FACTBOX-Main divisive issues before world U.N. summit
Sept. 11 (Reuters) – The largest gathering of world leaders in history
begins on Sept. 14 with 191 U.N. member nations still divided on the
issues. The summit is to map out new approaches to poverty, global
security and human rights in the 21st century.
— DEVELOPMENT – The draft document sets timetables to halve poverty
for the poorest of the poor, provide elementary education to all, cut
maternal deaths and halve the spread of AIDS by 2015, among
others. The United States objects to a provision urging nations to
meet the U.N. goal of giving 0.7 percent of a nation’s gross national
product in foreign aid.
— HUMAN RIGHTS COUNCIL – A smaller group of nations to sit year-round
on human rights to replace the current Human Rights Commission, a key
demand by Western nations. The new members would be elected by the
191-member General Assembly rather than regional groups. Human Rights
Watch and Amnesty International say opponents include Cuba, Russia,
Venezuela, Pakistan, Belarus, Vietnam and others.
— NON-PROLIFERATION – The draft says proliferation and risk that
terrorists might obtain unconventional weapons are the greatest
threats to peace. Washington and others want to remove references to
nuclear disarmament for big powers.
— TERRORISM – The draft says attacks on civilians and noncombatants
“cannot be justified.” Islamic nations want a mention of liberation
groups and the right to resist foreign occupation.
— PEACE-BUILDING COMMISSION – This is aimed at helping nations
emerging from conflict. Key Western nations want Security Council
control. Developing countries want the commission to report to the
General Assembly, where they have a majority, arguing they need a
voice in deciding priorities.
— RESPONSIBILITY TO PROTECT – The concept, promoted by Canada, other
Western nations and human rights groups, calls for various kinds of
intervention in case of genocide and war crimes. African nations such
as South Africa support the concept but other developing states say it
would provide an excuse for big powers to intervene.
— U.N. MANAGEMENT REFORM – Western nations, including the United
States, want to give the U.N. secretary-general more power to manage,
expand monitoring bodies and hire more independent auditors. Some
developing nations fear they will lose control in General Assembly,
which manages and budget and rules on U.N. posts.
(Writing by Evelyn Leopold, United Nations)
09/11/05 22:47 ET

