RUSSIA-ARMENIA RELATIONS

C O N F I D E N T I A L MOSCOW 004912 SIPDIS SIPDIS E.O. 12958: DECL: 10/01/2017 TAGS: PREL PGOV ECON AM RS SUBJECT: RUSSIA-ARMENIA RELATIONS Classified By: Political M/C Alice G. Wells. Reasons 1.4 (B/D). ¶1. (C) Summary. According to the MFA, the September 25 visit to Moscow by Armenian Prime Minister Sarkisyan reaffirmed the historical strong ties between the two countries. Both GOR officials and the Armenian Embassy expressed satisfaction with the direction and extent of bilateral engagement. To the extent that there is a road block to bettering relations, it is Armenia's "troublesome" neighbors, who limit its direct transportation routes to Russia. End summary. Relationship Strong and Growing -------------- ¶2. (C) MFA Armenia Desk Head Aleksandr Zagainov told us October 2 that the historically strong Armenia - Russia relations remain free of contentious issues. The meeting between the two prime ministers, held shortly after Zubkov's appointment as Prime Minister, centered on new economic projects. Although Russia's investment in Armenia is only USD 800 million per year, Zubkov promised to double the amount in the near future. Zagainov noted that despite Armenia's "difficult" neighborhood -- Turkey, Iran, Georgia's Abkhazia and Azerbaijan, bilateral trade reached USD 350 million in the first half of 2007 and is steadily growing. Troubles in the regions force import/exports to transit Ukraine, the Black Sea and Georgia before reaching Russia. Zagainov said that military cooperation is also continuing bilaterally as well as through the Collective Security Treaty Organization (CSTO). Hosting Russian military bases is a tradition for Armenia, added Zagainov. Complementarity Works -------------- ¶3. (C) Armenian Embassy Political Counselor Ara Badalyan echoed the GOR official view. According to him, the secret of success is Armenia's policy of complemetarity, which aims to balance Euro-integration and friendly engagement with Russia, and its traditional diaspora culture that guides Armenian foreign policy. With an estimated two million Armenians residing in Russia, and one and half million in the U.S., the Armenian government cannot afford a difficult relationship with either. That said, Russia remains the biggest importer of Armenian goods. Although the resolution of the Nagorno-Karabakh conflict remains a top priority for Armenia, lack of progress in Minsk Group negotiations has not affected Armenia's relationship with Russia, added Badalyan. 4, (C) Badalyan attributed the slow tempo of bilateral trade to troubles in the neighborhood. In the absence of Transcaucasus railways and a direct route through Abkhazia, Armenia relies on ships through Georgia. Baldalyan criticized the Georgian government for seeking conflict, rather than peace, with the GOR, saying, "The Georgians should learn the Armenian way." Comment -------------- ¶5. (C) While largely a non-event, the Sarkisyan visit underscored the stability in Russia-Armenia relations, which are not expected to be disrupted by the presidential elections scheduled in both countries for 2008. Burns