Month: September 2013

RUSSIAN, ARMENIAN LEADERS SHOULD SETTLE SOME ISSUES TO BRING RELATIONS TO NEW LEVEL – SARGSYAN

Interfax, Russia
September 3, 2013 Tuesday 5:07 PM MSK

NOVO-OGARYOVO Moscow region. Sept 3

Russian and Armenian leaders should discuss a number of issues so as
to bring relations between the two countries to a new level, Armenian
President Serzh Sargsyan said.

Meeting with Russian President Vladimir Putin outside Moscow on
Tuesday, Sargsyan said the relationship between the two countries is
“based on centuries-long traditions of friendship and brotherhood
between the peoples.”

“I am sure that these relations will be developing in a spirit of
mutual understanding, according to the Friendship and Cooperation
Treaty. We value these relations and will do all we can to develop
them. This is an absolute priority to us,” Sargsyan said.

At the same time, Russia and Armenia have some issues “that need
to be resolved so that our relations could be brought to a new and
higher level,” he said.

“And this is what I have come to Moscow with,” he said.

Putin said relations between the two countries are developing
intensively in all areas, which is facilitated by contacts at
different levels, including between the parliaments, governments and
businesses. “The result in this connection is positive: our trade
turnover has seen growth of more than 23%,” Putin said.

Russia is Armenia’s leading trade partner, and “this trend is
continuing,” he said.

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From: Baghdasarian

ARMENIA COULD DOUBLE CUT DIAMOND EXPORTS IN 2015

Interfax, Russia
September 3, 2013 Tuesday 4:24 PM MSK

YEREVAN. Sept 3

Armenia could double cut diamond exports from $79 million in 2012 to
$150 million in 2015, Armen Yeganian, head of the Economics Ministry’s
Industrial Policy Department, told Interfax.

The forecast is part of the strategy to develop the country’s
diamond-cutting industry, which the prime minister’s industrial
development council has approved.

This is the best-case scenario. A more moderate one sees global demand
for cut diamonds recovering more slowly and exports rising to $111
million, while exports would fall to $72 million in the worst-case
scenario, if there is a new wave of global crisis.

It is thought annual growth in cut diamond exports will be 14.7%
in the best scenario, 7.2% in the moderate one and 0.3% in the worst.

Yeganian said the forecasts were in constant prices.

He said exports would grow was orders increase, diamond cutters create
their own brands and measures are taken to improve the legal framework
and conditions for buying rough diamonds from Russia.

Cut diamond production and exports fell after the 2009 global crisis,
but started to grow this year. Armenia exports 99% of its cut diamonds.

The exports fell 61.3% last year to 135,900 carats or, in value,
30.5% to $79 million.

Armenia does not mine diamonds of its own but buys rough diamonds,
mainly from Russia and from Belgium, where the country exports most
of its cut diamonds.

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PIRELLI TO VISIT ARMENIA’S NAIRIT PLANT TO ANALYZE INVESTMENT OPPORTUNITIES

Interfax, Russia
September 3, 2013 Tuesday 3:23 PM MSK

MOSCOW. Sept 3

Rosneft (RTS: ROSN) President Igor Sechin has held a working meeting
with Chairman of the Board of Directors and Managing Director of
Italian tire manufacturer Pirelli Marco Tronchetti Provera, the
Russian state-owned oil producer said in a statement.

Rosneft reached an agreement “with its partner company Pirelli for
Pirelli’s delegation to visit the Nairit plant [Yerevan, Armenia]
to evaluate and determine possible opportunities for cooperation,”
the press release said.

Sechin also held a working meeting with General Director of the Nairit
plant Ovanes Akhinyan and Deputy General Director for Reconstruction
and Development Karen Mirzoyan on Rosneft’s potential participation
in a project to produce chloroprene rubber.

“In August 2013, Jacobs Consultancy Ltd conducted a technical and
environment audit of chloroprene rubber production from butadiene at
Nairit. Rosneft will take a decision whether to take part in this
project once it receives the final audit results and discusses the
conditions to join the project with the Armenian government,” the
press release said.