Zaman, Turkey
Sept 9 2005
PKK: The Name of the Metal Storm in Turkish-US Relations
by Melih Can
Not a single day goes by that Turkey does not face a new PKK attack
or a mine explosion. And not a single day goes by that Turkey does
not enter into a polemic on ”terrorism” with countries it thinks
are friendly.
It is true that lately, Turkey’s agenda has almost gotten stuck on
terrorism and the fight against the outlawed Kurdistan Workers’ Party
(PKK), also in the context of terrorism. The problems in the fight
against terrorism and the PKK, which were the main topics Prime
Minister Recep Tayyip Erdogan and US President George W. Bush
discussed during Erdogan’s visit to the United States, continue full
swing.
Under this framework, controversial statements made recently on the
PKK issue, especially by Iraqi Kurdistan Democratic Party (KDP)
leader, Massoud Barzani, who has been elected the president of the
northern Kurdish region, Bush congratulating [Jalal] Talabani and the
Iraqi Kurds on the “regional government,” and all the events that
surfaced afterwards, were obvious realities even though they seemed
to us like an April Fool’s Day joke made by our strategic partner.
New developments seemingly will occur in Turkish-American relations
both in the South and the East. And there are efforts to increase the
confusion in Turkish foreign policy day after day with the carrot and
stick policy. There are efforts to drag Turkey into a real paranoia
by putting it in a dilemma over “how much a friend and how much an
enemy?” On the other hand, some try to inculcate into us the “wait
and see policy.” But why? First of all, frankly speaking,
developments that are taking place in the south of Turkey, in the
north of Iraq and the US attitude towards the PKK continue to disturb
Turkey, and these constitute the biggest confidence problems in
relations. The recent events and counter statements that will
aggravate the issue do not elude attention, pieces come together and
become more meaningful.
Treating the terrorist as a militia
The BBC and Reuters referring to the PKK terrorist organization as
“militia” recently, was in fact not a chic attitude. As a matter of
fact, U.S. Assistant Secretary of State for European & Eurasian
Affairs Dan Fried said that the PKK, which is a terrorist
organization, is also America’s problem and implied that a
trans-border operation in northern Iraq by Turkey against PKK
terrorists could “bring the forces of both countries against each
other,” adding, “There are words Iraq will also say.’
Frankly speaking, we wonder whether these words will be in Arabic or
English? And we also know that the “dominant” one will do the
talking. In this context, when the fact that Barzani was elected the
president of the Kurdish region in the north and the attitude
displayed against the PKK by the US government are put together,
Turkey comes face to face with a terrible scenario. In particular,
the role given to Barzani and the Barzani tribe during this
transition period is very important. Even the personality of Massoud
Barzani automatically answers many questions. Contrary to Talabani,
Barzani is presented to us as more uncompromising, an inflexible man
who orchestrates chaos, a tribal leader who can start and continue a
bloody war over a so-called Kurdish state in the north.
Hence, the Barzani tribe is a right choice, especially at a time when
allegations about “their genes” and expectations about the
establishment of a so-called “Kurdish state” under the umbrella of
the Unites States and mentorship of the Israeli state are at the
peak. At this very point, as an interesting coincidence, the PKK
steps in and its place in this game can be better perceived.
The attitude of the regional countries, Turkey, Syria and Iran
against a Kurdish state is known. Some red lines – if they do not
change afterwards – have been formed on this subject. And despite
statements by these three countries that they would not allow the
establishment of such a state, the presence of Kurds in their
respective countries in various proportions is a reality. In other
words, if in case they object, these countries, in the first place,
may have to deal with the problems within their own borders. This is
called the PKK in Turkey. On the other hand, the uneasiness of US
administration over the warm cooperation that has been taking place
among the regional countries in recent years, and Washington’s
expectations in this context, are quite obvious. The latest events
have a potential of breaking Turkey’s resistance and creating
“doubts” and “problems” in its relations with the other countries in
the region. Even this joint attitude, that is not very well formed,
is enough to perturb the US. And the name given to it is the call for
democracy, reforms and integration with the world. In plain words,
its name is double-standards.
What should Turkey do?
While Turkey continues to be contented with “strategic relations,”
the US continues creating its own “strategic partners” in the region.
This name was Israel in the past but is now the so-called states of
“Kurdistan” and “Mountainous Karabakh.” Each of them is a piece of a
chain, stretching out from Khazar to the Red Sea. What would happen
if you want to interfere in these goings-on and terrorism being
nourished just beyond your borders? The answer is quite simple, you
would be invited to the “Metal Storm” with an implied threat by the
“mandated” country. The justification is handy: “Violating the
borders of a sovereign state.” Especially at a time when a
“pre-emptive strike” sword is hanging over your head. Turkey is being
dragged into a real deadend in its foreign politics. The reflections
of this deadend inevitably have also started to manifest themselves
in its domestic politics. As a matter of fact, True Path Party (DYP)
leader Mehmet Agar claimed that Turkey has lost its ability to carry
out a military operation beyond its borders during Justice and
Development Party (AKP) government. Agar claimed that Turkey has been
made to depend on foreign countries even in the fight against
terrorism, in addition to its economy and foreign policy. Similar
expressions are often used by Republican People’s Party (CHP) leader
Deniz Baykal as well as other politicians. In reply to all these
criticisms, Prime Minister Erdogan tries to display a determined
attitude and says, `We have to overcome the PKK problem. Consult or
not consult, we can use our right of hot pursuit.”
This situation created between the PKK and the AKP is certainly a
matter the present government does not approve of, either. However,
the fact that the AKP government has put Turkey into a reform and
restructuring process, especially into the process of full EU
membership, and it seems to be doing all these with the EU reccipe,
will certainly continue to make these allegations and accusations
remain on the agenda. Like every political party, the AKP government
as well would certainly like to be in Turkish political movement in
the process after this. Maybe because of this, in order to be able to
overcome its “obsession and blindness with the West” a little bit,
the AKP recently has started to turn its attention more to the “East”
and “South.” It would not be wrong to evaluate the recent visits in
this sense. Turkey has started to understand the necessity of
compensating for the disappointments it experienced in the West by
turning to the East just as the other Eastern states did. At least,
this is what our historical memory seemingly orders us to do. As a
matter of fact, British Foreign Secretary Jack Straw did not utter
these words in vain, “Let’s not treat Turkey harshly, let’s be more
courageous, let’s put Turkey next to us instead of pushing it far
aside.” The British vigilance has said this so far and will also
continue to do so tomorrow. But what is important is our wakefulness
and vigilance.
The Kurdish factor, in the context of the PKK and Northern Iraq,
continues to create important curves and testing fields in
Turkish-American relations. In other words, the current attitude and
policy the US is pursuing in the region, within its intentions, is
far beyond being a turning point in relations between “two allied
countries,” but is galloping at full speed towards a breaking point.
“Turkey’s terrorism test” continues. Turkey is looking for an
attitude between “Metal Storm” and “being in bed with an elephant.’
In this case, Turkey will either find another course to flow into, or
renew its marriage or return to its roots. However, in any case, the
one who loses will be “the pawn” again!

