“It will definitely not hurt, but it will not be a game changer given the structure of our economy,” Gabrielian told RFE/RL’s Armenian Service in an interview.
The two South Caucasus countries are due to establish transport links under the terms of a ceasefire that stopped the 2020 war in Nagorno-Karabakh and follow-up agreements also brokered by Russia. The agreements specifically commit Armenia to opening a transit road and railway that will connect Azerbaijan to its Nakhichevan exclave.
Armenia should in turn gain rail links with Russia, its main trading partner, and neighboring Iran via Azerbaijan. Prime Minister Nikol Pashinian regularly emphasizes this fact, predicting a massive boost to the Armenian economy.
“Shipping goods to Russia [by rail] through Baku doesn’t make much economic sense for us,” said Gabrielian, who served as deputy prime minister from 2014-2018 and had held other senior positions in Armenia’s government and Central Bank since 1999. “This used to be our main trade route in Soviet times. But back then we transported metal ores and other heavy industrial output.”
“We don’t have such products [exported to Russia] now. Nor are we implementing large investment projects for which we need to import things from Russia,” he said.
Gabrielian argued that Armenian exports to Russia now mostly consist of beverages, prepared foodstuffs and fresh fruits and vegetables. It will be cheaper and quicker to deliver them through Georgia than Azerbaijan, he said.
Most of Russian-Armenian trade, which totaled $2.6 billion last year, is carried out by trucks passing through the main Georgian-Russian border crossing at Upper Lars. Traffic through that mountainous pass is periodically blocked by bad weather, especially in winter months.
Gabrielian said that extensive road upgrades launched by the Georgian authorities in that area last year will eliminate this problem and make the Upper Lars road even more attractive to Armenian exporters and importers.
“So I don’t quite understand the economic rationale for that railroad,” added the 53-year-old economist, who is now the dean of the College of Business and Economics at the American University of Armenia.
Most Armenians appear to share this skepticism. According to a U.S.-funded opinion poll conducted late last year, only 5-6 percent of them think that the economic impact on their country of open borders with Azerbaijan and Turkey will be “definitely positive.”
