TURKISH-U.S. RELATIONS:
THE ROLE OF THE ARMENIAN ISSUE
Although several broad geopolitical issues have contributed to a fundamental shift in strategic relations between Turkey and the United States, the Armenian issue represents one of the more complex challenges facing Turkey today. Specifically, the Armenian issue comprises a daunting set of unresolved problems, ranging from the genocide issue to the Nagorno Karabagh conflict. The significance of the Armenian issue goes well beyond the confines of the Caucasus, as the current stage of Turkey’s transition will be particularly impacted by its approach to relations with Armenia and its handling of the deeper aspects of the Armenian issue.
Richard Giragosian *
The long history of bilateral relations between the Republic of Turkey and the United States has not been without occasional divisions and disputes. In recent years, however, the very foundation of Turkish-U.S. relations has been altered by the dynamic changes in the post-Cold War geopolitical landscape. Although the crisis in relations between the two countries was most evident in the public display of differences over U.S. policy related to Iraq , we have seen deep and profound tension become an underlying trend in the relationship.
A long-standing factor shaping the course of Turkish-American relations has been the “Armenian issue.” Specifically, the Armenian issue comprises a daunting set of unresolved problems, ranging from the genocide issue to the Nagorno Karabagh conflict. At the current stage of the Turkish transition, the Armenian issue has garnered an enhanced significance, with direct implications for the course of Turkey 's evolving role and mission as a NATO member and an aspiring member state of the European Union (EU).
The policy choices and political challenges now facing the Turkish leadership, therefore, pose unique questions regarding the trajectory of the modern Turkish state. But perhaps most importantly, there is also a unique opportunity for a new Turkish approach to relations with Armenia and its handling of the deeper aspects of the Armenian issue. Moreover, the depth and scope of the transition within Turkey today offers an important opportunity for reevaluation and modification of Turkish-Armenian relations. The real test for Turkey , in terms of its relations with Armenia , is actually a tangible reward, although new Turkish policy must emerge as a result of sophisticated design, for it will not happen by default.
The Development of Turkey 's Approach to Armenia
The last decade and a half has seen an evolution in Turkish foreign policy. This evolution has been matched by a related, yet secondary trend of internal change as well. Stemming in large part from the broader pressures of strategic geopolitical change on a global scale, the course of Turkish foreign policy has also been subject to the more concrete pressures of modernization from within Turkish society itself. These pressures have resulted in shifts in both Turkish “security culture” and its approach to regional security. 1
The most profound change for Turkish foreign policy was the 1991 collapse of the Soviet Union . The abrupt end to the Cold War led to an immediate questioning of Turkey 's decades-long role as a front line NATO state defending Western interests. Turkey was quick to adapt to the new geopolitical realities, however, and quickly redefined its role as a “proxy power” for Western, NATO and U.S. interests in the security vacuum that emerged in the former Soviet regions of the Caucasus and Central Asia . This Turkish power projection was welcomed by the U.S. and the NATO alliance, which saw an opportunity for Turkey to counter both the traditional Russian dominance and to check any potential Iranian bid for influence and power in these regions.
This new Turkish initiative was not confined to merely the Caucasus and Central Asia, however, as Turkey also targeted the Black Sea region, the Balkans, and the Middle East . During the early 1990s period, Turkey also launched a new multilateral engagement in the arena of regional security structures with a new emphasis and even took the initiative, as in the creation of the Black Sea Economic Cooperation (BSEC) organization, for example. 2
The course of Turkish relations with Armenia was, therefore, rooted in this broader context of activism and engagement. The Turkish approach toward Armenia has also been subject to the demands of the overall Turkish engagement with the other former Soviet states, with an obvious and natural preference for the Turkic states. And given the conflict over Nagorno Karabagh, the dominant role of Azerbaijan within this Turkish strategy was an inherent impediment to the establishment of a normal or stable relationship with Armenia .
