CENN Daily Digest — Armenia – 04/21/2004

Table of Contents:
1. Dalma Gardens Will Be Seized
2. Armenian President Says Iran Pipeline To End Energy Dependency
3. Armenian Paper Critical of State Policy on Iran Gas Pipeline
4. Armenian Industrial Production Up 10.5% in Q1
5. Development Bank Looks East to Aid Poor Nations


Source: A1 Plus, April 20, 2004

Dalma Gardens’ renters have today assembled at Municipality again. Their
problem is not settled, the territories will be taken away and the
tenants demand to prolong the contracts by 25 years.

Karen Davtyan, head of Department Real Estate Management of
Municipality, says there is a special decision of Government under which
a part of gardens is to remain as a green area and the rest will serve
other purposes.

Mr Davtyan informed they follow the above decision. “Policemen have come
today with tractors to destroy our green territories”, renter Azat
Khachatryan says. Then they left warning to raze the green zones if the
appropriate decision wasn’t produced the next day.

“No Court accepts any document on Dalma Gardens to launch legal
proceedings”, renter Yntsa Hovhannissyan says.

Tenants assure policemen have today blocked the roads to Leningradyan
street and Hrazdan Sport Complex to hamper the renters to come to their


Source: Mediamax News Agency, April 20, 2004

On April 20, 2004, in Yerevan Robert Kocharyan, the President Armenian
stated that a gas pipeline to link Iran and Armenia will only be used to
meet Armenia’s energy needs. “We do not discuss any other options with
the Iranian side,” Robert Kocharyan said in reply to a question about
the possible use of the pipeline for shipping gas to Europe.

Mediamax quoted Kocharyan as telling a news conference in Yerevan today
“the construction of the gas pipeline is very important as this will
make Armenia independent in terms of energy supplies”.


Source: Haykakan Zhamanak, April 17, 2004

Text of Erdzanik Abgaryan’s report by Armenian newspaper Haykakan
Zhamanak on 17 April headlined “Kocharyan is giving a big gas pipeline
to a Turk as a gift”.

It is no secret that the European Union has a positive attitude towards
the idea that the Central Asia-Iran-Armenia gas pipeline should go via
Armenia, suggesting the closure of the Armenian Nuclear Power Station,
which meets the interests of the people’s security. Iran’s position on
this issue is absolutely good.

But it is strange and tragicomic that the special representative of the
EU for the South Caucasus, Heikki Talvitie, and Iran’s Foreign Minister
Kamal Kharrazi have tried to persuade the Kocharyan administration to
agree to build the gas pipeline via Armenia. So the gas pipeline caused
a stir last week.

[Armenian Foreign Minister Vardan] Oskanyan, who fails all strategic
issues together with his chief [Armenian President Robert Kocharyan],
visited Tehran and finally buried the hope that the gas pipeline will be
constructed via Armenia. Information sources disseminate contradictory
information about that visit and it may be concluded that the Armenian
authorities and their secret services were behind that flow of
disinformation. But on 13 April Iran’s Oil Minister [Bizhan Namdar-]
Zanganeh announced that a contract on the Iran-Armenia gas pipeline is
already ready and he will soon visit Armenia for signing it. Saying that
the volumes of Iranian gas supplies are limited by 1,500m cu.m.
annually, Zanganeh in fact confirmed that the constructed pipeline will
not be a transit one. That is, Armenia is withdrawn from this
international programme just the same way as it was withdrawn from other
international and regional programmes. As a result of it, the Armenians
will be deprived of those significant sums that would be charged for
transit, and of many jobs, and it is even more tragic that Armenia will
be sidelined from all international interests.

As can be seen, the Iran-Armenia gas pipeline will also be under
Russia’s control as Russia’s Itera will be the gas pipeline’s operator.
We do not accuse Russia, we accuse its Armenian stooges: Kocharyan and
his administration who betrayed our national interests. Nevertheless, it
is obvious that Russia’s diplomatic position on this gas pipeline is
based not only on its aspiration to preserve its monopoly on gas
supplies to Europe, but also on its aim to establish deeper relations
with the Turks and Azerbaijanis. The point is that the Russians also
know that the Central Asia-Iran-Europe pipeline will be undoubtedly
constructed. And if not via Armenia, it may be constructed via Turkey or

So withdrawing Armenia from the regional and international cooperation
programmes, as well as from the Central Asia-Iran-Europe gas pipeline
system, Russia simply cooperates with Turkey and Azerbaijan in the issue
of sidelining Armenia from the world processes. So we can say that the
“national” socialist Dashnaks and the law-abiding persons who have
turned the National Assembly into barracks, headed by Kocharyan, are
handing the strategic interests of Armenia to the Turks on a plate. And
today’s opposition, at its mass rallies, is obliged to disclose this
crime along with other crimes of the Kocharyan administration that
flouts the interests of the Armenian people and statehood.


