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Turkey-Armenia: Open the border!

 

What does it mean for neighboring businessmen and customers when an abstract line on the ground called “country border” suddenly rise and become a concrete wall? This is the story behind the closed Turkish-Armenian border.

Arsen Ghazaryan

 “It would be a huge benefit for the Armenian economy if Turkey would open its border.” said Arsen Ghazarian, a prominent businessman and co-chair of Turkish-Armenian Business Council, five years ago. The Turkish-Armenian border was closed in 1994 because of the Nagorno-Karabakh conflict between Azerbaijan and Armenia. Yet, the border remains closed, and Turks and Armenians have no chance to trade.

Ghazarian believes that Armenians would be able to implement joint ventures in the energy sector, and open up important projects in the textile sector once the border is open to trade. An open border would also mean that Armenian businesses could ensure closer access to cheap raw material sources from Turkey.

In fact, Ghazarian, as an entrepreneur, is very well aware that Armenia would become more prosperous if the Turkish border remained open. However, Armenian politicians obviously do not pay heed to this fact, neither do their Turkish counterparts.

It is pretty clear that the triangular political conflict between Turkey, Azerbaijan and Armenia is not going to reach a resolution anytime soon, and that Armenia is likely to retain its unenviable position of being the most disadvantaged country in the Caucasian region.

 

The failure of trade limitations

It is important for Turkey to maintain an open Armenian border; not only would it benefit the Armenians, but also the Turkish business community. As a sovereign country, it might seem legitimate for Turkey to put limitations on her cross-border trade; it might even be in line with principles of fairness in international relations.

However, in reality, such embargoes never work in the nations’ favor; while people on both sides of the border suffer from economic consequences of such political decisions, this leads those countries into radicalization.

Iran is the best example of this. After the Iranian Islamic Revolution of 1979, the West decided to apply economic embargoes on Iran, but this never produced the desired outcome: i.e., the overthrow of the authoritarian regime in Iran. On the contrary, the country basically cocooned itself from interaction with the Western world. Iranian citizens turned into supporters of the regime; they had no better options since the regime became the only source of economic distribution.

 

Driven into the arms of Russia

A similar equation seems to be at play in Armenia because at the moment, the country has no options for partnership other than Russia. Russia sees Armenia merely as a shield to manage its Caucasian policy and as a vassal state. When things get complicated in the region, Russia increases its pressure on Armenia and tries to spoil the game. The basic problem is that Armenia is left with no other option but to play Russia’s hand in the region because of its economic subservience to Russia. The result is abject poverty for its citizens and little to no interaction with the rest of the world, social, politically and economically.

When the Armenian Republic was established in 1991 after the collapse of Soviet Union, Turkey was one of the first countries to recognize Armenia’s independence. However, when the Nagorno-Karabakh conflict started, Turkey closed its border with Armenia because of Azerbaijan’s pressure and initiated embargoes on this country.

Since that time, there haven’t been any direct economic relations between the two neighboring countries, and Armenia has increasingly been drawn into the Russian sphere of influence. Amongst her neighbors, it is only Russia, Iran and to a certain extent, Georgia, that Armenia has trade relations with, but because of Russia’s political pressure, relations do not go well with Georgia either. Neither does it have good relations with EU because again, as a direct consequence of coming under Russia’s influence, the EU Commission decided to withhold economic agreements with Armenia in 2013. This has been so ever since Armenia joined the customs union with Russia. In 2013, Russia became Armenia’s biggest trading partner.

Recently, the EU ran a project to enhance Turkish-Armenian relations, which is a strategically important step. When it comes to energy policies, EU could offer potential benefits to Armenia like including the country in its energy project, which plans to draw energy lines from Middle Asia to Turkey’s western border because the cost is relatively less.

On the other hand, EU wants to have good trade relations with Armenia through Turkey, which incidentally happens to be EU’s biggest trade partner. EU is very well aware that accessing the Armenian market would rescue Armenia from the Russian effect, and win it a new ally. That is why putting pressure on Turkey — with its access to the EU customs union — to open its Armenian border would be a rational first step to take. This will probably help in overcoming the social and political limitations of the country.

 

Fear and benefits

Additionally, while Turkish entrepreneurs would now have a chance to access a new market, this is going to enhance the relations between two societies in a manner akin to what was witnessed between the Kurds of Northern Iraq and Turkey. However, as Ghazarian puts it, “Some Armenian politicians, business people and economists fear that an influx of cheap Turkish imports through an open border could hurt the country’s fledgling manufacturing and farming sectors,” which, frankly, tells us that even as Armenian consumers reach out for cheaper products in the market, the business powers-that-be will feel uncomfortable about their business practices.

It simply looks like if Turkey — whose economy is almost 50 times bigger than Armenia’s — opens its border and allows cross-border trade, it would be mostly Armenians that would benefit from the situation. Considering Turkey’s economic clout, if and when Turkish entrepreneurs have access to the Armenian market, cheaper and better quality products will be made available throughout the country.

This will contribute to a resolution of the current political and social conflict between the two societies, since burgeoning and mutually beneficial trade relations will tend to moderate political approaches and soften social conflicts. More importantly, as we approach the 100th anniversary of the Armenian genocide, perhaps this will be Turkey’s best chance to apologize and even compensate. Even then, both sides would have to deal with Azeri and Russian pressures.

Global Entrepreneur

 

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