The Özal Initiative
The Turkish initiative to engage the new states of the Caucasus and Central Asia was driven by then President Turgut Özal. Under Özal's direction, Turkish policy went beyond even the parameters of the former Soviet Union, however, and garnered greater geopolitical gains by positioning Turkey as an integral element in the planning and execution of the U.S. military's Gulf War that drove Iraqi forces from Kuwait . This move also confirmed Turkey 's engagement in the Middle East and strengthened the evolving military partnership with Israel .
But, it was the newly independent Turkic states of Azerbaijan , Kazakhstan , Kyrgyzstan , Turkmenistan , and Uzbekistan that were the centerpiece of Turkish policy in the early-to mid-1990s. 3 As the president of the first nation to formally recognize the independence of these states, President Özal attempted to consolidate Turkish patronage by hosting an inaugural summit of Turkic states in 1992. This was followed by a flurry of commercial overtures, pledges of diplomatic support and an early effort to revive the historic “Silk Road” trade route connecting Central Asia via Turkey to the West.
This Turkish bid for regional power and influence in Eurasia only exacerbated Armenia'a sense of isolation and insecurity. Consumed by the daunting demands of sudden independence, conflict with Azerbaijan over Nagorno Karabagh, and the collapse of the Soviet economic system, Armenia was caught between what it perceived as a threatening revival of pan-Turkism and a Turkish refusal to even respond to Armenian overtures for normal relations. This was most evident in the Turkish refusal to extend diplomatic relations to Armenia , despite its recognition of Armenian independence in January 1992.
Turkish Ambition Turns to Frustration
By the time of his death in 1993, President Özal's ambitious initiative seeking Turkish dominance in Central Asia and the Caucasus had dramatically stalled. Although several factors contributed to the demise of the Özal strategy, the most important factor was the disappointment experienced by the Turkic states. In the initial post-Soviet period there were inflated expectations of the wonders and riches of the capitalist system, and with the early flurry of Turkish promises of trade and pledges of aid, there was a pronounced disappointment with the meager results.
The new independent leaders saw Turkish patronage as attractive but arrogant, and despite the appeal of a fellow Turkic and Islamic counter to Russian domination, the Central Asian states were particularly angered by a Turkish approach that was perceived as more condescending than partnering. And for Azerbaijan , the disappointment was rooted in more than the dimension of economic gain, as it looked to Turkey for much more in terms of military and political support against Armenia .
Despite the frustrations and limitations of the Özal initiative, it did, however, succeed in building a solid foundation for Turkish influence among the newly independent states. But by the mid-1990s, the focus had shifted considerably, becoming dominated by energy and the complicated pipeline politics of exporting oil and gas from the Caspian Sea . For Turkey , the Caspian energy issue served to solidify its geopolitical value as the sole Western power able to effectively outmaneuver both Russia and Iran as the principal partner for Azerbaijani energy development plans.
Leveraging Energy as Strategic Power
As the energy issue also spurred a deepening of strategic relations between Turkey and Azerbaijan , Armenia was quickly overwhelmed by a sophisticated Turkish geopolitical strategy leveraging energy for regional power. This strategy was two-pronged: the first was to establish Turkey as the dominant energy player in the region, while forging greater energy dependence on Turkey , and secondly, to isolate both Russia and Iran . An important, yet secondary benefit from this two-pronged strategy was the exploitation of Armenia 's energy insecurity.
This strategy was executed by exploiting its own position as regional proxy for the United States , and to a lesser degree, for Europe, offering an attractive route for the export of energy from the Caspian Sea . By positioning itself as a reliable alternative to both Russia and Iran as a main export route, Turkey secured Western backing for a plan to construct a new oil pipeline from Baku to its Ceyhan port on the Mediterranean Sea.