Source: Interfax, April 19 2004

Industrial production in Armenia in the first quarter 2004 increased
10.5% year-on-year to 69.5 million dram, not including industrial
production in the electricity sector, Economic Development and Trade
Minister Ashot Shakhnazarian told journalists.

He said that the mining and diamond cutting industries accounted for the
largest share in industrial production in the reporting period.

The minister said that exports of industrial products from Armenia
increased 27% year-on-year to amount to 43.2 million dram in the first
quarter this year. The official exchange rate on April 16 was 558.16
dram to the dollar.


International Herald Tribune, April 20, 2004

LONDON With the most advanced economies in the former Communist bloc set
to join the European Union next month, the multinational bank that was
set up to aid the transition to capitalism said Monday that it would pay
greater attention to poorer countries farther to the east.

The agency, the European Bank for Reconstruction and Development, will
not immediately cease operations in the eight Central and Eastern
European countries that, along with Malta and Cyprus, are set to join
the EU on May 1, 2004. But in those countries, the bank’s “role should
naturally fall away over the years to come,” said Prime Minister Tony
Blair of Britain, who addressed the agency’s annual meeting in London on

The development bank, which operates in 27 countries, said Monday that
it had created a new program aimed at increasing its lending in seven of
the poorest ones – Armenia, Azerbaijan, Georgia, the Kyrgyz Republic,
Moldova, Tajikistan and Uzbekistan – where more than 50 percent of the
population lives below the poverty line.

In those countries, governments are too indebted to raise new financing,
and foreign investors are often unwilling to enter, given the myriad
risks – not least, in countries such as Uzbekistan, where George Soros
and other investors have complained of a woeful human rights record.
Meanwhile, the terrorist attacks of Sept. 11, and the subsequent ouster
of the Taliban regime in Afghanistan – which borders on two of the seven
countries, Tajikistan and Uzbekistan – heightened the awareness in some
Western capitals of the strategic importance of former Soviet Central
Asia, in particular.

Jean Lemierre, the bank’s president, who was elected to a second
four-year term on Monday by the bank’s board, said the bank would step
up its efforts to finance small businesses, cross-border trade and
small-scale infrastructure projects, among other things.

“The bank is ready to take on the financial as well as reputational risk
as we seek to invest more in countries at the earlier stages of
transition,” Lemierre said.

The bank said it aimed to increase its combined investment in the seven
countries to about E150 million, or $181 million, a year from the
current E90 million. Because its investments typically result in
additional private-sector activity, the bank said it expected the
overall effect to be greater than that.

The bank will take on added risk in part by adhering to local law,
rather than international law, in some of its investments in the seven
countries. Bankers said that should not pose a threat to the bank’s
financial health because the activities in the seven poorest countries
account for only a fraction of the overall investments; the bank made
E3.7 billion worth of new investments last year.

Yet new lending in the seven poorest countries had actually been
dwindling. By 2002, said Michael McCulloch, a consultant to the bank on
its new initiative, these countries were actually paying more to service
previous commitments to the bank than they were receiving in new
investment flows.

In the relatively well-to-do Eastern and Central European countries that
are joining the EU, the agency has typically invested in large projects,
often in cooperation with private-sector lenders. With their financial
markets gained in depth and breadth, domestic and regional banks lend to
smaller borrowers. But the seven poorest countries have few lenders
willing to finance projects in the E500, 000 to E2 million range, the
bank said, yet these will be crucial to the development of their

As the bank shifts its emphasis a bit to the east, its horizon is
growing. Jean-Claude Juncker, the chairman of its board of governors and
prime minister of Luxembourg, urged other governors to complete the
process of accepting Mongolia as a country of operation for the bank.
The United States, among others, has already approved Mongolia as a
country of operation.

Caucasus Environmental NGO Network (CENN)

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