This article, written by ARAR Foundation co-founder Avetik Chalabyan, was originally published in Armenian by Mediamax on January 3, 2023 and has been translated into English by Weekly contributor Ara Nazarian, PhD.
Over the course of the past year, in a series of articles entitled “Armenia’s Fatal Choice,” I have outlined my thoughts about the steps that the current Armenian state and its active political community should take following the removal from power of Nikol Pashinyan’s failed regime. Following the series publication, the current regime continued to complicate the situation in Armenia with its ongoing failures, and the unfavorable geopolitical shifts in the region aggravated the existing external challenges. Today we face the question of how we can preserve and develop our independent state, and what future goals this should serve in order to mobilize the creative energy of our entire nation and become a self-sufficient and independent entity in our troubled region.
What is the mission of the Republic of Armenia?
At first glance, it seems that the answer to this question is already provided in the Declaration of Independence of the Republic of Armenia, by which the newly-created Republic of Armenia actually assumed the function of the unified state of the Armenian people, and as such, the key mission of ensuring the security and prosperity of the Armenian people. However, the reality is that during the past 32 years following the adoption of the Declaration of Independence, the Republic of Armenia not only did not become the unified state of the Armenian people and its center of gravity, but also at least one third of its inhabitants, about 1.2 million people, emigrated from the country during that period, presumably considering that the state is unable to provide them with a sufficient level of security or prosperity.
Moreover, during this period, Armenia was noted as a country with a high level of poverty and lower average standard of living than that of developed countries, matters further compounded by the collapse of the previously formed security system in recent years. The cumulative effect of these shortcomings has resulted in the sharp escalation of the security challenges facing the nation. Therefore, if we consider the Republic of Armenia as the unified system tasked with facilitating the security and prosperity of the Armenian people, then the state has not fulfilled its mission either now or in the past.
The Republic of Armenia also does not enjoy a position of value in the region. For instance, our close neighbor Azerbaijan is positioning itself to become a major exporter of energy resources; Turkey aspires to become the predominant military force within the region in addition to serving as the main center of various Eurasian transit flows; and our other neighbor Georgia is aiming to be a transit corridor and a tourist destination. However, the positioning of Armenia is yet to be clarified, as it is not addressing any significant regional issues, resulting in Armenia not enjoying any tangible advantages from the regional processes, which in turn negatively impacts its defense capabilities and economic development. In a sense, these factors are all interconnected, because 100 years ago, the same Turkey and Azerbaijan, having managed to seize a significant part of the territories of the Republic of Armenia, imposed such a map on it that significantly limits Armenia’s defense, transit and resource capabilities, thereby forcing existence in extremely unfavorable geographical conditions. If this pattern continues without radical changes, our security challenges will not only go unsolved, but will continue to worsen, threatening the very existence of the independent state itself, as it happened in 1920.
Armenian political thought has yet to provide a solution to address this geopolitical and values impasse. The main thesis of the current ruling regime and its various satellites is that Armenia does not have enough resources to face the neo-Turanian project; therefore, Armenia’s only prospect is to become part of that project under the auspices of the collective West, to ensure its existence. It is in this context that the regime offers unending concessions to the Turkish-Azerbaijani tandem with the hope of enjoying the tandem’s eventual benevolence. The main thesis of the current opposition is that, on the contrary, it is necessary to rely on Russia and partly on Iran, and oppose the neo-Turanian plan, by becoming a part of the emerging North-South axis.
Neither approach, however, offers Armenia a comprehensive security solution. In the case of the former, there is no guarantee that the Turkish-Azerbaijani tandem, becoming the de facto sovereign of Armenia, will tolerate its existence in the long term (as evidenced by history – translator’s note). Even if Armenia agrees to sign a peace treaty now under the pressure of the collective West, the tandem’s next action will be the depopulation of Artsakh, followed by Syunik, Vayots Dzor and other relatively sparsely populated eastern territories of Armenia, to which Azerbaijan does not hide its ambitions. The second option, of course, is outwardly more favorable for us, but the key gap here is that both Russia and Iran today have significant problems with the collective West. This is rapidly depleting their resources and even endangering the stability of the ruling regimes in each of these countries, and as a result, their ability to maintain a fundamental role in our region. We saw the first signs of it in 2020 in the Artsakh War when the Russian-Iranian tandem actually surrendered its positions to the Turkish-Azerbaijani, and as a result, sacrificed the vital interests of the Armenians, for short-term gains. Unfortunately, we see the same these days with Artsakh under siege.