Rosneft and Pirelli are still working on a plan to open a retail
outlet for the Italian company’s products in the framework of the
Russian company’s retail chain. As part of this project, Rosneft
and Pirelli have preliminarily identified a list of prospective
facilities to accommodate tire centers, which will be located in nine
Russian federal subjects: Moscow, the Moscow region, St. Petersburg,
Saratov, the Rostov region, the Krasnodar territory, Volgograd,
Samara, and Voronezh.

As reported, the Armenian government is in talks with Rosneft to sell
shares in the Nairit plant, which has been idle since April 2010. It
was designed to produce 10,000 tonnes of acetylene rubber and 25,000
tonnes of butadiene rubber per year. The program to develop the
enterprise entails the relaunch of chloroprene rubber production from
butadiene for the purpose of later boosting output to 25,000-30,000
tonnes a year, which is equal to 6%-8% of the global market. By the
end of the 1980s, the plant occupied 10%-12% of the global chloroprene
rubber market.

Rubber production was established at the Nairit plant by an acetylene
technology from natural gas. In recent years, because of rising
gas prices and the latest global economic crisis, the enterprise’s
situation has sharply deteriorated, eventually precipitating its
shutdown. The company was planning to attract investors in order to
resume production and convert to butadiene technology.

British consortium Rhinoville Property Ltd, founded by Polish company
Samex, American company Intertex, and Russian company Eurogas,
bought 90% of the Nairit company’s shares in 2006. The consortium
held 89.999% of CJSC Nairit Plant’s shares, the Armenian Energy and
Natural Resources Ministry owned 4.496%, CJSC ArmRosGazprom had 3.596%,
and CJSC Yerevan CHPP owned 1.907%.

The fixed assets of the plant and its main shareholder (Rhinoville
Property) were pledged as collateral on a loan from Mezhgosbank CIS
and transferred to the bank as its property when the loan was not
repaid. Mezhgosbank issued the $70-million loan in 2006 under the
plant’s collateral for a five-year period, effective until the end
of December 2011, at 12.5% per annum. The plant’s current debt is
$130 million.

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JILTING EU, ARMENIA TIES KNOT WITH MOSCOW

Wall Street Journal, NY
Sept 4 2013

By NAFTALI BENDAVID And LAURENCE NORMAN

European diplomats were stunned this week by word that Armenia, which
had been heading toward strengthening ties with the European Union,
will instead join a customs union led by Russia-handing the Kremlin
a victory in its tug of war with Brussels for influence in the region.

The question now is whether Armenia’s move foreshadows similar
decisions by other former Soviet republics.

Armenia’s shift was announced Tuesday in a statement posted on the
Kremlin website during a meeting between Russian President Vladimir
Putin and his Armenian counterpart, Serzh Sargsyan.

“This is a rational decision, it is a decision based on Armenia’s
national interests,” President Sargsyan said afterward, according
to a transcript on the Kremlin’s website. “The decision is not a
rejection of our dialogue with European institutions.”

The small country in the South Caucasus region had been expected to
initial an “association agreement” with the EU at a summit in November,
in Vilnius, Lithuania, strengthening trade relations while committing
Armenia to democratic changes.

But Mr. Putin has been turning up the pressure on the countries
sandwiched between Russia and the EU to join forces with its own
nascent customs union, which already includes Belarus and Kazakhstan.

Russia is widely seen as the dominant partner.

Countries in the Moscow-led customs union can’t be integrated into
the EU, European officials say, because they have effectively ceded
sovereignty over trade issues to Russia.

While Mr. Putin said Tuesday it was Armenia’s decision to join the
bloc, few in Brussels doubt that Armenia’s abrupt policy change came
because Moscow raised the costs of pursuing closer EU ties.

Russia has powerful leverage because it’s the country’s natural-gas
supplier and can determine the price of fuel. Thousands of Russian
troops are based in Armenia and Moscow has formal security guarantees
in place, which have bolstered Armenia in its bitter conflict with
neighboring Azerbaijan over the disputed territory of Nagorno-Karabakh.

Even so, the intensity of what Europeans see as Russian pressure
tactics and the speed of Armenia’s U-turn have spooked EU officials.

It was just six weeks ago-July 24-that the European Commission
completed years of talks with Armenia on the association accord,
and Armenian officials were assuring their Brussels counterparts that
there would be no stepping back.

