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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: 305 - (30/05/06)
Armenia is obliged to cleave to Russia. It is its only
powerful friend in a hostile world - the Caucasus peopled by Islamicists and
others of imperfect sympathy with itself.
A terrible tragedy is pulling them even closer together.
Worst plane crash ever
President Robert Kocharian rushed his influential defence minister to southern
Russia early on May 3rd to investigate the worst plane crash in Armenia's
history and declared a two-day period of national mourning for its more than one
hundred victims, which included dozens of Russians. Russian President Vladimir
Putin was informed at once.
There were many top personnel among the dead, including a former head of the
Armenian KGB and leaders of the aviation industry itself. In a small country
where everyone knows everybody else an event of this magnitude is deeply and
widely felt.
Kocharian held an emergency meeting with Defence Minister, Serzh Sarkisian,
Prime Minister, Andranik Markarian, and senior Armenian officials immediately
after news of the deadly accident reached Yerevan. A statement by his press
service said Sarkisian was instructed to clarify its "causes and
circumstances on the spot." The Armenian Prosecutor-General's Office has
opened a criminal case in connection with the crash, it added.
Sarkisian was joined in Sochi by Russian Transport Minister, Igor Levitin. The
two men co-chair the Russian-Armenian inter-governmental commission on economic
cooperation.
Common Armenian and Russian grief
The tragedy may bring the Armenians and Russians closer together. They are
already natural allies in Caucasus affairs.
Kocharian was contacted by phone by Putin immediately. A statement released by
the Kremlin said Putin briefed him on the "large-scale search and rescue
operation conducted by the Russian side in the disaster area and planned further
actions." "Robert Kocharian expressed gratitude for the telephone call
and the detailed information," the statement said. "Armenian
specialists will join in the operation very soon."
Putin and Kocharian were also cited as describing the plane crash as a
"common tragedy of the Armenian and Russian peoples." Armenia
officially mourned its victims on May 5th and 6th. May 5th was also a day of
national mourning in Russia.
At least twenty-six of the 113 passengers and crew on board the Airbus A-320 of
the Armenian national airline Armavia, which crashed into the Black Sea off the
Russian coast in stormy weather, were Russian citizens.
Virtually all of the other victims are believed to have been Armenian nationals.
It emerged that among them were Vyacheslav Yaralov, deputy director of Armavia
and the former head of Armenia's civil aviation authority, Husik Harutiunian, a
business executive who used to head the Armenian branch of the Soviet KGB in the
late 1980s, as well as the son of Karlos Petrosian, former head of the National
Security Service, the Armenian successor to the KGB.
Kocharian formed a separate government commission tasked with repatriating the
bodies of the Armenian victims and organizing their funeral in Armenia. The
commission will be headed by Minister for Local Government, Hovik Abrahamian.
The Armenian parliament, meanwhile, observed a minute of silence in memory of
the dead before adjourning its regular session. Deputies also decided to form a
multi-party ad hoc group that will take part in the Russian-Armenian probe of
the crash.
It also emerged that one of the deputies, Ashot Aghababian, also checked in for
the fatal Yerevan-Sochi flight but decided not to board the Armavia jet at the
last-minute request of Galust Sahakian, his brother-in-law and one of the
leaders of the parliament majority. Sahakian said he asked Aghababian to stay in
Yerevan and take part in a parliament vote that had been scheduled for May 3rd.
US hopes for agreement between Kocharian and Aliyev in Romania
Sean McCormack, an official of the US Department of State, said this in
commentary on the result of the visit of US Assistant Secretary of State Daniel
Fried to the South Caucasus. "Fried was to the South Caucasus working with
the OSCE Minsk Group co-chairs, Russia as well as France, to see if we could
find a way forward on resolving the Nagorno Karabakh issue between Armenia and
Azerbaijan," Sean McCormack said. "I don't have a readout for you as
to what sort of progress they may have made," he added.
"I know that the Presidents of Azerbaijan and Armenia are scheduled to get
together in Bucharest, Romania, in early June. They made a run at it while they
were in France. They weren't able to come to agreement," the US official
stressed.
"We, working with the Minsk Group co-chairs, are hopeful that they can come
together to resolve whatever differences there are. These are tough issues, we
know. It's going to require tough political decisions on both sides. But we
think that at the end of the day, taking this tough political decisions will
benefit all the peoples of the region," McCormack concluded.
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ECONOMY
Armenian economy grows 7.9% in Q1
Armenian GDP grew 7.9 per cent year-on-year in the first quarter of 2006 to
265.9 billion dram, the National Statistics Service said, Interfax News Agency
reported.
Industrial output fell 4.7 per cent to 137.9 billion dram, however agricultural
output rose 3.5 per cent to 40.2 billion dram and services sector output rose
21.4 per cent to 95.4 billion dram. Foreign trade turnover grew seven per cent
to 606.4 million Euro, including growth of 5.6 per cent to 184.4 million Euro
for exports and 13.6 per cent to 422 million Euro for imports. The trade deficit
was 237.6 million Euro. The 2006 budget targets GDP growth at 7.5 per cent. The
economy grew 13.9 per cent in 2005.
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ENERGY
Sale of power plant to increase energy security
A deal to sell power-producing unit number five at Armenia's Razdan thermal
power plant to Russian gas giant Gazprom will strengthen Armenia's energy
security and increase its competitiveness, Armenian Prime Minister, Andranik
Margarian, said, Interfax News Agency reported.