By assuming the leading role in the development of Azerbaijan 's Caspian reserves, Turkey was also able to construct an even more effective policy of isolating Armenia . The Baku-Ceyhan project, although stressing its exclusion of Russia and Iran , also resulted in the exclusion and isolation of Armenia from the development of regional energy . This new pipeline also ensured Georgian participation and, in fact, heightened Georgian dependence on the Turkish-led project.
Energy has also served as the central driver in the recent warming of relations between Turkey and Russia . This development is driven by the “Blue Stream” project, which supplies a significant amount of Russian natural gas from the Black Sea . This is a vital part of addressing Turkey 's mounting demand for energy but it also bolsters the recent expansion in trade between Turkey and Russia . This also offers Turkey an important strategic advantage for advancing its longer-term agenda for the Caucasus and Central Asia .
Azerbaijan as Strategic Partner
Another result of the activism of the Özal period was the deepening of the Turkish strategic partnership with Azerbaijan . As this relationship expanded in the mid-1990s with a convergence of both countries' energy needs and goals, it also became a fundamental factor in driving Turkey and Armenia farther apart. The tension existing between Turkey and Armenia over the Armenian genocide was not the only cause of this widening gap. Turkish geopolitical considerations, including its growing partnership with Azerbaijan, the impact of Russian relations with Armenia, and the course of the Nagorno Karabagh conflict did more to impede the development of normal relations than any Turkish displeasure over an Armenian campaign for genocide recognition.
The Azerbaijani exclave of Nakhichevan was one key factor directly impacting Turkey 's Armenian policy. As the only direct border between Azerbaijan and Turkey and separated from Azerbaijan proper by Armenian territory, the inherent vulnerability and strategic importance of the Nakhichevan exclave became a priority concern with the eruption of armed hostilities between Azerbaijani and Armenian forces in 1992. From the Turkish perspective, Nakhichevan posed a test for Turkish-Azerbaijani relations, stemming from a 1921 treaty stipulating a joint Soviet and Turkish role as the guarantors of security in Nakhichevan. Most significantly, it brought the Nagorno Karabagh conflict directly to Turkey 's border.
With other Armenian gains in Nagorno Karabagh and the establishment of a narrow land corridor connecting Armenia with Nagorno Karabagh, senior Turkish military planners became increasingly concerned. By 1993, as Armenian military gains mounted, Karabagh forces seized several Azerbaijani districts beyond the borders of Nagorno Karabagh. Turkey responded by massing 50,000 troops along its border with Armenia and Prime Minister Tansu Çiller “threatened to go to the Turkish parliament to declare war on Armenia .” 4
The Turkish Embargo of Armenia
Following Azerbaijan 's significant military losses, Turkey imposed an embargo on all goods to Armenia in April 1993, which marked the beginning of one of the most strained periods in modern Turkish-Armenian relations. The embargo, initially halting the delivery of wheat and some agricultural products, was further expanded to a virtual blockade, as Turkey cut all rail, road, and air links, closed its border with Armenia, and suspended humanitarian aid to Armenia, as the Turkish government decreed its intention “to terminate all the facilities granted for the routing of aid through our territory.” 5
As Azerbaijan had already imposed its own blockade on all trade, transport and energy links with Armenia , this Turkish move only enhanced the impact of an East-West encirclement of Armenia . The immediate effects on Armenia were profound, as Armenia was seriously energy-dependent and over-reliant on imports from the Russian Federation . Mounting instability in Georgia further disrupted Armenia 's sole external link, exacerbating the initial shortages and energy crisis and leading to a growing exodus of Armenians from their country. But, the Armenian economy quickly adapted so that it was able to cope with the impact of the embargo and the most serious crisis, the embargo on energy supplies, was dealt with by restarting the country's nuclear power plant.
Although the blockade's long term economic impact on Armenia was marginal, the political, diplomatic and security implications of a closed border and the related trade embargo was far more successful in applying consistent pressure on Armenia . The Turkish blockade, although seemingly rooted in Turkey 's role as Azerbaijan 's strategic ally, offered its own threat to Armenian national security well beyond the framework of the Nagorno Karabagh conflict or its relations with Azerbaijan . In fact, the Turkish role in the twin blockade of Armenia was driven as much by its pursuit of regional power as by its support for Azerbaijan .
