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Books on Armenia
REPUBLICAN REFERENCE
Area (sq.km)
29,800
Population
2,991,360
Principal ethnic groups
Armenian 93.3%
Azeri 2.6%
Russian 2%
Capital
Yerevan
Currency
Dram
President
Robert Kocharian
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Update No: 294 - (28/06/05)
Armenia is in a very sensitive region, almost as unstable as
the Middle East. It is, as it were, the 'Israel' of the affair, sticking out
like a sore thumb, and deeply resented by several of its neighbours, notably
Azerbaijan and Turkey, who operate a trade blockade against it. Its one backer
is Russia, still keen 'to divide and rule' in the Caucasus.
Baku alarmed at Russian arms transfer to Armenia
The announcement made by Russian chief of staff General Yuru Baluyevsky that
some of the weaponry from Russian military bases in Georgia will be transferred
to Armenia has alarmed Baku, Azeri Deputy Foreign Minister, Araz Azimov, said
recently. Baluyevsky said that Russian military bases will be withdrawn from
Georgia to Russia, while some of the military hardware and other equipment will
be sent to Armenia.
Azimov said that in the past, Russia diverted some of its weaponry withdrawn
from Georgia to Armenia. "This greatly worries us sand we would not want
Russia to take this step again," the Azeri said. The main cause of concern
for Azimov is due to the extremely sensitive situation in the region and the
atmosphere of regional security and stability.
Russian arms from Georgia stay under Russian control
Russian charge d'affaires in Azerbaijan, Pyotr Burdykin, on June 2nd, on behalf
of the Russian Foreign Minister, officially responded to the Azeri government's
note expressing its concern about the redeployment of some weapons from the
Russian military bases in Georgia to Armenia.
The note read that the matter can only imply the transfer of weapons from one
Russian military base to another, rather than their transfer to Armenia,
Burdykin said commenting on reports alleging that Russian weapons could be
passed to the Armenian armed forces' disposal. He added, "One of the ways
to withdraw weapons from Georgia is to transfer them to the Russian military
base located in Armenia, but this does not mean that we can pass these weapons
to Armenia."
The weapons will in any case remain under Russian jurisdiction. Burdykin stated
that the decision to redeploy part of the weapons from the Russian base in
Georgia was made due to very strong pressure, not only from Georgia but also
from other countries, (principally the USA).
New highway to Iran alarms environmentalists
It is vital for Armenia to maintain ties with Iran, the only one of its
immediate neighbours, apart from Georgia, with whom it is on reasonable terms.
But their common border is narrow, as is the one highway across it, which is
often impassable for months at a time in winter, hampering vital commercial
contacts.
Another one is to be built of greater width. But it unfortunately has to go
through pristine forest country dear to environmentalists, the Shikahog Forest.
The 90km road has already received a 16mn euro EU loan. It looks certain to go
ahead.
IMF approves new 3-year credit for Armenia
The International Monetary Fund (IMF), as well as the EU, is lessening the
isolation of Armenia. It has approved a new three - year lending programme for
Armenia that aims to bolster its strong macroeconomic performance and is
conditional on improved tax collection in Yerevan, as announced on May 27th.
In a statement circulated by the office, the IMF said Armenia would receive
about US$34.2m in low-interest loans through 2008. The decision will enable
Armenia to draw an amount equivalent to US$4.9m from the IMF immediately. The
first instalment of the fund's new Poverty Reduction and Growth Facility (PRGF),
worth about five million Euro, was distributed on May 25th, the statement read.
After the executive board's discussion, IMF's Deputy Managing Director Agustin
Carstens was quoted as saying that "Armenia's economic performance
continued to be strong in 2004 and early 2005.
Encouragingly, poverty and inequality indicators have improved notably in recent
years, owing mainly to higher salaries, private transfers from abroad, and state
social assistance." It has been reported that the authorities' new
three-year PRGF-supported programme aims at consolidating macroeconomic
stability, generating additional domestic resources to finance poverty-reducing
and growth-enhancing expenditures, and boosting private sector activities.
