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ARMENIA


  
  



Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 2,797 2,367 2,100 139
         
GNI per capita
 US $ 950 790 570 143
Ranking is given out of 208 nations - (data from the World Bank)

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


 


Update No: 311 - (29/11/06)

Kocharian urges establishment of diplomatic ties with Turkey
Armenian President Robert Kocharian stated on November 16th that Turkey, as a candidate for European Union membership, should follow a "different approach" on the issue of establishing diplomatic relations with Yerevan. Turkey's EU bid is good news for Armenia, but no relations are likely so long as Armenia occupies 20% of Azeri territory.
Stressing that diplomatic relations should be established without preconditions and prejudices, Kocharian claimed that although his country had suggested to Turkey the establishment of diplomatic relations, Ankara refused. "Our suggestion is still valid," he said in a speech at a meeting organized by the Bertelsmann Association in Berlin, where he also met with German Chancellor Angela Merkel.
Touching on Armenian's relations with its neighbours, Kocharian also said, "Turkey, which is an important state in its region, closed its borders to Armenia. An important country like Turkey should follow a different approach." 

'Proposal for historians' commission is a ploy'
The Armenian president dismissed the Turkish proposal to establish a joint commission of historians to study the Armenian genocide claims as a "Turkish ploy" by which he claimed Ankara will try to distance itself from the core of the alleged issue. Kocharian made the remarks in response to former German Ambassador Dietrich Kyaw, who asked him why he had rejected Turkish Premier Recep Tayyip Erdogan's proposal of a historians' commission to examine the genocide allegations. 
Kocharian also stated that Yerevan wants the establishment of a commission of politicians instead of a commission of historians and said, "Politicians, not historians, have responsibility for the 'genocide'." 

'Nagorno-Karabakh is independent'
Kocharian also claimed that the disputed enclave of Nagorno-Karabakh declared its independence following the collapse of the Soviet Union and the enclave has never been a part of Azerbaijan.
Nagorno-Karabakh is a mountainous region in Azerbaijan that has been under the control of Armenian and ethnic-Armenian Karabakh forces since a 1994 cease-fire ended a six-year separatist war that killed about 30,000 people and drove about 1 million from their homes. The region's final status remains unresolved, and years of talks under the auspices of international mediators have brought few visible results.
As a former president of the enclave, he is a hard-liner on the issue. Little movement can be expected until he departs from the scene in 2008, when his second and last term expires.
Stating that Nagorno-Karabakh young people have grown up with the will to live in an independent state and won't retreat from the ways things are, Kocharian underlined the need for the concerned sides in the region to be ready for a solution in Nagorno-Karabakh before the EU makes new initiatives.
Kocharian stressed that no country that had gained its independence will give up this right and added, "The people of Nagorno-Karabakh also fought for their independence and won it. Therefore they don't want to lose it." 

Ankara: Armenia distorts the facts
Turkish Foreign Ministry spokesperson Namik Tan on November 17th lambasted the claim of the Armenian Foreign Ministry, saying, "The claim that Kocharian's letter to Erdogan in 2005 did not get a response is another example of the Armenian aim to distort the facts."
Bringing up Erdogan's proposal to set up a commission composed of Armenian and Turkish historians to study the genocide claims, Tan said, "While the situation is like that, the Armenian Foreign Ministry claimed on Nov. 4 that Kocharian's letter to Erdogan did not get a response. However, the concerned Turkish and Armenian officials have gathered three times since April 2005, and our latest proposal was conveyed to Yerevan this September. Therefore, the latest claim of the Armenian Foreign Ministry is another example of the Armenian aim to distort the facts."
It is obvious that nothing will improve the bilateral relationship until Kocharian goes in eighteen months' time.

