DeFacto Agency, Armenia
Sept 28 2005
ACTIVATION OF NK TALKS CAN RESULT IN AN AGREEMENT, BELIEVES KOCHARYAN
“Since 1994 we have been negotiating with Azerbaijan within the
framework of the OSCE MG. There were moments, when the parties were
close to solution of the problem; however, something hampered it and
the negotiations became passive. At present there is some activation in
the negotiation process and he hope we’ll manage to achieve success”,
stated RA President Robert Kocharyan at the joint press conference
with President of Finland Tarja Halonen on the outcomes of Armenian –
Finnish talks on September 27.
Touching upon the issue referring to international participation in
the settlement process Robert Kocharyan noted international structures
should interfere with the issue after the parties had adopted an
agreement. “We take a favorable view of the international community’s
participation in the issue and we hope as soon as the parties reach
political consensus assistance – both economic and political – will
increase”, stated RA President.
In the course of the press conference Robert Kocharyan expressed
satisfaction concerning the meeting’s outcomes and pointed out the
necessity of development of relations with Finland, especially in
the context of development of cooperation with the EU.
In her turn, T. Halonen highly estimated Armenia’s participation in
the EU program titled “Enlarged Europe. New Neighbors”. She stated
Finland would promote Armenia in the process of Euro integration.

FINLAND TO PROMOTE EUROPEAN INTEGRATION OF ARMENIA
De Facto Agency, Armenia
Sept 28 2005
Armenia goes on working over the Plan of Actions within the European
Neighborhood Policy, stated RA President Robert Kocharyan in the
course of the joint press conference with Finnish President Tarja
Halonen on September 27.
In her turn President of Finland congratulated RA authorities on the
progress achieved in cooperation with the EU. When speaking about
Armenia’s Euro integration she stated democracy, human rights and
supremacy of law were each state’s bases.
Finnish President stated the necessity to determine the perspectives
of bilateral economic cooperation.
From: Emil Lazarian | Ararat NewsPress

MINISTERS OF INTERNAL AFFAIRS OF BELARUS AND ARMENIA TO SIGN COOPERATION PROTOCOL
De Facto Agency, Armenia
Sept 28 2005
Ministers of Internal Affairs of Armenia and Belarus are to sign
a bilateral Protocol on interaction between Ministry of Internal
Affairs of Belarus and RA Policy for 2006 – 2007 in the course of
the sitting of CIS Internal Ministers Council that is to take place
in Yerevan on September 29 – 30.
According to Regnum Ministers of Internal Affairs of Armenia and
Belarus are to discuss the issues referring to struggle against
corruption and other problems.
From: Emil Lazarian | Ararat NewsPress

GOVERNMENT SUPPORT GUARANTEES BUSINESS
Azat Artsakh, Republic of Nagorno Karabakh
Sept 28 2005
In two or three years after the maintenance of the ceasefire the
NKR government launched the loan programme for the treatment of the
paralyzed economy through the funds of Artsakhinvest Foundation. That
was absolutely the right thing to choose. The wrong thing about it was
that the people in charge of loan repayment relied on the conscience
of borrowers. There was no mechanism of loan repayment.
The consequence of this is that the bulk of over 2 billion drams of
loan has not been repaid yet. Carrying on with this “guarantee free”
loan programme would mean dissipation of government funds. The year
2003 can be considered as the second stage of the loan programme.
This time the executive’s attitude was more cautious, warrants were
replaced by collateral of real and personal property. In order
to coordinate the programmes of development of small and medium
size business the Foundation for Small and Medium-Size Business
Development was set up, which was restructured into the Arstakh
Development Agency in 2005. From 2003 to 2005 over 1 billion 62
million drams from government funds was lent to businesses operating
in NKR. The year 2005 is distinguished by the scope and amount of
soft loans. In 2005 about 800 million drams was lent from government
funds. 200 million drams was provided for wine growing and orchards,
cattle farming, manufacturing and purchase of agricultural machines
each. Besides, food processing, IT and other branches were also
funded in the framework of loan programmes. In order for the money to
reach the addressees (i.e. regions mainly) the Artsakh Development
Agency set limits on the number of applications for loans from each
region. This policy is obviously effective. If in 2003 the loans
granted for wine growing in Askeran region totaled only 9.8 million,
in 2005 they mounted to 49 million. In the region of Hadrut the loan
sums totaled 7.4 million and 30 million, in Martakert 6.0 and 35
million respectively. Two businesses received 100 million drams each
for purchase of agricultural machines. The two pools of agricultural
machines will offer agricultural services to farmers at comparatively
low prices. Summing up the indices describing the dynamic of small
businesses and government funding, we may say that small business is
going along successfully despite the problem of collateral.