“The pressures on Armenia were known, and in that sense it is not a
surprise,” said Jacek Saryusz-Wolski, a Polish member of the European
Parliament’s foreign-affairs committee. “But the fact that the pressure
succeeded in getting Armenia, under force if you wish, to change its
decision-that is a surprise, and we profoundly regret it.”

In terms of trade, Armenia is not a huge prize for either side. Its
economy is relatively small, with a gross domestic product of [email protected]
billion ($10 billion).

But EU leaders had apparently seen the conclusion of the association
deal as a diplomatic victory.

Swedish Foreign Minister Carl Bildt reflected the widespread
frustration among European leaders in a tweet: “Armenia negotiated
4 years to get Association Agreement with EU. Now President prefers
Kremlin to Brussels.”

One Western diplomat with knowledge of the situation said Armenia
had negotiated with the EU in good faith, but “they themselves did
not expect this kind of pressure from Russia.”

He said that the EU will continue to work with Armenia on issues like
easing visa procedures, and that Armenia could change direction yet
again as it confronts Russia’s dominance within the customs union.

Moscow’s customs union is supposed to evolve in 2015 into a more
comprehensive Eurasian Economic Union, which Russian leaders foresee
as a counterweight to the EU.

Armenia’s move illustrates the pressure on countries that find
themselves pulled between East and West, and could mean trouble for
others considering linking with the EU.

Ukraine, for example, is expected to sign its own long-awaited EU
association agreement at the November summit, and Moldova and Georgia
are scheduled to tentatively initial such deals at the same time.

“It is the general context which is so worrying,” Mr. Saryusz-Wolski
said. “This pressure concerns all the four countries (including
Armenia) on the road to association. It’s part of the wider picture,
and the fear that it might provoke a domino effect.”

EU officials’ surprise was evident Wednesday in their hesitant initial
responses. “We are seeking further clarification from the Armenian
side,” said Maja Kocijancic, an EU foreign affairs spokeswoman. “Then
we will be able to assess the implications.”

A European diplomat called Armenia’s switch a “wake-up call” on
Russia’s intentions. But he said it doesn’t necessarily follow that
other countries will spurn the EU; Georgian leaders remain deeply
angry over Russia’s 2008 invasion of their country, while Ukraine
and Moldova have made strong public commitments to Europe.

The battle over the EU’s Eastern Partnership-which includes Armenia,
Ukraine, Georgia, Moldova, Azerbaijan and Belarus-is only one of the
current flash points between Europe and Russia.

Russia has complained about EU rules that force the splitting of
giant energy utilities, with Mr. Putin repeatedly accusing Brussels of
“confiscating” Russia’s investment in some EU countries.

The EU, for its part, became the first entity to take Russia to the
World Trade Organization over special taxes Moscow imposes on vehicle
imports. European officials also criticize Moscow for blocking efforts
to isolate Syrian President Bashar al-Assad.

From: Emil Lazarian | Ararat NewsPress

CAUCASUS, CENTRAL ASIAN COUNTRIES WARILY ASSESSING IMPENDING ATTACK ON SYRIA

EurasiaNet.org
Sept 4 2013

September 4, 2013 – 11:40am, by Joshua Kucera

The impending attack by the U.S. on Syria has dominated the world’s
attention for the last week or so. And the powers surrounding the
Caucasus and Central Asia — notably Russia, Turkey, and Iran —
have been among the most active in discussing Syria, with Russia
and Iran backing the government of Bashar al-Assad and Turkey one
of the strongest supporters of the rebels. In spite of, or perhaps
as a result, of that, the countries in between have taken a cautious
approach to the possibility of U.S. military involvement in Syria.

Befitting its strong attachment to the U.S., Georgia’s foreign ministry
made a statement that appeared to endorse the American position that
Assad’s government should be punished for the use of chemical weapons:

“Georgia welcomes and supports readiness of the international community
to play more active role in resolving humanitarian crisis in Syria
and to hold the regime that committed this crime accountable for
violating the fundamental international humanitarian norm.”

