ITAR-TASS News Agency
TASS
March 24, 2004 Wednesday
Minsk Group can’t play positive role in Karabakh conflict -Aliyev
By Sevindzh Abdullayeva and Viktor Shulman
BAKU
Azerbaijani President Ilkham Aliyev said the OSCE Minsk Group’s
current approach towards the Karabakh conflict did not allow it to
play a positive role in its resolution.
“The position of the Minsk Group is not translated into efforts to
resolve the conflict and boils down to watching the process,” Aliyev
told journalists upon arrival from Uzbekistan where he had been on a
two-day state visit.
Aliyev said he had repeatedly reminded the Minsk Group co-chairmen
about the need to mediate the peace efforts within the framework of
their mandate. “However when we are told that the presidents of
Azerbaijan and Armenia should come to agreement themselves and the
co-chairmen will support whatever decision they make, it is not
mediation,” the president said.
Evaluating the work of the Minsk Group since its creation 12 years
ago, Aliyev said, “Nothing positive has been done over this time”.
“I cannot say that the Minsk Group was indifferent to the problem. It
tried and tried to contribute to the settlement efforts, but there
has been no result so far,” he said.

ITAR-TASS News Agency
TASS
March 24, 2004 Wednesday
Armsberbank to become Russian Vneshtorgbank subsidiary
By Tigran Liloyan
YEREVAN
One of largest Armenian banks — Armsberbank became a subsidiary bank
of the Russian Vneshtorgbank. Under the agreement signed on Wednesday
Vneshtorgbank purchased the controlling interest or 70 percent of the
Armenian bank stock.
Vneshtorgbank President Andrei Kostin noted that this is the first
such action on the post-Soviet space. The purchase of the Armenian
bank is another step to implement the strategy of the Vneshtorgbank
development that envisages the development of the network of
subsidiary banks in Europe and CIS countries.
“The political stability, rapid economic growth and certainly growing
needs of the country’s economy are among causes of Vneshtorgbank
activities in Armenia,” Kostin emphasized. Armsberbank will provide
loans to Russian enterprises operating in Armenia including the
national gas producer Gazprom, power grid United Energy Systems of
Russia and Airlines Sibir.
Apart for the investment activities the Vneshtorgbank leadership
intends to continue development of traditional banking services for
population, Kostin pointed out.
“Armenia will gain much from the deal,” one of leading Armenian
businessmen and chairman of the Armsberbank board Mikhail Bagdasarov
remarked. According to him, “Vneshtorgbank coming to Armenia cut the
distance between the countries and their economies, and it will make
Russia and Armenia closer.”

ITAR-TASS News Agency
TASS
March 24, 2004 Wednesday
Azerbaijan warns against opening of Turkey-Armenia border
By Sevindzh Abdullayeva and Viktor Shulman
BAKU
The European Union and some influential countries are exerting
serious pressure on Turkey to make it open its border with Armenia,
Azerbaijani President Ilkham Aliyev said.
“If Turkey opens the border with Armenia, the resolution of the
Karabakh conflict will become impossible,” he warned on Wednesday.
“In his this Azerbaijan will lose a very important lever and further
negotiations within the framework of the peace process will be
impossible,” the president told journalists.
He believes this will halt negotiations.
“If the interested parties genuinely want the Karabakh conflict to be
resolved peacefully, they have to stop putting pressure on Turkey,”
Aliyev said.
At the same tine, he expressed confidence that Turkey will not give
in to this pressure. “The Turkish-Azerbaijani brotherhood is above
everything else both for us and for the people of Turkey,” he said.
Aliyev also criticised the OSCE Minsk Group for its inability to play
a positive role in the resolution of the Karabakh conflict.
“The position of the Minsk Group is not translated into efforts to
resolve the conflict and boils down to watching the process,” he
said.
Aliyev said he had repeatedly reminded the Minsk Group co-chairmen
about the need to mediate the peace efforts within the framework of
their mandate. “However when we are told that the presidents of
Azerbaijan and Armenia should come to agreement themselves and the
co-chairmen will support whatever decision they make, it is not
mediation,” the president said.
Evaluating the work of the Minsk Group since its creation 12 years
ago, Aliyev said, “Nothing positive has been done over this time”.
“I cannot say that the Minsk Group was indifferent to the problem. It
tried and tried to contribute to the settlement efforts, but there
has been no result so far,” he said.