Tax and customs administration reforms, the heart of the programme, will focus
on raising domestic resources in a transparent and nondiscretionary manner that
would help to create a business climate conducive to economic activity and
strengthening the tax base, which will be needed as external aid flows diminish
over the medium term.
"The central bank of Armenia (CBA) will continue to focus on maintaining
price stability, amid strong capital and remittance inflows. The CBA will
maintain the flexible exchange rate regime, while enhancing the instruments for
sterilising capital inflows. Fiscal consolidation over the medium term will
facilitate containing the monetary effect of capital inflows," Carstens
said.
The programme envisages financial sector reforms, strengthening banking
supervision and improving corporate governance, particularly of banks to expand
financial intermediation. Authorities will step up the pace of reforms in the
non-bank financial sector, including by implementing an appropriate supervisory
and regulatory framework in the insurance sector. The authorities are determined
to address remaining problems in the energy and water sectors, with the support
of the World Bank, Carstens stated. The Fund approved the fresh loans less than
six months after completing a similar lending scheme for Armenia worth 105m
Euro. The PRGF funds have been used by the Armenian central bank to maintain a
stable exchange rate of the national currency, the dram, and alleviate the
country's negative balance of payments.
Hosting Black Sea debate
It is naturally very much in Armenia's interest to maintain good relations
with Black Sea littoral states, hoping for an eventual reconciliation with the
largest of them, Turkey. The seventh sitting of the board of governors of the
Black Sea Trade and Development bank (BSTDB) and the Black Sea Business Forum
started in Yerevan on June 5th. The BSTDB promotes the economic development of
the member states by financing the programmes of state and private enterprises,
Interfax News Agency reported.
High-ranking officials of the Black Sea regions and a number of international
and financial organisations like the European Union, European Bank for
Reconstruction and Development, International Monetary Fund, World Bank and
International Financial Corporation were invited to attend. The delegation of
the Russian Federation, led by the Russian branch of the BSTDB, head of the
department for investment policy of the Russian Ministry of Economic
Development, Svetlana Ganeyeva, was also present.
The participants of the sitting, held under the aegis of the Armenian president
and government, considered the annual report on the bank's activities in 2004
and the key issues of the BSTDB development.
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ENERGY
Iran and Armenia to build two power stations
Iran and Armenia concluded an agreement to build 2 power stations at the common
border of the 2 countries, Interfax News Agency reported.
This decision was adopted on May 14th at the 7th meeting of the joint technical
commission that was attended by the deputy head of Iran's Water and Energy
Resources Company for development projects, Nasser Nemati, and Armenian Deputy
Minister of Energy Karen Sarkisian, according to Interfax. "Given the 40km
Iran-Armenia common border across the Aras river, the 2 sides decided to use the
relevant hydroelectric potential," Nemati said at the meeting. A report
released by the public relations department of Iran's Water and Energy Resources
Company quoted Nemati as saying that based on the agreement, the first power
station with a production capacity of 130m watt will be established in Armenia
by building an 18.3km tunnel. "The second one with a capacity of 140MWs
will be constructed in Iran. A 17.5km tunnel is required to be set up for the
second power station," the report added. It said the preliminary studies on
the first phase of the second project are currently underway. The report
concluded that so far 5 documents have already been mutually signed and
necessary talks on expediting the settlement of the current problems have been
held.
Georgia wants to join Iran-Armenia gas pipeline - premier
Georgia has reiterated its interest in being involved in the construction of the
Iran-Armenia gas pipeline, Mediamax News Agency reported.
Georgian Prime Minister, Zurab Noghaideli, said this at the meeting with his
Armenian counterpart, Andranik Markaryan, in Tbilisi on 1 June, the press
service of the Armenian government has told.
