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    Categories: 2019

RFE/RL Armenian Report – 08/28/2019

                                        Wednesday, 

Lawyers Appeal Against Ex-Minister’s Arrest

        • Nane Sahakian
        • Ruzanna Stepanian

Armenia -- Finance Minister Gagik Khachatrian attends a parliament session in 
Yerevan, November 16, 2015.

Lawyers for former Finance Minister Gagik Khachatrian on Wednesday appealed 
against a law-enforcement agency’s decision to arrest him on suspicion of 
corruption.

The National Security Service (NSS) detained Khachatrian late on Tuesday after 
searching his and his relatives’ homes and offices. The NSS director, Artur 
Vanetsian, said he is suspected of abusing his powers and misusing “tens of 
millions of dollars” worth of public funds while in office.

Khachatrian, who had also ran Armenia’s tax and customs services during former 
President Serzh Sarkisian’s rule, was indicted on Tuesday as part of a separate 
corruption inquiry conducted by another law-enforcement body, the Special 
Investigative Service (SIS).

One of his lawyers, Yerem Sargsian, criticized the arrest, saying that his 
client had never attempted to go into hiding. It would have been more 
“reasonable” to have Khachatrian sign a pledge not to leave Armenia pending 
investigation, instead of taking him into custody, Sargsian told reporters.

The NSS did not indict the former official, who is reputed to be one of the 
country’s richest men, as of Wednesday evening. Nor did it shed more light on 
the criminal case.

In Sargsian’s words, one of the accusations brought against Khachatrian stems 
from NSS claims that some employees of the State Revenue Committee (SRC) 
systematically did not report for work but still got paid by the government 
agency.

“This raises the question of to what extent Mr. Khachatrian was responsible for 
that,” said the lawyer. He also suggested that the alleged fraud could not have 
cost the state the “tens of millions of dollars” cited by Vanetsian.

Khachatrian, 53, had held various positions in the tax and customs services for 
over a decade preceding his appointment as SRC chief in 2008. He headed the tax 
collection agency until 2014 and served as Armenia’s finance minister for the 
next two years.

Throughout his tenure Khachatrian was dogged by corruption allegations. He 
always denied illegally enriching himself and his family.

The NSS said on Tuesday that it began investigating Khachatrian in February 
this year. This raised questions about the timing of his arrest. Some 
commentators speculated that it is aimed at deflecting public attention from 
the Armenian government’s possible decision to allow a Western company to 
restart a controversial gold mining project resisted by environmentalists and 
some opposition groups.

Two opposition lawmakers opposed to mining operations at the Amulsar deposit 
cast doubt on the credibility of that speculation. “If it’s a [government] 
ploy, then it’s a failed ploy,” one of them, Naira Zohrabian, told RFE/RL’s 
Armenian service.

“Amulsar is a bigger issue than the arrest of [Robert] Kocharian, Serzh 
Sarkisian, Gagik Khachatrian or anyone else,” said Edmon Marukian, the leader 
of the opposition Bright Armenia Party.

Marukian at the same time welcomed Khachatrian’s arrest. “I hope that 
[law-enforcement authorities] will not stop there,” he said.



Moody’s Upgrades Armenia’s Ratings

        • Artak Khulian

Armenia - A view of the center of Yerevan and Mount Ararat, February 17, 2013.

Moody’s Investors Service has revised upward its credit ratings for Armenia and 
forecast continued economic growth in the country.

In a statement issued on Tuesday, the ratings agency said it has upgraded 
Armenia’s “local and foreign currency long-term issuer and foreign currency 
senior unsecured debt ratings” to Ba3 from B1. “The outlook has been changed to 
stable from positive,” said the statement.

“Moody's has concurrently raised Armenia's long-term local currency bond and 
deposit ceilings to Baa2 from Baa3,” it added. “The long-term foreign currency 
bond ceiling and long-term foreign currency deposit ceiling have also been 
raised to Ba1 from Ba2 and B1 from B2, respectively.”

Moody’s also offered a positive outlook for the Armenian economy, saying that 
it should grow by at least 5.5 percent annually in the coming years. “The 
sectors that have contributed to 2018 growth will continue expand solidly, such 
as tourism, information technology (IT), and light manufacturing, including of 
textiles,” it said. “In particular, ongoing investments in hotels will raise 
tourism capacity, new textile factories are being built, and the number of IT 
sector companies and projects are growing rapidly.”

Moody’s was particularly encouraged by the long-running rapid expansion of the 
Armenian IT industry, saying that it is “providing a strong foundation for the 
development of a skills- and knowledge-based economy.”

The Western agency went on to praise the Armenian authorities’ fiscal and 
monetary policies contributing to macroeconomic stability. “Moody's expects 
Armenia's government debt burden to decline steadily from currently moderate 
levels of around 51 percent of GDP as of the end of 2018,” it said.

Prime Minister Nikol Pashinian was quick to seize upon the ratings upgrades. 
“This is a really important development which increases international 
confidence in the Armenian economy and makes our country considerably more 
attractive to investors,” he wrote on his Facebook page.

Bagrat Asatrian, an economist who ran the Central Bank of Armenia in the 1990s, 
likewise stressed the importance of the Moody’s statement. “In essence it 
reflects positive changes that have occurred in our economy,” he told RFE/RL’s 
Armenian service.

Asatrian singled out the easing of the debt burden anticipated by Moody’s. “For 
many years our public debt grew,” he said. “That growth has stopped and we have 
even started having a reduction [in the debt.]”

But another economist, Suren Parsian, reacted more cautiously, saying that 
Moody’s had already assigned the same ratings to Armenia in 2015. Parsian also 
said that steady and robust growth forecast by the agency will not necessarily 
materialize

“If we want to have dynamic growth in the medium and long terms we have to 
revise our economic system and institutions, which has not been done,” he said.



