Author: Chakhmakhchian Vatche

The Power and Interest News Report- PINR
Dec 15 2006

”Current Geostrategy in the South Caucasus”

In recent months, relations between Georgia and Russia have
deteriorated. The clash between these two states is only a symptom of
the broader strategic positioning of the West and Russia in and
around the South Caucasus. In this scenario, at regional and global
levels, countries and organizations are involved in a struggle for
power and energy security. Considering these two issues, what is the
current situation in the South Caucasus and what can be expected in
the future?

Affecting the region are the political-military and security policies
of the actors involved. These actors include Georgia, Armenia, and
Azerbaijan, and their "frozen" conflicts of Abkhazia, South Ossetia
and Nagorno-Karabakh. Additionally, the leverage of regional powers,
such as Turkey and Iran, and of global powers, such as the United
States, Russia and China, is part of the power configuration in the
region.

In addition to countries, international organizations are also
involved in this game. At the regional level, there is the Black Sea
Economic Cooperation (B.S.E.C.), the Black Sea Force (BLACKSEAFOR)
the Caspian Sea Force (CASFOR), the cooperation between Georgia,
Ukraine, Azerbaijan and Moldova (G.U.A.M.) and the Collective
Security Treaty Organization (C.S.T.O.) within the Commonwealth of
Independent States (C.I.S.). At the global level, the North Atlantic
Treaty Organization (N.A.T.O.) and the European Union also exercise
political weight in the South Caucasus.

Energy Security

In addition to the power configuration is the issue of energy
security. Energy security is high on the international agenda, as the
United States, the European Union and N.A.T.O. have expressed their
concern about threats to energy security. E.U. countries as a whole
currently import 50 percent of their energy needs (the U.S. imports
58 percent of its oil), and will import 70 percent by 2030.
Furthermore, E.U. countries import 25 percent of their energy needs
from Russia, which may rise to 40 percent in 2030 (another 45 percent
comes from the Middle East). Besides this growing dependency, it has
became clear that the energy instrument is an essential part of
Russia’s external and security policy after it used this to force
Ukraine to pay a higher gas price at the end of 2005.

The geopolitical importance of the South Caucasus is also based on
the presence of energy resources. Stability in the Caucasus is a
vital requirement for the uninterrupted transport of Caspian oil and
gas. The Caspian Sea region (the South Caucasus and Central Asia)
contains about 3-4 percent of the world’s oil reserves and 4-6
percent of the world’s gas reserves. In itself, the Caucasian share
of global oil and gas reserves is not considerable. However, in light
of the uncertainty over the reliability of Persian Gulf supplies, as
well as the possibility that Russia may use energy delivery as a
power tool, the transport of Caspian and Central Asian (Kazakhstan
and Turkmenistan) energy supplies to the West via the Caucasus has
gained vital importance.

The importance of the region has also grown as a result of energy
policies by consumer states in the West that want to decrease their
dependence on resources from Russia and the Middle East. A number of
states and organizations are making efforts to end Russia’s near
monopoly on the transport of energy supplies in the Eurasian region
by creating alternative pipeline routes to transport these supplies.
Thus, the Atasu-Alashankou oil pipeline (China and Kazakhstan), the
Baku-Tbilisi-Ceyhan (B.T.C.) and Baku-Tbilisi-Erzurum (B.T.E.)
pipelines (Georgia, Azerbaijan, Turkey and Kazakhstan) and the
Nabucco gas pipeline (European Union, Turkey, Bulgaria, Romania,
Hungary and Austria) are operational, under construction or planned.

Defrosting the Frozen Conflicts

Washington wants a stable South Caucasus region for its investment in
the energy sector, as well as for its geostrategic interests in the
region. The separatist regions in Georgia — Abkhazia and South
Ossetia — have become areas of the major players’ interests in the
region. With the exception of the tensions surrounding Tbilisi,
Russia has not played a very neutral role in these conflicts. Russia
has used the conflicts as political leverage with the West.

The objectives are clear: the West and Russia have the aspiration of
being the major player in the South Caucasus. Russia, however, is
gradually being forced to retreat from this region. To counter this
development, one of Russia’s tactics is to slow down Western advances
by keeping the so-called "frozen conflicts" active. This makes it
harder for Georgia to attract Western investment and it is
complicating its accession to N.A.T.O.

The tensions are likely to continue if these global powers and their
organizations cannot find consensus or "peaceful coexistence." In
these circumstances, a solution to the frozen conflicts is rather
unthinkable. If that is the case, disputes — harmful to the economic
development of the South Caucasus — are likely to continue until the
time that these countries are consolidated into Western structures.