Markaryan said in reply that the first phase of the project is being implemented
now, but "Armenia has not ruled out the possibility of discussing this
issue with Georgia in the future."
To recap, Georgian Prime Minister, Zurab Noghaideli, arrived in Armenia on an
unscheduled visit on 11-12 March 2005. He said following the visit that the
Iran-Armenia gas pipeline had been one of the main subjects of talks.
"We are certain that we want the gas pipeline from Iran to Armenia to be
used to export gas to Georgia. It will be a profitable project for Armenia. If
Georgia is a transit country for Armenia today, then Armenia will become a
transit state for Georgia," Noghaideli said during his visit in March.
"The Georgian side raised the issue that Armenia become a transit country
for gas supplies from Iran to Ukraine through Armenia and Georgia. We have heard
this request and will discuss it in the future," Markaryan said in reply.
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FOREIGN ECONOMIC RELATIONS
Yerevan and Tehran develop agro ties
Armenian deputy Minister of Agriculture, Samvel Avetisian, recently signed a
memorandum on economic cooperation with Mazandaran province in Nur city of Iran.
This memorandum will expand economic relations between Armenia and Iran and
Mazandaran, Interfax News Agency reported.
Mazandaran province is situated in the north of Iran along the Caspian shore.
While addressing the meeting with representatives of diverse departments,
entrepreneurs and businessmen of Iran and Armenia, Avetisian underlined that the
high economic and agricultural potential of Mazandaran would be able to meet the
needs of Yerevan quite successfully. "In the course of our four-day visit
preconditions were formed for Armenian and Iranian entrepreneurs making
investments in both countries," Avetisian said.
Armenian official, CIS representative discuss cooperation
Armenian Deputy Foreign Minister, Gegam Garibdzhanyan and secretary-general of
the Interparliamentary Assembly of the CIS countries, Mikhail Krotov, discussed
issues regarding Armenia's participation in the 9th international economic
forum, held in St Petersburg on 14-19 June.
During the meeting, Mikhail Krotov informed the Armenian deputy foreign minister
of the work of the Interparliamentary Assembly of the CIS, its programmes and
measures to develop interparliamentary relations in the CIS countries, the
Armenian Foreign Ministry press service has told Arminfo.
Garibdzhanyan noted that an active participation of Armenia in the CIS will
continue and the country will do its best to take part in the forthcoming forum.
He also stressed the need to expand cooperation between the CIS countries in the
humanitarian sphere.
The foreign deputy minister said that the declaration on cooperation in the
humanitarian sphere, which was signed at the informal summit of CIS presidents
in Moscow on 8 May, opened up prospects for boosting partnership in this sphere
as part of Armenian-Russian bilateral cooperation as well as within the
framework of the CIS.
Armenian, Russian presidential aides discuss economic projects
The head of the Armenian presidential administration, Artashes Tumanyan, and his
Russian counterpart Dmitriy Medvedev discussed a wide range of issues pertaining
to the expansion of Armenian-Russian cooperation, Arminfo News Agency reported.
The meeting discussed the need to find ways for effectively putting into
operation the Armenian enterprises handed over to Russia within the framework of
the property-for-debt agreement. The sides touched on problems related to the
launch of the Kavkaz ferry link. Tumanyan and Medvedev also discussed a number
of regional projects, including the Iran-Armenia gas pipeline.
In 2003, Armenia handed over to Russia the shares of five enterprises totalling
US$93.7m to repay its debt. The enterprises included the Razdan thermoelectric
power plant estimated at US$31m, the Mars [radio electronic plant] company
estimated at US$56m, the Yerevan Scientific Research Institute of Automated
Control Systems and the Yerevan Scientific Research Institute of Mathematical
Equipment estimated at over US$5m, and the Yerevan Scientific Research Institute
and Production Enterprise of Material Studies estimated at US$350,000.
Trade between Armenia and Russia amounted to US$266.2m in 2004, which is 10.6
per cent less than in the previous year.
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