He said the funds received from the sale of the energy unit would be used to
compensate for an increase in price for Russian gas for the public and for
industry.
"If the Armenian government did not decide to compensate for gas prices for
industrial companies, we could expect significant growth in price for local
products, both inside the republic and abroad," the prime minister said. He
said that thanks to this deal the cost of industrial products in the republic
will be lower than in other Commonwealth of Independent States countries, as a
result Armenia would be in a better situation than other CIS states. "This
deal is correct, in that it is aimed at simulating exports of Armenian
products," Margarian said. He said that not only gas prices, but also
electricity prices would remain unchanged for three years.
The premier said that the sale of the fifth power-producing unit has made it
possible to carry out significant compensation, as the republic's budget does
not have this amount of revenue. However, the prime minister said that Armenia
will continue to build a third power line to Iran and a second strand of the
Iran-Armenia pipeline, and the deal with Gazprom will not influence these two
projects. The Armenian government has decided to sell the Razdan-5 power unit to
the Russian gas company, Gazprom, for 248.8 million Euro, he said.
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FOREIGN INVESTMENT
Armenia expects foreign investment at same level
Armenia expects that foreign investment in its economy in 2006 will remain
at 504.5 million Euro, the level of the previous year, Deputy Trade and Economic
Development Minister, Tigran Davtian, said at a press conference on April 6,
Interfax News Agency reported.
A total of 1.996 billion Euro in foreign investment has been invested in the
Armenian economy in the fourteen years since its independence, including 1.46
billion Euro of direct foreign investment, he said. The peak year was 2005, when
total foreign investment exceeded 500 million Euro for the first time, Davtian
said. Investment in the real sector of the economy rose 31per cent to 400.4
million Euro, he said. The telecommunication sector saw 132.1 million Euro in
investment and 97.5 million Euro was invested in the mining sector largely
because of the privatisation of the Zangezur Copper-Molybdenum Plant. There was
53.3 million Euro invested in metallurgy, mainly in the Armenal packaging plant.
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FOREIGN LOANS
WB loans Armenia 5m Euro to develop renewable energy
The World Bank has approved a five million Euro loan for Armenia to develop
renewable energy in the country, the World Bank office in Yerevan said, Interfax
News Agency reported.
"The project will increase the role of renewable resources in Armenia's
electricity generation mix in the future thereby increasing the diversification
of electricity supply and energy security," said Gevorg Sargsyan, head of
the World Bank team designing the project. "It will also generate
environmental benefits by reducing emissions and pollution." The main goal
of the project is to build a sustainable market-based capacity to develop and
finance renewable energy projects on commercial terms. The two components of the
Renewable Energy Project are assistance to remove barriers and support project
implementation and financing of investment. IDA and grant funds will be
channelled through the Renewable Energy and Energy Efficiency Fund, which will
provide finance to private investors through a financial intermediary. The
40-year loan has an interest rate of an annual 0.75 per cent and a deferment
period for the first ten years. The overall cost of the renewable energy
programme over the next five years is 18 million Euro, an office representative
said.
A fund has been set up to carry out the programme. The European Bank for
Reconstruction and Development (EBRD) said it was ready to contribute to the
fund and will provide a seven million Euro loan for these purposes. The
Gafeschan Family Fund will provide a three million Euro loan and the United
Nations Development Programme's Global Environment Facility (UNDP/GEF) will also
issue a three million Euro grant. This project will assist the government to
increase privately owned and operated power generation utilising renewable
energy and to reduce greenhouse gas (carbon dioxide) emissions by overcoming
barriers to the development of renewable energy. Following the energy crisis,
Armenia has achieved results in reforming the power sector and improving its
financial performance. The key remaining challenge for the sector is to ensure
sustainable and reliable power supply by shifting reliance from costly and
polluting sources of energy to lower cost and environmentally friendly
alternatives and by increasing the energy diversification and achieving a higher
degree of energy security through the utilisation of the indigenous renewable
energy resources. While the overall legal and regulatory framework in Armenia is
supportive to the development of renewable resources, private investments in
renewable projects are delayed by a number of legal, regulatory, informational,
financial, and institutional barriers.
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MINING
Global Gold to invest 7.1m Euro in gold deposit
Global Gold Mining will invest 7.1 million Euro in the Tukhmanuk gold deposit in
northern Armenia in 2006-2007, the US company's regional director, Ashot
Pogosian, said, Interfax News Agency reported.
The company will invest 3.8 million Euro in operations and 3.3 million Euro in
exploration, he said. The deposit will be open-cast mined for the first two
years, and then the company will switch to deep mining, he said. He also said
the project must undergo an environmental impact study and technical assessment.
Pogosian said a contract will hopefully be signed in May and operations at the
deposit will begin.
The deposit will only be mined in summer due to the harsh local climate, and ore
will then be processed at a nearby beneficiation plant for the rest of the year.
Tukhmanuk has proven reserves of eight tonnes of gold and is potentially the
country's second largest gold deposit after the Sotk field, said Global Gold
chief geologist Genrikh Mkrtchian, who is also a member of the State Mineral
Reserves Commission. The company plans to mine about 150,000 tonnes of ore over
two years and produce about 800 kilograms of gold and 2,400 kilograms of silver,
he said. The open-cast mine will employ about 90 people and the beneficiation
plant will have about the same number of workers.
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