The Russian Oil and Gas Report (Russia)
March 24, 2004, Wednesday
IRAN-ARMENIA GAS PIPELINE MAY REACH EUROPEAN UNION
The Iran-Armenia gas pipeline, the contract on construction of which
will be signed very soon, may be extended through Georgia to Ukraine
and further to European Union countries, reports Armenian Energy
Minister Armen Movsisyan. It is possible that the pipeline may be
build from Iran through Armenia and Georgia and further on the floor
of the Black Sea to Ukraine. The minister states, “After completion
of the Blue Stream project construction of long offshore gas
pipelines is already not a fantasy. Iran, Turkmenistan, and what is
the most important, European Union, want this. Europe plans to extend
the gas pipeline with Iranian and Turkmen gas crossing Armenia to its
territory. But this is a matter of serious and long negotiations that
also influences other countries that currently receive Russian gas.”
In 2002, the Kiev-based research institute VNIPItransgaz prepared a
business plan of the project of gas pipeline construction via the
route Iran-Armenia-Georgia-Ukraine-Europe with construction of 550
kilometers of pipes on the floor of the Black Sea from the Georgian
pot of Supsa to Feodosia in the Crimea. The project was estimated at
$5 billion. The gas supplies were estimated at up to 60 billion cubic
meters a year including 10 billion cubic meters or Ukraine.
Source: Vremya Novostey, March 23, 2004

Agency WPS
DEFENSE and SECURITY (Russia)
March 24, 2004, Wednesday
A COMMAND-STAFF EXERCISE TO BE CONDUCTED IN ARMENIA ON MARCH 23-27
A command-staff exercise will be conducted in Armenia on March 23-27.
Technical, logistic and medical units will be involved in the
maneuvers. Colonel Seiran Shakhsuvaryan, press secretary of the
Armenian Defense Ministry, stated that the Armenian Army will call up
reservists during the first phase of the exercise.
Source: Regnum information agency, March 22, 2004
Translated by Alexander Dubovoi

Agency WPS
DEFENSE and SECURITY (Russia)
March 24, 2004, Wednesday
A COMPROMISE IS BETTER THAN A VICTORY
SOURCE: Nezavisimaya Gazeta, March 22, 2004, p. 10
by Vladimir Kazimirov
Ambassador Vladimir Nikolayevich Kazimirov: head of Russia’s
mediatory mission in 1992-1996; presidential envoy for Nagorny
Karabakh; co-chairman of the Minsk OSCE group.
Negotiations between Armenia and Azerbaijan are again at the
crossroads. Two foreign ministers will soon discuss what to do with
this process.
Settling of the Karabakh conflict has become irrational owing to the
maximalism of the conflicting sides. Negotiations held in 1994-1997
were not very fruitful. The conflicting sides rejected proposals by
the Minsk OSCE group three times; 20 meetings held by the presidents
of Azerbaijan and Armenia in 1999-2002 did not solve the problem
either. Negotiations were suspended for six months on the plea of
elections in Armenia and Azerbaijan. It seems that at present nothing
prevent negotiations. But it turned out that the positions of the
conflicting sides have become more uncompromising than before. First
moves made by the new president of Azerbaijan are very contradictory.
He has repeatedly promised to recover the lost territories. At the
same time, he supports peaceful methods, and all bellicose statements
are made by the defense minister. Ilham Aliyev refused to hold
negotiations with Robert Kocharyan in the current format. He states
that the process of negotiations should be speeded up. He said that
he does not needed compromises (he probably hopes to dictate his
conditions of peaceful settlement of the conflict). In the meantime,
Yerevan does not want to resume negotiations with the new president
(who is the son of the former president) and proposes to invite
Stepanakert to negotiations.
The absolute incompatibility of approaches and unwillingness to make
compromises are the cause of a long stagnation of negotiations. As a
matter of fact, the conflicting sides seek after the impossible:
Armenia wants Azerbaijan to acknowledge the independence of Nagorny
Karabakh, or make it part of Armenia; Azerbaijan demands that Armenia
leave Nagorny Karabakh (by the way, Azerbaijan does not make a
mention about this territory’s status after Armenia’s withdrawal).
Armenia does not understand that people who give up Nagorny Karabakh
will not live long in Baku. Azerbaijan does not understand that
Armenia will only leave this territory if tension decreases. Baku
relies on oil proceeds, propaganda and exterior pressure on Armenia.
A cold war against Armenia stops all contacts between the nations.
It’s natural that progress is impossible while the conflicting sides
use previous schemes. A break-through is required. The tenth
anniversary of the armistice (May 12, 2004) gives a chance to improve
the situation. This is a very good pretext to organize a meeting of
the presidents of Armenia and Azerbaijan in order to confirm the
armistice. Would such a gesture be useful? This move would make it
possible to resume a dialogue, taking into account the fact that the
psychological core of the conflict boils down to mutual distrust.
The conflicting sides need a stable mechanism of regular negotiations
between authorized delegations. The agenda of negotiations can be
open. Negotiations should develop in three parallel directions.
Firstly, the conflicting sides must get rid of the cause of the
conflict (security and the status of Nagorny Karabakh for a period of
transition). Secondly, the sides must eliminate the aftermath of the
conflict (the withdrawal of troops and return of refugees). Thirdly,
Azerbaijan and Armenia must relax tension and improve their
relations. It would be very difficult to advance in the former two
directions, which is why the sides must focus on the third one. At
present Armenia and Azerbaijan cannot solve even the simplest
problems.
A summit of the presidents and resumption of sound negotiations would
let the conflicting sides to advance to a peaceful solution. This
scheme does not contain aspects with which the conflicting sides
cannot put up. In addition, the conflicting sides must control their
propagandistic sources. Their role in the current processes is very
harmful for new generations.
(…)
Translated by Alexander Dubovoi

