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Update No: 253

The Armenian republic is in a bad way. It has won a war, but lost the peace. That is in effect the outcome of a lingering dispute with Azerbaijan over the Armenian enclave in the Moslem republic, Nagorno-Kharabakh. Armenia swept in 1988-92to victory and seized 20% of Azeri territory, with strong Russian support. But it now faces a permanent embargo on its trade with two close neighbours, Azerbaijan and Turkey. The economy has suffered.
There is need for a statesmanlike end to the dispute. Robert Kocharyan, the president of Armenia, was once president of the embattled enclave. He would be the ideal person to bring the issue to a conclusion and win a Nobel Peace Prize into the bargain.
But to do that he needs an interlocutor on the Azeri side with the same goals in mind. President Haidar Aliyev is an experienced operator and desperately keen to see resolution to the conflict that could see millions of his over 20 million population restored to their previous property and lands.
Moreover, near the end his likely period of office (he is 77), he personally would benefit largely from a deal, ensuring the succession to his son, Ilham, now deputy head of the oil concern SOKAR.
The obstacle to a settlement is the obdurate refusal of hardliners in Yerevan (and naturally in Nagorno-Kharabakh) to accept the surrender of most, if not nearly all the territory won in the 1988-92 war. People died to win territory, which is now sanctified in blood.
Sooner or later there will be a compromise, and the sooner for Armenia the better. Even the diaspora, a very extensive one, consisting of many more abroad then in Armenia, are fed up with the intransigence of the hardliners. Until they relent, Armenia is unlikely to recover much in the way of attracting foreign investment or recover from its post-Soviet malaise.

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CONSTRUCTION

Armenian capital's mayor details Yerevan face-lift plans

The Armenian capital is looking forward to the changes to the country's constitution. As a result of reforms, Yerevan, which is financed by the state budget, will get the opportunity to form its own budget and effectively solve existing problems, National Television of Armenia has reported.
The capital's mayor, Robert Nazaryan, said that last year's programme for Yerevan's development had been implemented almost completely. Only several points were not implemented due to a lack of funds. It was precisely this lack of funds that prevented the commissioning of two residential buildings at the intersection of Vagarchyan and Kochar Streets last year. Robert Nazaryan assured us that in spite of the difficulties, the construction of the buildings will be finalised in February this year. Thanks to this, 200 families, who have been waiting for their accommodation for more than 12 years, will be able to give a house-warming party.
The 2001 programme envisaged to finalise the construction of Yerevan's southern gate - an important transport knot at the intersection of Echmiadzin Avenue and Vysokovoltnaya Streets. But this was hampered by bad weather. The mayor assured the television viewers that the renewed southern gate of the capital would be open in early March. In 2002, work to improve Yerevan's central streets will continue on the basis of funds allocated by the Lincy Foundation. Robert Nazaryan said that almost the entire city centre would be improved by the end of the year. But most importantly, Republic Square, the heart of the capital, will be unrecognisable after the work is completed.

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ENERGY

Armenia, Iran sign agreement on building gas pipeline

Armenian and Iranian leaders signed an agreement on building a gas pipeline to supply natural gas from Iran to Armenia, Prime-TASS Economic News Agency said.
The agreement was signed during Armenian President, Robert Kocharyan's, visit to Teheran on 25th-27th December.
Construction is due to begin early this year. In its first phase, a 100-km-long section will be built on Iranian territory and a 41 km long section, on Armenian territory. The project will enable Armenia to start getting 1.5m cu. m. of Iranian natural gas a day.
An international consortium comprising Russia's Gazprom, Gas de France, Iran's National Gas Company and the Armenian Energy Ministry will do the construction.
The project is expected to cost of around US$120m. The pipeline's design capacity is 1bn cu. m. a year.

