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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: 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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