PRE-ELECTION CHALLENGES CORPORATION
Hakob Badalyan

Lragir.am
13 april 06

When politics is mixed with economy, the outcome is neither economy
nor politics. This magnificently simple formula was given by the
minister of defense on April 11, commenting on the Russian-Armenian
agreement on gas and thereof the sale of the fifth generating unit of
the Thermal Power Plant of Hrazdan to Gasprom. They say other things
were sold as well, but first let us try to find out if the outcome
of the sale of the fifth generating unit was economics or politics.

A recent news release of the news agency Regnum on the decision
of the Armenian government informed that before the sale the fifth
generating unit was transferred from the balance of the Ministry of
Energy to the Ministry of Defense which was going to sign a contract
of sale with either Gasprom or the legal entity founded by Gasprom
in Armenia. And the proceeds from the sale of the fifth generating
unit, 248 million dollars, would embark the balance of the Ministry
of Defense. Of course, under the decision of the same government, 188
million dollars out of this money will be paid to Armrusgasard within
three years to subsidize gas consumed by the population and industry.

The other 60 million will be transferred to the state budget, again
within three years.

If the money is to go to the state budget finally, why did the Ministry
of Defense sell the fifth generating unit and not the Ministry of
Energy? And why is the money first transferred to the ministry and
only then to the necessary targets. This money “voyage” seems not
to obey any economic rule. It does not mean, however, that it has
a political logic. If apparently it is not economy, and we will say
it is not politics not to politicize, what is it then? Does it mean
that what was mixed with economy in the deal was not politics, or
what was mixed with politics was not economy, or something else was
mixed with economy and politics, or yet this something was covered
with economy or politics?

Since the deal and its details are kept in an atmosphere of secrecy,
and the defense minister promises to explain the charm of the sale
of the fifth generating unit later, we have to look for answers to
these questions all by ourselves, tracking facts and statements.

Under these circumstances the fact of selling the energy plant via
the Ministry of Defense causes surprise. It is surprising, for the
Ministry of Defense had not interfered with the sale of any of the
objects of the energy sector of Armenia that were also sold or given
to Russia. It is true, of course, that the defense minister is also
the co-chair of the Russian-Armenian intergovernmental commission,
but he was the co-chair of this commission when the distribution
networks were given to Russia to repay the debt of Armenia, and the
Ministry of Defense did not interfere.

It is also rather interesting that till the agreement on gas the
co-chair of the intergovernmental commission and the minister of
defense displayed no public activity with regard to gas. Certainly,
instead of words and forecasts he preferred to tackle the danger
threatening the people of Armenia, in other words, he was busy with
real work while the other government officials were making indefinite
allegations. We were rather late to learn, however, that the defense
minister was working. He announced March 22 that he had extended
proposals to Gasprom which were accepted and the population was
saved from a social aftershock. In early April it became known what
proposals had been mentioned and what the price of salvation of people
had been. The joy for salvation was so great that people forgot to
ask if the defense minister alone had realized that selling the fifth
generating unit would relieve people’s state for three years, if the
Russians agreed to buy the generating unit from the defense minister
only or if only the generating unit. For Gasprom officially published
that it would buy other objects of the energy sector of Armenia,
and the minister of defense announced there would be interesting
developments with regard to the Iran-Armenia pipeline.

So there is no need to cause problems with anti-Russian moods now and
have to overcome them later, announced Serge Sargsyan. He announced
that the anti-Russian groups did not have any influence, all they could
do was to make a noise. If they do not have influence, how are they
supposed to cause problems. It means they have influence, nevertheless.

Besides, there is a noteworthy nuance, which had a rather typical and
revealing role in the entire odyssey about gas, however. The defense
minister voiced the criticism against anti-Russian groups when John
Danilovich, Chief Executive Officer of the Millennium Challenge
Corporation, was visiting Armenia. Through the latter the U.S.

government is going to allocate 235 million dollars to Armenia, which
is characterized as a carte blanche to President Robert Kocharyan
on some conditions, of course. But one man’s meat is another man’s
poison. This is life.

Another nuance is interesting, which is also important. Earlier when
the president of Armenia visited Russia to settle the question of gas
with Putin, it was announced that the problem of gas would be settled
in mid-February. Surprisingly, however, the problem was solved much
later. The deal of 248 million dollars was signed in early April, a
week after the agreement on 235 million dollars signed in Washington,
which means that within only three years more money will be transferred
to the balance of the defense ministry (outside its budget) than the
money that will come from America within 5 years.