Georgia’s position is largely a factor of its ties to Turkey and the
U.S., Michael Cecire, a Washington-based analyst of Georgia and the
Caucasus, told The Bug Pit:

The Georgian government is happy to defer to their partners in the West
and in nearby Turkey to take the lead on the issue. When it comes to
Syria, Tbilisi’s primary geopolitical concerns would be to ensure that
the consequences from an intervention did not lead to destabilization
in the South Caucasus. The Assad regime’s closeness to Hezbollah and
Iran, which both operate in the Caucasus to varying extents, makes
this at least a possibility — particularly in light of Hezbollah’s
alleged role in an early 2012 disarmed bombing attempt in Tbilisi.

But overall, I think Georgia is most keen to demonstrate its support
to the West and Ankara without committing itself to an issue with
which it currently has no immediate, clear national interests.

Azerbaijan has been more circumspect about its position, which again
would seem to be a factor of its attempt to maintain good relations
with both Turkey and Russia. The head of the foreign relations
department under the president of Azerbaijan, Novruz Mammadov, told
reporters: “The position is being discussed between the Congress and
the President of this country… It would’ve been better if we have
expressed our own opinion after their opinion is made concrete,”

Perhaps the keenest interest in the region is on the part of Armenia,
given that a substantial Armenian minority lives in Syria. Many
Syrian Armenians have already fled to Armenia, though the government
has struggled to cope with the wave of refugees. As for Yerevan’s
policy on an American attack, the government is trying to stay out
of it, though privately is against such an attack, Sergey Minasyan,
a Yerevan-based analys at the Caucasus Institutet, told The Bug Pit.

“Armenia’s vital interest is just to avoid any attack/deepening of the
conflict/external involvement (especially from Turkish side,” he said.

“The Armenian government will try to preserve neutrality as long as
possible without any strict respond/positioning and to prepare for
a new Armenian refugees wave from Syria.”

Naturally, the events in Syria also have provided an opportunity
for Armenia and Azerbaijan to spar over the disputed territory of
Nagorno Karabakh: Azerbaijan complained to the United Nations that
Armenia is resettling Syrian refugees in Karabakh, while Karabakh’s
de facto foreign ministry has denied that is the case with even a
single Syrian refugee:

Azerbaijan is trying to use the Syrian crisis for its political goals,
which is currently under the focus of the international community,
in particular the fate of the Syrian Armenians that, along with
other Syrian refugees, are forced to find refuge in different parts
of the world.

Overwhelmed by its mania of distorting the essence of the conflict and
misleading the international community, the Minister of Foreign Affairs
of Azerbaijan did not hesitate to use obvious lies and misinformation.

Across the Caspian in Central Asia, the governments have less at stake
and are more inclined to defer to Russia. Kazakhstan’s foreign ministry
issued a statement saying that, if confirmed, the use of chemical
weapons by the government would be a “crime against humanity.” But
it added, “Kazakhstan calls on the international community to show
restraint and to assess the situation based on the final conclusions
of UN experts.”

In the end, though, Astana will follow Moscow, Daniyar Kosnazarov,
an Almaty-based analyst at the Eurasian Research Institute, told
The Bug Pit: “Kazakhstan’s position or the tone of its statement, if
the intervention will begin, will certainly depend on the Kremlin’s
reaction, which is strongly against any military intervention by the
U.S. However, one should assume that Astana in any case will again
call for the urgent end of the conflict.”

The government of Kyrgyzstan is taking a similar stance, Shairbek
Juraev, a political analyst at the American University of Central Asia,
told The Bug Pit: “The only dimension of this case that is relevant
to us [in Kyrgyzstan] is the fact that the key major international
partners of Kyrgyzstan are on different sides of the debate, with
Russia and China clearly opposing, and U.S. and Turkey clearly ready
to attack. An eventual statement of Kyrgyzstan would most likely come
from its solidarity with some of its international partners. The
approaching [Shanghai Cooperation Organization] summit in Bishkek
may speed up taking a stance.”

ANONYMOUS LEAKS INFORMATION ON LEADING AZERBAIJAN ENERGY COMPANY

SC Magazine
Sept 4 2013

A group claiming to be an Armenian branch of hacker collective
Anonymous has leaked 7 GB worth of documents relating to Azerenergy,
the leading energy producer in the Eurasian country of Azerbaijan.