United Press International
March 24, 2004 Wednesday 11:18 AM Eastern Time
Outside View: New crisis in Kosovo
By NIKOLAS K. GVOSDEV
WASHINGTON, March 23 (UPI)
The violence in Kosovo this past week has dealt a serious blow to the
credibility of the Western Alliance.
After promising for five years that NATO could provide security so
that the United Nations could lay the foundations for the
construction of a multiethnic, democratic Kosovo, a well-organized
campaign exposed the hollowness of Western guarantees. It also tests
the long-term commitment of the alliance to engage in successful
peacekeeping.
Only a few weeks ago, Kosovo was continuing to be promoted as a
successful exercise in nation building. Indeed, the United States was
even preparing to withdraw more forces from the international
protectorate, on the grounds that reconstruction efforts were
proceeding apace.
Of course, the violence that rocked Kosovo this past week is a grim
reminder that ignoring a problem does not make it go away.
The West has been so desperate, however, to paint Kosovo as a
“success” for humanitarian intervention and nation building — even
to the point of citing it as a precedent for how things should go in
Iraq — that warnings of problems bubbling below the surface were
discounted.
Indeed, Washington Post reporter Dana Priest had noted that after
NATO forces entered the province in 1999, “A more enduring, invisible
battlefield emerged quickly. The peacekeepers of the NATO Kosovo
Force, or KFOR, didn’t even pretend to mobilize on it. It was a
battlefield on which the struggle for ultimate power and control was
waged by underground political structures and outlawed security
apparatuses.”
But NATO countries placed such a high value on “no-casualty” missions
that aggressive and effective peacekeeping — including disarming
militias, hunting down war criminals and combating organized crime
and terrorist groups — took a back seat to “not stirring things up.”
And so the province has simmered.
In February, Serbian intelligence alerted their Western counterparts
that there might be an upsurge in violence in Kosovo and in other
areas of the Balkans. On the eve of the violence, Marek Nowicki, the
United Nations ombudsman for Kosovo, complained to the Council of
Europe at a hearing in Paris that the human rights situation in the
province was “unacceptable.” But Nowicki went on to criticize
international authorities in the province for failing to support his
work, accusing U.N. officials of playing down his concerns and
declining to pressure local authorities to act on his
recommendations.
The violence directed against the Serbs of Kosovo — “an outbreak of
violence of this scale, of this speed, of this intensity,” according
to spokesman Derek Chappell — occurred under the watchful eyes of
more than 18,000 international peacekeepers. So this raises a very
serious question: What was NATO and the United Nations doing? How
could these attacks be planned and coordinated across the province
with no advance warning, no signs, no leaks? And what does this say
for the effectiveness of NATO peacekeepers?
Jonathan Eyal of London’s Royal United Services Institute maintains
that NATO “has simply grown too complacent. It has ignored repeated
intelligence warnings about a rising level of tension between
Kosovo’s communities” and so was unprepared to act.
The destruction of the 130-home Serbian village of Svinjare —
located less than a mile away from a base housing French NATO
peacekeepers — was just one in a series of incidents that one
Western diplomat said were attempts by local Albanians “to cleanse
the Serbs and create a fait accompli before any talks.” So the result
has been startled inaction in the face of what Adm. Gregory Johnson,
commander of NATO forces in southeastern Europe, characterized as
“almost amount(ing) to ethnic cleansing.”
Certainly, “multiethnicity” as a value defended in the new Kosovo
also has gone up in flames.
NATO’s performance in Kosovo does not inspire those locked in other
ethnic conflicts in the region — such as the Cypriots, the Armenians
of Nagorno-Karabakh, the secessionists regions of Georgia, or even
the Israelis and the Palestinians — to assume that any settlement
backed by NATO guarantees would provide real and genuine security.
Outward calm has returned to the province. But the damage to NATO’s
credibility may be much longer lasting.