You can listen to the program feature on the Turkish sensitivity towards
their history by Dorian Jones is “hidden”
in the BBC World Service Outlook program until Thursday on
(broadband connection needed)
Otherwise there follows the main points from this program
(some of the spellings of Turkish names may be suspect as it is taken
from an audio report)
Thousands of Armenian orphan children were “saved” and brought up as
Turkish Muslims during the Armenian Genocide (these specific words are
used in the broadcast).
Fethiye Cetin’s book (now in its fifth reprint) reveals her grandmother
was one such child prepared after extensive research into one of
Turkey’s darkest chapters.
Armenians are routinely described in Turkey as enemies and spies and the
genocide is “hidden” from the population.
Fethiye decided to write the book after feeling pain reading about
conflicting statistics on the number of deaths: each victim in her view
was an individual human tragedy.
Prof Selim Deringi mentioned that there were intractable problems, and
the wounds from the past have not healed.
The opposite views (genocide of civilians v 5th column collaborators
with enemy in wartime conditions) show that there is not a state of
dialogue.
A Turkish conference on the genocide (the professor was one of the
organisers) was deferred after “intense government pressure”.
European and other external pressure has resulted in the conference
being reorganised.
There is very strong opposition to any change to the official position
on this issue.
Shukri Elekdar believes that recognition of the genocide is a threat to
Turkey’s future, particularly as he sees it as part of a wider policy to
seize Turkish territory
(this is demonstrated by Armenians referring to Eastern Turkey as
Western Armenia.
All Turkish political parties are united behind the government on this
despite the Armenian benefit from the support received from the USA.
Nevertheless, more and more people are delving into Turkey’s past.
Berkiye Pars is editing her film on her grandparent’s adopted child.
She wants Turks to have a chance to learn about their own past.
Many families have Armenian or Greek members – but they keep this a
secret, even denounce it though their own neighbours know this.
Yshim Fsoghlu is preparing a new film (Waiting for Clouds) on the
expulsion of 1 million Greeks as part of the population exchange.
This is another taboo in Turkey’s many dark chapters in its past.
She too has been threatened with legal prosecution as has Orhan Pamuk
but feels that artists must challenge historical taboos.
People can be reactive with such material but they must think and feel

ARKA News Agency, Armenia
Sept 9 2005
VARDAN OSKANYAN: ARMENIA SATISFIED WITH ITS DEVELOPMENT, BUT
CONSIDERS IT INSUFFICIENT
YEREVAN, September 9. /ARKA/. Armenia is satisfied with its
development, but also considers it insufficient, RA Foreign Minister
Vardan Oskanyan said at the presentation of the UNDP Human
Development Report for 2005. He said that “the situation in Armenia
is not bad at first glance”, especially comparing with neighbors. At
the same time he said that Armenia should not direct its attention to
the achievements of neighboring countries, but should lay emphasis on
its own indicators of development. “We still have much to do though
positive indicators have been registered. We should achieve more high
indicators of human development”, Oskanyan said.
He also said that the UNDP Human Development Report should become “a
guide for the RA Government”, which will allow not only to reveal
existing problems in Armenia, but will also become a basis for
socio-economic development. “I hope our Government will familiarize
with this report and will take it as the basis for its future
activities”, Oskanyan said.
Oskanyan positively evaluated Armenia’s indicators which according to
him “should not be underestimated”. “Armenia achieved very high
economic growth over the past five years, which however almost not
affected people’s life, and this growth should be transformed into
human development. It can be realized through poverty reduction and
future democratization”, Oskanyan said. He said that another
alternative is mobilization of the potential of Diaspora and
international donor organizations, particularly, national and
international resources to promote development in the regions. “The
problems of transition still affect Armenia’s population, and they
should be eliminated. The transparent system of governance is crucial
for this, and the international community can help a lot with this
issue. The assistance and partnership should be used to achieve
development”, Oskanyan said.
According to the UNDP Human Development Report, Armenia ranked 83rd
among 117 countries of the world. A.A. -0–