FIRES
Azat Artsakh, Republic of Nagorno Karabakh
Sept 28 2005
Harvesting of grain is over. At the NKR Department of Emergency
we were told that out of the 62 thousand 650 hectares under wheat
49.4 hectares was destroyed by fire. The damage totaled 45 million
980 thousand drams. In 2004 338.8 hectares out of 57 thousand
660 hectares was destroyed by fire, and the damage totaled 38
million 798 thousand drams. Since January 1, 2005 76 fires have
been reported in the republic, and the damage totaled 4 million 142
thousand 600 drams. In 2004 the number of fires was 76, the damage
totaled 40 million 103 thousand 765 drams. According to the head of
the Department of Emergency Gregory Gasparian, on September 16 two
houses burnt down in the village of Avetaranots. According to him,
it was impossible to fight the fire because the fire brigade had to
drive 55 km to reach the villages, but they managed to save the two
neighbouring houses. G. Gasparian said the department had requested
the NKR government to station fire brigades in several areas in the
regions of the republic.

BELARUS SECURITY COUNCIL SECRETARY TO VISIT YEREVAN
De Facto Agency, Armenia
Sept 28 2005
On September 27 the issues referring to the upcoming visit of Belarus
Security Council Secretary Gennady Nevyglas were discussed in the
course of meeting of Secretary of the National Security Council under
RA President, Defense Minister Serge Sargsyan and Belarus Ambassador
to Armenia Marina Dolgopolova.
According to the information De Facto got at the RA Defense Ministry,
the parties also discussed the issues of mutual interest.

