Asia and Eurasia
Ublocking Closed Transport Links in the Caucasus: Opening the Border of Armenia and Turkey

There’s no doubt as to the relevance of the possibility that transport and all other links in the Transcaucasus will be unblocked; it would entail the opening of the Armenian-Turkish border and establishment of direct trade and economic relations between Armenia and Turkey (which had ultimately been unsuccessful before), as well as the partial establishment of Armenian-Azerbaijani economic relations, in terms of cargo transportation, energy transit and electricity.

This is due to:

1) the imperative of the security and stability of the Transcaucasian region at the regional and international level;

2) the decisions laid out by the 3 official tripartite political statements of Russia, Armenia and Azerbaijan, after the 44-day war in Artsakh, in terms of unblocking infrastructure, including transport links between the parties, which was practically implemented through efforts at the level of the Deputy Prime Ministers of the participating countries;

3) direct negotiations between the political leadership of Armenia and Turkey on the issue of unblocking transport links in the region and opening the Armenian-Turkish border;
 In this regard, there is a need to assess the "reforming of catalytic processes", its prospects and realities, including:

a) the situation after the unblocking of transit links and the opening of borders with Turkey, objectively and regardless of desires or unwillingness, gradually forming into a single integral economic region with common norms, based on international conventions and the rule of fair business relations, the format of which will be located above or beyond the jurisdictions of individual countries;

b) possible benefits and risks for the economies of the countries of the region, and the degree of their future competitiveness, given an open Armenian-Turkish border;
c) socio-demographic and all other consequences of the opening of the Armenian-Turkish border.

First, it should be stated that political and diplomatic relations between Armenia and Turkey are currently worse than ever. In this regard, the question is whether political and diplomatic processes can also influence the process of establishing direct economic relations between countries. This settlement process between the special representatives of Armenia and Turkey is being mediated by Russia (started in January 2022).

The establishment of direct trade and economic relations between Armenia and Turkey will contribute to the mitigation of hostile sentiments and the gradual building of peaceful relations between Armenia, Turkey and Azerbaijan, which is an extremely important task for other countries in the region. Meanwhile, it should be kept in mind that the problem has its very sensitive facets and aspects. These include Turkey’s denial of the historical fact of the Armenian genocide in their historical homeland, the unresolved problem of Artsakh (Nagorno-Karabakh), and the fact of Turkey's participation in the 44-day war in Artsakh, objectively impose a very heavy burden on this, introducing a historical, international matrix of relations - legal, juridical, social, spiritual and emotional aspects, which objectively cannot be artificially ignored and evaded when building direct Armenian-Turkish economic relations.
The visible scenarios for the development of Armenian-Turkish relations are that the opening of borders and the establishment of direct trade and economic relations between the countries, against the background of these unresolved problems, may manifest itself in the following process:

a) to serve as a motivation for resolving existing problems, taking into account all the realities of the past and present, and create a favourable background for the restoration of trust between the peoples;

b) to lead to the gradual building of mutually beneficial relationships, because only mutual or mutually beneficial relationships can have a positive effect in the expected processes; at the same time, undesirable and one-sided scenarios of the development of events cannot be excluded;

c) the business community, the system of public administration and especially local self-government may find themselves in a completely new, unusual situation, and in a certain confusion.

In this regard, any research or practical steps to implement the roadmap requires a methodologically correct means for solving this problem. The establishment of Armenian-Turkish direct economic relations requires a pragmatic, mathematical approach;  first it must be determined whether the problem has a solution or not. In this case, we proceed from the assumption that the problem has a solution; otherwise it makes no sense to seek one. In our mathematical approach, a second question follows, whether this is the only solution or not. By and large, this should be the only solution, in a broad sense (notwithstanding particular variations), which we will form as the establishment of mutually beneficial relations; otherwise, the problem has no solution, and, as mathematicians again say, it is useless to do this.

Assessing the initial situation, we can state that, with certain possibilities for restoring relations, it reflects the diagnosable uncertainty, both among experts and the ruling circles of both countries. In Armenia, outwardly pessimistic assessments revolving around the possibility of a thorough expansion from the Turkish side in all areas of economic relations prevail, and sometimes it’s a hopeless situation. There are also adherents of positive development and some benefits from unblocking roads and all transit. At the same time, a decrease in the cost of cargo transportation is indicated, but in general, the benefits from this for the Armenian side are not entirely convincingly explained. It is obvious that, in general, politically biased negative or positive assessments prevail, and the need for a science-based, objective assessment of the development of events according to the proposed scenario is acutely felt. Meanwhile, in our opinion, hopeless moods and the resulting statement of the status quo on closed transit links means a road to nowhere or a further slow deterioration of the competitiveness of the Armenian economy.
 Naturally, with some positive development expectations, when infrastructure links are unblocked, it is not entirely clear where to start the process of building economic relations in order to come to a mutually beneficial format in the future.

At the heart of economic relations between individual business entities, in general, there are trusting relationships at the economic and individual level, where contractors acting directly, one way or another, rarely make business problems dependent on stereotypes and perceptions of history. However, this does not mean that stereotypes and the perception of history will disappear somewhere; they exist in parallel and at times can suddenly and even very harshly affect the relationship of business counterparties, despite prior intentions. We can recall the relationship between Japan and South Korea, when businesses were concerned about the decision of the Supreme Court of South Korea that Japanese companies must pay compensation as a result of a lawsuit filed by South Korean workers who were drafted during World War II. In that situation (November 2013), Japan's three major business organisations and the Japan-Korea Economic Association, fearing that the issue of compensation could harm the good relations between Japan and South Korea, made an unprecedented statement calling for a solution to this issue.

