Balances might change in Caucasus

The embargo against Iran is lifted. What does this mean for Armenia, which is in economical and commercial cooperation with Iran? We tried to answer this question with Caucasus Institute Director Aleksander İskandaryan.

5 countries that are permanent members of UN and Germany (P5+1) negotiated the nuclear program of Iran and as a result, the embargo against Iran was lifted last week. This development  means that the restrictions on banking and business sector of Iran were also lifted to a considerable extent. So, what does this mean for Armenia, which is in economical and commercial cooperation with Iran? We tried to answer this question with Caucasus Institute Director Aleksander İskandaryan.

Stating that this development will affect Armenian economy in a positive way, İskandaryan also thinks that this won't be a rapid process: “Effects of this development on Armenian economy won't take place right away. This is an ongoing process. Indeed, there will be progress. When Iran's condition and financial condition start to get better, this change will improve. However, this won't be happen overnight.”

İskandaryan pointed out that some joint projects with Armenia are proceeding slowly, since Iran's financial sources are limited and said that this situation will change. “There are some projects that cannot be realized because Iran's financial sources are 'closed'. For instance, there is a hydroelectric power plant project on Aras River between Armenia and Iran. With this, Armenia will give more electricity to Iran. There is a road project that will link Bandar Abbas, which will pass through Armenia and Georgia, to Black Sea. Such projects cannot be realized because of financial problems and this situation might change.”

Iran offered gas with cheaper prices to Armenia before, but Armenia didn't answer in the affirmative and nothing happened. İskandaryan also mentioned this issue: “Armenia is already receiving gas from Iran. They produce energy by this gas, because Iran has no capacity to produce energy on the north of the country. With this new plan, Iran will give more gas to Iran and Russia will give more gas to Georgia. This means that this development is important not only for Armenia-Iran relations, but also for Iran-Georgia-Armenia-Russia relations. There is no need to built new ways to transfer gas from Iran to Georgia. Iran would give more gas to Armenia and Georgia will receive gas from Russia. Such plans might be realized.”

İskandaryan also said: “Presently, Georgia receive gas from Azerbaijan, but Azerbaijan cannot satisfy their needs anymore. In Georgia, there is a gas shortage. They want to to take it from Iran, but this is difficult. That is why they thought about such plans.”

Stating that this project can be realized quickly, İskandaryan said: “They only need to come to terms in order to realize this project. This might happen very soon, even in this year.” Iskandaryan also assessed what would happen in Azerbaijan, if Georgia receives gas from Russia instead of Azerbaijan: “Azerbaijan is going through an economical disaster. The country is in the process of collapsing and this will continue. I don't think that this situation can be changed easily and quickly. About a year ago, Azerbaijan's gold fund was around 18 billion dollars, and now, it is below 5 billion.”

Aliyev: We weren't prepared for a decline of prices  

According to Asbarez's report, Azerbaijan President İlham Aliyev said that they weren't ready for such a decline of oil prices. “We were expecting that post-oil period will start 20 years  later, not now.”

Positive messages from Iran 

Alin Ozinian reporting from Armenia:

On January 24, Iran President Hassan Rouhani and Armenia President Serzh Sargsyan spoke on the phone. They talked about the future of regional relations. Pointing out that Yerevan-Tehran relations set an example for the world, Rouhani said that Iran and Armenia should utilize their capacities for linking Persian Gulf to Black Sea. Rouhani also said that Tehran-Yerevan relations keep improving and added: “the sincere and friendly relationship between Iran and Armenia sets an example and the bilateral economical relations will improve, now that the embargo is lifted.” Congratulating Iran state and people about the lifting of the embargo, Sargsyan wanted the relations to improve quickly.

Rouhani will also go on an Europe trip and his first stop will be Italy. Then, he plans to go to Vatican and Paris. It is reported that Rouhani will meet with the Pope. The last time when Iranian state officials were in touch with Europe was 10 years ago. It is claimed that some “association agreements” might be signed during these visits. 


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Varduhi Balyan