Concerning the Nagorno-Karabakh conflict between Armenia and
Azerbaijan, the outlook is similar to that of the Georgian regions.
The main foreign actors in this conflict — Russia, the United States
and the European Union — will have to find a compromise. At the
moment, the United States is the party most interested in solving the
conflict and is putting serious efforts into finding a settlement.
Yet, political will and public support has to be created on both
sides. It seems that political pressure is rising on Azerbaijan and
Armenia. The United States — perhaps more than Europe — has the
military, political and economic capacities, and, due to its
investments, the will to force a breakthrough in the negotiations.
Just like the Georgian separatist regions, the main condition for a
solution is cooperation with and by Russia.

Military Alliances as Guardians of Energy

Matters of energy security tend to attract the attention of military
organizations. For example, military organizations are at the center
of the security of oil and gas pipelines against terrorist attacks.
In G.U.A.M., increasing tensions between Georgia and Moldova with
Russia has forced it to reconsider its energy security and to find an
alternative to dependency on Russian oil and gas. In such an
alternative scenario, Azerbaijan is to play a crucial role both as
energy supplier and transit country for oil and gas from Central
Asia. The sustainability of such a scenario is yet to be shown.
Considering the current more pro-Russian government in Ukraine,
however, G.U.A.M.’s energy security plans have become unlikely.

The Russian armed forces are currently tasked with the protection of
energy resources, such as off-shore platforms. Also, for the
Russian-led C.S.T.O., energy security seems to be recognized as a
task of growing importance. A recent exercise at a nuclear energy
station in Armenia showed that the C.I.S. Anti-Terrorist Center is
already involved in this. It is not unlikely that in the future the
C.S.T.O. will take over energy security tasks and other
responsibilities of the C.I.S. Anti-Terrorist Center. Therefore, the
involvement of the C.S.T.O. in energy security, especially in the
South Caucasus, specifically in Armenia, is likely to develop
further. Moreover, regional maritime task forces — CASFOR and
BLACKSEAFOR — could potentially be used for such operations around
the Caucasus.

According to Western and Russian sources, the West is also directly
involved in energy security in the South Caucasus. Allegedly,
military officers from Turkey, together with their colleagues from
Azerbaijan and Georgia, have regularly carried out command staff
exercises to practice the protection of the B.T.C. pipeline.
Furthermore, in 2005 an agreement had supposedly been reached which
arranged for the United States and N.A.T.O. to secure the B.T.C.
pipeline. In the future, they would also safeguard the B.T.E. gas
pipeline.

In addition to this, military units of N.A.T.O. and the United States
would also support and/or train Azeri and Georgian troops tasked with
the protection of pipelines. Moreover, the United States is allegedly
going to provide Azerbaijan three cutters and small submarines,
intended to guard its oil fields. However, Georgian, N.A.T.O. and
U.S. officials all deny any N.A.T.O. or U.S. involvement in pipeline
security in Georgia and Azerbaijan and claim that these two states
have their own dedicated units for pipeline protection. Nevertheless,
statements by leading N.A.T.O. officials, dedicated meetings, and
other activities indicate that N.A.T.O. is increasingly interested in
the South Caucasus and its energy resources in particular.

Considering that the United States and N.A.T.O. are likely to be
involved in energy security in the South Caucasus, as is Russia with
the C.S.T.O., this could lead to rivalry. In the worst case, even a
local arms race between their regional allies — with Iran and
Armenia on the Russian side versus Azerbaijan and Georgia on the
Western side — should not be ruled out.

U.S.-Russian Competition in the Caucasus and the Caspian Sea

The geostrategic importance of the South Caucasus and the Caspian
region as a corridor from Europe to Central Asia, as a bridgehead to
control and pressure Iran, and also because of the energy resources
and the war on terrorism, are the main reasons for the U.S. presence
in the region. The United States, with its heavy military involvement
in Iraq and Afghanistan, and following the switch of Uzbekistan to
the Russian camp, is apt to seek strong points in the Caucasian area
in support of its global geostrategy.

The recent involvement of the United States might upset the
precarious power balance in these regions, which has evolved after
the disintegration of the Soviet Union. This is especially true now
that Iran and Russia, the greatest powers in the region, feel
threatened. Russia regards the South Caucasus as its traditional
backyard of influence and counters increasing involvement in the area
by the West. The United States has chosen Azerbaijan as its most
important ally in the Caspian basin and has developed a program of
intense military cooperation. Russian military analysts argue that
the situation is reminiscent to the U.S.-Georgian Train and Equip
Program, which since its start in 2002 has provided Georgia with a
capable, well-trained and equipped army. Russian analysts fear that
this soon will be the case with Azerbaijan as well, thus depriving
Russia of all its means of influencing Azerbaijan.

