the challenges facing landlocked developing countries: a case study ...

With the closure of the Turkish and Azerbaijani borders, Armenia has become increasingly
dependent on Georgia and Iran. Armenia’s relations with Iran are warm, and have witnessed
increased efforts by both governments to further political relations in order to facilitate the
nations’ increasing economic interdependence. Relations with Georgia have also seen recent
improvements, deriving largely from an increasing economic interdependence. Tensions
between Armenia and Georgia, however, still exist, stemming largely from Georgia’s
increasing alliance with the West and political distance from Russia, its cooperation with
Azerbaijan and Turkey in the construction of the Baku-Ceyhan pipeline, and discrimination
against Armenians in Georgia. Attempting to improve their bilateral relations, Georgia and
Armenia signed an agreement in 2001 promising not to enter into alliances considered to be
hostile to the other country. Political instability in Georgia, most notably the two recent civil
wars, also placed on this trade route for Armenia.
Despite the ongoing tensions with its neighbors, Armenia continues to maintain extremely
close political relations with its most important trade partner, Russia. In fact, Russia
maintains a military presence in Armenia, controlling its borders and protecting its national
security.
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