Financial details, offshore communications, contracts, research and
photos of passports are among the documents that have been leaked,
with the group adding “illegal schemes” to the mix in an announcement
posted Tuesday afternoon to cyberguerilla.org – a forum designed to
maintain anonymity.

The entire multi-gigabyte package was broken into 13 parts and hosted
on AnonFiles.com, an anonymous file- hosting website unrelated to
the similarly named hacker collective.

“We are not that very much happy with Aliev’s politics therefore
this release is just another leap in a series of releases to fight
Azerbaijani mafia clans,” the group wrote in its post, indicating
there would be more to come.

An Azerenergy representative could not immediately be reached for
comment.

Ilham Aliyev is the president of Azerbaijan since 2003 and in a U.S.

Embassy diplomatic cable posted to WikiLeaks in 2009 he was compared
to mafia figures. According to a EurasiaNet.org article, Aliyev is
unbending with regard to domestic political diversity and, according
to the WikiLeaks document, the 10-year Azerbaijan leader has a
“dual-nature” whose U.S. interests contradict U.S. values.

“HELP AZERBAIJAN FREE OF POLITICAL TERROR AND DICTATORSHIP,” the
group wrote in its post.

This is the second time this year that an Azerbaijan organization
has suffered an information leak by a group claiming to be Anonymous.

In April, a group calling itself Anonymous leaked 1.5 GB of data from
the Ministry of Communications and Information Technologies of the
Republic of Azerbaijan. The group called attention to ties between
various corporations and government agencies that were said to have
financed terror groups.

Anonymous continues to make headlines – most recently in July for three
consecutive releases of lists of FEMA contacts – but the collective has
remained under the radar in recent time due to a number of high-profile
arrests by the FBI.

Among those FBI arrests are key members of Anonymous splinter group
Lulz Security, as well as distributors of the Gozi virus, who are
not said to be associated with Anonymous. The Gozi virus infected
millions of computers and stole millions of dollars from financial
institutions around the globe.

ARMENIA SET TO JOIN RUSSIA-LED CUSTOMS UNION IN BLOW TO EU

EuroNews, France
Sept 4 2013

04/09 18:35 CET

Armenia is turning its back on Europe with a decision to join a
Russia-led customs union.

The country is going with its former soviet master instead of signing
up to a European free trade agreement – dealing a blow to the EU’s
Eastern Partnership policy.

The decision came after Armenian President Serzh Sargsyan met with
his counterpart Vladimir Putin.

“We have exchanged opinions on issues of Eurasian integration,”
said Sargsyan.

“And I confirmed Armenia’s wish to enter the customs union and to
join the process of forming of the Eurasian Economic Union.”

If all goes to plan, Armenia will join not only join Russia in the
union, but also Belarus and Kazakhstan.

Charles Tannock, a British Conservative MEP, said Russia had been using
“extreme bullying tactics” with its neighbours.

“I understand that the President of Armenia went to Moscow, was
summoned by President Putin, and told that if he went ahead with his
euro-atlantic aspirations, in terms of getting closer to the EU by
having this free trade agreement, that would be the end of Russian
security guarantees,” he said.

Armenia’s decision is a political boost for Putin, who is struggling
to stop Ukraine from turning towards the European Union.

ARMENIA CHOOSES RUSSIAN TRADE DEAL OVER EU

Russia Today
Sept 4 2013

Published time: September 04, 2013 12:48

Armenia has decided to hang its hat with its former Soviet ally Russia
instead of joining a European free-trade agreement, President Serzh
Sarksyan announced after meeting with Vladimir Putin.

Armenia said it would join Russia in the Customs Union, as well as
engage in the Eurasian integration process instead of negotiating
a free trade agreement with the EU. The move is seen as a political
victory for Putin, who has been rounding up former Soviet states to
rival the EU, promising lower gas prices and other trade perks.

“Russia supports the decision by Armenia to enter the customs union
… We will fully work for this to happen,” Putin said at the bilateral
talk at his countryside house outside of Moscow .