U.S. military cooperation in the South Caucasus and the Caspian seems
to evolve smoothly. Although the United States gives the impression
of being reluctant to make its military presence and activities
public, it is clear that it is effectively defending its interests in
the region, including its energy security. In addition to U.S.
military support, Azerbaijan’s increasing defense budget will also
contribute to strengthening its military power. The question remains
whether the United States will be able to convince other states, such
as Kazakhstan, to join this military cooperation.

Russia has shown it is seriously interested in preserving its
regional authority with its Caspian Flotilla. Yet with a growing U.S.
presence, it will need to form alliances. A Russian-led CASFOR
maritime force, including other littoral states in addition to Iran,
still seems far in the future. A cause of potential conflict is the
unclear legal status of the Caspian. So far, the littoral states have
not reached an agreement on dividing the Caspian Sea. Near armed
clashes have already occurred between Azerbaijan and Iran over
disputed oil fields. Tensions are likely to continue as long as the
legal situation of the Caspian Sea remains in dispute. Because of the
geostrategic and economic interests at stake, and an apparent failure
to come to a consensus from both sides, the competition between
Russia and the United States in the Caucasus and the Caspian Sea is
likely to be prolonged in the years ahead.

A Comprehensive Role for the E.U. in Conflict Resolution

The separatist areas of Abkhazia and South Ossetia form a hindrance
for further integration of Georgia into the Western architecture.
Although Georgia is eager to see the Russian peacekeepers withdrawn,
conversely Russia is keen to continue its presence to maintain
influence in Georgia. Nor will Russia accept its forces to be
replaced by those of N.A.T.O. in the separatist areas, which is
another objective of the Georgian government.

Recent statements by the European Union display a more active policy
in the South Caucasus. The European Union has the reputation of an
"honest broker" and as having a wide scope of instruments for
achieving peace and stability. Conversion of statements into an
active security policy could be established by forming a military
mission to be deployed in Abkhazia and South Ossetia, not to replace
the Russian peacekeepers, but as an additional asset to promote
stability and reconstruction. Such a mission would be beneficial for
the stature of the European Union, to prove that it is capable of
conducting crisis management missions. Furthermore, this would adhere
to the call of the Georgian government to introduce Western
peacekeepers in the disputed areas.

Russia may oppose a competitive peacekeeping force, but it will have
a difficult time openly disapproving of such an E.U. mission since it
wants to maintain good relations with the European body and also
because it has no grounds to feel threatened by E.U. peacekeepers. A
possible E.U. military mission to the separatist areas should be part
of a larger E.U. operation, using its social and economic instruments
as well for stability and reconstruction. Such an approach would
strengthen a normal economic build-up and thus be detrimental toward
the largely illegal economic structures of the current leadership of
Abkhazia and South Ossetia. With such an encompassing program, the
separatist regions could gradually develop into stable societies,
which would also be beneficial for their position toward the Georgian
government.

Likewise, taking into account the fact that the O.S.C.E.’s long-time
negotiations to reach a settlement on Nagorno-Karabakh have been in
vain, the European Union could also pursue an encompassing action
program on this conflict. Here, as well, the deployment of an E.U.
military mission, together with social and economic measures to
encourage development of state and society, could bring a political
solution closer. Moreover, a stabilized South Caucasus would also be
advantageous for structural energy supplies from Central Asia via the
South Caucasus to Europe. Therefore, political and economic
objectives could be united.

A Joint Effort of N.A.T.O. and the E.U. in the South Caucasus

Moving past their reluctant attitude in the 1990s, in the 21st
century the alliance and the union have started to pursue a much more
active policy toward the South Caucasus. The reasons for the change
in attitude of N.A.T.O. and the E.U. are found in a corresponding
U.S. agenda, which even earlier started to follow a proactive course
in this region. For the European countries, the issue of energy
security has resulted in more attention for the South Caucasus due to
rising prices, increasing scarcity and uncertainty of energy
deliveries. Although the entrance of Georgia into N.A.T.O. — and
subsequently Azerbaijan and perhaps Armenia as well — might still
take some years, it is probable that the relationship between
N.A.T.O. and the South Caucasian states will further deepen, with
Georgia taking the lead. Similarly, increased ties between the South
Caucasian states and the E.U. can also be expected, although
membership of the E.U. for them seems further away than that of
N.A.T.O., due to the enlargement fatigue within the E.U.

