Our Analytics 6 july — 14:10

Rouhani and Pashinyan bound by one dream (Our analysis)



Armenian Deputy Prime Minister Mher Grigoryan and Iranian President Hassan Rouhani agreed at the 3 July meeting in Tehran to expand cooperation in a number of areas of mutual interest between the two countries.

It has become a tradition with the Iranian and Armenian mass media to represent meetings of any significant people of the two countries as an epochal event, after which the economic cooperation between Tehran and Yerevan is simply obliged to rush up, expand, deepen and bring huge benefits.

Local commentators are not even embarrassed by the objective indicators of the volume of trade and the place that both parties occupy in each other's foreign trade. And indeed, why ponder over the numbers, if 'everyone knows' that the economic ties between the two countries are 'growing rapidly' today and will strike the imagination of economists tomorrow.

Mher Grigoryan received by Rouhani

A small example. At the end of 2018, in Armenia and Iran, they proudly declared that they had 'reached a record level' in trade turnover, mutually trading as much as $364 million. Forgetting to mention that in 2012 this figure was $380 million. In 2017, the volume of trade between Tehran and Yerevan amounted to about $263.5 million, which was presented in local mass media as an excellent indicator. But how then to deal with the fact that in 2010 it was $285 million?

And here is what is particularly interesting. In the early 2010s, the Armenian-Iranian 'mega-projects,' which are now being actively discussed by officials of the two countries, existed only in the form of expert developments, sketches and drafts. That did not prevent mutual trade of the two countries from demonstrating quite a good momentum, moreover, it was for the period from 2010 to 2012 that the international 'crippling sanctions' against Iran, introduced, by the way, by the UN, were expanded.

And today, when the Armenian-Iranian portfolio is simply already swelling from joint projects - in logistics, in energy, and in other areas - they somehow cannot achieve the performance of those years.

Actually, what kind of mega-projects can we talk about if the volume of mutual trade between Iran and the EAEU, of which Armenia is a member, barely reached two billion dollars last year. And the share of the Eurasian Economic Union in Iran's foreign trade was 2 (two!) per cent. By the way, it is not at all difficult to calculate that Yerevan's share in this volume is about a quarter.

That is, half per cent in the total trade turnover of Iran is the real weight of Armenia as a trading partner and, at the same time, an objective assessment of the realism of those projects that discuss the VIPs of the two countries.

However, when were politicians ever confused by the discrepancy between their declarations and objective reality? The main thing here is not to be silent, but to put forward more and more initiatives, so that society would rather forget about the failed old ones and follow the officials in dreaming of a new magic tool that should certainly help the recovery of the economy.

In full compliance with this simple rule, Armenian and Iranian officials are promoting the idea of the extraordinary efficiency of a free trade zone between the EAEU member countries and Iran. In which, according to local experts, Armenia will be assigned the role of a gate - for Iran to the countries of the EAEU and, accordingly, for the countries of the EAEU to Iran. Moreover, Yerevan in this scheme sees itself as a gatekeeper, or an automaton, which will receive money to open this gate.

The bewilderment of serious experts about the viability and profitability of this scheme in conditions when Iran is methodically driven by sanctions into economic isolation, when foreign business refuses to work with Tehran - Yerevan prefers to ignore. Even the obvious drop in the trade turnover of the Islamic Republic with the economic leaders of the EAEU - Russia and Kazakhstan - does not prevent the flight of imagination of Armenian politicians.

Moreover, for the explanation of this slippery moment, they came up with two iron, in their opinion, arguments.

First, Moscow is also under sanctions, and imported products still go there, through Kazakhstan and Belarus. As a result, Minsk and Nur-Sultan get good money from this.

Second, they believe, the West is more than loyal to both Armenia in general and the new leadership of the country in particular. Therefore, they will simply close their eyes there on Yerevan's shallow pranks with grey import-export schemes. And in any case, it is never too late to once again launch a propaganda campaign. Selling the world fables about the unbearable suffering that the country, which is small but thoroughly saturated with Western values, is experiencing from 'authoritarian' and 'democracy-alien' neighbours - Turkey and Azerbaijan.

Such arguments show only one thing: neither the Armenian leadership nor the Rouhani administration are fully aware of the situation around Tehran. Moscow is not an example here, it is a completely different story, because what Russia is allowed to do for a variety of reasons will not be allowed to Iran and Armenia.

Moreover, hopes for the West's indulgence with respect to the grey schemes of export-import pranks come either from the provincial mindedness or from complete incompetence in the international situation. The United States and its European allies are extremely decisive towards Tehran. The stakes here are extremely high, and the game itself goes on at a level that the provincials simply are not allowed in, and for trying to intervene they can be harshly criticised.

So, all the declarations that we hear in the course of the Armenian-Iranian contacts are not viable a priori. This is another dream. They have no chance to come true, but then, how nice they sound. The only problem is that these dreams remain the only wealth in the relations between Tehran and Yerevan.

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