Armenia to supply Georgian capital with electricity

The ArmRosgasprom [Armenian Russian gas industry] company is to continue with electricity supply to the Georgian capital, the company's press service has told Arminfo News Agency.
The company's press service did not specify the terms and the amount of electricity to be supplied to Georgia. However, according to Georgian sources, the amount of electricity supply will remain the same - about 120 MW per day.
The terms of electricity supply to the Georgian capital expired on 20th January this year. The ArmRosgasprom company began supplying electricity to the Georgian capital on 29th December 2001 following an accident in the Gardabani Power Plant. The USA's AES-Telasi company, which is in charge of the Tbilisi power grid, is to pay for the earlier supply of electricity. The cost of the deal has not been disclosed, but Arminfo News Agency has learnt that the American company is buying the electricity at 2.5 cents per kWh.

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ENVIRONMENT

Armenia establishes new water authority

An agency for the management of water resources has been established within the Ministry of Ecology by governmental decision. The agency's purpose is the comprehensive management of water resources, the creation of an inventory of water sources, and water utilization. The new authority is created within the framework of the water resources management programme developed by the World Bank in 1999-2000, said Minister of Ecology Vardan Ayvasyan, Noyan Tapan News Agency has reported.
Ayvasyan noted that in order to make the sector manageable the agency will distribute water according to its usage, issue permits for the utilisation of water sources, keep water surveys, etc. The functions of the agency and the state committee of water management have been redefined, the minister noted. "The agency is the owner of the water resources of Armenia on the state's behalf, while the committee is only a customer," Ayvasyan said.

Armenia to launch programme for protection of ozone layer

In 2002-2006 a national programme will be implemented in Armenia to replace materials furthering the destruction of the ozone layer and to manage refrigerating equipment. The draft programme was discussed at a session at the Tekeyan cultural centre on 17th January, Arminfo News Agency has reported.
The participants in the session pointed out that the programme would be implemented with the support of UNEP - United Nations Environment Programme. During the implementation of the programme a ban will be imposed on imports into Armenia of equipment which contains materials that destroy the ozone layer, and some technologies at the refrigerating enterprise Saga and Armkhimbyt [Armenian Chemical Domestic], which emit aerosols, will be replaced in line with the requirements of the 1987 Montreal protocol. Armenia joined the protocol in 1999.
The session discussed the state of the planet's ozone layer, consequences of its destruction and possibilities for replacing materials and technologies which further the destruction of the ozone layer. The danger of using materials that destroy the ozone layer lies in the length of their impact on the environment - from 60 to 134 years.

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FOREIGN LOANS

World Bank credit to develop Armenian information technology

The World Bank is to give Armenia a credit of US$5m to set up an information technology business-incubator, Arminfo reported. The director of the World Bank office in Yerevan, Oveys Saadat, and Armenian Trade and Industry Minister, Karen Chshmarityan signed a credit agreement in Yerevan recently.
Saadat said that the signing of the agreement in Yerevan showed the World Bank's confidence in the Armenian government and the country's human potential, which is required for the development of information technology. The credit will be granted on easy terms for a period of 40 years with an interest rate of 0.75 per cent per annum. The repayment of the credit will begin 10 years after the credit is granted. This is due to happen in 2002, when the Armenian National Assembly ratifies the agreement.
According to Chshmarityan, the credit is to be spent on the development of enterprises working in the sphere of information technology and the training of personnel. A special structure is to be set up for this purpose. About US$1m will be spent on the training of experts and the rest of the US$4m on repairing and providing technical equipment for the building where the programme will be implemented.

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PRIVATISATION

Armenia earns US$4m from privatisation in 2001

Armenia has earned 2.3bn drams (about US$4m) from privatisation this year against 2.9bn drams [US$5.1m] in 2000, the Armenian State Property Ministry told Arminfo.
The majority of this sum (1.9bn drams [US$3.3m]) came from the privatisation of 82 industrial enterprises, 400m drams [US$709,219] from the sale of trade and public service facilities and 14.5m drams [US$25,709] from the sale of incomplete construction sites.
Large enterprises, such as Transistor [transistor], Almaz [diamond], Sapfir [sapphire] and the Razdan Cement closed-type joint-stock companies etc, have been privatised this year. The total income from privatisation in Armenia is 70bn drams (about US$125m).

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