There is also a third, yet somewhat embryonic direction in the Armenian political mind, based on the idea that representing a global nation that has certain resources and influence in various large countries; the Republic of Armenia should claim a global role and become valuable for the whole world. This will give Armenia additional resources and help overcome its geographically imposed limitations. One of the main supporters of this idea is the first Prime Minister of the Republic of Armenia, Vazgen Manukyan, who in his recent article, “Insurmountable Desire,” put forth the thesis that Armenians should solve big problems on a global scale. Then, they will regain their global importance, as before, when the transit trade from India to Europe was in their hands. This is a win-win idea, but it requires answering at least two critical questions. First, what exactly is a realistic role to consider? And until that role is reached, how do we avoid the predators around us and prevent the loss of our statehood?
What global problems is the world facing?
Let us try to answer the first question from the beginning. Any strategic role must be based on the effective use of existing resources, the fundamental shifts taking place in the given period and the opportunities presented as a result. Let’s look at the global shifts that will affect us in the coming years, assess their possible positive and negative effects and understand the effective balance, because they may very well work against us, as the escalation of the relations between the West and Russia, for example, adversely affected us. Below, we will review the main factors and highlight the most important ones.
Let’s start with the aggravation of relations between the West and Russia (also in parallel with China and Iran), and against that background, the strengthening of Turkey. This factor has had an unfavorable effect on us thus far, as it has led to the disruption of the balance of power in our region and enabled the Turkish-Azerbaijani tandem to unleash almost unhindered aggression against Armenia and Artsakh. If the escalation of relations continues, in particular, leading to the direct involvement of the North Atlantic Alliance countries in military operations, the consequences may be even more disastrous and lead to the opening of a second front in our region. In that case, Armenia may become the scene of a new military conflict, and any development prospects might as well be forgotten in that scenario. However, if the conflict enters a “cold war” phase, direct combat operations stop, and the parties transfer their differences to the diplomatic and economic arenas, Armenia can and will benefit, because by maintaining favorable relations between the parties, it can become one of the economic, financial and humanitarian links connecting them (as done so now by India and Turkey).
The second important factor is global warming and the expected decarbonization of the global economy. This factor is favorable for Armenia, as it already meets a significant part of its energy needs with nuclear and hydro energy and has significant untapped solar energy resources, which can facilitate economic growth in the coming years, while simultaneously solving the problem of reducing dependence on external energy sources. This factor will also work against our enemies, devaluing one of their main assets in the long run: oil and gas. Moreover, the reduction of freshwater resources and access, due to global warming and population growth, arms Armenia with additional advantages, should it be able to preserve and use its water resources efficiently.
The third important factor is the gradual shift of the global center of economic activity to Asia, particularly China and India, and the growth of various transit flows associated with this. This can significantly improve Armenia’s position in the region, should it be able to establish effective relations with the rising economic giants of Asia and assume a concrete role in the management of transit flows between Asia and Europe, given the favorable prerequisites for this today. It is obvious, however, that the competition for this role is also intensifying, particularly from our neighbor Azerbaijan, and maintaining full control over Syunik should be considered in the context of that competition.
The fourth important factor is the revolution taking place in the field of artificial intelligence and biotechnology, which can radically change the role of man in economic processes, delegating a significant part of the functions performed by humans to date to self-learning algorithms and a new generation of robotic systems capable of imitating human behavior. This revolution could lead to the majority of people being excluded from the economic process altogether, and the world to be ruled by a professional minority who control algorithms, data and key technologies. We already see examples of this today in Facebook, Google or Amazon, which have started to gain a huge and disproportionate influence on our lives. Armenia still has the opportunity to jump on this bandwagon and have its share in the future hyper-technological world. However, should Armenia delay this process, a significant portion of its population may end up on the opposite side of the economic barricades and be condemned to eternal poverty.
