its population
There is no result in searching for efficiency and a number of questions arise in the study of inefficient economic relations between Iran and Armenia. In particular, one of the factors giving rise to these questions is the statement of the Minister of Oil of Iran, Masud Mirkazim, “a new oil pipeline will be laid starting from Tabriz in Iran up to the border of Armenia”.76 The fact is that Iran hardly meets the oil demand of its northern regions thanks to the increase of the production capacity of oil refineries and improvement of infrastructure. As a result, it goes into swop operations with Kazakhstan and Turkmenistan, and returns back to the Persian Gulf in the south the oil it purchased from them for its refineries in the north (Rey, Tabriz and Neka). Iran does not have infrastructure to transmit the oil produced in the
75 Новые геоэкономические тенденции на Южном �авказе, Игор Мурадян, 2010, http://geopolitika.ru/Arti://geopolitika.ru/Artigeopolitika.ru/Arti.ru/Artiru/Arti/ArtiArticles/993 76 Iran to boost energy exports to Armenia, 2011, http:// www.tehrantimes.com/index_View.asp?code=235090

south to the regions with developed industry in the north. In this case, Iran meets the demand of refineries in the north at the cost of the Turkmen and Kazakh oil. When there is a lack of oil in the north of Iran, what is the economic logic in laying a new oil pipeline to Armenia? Is not it better for Iran to meet demand of its northern regions, and then to think about Armenia? How is it possible that while decreasing internal subsidies given to oil products, Iran increases subsidies to Armenia?

2.5. “Black roads” to Armenia
The road agreed between Russia, Iran and India within the Northern-Southern corridor is planned to cross the territory of Armenia. However, the constructing this road, which is not because of economic efficiency, but rather a result of political intrigues, is unpromising. It is not by chance that the winner of the bid announced for the construction of the Yerevan-Ashtarak part of 11.7 kms of the Northern-Southern road was not notified and then failed.77 A well-minded investor would never put millions of USD for a project in danger, which is economically inefficient and serves only to put Armenia on its feet. The risks (commercial, political and so on) of this project are high. Even if Iran joins the most powerful anti-Azerbaijan coalition, it cannot make Armenia a transit corridor. Even for the most pessimistic calculations, Georgia
77 Проект строительства второго участка автодороги Север-Юг будет готов в марте 2011 года – министр, http:// www.miacum.ru/gazeta/2010/12/24/Проект_строительства_ второго_участка_автодороги_Север-Юг_будет_готов_в

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receives annually a transit profit78 in the amount of 250 million USD because of the opportunities opened by Azerbaijan, and that makes up 10% of Georgia’s state budget. It is not real that Iran goes against Baku and opens a new corridor over Armenia. There are two more arguments strengthening the idea of Georgia blocking the development of the Iranian-Armenian transit vector towards Europe: Azerbaijani residents in Georgia are the biggest investors and tax payers. Thus, the geo-economic importance of Azerbaijan is associated not with the paradigm of “corridor” but “regional transit centre”. Tehran should accept Azerbaijan not as an object, but as a party, and regional player having strong influence and leverage. From this point of view, demo projects of Iran realized in Armenia against the will of Azerbaijan are a loss of resources and time for Tehran.

78 Новые геоэкономические тенденции на Южном �авказе, Игор Мурадян, 2010, http://geopolitika.ru/Articles/993