This and other examples show that in the economic relations between Armenia and Turkey, one cannot ignore issues related to historical facts, ideas and stereotypes. These, from time to time, can become a factor in aggravating and possibly worsening Armenian-Turkish political and economic relations.

It should be noted that the stability of Armenian-Turkish relations will largely depend on the security of Armenia and Artsakh, which today is guaranteed by the military-strategic partnership between Armenia and Russia, the participation of Armenia in the CSTO, and the presence of Russian peacekeepers in Artsakh. It should also be taken into account that, in fact, the participants in the single economic zone of the EAEU in a joint format (since there is a bilateral format of Kazakh-Turkish, Kyrgyz-Turkish relations against the backdrop of the organisation of the Turkic countries) will position themselves in a new way with their geographical neighbour - Turkey. Armenia will have to build trade and economic relations with Turkey not only according to WTO regulations (which, after a flurry of sanctions against Russia in 2022, are unlikely to be decisive), but especially within the EAEU.

In order to study and build a roadmap for the processes of normalisation of Armenian-Turkish relations, it is important to simultaneously study the economic and socio-demographic consequences of the normalisation of relations between Armenia and Turkey, which should be analysed in terms of geopolitical, political, geo-economic, economic and commercial factors and realities, since these aspects , being in close relationship, at the same time demonstrate a definitely deterministic autonomy of influence.

Based on the goal of establishing direct trade and economic relations between Armenia and Turkey, it is necessary to develop a roadmap for its implementation, built on a specific concept, approaches, criteria and mechanisms for mutually beneficial relations.
 The position of the Armenian authorities in the negotiations on the unblocking of transport links and the establishment of direct Armenian-Turkish trade and economic relations, is based on the titled approach - "without preconditions", and on the fact that the land and air Armenian-Turkish border in 1993 was unilaterally closed by Turkey.

When building a position to unblock transport links in the region and economic relations with Turkey, Armenia will have to proceed from the legal principles of international conventions, in particular, the provisions of the WTO (which Turkey grossly violates in the case of Armenia), the provisions of the UN Convention on the problem of developing countries that do not have access to the sea, particularly under the 2014 Vienna Action Plan for Landlocked Developing Countries (LLDCs) and other international conventions. These also include the Lisbon Energy Charter and the International Energy Charter, as well as the UN Agreement on Transport and Communications (section 34. Intergovernmental Agreement on the Asian Highway Network), which was signed and ratified by 31 states, including Turkey (2010), Armenia (2005) and Azerbaijan (2005, the latter with reservations).

The problem of the possibility of unblocking links, including railways, highways, gas pipelines, power lines, etc., is also associated with the international legal structure and format of unblocked links.

 We should point out,  that the problem of transport linksS between Azerbaijan and its exclave, Nakhichevan, is being widely discussed at different levels. This issue is often presented as an aspect of a corridor format on the territory of Armenia - passing through the Syunik region in Meghri (in the southeast, near the Iranian border of Iran), the so-called Zangezur corridor. The positions of the parties in the corridor format are diametrically opposed. The question is whether Azerbaijan and Turkey are ready to admit that the unblocking of transport links between Azerbaijan and its exclave, Nakhichevan, is, in fact, a format for opening roads through the territory and under the jurisdiction of Armenia and under its responsibility, with all the international legal regimes of the sovereign Republic of Armenia. By the way, the position of Moscow and Yerevan on this issue is unambiguous and unanimous. It is clearly expressed in the tripartite declaration of Russia, Azerbaijan and Armenia dated November 9, 2020 (paragraph 9) and in the subsequent two tripartite official statements of the parties, as well as in the statements of officials of the Russian Federation (represented by the Deputy Prime Minister of the Russian Federation Overchuk), as well as the Armenian side.

In this regard, it should also be noted that on March 2022, a Memorandum of Understanding between the governments of the two states was signed between Azerbaijan and Iran in Baku, and the creation of a new transport artery on the territory of Iran, connecting the "East Zangezur economic" region of Azerbaijan with its exclave - Nakhichevan. In this case, this document uses the expression transport artery through the territory of Iran, which is broadly interpreted as a transport corridor that unambiguously implies the jurisdiction of Iran. This also confirms the conclusion that the Azerbaijani side often publicly discloses the term of transport corridor through the territory of Armenia and, moreover, outside the direct jurisdiction of Armenia, solely for propaganda purposes. The indicated multi-format transit link between Azerbaijan and Iran will pass through the territory of Iran, about 5 km south of the Armenian-Iranian border, and will actually duplicate the unblocked road along the northern bank of the Araks (Araz) border river to Meghri, passing through the territory of Armenia.

In general, in the “reforming process” of unblocking transport links, it is important to assess and predict how the establishment of direct Armenian-Turkish trade and economic relations will lead to a transformation of regional geopolitics and geo-economic balances. It is important to assess these changes, especially from the positions of regional and world powers, each state of the South Caucasus and all neighbouring countries.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.