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Strategies & Market Trends : Investment in Russia and Eastern Europe -- Ignore unavailable to you. Want to Upgrade?

To: CIMA who wrote (891)	1/14/1999 9:12:00 AM
From: CIMA	Respond to of 1301

Russia Builds Presence in Caucasus - Upgrades Arsenal in Armenia Summary: * Russia has announced its decision to deploy state of the art surface to air missiles to Armenia, boosting its commitment to the former Soviet republic. Russia's relationship with Armenia allows it to increase pressure on Georgia and Azerbaijan, as well as to have increased influence in the Middle East. Analysis: Russian ambassador to Armenia, Yuri Dryukov, announced on January 13, 1999 that Russia would deploy S-300 air defense missiles to Armenia. According to Dryukov, the missile deployment is part of an ongoing effort to modernize the Russian arsenal in the former Soviet Republic. Aging Mig-23 aircraft were replaced last month by a more modern squadron of MiG-29 fighters. These deployments come amidst growing tension in the region, and should serve not only to exacerbate the situation but also as a mechanism for applying pressure on other former Soviet Republics. While Armenia is delighted by the Russian presence, other former Soviet satellites have rejected Moscow's overtures. Russia's presence has distressed Georgia, Armenia's neighbor to the west. Last month Russian peacekeeping forces killed a Georgian soldier. And on the night of January 6, drunk Russian troops in the Abkhazia region of Georgia opened fire on Georgian internal troops. While there were no casualties, the Georgian government sent a warning to Moscow that it would not allow Russian peace- keeping troops to remain in Georgia if Russian troops were not brought under control. Russian troops are currently stationed in Georgia to enforce a 1994 cease-fire between Georgia and Abkahzia, a region which first broke away from and then fought a war with Georgia from 1992-93. In addition to problems arising from its intolerance of allegedly unruly Russian soldiers, Georgia has also accused Russia of backing separatists in Abkhazia. To the east of Armenia, Azerbaijan is mistrustful of Russian intentions in the area. In December, Azerbaijan voiced concern over sales and deployment of weapons to Armenia. Growing cooperation between Armenia and Russia is worrisome to Azerbaijan, which was reflected in the Azeri Defense Minister's visit on December 24 to Turkey. Lieutenant General Safar Abiyev's discussions with Turkish officials focused specifically on the situation in Armenia. Azerbaijan maintains that, since a cease- fire was signed in 1994, Armenia has shown no signs of working towards a negotiated solution to their unresolved mutual conflicts. Azerbaijan regards the deployment of the S-300 missiles and newer MiG fighters to Armenia as a threat to security in the region. Armenia remains very receptive to the idea of strengthening its relationship with Russia. On January 3 Foreign Minister Vardan Oskanyan said that Armenia's main policy achievement for 1998 was improving relations with Russia. For its part, Russia undoubtedly sees a strong alliance with Armenia as a springboard for reasserting influence in the region. Although nations in the region have accused Russia of encouraging conflict in CIS states, Russia denies these claims. Nevertheless Moscow would certainly stand to benefit from friction among its former territories, allowing Russia to spread its tentacles once again by causing these countries to rely on it as the only power capable of guaranteeing peace in the region. Russia's increased attention to Armenia is more of the rekindling of Soviet imperialism that we have discussed in previous issues of the GIU. Armenia will be a strategic platform from which to launch and strengthen what we see as Russia's gambit to restore the borders of the Soviet Union. Armenia's geographic position makes it an ideal location from which Russia can implement policies to restore dominance in the region. Armenia is situated between two troublesome republics, Georgia and Azerbaijan, and is also an entry point into the Middle East. Communism may have collapsed earlier this decade, but the West's limited and erratic effort to restructure the post-Soviet world has failed either to moderate national conflicts in the Caucasus or to subdue Russia's imperialist impulses. ___________________________________________________ To receive free daily Global Intelligence Updates, sign up on the web at stratfor.com, or send your name, organization, position, mailing address, phone number, and e-mail address to alert@stratfor.com ___________________________________________________ STRATFOR, Inc. 504 Lavaca, Suite 1100 Austin, TX 78701 Phone: 512-583-5000 Fax: 512-583-5025 Internet: stratfor.com Email: info@stratfor.com