Many other factors will affect Armenia: the extent of remote work, the transition to healthy diets, the aging of the population in developed countries and the growth of health services, the radical transformation of educational models, the penetration of the same artificial intelligence into the military sphere, the commercialization of space, the facilitation of the transfer of production technologies between countries, etc. Each of these trends creates new opportunities, yet, the importance lies in how quickly Armenia can take advantage of these opportunities, mobilize its resources around them, take risks and quickly scale the results (essentially Armenia needs to look for means to change the game, as the current conditions are not conducive to Armenia – translator’s note).
What resources do we have?
It is important to understand the resources we have at our disposal and how best we can use them. Therefore, let’s consider them as widely as possible, without overestimating their value and focus on those that present a competitive advantage.
Our first resource is our historical, cultural and spiritual heritage, enshrined in many monuments, manuscripts, works of art, and also in our value system and daily lifestyle. It is no coincidence that Armenia is not only the first Christian nation in the world, but also the one with one of the lowest levels of violence in the world, all interconnected to one another.
Our second resource is the scientific and technological potential. While having suffered significantly during the years of independence, it is experiencing some level of growth today. Among the CIS countries, Armenia leads in the number of scientific publications per capita, as well as in the volume of high-tech services per capita, although in absolute numbers, it lags behind the larger CIS countries.
Our third resource is our combat potential even though we suffered a painful defeat in the 2020 Artsakh War and continue to lose ground in the border clashes against Azerbaijan. Our army is able to restore its combat capabilities. Additionally, a significant portion of our people is naturally inclined to military service and appreciates its value.
Our fourth resource is our financial capability. Armenia stands out for its high macro-economic stability. Although our banks are small in absolute terms, they are sufficiently capitalized compared to the existing economy, and there is significant Armenian financial capital abroad, which easily flows into the country under favorable conditions and stimulates economic growth.
Our fifth resource is our territory. Although it is physically limited, much of it has favorable conditions for life and tourism, transit corridors and significant reserves of freshwater and renewable energy.
Finally, we have significant managerial and professional potential. Our compatriots outside of Armenia are achieving great success in these areas, and the professional services sector is developing rapidly within the country, partly by taking advantage of the expanded opportunities for remote work.
Perhaps none of this is a secret, yet a natural question arises: how do we leverage these resources for a multifold increase in results in order to become a powerful and developed nation, instead of somehow “getting by” as we do now? The real secret lies in our ability to take advantage of the emerging global opportunities and use these resources in innovative ways to achieve synergistic results.
How to turn resources into competitive value
In today’s Armenia, for example, we have an army that fights mostly with weapons and military technology from the last century. We have high-tech companies that work for foreign clients, and we have financial capital that circulates in various commercial operations, creating no real competitive value for the country. Now, imagine a situation where some financial capital is reoriented to finance military start-ups; the military is reoriented to procure domestically developed and produced solutions that meet its specific needs instead of buying expensive weapons from Russia and other countries, and high-tech companies reorient some of their capabilities to address our military needs. Let’s add high-quality managers who are able to bring those three together and manage the complex processes between them. If this is successful, the army can significantly modernize its capabilities and tactics in a few years, high-tech companies will create valuable solutions that are in demand not only in Armenia, but also in other countries, and financial capital will multiply the funds it has invested, because these companies will represent a serious market value. The state, in its turn, will significantly increase its security capabilities, as not only will the combat readiness of the army increase, but also the military-industrial products will become an important asset in gaining new allies and strengthening relations with existing ones. As the most successful example of this, one can study the experience of Israel, where as a result of close cooperation between the military, the high-tech sector and financial capital, and the consistent leadership of the state, this small country has become one of the five largest arms exporters in the world (unfortunately, also arming our enemies), while radically improving its own security environment.
