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Armenia questions the benefits of strategic alliance with Russia Armenian News Network / Groong January 28, 2006 By Grigor Hakobyan Background With the coming of the New Year, Armenia came face to face with a problem that may undermine its national security as a viable and sovereign nation-state. The problem in question is the role played by major business monopolies in Armenia and their ability to undermine the positive performance of Armenia's economy. Among many, the problem that is most acute is Armenia's heavy reliance on Russian gas monopoly, Gazprom, for the deliveries of its natural gas to the country. Despite the fact that the Armenian government was able to postpone an almost 100% hike in the price of natural gas until April 1st of 2006, that is less than sufficient solace for a country whose federal budget is rather meager in size, compared to those of Eastern European countries like Poland, Bulgaria or Romania. Very little was attained from the January 22nd meeting of President Kocharyan with Russian President Vladimir Putin in Moscow and the rise in the price for natural gas is currently viewed by the Armenian leadership as inevitable. As a result of the price hike, public moods prevailing in Armenia toward the neo-imperial policies of economic expansion and colonial- style dependence being implemented by the Russian government in the region began to change rather quickly. Public statements of various government figures in Armenia and other Armenian intellectuals and political figures outside of the ruling government ranged from suggestions to charge for the difference in price from the stationing of Russian troops in Armenia to their rapid withdrawal from the country. Although representatives of Gazprom have recently offered to maintain the current prices of natural gas delivered to Armenia for some undetermined time in exchange for acquisition of additional Armenian assets, such as the 5th block of the Hrazdan's thermal power plant owned by the Armenian government and currently being renovated by Iranian specialists on a $150 million dollar loan and taking part in the construction of Iran-Armenia gas pipeline , the Armenian officials in their turn have rejected such offers and argued that multi-million dollar loans under much favorable conditions could be easily attained from a range of donors in the west . Analysis At this point of course, it is rather naove to expect any significant changes in the foreign policy orientation of Armenia, but nonetheless it would be plausible to expect further qualitative changes in Armenia's growing relations with the west as the country continues its gradual integration with the western political and economic infrastructures. As the interaction between Armenia and the west intensifies, while bullying by neo-imperialist Russian continues, the probability of Armenia expressing an interest to join NATO could become more pronounced than it is currently observed. Strengthening of democratic institutions in the country and the opening of the decades long railroad blockade of Armenia, - that is so tenaciously maintained by the neighboring Turkey, as it is demanded by the European Union and often encouraged by the United States, - could significantly expedite Armenia's integration with the west and further erode Russian influence in the region. Another process actively taking place in the country is the ongoing effort by the ruling government of Armenia to diversify its energy sources and rapidly introduce a range of alternative sources of energy so readily availably in the country. Among them is the ongoing construction of Iran-Armenia gas pipeline expected to be completed by the end of 2006, much sooner than originally envisioned. The gas pipeline is expected to stretch out 141 km (87 miles) and deliver 36 billion cubic meters of natural gas within the 20 years of its operation.  The possibility of extending the gas pipeline into Georgia, Ukraine and further into Eastern Europe can certainly become a future development scenario of the project. The cost of the Iran-Armenia gas pipeline is $170 million dollars. It is being financed by the Iranian government in exchange for future deliveries of electricity generated in Armenia and subsequently transmitted back to Iran as a form of repayment of the loan. Yet another form of energy diversification implemented by the Armenian government is the large number of hydroelectric power plants currently being operated in Armenia. At this point there are 32 minor hydro-electric power plants being constructed in the country in addition to those that already exist in Armenia. Another 24 hydro electric power plants are planned to be constructed in the foreseeable future. According to a recent study conducted by the World Bank , Armenia's total hydroelectric capacity is estimated at about 400 MW, which is enough to secure nearly 10% of the country's inner demand for electricity . Creation of yet another nuclear power plant in 2016 as a replacement to the one that is already being utilized at Metsamor is also widely anticipated. Meanwhile, in the fall of 2005, with the help of Iranian engineers, first time ever, Armenia was able to construct its first energy generating wind farm, located in the Pushkin Pass, north-eastern Armenia.  It is comprised of 4 turbines with initial capacity of 660 KW, however, the government of Armenia is envisioning enlarging the existing power plant and subsequently increasing its energy generation capacity. More wind farms are planned for construction throughout the country in the near future. Special programs are being implemented by the government of Armenia to promote the increasing use of solar energy in the country, while harnessing the geothermal energy. In addition, biomass continues to be of growing interest for the authorities.  Conclusions The sudden rise in prices for deliveries of Russian gas into the country and subsequent rise of transit fees initiated by Georgia toward Armenia has created a two-fold situation in the country. One that threatens to undermine Armenia's continuous economic growth and another one which pushes Armenian creativity to its limits, making Armenia the region's pioneer in the field of engineering and utilizations of alternative sources of energy. Continuous progress in the fields of echo technologies promises a brighter energy future for Armenia. The geopolitical consequences of a rift in public opinion prevailing in Armenia toward its Russian counterpart as a result of economic pressures applied by the Russian government toward Armenia may set a stage for a doubling of Armenia's efforts for faster integration with Euro-Atlantic structures. Furthermore, continuing Russian efforts to dominate the region may boomerang and further undermine the Russian influence in the south Caucasus. Sources 1) PanARMENIAN.Net-12/26/05 2) PanARMENIAN.Net-12/08/05 3) Arminfo-12/18/06 4) Armenpress-03/04/05 5) http://wbln0018.worldbank.org/esmap/site.nsf/files/070-05+RE+Potential+Final+P044440.pdf/$FILE/070-05+RE+Potential+Final+P044440.pdf 6) Arminfo-01/16/06 7) Armenpress-11/02/05 8) Arka News Agency-12/22/06 -- Grigor Hakobyan is an independent political analyst residing in Scottsdale, AZ.