ARMENIA THIS WEEK
Monday, December 20, 2004
In this issue:
Armenia’s top mining company sold for $132 million
Online chess and e-visas amid Armenia IT expansion
Azerbaijan wages worldwide anti-Armenian campaign
TOP MINING COMPANY SOLD IN MAJOR PRIVATIZATION DEAL
The Armenian government finalized last week the privatization of
the country’s largest mining enterprise. Germany’s Chronimet and
subsidiaries bought the Zangezur copper-molybdenum complex for $132
million, in what is the second biggest privatization deal for Armenia
since the $142 million takeover of Armentel by the Greek Hellenic
Telecommunications Organization (OTE) in 1998.
The privatization will be financed by German credit institutions,
including the Deutche Bank, with Chronimet pledging to invest at least
$250 million by 2012 and boost production by over 50 percent. Armenia’s
Industry Minister Karen Chshmaritian said that the government picked
Chronimet over the U.S. Comsup Commodities and Russia’s Soyuz Metal,
with Chronimet also pledging to process the molybdenum ore at its
Yerevan smelter.
The government further decided to allocate $32 million from the
proceeds to the town of Kajaran, where the mining complex is located,
with $25 million going to cover the 2005 budget deficit and the
remaining $75 million to the government’s special privatization
account.
Foreign investments in Armenia amounted to over $175 million in the
first three quarters of 2004 (without the Zangezur privatization),
up five percent year-on-year. Most of the investments came from
Greece ($61 million), Russia ($28 million), Argentina ($26 million)
and the United States ($19 million). Armenia’s rapid privatization
process, while frequently criticized domestically, has been praised
internationally.
Speaking in Tbilisi last month, the U.S. Undersecretary of Treasury
John B. Taylor urged Georgia to step up privatization to reduce
the size of government and encourage growth. Taylor noted that the
private sector in Armenia accounts for 75 percent of total employment,
compared to 40 percent in Georgia. Armenia’s Gross Domestic Product
(GDP) grew by 10 to 14 percent in 2001-3 and by another 10 percent
in the eleven months of 2004. (Sources: Armenia This Week 11-8;
U.S. Dept. of Treasury 11-22; Arminfo 11-30, 12-16, 20; RFE/RL
Arm. Report 12-14; Interfax 12-17)
ONLINE CHESS COMPETITION SEEN AS REFLECTION OF ARMENIA’S BURGEONING IT
SECTOR
Armenia is this week playing host for the world’s first-ever online team
chess tournament. Top players from Armenia, China, France and Russia are
competing for the $55,000 prize fund. The tournament is part of
year-long events dedicated to the 75th anniversary of the birth of
Tigran Petrosian, a past chess world champion. The tournament organizers
hope to promote Armenia as a center for information technology, as well
as chess.
Two years ago, Armenia became only the second country in the world
(after Australia) to introduce an electronic visa system for foreign
visitors. In its first year, the new program saw over 2,200 applicants
and the number of e-visa users has grown monthly since. The overall
number of tourists visiting Armenia grew by 27 percent in 2003 and by a
further 30 percent in the first three quarters of this year.
Armenia’s breakthroughs in online chess and consular services are a
reflection of the growing size of the country’s information technology
sector. In recent months, Armenia saw the arrival of the U.S.-based
Synopsys, Inc. and expansion of the Netherlands-based Lycos-Europe, two
leaders in their respective fields of semiconductor design software and
provision of online portals. Lycos, which took over the Armenia branch
of then U.S.-based Brience Inc. in 2002 has since invested over $8
million in Armenia operations and plans another $7 million in
investments next year. Synopsis, which took over Armenia-based LEDA
Design last October, plans tens of millions of dollars in Armenia
investments. (Sources: ;
; ; ; Arminfo
10-27, 11-30; Noyan Tapan 12-2; RIA-Novosti 12-18)
AZERI LEADER DECLARES “COLD WAR” ON ARMENIANS
Azerbaijan’s President Ilham Aliyev told his subordinates earlier
this month that he is waging a “cold war” against Armenia and
the ongoing negotiations were only a way to achieve unilateral
Armenian concessions on the Karabakh issue. Armenia and Azerbaijan
are currently engaged in what is typically referred to as a “peace
process.” Aliyev said that as part of this “war” he would continue to
boost Azerbaijan’s military spending and tighten the ongoing economic
blockade against Armenia. Speaking last week at London’s Royal
Institute for International Affairs, Aliyev said that he would not
engage in any confidence-building measures and that he had “no desire”
to tone down his country’s war-mongering and anti-Armenian propaganda.
As part of the campaign Azeri propagandists use rhetoric reminiscent to
the ‘traditional’ anti-Semitic discourse, arguing that all ethnic
Armenians should be treated “not as a nation, but as an organization,”
which is aggressive and dangerous, yet weak. At its core, this
disinformation campaign includes falsification of the nature and history
of the Karabakh conflict, as well as exaggeration of the size of the
territories that came under Armenian control as a result of the war and
the number of Azeri displaced and imprisoned.
This disinformation campaign also spreads into areas of global concern,
such as baseless accusations of support for Islamic terrorism, weapons
proliferation and drug trafficking, and into more “exotic” claims that
Armenians are behind everything from crop failures to unexplained
natural phenomena. (As strange as they are, some of these claims are
picked up by uninformed and/or unscrupulous foreign officials and
commentators.) Azeri officials’ claims that Armenia is a weak and a
‘dying’ country are contradicted by concurrent claims that the world
Armenian ‘cabal’ is behind all international criticism of Azeri
corruption and human rights abuses.
Last month, Azeri officials revealed for the first time that it was
their policy not to allow ethnic Armenians, no matter their citizenship
or political background, into Azerbaijan (although a few exceptions have
been made for state officials under pressure from foreign governments),
since their ‘security could not be guaranteed’ and since they themselves
pose unspecified security risks. The statement came after Baku airport
officials barred the entrance for a Bulgarian sports journalist of
Armenian origin, who arrived to cover the Bulgaria-Azerbaijan soccer
match. Azeri parliamentarians have this week called for a law that would
also bar all ‘pro-Armenian’ foreign citizens from visiting Azerbaijan.
(Sources: 525-ci Gazet 4-1-03; Armenia This Week 11-1, 15; Azad
Azarbaycan 11-18; Interfax 12-8; Azertag 12-16; Ekho 12-21)
Note to Readers: Armenia This Week will not be issued in the next two
weeks. It will resume publication on January 10. Happy Holidays!
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