Russia tightens its grip on Armenia
His intransigence effectively puts his country in the grip of Moscow, whose military assistance is vital to its survival, but so is its energy and other inputs. The acquisition by the Russian company Vympelkom of a majority stake in the Armenian telecoms firm ArmenTel has further strengthened Russia's economic hold on Armenia. 
Vympelkom in early November bought Greek firm OTE's 90 per cent stake in ArmenTel, which has a monopoly over the fixed-line and internet market in Armenia and partly owns the mobile network. The remaining ten per cent of shares are currently owned by the government. 
Vympelkom, which trades under the name BeeLine in Russia, won the tender on November 3rd against two competitors, Russia's MTS and an Arab consortium called ETISALAT.
The Russian company may now be on the brink of taking full control of ArmenTel, as the government has indicated that it might be prepared to sell its shares on condition that Vympelkom agrees not to hold a monopoly position in the telecoms industry.
The decision on the sale was made immediately after an official visit by Armenian president Robert Kocharian to Moscow where his Russian counterpart Vladimir Putin said that Russia's position as only the third largest investor in Armenia after Germany and Greece was "shameful."
The sale is the latest in a series of Russian takeovers in key areas of the Armenian economy, just as public attitudes towards Moscow are cooling because of the effect of its blockade of Georgia on Armenia and a rise of xenophobic attacks in Russia towards Caucasians, including Armenians.
At present, Russian companies own the Sevan-Razdan group of hydroelectric plants, the Razdan thermoelectric plant and manage the Armenian nuclear power station at Metsamor, which produces 75 per cent of the country's energy. Russian Railways is planning to take a long-term lease of the railway system, while ArmRosgazprom, the joint Armenian-Russian company, owns a large share of the Armenian gas network.
The opposition claims that the sale of key assets to Russian companies is undermining Armenia. "Just take a look," said Aram Manukian, a leading member of Armenia's former governing party, the Armenian National Movement. "The energy sector, communications, and the railway system have all been given to Russia. All this essentially weakens Armenia's independence."
Defence Minister Serzh Sarkisian, the second most powerful figure in the country, has rejected opposition claims, telling journalists, "You won't find to this day any examples of how Russian capital in Armenia has been used as a tool for political pressure." 
Armenian prime minister Andranik Markarian said briefly, "Russia is not our enemy."
OTE had owned ArmenTel since 1997 when it bought it for US$142.5 million, later investing up to US$300 million more in the company. 
If the Armenian government approves the Vympelkom acquisition, the Russian company will pay 342 million euro for ArmenTel and take on its debts of over 40 million euro. Vympelkom's general director Alexander Izosimov said, "Owning 40 per cent of the cellular market in Armenia, ArmenTel is in a strong position, which we intend to strengthen even further." 
According to the Armenian trade ministry, 2005 was the first year that Russia was not the leading investor in Armenia, having had that role every year since 1991. The latest deal is putting it squarely back on top again in 2006.
"Russia's desire to become established in Armenia as the most stable country in the South Caucasus is understandable, as the attitude toward Russian business is better here than in Georgia," said political analyst Anna Harutyunian.
However, Aram Sarkisian, head of the opposition Democratic Party, said the government should not have ceded control so easily. "All power generating operations are effectively in Russia's hands," he told IWPR. "There are no problems with Russia. That country is our ally and I am in favour of deepening cooperation with it. But the government should control our strategic facilities."
There is also criticism of the way the government has entrusted management of its ten per cent stake in ArmenTel to the transport and communications minister Andranik Manukian. Grigor Konjeian, a parliamentary deputy from the pro-government United Labour Party, told IWPR that this was a purely technical move. "There is nothing strange in this, as collective management will lead to excessive circumlocution," he said. " It was for the sake of simplicity and transparency that it was decided to delegate the government's powers to an official." 
But the leader of the opposition National Democrat bloc Arshak Sadoyan remains sceptical, "The fact that the shares were transferred to the transport and communications minister can have only one meaning. He has been given the right to sell the ten per cent of the shares that belong to the state. If this takes place, that will be an act of high treason."
Many ordinary Armenians, who have often been very critical of ArmenTel over the last few years, are only interested in how the sale will affect their telephone service. "It doesn't matter to me who the operator will be," said Yerevan resident Suren Minasian. "Ordinary consumers just need easy high-quality communications."

Kocharian: Armenia Counts on Increase of Kazak Investments 
Kocharian has a new idea of how partly to offset Russian influence. Armenia counts on an increase of Kazak investments in its economy. he said at a meeting with Kazakh leader Nursultan Nazarbayev. 
"We are watching the investment activities of Kazakh entrepreneurs and we welcome Kazak business in our region," the RA President said. "Armenia would also like to expand humanitarian cooperation. The resources are huge here and we see the genuine wish of the Kazak side to develop this cooperation," Robert Kocharian said. 
"We are interested in cooperating with a state which occupies leading positions in the Central Asian region. We are trying to gain such positions in the South Caucasus," the Armenian leader said. 
For his part Nursultan Nazarbayev remarked that there are no obstacles for the development of the Armenian-Kazak relations, adding that Kazakstan is ready to expand bilateral ties, reports Kazakstan Today.

