By Sebastian Alison
Oct. 20 (Bloomberg) — Russian President Dmitry
Medvedev today visits Armenia, the country’s
closest ally in the South Caucasus, on his first
trip to the region since Russia fought a war with Georgia in August.
This will be Medvedev’s fifth meeting this year
with Armenian President Serzh Sargsyan, and the
first outside Russia, his office said in an
e-mailed statement issued in Moscow ahead of the trip.
“This is a clear demonstration of the high level
of political dialogue aimed at further
strengthening relations of strategic partnership
and unity between Russia and Armenia,” it said.
The former Soviet republic of Armenia doesn’t
border Russia, from which it’s separated by
Georgia and Azerbaijan. As it doesn’t have
diplomatic relations with Azerbaijan after a war
over the disputed region of Nagorno-Karabakh, all
of its trade with Russia, its main foreign trade
partner, is routed through Georgia.
This includes natural gas, with Armenia depending
on a Soviet- era pipeline which crosses Georgia
for its supplies. Russian gas monopoly OAO
Gazprom owns 67.9 percent of Armenian gas company
ZAO ArmRosGazprom and on Sept. 16 agreed to
gradual gas price increases as part of its policy
of cutting subsidies to former Soviet republics.
This gradual approach contrasts with past threats
to cut supplies altogether to Ukraine and
Belarus. It foresees prices rising to
“European” levels by 2011, Gazprom said in a
Sept. 16 statement. Russian gas continued flowing
across Georgia to Armenia even during the war
sparked by Georgian troops entering the breakaway
region of South Ossetia to reclaim it on Aug. 7,
after which the Russian army expelled them in a five-day rout.
Russian-Armenian trade rose 13 percent in the
first eight months of this year compared with the
same period in 2007, reaching $536.5 million, the
Kremlin statement said. Russia has invested more
than $1.6 billion in Armenia since the Soviet
Union broke up in 1991, the statement said. Of
that, $428 million was invested in the first half of 2008.
Medvedev is due to arrive in the Armenian
capital, Yerevan later today and will leave tomorrow.
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