Raising Tensions Around Iran: Should Armenia be Concerned?

By Dr. Benyamin Poghosyan

In recent months Iran has been facing both internal and external challenges. The wave of demonstrations shook up the Islamic Republic in late December – early January 2017-2018. The expert community still has contradicting views for the main reasons of the protest movement – internal struggle between conservatives and reformists, outside meddling with main arrows targeted the US, Israel and Saudi Arabia as potential sponsors, spontaneous movement based on economic hardships and rampant corruption. Regardless what explanation is closer to the truth, these developments proved once more that almost a decade after the Green movement, domestic stability in Iran is not guaranteed. The February 11 suggestion by the President Rouhani to hold referendum in Iran to solve the differences between conservatives and reformists, which was harshly criticized by conservative establishment, as well as continued devaluation of Iranian currency which led to police actions against both exchange offices and informal money changers are additional signs of domestic power struggle between different sections of the Iranian state.

The external security environment is not cloudless too. The new US administration is ramping up its pressure against Iran. President Trump threatened to get the US out of the Iran nuclear deal unless major amendments in agreement, which should put restrictions on Iranian ballistic missile program and cancel the agreed timeframe for ceasing Uranium enrichment. The US secretary of State Rex Tillerson revealed that one of the key US goals in Syria is the containment of Iranian influence there. The Iran is getting closer to direct military confrontation with Israel in Syria. The February 10 incident, which involved the shooting of alleged Iranian drone in Israel and downing of Israeli F16 military jet by Syrian air defense was another proof of Israel – Iran contradictions over the Iranian military presence in Syria. Another potential hot point is Lebanon. Israel and the US are accusing Iran of establishing missile productions capacities there, which can be used by Hezbollah to attack Israel. There were warnings from Israeli side that they are ready to launch military operation in Lebanon to prevent such scenario.

The Turkish military operation launched in northwestern Syria against Kurds may potentially complicate Iran’s relations with Ankara. Iran is not happy with growing alliance between the US and the main Syrian Kurdish PYD party. However, growing Turkish military presence around Aleppo city may bring Turkish supported groups in direct confrontation with Assad and Iranian proxy forces which are assisted by the Iranian advisers.

In this geopolitical conundrum relations with the South Caucasus, and in particular with Armenia, are not among the top issues of Iran’s foreign policy agenda. Meanwhile, the case is not the same from Armenia’s perspective. Being under joint Azerbaijan – Turkish pressure within the ‘War of Attrition” strategy implemented by Baku, the development of relations with Iran are vital for Yerevan. Armenia makes huge efforts to position itself as a potential bridge connecting Eurasian Economic Union, European Union and Iran. The membership into EAEU, the signature of Comprehensive and Enhanced Partnership agreement with EU as well as involvement in EU GSP+ system, and upcoming signature of Free Trade Agreement between Iran and EAEU raise hopes in Armenia to attract foreign direct investments to launch production lines.

The main idea is to lure potential investors by the zero tariff exports from Armenia to Russia, EU and Iran. The European companies may use Armenia as a launchpad to export to the 80 million Iranian markets, Iranian business may produce goods in Armenia and export with zero tariffs to the EU. The growing economic involvement of China in Post-Soviet space creates additional possibilities for Armenia to bring Chinese consumer electronics giants offering them zero tariffs exports to Iran and Southern Russia. The launch of Meghri Free Economic Zone in December 2017 aims to facilitate this process. The “Persian Gulf – Black Sea” multimodal transport corridor project which will connect Iran to Europe through Armenia and Georgia, is another opportunity for Armenia. Even with its limited transit capacities due to the absence of Armenia – Iran railway and problems connected with winter weather on Iran – Armenia highway, the launch of the corridor may be useful.

In 2005-2013 period when the US – Iranian relations were again strained culminated in 2010 UN Security Council sanctions against Tehran, Armenia successfully managed to develop relations with Tehran without putting in risk its relations with the US. Armenia’s message was clear – if US is not able to put pressure on its strategic ally Turkey and get Armenia – Turkey borders opened, Yerevan has no alternatives other than develop its relations with Tehran. It worthy to mention, that from the US point of view, the growing Armenia – Iran connections may serve to the US strategic goal – to diversify Armenia’s foreign policy and not to allow Russia to finalize its grip over Armenia. Even during the “US – Russia reset” period of 2009-2011, the US was rejecting the Russian notion of Moscow’s legitimate special interests zone within its immediate neighborhood. Thus, Iran – Armenia relations could not threaten the US strategy to put necessary pressure on Iran to convince him to start negotiations over its nuclear program, but could well serve the US goal of diversifying Armenia’s foreign policy. Given the US – Russia strategic disagreement and the growing discussions in American top political establishment on the necessity to contain Russia, the US most probably will continue its previous policy on Armenia – Iran relations.

Thus, as for now, the regional tensions around Iran and possible further deterioration in Iran – US relations may not result in US demands to Armenia to restrict its relations with Tehran.

Dr. Benyamin Poghosyan is the Executive Director of the Political Science Association of Armenia.