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AVIATION

Air Arabia launches direct flights to Yerevan 


Sharjah-based budget carrier Air Arabia, the first low-fares airline in the Middle East and North Africa announced that they will fly direct from Sharjah to Yerevan, which is one of the latest additions to the Middle East carrier's destinations portfolio, Interfax News Agency reported. 
Yerevan is the fifth new destination announced by Air Arabia in recent weeks and promises to attract many travellers as it is only three hours away from Sharjah airport and a very convenient attraction for nature-inspired weekend breaks.

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ECONOMY

Armenian economy grows 12.5% in 9 months 

Armenian GDP grew 12.5 per cent year-on-year to 1.72 trillion dram in the first nine months of 2006, the national statistics service said, Interfax News Agency reported.
Industrial output fell 1.6 per cent to 468.01 billion dram. Agricultural output was unchanged at 370.568 billion dram. The finance and economy ministry is forecasting that GDP will grow 11-12 per cent in 2006 compared with a budget target of 7.5 per cent. GDP rose 13.9 per cent in 2005. Armenia's foreign trade deficit was 809.3 million Euro in January-September 2006, or 21.8 per cent more than in the same period last year. Foreign trade increased 12.1 per cent year-on-year to 2.208 billion Euro in the first nine months of 2006, the national statistics service said. Imports grew 19.4 per cent to 1.509 billion Euro, but exports dropped 0.9 per cent to 699.4 million Euro. Inflation in Armenia in October 2006 amounted to 0.2 per cent, and in January-October - 2.5 per cent, a source in the national statistics service said. Last month foodstuffs, including alcoholic drinks and tobacco, increased 0.4 per cent, while non-foodstuffs fell 0.4 per cent in price, and tariffs gained 0.1 per cent. Armenia had deflation of 0.2 per cent in 2005.

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FOREIGN LOANS

Copper producer seeks 150 million loan 

Copper producer CJSC Armenian Copper Programme intends to borrow 150 million Euro from Russian financial organisations to put the Tekhut copper-molybdenum field in northern Armenia on stream, Gagik Arzumanian, ACP's director, said, Interfax News Agency reported.
Arzumanian said talks with a number of potential Russian investors, which he did not name, began three months ago. He said the loan would enable ACP to mine and process seven million tonnes of ore per year at the Tekhut field. ACP obtained a 25-year licence to operate the field back in 2001 but exploration had delayed the launch. The company hired Canada's Strathcona Mineral Services Ltd. to appraise reserves at the end of 2004 and used the results of the appraisal to draft its business plan. Tekhut is Armenia's second biggest copper and molybdenum field after the Kajaran field. Tekhut contains a proven 1.6 million tonnes of copper and 99,000 tonnes of molybdenum. Arzumanian said the field had a total resource of around 500 million tonnes of ore. ACP was set up in 1997 with the assets of the former Alaverdi Mining and Metals Combine as its core. The Liechtenstein-registered Vallex F.M. Establishment owns 81 per cent of the company and Valery Medzhlumian, a Russian citizen, owns 19 per cent. ACP produced 9,881.49 tonnes of blister copper in 2005. Arzumanian said ACP reduced blister output 7.9 per cent in January-September 2006 to 6,940 tonnes from 7,533 tonnes in the same period of last year. The company processed 36,500 tonnes of concentrate, down from 39,900 tonnes a year previously. ACP has been buying concentrate from the Zangezur copper-molybdenum plant and affiliated LLC Base Metals, which develops the Drmbon copper-gold deposit in the Nagorno-Karabakh Republic, since the start of this year.

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TELECOMMUNICATIONS

Vimpelcom to buy 90% of Armentel for 341.9m Euro 

VimpelCom has signed a purchase agreement with Hellenic Telecommunications Organisation (OTE) to acquire 90 per cent of national Armenian fixed-line and cellular operator Armentel for 341.9 million Euro, Russia's second leading provider said in a press release, New Europe reported.
VimpelCom will assume approximately 40 million Euro in net debt and obligations. Armentel is a fixed-line and mobile operator in Armenia with licences in the GSM-900 and CDMA standards. Armentel's subscriber base includes approximately 600,000 fixed-line subscribers and 400,000 GSM sub-scribers, the release said.

 

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