Although formally denied, there is reason to believe that N.A.T.O.
has, or will have, a role in pipeline security in the South Caucasus,
for clear geostrategic reasons. The E.U. is also likely to build up
its activities in the South Caucasus, especially in energy
infrastructure, economic development, rule of law, and probably also
conflict solution — for which it has a more independent reputation
than does N.A.T.O. Consequently, N.A.T.O. and the E.U. will share an
upcoming long-lasting involvement in the region, which, by
establishing a labor division in their best fields of expertise, may
be able to bring security and prosperity to the South Caucasus.

Synergy of Military and Energy Instruments of Security Policy

Considering that the military power of the U.S., N.A.T.O., Russia and
the C.S.T.O. and the regional maritime task forces are assigned to
energy security in this region, the conclusion seems valid that in
the near future the combination of military and energy will
constitute the major instruments of power in the South Caucasus.
Because of the growing importance of energy resources, a further
intertwining of these two policy tools can be expected, not only
around the South Caucasus, but elsewhere in the world as well. This
is in contrast with the thinking that the military instrument has
been replaced by the economic (energy) instrument. Therefore,
countries and organizations will need to have a well-considered
build-up and coordination of their military and energy instruments in
order to conduct a successful security policy.

Report Drafted By:
Dr. Marcel de Haas

The Power and Interest News Report (PINR) is an independent
organization that utilizes open source intelligence to provide
conflict analysis services in the context of international relations.
PINR approaches a subject based upon the powers and interests
involved, leaving the moral judgments to the reader. This report may
not be reproduced, reprinted or broadcast without the written
permission of [email protected]. All comments should be directed to
[email protected].

HAYKO RECOGNIZED BEST SINGER OF YEAR AT NATIONAL MUSIC AWARDING

YEREVAN, DECEMBER 15, NOYAN TAPAN. Results of the 4th National Music
Awarding were summed up on December 14 at the Al.Spendiarian Opera and
Ballet National Academic Theater. By the jury members’ open vote,
Hayko was recognized the "Best Singer of the Year" and Hasmik
Karapetian and Emmi shared the "Best Singer" (female) prize. Silva
Hakobian, recently won the first prize at the BBC music awarding was
recongized the winner in the "Discovery of the Year" nomination.

Tigran Petrosian’s "Whom" disk was recognized the "Best Album of the
Year," "Hayer" group was recognized the "Best Pop Group," "Empyray" –
the "Best Rock Group," the "Hayk" group’s "Kamin Pchi" Let’s Wind Blow
song was recognized the "Best Hit," Arman Hovhannisian’s and Arminka’s
duet was recognized the "Best Duet." The "Barev, Yerkir" (Good
Morning, Country) clip shot by director Davit Babayan was recognized
the "Best Clip of the Year" prize with unanimously vote of the jury
members. The prize after Tigran Naghdalian was given to composer Armen
Martirosian and author of the words Avet Barseghian for the "Karmir,
Kapuyt, Tsiranaguyn" (Red, Blue, Orange) song. World-famous
chansonnier Charles Aznavour was awarded a special prize. Singer Andre
was rewarded with a special prize for first of all representing
Armenia in the "Eurovision-2006" competition, and singer Varduhi
Vardanian was also awarded for the significant contribution in the art
of singing.

PanARMENIAN.Net

EU Leaders Endorse Decision to Suspend Turkey’s Entry Talks
15.12.2006 17:39 GMT+04:00

/PanARMENIAN.Net/ European Union leaders have formally endorsed on
Friday the conclusions of Monday`s foreign ministers meeting which
agreed to partially freeze Turkey’s membership talks due to Cyprus
standoff, ABHaber reports.

European Commission President Jose Manuel Barroso said all 25 leaders
support the decision unanimously to slow down talks with Turkey over
its reservations to honor a pact to open its ports and airports to EU
member Greek Cypriot administration. Ankara refuses to open its ports
to EU member the Greek Cypriot administration and is asking the EU to
first end the isolation of the Turkish Cypriots.

ARMENIAN WOMEN ARE SILENT VICTIMS
By Gayane Abrahamian in Yerevan and Gavar

Institute for War and Peace Reporting (IWPR), UK
Dec 14 2006

Thousands endure beatings but lack means to protect themselves.

Almost half of Armenia’s women have suffered domestic abuse, say
researchers, yet this disturbing problem is being hushed up because
of traditional attitudes.

"Armenian women suffer violence, but they are afraid and keep silent,
as they don’t believe that anything can be done about it," said
Consuelo Vidal, United Nations resident coordinator in Armenia at
the launch of a 16-day programme Campaign Against Gender Violence
that continues until December 16.

For 13 years, Hasmik Hakobian has been married to a man from a
traditional Armenian family in the town of Gavar around 100 kilometres
from Yerevan.