There is an interesting economic dimension to the Turkish embargo and blockade of Armenia . Over the past several years, the Armenian economy has adjusted and adapted to a closed border with Turkey , most notably demonstrated by the impressive rate of economic growth in Armenia . Thus, the Turkish embargo has long since lost its economic efficiency. Yet there is a second economic aspect of the blockade that offers an incentive to improving Turkish-Armenian relations.
This economic incentive is the driving force behind the efforts of the Turkish-Armenian Business Development Council (TABDC), a group advocating the lifting of all Turkish restrictions and bans on trade and commerce with Armenia. The current level of bilateral trade is limited in scope, as Armenian and Turkish goods must be rerouted through Georgia , and though limited in scale, is roughly $120 million annually. According to the findings of a World Bank study, 6 the economic benefits for all countries in the region is a clear, but often underestimated, lost opportunity for greater economic development as a step toward regional reintegration.
For Armenia , the most significant economic incentive for the lifting of the embargo lies in the potential for reducing unnaturally high transport costs. For Turkey , an added economic incentive is based on the need for job creation and trade-driven development in the country's poorer, underdeveloped districts of eastern Turkey . Overall, the World Bank has concluded that a normalization of trade relations would save Armenia between $6-8 million in transport costs for non-energy products, and would potentially double Armenian exports. 7
In the event of a reopening of its border with Turkey , Armenia also has the potential to expand its role as energy exporter. Specifically, Armenia has the largest capacity for surplus electricity production in the region and regularly exports electricity supplies to Georgia and Iran . If there were an open border with Turkey , Armenia might become a key platform for similar electricity exports to eastern Turkey . This potential has also driven Russian energy planning in the region, seeing Armenia as a convenient avenue for market expansion.
THE ROLE OF THE ARMENIAN ISSUE
Although several broad geopolitical issues have contributed to a fundamental shift in strategic relations between Turkey and the United States, the Armenian issue represents one of the more complex challenges facing Turkey today. Specifically, the Armenian issue comprises a daunting set of unresolved problems, ranging from the genocide issue to the Nagorno Karabagh conflict. The significance of the Armenian issue goes well beyond the confines of the Caucasus, as the current stage of Turkey’s transition will be particularly impacted by its approach to relations with Armenia and its handling of the deeper aspects of the Armenian issue.
Richard Giragosian *
The long history of bilateral relations between the Republic of Turkey and the United States has not been without occasional divisions and disputes. In recent years, however, the very foundation of Turkish-U.S. relations has been altered by the dynamic changes in the post-Cold War geopolitical landscape. Although the crisis in relations between the two countries was most evident in the public display of differences over U.S. policy related to Iraq , we have seen deep and profound tension become an underlying trend in the relationship.
A long-standing factor shaping the course of Turkish-American relations has been the “Armenian issue.” Specifically, the Armenian issue comprises a daunting set of unresolved problems, ranging from the genocide issue to the Nagorno Karabagh conflict. At the current stage of the Turkish transition, the Armenian issue has garnered an enhanced significance, with direct implications for the course of Turkey 's evolving role and mission as a NATO member and an aspiring member state of the European Union (EU).
The policy choices and political challenges now facing the Turkish leadership, therefore, pose unique questions regarding the trajectory of the modern Turkish state. But perhaps most importantly, there is also a unique opportunity for a new Turkish approach to relations with Armenia and its handling of the deeper aspects of the Armenian issue. Moreover, the depth and scope of the transition within Turkey today offers an important opportunity for reevaluation and modification of Turkish-Armenian relations. The real test for Turkey , in terms of its relations with Armenia , is actually a tangible reward, although new Turkish policy must emerge as a result of sophisticated design, for it will not happen by default.
