There is a fresh impetus in Yerevan to deepen and develop relations with Tokyo, seen as a key Asian trade market, a partner in forging a knowledge-based economy and a logical hedge to Belt and Road engagement.

Armenia has long held a special affinity for Japan. Stemming from the centuries-old presence of Armenian businessmen throughout Asia, including a small but significant commercial elite in Singapore, Thailand and India, Japan was a key outpost for early Armenian diplomacy.

As early as 1920, Armenia was represented by Diana Apcar, an ethnic Armenian, but Rangoon-born – now Yangon – intellectual who, as Armenia’s Honorary Consul in Japan, was possibly the first female diplomat in history.

Japan’s pivotal position as the center of Armenian diplomacy in Asia continues. Armenian Ambassador Grant Pogosyan stands out by virtue of a rare combination of being both a professional diplomat and a local professor, with more than two decades of experience teaching at a university in Tokyo.

As a fluent Japanese speaker, Ambassador Poghosyan has contributed to the substantial deepening and development of bilateral Armenian-Japanese relations, including an expanded breadth that encompasses humanitarian and cultural ties beyond the traditional areas of political and economic cooperation.

Although Japan was one of the first countries to recognize the newly independent Republic of Armenia in September 1992, the Armenian embassy in Tokyo was not established until 2010, while Japan opened its embassy in Yerevan in 2015.

Diplomatic, economic and commercial ties have nevertheless consistently expanded, with two Armenian presidential and two foreign ministerial visits to Japan from 1999-2012, as well as several separate visits by the Armenian premier, various ministers and parliamentarians.

Bilateral trade is promising, but relatively meager to date, with Armenia exporting to Japan only about 1.17 billion yen (US$9.8 million) and importing roughly in 2.17 billion yen worth of goods and products in 2017. Japan’s role as a donor to Armenia is far more significant, however, with official development aid extended through 2016 totaling approximately 39 billion yen in loans and grants, with an additional 4.5 billion yen in financing for technical cooperation.

In recent years, official Japanese trips to Armenia included four visits by the parliamentary vice-ministers for foreign affairs, and one visit by the state minister for foreign affairs, as well as a high-profile visit by current Japanese Foreign Minister Taro Kono in September 2018.

Endowed with a refreshing degree of strategic vision on the Armenian side, there is a more focused approach to forging a strategic relationship with Japan. This improvement stems from two main factors.

New markets, IT

The first, most fundamental driver of Armenia’s renewed engagement of Japan is rooted in a revised strategic vision that elevates attention to the importance of Asia as a source of new markets and investors for Armenia.

This belated recognition of the importance of Asia as a strategic target is bolstered by a steady influx of Asian tourists to Armenia.

For Armenia, which is seeking to correct its over-dependence on Russia, the deepening ties with Tokyo are also based on an understanding that Moscow will be much more permissive of such diplomacy in Asia than any deeper embrace of the West.

A second factor shaping Armenia’s pursuit of Japan stems from the Armenian government’s recently articulated goal of forging a more innovative knowledge-based economy, leveraging the synergy of its surging IT sector with the desire for Japanese technical expertise, applications and hardware.

A key component in this area is the necessity for Armenia to tailor Japanese technical and technological training programs to address what has become a shortfall in Armenian education and a shortage of a new generation of skilled IT workers and specialists.

The signing of a new Japan-Armenia Investment Agreement in 2018 has also granted new impetus to the expansion of bilateral relations. The agreement offered most-favored-nation status, and it is also expected to encourage Japanese investment in Armenia’s growing information technology sector. It is this agreement, and its inherent focus on IT, that reveals the deeper strategy underlying Armenia’s view of Japan.

Balancing the Belt

But it is geopolitics and Armenia’s quest for greater strategic balance that makes Japan so attractive. More specifically, with a sustained policy of developing relations with China, Armenia sees a need for balance and parity by also deepening relations with Japan.

And looking beyond geopolitical balancing between Beijing and Tokyo, the imperative for Yerevan in this context is “strategic diversification,” mandated by the spring 2018 Velvet Revolution that swept Armenia’s new government to power.

For Armenia, this localized focus on strategic diversification reflects the divergence of Armenia’s relationship with China and Japan.

With China, Armenia relies on the need for alternative military and security ties, beyond simply an over-dependence on Russia, as well as the potential of indirect dividends or economic spillover from China’s Belt and Road Initiative.

The latter promise of Chinese capital investment in regional infrastructure is also an important longer-term goal for Armenia.

Armenia’s view of the grand Belt Road Initiative project also sees China as a gateway for greater “inter-connectivity” and essential consideration of remote, isolated and landlocked Armenia. But at the same time, Japan is also valued as a source for a different, and more advanced form of such inter-connectivity, offering Armenia a path to greater technological integration and access, a much more pressing factor than basic Chinese capital investment in roads and rail.

The Armenian strategy is based on a view of Japan as a pivotal player with the capacity to counterbalance China and to go beyond any over-reliance on still-distant Belt and Road projects.

Armenia’s neighbors in the South Caucasus have taken a more China-focused approach, with Georgia relying more heavily on Beijing as a partner for the financing of its infrastructure and Azerbaijan also looking to the Chinese for cooperation in its energy sector. Neither country seeks to engage Japan as an offset to balance against expectations from China’s Belt and Road vision.

Against this backdrop of a more refined and better defined strategic vision, Armenia is now moving quickly to forge an enhanced and empowered policy of engaging Japan.

Bolstered by the country’s already deepening relationship with China, this balanced “pivot” to Asia offers Armenia an important new opportunity, an imperative given the lack of credible Belt and Road opportunities to date.

Richard Giragosian is the director of the Regional Studies Center, an independent think tank in Yerevan, Armenia.