She was just nineteen when her father married her off to a young man,
whom she’d only ever seen from the window of her house.

"I have a black eye permanently so the neighbours have long stopped
asking me what the matter is," said Hasmik. "Happiness for me means
not being beaten and blood not gushing from my nose."

Hasmik said she was beaten for the first time three days after her
wedding, and since then she has lost count of the number of times
she has suffered abuse.

"I was pregnant then,’ she recalled. "I was baking bread. I don’t
know what my mother-in-law had told my husband, but he was mad with
rage when he rushed into the bakery. He snatched the rolling pin
from my hands and hit me on the back and head with it. I came round
in hospital, having already delivered the baby."

Hasmik decided to leave her husband, but her father refused to take
her back home, saying that wives were always beaten by their husbands
and advising her to put up with it and raise her child.

Ethnographer and sociologist Mihran Galstian said that traditional
denigrating attitudes towards women in Armenia has made such violence
possible. Armenian folk proverbs actively encourage beating by
promoting the idea that "a woman is like wool – the more you beat it,
the softer it becomes" or "a woman is made to cry".

Officials and parliamentarians also refuse to acknowledge there is
a problem.

For example, Armen Ashotian, a member of parliament from the governing
Republican Party, said, "Domestic violence is not a feature of our
families. I think that people who want to raise this problem are
really not bothered by the issue but just want to get new grants.

They are lowering the image of Armenia for the sake of their own
pockets.

"There are occasionally cases of it, but domestic violence is not on
a big scale in our society. They shouldn’t present Armenia as some
kind of African tribe, where people eat one another."

Data collected suggests otherwise. In 2004-2005, the Sociometer Centre
for Independent Sociological Studies conducted a poll of 1200 women
in Yerevan and eight towns and eight villages. Forty six per cent
said they were exposed to violence in their family, a quarter in the
presence of their children.

"Our officials refuse to admit that violence does exist in Armenian
families and that serious measures need to be taken to fight it,"
said Susanna Vardanian, director of the Women’s Rights Centre in
Yerevan. "Moreover, they accuse others of destroying our traditionally
strong families in order to get grants."

"Unfortunately, many see the abuse of women as normal. The belief
that violence is an integral part of married life originates in early
childhood: first a girl is beaten by her brother, then by her husband,
and she comes to think that that’s the way it should be," said Adibek
Aharonian, director of the Sociometer centre.

According to Sociometer, 45 per cent of the women suffering abuse
in their families keep quiet about their problem. Only 0.3 per cent
resort to divorce, and no more than 0.4 per cent contact the police.

Vardanian said women had no faith in the police to protect them and
they were afraid of the consequences, "After the police leave, [a
victim] may be subjected to still greater violence, as it’s shameful
to wash your family’s dirty linen in public."

Gulnara Martirosian (not her real name) now lives in an old people’s
home in Yerevan, although she is only 45. Her 25 years of married
life were an endless series of fights not only with her husband,
but also with his mother and brother.

"Anyone who felt like it could beat me," she told IWPR. "If something
was wrong in the house, I was the one who got the blame. They pounced
on me and beat me – all together. Once I tried to defend myself,
I grabbed a chair and hit my husband over the head with it."

This incident, which happened in 2002, cost Gulnara her sight.

"I hit him and darted out of the house, but there was nowhere to run
– my parents are dead, I have no relatives, and I sought refuge in
my neighbour’s house," she went on. "My husband came for me there,
and when he saw me, he splashed acid in my eyes. I remember my face
burning, the pain was so bad I lost consciousness. I was taken to
Yerevan and operated on there, but my sight never returned."

No one from the family comes to see Gulnara and she says her children
have been told that she is dead.

"I couldn’t stand up for my rights, as I had no money, no relatives to
run around the courts for me. That’s how my life has passed," she said.

Since the Centre for Women Rights opened seven years ago,
more than 10,000 women, including over four thousand victims of
domestic violence, have called its hotline, asking for help. Another
organisation, the Motherhood Foundation, has been open for four years
and has dealt with 3,000 women, who said they were exposed to abuse.

"These are rather high figures for Armenia, considering that women
suffering violence tend to seek help from their relatives and friends,
and only those in a hopeless situation turn to organisations like
ours," said Anna Badalian, a psychologist at the foundation.

IWPR randomly polled ten women in Yerevan on the street. Four of them
said they had been beaten by their husbands more than once. And there
was a clear difference in outlook between the generations.

"If couples divorced because of beatings and abuse, there would be
no families left in Armenia," said accountant Satik Kintoian, 78.

"I remember my grandfather saying that a man, when choosing a wife
for himself, should beat her first, and if she cowered in the corner,
that meant she would make a good wife, and if she ran away, then
she wouldn’t.