ARKA News Agency, Armenia
Sept 9 2005
EVENTS DEDICATED TO UN 60TH ANNIVERSARY TO START IN ARMENIA ON
SEPTEMBER 17, 2005
YEREVAN, September 9. /ARKA/. The events dedicated to the 60th
anniversary of the UN will start in Armenia on September 17, 2005,
Resident Representative of the UNDP to Armenia, Ambassador Consuelo
Vidal told a press-conference in Yerevan. She reported that it is
expect to organize a concert in the Republic Square, as well as to
organize the chess tournament for children of 10-12 age group for the
UN Cup with the participation of grand master Smbat Lputyan in
Cascade territory on September 24, 2005. The events will last till
October 24, 2005, which is the UN Day. On this day an exhibition of
works of young photographers will be organized in Yerevan, as well as
a concert of classic music at the Aram Khachatryan Concert Hall.
She also reported that a new video clip was recorded with
participation of stars of Armenian pop music on a new song “We and
our history”. The music is by Anita Hakhverdyan, the words by Aram
Avagyan, and 26 singers, who are well-known in Armenia, sing this
song, namely Shushan Petrosyan, Hayko, Andre, Ani-Christi. Producer
of this clip is Hrach Keshishyan.
2005 is also the year of the 5th anniversary of the UN Millennium
Declaration, which was signed by 191 counties, including Armenia. The
countries committed to reach 8 MD Goals by 2015, particularly poverty
reduction, reduction of child mortality, environmental protection,
improvement of education. A.A. -0–
From: Emil Lazarian | Ararat NewsPress

ARKA News Agency, Armenia
Sept 9 2005
ARMENIAN PRESIDENT MEETS WITH PRESIDENT OF BAMO HOLDING COMPANY
YEREVAN, September 9. /ARKA/. RA President Robert Kocharyan has held
a meeting with President of the BAMO holding company Murad Muradyan.
Under a contract with the Department for State Property Management,
BAMO has prucahsed the Yerevan Karen Demirchayn Sport-Concert
Complex. During the meeting, the Armenian President expressed
satisfaction with the transaction, and Murad Muradyan assured Robert
Kocharyan that BAMO will strictly observe the contact. The sdies also
pointed out that the implementation of an investment program will
open up new opportunities to Armenia’s sport and cultural spheres.
On August 25, 2005, the RA government made a decision alienating the
Yerevan Karen Demirchyan Sport-Concert Complex to the BAMO holding
company through direct sale for $5.7mln.
The BAMO holding company is one of the largest construction companies
in the CIS and comprises nine companies engaged on construction in
Russia, Armenia, and Germany. A total of 4,500 people are employed by
BAMO. The holding company launched its activities in Armenia in 2001
by constructing a wood-processing enterprise in Martuni, Gegharkuni
region, Armenia.
The Karen Demirchyan complex is the largest sport-concert complex in
Armenia (46,000sq meters). P.T. -0–
From: Baghdasarian

The Times, UK
Sept 9 2005
Joyous postscript to tales of goal famine and lost luggage
By David McVay

IT WAS rumours of a devastating flood that inspired Noah, so the
story goes, to build his Ark on top of Mount Ararat, which borders
Armenia and gazes down upon its capital, Yerevan. Below, in the
country’s national stadium one Saturday in late March two years ago,
the topic of conversation was also of a drought, a goal drought to be
precise. Rumours of it raining goals proved unfounded.
In the press box that day, the blood appeared to be draining from
Malcolm Brodie, the highly respected Irish journalist who has covered
Northern Ireland for more than half a century. The great man’s
thermals could not prevent the cold of an Armenian spring afternoon
creeping into every joint.

