RUSSIA BUSINESS DEVELOPING POSITIONS IN ARMENIA ECONOMY
ITAR-TASS News Agency, Russia
September 24, 2007 Monday
Russian businesses are strengthening their positions and influence
in the Armenian economy.
Now the whole market of the republic’s fixed and mobile communication
is controlled by Russian businesses. Vympelcom (trade mark Bee Line)
is the owner of the Armenian telephone company ArmenTel (the whole
fixed and a part of mobile communication). On September 14, Mobile
TeleSystems (MTS) announced the purchase of 80 percent of stocks of
the leading operator of the Armenian cellular communication Vivacell.
The Russian business positions in the Armenian power engineering
industry are very strong. In 2005, the Interenergo company that is a
daughter of the UES (Unified Energy Systems) of Russia electric power
utility, bought the right to manage Electrical Networks of Armenia
for a period of 99 years.
On September 2, the leader of the industry and one of the largest
taxpayers of Armenia – the ArmRosgazprom JV for gas transportation
marked its 10th anniversary. Russia’s natural gas monopoly Gazprom
holds 57.79 percent of stocks of this monopoly seller of gas on the
Armenian domestic market, 34.7 percent of the JV stake belongs to
the Armenian government (the Energy Ministry) and 7.71 percent to
the ITERA Group. ArmRosgazrpom is taking part in the laying of a gas
pipeline from Iran to Armenia and is going to export electric power
to neighbouring counties.
The fuel and energy sector remains the most promising sphere of
bilateral cooperation. Armenia gets 80 percent of needed energy
resources from Russia. The Armenian NPP is the main cooperation
facility. The nuclear power plant was shut down after a devastating
earthquake in Armenia in 1989 and in 1996 is was de-mothballed with the
participation of Russian specialists. The power unit of the Armenian
NPP that uses Russian nuclear fuel generates up to 40 percent of
electricity consumed in the republic. From April 2003 the NPP was
transferred to the financial-industrial management of the INTER RAO UES
closed joint stock company. The Sevan-Razdan hydropower plant cascade
was transferred to the property of RAO UES as part of settlement of
the Armenian debt to Russia for the supplied nuclear fuel.
In December 2003, INTER RAO UES started to manage Armenia’s largest
Razdan thermal power plant that accounts for about 30 percent of
all power generating capacities of the republic. In January 2004,
the plant was finally handed over to Russia as part of the debt
settlement. The Razdan Energy Company was created that took over the
property rights of this facility.
On Friday, it was announced here that Russia’s major investment company
Troika Dialogue is buying Armimpexbank. Russia’s Vneshtorgbank had
earlier become the owner of Armsberbank and renamed it into VTB Armenia
bank. The Russian insurance company Ingosstrakh owns 75 percent of
stocks of Armenia’s major insurance company Efes (INGO-Armenia).
Military-technical cooperation is an important aspect of
Russian-Armenian relations. Within its framework Armenia purchases
equipment and weapons at internal Russian prices. Armenian military
undergo training at Russian military academies free of charge or on
privileged terms.
In the meantime, Armenian Prime Minister Serzh Sarkisyan is beginning
an official visit to Moscow to discuss a broad spectrum of issues of
Russian-Armenian cooperation in the political and economic spheres.
He will meet Russian Prime Minister Viktor Zubkov, hold talks on
various aspects of bilateral relations and give a press conference
at Itar-Tass.
It is the first visit to Russia paid by the current Armenian cabinet
head who was appointed for the post in April. Sarkisyan retained
the post of the head of the Armenian part of the intergovernmental
commission on economic cooperation between Russia and Armenia.
The two countries’ cooperation is developing on the bilateral
and multilateral basis. Armenia, the same as Russia, is for the
strengthening of the Commonwealth of Independent States (CIS) and a
member of the Collective Security Treaty Organisation (CSTO).
Russia and Armenia have become reliable economic partners that found
reflection in their treaty "on long-term economic cooperation for
the period up to 2000,"signed in September 2001 by Russian President
Vladimir Putin and Armenian President Robert Kocharyan.
Russia today is the main trade partner of Armenia. Russia’s Exports
to the country are mainly nuclear fuel and equipment supplies for
the Armenian nuclear power plant, energy resources, machinery and
equipment. Food products, raw materials, unprocessed aluminium, as
well as liquors and semi-precious stones and metals prevail in the
structure of Russian imports from Armenia. About 70 Russian regions
are maintaining bilateral economic relations with Armenia.
The volume of trade turnover between Russia and Armenia has doubled
and may exceed 0.5 billion US dollars by the end of the year, Russian
Acting Transport Minister Igor Levitin who heads the Russian part of
the intergovernmental cooperation commission said in Armenia last
week. He stated that Russian investments in the Armenian economy
have also increased. In the first half of the year they amounted to
74 million dollars.
The lack of direct transport service between the two countries is
the main obstacle to the development of Russian-Armenian economic
cooperation. The Abkhazian section of the railway between Russia and
Armenia is closed, therefore the main part of cargoes from Russia
to Armenia is transported via the Black Sea through the Georgian
Poti port and then by railway. Measures are currently being taken to
increase the load on the Kavkaz-Poti ferry service.