Armenia Choking as Economic Stranglehold Tightens

The latest price of the undeclared war between Armenia and Azerbaijan is bread.

Throughout the Armenian capital, irritable bread lines stretched for blocks last week, with one particular monster on Marshal Bagramian Avenue running to more than 500 people.

“This is not living. We’re barely existing,” said nuclear engineer Misha Shakhkeldian, who had finished his last loaf the day before and expected to stand in line 12 hours Thursday to replace it.

Azerbaijan is also reported to be hurting economically because of the conflict over the disputed territory of Nagorno-Karabakh and suffering through bread lines of its own, the likes of which Russia has not seen for almost a year.

But Armenia bears the economic brunt of the dispute. It is caught in a geographical dead end that leaves it dependent on hostile Azerbaijan, which once forwarded 85% of Armenian imports, and war-torn Georgia for its road and rail ties to the outside world. And after four years of near-isolation, the Armenian economy shows it.

The ancient Caucasus Mountains country of 4 million lost its flour supply recently because of fighting in Georgia, where ethnic Abkhazians are battling for independence. Earlier this month, militants blew up the bridge there that was one of Armenia’s last ties to Russia.

Fuel in Armenia is in such short supply that when airplanes take off for Moscow, often after two or three days’ delay, they can only make the short hop to the Black Sea town of Sochi, where flight crews hand over suitcases of cash for the fuel to fly onward.

“Basically, Armenia is in a total blockade,” Deputy Energy Minister Mels Akopian said.

Without fuel and raw supplies for its factories, Armenian industry is running at only about 40% of capacity, Akopian estimated. Electricity and water are cut off for several hours a day in the capital, and Armenians shivered through last winter with little heat in their homes.

According to an analysis by the Armenian president’s office, Azerbaijan’s blockade has caused a total of 25 billion rubles in damage--more than $100 million--just at the crucial period when the country must make the difficult transition from socialism to a free market.

The chronic shortages have also brought political troubles for Levon Ter-Petrosyan, the scholar-president who was elected amid much acclaim last fall. His opposition, led by the rival Dashnak Party, has gained ground recently and organized several rallies in central Yerevan to demand his resignation.

After unimpressive showings at the demonstrations and a conciliatory gift of government posts from Ter-Petrosyan, opposition members appeared to have quieted down last week. But the bread lines were doing their work for them.

“I think the president is just a marionette,” Shakhkeldian said as the line inched forward. “He’s a good person, but he can’t do anything.” The downcast citizens waiting in the queue said that they had heard about the blown-up Georgian bridge, but they knew perfectly well that the problem did not lie in a single river crossing.

“It’s all connected with Karabakh,” said economist Michael Mnatsakian, about 100th in line. “For the roads to open again, the Karabakh issue has to be resolved.”

Easier said than done. Battles continued to rage this weekend in the mountainous enclave of 150,000 people, populated mainly by Armenians but technically part of Azerbaijan. At least 2,000 people have died there in more than four years of fighting.

Armenian sources claimed Saturday that the latest skirmishes in the Mardakert region had cost 200 Azerbaijani soldiers their lives. Azerbaijan, on the contrary, claimed its forces were on the verge of retaking several key points, including the narrow Lachin corridor that links Nagorno-Karabakh with Armenia.

Negotiations to stop the fighting have led nowhere for years now. Armenian and Azerbaijani officials reported yet another impasse last week and are now expected to take their case yet again to the United Nations.

Long-suffering Armenians understand the difficulties of such talks, presidential adviser Gerard Libaridian said, and that is why their travails have not evolved into a powerful movement to bring Ter-Petrosyan down.

“The only alternative” to Ter-Petrosyan’s attempts to reach a peace settlement “is real war against Azerbaijan,” Libaridian said. “And people don’t want that.”