To suggest that this was one of the more enjoyable occasions for a
Northern Ireland correspondent might be a trifle misleading. But only
a trifle. Reporting on Northern Ireland requires a specialist
survival kit. A thick skin, for climate and criticism; fortitude and
a strong constitution for the compulsory drowning of sorrows in Irish
bars from Crete to Copenhagen; fake contact lenses with active
centres to conceal the glazed look that engulfs the senses during
extended periods of boredom, ie, 1,298 minutes without scoring a
goal, and, of course, an optimism that might attract a visit from the
men in white coats after four years without a victory in meaningful
competition.
In Yerevan in 2003, Sammy McIlroy’s European Championship venture had
already disintegrated when Artur Petrosyan scored a late winner to
claim a rare win for the home team. However, it is far better to lose
on a foreign field, bereft of a goal once more, than to surrender
meekly at Windsor Park.
One-nil to ten-man Canada; 2-0 to Greece and several nondescript
goalless draws with Ukraine, Cyprus and the Magaluf Waiters XI
gathering for an annual bash in Belfast.
While many have suffered for the cause, so have the players. When
McIlroy began the Euro 2004 campaign with a game away to Spain in
October 2002, the squad, the fans and the press corps went to
Valencia. Sadly, the training kit and some football boots headed for
Madrid. Then Barcelona, before being reunited with their owners two
days later.
Even a victory over Malta in October 2001, the last occasion that the
side had completed back-to-back wins was disrupted by turbulence,
literally, on the return trip.
So is it any wonder the green wig mops jigged and drank in the
streets of Belfast into the small hours on Wednesday night after
their team beat England at Windsor Park for the first time in 78
years? Can you blame the likes of David Healy, the match-winner, for
celebrating as if they had won the World Cup rather than secured
fourth place in group six? Or the journalists who have witnessed the
bad in Baku and the ugly in Ukraine for punching the air when Healy
scored? `As a practising Christian I believe in David and Goliath and
I was praying to God that that would happen and it did,’ Stuart
Elliott, the Hull City forward, said. The mouse roared indeed. The
three lions trembled.

Men’s News Daily, CA
Sept 11 2005
X-Sender: Asbed Bedrossian
X-Listprocessor-Version: 8.1 — ListProcessor(tm) by CREN
Doing Away With The Poor
September 11, 2005
by Burt Prelutsky
It is alleged that when his ex-wife was asked to sum up William
Saroyan, famous for his heartwarming stories about Fresno’s Armenian
community, she replied, `Bill loved mankind, but he hated people.’
Knowing from firsthand experience how bitter ex-wives can be, I can’t
comment on the veracity of that rather pithy analysis, but I think
it’s a very appropriate comment when it comes to large numbers of
Democrats.
The specific group I have in mind includes several millionaire
members of the U.S. Senate, virtually every major figure in the
motion picture and popular music industries, and a slew of business
tycoons. The one thing all these muckety mucks have in common is they
only mingle with each other. They love mankind, but they hate poor
people. That’s why they live behind high walls and electric gates,
and travel everywhere in limos and private jets, generally
accompanied by extremely large men carrying extremely large guns.
When it comes to speaking at charity banquets and delivering
political speeches, the rich and famous will say all the usual
compassionate bilge about the poor and the downtrodden. But so far as
actually interacting with them, that’s strictly limited to the peons
who mop their floors, cook their food, mow their lawns, and look
after their kids. And, frankly, I don’t blame them. I mean, who the
heck really wants to hang around poor people? Besides not looking or
even smelling as good as rich people, they always want something. And
usually what they want more than anything is to be rich. That’s
exactly the sort of thing that makes wealthy people really nervous.
After all, it’s not their own kind who go around starting
revolutions, burgling their homes, kidnapping for ransom, or knocking
them on the head to steal their wallets.
So it is we have millionaires like Kennedy and Kerry, Edwards and
Feinstein, Boxer and Dean, trying to pass themselves off as
populists, yammering about raising taxes and soaking the rich, as if
they themselves were members in good standing of the lunch bucket
brigade. The odd thing is that so many poor people seem so willing to
go along with the gag. That can either be attributed to extremely
good manners or a naivete bordering on feeble-mindedness.
In any case, being neither rich nor poor myself, perhaps it’s no
surprise that, being in a position to view the problem objectively, I
have been able to come up with a surefire cure for poverty in
America.
I’m not sure if it’s this way in other parts of the country, but here
in Southern California, individuals and companies get to adopt a mile
or two of freeway. I’m not sure what their responsibility is,
inasmuch as the orange-vested clean up crews consist, so far as I can
tell, of bad drivers performing the community service portion of
their sentences, and not of Rosanne Barr or the gang at Morton’s
Mufflers. But I figure they must have kicked in a pretty penny in
order to get their names on those little highway signs. After all,
publicity doesn’t come cheap in this town.
Well, it struck me that if the well-to-do are willing to adopt a
stretch of the 405, why don’t they, instead, adopt the poor? Heck,
all by themselves, liberals like Ted Turner, Barbara Streisand and
George Soros, can afford to adopt every illegal alien coming across
the border. And what’s more, Ben & Jerry’s ice cream moguls Ben Cohen
and Jerry Greenfield can provide them with butter pecan and fudge
ripple until the cows come home.

