Oxford Analytica Daily Brief Oct 1, 1997

ARMENIA: Foreign Relations (E)

[Hratch Tchilingirian]

EVENT: A senior presidential foreign policy adviser, Gerard
Libaridian, resigned last month.

SIGNIFICANCE: Libaridian's departure comes at a time when
Armenia has been mounting a relatively successful effort to
build its international ties.

ANALYSIS: On September 15, Gerard Libaridian announced that
President Levon Ter-Petrosian had accepted his resignation as
a senior foreign policy advisor, on purely personal grounds.
Libaridian has been a key architect of Armenian foreign policy
since independence, playing a central role in negotiations
over Nagorno-Karabakh -- Azerbaijan's Armenian-populated
region -- and in warming relations with Turkey. Libaridian
also played an important part in establishing Armenia's
foreign ministry and foreign policy-making processes.

Libaridian was one of several diaspora Armenians to have
played a prominent part in Armenia's foreign policy. Born in
Beirut, Libaridian is a US citizen and will now return to the
United States. Other diaspora Armenians with important
foreign policy functions have included Rafi Hovanisian, the
first foreign minister of independent Armenia, and First
Deputy Foreign Minister Vartan Oskanian, Armenia's chief
negotiator within the Minsk Group of the Organisation for
Security and Cooperation in Europe (OSCE), the principal forum
for international talks on Nagorno-Karabakh. Such diaspora
figures have brought valuable knowledge and experience to the
newly independent state's diplomacy.

Libaridian has no obvious successor. Armenia is still
affected by its shortage of skilled foreign policy personnel -
- its ambassadorial posts to the UN and the United Kingdom
have been vacant since late last year -- but Libaridian's
departure will not be as major a blow as it once would have
been. Several native Armenian diplomats who have served in
the West are returning to Yerevan. Moreover, Libaridian seems
likely to continue to provide ad hoc advice to Ter-Petrosian
in his new capacity as ambassador-at-large.

Foreign policy setbacks. Libaridian's departure from Yerevan
comes as Armenian foreign policy is recovering from last
December's Lisbon OSCE summit, which was widely seen as a
diplomatic failure for Armenia. Azerbaijan won from the
summit an affirmation of the country's territorial integrity,
despite Armenia's veto of the summit declaration (see EEDB,
December 6, 1996, I).

Since December, Armenia has faced a number of foreign policy
problems and the prospect of increased international
isolation:

-- In February, Armen Sarkisian resigned as prime
minister, owing to ill health. Sarkisian had taken a
high-profile foreign policy role and had been
achieving some success in rebuilding Armenia's
international position following Lisbon (see EEDB,
March 26, 1997, I). However, Sarkisian now appears
to have recovered, and has recently been appointed as
another ambassador-at-large.

-- In April, reports that Russia had made major arms
transfers to Armenia in 1992-94 allowed Azerbaijan to
intensify its efforts to isolate Armenia
internationally, and encouraged a shift in western
sympathies from Yerevan to Baku.

-- US support for Section 907 of the 1992 US Freedom
Support Act -- which blocks government-to-government
aid to Azerbaijan until Baku lifts its economic
embargo on Armenia -- has been waning. During
Azerbaijani President Heydar Aliyev's visit to the
United States in August, US President Bill Clinton
pledged to seek to repeal Section 907. Aliyev's
visit also saw the signing of several agreements
strengthening US-Azerbaijani relations (see EEDB,
August 8, 1997, II).

Foreign policy successes. Armenian foreign policy rests on
three linked principles:

-- Security. Armenia sees its immediate environment as
hostile, and its foreign policy agenda is dominated by
military and security concerns. For the purposes of
deterrence, Armenia wishes to build its defence
forces so that it at least matches Azerbaijan in
military strength.

-- Balance. For historical reasons, Armenia prefers to
take the initiative in building a set of balanced
relations with all relevant powers, rather than
relying on a single alignment led by another state.
Yerevan's enthusiasm for ties with both Russia and
the United States contrasts with the more unequivocal
pro-western orientation of Georgia and Azerbaijan.
Armenia has been able to preserve a balance by
neither antagonising nor fully accommodating the
players in a crowded region.