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CONCLUSION
During the study of Iranian-Armenian relations in the political and economic fields, it is possible to make a number of conclusions for both countries from the point of view of geopolitical benefit. From the Armenian point of view, the conclusions can be systematized in the following order: First of all, the historical development of the Iranian-Armenian relations starting from the ‘90s was going in the way Russia that permitted Yerevan, and the relations were directly dependent from the development speed of the Russian-Iranian relations. And even if Moscow was not interested in the isolation of Armenia from regional transport projects, it tried all means to “Kaliningradise” Armenia, i.e. to keep it under control. If we look at the situation, the efforts to establish necessary economic logistics to break Armenia dependence on Moscow are condemned to failure, as the majority of Armenia’s large scale entities are under Russia’s control. The Armenian economy is virtually dependent on Russia. In this case, it would be wrong to state that Armenia freely follows independent foreign policy with Russia, since the Iranian-Armenian border is protected by Russia in every sense. Secondly, we can see the failure of the “complementary” political course in the foreign policy of Armenia. As the result of unsuccessful foreign policy of Armenia,
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the annual loss in the GDP is 10-13%.79 Besides, both Armenian and international experts accept the non-existence of the foreign political course under the name of “complementarism”. The case, when the US State Department imposed sanctions80 on Armenia, accusing it of selling chemical equipment to Iran, and the Government of Armenia retreated81, can be an example of the nonexistence of “complementarism” directly related to Iran. As it is expected, Armenia drew back immediately as the result of the pressure, and put in danger its “efficient” relations. Namely, after this event, the Ambassador of Iran in Yerevan, Mahammad Koyelini, stated to the former Minister of Foreign Affairs of Armenia, Vardan Oskanyan: “Don’t you think it would be more correct to use the word “multilateral relations” instead of “complementarism” when describing your foreign policy?”82 The most correct evaluation of Armenia’s foreign policy was stated by the former president of the country, Levon Ter-Petrossian, during his speech at “Freedom” square on 8 December 200783:
79 Lev Freinkman, Cost of Closed Borders for Armenia Trade, Journal of Economic Policy and Poverty,2010, p.9 80 US imposes sanctions on Armenian entities, 5/9/2002,http:// www.nti.org/db/nisprofs/armenia/excondev. htm 81 Armenia: Westward Foreign-Policy Shift Brings Unease in Iran http://www.eurasianet.org/departments/insight/articles/ eav100502.shtml 82 Ibid 83 Levon Ter Petrosian, “History, Ideology, Typology”, Speech at Freedom Square, 8 December, 2007, available at http:// www.levonforpresident.am/?lang=eng

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“Robert Kocharyan and Serzh Sargsyan consider Armenia as their own property, and share it with their family members and far relatives. The officials dismissed in Karabakh were immediately employed in Armenia. And the Karabakh people gradually took over the entire business environment of our country.” While dealing with the Karabakh clan and foreign Diaspora as their desired result, the government deals with the Moscow, since Armenia’s economy is paralyzed because of the sale of important state property to Russia in 2003 and the global financial crisis. This type of foreign policy course cannot be called “complementarism” or “a balanced policy”. Thirdly, Armenia provoked the official intensification of relations with Iran, after the gas crisis between Russia and Ukraine in January 2009, it was reported about the will of European countries to normalise their relations with Iran and efforts of Yerevan to develop its relations in the name of protecting the country’s interest.84 In reality, even though the origination of this paradigm is justified to some extent with energy interests, it seems impossible for Yerevan to follow a foreign policy far from “Russian” influence. It is possible to note two cases that happened quite recently. First of all, when in April 2006 Russia marked up the price of gas transported to Armenia and closed the Verkhniy Lars crossing point at the Russian-Georgian border (the only one land connection of
84 “Agenda for Armenian Foreign Policy 2009-2010”, Yerevan, Armenia, 2009, p.38, http://www.acgrc.am/Agenda%20 for%20Armenian%20Foreign%20Policy%202009-2010.pdf

