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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: 309 - (26/09/06)
The endgame of Kocharian
The presidency of Robert Kocharian of Armenia is entering the final straight. He
is a far more astute man than fellow dictator and former playboy, President
Ilham Aliyev of Azerbaijan. He was elected long before him in 1998, indeed was
re-elected in February 2003. But, like Putin, he is not allowed by the
constitution of his country to stand again in 2008.
He is powerful enough to change the constitution, like President Alexander
Lukashenka of Belarus, now in his third term. But Kocharian knows that
Lukashenka is totally despised throughout Europe, indeed the civilized world, as
its 'last dictator.' He does not want to be tarred with the same brush, although
there are opponents at home who would claim that he deserves to be.
Nevertheless, a thought may have occurred to his shrewd brain, as to Putin's.
There is nothing to stop either of them standing again in the subsequent
election, in February 2013 in Armenia's case, when the now 51-year old Kocharian
would still be only 58, a veritable stripling in political terms. He is
moreover, like Putin, a fitness buff in good condition. A five-year holiday from
power could do nothing to prevent that from carrying on being the case. He has a
young family whom he could see a lot more of; and he has of course made
excellent contacts in the last eight years. A fortune awaits him for sure - and
even perhaps in due course a return from his own Colombey-des-Deux Eglises. It
is anyway a gratifying thought to entertain in the last legal days of one's
presidency.
Baku's sparring with Nicosia rebounds heavily on Yerevan
The present problems between Azerbaijan and EU-member Cyprus come as a very
unwelcome development for Armenia. Armenia has of course caused Azerbaijan
plenty of grief in its time. Baku is not likely to be all that sorry for any
discomfort felt in Yerevan.
The EU is in the habit of preferring to deal with entire regions, not single
countries at a time. As a result, both Armenia and Georgia have discovered that
their EU neighbourhood "action plans" -- paving the way for closer
political cooperation and greater economic aid -- are held hostage to the spat
between Baku and Nicosia.
Initial hopes that the "action plans" could be negotiated and signed
by the end of the year have begun to recede.
"It would be strange if the start of the planned talks between the
[European] Commission and Armenia on the draft action plan remained blocked by
the dispute between Cyprus and Azerbaijan over flights to Northern Cyprus, since
that dispute does not concern Armenia."
The unhappiness in the reactions of Armenian diplomats has been palpable in
recent weeks. The country's president, Robert Kocharian, who was on a two-day
visit to Brussels and the EU's headquarters in mid-September, made sure that
that unhappiness was felt by his hosts.
EU foreign policy chief Javier Solana offered solace, but no guarantees of a
quick breakthrough. He was, however, emollience itself. "I hope very much
that the neighbourhood policy that we have established in the European Union
will be a constructive and positive help for Armenia in their relations with the
European Union," he said. "As you know still we have not completely
started the negotiations, but we hope very much that will be done in the
foreseeable future."
Out in the cold
EU member states retain full sovereignty in the area of external relations;
and a single country can theoretically block any decision. The Greek government
of Cyprus held out for a long time before giving its consent to EU membership
talks with Turkey. Nicosia is likely to face far lesser pressure in the EU in
its dealings with Turkey's more remote ally, Azerbaijan.
That leaves Armenia out in the cold too.
Privately, EU diplomats have said that no decisions on the south Caucasus
"action plans" will be made before Azerbaijani elections in November.
Even so, officials indicate there are no guarantees of a breakthrough for
Armenia and Georgia before the end of the year.
Kocharian told EU officials that "no country should pay the price for the
problems of others."
He did draw support from Josep Borrell, the president of the European
Parliament. "It would be strange if the start of the planned talks between
the European Commission and Armenia on the draft action plan remained blocked by
the dispute between Cyprus and Azerbaijan over flights to Northern Cyprus, since
that dispute does not concern Armenia. We have been talking about that with the
president and I told him of my strong commitment that these talks should be
starting at the planned time."
However, Borrell's support is of little practical value to Kocharian, as the
parliament has no say in EU foreign policy decisions.
Nevertheless, the parliament has a role to play in shaping the political climate
in the EU and thus indirectly helps shape longer-term decisions. Borrell
yesterday pointed to earlier efforts by the parliament that helped secure the
southern Caucasus an EU special representative, and forced the EU to include the
three countries in the neighbourhood policy.
The European Parliament has also been vocal in calling on Turkey to open its
border with Armenia and recognize the Armenian genocide. Borrell yesterday
recalled that the parliament had adopted a resolution calling for the steps
before EU entry talks were launched with Turkey.
"The parliament has already set out a declaration on the opening of
negotiations with Turkey," Borrell said. "We have already said
whatever we think we should have said. And the opening of the border and the
recognition of the Armenian genocide was mentioned in that resolution, that the
parliament strongly requires these as a condition. But this is the point of view
of the parliament, we will have to see."
Again, the European Parliament had no formal powers to affect the decision on
Turkey. Its approval will be needed before Turkey can accede to the EU, but that
vote is unlikely to take place before the middle of the next decade.
Kocharian asked the EU to bring its influence to bear on Turkey to reopen the
railroad to Georgia -- which passes through Armenia -- instead of building a
new, direct link.
Solana told Kocharian the EU will "do its best." However, last year
diplomats said that the EU was inclined to agree with Azerbaijani claims that
the Armenian-Turkish border is one of the very few levers the international
community has on Yerevan in the Nagorno-Karabakh conflict.