Assa-Irada, Azerbaijan
Sept 9 2005
Crisis Group proposes postponement of Garabagh status discussions
Baku, September 8, AssA-Irada
The International Crisis Group, an organization working to prevent
conflicts worldwide, has made proposals on the settlement of the
Armenia-Azerbaijan conflict over Upper Garabagh.
The ICG vice-president Alain Deletroz, in an exclusive interview with
Radio Liberty, said the status of the region is the `most problematic
issue in peace talks’, suggesting that discussions on the matter be
postponed for 10-15 years.
Deletroz called on both sides, in particular, Azerbaijan, to put an
end to belligerent statements. `On one hand, Upper Garabagh Armenians
are called Azerbaijani citizens, while on the other – enemies. This
may make the peace process impossible’, he said.
The ICG representative said that first of all, displaced persons
should return home and relations should be established between the
Azerbaijani and Armenian communities of Garabagh.
`This can be done through stationing military contingents of
countries trusted by Azerbaijan and Armenia in the conflict zone.’
Deletroz pledged to submit his proposals to the two countries’
officials.*

Institute for War & Peace Reporting
Sept 9 2005
ARMENIA: THE POWER OF RUMOUR

Confusion over whether the Russians had bought or just leased
Armenia’s electricity company adds to underlying fears about losing
strategic assets.
By Naira Melkumian in Erevan