Armenia with Russia), even a number of pro-Russian politicians had doubts in respect to the reliability of Russia’s policy towards it’s the most faithful partner, in this case Armenia. Secondly, in the months of June-July 2010, the Armenian press highlighted that the development of military situation was against the development of the country as a failure of the state, and characterised Armenia as being under the influence of Russia as “a bad copy”85 of Russia and noted the emerge of negative tendency as the result. In particular, the fear in Armenian society continued until Russia signed the agreement in August extending the period of the use of military bases of Russia in Armenia. All these obviously indicate that Russia has political and economic means permitting to protect its interests in Armenian society, Moscow has deep roots which gives a chance to balance Iran-Armenian relations when a dangerous moment might come and turn it for its benefit. In respect to Iran, the following conclusions can be made: First of all, while constantly talking about “brotherhood and Islamic solidarity” with Azerbaijan, the Iranian officials deprive millions of Azerbaijanis of the opportunity to have education in their native language and have cultural autonomy. However, they protect cultural and religious interests of the Armenian minority. Thus, today in Iran there are 29 special edu85 Arman Melikyan: Armenia is a bad copy of Russia, 17 August 2010, http://www.panarmenian.net/eng/politics/ news/52225/

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cation centers for Armenians. We can refer to kindergartens, secondary schools and lyceums here as well. The Armenians living in Iran have the right to read and write in their native language.86 The official Eastern Armenian language is used in Iran. There are approximately 200 education and cultural units of the Iranian Armenians. Secondly, the Iranian National Oil Company has 10% of shares in the “Shahdeniz” project. Notwithstanding that in 2001 the Iranian vessels attacked the Azerbaijani territory in the Caspian Sea, and were withdrawn through diplomatic measures of Azerbaijan and the unofficial response of Turkey. Even though Azerbaijan develops bilateral relations also in the energy sector, Tehran tries to realize projects that do not have any economic perspective. In addition, as the result Iran’s sharp and inexpiable position in the definition of the legal status of the Caspian Sea, the problem has not yet been solved. Since Iran evaluates the presence of the West in the region as a threat to its national interests, Tehran’s energy policy cannot be successful. Even though the biggest project, “Nabucco” of the EU “Southern Corridor” is in big need of Iranian gas, Tehran’s position, which is against its national interests, makes the participation of the country in this project impossible. Thirdly, Iran sharply responded to the cooperation of the NATO and the USA with regional countries and considers it as a threat to its security. Even though
86 Arman Poladyan, Religious minorities in Iran, Religion and Society Volume n.910, February 2010, http://hra.am/content/ library/religion-10.pdf

the president of Armenia, Serzh Sargsyan, denies87, according to the memorandum on cooperation signed in Yerevan between Armenia and Iran in the fields of defence and security88, both have the intention to cooperate ranging from the exchange of attendees of military schools to the establishment of joint ventures for production of defensive products. According to the agreement signed between the ministers of defence of Iran and Armenia, both countries will cooperate militarily during the war. In this case, it is obvious that there was no diplomatic justification for the efforts of Iranian officials as a neutral power between the conflicting parties in the solution of the Nagorno-Karabakh conflict. To put it into the words of Tatul Hakobyan, the expert on foreign policy of the Civilitas Foundation of Armenia: “In 1992-1994, Tehran was the main supporting point of Armenia in its integration into the world at the most difficult times”, and today Tehran’s peaceful attempts can be evaluated as efforts to help Armenia to overcome a difficult situation. Fourthly, it becomes obvious that Iran forms its regional policy in the background of the failure of doctrinal principles in its foreign policy. The internal and external changes worries Iran from the perspective of protecting Islamic principles as “Islamic state”.89 The presence of the US in Afghani87 See, Serj Sarkissian’s interview to “Ekho Moskvo”, January 2011 88 Emil Danielyan, Armenia: Yerevan Courts Unlikely New Security Partners -- The U.S. And Iran, Radio Free Europe, Yerevan, 29 March 2002 http://www.rferl.org/nca/features/2002/03/29032002101905.asp 89 Seyid Cəlal Dehkani, Əmniyyəte heste şenaxte dər siyasəte