RUSSIA TIGHTENS GRIP ON ARMENIAN ENERGY SECTOR
Emil Danielyan
EurasiaNet Organization
Sept 28 2005
Russia has enhanced its already dominant role in Armenia’s energy
sector by buying the country’s electricity grid after years of
behind-the-scene maneuvering. The Armenian government gave the green
light recently to the formal takeover of the Electricity Networks
of Armenia (ENA) utility by a subsidiary of Unified Energy Systems
(UES), the state-controlled Russian power monopoly.
UES and other Russian energy firms already own or manage several
major power plants that account for as much as 80 percent of Armenia’s
electricity production. In addition, they are the sole suppliers of
the country’s main energy resources: natural gas and nuclear fuel.
The Armenian government’s decision followed a request submitted by
Midland Resources Holding, a British-registered company that privatized
the Armenian power utility three years ago. Under its contractual
obligations, Midland could not resell ENA to another foreign investor
without official consent. When the government announced its approval
of the sale on September 23, Energy Minister Armen Movsisian suggested
that Yerevan was swayed by the Russian company’s pledge to assume
Midland’s commitments to make substantial capital investments in the
Soviet-era network.
“With this decision, the government legalized a deal between a buyer
and a seller that was effectively struck long ago,” commented the
Yerevan daily Hayots Ashkhar.
UES had been the de facto owner of ENA since June 2005, when it signed
a controversial “management contract” with Midland. The Russian giant,
acting through one of its offshore subsidiaries called Interenergo
BV, paid $73 million for the right to manage the utility and receive
its profits. Both the World Bank and the US Agency for International
Development challenged the legality of the deal, arguing that the
Armenian government, suspiciously silent on the issue, had not been
officially notified of the agreement’s signature beforehand.
UES and Midland countered that they did not need a government
approval for their agreement because it fell short of a formal
acquisition. Still, the two companies eventually decided to formalize
ENA’s sale to the Russians and go through relevant legal procedures.
The move was welcomed by the World Bank and USAID. “I am pleased to
see that the rules are now being followed,” the head of the bank’s
Yerevan office, Roger Robinson, told reporters on September 13.
However, critics of the President Robert Kocharian’s administration
remain concerned about the Russian takeover of ENA, saying that
it could render Armenia even more dependent on Russia, its main
political and military ally. [For background see the Eurasia Insight
archive]. They also fear that Moscow may now completely monopolize
Armenia’s energy sector and nullify the results of sweeping reforms
undertaken over the past decade. These measures allowed Armenia to not
only end the severe power shortages of the 1990s, but also to develop
an electricity surplus, enabling Armenia to export electricity to
neighboring Georgia and Iran. A key component of that reform effort
has been the structural separation of the facilities that generate,
transmit and distribute electricity.
In 2003, UES was granted ownership of several Armenian hydro-electric
plants and the nuclear power station at Metsamor in return for
repaying the latter’s $40 million debt to Russian nuclear fuel
suppliers. Armenia’s largest thermal power plant, located in the
central town of Hrazdan, was also handed over to Russia in 2002 as a
result of a similar equities-for-debt swap. [For background see the
Eurasia Insight archive].
Movsisian insisted that this fact will have little bearing on ENA’s
operations. The energy sector, he argued, is tightly regulated by
Armenia’s Public Service Regulatory Commission (PSRC), a supposedly
independent body that sets utility tariffs. UES Deputy Chairman Andrei
Rappoport made a similar point in a September 20 interview with the
Russian Regnum news agency. “The fact is that the most important member
in this market is the commission on regulating public services,”
Rappoport said. “It regulates the state policy on setting tariffs
for each actor of the market, on issuing licenses on their activity,
confirming and coordinating contracts.”
Western donors seem to agree with this line of reasoning. “The very
important thing in a utility is the strength of the regulator,” said
the World Bank’s Robinson. “We have great confidence in the regulator
here in Armenia.”
Russia, however, faces growing competition in Armenia’s energy
market from the country’s southern neighbor, Iran. After months of
deliberations, the Armenian leadership has decided to accept Iran’s
proposal to complete the construction of another large thermal power
plant in Hrazdan. Officials say a state-run Iranian company will invest
$150 million in the plant. In exchange for finishing construction of
the plant, the facility’s electricity will be delivered to Iran, as
a payment-in-kind. The facility will be powered by Iranian natural
gas that will be pumped to Armenia through a pipeline currently
under construction. [For additional information see the Eurasia
Insight archive].
Yerevan has reportedly faced strong pressure from Moscow to accept
an alternative proposal from UES and Russia’s GazProm gas monopoly
for completing the construction of this plant. Rappoport admitted
that there has been a “certain rivalry on this issue” between Moscow
and Tehran.
Further competition could come in the form of a $150 million
reconstruction of an old thermal power plant in Yerevan, financed by
the Japan Bank for International Cooperation. Armenian officials say
the electricity produced at the modernized facility will be twice
as cheap as that of the Russian-owned Hrazdan plant. Only time will
tell if this is enough of a competitive edge for the new owner of
the Armenian power grid.
Editor’s Note: Emil Danielyan is a Yerevan-based journalist and
political analyst.