"I was beaten and loved too. They say the more he beats you, the more
he’ll love you. I have no regrets about my life. I’m not saying that
a wife should be beaten every day, but when she crosses the line,
she should have a beating."

Zaruhi Minasian, a 26-year-old translator, takes a different view.

She said she has never been subjected to physical abuse but she has
experienced psychological pressure.

"I have no respect for men who want to prove themselves by taking
it out against women," she said. "That only proves that these men
are weak."

Gayane Abrahamian is a correspondent for Armenianow.com.

;s= f&o=326150&apc_state=henpcrs

PARISYAN SHUTS OUT FICKETT

The Sweet Science
Dec 14 2006

Welterweight Karo Parisyan dominated Drew Fickett by scores of 30-27
all across the board. Fickett found success in the first with some
nice kicks. Most of the first round took place on their feet as
Parisyan scored with some nice rights that reddened Fickett’s face.

In the second, Parisyan slammed Fickett to the mat. Fickett then landed
an elbow from his back which created an ugly cut under Parisyan’s
right eye. Parisyan answered with his own elbows that created a
vertical cut on Fickett’s forehead. The blood flowed after each cut.

In the third round, Parisyan landed more shots to the face of
Fickett. Fickett tried to take his opponent down but Parisyan wasn’t
having any of it. The Armenian-American defended well and earned the
decision. Parisyan is now 24-3. Fickett drops one and is now 30-5.

WE PROMISED AND AMERICANS BECAME OPTIMISTIC

Lragir, Armenia
Dec 12 2006

The Millennium Challenge Corporation has provided the first tranche
of 882 thousand dollars and will provide another 507 thousand out
of 236 million dollars by the end of this year. On December 12 the
leadership of the Millennium Challenge Account Armenia State Non-Profit
Organization and the representatives of the Armenian party held a news
conference to congratulate the Armenian government and people. The
speakers started and finished their speeches with congratulations
but more interesting things were stated between these congratulations.

For instance, Anthony Godfry, the U.S. Charge d’Affaires to Armenia
stated that this project with a total value of 236 million dollars
will continue if the elections in 2007 and 2008 are free and fair.

Like six month ago, the American party fears that Armenia still has
problems with fair governance, political rights, civil freedoms and
corruption, but the Americans are optimistic that these problems will
be settled. They are optimistic because the Armenian government has
assumed obligations, and has promised to honor these obligations.

Anthony Godfry stated that hopefully the Armenian public will help
honor these obligations, while the international community is already
giving practical assistance. We tried to find out that if it is
possible to consider free and fair processes in a country where the
media are controlled by the president. Anthony Godfry only said that
they will rely on the evaluations of the World Bank with regard to
fair governance.

The speakers declined to say how and with whose help the MCA is going
to evaluate he state of political and civil freedoms, fair governance
and transparency in elections, but they noted that the press will have
importance, and international observers will be observing the elections
in Armenia. It was not clear whose evaluation of the elections will
shape the opinion of the MCA. For its part, MCA Armenia guarantees
that thee will be no corruption. Alex Russin, the director of the MCC
Program for Armenia stated that this is an investment in the future of
Armenia, and they are interested in the right use of these funds. He
believes that transparency will be helpful for entitled spending of
these funds.

Meanwhile, Ara Hovsepyan, the chief executive of the MCA Armenia
advised not to focus on political problems. "The country may do
well in political matters, but the MCA program may be uneffective
and pointless."

EBRD TO DOUBLE ITS INVESTMENTS IN ARMENIA

Armenpress
Dec 12 2006

YEREVAN, DECEMBER 12, ARMENPRESS: The European Bank for Reconstruction
and Development (EBRD) has pledged to double the amount of its
investments in Armenia.

Michael Weinstein, head of the EBRD Armenia Office, said told reporters
today that EBRD’s current investment portfolio in Armenia made 60
million euros.

He said this figure is expected to grow to 120 million euros by the
end of 2008.

EBRD provides credits for development of agriculture, small and
medium-sized businesses, health and other sector. In a latest report
EBRD praised Armenia for continued economic growth saying, however,
it was largely due to the increased foreign investment, a high inflow
of remittances, strong private consumption and an increase in exports.

It said construction, services and investments driven by remittances
and bilateral grants will help to maintain Armenia’s economic
momentum in the short term, but warned that a combination of continued
currency appreciation and high energy prices that led to strengthened
inflationary pressures pose a significant risk in the medium term.