The Development of Turkey 's Approach to Armenia
The last decade and a half has seen an evolution in Turkish foreign policy. This evolution has been matched by a related, yet secondary trend of internal change as well. Stemming in large part from the broader pressures of strategic geopolitical change on a global scale, the course of Turkish foreign policy has also been subject to the more concrete pressures of modernization from within Turkish society itself. These pressures have resulted in shifts in both Turkish “security culture” and its approach to regional security. 1
The most profound change for Turkish foreign policy was the 1991 collapse of the Soviet Union . The abrupt end to the Cold War led to an immediate questioning of Turkey 's decades-long role as a front line NATO state defending Western interests. Turkey was quick to adapt to the new geopolitical realities, however, and quickly redefined its role as a “proxy power” for Western, NATO and U.S. interests in the security vacuum that emerged in the former Soviet regions of the Caucasus and Central Asia . This Turkish power projection was welcomed by the U.S. and the NATO alliance, which saw an opportunity for Turkey to counter both the traditional Russian dominance and to check any potential Iranian bid for influence and power in these regions.
This new Turkish initiative was not confined to merely the Caucasus and Central Asia, however, as Turkey also targeted the Black Sea region, the Balkans, and the Middle East . During the early 1990s period, Turkey also launched a new multilateral engagement in the arena of regional security structures with a new emphasis and even took the initiative, as in the creation of the Black Sea Economic Cooperation (BSEC) organization, for example. 2
The course of Turkish relations with Armenia was, therefore, rooted in this broader context of activism and engagement. The Turkish approach toward Armenia has also been subject to the demands of the overall Turkish engagement with the other former Soviet states, with an obvious and natural preference for the Turkic states. And given the conflict over Nagorno Karabagh, the dominant role of Azerbaijan within this Turkish strategy was an inherent impediment to the establishment of a normal or stable relationship with Armenia .
The Özal Initiative
The Turkish initiative to engage the new states of the Caucasus and Central Asia was driven by then President Turgut Özal. Under Özal's direction, Turkish policy went beyond even the parameters of the former Soviet Union, however, and garnered greater geopolitical gains by positioning Turkey as an integral element in the planning and execution of the U.S. military's Gulf War that drove Iraqi forces from Kuwait . This move also confirmed Turkey 's engagement in the Middle East and strengthened the evolving military partnership with Israel .
But, it was the newly independent Turkic states of Azerbaijan , Kazakhstan , Kyrgyzstan , Turkmenistan , and Uzbekistan that were the centerpiece of Turkish policy in the early-to mid-1990s. 3 As the president of the first nation to formally recognize the independence of these states, President Özal attempted to consolidate Turkish patronage by hosting an inaugural summit of Turkic states in 1992. This was followed by a flurry of commercial overtures, pledges of diplomatic support and an early effort to revive the historic “Silk Road” trade route connecting Central Asia via Turkey to the West.
This Turkish bid for regional power and influence in Eurasia only exacerbated Armenia'a sense of isolation and insecurity. Consumed by the daunting demands of sudden independence, conflict with Azerbaijan over Nagorno Karabagh, and the collapse of the Soviet economic system, Armenia was caught between what it perceived as a threatening revival of pan-Turkism and a Turkish refusal to even respond to Armenian overtures for normal relations. This was most evident in the Turkish refusal to extend diplomatic relations to Armenia , despite its recognition of Armenian independence in January 1992.
Turkish Ambition Turns to Frustration
By the time of his death in 1993, President Özal's ambitious initiative seeking Turkish dominance in Central Asia and the Caucasus had dramatically stalled. Although several factors contributed to the demise of the Özal strategy, the most important factor was the disappointment experienced by the Turkic states. In the initial post-Soviet period there were inflated expectations of the wonders and riches of the capitalist system, and with the early flurry of Turkish promises of trade and pledges of aid, there was a pronounced disappointment with the meager results.
