Georgia: Armenian Economic Concerns

The Armenian Economist comments on the military confrontation between Georgia and Russia noting that 96 percent of Armenia’s trade goes via its northern neighbor. The blog says that Armenia will suffer as a result and concludes that it is now effectively blockaded on all sides.

Much of the country’s exports are destined west, and much of its imports, other than Russian natural gas which is piped through Georgia, are also from the west. The infrastructure that makes these transactions possible is Georgia’s, which by extension is Armenia’s. Unfortunately, this infrastructure is getting degraded with the escalation in hostilities.

From an economic perspective, there will be no winners, and Armenia will be a casualty of this war. There is nothing that the government can do to alter the status quo. […] The country is de facto blockaded on all sides, by (1) instability to the north, (2) Azerbaijan to the east, Iran (the terrain and distance) to the south, and (4) Turkey to the west. Unless wisdom prevails, this winter can be very cold!