An attentive reader will stop me here and ask: if all this is so simple, why has it not been done until now, and how can we guarantee its success? First of all, I do not claim that this is simple. It is complicated and requires a great deal of effort and time. Secondly, it was not done in the past because there was neither the political will nor the favorable preconditions that have arisen today as a result of global and internal changes. For example, up until the 2020 Artsakh War, the leadership of our army did not take Armenian weapons seriously and preferred Russian ones; the Armenian financial capital did not consider the military industry as an attractive investment space; and most of the military industrial companies were small, underfunded and incapable of making serious offers to the armed forces. In two short years, our army is in dire need of modern weapons systems and technological solutions, Russian weapons are absent from the market, and Armenian financial capital after the war began to enter the sector carefully, where several leading companies have emerged, and the sector has been formed, all prerequisites that were absent even two years ago. The state has a small role in all of this for now, but in the long run, the calculated state intervention can play a significant role, enabling the development of private enterprise and relevant branches, to promote the necessary scientific and educational environment, to ensure stable orders, and as a result, to make the military industry one of the additional power factors that will strengthen our role in the region.
By a similar logic, several other important synergistic triangles can be drawn, for example, between historical and cultural heritage, natural and climatic resources and financial capital, and as a result, an attractive living environment that attracts not only tourists but also permanent residents, and thereby making the country more prosperous and safer, because the flows of people and capital from abroad become additional guarantors of security with proper management. Costa Rica, for example, an “island” of peace and prosperity in the explosive and impoverished region of Central America, has become a stable destination for the inflow of people and capital (in the last 30 years, the country’s population has grown from three million to five million, mainly due to immigration).
Until the 2022 Ukraine war, Armenia was rarely considered as an “attractive” destination for foreigners. However, this tragic event unexpectedly led to the inflow of several tens of thousands of foreigners, mostly from Russia, into Armenia last year. It turns out that Armenia has a number of objective advantages: the real estate market is expansive and affordable; the banking system is flexible; it is not difficult to register and launch new companies; and the living environment is quite attractive, especially for Russian-speaking people, who do not have to contend with linguistic and cultural obstacles. All this was achieved to some extent by happenstance, but if we try to project the existing realities into the future, then it is possible to systematically develop life and business environments in such a way that it becomes attractive not only in wartime, but also at any time, and not only for Russian-speaking people, but also for Europeans, Indians, Iranians and others. In the long run, it is possible to envision tens of thousands of foreigners, mostly representatives of the business sector, as permanent residents of Armenia, to keep and manage their capital here to create jobs and new economic opportunities. This can also be attributed to Armenian capital, which can work anywhere in the world, but be managed from Armenia, given that the banking system is flexible and advanced, the professional workforce is educated and dynamic, the technological sector is ready to solve complex problems, and the liberal environment provides additional advantages for activities. If we add to this the possibility of becoming a transit hub for services, technologies and capital between the West on the one hand, and Russia, Iran and India on the other, then the picture is complete and becomes quite realistic, although its implementation will also require enormous efforts and years of work.
What real mission can we undertake?
If we try to combine the main global processes and Armenia’s existing resources, then, as a first approximation, the following opportunities open up for Armenia from the point of view of assuming a leading role in the region in the coming decade:
- A high-tech service center that specializes in the development and scaling of artificial intelligence solutions for the financial and professional sectors
- Center for high-tech military industry and military affairs, specializing in the combat application of artificial intelligence and modern battlefield management systems solutions
- A hub for the management of transit, financial, technological and humanitarian flows between Europe, Russia, India, Iran and China, with a modern life and business infrastructure
- A country based on green energy, with an ecologically clean-living environment that’s safe and attractive for Armenian and foreign tourists, returning seniors, as well as businessmen
- Scientific-cultural center, which organically synthesizes our spiritual and cultural heritage with modern culture and humanities, becoming the translation and artistic hub of the region.
If this list seems incomplete, you can add new options, remembering however, that being here implies a high bar of ambition: not just activity, but real excellence, not individual success, but a systemic one. If, however, we succeed in at least three of the five directions mentioned above, it will significantly change the perspective of our country, giving it a clear mission, a stable motivation to live and work in Armenia and additional security guarantees. Therefore, the main task of the coming years will be not just to succeed in the individual field, but to mobilize forces and cooperate with like-minded people in order to achieve systemic success, to become a serious actor in the region and beyond its borders and to scale our results.
So how can we ensure the security of our country before reaching the proposed bright future? The answer is not one-size-fits-all and requires a similar in-depth discussion. I promise to present to you my ideas about it in the next article, not claiming an unequivocal solution, but being convinced that having a clear vision for our future and a conscious mission, we will find that solution as well.
Ara Nazarian, PhD
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