A deal under which Armenia’s electricity grid could be sold to a
Russian-owned energy giant has led to an outcry from opposition
politicians who are worried about who controls the country’s
strategic assets.
Under a deal signed in June, the Russian electricity firm United
Energy Systems, UES, has agreed to run the power network in Armenia
on behalf of the Canadian-owned and British-registered company
Midland Resources Holdings Ltd, which acquired 100 per cent of
Electricity Networks of Armenia, AEN, in a privatisation deal in
2002.
Midland Resources has made it clear in remarks emailed to IWPR that
it retains ownership of AEN, but that in the long term it would like
to sell it to UES.
In Armenia, initial reports about the nature of the deal were
contradictory, and as rumours of an immediate Russian takeover
started circulating, the government appeared not to know about the
long-term goal of transferring shares in the national power company
to UES.
The first news reports said simply – and accurately – that
Interenergo, part of the UES group, was to manage AEN, under a
99-year lease from Midland Resources.
Neither the energy ministry nor the regulatory body for the public
sector in Armenia appear to have been informed of the move, because
technically there was no requirement for this.
AEN told IWPR that it was under no obligation to tell the government.
`We are only obliged to notify the government if we sell shares in
the company. This was a management transfer and not a sale of shares.
That is why we did not inform the government,’ AEN press officer
Margarita Grigorian told IWPR.
Even at this point, critics of the Armenian government were put on
the alert.
`Any fool can see that handing over management of a company for 99
years means only one thing – the [future] sale of the company,’ said
Aram Sargsian, a member of parliament who heads the Democratic Party.
Sargsian said the AEN deal would make Armenia even more dependent on
Russia. He noted that UES’s company holdings already accounted for 75
to 80 per cent of Armenia’s energy production – and now it was
seeking control of distribution as well.
`It’s patently obvious. Whoever controls the switch controls the
country,’ he said.
The issue became confused after people began reading UES’s annual
financial report for 2004 (dated June 28), saying that in June 2005,
Interenergo had acquired 100 per cent of AEN’s shares for 73 million
US dollars.
The reported sale of a key national asset stoked concerns in Armenia,
fuelled by the government’s resolute silence.
Eduard Aghajanov, an economist at Armat, a political science
institute in Yerevan, said any sale of AEN to a foreign company was
contrary to national strategic interests.
`The owner of the power grid will dictate his terms to both producer
and consumer, and that is an unacceptable situation,’ Aghajanov told
IWPR.
Victor Dallakian, of the opposition Justice faction, went further,
warning that `Armenia will be under the threat of energy terror’.
International institutions were perturbed at the lack of clear
signals from the Armenian government about what was going on.
Roger Robinson of the World Bank’s Armenia mission told a press
conference on July 8 that he considered `the regular provision of
transparent and official information on events concerning this sphere
[electricity distribution] very important’.
This week, Robinson told IWPR that those remarks were intended to
`press the red alarm button to alert people, especially the
government, that the due process of law should be observed’.
He believes his strategy paid off, `That press conference really
galvanised a lot of people.’
On July 18, the United States government’s development agency USAID
followed suit with a press release expressing concern `that a
transfer of the ownership of AEN may have taken place without
following important Armenian government regulations which exist to
protect Armenian consumers’. USAID said it `would review its
assistance portfolio to Armenia in light of any revised AEN ownership
or lack of due process in changing that ownership agreement’.
On July 25, Mikhail Mantrov, the deputy director of UES subsidiary,
Inter RAO UES, which owns Interenergo, retracted the group’s earlier
statement and corrected the record, telling a press conference that
AEN was the subject of a management transfer rather than a purchase.
Midland issued a statement on July 20 confirming that it remained
AEN’s owner.
After talking to the companies involved, Armenia’s Public Sector
Regulatory Commission concluded on August 22 that all of AEN’s shares
did indeed remain with Midland Resources.
This week, Midland Resources president Alex Shnaider told IWPR by
email that the company did hope to sell AEN to the Russian firm
eventually, once all the legal requirements had been met. He insisted
that his firm had been punctilious in meeting its obligations to the
Armenian government.
`The aim of the transaction is to sell 100 per cent of Midland’s
shares in AEN to RAO [UES],’ he said. `The deal is divided into two
stages. First, in order to prepare for the transaction, both parties
will study the company’s assets and create joint management
provisions for the company in consultation with the Armenian
government. During this stage, Midland will remain the sole owner of
AEN’s shares.
`The second stage of the transaction will involve the transfer of the
shares. This can only occur following approval from the government,
as outlined in the initial contract between Midland and the
government of the Republic of Armenia.’
Shnaider said was not aware of any unresolved issues with the
Armenian government and he did not feel there were any solid grounds
for further inquiries. `To the best of our knowledge, the
declarations made by UES and Midland have fully satisfied the
government commission. Midland always fulfils its contractual
obligations and has fully complied with the laws of the Republic of
Armenia,’ he told IWPR.
The deal is worth a total sum of `upwards of 70 million dollars’, he
added.
The government has instructed its legal experts to check the nature
of the transfer of AEN’s management to UES.
`We want to study the contract, comprehend the deal that’s taken
place, and compare what’s happening with what was set out in the deal
the Armenian government signed with Midland resources in 2002,’
Deputy Energy Minister Areg Galstian told IWPR
`Until then [completion of the study], we will refrain from drawing
any conclusions.’
But the public perception that the government failed to reveal what
it did – or did not – know about the deal has laid it open to
accusations of lack of transparency.
`Since independence, almost all the [privatisation] deals done in
this country have taken place under a veil of secrecy… This is no
exception,’ said opposition deputy Sargsian.
Repeated requests by IWPR to government spokespersons to comment on
the deal have not resulted in any further clarifications, or even in
an official acknowledgement that Midland’s ultimate goal is to sell
its AEN shares to UES.
In Yerevan, World Bank representative Robinson said he had still
received no official confirmation that AEN was to be sold to the
Russian energy group.
But he said he was less concerned about the potential buyer being
Russian-owned than about ensuring the Armenian government is
satisfied that the purchaser possesses the right energy-industry
expertise, has sound financial management and will act with
integrity.
If the government adheres to its own procedures on these matters, and
to the international rules on transparency, Robinson sees no obstacle
to the World Bank continuing its current programme in Armenia.
In political circles, the issue of Russian control over key Armenian
assets is likely to rumble on. Government allies like Vahan
Hovhannisian, the deputy speaker of parliament, argue that because
the two countries are allies, `there is no threat to our national
security’ from UES’s engagement in Armenia’s power industry.
But opposition parties are unlikely to pass up the chance to attack
the government the moment the Russians open negotiations on acquiring
AEN.
Naira Melkumian is an independent journalist in Yerevan.