The Threats of Turkish-Azerbaijani Infiltration into Armenia's Economy Are Real

The spread of the coronavirus pandemic, followed by the war in Artsakh, has dealt a severe blow to Armenia's economy. In light of the new regional realities, a critical issue for our country is to revitalize economic development after experiencing significant and irreversible losses. This is also linked to the preservation of our statehood and sovereignty, as economic development can create preconditions for restoring the country's military capabilities, reducing emigration and unemployment levels, and improving the currently dire demographic situation.

Furthermore, the larger a state's economic potential, the more attention it receives from external players on the international stage. While some growth is observed in Armenia's economy, experts assess that this growth is only noticeable compared to the total lockdown period of last year and against the backdrop of the catastrophic events of autumn, and its volume is far from what is necessary for rapid recovery. However, the authorities, in their old habit of seeking political dividends, are attempting to present the existing indicators as unprecedented phenomena.

Simultaneously, representatives of the current ruling party link the prospects for Armenia's economic development to the unblocking of communication routes in the region and the normalization of relations with Turkey and Azerbaijan. However, engaging economically with Turkey and Azerbaijan presents more serious dangers than opportunities for development.

Perhaps it is evident today how Turkey and Azerbaijan are utilizing their economic levers to influence the political landscape of various countries. In this context, Armenia's two neighboring adversaries are employing a targeted investment policy.

If Ankara can expand Turkish influence through investment projects across various countries from the Balkans and Africa to Central Asian states, Azerbaijan primarily leverages its potential in supplying energy resources. For instance, Azerbaijan's state oil company, SOCAR, holds a dominant position in the Georgian market for gasoline and fuels through its subsidiary, SOCAR Energy Georgia. Moreover, it has been Georgia's top taxpayer for years and continues to be a major employer. SOCAR also invests in charity programs in Georgia. Naturally, the Georgian authorities cannot overlook this reality.

If Baku is using its energy leverage in various countries, one can only imagine how aggressively it might attempt to penetrate the Armenian energy market, establish dominance, and dictate its agenda. Considering such a danger, it is not surprising that the statement made by Minister of Economy Vahan Kerobyan has received significant attention in the media, stating that his ministry is discussing an investment project worth $60 million aimed at creating a new network of gas stations in Armenia. According to him, this investment project originates from Georgia.

It is no wonder that following this announcement, alarm bells are already ringing in the media and broader public circles. The issue is that the media has uncovered that the project will be implemented by the well-known wealthy David Yakobashvili, who heads the Petrocas Energy Group, responsible for oil product transports through Georgia. It is also the railway transporter of fuel to Armenia. Notably, Petrocas Energy Group claims that they are purchasing their oil products from Russian Lukoil, Romanian Rompetrol, Greek Hellenic Eco, and Azerbaijani SOCAR. Furthermore, Azerbaijani media have reported possibilities that Yakobashvili may be selling oil purchased from SOCAR to Armenia.

Although Yakobashvili's company states that only Romanian and Greek oil is supplied to Armenia, the commercial operations occur through such complex offshore networks that tracking them is virtually impossible. Thus, the reasonable suspicions circulating in the Armenian media regarding SOCAR's wish to infiltrate the Armenian market through a proxy company seeking to establish a monopoly through dumping practices are not unfounded.

It is very strange that a Georgian investor wishes to make such a significant investment in Armenia precisely under the circumstances created by the war. What prevented him from making this investment, for instance, before the war, when the situation was more stable? And the issue does not end solely within the framework of this project. It is likely that unexpected foreign investors with backing from Turkey and Azerbaijan may suddenly emerge in the near future. The dangers stemming from the objectives of the Turkish-Azerbaijani tandem are more than real, but the issue is also connected to the behavior of Armenia's current authorities. Will they be able to thwart the dangers originating from Turkey and Azerbaijan by seriously analyzing the suspicious investment plans, or will they prefer to continue their “brotherhood” with the Turks and, for the sake of a slight economic shift, which they could declare as the arrival of promised investments, sell off the last remnants of Armenia's sovereignty and decision-making capabilities? Despite what we are discussing, experience shows that these authorities are capable of any move.