(Nikolas K. Gvosdev is executive editor of The National Interest and
a senior fellow for strategic studies at The Nixon Center.)

(United Press International’s Outside View commentaries are written
by outside contributors who specialize in a variety of important
issues. The views expressed do not necessarily reflect those of
United Press International. In the interests of creating an open
forum, original submissions are invited.)

ITAR-TASS News Agency
TASS
March 24, 2004 Wednesday
Armenian govt to support Russian bank’s projects
By Tigran Liloyan
YEREVAN
The Armenian government confirmed its readiness to support all
efforts of Russia’s Vneshtorgbank to develop the financial and
banking system in this Transcaucasian country.
Vneshtorgbank has acquired the controlling block of shares in
Armenia’s savings bank, Armsberbank.
Armenian Prime Minister Andranik Margaryan said after a meeting with
Vneshtorgbank CEO Andrei Kostin on Wednesday that it was the first
example of official participation of a Russian bank in the Armenian
banking system.
Margaryan believes that the deal will strengthen traditional economic
ties and trade between Armenia and Russia, the government press
service told Itar-Tass.
Kostin said Vneshtorgbank would take serious steps to develop
Armsberbank, to improve the quality of services to the population,
encourage investment programmes, and boost bilateral economic and
trade ties.
According to Kostin, political stability in Armenia, economic growth,
the government’s economic policy, and liberal banking legislation
bode well for these efforts.
In his view, Vneshtorgbank’s operations in Armenia will help boost
public trust in the Armenian banking sector.

Associated Press Worldstream
March 24, 2004 Wednesday
Russia’s state-owned Vneshtorgbank buys controlling stake in Armenian
bank
Russia’s state-owned Vneshtorgbank on Wednesday bought 70 percent of
the shares in a major Armenian bank, officials said.
Andrei Kostin, board chairman of Vneshtorgbank, said that the
purchase of a controlling stake in Armenia’s Armsberbank marked the
Russian bank’s first acquisition of another bank in the former Soviet
Union.
He called it recognition of Armenia’s political and economic
stability.
Russian state-owned companies have increasingly tightened their
foothold in this ex-Soviet republic. Russia’s giant energy monopoly
assumed financial control of Armenia’s only nuclear plant last year
in a deal that Armenia sought to get out from under massive energy
debts to Russian fuel suppliers.
Armenia also depends on Russia’s Gazprom for natural gas supplies,
and Russian businesses are reportedly eying other sectors of the
Armenian economy.
Kostin said that Vneshtorgbank, which is 99.9 percent state-owned,
planned to use its investment to provide “the whole spectrum of
services to Russian companies operating in Armenia.” He also said
that it was considering a significant increase of Armsberbank’s
capital.
Armsberbank was created in 1923 and privatized in 2001.
Two other Armenian banks, Areksimbank and Yunibank, also have Russian
investors.

ARKA News Agency
March 24 2004
ENTRY OF VNYESHTORGBANK AT ARMENIAN MARKET TO ALLOW INCREASING OF
ARMENIAN POPULATION TRUST TO BANKING SYSTEM
YEREVAN, March 24./ARKA/ Entry of Vnyeshtorgbank at Armenian market
will allow increasing of Armenian population trust to banking system,
Chairman of VTB Board Andrey Kostin stated at the meeting with RA
Prime Minister Andranik Margarian. Kostin stressed that Russia
reports growth of population trust to the banks.
He noted mutual importance of the deal and said that VTB will make
everything for development of Armsavingsbank. First of all for
improvement of servicing of the population, stimulation of investment
programs and deepening of economic and trade relations between the
countries. According to him, political stability in Armenia, level of
economic growth, economic policy of the Government and liberal legal
field of the banking system are favorable for realization of this
goal.
RA Prime Minister said that the Government is ready to provide
practical assistance to VTB, which will contribute to tightening of
traditional economic and trade links between RA and RF.
Russian Vnyeshtorgbank purchased 70% of Armsavingsbank (Armenia)
shares. The signing of the agreement took place today. L.D. -0 –