'Crossroads of Peace' Deadlocked: Nikol Pashinyan’s Geopolitical Gamble May Cost Armenia Its Economy

Nikol Pashinyan's election platform, which presents Armenia as a "crossroads of peace,” could lead to financial collapse and a sharp fall of the dram amid conflict with the Eurasian Economic Union (EAEU).

Photo: wikimedia.org by Soghomon Matevosyan, https://creativecommons.org/licenses/by/4.0/

People of Armenia

Parliamentary elections in Armenia are approaching and will take place on June 7. Prime Minister Nikol Pashinyan has built the campaign platform of his Civil Contract party around two key ideas.

Armenia intends to remain a member of the Eurasian Economic Union while simultaneously continuing reforms based on European standards for as long as possible.

"When the time comes to make a choice, the people of Armenia will make that choice,” he said.

In contrast to the words of Belarusian President Alexander Lukashenko — "Who needs Armenia, where will it go?” — Pashinyan appeals to Armenian national pride.

He projects confidence that Armenia is needed by everyone because it is becoming a "crossroads of peace” that is important "to the East, the West, the North and the South.” He refers to transport corridors passing through Armenia that could allow Yerevan to boost its economy through transit tariffs.

Armenia Will Not Become 'Crossroads of Peace' So Easily

It is worth examining these corridors in detail.

The international North-South transport corridor relies on cargo flows provided by Russia and the EAEU, and it is already functioning.

The East-West transport corridor (TRIPP), also referred to as "Trump's road of peace” and formerly known as the Zangezur Corridor, includes the restoration and construction of rail and road links between mainland Azerbaijan and the Nakhchivan Autonomous Republic through Armenia's Syunik region and other northern territories before continuing into Turkey.

The route passes very close to the Iranian border. The United States, which has been designated as the project's overseer, remains in a state of permanent confrontation with Iran, so investors continue to hesitate.

TRIPP itself forms part of the Middle Corridor, the Trans-Caspian route linking China and Central Asia with Europe while bypassing Russian territory.

Along this route, cargo must repeatedly switch between trains, ferries crossing the Caspian Sea, trucks and railways, significantly increasing transit costs.

Port infrastructure on the Caspian Sea, including shortages of container vessels and terminals, is not yet prepared for a sharp rise in cargo traffic.

At the same time, Azerbaijan and Iran have started actively building an alternative route along the southern bank of the Araks River. The existence of this alternative reduces the commercial attractiveness and monopoly status of TRIPP.

In addition, while Armenia remains a member of the EAEU, customs control on the Turkish border will remain complicated.

As a result, the so-called "crossroads of peace” currently exists only in theory. It requires enormous investment, which Armenia itself does not possess, while the political environment in the region remains highly unstable.

Nevertheless, Pashinyan behaves as though he sits at the top of the mountain.

Without naming Russia and Belarus directly, he warned that Armenia is no longer a country that can be intimidated by rising potato or gas prices.

Lacking the courage to attack Moscow directly, he continuously attacks Minsk, accusing Belarus of "activating its agent” in order to "bind Armenia once again as it was before 2018.”

Everything appears to be moving toward a moment when Armenians may begin asking: "Why is this happening to us?”

Armenia Wants to Prosper on Russian Money

There is an old Russian saying: you should celebrate with your own money.

Armenia purchases Russian gas at $177.5 per thousand cubic meters and then adds taxes to that amount, including VAT and other charges.

As a result, the tariff set for the population by Armenia's Public Services Regulatory Commission rises to around $400 per thousand cubic meters.

Gazprom's share in that tariff through Gazprom Armenia also exists, but it is not pure profit.

It covers domestic operating costs for main gas pipelines and local distribution networks, gas metering, dispatch services, technological maintenance and compensation for delivery losses caused by Armenia's mountainous terrain. Gasification in Armenia stands at approximately 95 percent.

These tariffs are established by the Armenian regulator, and Gazprom Armenia cannot independently raise prices. The company must submit a request to the commission, which makes the final decision.

Russia has already issued warnings to Armenia. Imports of Armenian mineral water and cognac have been suspended, yet Pashinyan does not appear concerned.

Russia's Military Base in Gyumri Remains Important for Armenia

The prime minister appears convinced that Russia will tolerate his behavior because Moscow needs its military base in Gyumri.

Yet Armenia itself needs the base no less, as it serves as the main deterrent against potential aggression from Ankara and Baku.

The West cannot offer such guarantees because it shares no common border with Armenia.

Russia also possesses leverage beyond gas supplies.

Experts estimate that Armenia's food, alcohol and tobacco industries could see production fall by 30 percent if transport routes to Russia were blocked.

By the beginning of 2026, changes in trade rules and a decline in re-export volumes had already reduced Russian-Armenian trade turnover by nearly half, down to $6.4 billion.

A complete shutdown of trade channels would trigger a severe liquidity shortage in Armenia's banking sector and cause the dram to fall sharply.

Ukraine, however, did not abandon its destructive course despite suffering similar losses.

On June 7, Armenia will quite literally decide its future.