The new independent leaders saw Turkish patronage as attractive but arrogant, and despite the appeal of a fellow Turkic and Islamic counter to Russian domination, the Central Asian states were particularly angered by a Turkish approach that was perceived as more condescending than partnering. And for Azerbaijan , the disappointment was rooted in more than the dimension of economic gain, as it looked to Turkey for much more in terms of military and political support against Armenia .
Despite the frustrations and limitations of the Özal initiative, it did, however, succeed in building a solid foundation for Turkish influence among the newly independent states. But by the mid-1990s, the focus had shifted considerably, becoming dominated by energy and the complicated pipeline politics of exporting oil and gas from the Caspian Sea . For Turkey , the Caspian energy issue served to solidify its geopolitical value as the sole Western power able to effectively outmaneuver both Russia and Iran as the principal partner for Azerbaijani energy development plans.
Leveraging Energy as Strategic Power
As the energy issue also spurred a deepening of strategic relations between Turkey and Azerbaijan , Armenia was quickly overwhelmed by a sophisticated Turkish geopolitical strategy leveraging energy for regional power. This strategy was two-pronged: the first was to establish Turkey as the dominant energy player in the region, while forging greater energy dependence on Turkey , and secondly, to isolate both Russia and Iran . An important, yet secondary benefit from this two-pronged strategy was the exploitation of Armenia 's energy insecurity.
This strategy was executed by exploiting its own position as regional proxy for the United States , and to a lesser degree, for Europe, offering an attractive route for the export of energy from the Caspian Sea . By positioning itself as a reliable alternative to both Russia and Iran as a main export route, Turkey secured Western backing for a plan to construct a new oil pipeline from Baku to its Ceyhan port on the Mediterranean Sea.
By assuming the leading role in the development of Azerbaijan 's Caspian reserves, Turkey was also able to construct an even more effective policy of isolating Armenia . The Baku-Ceyhan project, although stressing its exclusion of Russia and Iran , also resulted in the exclusion and isolation of Armenia from the development of regional energy . This new pipeline also ensured Georgian participation and, in fact, heightened Georgian dependence on the Turkish-led project.
Energy has also served as the central driver in the recent warming of relations between Turkey and Russia . This development is driven by the “Blue Stream” project, which supplies a significant amount of Russian natural gas from the Black Sea . This is a vital part of addressing Turkey 's mounting demand for energy but it also bolsters the recent expansion in trade between Turkey and Russia . This also offers Turkey an important strategic advantage for advancing its longer-term agenda for the Caucasus and Central Asia .
Azerbaijan as Strategic Partner
Another result of the activism of the Özal period was the deepening of the Turkish strategic partnership with Azerbaijan . As this relationship expanded in the mid-1990s with a convergence of both countries' energy needs and goals, it also became a fundamental factor in driving Turkey and Armenia farther apart. The tension existing between Turkey and Armenia over the Armenian genocide was not the only cause of this widening gap. Turkish geopolitical considerations, including its growing partnership with Azerbaijan, the impact of Russian relations with Armenia, and the course of the Nagorno Karabagh conflict did more to impede the development of normal relations than any Turkish displeasure over an Armenian campaign for genocide recognition.
The Azerbaijani exclave of Nakhichevan was one key factor directly impacting Turkey 's Armenian policy. As the only direct border between Azerbaijan and Turkey and separated from Azerbaijan proper by Armenian territory, the inherent vulnerability and strategic importance of the Nakhichevan exclave became a priority concern with the eruption of armed hostilities between Azerbaijani and Armenian forces in 1992. From the Turkish perspective, Nakhichevan posed a test for Turkish-Azerbaijani relations, stemming from a 1921 treaty stipulating a joint Soviet and Turkish role as the guarantors of security in Nakhichevan. Most significantly, it brought the Nagorno Karabagh conflict directly to Turkey 's border.