-- Pragmatism. Armenia is aware of its relative military
and economic weakness -- especially compared with
Azerbaijan -- and takes account of this in pursuing
its foreign relations, sometimes to the dismay of
domestic public opinion. Armenia's main foreign
policy lever is its geo-strategic position.

Armenia thus aims to build as many international ties as
possible, both within the region and beyond, in order to boost
its security. The Ter-Petrosian administration is also aware
that the international community will not allow the Nagorno-
Karabakh conflict to go unresolved indefinitely. Yerevan thus
aims to build a set of relationships that will facilitate an
eventual settlement as favourable to the Armenian position as
possible.

Despite foreign policy setbacks, Yerevan has recently recorded
some foreign policy successes:

1. Neighbouring states. Progress in developing friendly
relations with neighbouring states includes:

-- Georgia. Relations between Tbilisi and Yerevan are
friendly, although Georgia's more antagonistic
orientation vis-a-vis Russia make for a closer
affinity with Azerbaijan (see EEDB, August 19, 1997,
I). Georgia has more to gain from Azerbaijan's oil
wealth than from good relations with Armenia.
Nevertheless, in July Armenia signed a 'strategic
partnership' agreement with Georgia.

-- Iran. Relations with Iran are increasingly cemented
by numerous bilateral agreements. Iran's economic
presence in Armenia (especially in energy, industry
and consumer goods) is particularly strong. Although
Iran maintains a neutral stance on Nagorno-Karabakh,
its economic ties with Armenia aggravate Baku, as
they undermine the effect of the Azerbaijani
blockade. Armenia is developing a 'strategic
cooperation' agreement with Iran, and has announced
its intention to appoint a military attache.

-- Turkey. There are signs of a softening of Ankara's
position on its blockade of Armenia, although a
normalisation of relations with Yerevan remains
hostage to Turkey's hopes of benefiting from the
transit of Azerbaijani oil. Azerbaijani pressure
means that Turkey continues to make resolution of the
Nagorno-Karabakh conflict a condition of normalised
relations with Armenia. However, Turkey has
suggested that opening its Armenian border to trade
would foster progress on Nagorno-Karabakh, although
Aliyev appears unconvinced by this argument (see
EEDB, September 10, 1997, I).

No progress will be made in relations with Azerbaijan until a
resolution is reached on Nagorno-Karabakh, of which there is
little prospect at present (see EEDB, September 5, 1997, I).
The diversity of regional states' interests means that none is
likely to be able to mediate effectively between Armenia and
Azerbaijan. A settlement on Nagorno-Karabakh will probably
rely on mediation by outside powers.

2. Wider ties. There have been several recent developments
in Armenia's ties outside its immediate neighbours, including
an economic and military cooperation agreement with Ukraine
and a 'strategic partnership' agreement with Kazakhstan,
adding to those which Yerevan already has with Turkmenistan
and Kyrgyzstan. Armenia is developing 'strategic cooperation'
agreements with the United States -- where it hopes to post a
military attache -- and China, and over the summer signed
agreements with Syria, Lebanon and Egypt. Yerevan also gives
weight to participation within multilateral fora such as the
CIS and NATO's Partnership for Peace. In July, Armenia signed
military cooperation agreements with Greece and Bulgaria.
Yerevan hopes to appoint a military attache in Athens. Some
Armenian officials have spoken of a Moscow-Yerevan-Athens
axis, although this prospect alarms Turkey.

Armenia's most notable recent foreign policy success came with
the August 29 treaty with Russia on friendship, cooperation
and mutual assistance, in which Moscow committed itself to the
defence of Armenia should it be attacked by a third party.
Russia is the key regional security player, and has proved a
valuable historical ally for Armenia. Although it appeared as
a response to Aliyev's US trip, the treaty had probably long
been under development. However, it is clear from the wider
context of Armenian foreign policy that -- while Yerevan
welcomes the Russian security guarantee -- the country does
not want to rely exclusively on Moscow, nor to become part of
a confrontation between Russian and US-led alliances in the
Transcaucasus.

CONCLUSION: The Nagorno-Karabakh conflict will continue to
dominate Armenia's foreign policy agenda. However, Armenia
will continue to develop a range of bilateral and multilateral
ties to constrain Baku's ability to mobilise international
pressure, and to improve the Armenian position vis-a-vis a
final settlement in Nagorno-Karabakh.