Tehran courts Yerevan
The fact that the US is displeased with Iran is only for the good as far as
Armenia is concerned. Relations between these two neighbours are cordial, they
share a short stretch of frontier with the common sympathy and understanding of
pariahs - and the common enmity of Azerbaijan.
The Iranians are apprehensive about Azerbaijan. The former Soviet Republic has
enunciated the idea of a 'Greater Azerbaijan' to include the northern province
of the same name in Iran, with 12-25m people, nobody knows quite how many. This
is certainly a fearsome project in the eyes of Tehran. But there is one obvious
stopper to it - Armenia.
The speaker of the Iranian parliament, Gholamali Haddad-Adel, ended a two-day
official visit to Armenia on September 12th, reiterating Tehran's strong
interest in maintaining close political and economic ties with Yerevan. Indeed.
"Iran is a big country with a large population and great potential,"
he said after talks with President Robert Kocharian and other Armenian leaders.
"In my view, independent positions adopted by the Republic of Armenia allow
us to use that potential for further developing and deepening our bilateral
relations and making our countries more prosperous."
Kocharian's press office quoted Haddad-Adel as telling the Armenian leader
earlier in the day that Armenia "occupies a special place" in the list
of Iran's ex-Soviet neighbours. Kocharian, for his part, praised the current
state of Iranian-Armenian relations, pointing to large-scale bilateral energy
projects.
The implementation of those projects seems to have gained a new momentum since
Kocharian's early July visit to Tehran where he held talks with Iran's President
Mahmoud Ahmadinejad. The most important of them is the ongoing construction of a
pipeline, which is due to start pumping Iranian natural gas to Armenia next
year.
Speaking at a joint news conference with his Armenian counterpart Tigran
Torosian, Haddad-Adel indicated that the two governments are considering
building another pipeline that would allow for Iranian gas exports to third
countries. "The main purpose of the pipelines built from Iran to Armenia is
to supply Armenia with gas," he said. "But naturally, when Iranian gas
starts flowing into Armenia, perhaps it will be exported to other countries as
well."
Kocharian's last trip to Tehran also yielded an agreement on the construction of
a third high-voltage transmission line that will connect the Armenian and
Iranian power grids. In addition, the two countries intend to build a major
hydro-electric plant on the river Arax marking the Armenian-Iranian border.
"Relations between our two countries are exemplary for the entire
region," declared Torosian. The Armenian speaker also sounded sympathetic
to Tehran's controversial nuclear programme, taking an apparent swipe at the US,
which has been pushing for international sanctions against the Islamic Republic.
"No country or a group of countries must use their powers at one or another
point to restrict other countries' rights," he said.
Torosian went on to repeat Yerevan's calls for a peaceful resolution of the
Iranian nuclear dispute. "We all hope that issues relating to Iran's
nuclear programme will find solutions within the framework of negotiations and
in accordance with international treaties," he said.
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BANKING
Co-owner of VTB-Armenia could sell 30% stake to VTB
Armenian businessman Mikhail Bagdasarov is planning to sell his 30 per cent
stake in VTB-Armenia Bank (formerly Armsberbank). Bagdasarov said that he is
holding negotiations on selling his stake with Vneshrotgbank (VTB), the owner of
70 per cent of the bank's shares and an initial right of refusal to buy up the
remaining shares, Interfax News Agency reported.
Talks are also being held with other potential investors, but Bagdasarov did not
give any further details about them. VTB refused to comment. VTB acquired 70 per
cent of Armsberbank in March 2004 and has provided financial institutions with
subordinated loans for approximately 15 million Euor-20 million Euro since then.
VTB-Armenia had charter capital of around 18 million Euro at the end of the
first half of 2006. Bagdasarov owns Armenia's Armavia Airlines, the Mika Cement
plant and oil trader, Mika Limited.
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FOREIGN INVESTMENTS
Foreign investment in Armenia increases 28% in H1
Foreign investment in Armenia grew 27.9 per cent year-on-year in the first half
of 2006 to 178.5 million Euro, the national statistics service told Interfax
News Agency.
Foreign direct investment (FDI) grew 9.2 per cent to 86.3 million Euro. The
communications sector received 33.1 per cent of the FDI, the mining industry
14.3 per cent, air transport 9.4 per cent and food industry 9.2 per cent.
Lebanon was the biggest investor with 49.6 million Euro (up 110 per cent
year-on-year), including 652,700 Euro of direct investment.
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MINERALS & METALS
Canadian firm to invest 10m in mine
Canada's Dundee Precious Metals will invest 10m Euro in the Kapan mining and
beneficiation plant in Armenia, Jonathan Goodman, the Canadian company's CEO,
said at a press conference in Yerevan, Interfax News Agency reported.
Goodman said an agreement had been signed to acquire 80 per cent of the shares
in Vatrin Investment Ltd, the sole owner of Deno Gold Naning, which owns the
mine. Goodman said the Kapan mine produced copper and zinc concentrates, all of
which were exported. He said the investment was intended to increase ore mining
to one million tonnes from 300,000 tonnes per year.
Multi group sells gold rights to S. African firm
Armenia's Multi Group has sold the rights to the Mghart gold field in Armenia's
Lori district to South Africa's Magaro, a source at the Armenian Trade and
Economic Development ministry said recently, Interfax News Agency reported.
The ministry did not say how much the deal was worth. It said Multi Group had
been developing the site for three years and had built a small recovery plant
next to the open pit. The State Reserves Committee has said that the ore is
graded at an average of 10 grams per tonne for gold. The field contains an
estimated 250,000 tonnes of ore.
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