With other Armenian gains in Nagorno Karabagh and the establishment of a narrow land corridor connecting Armenia with Nagorno Karabagh, senior Turkish military planners became increasingly concerned. By 1993, as Armenian military gains mounted, Karabagh forces seized several Azerbaijani districts beyond the borders of Nagorno Karabagh. Turkey responded by massing 50,000 troops along its border with Armenia and Prime Minister Tansu Çiller “threatened to go to the Turkish parliament to declare war on Armenia .” 4
The Turkish Embargo of Armenia
Following Azerbaijan 's significant military losses, Turkey imposed an embargo on all goods to Armenia in April 1993, which marked the beginning of one of the most strained periods in modern Turkish-Armenian relations. The embargo, initially halting the delivery of wheat and some agricultural products, was further expanded to a virtual blockade, as Turkey cut all rail, road, and air links, closed its border with Armenia, and suspended humanitarian aid to Armenia, as the Turkish government decreed its intention “to terminate all the facilities granted for the routing of aid through our territory.” 5
As Azerbaijan had already imposed its own blockade on all trade, transport and energy links with Armenia , this Turkish move only enhanced the impact of an East-West encirclement of Armenia . The immediate effects on Armenia were profound, as Armenia was seriously energy-dependent and over-reliant on imports from the Russian Federation . Mounting instability in Georgia further disrupted Armenia 's sole external link, exacerbating the initial shortages and energy crisis and leading to a growing exodus of Armenians from their country. But, the Armenian economy quickly adapted so that it was able to cope with the impact of the embargo and the most serious crisis, the embargo on energy supplies, was dealt with by restarting the country's nuclear power plant.
Although the blockade's long term economic impact on Armenia was marginal, the political, diplomatic and security implications of a closed border and the related trade embargo was far more successful in applying consistent pressure on Armenia . The Turkish blockade, although seemingly rooted in Turkey 's role as Azerbaijan 's strategic ally, offered its own threat to Armenian national security well beyond the framework of the Nagorno Karabagh conflict or its relations with Azerbaijan . In fact, the Turkish role in the twin blockade of Armenia was driven as much by its pursuit of regional power as by its support for Azerbaijan .
There is an interesting economic dimension to the Turkish embargo and blockade of Armenia . Over the past several years, the Armenian economy has adjusted and adapted to a closed border with Turkey , most notably demonstrated by the impressive rate of economic growth in Armenia . Thus, the Turkish embargo has long since lost its economic efficiency. Yet there is a second economic aspect of the blockade that offers an incentive to improving Turkish-Armenian relations.
This economic incentive is the driving force behind the efforts of the Turkish-Armenian Business Development Council (TABDC), a group advocating the lifting of all Turkish restrictions and bans on trade and commerce with Armenia. The current level of bilateral trade is limited in scope, as Armenian and Turkish goods must be rerouted through Georgia , and though limited in scale, is roughly $120 million annually. According to the findings of a World Bank study, 6 the economic benefits for all countries in the region is a clear, but often underestimated, lost opportunity for greater economic development as a step toward regional reintegration.
For Armenia , the most significant economic incentive for the lifting of the embargo lies in the potential for reducing unnaturally high transport costs. For Turkey , an added economic incentive is based on the need for job creation and trade-driven development in the country's poorer, underdeveloped districts of eastern Turkey . Overall, the World Bank has concluded that a normalization of trade relations would save Armenia between $6-8 million in transport costs for non-energy products, and would potentially double Armenian exports. 7
In the event of a reopening of its border with Turkey , Armenia also has the potential to expand its role as energy exporter. Specifically, Armenia has the largest capacity for surplus electricity production in the region and regularly exports electricity supplies to Georgia and Iran . If there were an open border with Turkey , Armenia might become a key platform for similar electricity exports to eastern Turkey . This potential has also driven Russian energy planning in the region, seeing Armenia as a convenient avenue for market expansion.
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