Russia is Armenia’s largest trading partner and the largest foreign
investor in the small, landlocked Caucasus country. Trade in 2012
reached $1.2 billion and Russian capital investment was over $3
billion, or nearly half of Armenia’s foreign investment, Putin said.

In July Armenia engaged in technical talks on a ‘deep and comprehensive
free-trade agreement’ (DCFTA) with the EU, and observers largely
expected the country to initiate a free trade agreement with the EU at
the Vilnius summit in late November. The EU has stated both publicly
and privately membership of the Russia’s Eurasian Customs Union is
“incompatible” with DCFTA.

The three-member customs union of Russia, Kazakhstan and Belarus was
founded in 2010 as a counterweight to the EU. Putin hopes to expand it
into a ‘Eurasian Union’- a political and economic union of post-Soviet
states like Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan.

While President Putin said earlier the Eurasian Union would be built
upon the ‘best values of the Soviet Union’, critics claim that the
drive towards integration aims to restore the ‘Soviet Empire’.

It has been suggested the Eurasian Union could also include other
countries that have been historically or culturally close, such as
Finland, Hungary, the Czech Republic, Bulgaria, Vietnam, Mongolia,
Cuba and Venezuela. This is expected to incorporate the countries
into a common body where Russian would be the common language of
communication and economic cooperation.

Russia has so far failed to lure Ukraine away from an EU trading
alliance and relations with Belarus have soured after they detained
and jailed the CEO of Russia’s largest potash producer, Uralkali.

EXPERT: ARMENIA’S DECISION TO JOIN CUSTOMS UNION WILL BENEFIT ALL ITS MEMBERS

Belarusian Telegraph Agency
Sept 4 2013

04.09.2013 16:08

MINSK, 4 September (BelTA) – Armenia’s decision to join the Customs
Union makes economic sense and will benefit all its members, Doctor of
Economics, head of the economic policy sub-department at the Belarusian
State Economic University, Professor Alexander Bondar said commenting
on the statement by Armenia’s President Serzh Sargsyan about Armenia’s
plans to join the Customs Union and take part in the formation of
the Eurasian Economic Union.

“It is interesting and economically beneficial for Armenia and
the existing members of the Customs Union. The accession of new
members promises more export opportunities and will help address
import-substitution targets,” Alexander Bondar said. The Customs
Union member states have the single customs territory with no customs
duties and economic restrictions, which considerably facilitates
product promotion and sales.

“Integration is gaining momentum on the group level. It is sometimes
hard to penetrate the market of the European Union, but by expanding
and strengthening the Customs Union we are creating our own market
that might grow strong enough to rival the EU market and become its
partner. Therefore, when the Customs Union strengthens its positions,
there will be more areas of common interest and more opportunities to
develop partner relations. We are expanding integration, building up
our capacities and creating additional opportunities,” the expert said.

Speaking about a possibility of Ukraine’s accession to the Customs
Union Alexander Bondar noted that so far Ukraine has an observer status
in the Eurasian Economic Community and is an important trading partner
of the Customs Union member states. The expert said that much will
depend on how visible the efficiency of the Customs Union will be,
because it will allow demonstrating the advantages of being a Customs
Union member. “It will need time. The Customs Union will first welcome
Armenia, and some time later the country will see economic advantages
of its membership in the Customs Union,” he said.

At present the Customs Union comprises Belarus, Russia and Kazakhstan.

Ukraine’s Nikolai Azarov announced Ukraine’s willingness to join the
Customs Union agreement on removing technical barriers in mutual trade
with the CIS member states that are not members of the Customs Union.

LUKASHENKO PRESENTS ORDER OF FRIENDSHIP TO ARMENIAN MP GAGIK TSARUKYAN

Belarusian Telegraph Agency
Sept 4 2013

04.09.2013 17:35

MINSK, 4 September (BelTA) – President of the Republic of Belarus
Alexander Lukashenko presented the Order of Friendship to member of
the National Assembly of Armenia, head of the Multi Group Concern
Gagik Tsarukyan in recognition of his big personal contribution to
the development of trade, economic and political ties between Belarus
and Armenia. The head of state signed the corresponding decree on 4
September, BelTA learned from the presidential press service.

From: Baghdasarian