OPINION : THE GHETTO OF EUROPE
Baris Sanli , JTW Columnist
Journal of Turkish Weekly
Sept 28 2005
It seems like not ending. Condition after condition after condition….
What is next? Leave the East Anatolia to Armenians, give Izmir to
Greeks? Okey, if Turkey has satisfied these points, will the Europeans
feel satisfied? Unfortunately, it is impossible.
On the one hand, it was possible to bridge cultures, on the other
hand there is no difference between the Brussels’ diplomats and the
medieval Europeans. Are they visionaries? I doubt this. Now, it is
better to leave everything to time. Turkey and Turkish government
tried everything to be part of EU, be part of a historic integration.
I believe, with his conservative and religious background Turkish
PMTayyip Erdogan is a case study to be teached to European diplomats.
>>From another perspective, what has Europe done for Turkey? They just
talked, gave orders and agitated the carefully balanced power triangle
in Turkey. I am wondering is there some kind of meaning for adherence
or keeping promises in the dictionary of European Diplomacy. Turkey’s
membership is not sine qua non for both parties, but it was certainly
a historic chance. Historic chances should be left to more open minded
people and politicians those know the importance of being a human
despite cultural differences. Now this is the time to see the reality.
Reality is this, Europe is a ghetto. Not a physical but a cultural
and prejudicial ghetto. The history starts with the white man, the
science starts with the white man, democracy, human values start
with the white man. That is their unbreakable cultural ghetto, even
if they form the most complex political organization in the history
of man kind. With chains of prejudices and a elitist understanding
of the God’s religion, it is impossible to expect Europeans to get
out of this ghetto. Other cultures? Probably, they must be defining
other cultures as “the mentally primitive, should be colonized life
forms resembling us”.
We, Turks, are stupid, why are we trying to integrate with western
values? It is clearly idiotism to believe in such an integration.
Turkey’s EU adventure will be another example of Europe’s understanding
of the “other”. So the radicals’ “They will never accept you, they
just play with you until they got bored” theory may found ground to
flourish. At least we, naïve Turks, expected some kind of adherence
not from Christians or Europeans but statesman and diplomats. But
there is no adherence either. After the latest proposal, the Turkish
people’s faith in Europe has been shattered beyond limits. At this
time, for me and other middle class Turks, EU adventure seems to be
finished. The reason is not Cyprus or Armenian allegations; it is
the Ghetto in which Europe lives happily.
–Boundary_(ID_aUOwcRfTQ6DQqmMhMvBkzQ)–
From: Baghdasarian

MEETING WITH THE SPEAKER
Azat Artsakh, Republic of Nagorno Karabakh
Sept 28 2005
On September 26 the speaker of the National Assembly of NKR received
the delegation of the USA Western Region branch of the Democratic
Liberal Party. According to the head of the delegation, the chair of
the department Ara Aharonian, the aim of the visit was to decide the
further plans of the department. “All that was carried out in Artsakh
in the past years should be developed consistently. This is a rather
complicated and intensive process and in this we need the support of
our compatriots abroad,” said the NA speaker in his greeting speech.
In this context he emphasized the importance of the Armenian Diaspora
and the role of its political, religious and other organizations,
including the Democratic Liberal Party in the projects of Hayastan
Foundation. Then the speaker dwelled upon the tendencies in the
public, political, social and economic life in NKR. The chairman
of the standing committee for foreign relations Vahram Atanessian
and the head of the administration of the National Assembly Arthur
Sarghissian were also present at the meeting.

IRAN, ARMENIA TO WORK ON JOINT RAILWAY PROJECT
Persian Journal, Iran
Sept 29 2005
Sep 28, 2005
The official in charge of the Public Relations Department of Armenia’s
Ministry of Transport, Arthur Sarkisian, said on Wednesday that the new
government in his country will examine a new project on Armenia-Iran
railway track.
Speaking at the joint meeting of the “UN Economic and Social Commission
for Asia and Pacific Affairs” and “Russia’s Railway Company”, he
added that the new railway line will connect Armenia to Iran without
passing through Turkey and Azerbaijan.
He noted that at present the technical and economic dimensions of the
project are being assessed and that the prospect of connecting it to
the railways of Georgia, Abkhazia and Russia is likely to be examined.
Turning to Armenia’s geopolitical position, he said that given his
country is situated at the intersection of North-South and East-West
corridors, its transport facilities can help develop these corridors.
Referring to Armenia’s political discord with Azerbaijan and
Turkey, Sarkisian noted that using such facilities will cause many
difficulties.
The railway connection from Armenia to Azerbaijan has practically been
disrupted since disintegration of the ex-Soviet Union in early 1990s.
Meanwhile, Iran-Armenia railway connection has also been disrupted on
account of breakout of relations between Armenia and the Autonomous
Republic of Nakhichevan.