ARMENIA RECEIVES FIRST DISBURSEMENT FROM MILLENNIUM CHALLENGES CORPORATION

Armenpress
Dec 12 2006

YEREVAN, DECEMBER 12, ARMENPRESS: A senior U.S. diplomat praised today
Armenian authorities for doing a great deal of good job to meet the
requirements for the first disbursement of $1.4 million from the
U.S. government-funded Millennium Challenges Corporation (MCC).

Anthony Godfrey, charge d’affaires of the U.S. embassy in Yerevan, told
a news conference today that MCC has already transferred to Armenia
$882,000 and will transfer another $507,000 later this month. Under
the Compact signed by the MCC and Armenia, the latter will receive
$236 million in extra U.S. aid to develop its rural areas.

The Armenian Compact is designed to reduce rural poverty through a
sustainable increase in the economic performance of the agricultural
sector. Armenia plans to achieve this goal through a five-year program
of strategic investments in rural roads, irrigation infrastructure
and technical and financial assistance to improve the supply of water
and to support farmers and agribusinesses. The Program will directly
impact approximately 750,000 people, or an estimated 75 percent of
the rural population, and is expected to reduce the rural poverty
rate and boost annual incomes.

The Compact includes a $67 million project to rehabilitate up to 943
kilometers of rural roads, more than a third of Armenia’s proposed
Lifeline road network. When complete, the Lifeline road network
will ensure that every rural community has road access to markets,
services, and the main road network.

Under the Compact, the Government of Armenia will be required to commit
additional resources for maintenance of the road network. The Compact
also includes a $146 million project to increase the productivity
of approximately 250,000 farm households (34% of which are headed
by women) through improved water supply, higher yields, higher-value
crops, and a more competitive agricultural sector.

Millennium Challenge Corporation (MCC), a U.S. government corporation
designed to work with some of the poorest countries in the world, is
based on the principle that aid is most effective when it reinforces
good governance, economic freedom, and investments in people that
promote economic growth and elimination of extreme poverty.

NAGORNO-KARABAKH GAINS A CONSTITUTION, BUT LITTLE CLARITY FOR FUTURE
Zoe Powell

EurasiaNet, NY
Dec 12 2006

The disputed territory of Nagorno-Karabakh, a remote, predominantly
ethnic Armenian region formerly held by Azerbaijan, gained a
constitution on December 10, but the impact of the vote remains
contentious. The international community, if it followed the referendum
at all, criticized it as a potential threat to ongoing, delicate
talks between Armenia and Azerbaijan over the territory. But for the
separatist leadership itself, the vote was no more than a natural
step in its 15-year journey toward full-fledged independence.

"The constitution is not the answer to all our problems. The
constitution is a chance," declared de facto President Arkady
Ghoukassian at a December 11 press conference following the territory’s
adoption of the constitution. "Now that we’ve adopted a constitution,
we have a much better chance to become a democratic country according
to European standards . . . A country striving for European standards
has a better chance for recognition than a totalitarian regime."

Preliminary results show the referendum passed with the support
of almost 99 percent of the 78,389 Karabakhi voters taking part –
a staggeringly positive result that did not come as a surprise for
most residents in this isolated mountain region, a six to eight-hour
drive from the Armenian capital, Yerevan.

The vote was not without controversy, however. Some observers
initially questioned the referendum’s timing – presidential elections
are scheduled in the self-declared state for the summer of 2007 –
and the relatively abbreviated time for public discussion.

For now, though, the international community has given little
sign of giving the government – or the many voters surveyed by
EurasiaNet – their desired response. Azerbaijan, the European Union,
the Council of Europe, the Organization for Security and Cooperation
in Europe (OSCE), and GUAM (a regional association including Georgia,
Ukraine, Azerbaijan and Moldova) have all refused to recognize the
referendum as valid. In a recent statement, OSCE Chairman-in-Office
and Belgian Foreign Minister Karel de Gucht commented that the vote
could undermine progress made in talks mediated by the OSCE between
Armenia and Azerbaijan over the disputed territory. [For background
see the Eurasia Insight archive].

Meanwhile, Nagorno-Karabakh government officials maintain that
they’re moving on. "We, in any case, need to organize ourselves to
be independent," commented de facto Deputy Foreign Minister Masis
Mayilian. "What, should we wait 14 years until the Azerbaijanis agree
to build our state?"

Some 54 observers, primarily from Armenia, Russia and France, monitored
the voting process. The day of the vote, the 15th anniversary of
the territory’s original independence referendum, has been declared
"Constitution Day."

Rather than cause for conflict, territorial leaders assert, the
constitution should be cause for comparison – with Azerbaijan, which
battled Armenia and Karabakh separatists for control of the territory
from 1988-1994.