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stan gives ground to enlarge cooperation with Russia for balancing the power of Iran, and this brings up ideological problems of Iran, supported by Islamic principles. It is impossible to explain by any religious ideology the fact that Iran turns a blind eye to human and drug trafficking in the occupied territories of Azerbaijan and establishes actually a “gray zone”. 132 kilometers of the Azerbaijani-Iranian border, which is, de-facto, under the control of Armenia, have been actively used for the production, transit and trafficking of drugs, arms and human beings, illegal migration, concealment of terrorists, money laundering and other dangerous types of transnational crimes. Thus, in the current situation, the intensification by Iran of its relations with Armenia cannot be considered to be efficient based on the abovementioned economic indicators. At the same time, in the regional situation, it seems unreasonable that Iran interferes into domestic affairs of Azerbaijan when the latter’s policy is to build a close neighborhood and friendship with Tehran. Unlike the ‘90s, today Azerbaijan has economic and military capacity as well as diplomatic skills to respond to such danger. In 1998, the President of Armenia L.Ter-Petrossian invited the Armenian society “to think” in his famous article.9092. It seems there is need for both
xarici Cumhure İslame İran, Revabete Xarici, bahar 1388, 1, s. 54.) 90 War or Peace? Time for Thoughtfulness, Levon TerPetrossian, 1998 http://khosq.com/hy/article/2009/08/06/ war_or_peace_time_for_thoughtfulness_by_levon_ter_ petrossian_1998

Iranian and Armenian officials to think. One should not forget that logical end of thinking is to make a conclusion. In the future, efforts of Iran to develop geopolitical relations with Armenia may increase contradictions with the Islamic world. The geo-economic importance of Azerbaijan is associated not as a “corridor”, but with the paradigm of “regional transit centre”. Tehran should accept its role as a transit regional player. In this respect, demo projects of Iran implemented in Armenia against the will of Azerbaijan will result in lost resources and time. At the present situation, Azerbaijan’s diversified strategy of foreign policy and resources has allowed the finding of a modus vivendi with the regional and non-regional actors. Their peculiar and sometimes contradictory policy will necessitate bringing Iranian-Armenian relations in line with geopolitical logic and Tehran drawing back its support for the occupiers.

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15 February, 2006, http://www.ifri.org/files/Russie/ifri_RNV_minassian_Armenie_Russie_ ANG _fevr2008.pdf Mohammad Reza Djalili, Diplomatie islamique: stratégie internationale du Khomeynisme (Paris: PUF, 1989) Nana PETROSYAN, ‘Bakü-Tiflis-Ceyhan Bölgede Güç Dengesini Bozuyor’, http://www.azg. am/&num=2005052604 National Security Concept of Armenia, s.19-20, http://www.natoinfo.am/eng/publications/documents/NationalSecurity_eng.pdf Nikolay Hovhannisyan, “Hayasdane Anderkafkasyan-Mercavor Arevelyan Aflharhakagakagan Darazaflercani Gorzon”,The Countries and Peoples of The Near and Middle East XVIII, Yerevan 1999 Olivier Roy, “The Iranian Foreign Policy Toward Central Asia”,http://www.eurasianet.org/resource/regional/royoniran.html Power Swap With Armenia Will Double, http://www.iran-daily.com/1389/10/2/MainPaper/3852/Page/4/?NewsID=32317 Richard Giragosian, Toward a new concept of Armenian National Security, Prepared for third Annual AIPRG International Conference 15-16 January 2005 The World Bank Washington DC, p.2-3 Şabanov Gündüz, İran: siyasət milli maraqlarla ziddiyyətdə, http://www.525.az/vi ew.php?lang= az&menu=10&id=26015 Sargsyan, Hakobyan Did Not Deny Armenia’s Arms Transfer to Iran: WikiLeaks, http://www. epress.am/en/2010/12/07/sargsyan-hakobyan-did-not-deny-armenias-arms-transfer-to-iranwikileaks/ Seyid Cəlal Dehkani, Əmniyyəte heste şenaxte dər siyasəte xarici Cumhure İslame İran, Revabete Xarici, bahar 1388 Svante E. Cornell, “Iran and the Caucasus”, Middle East Policy ( Jan 1998, v5, n4), p. 59 Tehran Armenian patriarch felicitates supreme leader and president, 8/2/2011 Islamic Republic News Agency/IRNA NewsCode: 30232861 Tehran says will oppose ‘American forces’ in Karabakh, http://www.armenianow.com/karabakh/23799/iran_karabakh_us_peacekeepers Tensions in Iran’s National Security Strategy http://reut-institute.org/en/Publication. aspx?PublicationId=1769 The Constitution of the Islamic Republic of Iran The Global Competitiveness Report 2010-2011, World Economic Forum Thomas Friedman, As Ugly as It Gets, New York Times, 26 may 2010 http://www.nytimes. com/2010/05/26/opinion/26friedman.html?hp=&pagewanted=print# US embassy cables: US fury at Armenia over arms transfers to Iran, Guardian 28 November 2010, http://www.guardian.co.uk/world/us-embassy-cables-documents/184879 US imposes sanctions on Armenian entities 5/9/2002, http://www.nti.org/db /nisprofs/a rme nia/excondev.htm US imposes sanctions on Armenian entities, 5/9/2002, http://www.nti.o rg/db/nisprofs/armenia/excondev.htm Vahan Bayburtyan, “Hay-İranagan Haraberutyunnere Hayasdani Angahutyan Zerk Berumis Hedo”, The Countries and Peoples of The Near and Middle East XVII, Erivan 1998, p.11 War or Peace? Time for Thoughtfulness, Levon Ter-Petrossian, 1998 http://khosq.com/hy/ar-

