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armenia

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ARMENIA


  
  
 

REPUBLICAN REFERENCE

Area (sq.km)
29,800

Population
3,336,100

Principal ethnic groups
Armenian 93.3%
Azeri 2.6%
Russian 2%

Capital
Yerevan

Currency
Dram

President
Robert Kocharian
 

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Background:
An Orthodox Christian country, Armenia was incorporated into Russia in 1828 and the USSR in 1920. Armenian leaders remain preoccupied by the long conflict with Azerbaijan over Nagorno-Karabakh, a primarily Armenian-populated exclave, assigned to Soviet Azerbaijan in the 1920s by Moscow. Armenia and Azerbaijan began fighting over the exclave in 1988; the struggle escalated after both countries attained independence from the Soviet Union in 1991. By May 1994, when a cease-fire took hold, Armenian forces held not only Nagorno-Karabakh but also a significant portion of Azerbaijan proper. The economies of both sides have been hurt by their inability to make substantial progress toward a peaceful resolution. 

Update No: 267 - (27/03/03)

The Armenian president, Robert Kocharian, duly won re-election on the second round on March 5th, a totally predictable result. He got 67.5% of the vote to his opponents 32.5%. The first round had assumed to be rigged, but, if so, was not rigged effectively because it only gave him just short of the majority he needed. The second was rigged more successfully according not just to the opposition, but independent observers. The opposition currently screaming 'foul play' are unlikely to get any satisfaction.

The president
It is not really appreciated in the West what sort of man Kocharian is. He looks handsome and personable, but so have many other figures in history. He made his start in top politics as president, actually warlord, of Nagorno-Karabakh, the Armenian enclave in Azerbaijan, as it was at the time. Today thanks to the seizure of 20% of Azeri territory, including the vital Lachin corridor, Nagorno-Karabakh is no longer an enclave. Kocharian regards this as his greatest achievement.
He is the hardest of hardliners on the issue; and to expect him to compromise is unrealistic. There is a streak of utter ruthlessness in the man, which puts one in mind of Premier Sharon of Israel, another implacably abrasive defendant of a beleaguered nation.
There is a story going the rounds, reported by New Europe in February, which gives one the measure of the man. He was in a restaurant in Yerevan, indeed not surprisingly the best in town, having a meal with friends. Suddenly, he was spoken to by someone on a nearby table who addressed him by an Armenian name, but a nickname of obviously somewhat pejorative connotations by which he was known in Nagorno-Karabakh; "so Sonja you do not want to know your old friends now that you have risen so high."
Without looking at his impertinent interlocutor, he nodded to his bodyguards looking after him along the wall. The foolish perpetrator of lèse majesté was lifted bodily from his seat, taken down to the toilets and never seen again. Evidently he 'slipped' on the steps. Well, he certainly slipped, but rather more importantly than just physically.
The bodyguards may of course have exceeded instructions. But one has to judge someone by their bodyguards. They were obviously stalwart veterans of the Nagorno-Karabakh conflict. That is why there will be no easy solution to it.
The Armenians and Israelis have a lot in common, hated by their neighbours, redoubtable in battle, with a record of producing brilliant businessmen. Russian anti-Semites go as far as to claim that the Armenians are Semites, which of course they are not - although the irony is the Palestinians, deadly foes of the Israelis by now, actually are.

Insoluble conflict
There are disputes over Nagorno-Karabakh that are not going to go away. Perhaps the biggest problem is that the region only became an enclave as a result of a cruel series of events, not quite as cruel as those that led to the original eviction of Jews from Palestine, to recount which would require a whole history of the country.
The churches and historical monuments of the region are totally Armenian. Kocharian and his hardliners are going to be fierce about that. Embargoes on trade are in force with Armenia by Turkey and Azerbaijan.
So long as this goes on there will be a frightful incongruence about the Armenians being in the region at all. They need to find a statesman to resolve this one. It does not look likely to be Kocharian.

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ENVIRONMENT

Water reservoir project for River Arax at hand


According to Armenian experts, approximately one billion cubic metres of water run out of Armenia each year and flow into the border River Arax as there are no facilities to store it in the country.
An Armenian research institute dealing with water problems has designed an ambitious plan to prevent this and has sent it to the government and national security service for approval, Armenpress News Agency has reported.
The institute's chief, Yuri Javadian, says the water reservoir that is supposed to be built near Surmalu village in Armavir province will be able to collect annually about 600 million cubic metres of water. Capacities of another acting water reservoir on the River Arax are about 525 million cubic metres. Engineers also plan to construct a hydro power plant on the reservoir with annual capacity of 8,760 Kwh. The water from the new reservoir would go to revive salt soils in the province. 

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FOREIGN INVESTMENT

Investment amendments meet international levels

The Armenian government has approved amendments to the law on foreign investments aimed at bringing the Armenian legislation into compliance with international norms. According to the Trade and Economic Development Ministry, the changes are expected to settle all the disputes between the government and foreign investments in the international arbitrage, Armenpress reported. Formerly such disputes were settled by Armenian courts. 
It should be noted that Armenia has signed international agreements on mutual protection and stimulation of foreign investments with 30 countries and is negotiating the issue with 30 more states.

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FOREIGN LOANS

World Bank approves US$40m loan for Armenia

The World Bank's Board of Executive Directors has approved a SAC-5 (Structural Adjustment Credit) for Armenia worth US$40m (SDR 30.2m). The SAC-5 will support the government's policy of eliminating administrative barriers for the development of the private sector and advancing social reforms, Mediamax News Agency reported.
"SAC-5 is a logical extension of SAC-4 and reflects the World Bank's assessment that the current government reform strategy has been broadly successful in increasing growth rates, expanding exports and reducing poverty," Armenia Country Manager, Roger Robinson, said.

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INDUSTRY

Armenian president says his industrial revival plan already under way

The situation around election time influences the investment environment in the country. It will be possible to estimate the extent of this after 20th March, when the National Statistics Service publishes economic indexes, Robert Kocharyan, said during his working visit to the Yerevan Pure Iron Factory [Makur Erkat], the Public Television service of Armenia has reported.
He added that during the elections the country's enterprises worked normally. Robert Kocharyan said that he had already started implementing his election programme which envisages the rehabilitation of the industry and opportunity for jobs.
The Armenian president started his first working day by visiting the Yerevan Pure Iron Factory. In Soviet times all molybdenum concentrate produced in Armenia was exported. At present the factory, which was privatised in 1996, exports fully-processed molybdenum concentrate, which is in great demand on the world market. The factory sells 95 per cent of its production on the European market, in Italy, Spain and Germany.
Henrik Karapetyan, Director of Pure Iron Factory, said: "We are now producing 3,500 tonnes of molybdenum annually."
A contract was signed with the German company during Robert Kocharyan's official visit to Germany in January this year. The contract envisages the rehabilitation of production and an increase in the factory's volume and investments of US$18-20m over the next several years. The investment programme will enable Armenia to establish new branches of the Armenian industry based on molybdenum concentrate.

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