The 142-article document describes the Nagorno-Karabakh Republic as
"a sovereign, democratic legal and social state" with powers in
territory currently controlled by the separatist government. It
establishes a broad range of generally defined rights, from the
direct election of the territory’s president, parliament and local
governments, to the presumption of innocence and freedom of assembly,
speech, and religion. "If Azerbaijan had such a constitution, if it
was the same democratic state, it’d be easier to talk with them,"
Ghoukassian said. "I hope that this will be considered by the
international community."

The sensitive issue of the return of ethnic Azerbaijani refugees is
not specifically addressed in the document, although the constitution
provides for a right of return for "every citizen and foreign citizen
having the right to live in the Nagorno-Karabakh Republic." The issue
of citizenship has been left undefined, pending a later law.

Karabakhis currently carry Armenian passports, but cannot vote in
Armenia’s elections. Armenian is defined as the state language, but
the constitution guarantees "the free use of other languages spread
among the population."

"Whether recognized or not, we have rights," commented Gegam
Bagdasarian, editor of the independent weekly Demo and a member of the
Nagorno-Karabakh parliament who abstained from voting on the draft
constitution, approved on November 1. "The international community
should be interested in democracy. The more democracy we have, the
easier it will be to find a common language to resolve our problems."

The military initially had a strong say in separatist
Nagorno-Karabakh’s affairs, but in the years since a 2000 assassination
attempt against Ghoukassian, and the subsequent imprisonment of
de facto Defense Minister Samvel Babaian, civilian government has
asserted itself. Representatives of the territorial leadership claim
that Nagorno-Karabakh now compares favorably with both Azerbaijan
and Armenia in terms of freedom of expression.

Newspaper editor Bagdasarian agrees. A critical article in his paper,
Demo, questioned whether the constitutional referendum was linked to a
desire by Ghoukassian for a third presidential term. The fact that the
newspaper has not faced repercussions for questioning Ghoukassian’s
motives is a sign that greater openness has indeed taken root, the
editor maintained. The Nagorno-Karabakh leader, in office since 1997,
later held a press conference in which he stated that he would not
seek a third term.

"Five to six years ago, the government reacted very negatively to
critical stories. But now, not at all," Bagdasarian said.

Nonetheless, pragmatism dictates the response, he added. "It’s not
that they don’t react because they’re so civilized, but because they
don’t see a real threat [from print media] to themselves."

Nor did hopes among many ordinary Karabakhis voting in the referendum –
routinely described as "a duty" — focus on democracy alone. Status as
a legitimate, recognized state was one goal; the economic stability
that is seen to come with the trappings of a recognized state was
another.

"We’re a hard-working people. We want factories. We want work. We
want for everyone to have a normal life," said Artur, a 45-year-old
war veteran standing outside a grocery store not far from the polling
station where de facto President Ghoukassian cast his ballot. "We
have to vote so that people know our position."

Some voters queried on their way to the polls asserted that they
had studied the constitution carefully, but others shrugged off the
question. "Why read it?" commented one elderly man en route to cast
his ballot in Stepanakert’s theater. "I’m going to vote for it and
that’s all that’s needed."

Souten Tantazian, the chairman of polling station #30 in Stepanakert,
was succinct: "This is for our future."

Editor’s Note: Zoe Powell is the pseudonym for a journalist based
in Tbilisi.

FILM DIRECTOR RUBEN GEVORGIANTS MAKES DOCUMENTARY ABOUT WORLD FAMOUS DRAMATURGE TONINO GUERRA

Noyan Tapan
Dec 08 2006

YEREVAN, DECEMBER 8, NOYAN TAPAN. Film director Ruben Gevorgiants,
Chairman of the Union of Cinematographers of Armenia, is making
a documentary about the world-famous cinema dramaturge Tonino
Guerra. During the December 8 press conference, he said that
he was already awarded the Amarcord Prize (which is given for a
great contrubution to the world cinematography) of the Independent
Association of Italian Cultural Workers for his incompleted film
"Tonino Guerra, Armenia and the World". 32 films about T. Guerra have
been made, with only R. Gevorgiants being awarded this prize. In
his words, the film will be completed in the spring of 2007, after
which there will be its premiere in Yerevan with the participation
of Tonino Guerra. The film director noted that the documentary will
be in Italian. "Guerra worked with Federico Fellini, Michelangelo
Antonioni and Andrey Tarkovski, who created part of the best films in
the world. These works are considered as progressive even today and
occupy their worthy place among classic films," he underlined. Speaking
about the state of the Armenian cinema, R. Gevorgiants said that its
development requires first of all creation of the appropriate cultural
field and encouragement of talented cinematographers.