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ticle/2009/08/06/war_or_peace_time_for_thoughtfulness_by_levon_ter_petrossian_1998 WikiLeaks: former President Ter-Petrossian was personally profiting from narcotics trade to Iran, http://www.panarmenian.net/eng/world/news/60585/WikiLeaks_former_President_TerPetrossian_was_personally_profiting_from_narcotics_trade_to_Iran Yossef Bodansky & Vaughn S. Forrest, Iran’s European Springboard?, September 1, 1992, http:// www.srpska-mreza.com/Bosnia/bodansky1.html Zbigniew Brzezinski. The Grand Chessboard American Primacy And It’s Geostrategic Imperatives, 1998 Иран намерен наращивать преимущественно экономическое сотрудничество с Арменией, http://www.regnum.ru/news/1181385.html Ирано-армянская дружба, или Пара слов о «моральном» праве судить соседей, 2011, http://1news.az/analytics/20110124012408830.html Ирано-армянская дружба, или Пара слов о «моральном» праве судить соседей, 2011, http://1news.az/analytics/20110124012408830.html Медведев: «Иран должен убедить мир, что развивает мирный атом», РИА Новости 27.01.2011, http://1news.az/region/Russia/20110127120447791.html Новые геоэкономические тенденции на Южном Кавказе, Игор Мурадян, 2010, http://geopolitika.ru/Articles/993 Новые геоэкономические тенденции на Южном Кавказе, Игор Мурадян, 2010, http://geopolitika.ru/Articles/993 Проект строительства второго участка автодороги Север-Юг будет готов в марте 2011 года – министр, http://www.miacum.ru/gaz eta/2010/12/24/Проект_стр оительства_второго_ участка_автодороги_Север-Юг_будет_готов_в Рамиз Мехтиев: «Международный терроризм наряду с оккупацией территорий Азербайджана Арменией - угроза национальной безопасности страны», http://www.1news. az/politics/20101012012848473.html Энергетичекие интересы Ирана в Каспийском Регионе, Альберт Зульхарнеев, Индекс Безопасности, №2, 2009 Энергетичекие интересы Ирана в Каспийском Регионе, Альберт Зульхарнеев, Индекс Безопасности, №2, 2009 Эхо Москвы / Передачи / Интервью / Четверг, 27.01.2011: Серж Саргсян, президент Армении http://www.echo.msk.ru/programs/beseda/744902-echo.phtml

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Iranian-Armenian Relations geopolitical reality political statements