Pashinian Ally Blasts ‘Selective Environmentalism’ In Armenia

        • Naira Nalbandian

Armenia -- Deputy parliament speaker Alen Simonian speaks to RFE/RL, Yerevan, 
June 24, 2019.

A close political ally of Prime Minister Nikol Pashinian on Wednesday hit out 
at people vocally opposed to the Amulsar mining project, saying that many of 
them know little about it and ignore other environmental issues facing Armenia.

“Many, many people writing ‘Save Amulsar’ on Facebook simply don’t know where 
Amulsar is physically located in the territory of Armenia,” said deputy 
parliament speaker Alen Simonian. “But when trees were cut down in [forests 
around] Dilijan and Ijevan this selective environmentalism was not in action 
for some reason.”

The Amulsar issue came to the fore after Pashinian indicated on August 19 his 
intention to enable a British-American company, Lydian International, to mine 
and smelt gold at the massive deposit located in the southeastern Vayots Dzor 
province. He cited the findings of an independent environmental audit that was 
conducted by a Lebanese firm, ELARD, contracted by the Armenian government.

In its final report released earlier in August, ELARD concluded, among other 
things, that toxic waste from the would-be Amulsar mine is extremely unlikely 
to contaminate mineral water sources in the nearby resort town of Jermuk or 
rivers and canals flowing into Lake Sevan.

Armenian environmental activists denounced Pashinian’s statement. They as well 
as protesters blocking the roads leading to Amulsar maintain that the project 
would wreak havoc on the environment.

Opposition politicians and even some parliament deputies from Armenia’s ruling 
My Step alliance have also spoken out against the U.S.-backed project. But 
other My Step lawmakers have voiced support for Lydian’s renewed operations at 
Amulsar disrupted by the protesters in June 2018.

Simonian downplayed those differences when he spoke to reporters after a 
meeting of My Step’s parliamentary faction chaired by speaker Ararat Mirzoyan. 
He insisted that they will not cause a split within Pashinian’s bloc.

“It’s up to the government, not the parliament faction, to make a decision on 
the [Amulsar] issue,” said Simonian. “We will discuss the issue only if it 
comes to the National Assembly.”

“Haykakan Zhamanak,” a newspaper owned by Pashinian’s family, commented on the 
Amulsar controversy and other challenges facing Armenia in an editorial 
published on Wednesday.

“In this situation, the government has to not only solve the problems but also 
overcome the resistance of the entrenched [state] system,” the paper 
complained. “But one gets the impression that Prime Minister Nikol Pashinian is 
doing that single-handedly or with the help of a handful of ministers and 
parliament deputies and that others are waiting on the sidelines to see how all 
this ends.”

Simonian would not say whether he thinks that Pashinian warned his loyalists 
through the “Haykakan Zhamanak” article to fall in line with the government’s 
position on Amulsar.

In his August 19 comments, Pashinian said that Lydian International will have 
to stick to “unprecedentedly high environmental standards that have not been 
applied in Armenia until now.”

He said that the government will also force other mining companies operating in 
the country to gradually comply with those standards. Pashinian suggested that 
some of them have sponsored the environmentalists’ campaign against Lydian in 
an effort to kill the Amulsar project and thus avoid spending large sums of 
money on improving their notoriously poor environmental records.



Press Review


“Haykakan Zhamanak” hits out at Armenia’s former leaders and their allies 
accusing the current authorities of failing to address Armenia’s problems and 
using former President Serzh Sarkisian as a scapegoat. “It is evident that the 
root causes of all existing serious problems lie in the past,” writes the 
pro-government paper. It says that it was the Sarkisian administration that 
allowed a Western company to develop the Amulsar gold deposit, “drove Karabakh 
out of the negotiation process” and failed to counter Azerbaijan’s military 
buildup. “In this situation, the government has to not only solve the problems 
but also overcome the resistance of the entrenched [state] system,” it says.

“But one gets the impression that Prime Minister Nikol Pashinian is doing that 
single-handedly or with the help of a handful of ministers and parliament 
deputies and that others are waiting on the sidelines to see how all this 
ends,” continues “Haykakan Zhamanak.” “Solutions to these problems require not 
only teamwork but also a full mutual understanding between the [ruling] team 
and the public. The establishment of that mutual understanding is incumbent on 
not only Nikol Pashinian. This applies to everyone: both the authorities and 
the opposition. In a critical situation one cannot step aside, place the entire 
responsibility on one man and then complain that he governs the country on his 
own.”

Citing comments made this week by a senior official from the Investigative 
Committee, “Zhamanak” suggests that the authorities have made a “political 
decision” to allow the Lydian International company to restart the Amulsar 
project. “Apparently the authorities just need some time to ensure proper 
conditions for the exploitation of the mine,” speculates the paper. It says the 
protesters blocking Lydian’s access to Amulsar remain unwilling to lift the 
blockade, thereby creating an “impasse” for the authorities. A use of force 
against them would reflect negatively on Pashinian’s popularity, it claims, 
adding that the prime minister risks meeting the fate of other post-Soviet 
revolutionary leaders whose tenures proved a “political fiasco.”

“Zhoghovurd” describes as “overdue” the arrest of former Finance Minister Gagik 
Khachatrian, arguing that law-enforcement authorities began investigating him 
immediately after last year’s “Velvet Revolution.” State prosecutors said as 
recently as in March that Khachatrian is not under investigation. “But it turns 
out now that not only a criminal case was opened but that Khachatrian 
compensated the state for the damage [caused by him] and yet Prosecutor-General 
Artur Davtian was not aware of that,” says the paper.

(Sargis Harutyunyan)


Reprinted on ANN/Armenian News with permission from RFE/RL
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Nyrie Kalashian: