Author: Boshkezenian Garik

ARMENIA THIS WEEK
Monday, August 30, 2004

ARMENIANS ON TRIAL FOR AFRICAN “COUP ATTEMPT”
Six Armenian nationals working on contract in West Africa appear to have
been caught up in an attempted coup. Pilot Ashot Karapetian, co-pilot Samvel
Darbinian, aeronautical engineer Ashot Simonian, navigator Samvel
Matchkalian, flight engineer Razmik Khachatrian and technician Suren
Muradian flew an Antonov-12, a Soviet-made cargo plane for Armenia-based
Tiga Air company. The six were arrested last March in Equatorial Guinea,
along with their client Gerhard Eugen Merz of Germany (who had since died in
prison), several South Africans and Guineans.

Ambassador Sergei Manaserian and other officials are currently in Equatorial
Guinea for the trial, and had visited the aviators twice before. They met
with local leaders to request that the Armenians be released and that their
detention conditions be improved in the meantime. The Armenians did not
report being ill-treated in custody and have been able to telephone their
relatives in Yerevan on at least one occasion.

The Armenians have pled “not guilty” to charges of coup plotting, which
according to the governments of South Africa, Zimbabwe and Equatorial Guinea
as well as confessions of would-be participants, involved dozens of South
African and Angolan mercenaries led by British ex-Special Forces soldier
Simon Mann, and was allegedly financed by Mark Thatcher, son of the former
British Prime Minister. They are said to have sought to overthrow President
Teodoro Obiang Nguema and install his Spain-based opponent in this oil-rich
country.

According to Armenian pilots and their lawyer, they arrived in Equatorial
Guinea last January to fly freight between that country and two other
African nations, and until last week were unaware on what charges they were
held. Local prosecutors, however, have alleged that the Armenians were to
fly in mercenaries for the would be coup and demanded they be sentenced to
at least 26 years in prison.

Armenian Foreign Ministry spokesman Hamlet Gasparian described the
accusations as “nonsensical, absurd.. and groundless.” According to
Gasparian, South African suspects in the case have denied that the Armenians
were involved in coup preparations. A release of some of the alleged
mercenaries following a separate, but related trial in Zimbabwe, may augur
well for the Armenians. But Foreign Minister Vartan Oskanian argued against
a rush to optimism. The verdict is expected on September 1. (Sources: RFE/RL
Arm. Report 3-10, 23, 31, 7-13, 8-23, 26; Arminfo 3-18, 23, 5-21, 6-21,
7-16; 8-24, 30; ArmeniaNow 3-26; AFP 8-24, 26, 27)

SOUTH OSSETIA CEASE-FIRE HOLDS FOLLOWING GEORGIAN PULL-OUT
Georgia pulled out most of the forces it introduced in South Ossetia earlier
this summer, heeding calls by the United States to de-militarize the region
and resume peace talks. Some of the Georgian forces involved were trained by
the U.S. The province lies in proximity to the Russia-Georgia gas pipeline
and highway, both of key economic significance to Armenia. Armenian
officials have expressed concern over recent fighting in the area, which
Armenian observers see as setting a potentially negative precedent for the
Karabakh peace process.

The new cease-fire took hold last week, as President Mikhail Saakashvili
sacked his Armed Forces’ chief of staff, whom other Georgian officials
accused of failing to achieve military objectives and losing at least 16
Georgian soldiers in the process. The Ossetian side reported at least
several police and civilians killed, mostly from Georgian shelling of the
regional center of Tskhinvali. Saakashvili says he is committed to a
peaceful settlement. Georgia is now seeking to replace Russian peacekeepers
in the region with a Western force. (Sources: Arm. This Week 7-12; New York
Times 8-5; RFE/RL Newsline 8-23, 25, 27; Civil.ge 8-26, 27)

NO MEDALS, AS ARMENIA TEAM RETURNS FROM ATHENS
Armenia’s 18-person team won no medals, as the 2004 Summer Olympics in
Greece concluded over the weekend. Diaspora Armenians fared better winning
at least one gold, one silver and several bronze medals.

Armen Ghazaryan placed fourth in weightlifting, shy of a medal by only about
a pound of his own weight, and Norair Bakhtamyan also placed fourth in
shooting. Four wrestlers, two weightlifters and one boxer from the Armenia
team finished in the top ten of their respective competitions. Armenia won
one gold and one silver medal in 1996 and one bronze in the 2000 Olympics.

Baku-born Karina Aznavourian won a team fencing gold for Russia, her second
in as many Olympics. Three Gyumri natives, Ara Abrahamian, Artiom Kiureghian
and Mkhitar Manukian, won silver and bronze medals in wrestling for Sweden,
Greece and Kazakhstan, respectively. Another wrestler, Masis-born Armen
Nazarian secured a bronze medal for Bulgaria. (Sources: ;
Arm. This Week 8-16)

Note to readers: Due to the Labor Day holiday, the next issue of Armenia
This Week will appear on September 13. Visit
to read Armenia This Week issues
since 1997.

A WEEKLY NEWSLETTER PUBLISHED BY THE ARMENIAN ASSEMBLY OF AMERICA
122 C Street, N.W., Suite 350, Washington, D.C. 20001 (202) 393-3434 FAX
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Armenian Assembly of America
Research and Information Office

FACT SHEET
August 24, 2004

AZERBAIJANI GOVERNMENT’S WAR RHETORIC
In the years since the outbreak of the Karabakh conflict in the 1980s, the
Azerbaijani government and entities sponsored by it have hurled a litany of
threats, hate-mongering, complaints, accusations and abuse at the Armenians
of Karabakh, Armenia and Armenians around the world. Such rhetoric continued
unabated despite the establishment of a cease-fire in Karabakh in May 1994
and the ongoing peace process, and has intensified in recent years.
Egregious examples of this rhetoric follow:

· President Ilham Aliyev has repeatedly told his nation that
Azerbaijan could launch a new war in Karabakh: “At any moment we must be
able to liberate our territories by military means. To achieve this we have
everything.” Aliyev predicts that Azerbaijan will soon become an
economically strong state, while its military “superiority” will increase
further. “Under these circumstances we cannot react positively to those
calling us to compromise.” (Source: Zerkalo 7/23/04) Azerbaijan has been
increasing its military spending to more than $217 million (Source: IISS
Military Balance) and buying more tanks, artillery and aircraft (Source: UN
Directory of Conventional Arms). Aliyev warned that unless Armenians
capitulate “we will all smash the heads of the Armenians.” (Source: Turan
via BBC Monitoring 10/27/00)

· The Azerbaijani Defense Minister Gen. Safar Abiyev says that
occasional violations of the 1994 cease-fire are “natural” since Azerbaijan
is still “at war.” (Source: Sarg via BBC Monitoring 8/14/03) Abiyev makes
claims on Armenia’s territory: “Armenia must always remember that what
Azerbaijan accepted yesterday will not be accepted today and tomorrow.
Azerbaijan will not want to have a separated state – meaning Nakhichevan,
cut from the mainland Azerbaijan. This issue will be raised tomorrow.”
(Source: Ekho 5/16/03). Asked if the Azeri army is ready “to go to Yerevan,”
Abiyev answers: “We can go even farther.” (Source: ANS via BBC Monitoring
3/22/02) Abiyev claims that “The Armenian state was created on the occupied
Azeri lands with the area of 29,000 square kilometers.” (Source: ANS.az
12/7/01)

· The Azerbaijani Defense Ministry spokesman Col. Ramiz Melikov: “In
the next 25-30 years there will be no Armenian state in the South Caucasus.
This nation has been a nuisance for its neighbors and has no right to live
in this region. Present-day Armenia was built on historical Azerbaijani
lands. I believe that in 25 to 30 years these territories will once again
come under Azerbaijan’s jurisdiction.” (Source: Zerkalo 8/4/04) Following
the brutal murder of an Armenian student of NATO English language courses in
Hungary last February, Melikov qualified the confessed murderer Ramil
Safarov as a “talented and disciplined officer.” Melikov added that, “as an
Azeri, I understand and support Safarov’s actions.” Melikov did not exclude
similar attacks on Armenians in the future. (Source: Regnum 2/25/04)

· Azerbaijan’s Ambassador to the Council of Europe Agshin Mekhtiyev
warned of more attacks on individual Armenians, adding that he “would not
advise Armenians to sleep easy in their beds.” (Source: Zerkalo 2/24/04)
Parliament member and former Heydar Aliyev bodyguard Siyavush Novruzov told
Terry Davis, envoy of the Parliamentary Assembly of the Council of Europe,
that “similar incidents” could occur in PACE as well, unless the Karabakh
conflict is settled in Baku’s favor. (Source: Ekho 2/27/04) Azerbaijan’s
Human Rights Ombudsman Elmira Suleimanova said that Safarov should serve as
“an example for Azerbaijani youth.” (Source: Zerkalo 2/28/04)

· The Azerbaijani Ministry of National Security (MNS) has publicly
and, according to media reports, clandestinely sponsored rhetoric and
activities directed against Karabakh peace efforts. In 2004, this successor
to the Soviet-era KGB held a public competition for the “best” films and
books targeting Armenians, with Minister Namik Abbasov giving financial
awards of up to $2,000 to the winners. (Source: Azertag.com 3/26/04) Azeri
officials have condemned Track II peace-building contacts with Armenians,
and groups linked to MNS have attacked Azeri peace activists. (Sources: ANS
via BBC Monitoring 11/3/01, 4/16/02; 525ci Gazet 5/11/02; Zerkalo via BBC
Monitoring 4/30/03; IWPR Caucasus Report 5/1/03)

· Heydar Aliyev’s National Security Advisor Vafa Gulizade demanded
that “Armenians should be driven out of Azerbaijan forever.” Unless
Azerbaijan fights and drives all Armenians out, Gulizade believes that
“Armenians would [eventually] buy up real estate in Baku… They will try to
take Azerbaijan into their hands in this way.” (Source: Azadlyq via BBC
Monitoring 10/10/01) “The entire Armenian population of Nagornyy Karabakh
should be moved from there…This problem will not be resolved as long as
Armenians are in Nagornyy Karabakh.” (Source: Yeni Azerbaycan via BBC
Monitoring 11/14/01) “If they want autonomy on our land, let us have
autonomy in Zangazur and Goyca [southern and eastern Armenia] which will
enable Azerbaijan to reach Turkey by land.” (Source: ANS via BBC Monitoring
4/6/02)

· The Azerbaijani Parliament member from ruling Yeni Azerbaycan Party
Asia Manafova: “Our people must repay the debt it owes to [the late
President] Heydar Aliyev and free Karabakh from Armenian occupiers. To
achieve this goal we are ready… undertake acts of suicide bombing.”
Manafova called on other Parliament members to also become suicide bombers.
(Source: Regnum.ru 12/15/03) The pro-government Azerbaijan News Service
(ANS) has been the most active Azeri TV channel opposing any contacts with
Armenians and arguing for war, suggesting, among other things, to recruit
suicide bombers from among thousands of orphaned and homeless children in
Azerbaijan. (Source: ANS via BBC Monitoring 10/13/02).

As one of the leading mediators in the Karabakh peace process and Co-Chair
of the OSCE Minsk Group, as well as a nation with deep bilateral ties with
both Armenia and Azerbaijan, the United States needs to be much more active
in securing an end to such irresponsible and bellicose high-level
Azerbaijani statements. Clearly these officials envision another military
offensive against NKR and Armenia, ethnic cleansing and in the case of Col.
Melikov, Armenia’s demise and genocide against its population. Silence in
the face of such threats only emboldens the would-be aggressors.

Azeri, Belarus defence ministers discuss cooperation, Karabakh in Minsk

ANS TV, Baku
29 Aug 04

The Armenian-Azerbaijani Nagornyy Karabakh conflict has been discussed
at a meeting between Azerbaijani Defence Minister Safar Abiyev and his
Belarus counterpart Leanid Maltsaw in Minsk. During the meeting, Safar
Abiyev said that Azerbaijan did not want war but it was provoked into
starting war.

The Belarus defence minister said that his country backed a solution
to the conflict that is in line with UN principles and international
legal norms.

Bilateral military cooperation between Azerbaijan and Belarus was also
discussed within the framework of the two-day visit.

ArmenPress
Aug 27 2004

PRIME MINISTER HAILED OPENING OF ALL ARMENIAN EDUCATION SUMMIT

YEREVAN, AUGUST 27, ARMENPRESS: Armenian prime minister Andranik
Margarian has addressed a greeting message to the participants of All
Armenian Education Summit which says in particular,
“Dear Ladies and Gentlemen, respectable participants of All
Armenian Education Summit, guests, on behalf of Armenian government
and personally on my behalf I welcome the opening of this summit.
I am exceptionally happy that steps have been taken recently to
organize All Armenian cultural, scientific-educational, business and
other forums which aim to unite our potential and to contribute to
prosperity of our country and strengthening of Armenia-Diaspora ties.
In this regard I attach great importance to this summit and voice my
belief that educational reforms in our country will be thoroughly
analyzed and valued, interested discussions will be held on
preservation of Armenian identity, giving a stimulus to educational
cultural life in Diaspora and so on.
I wish a fruitful work to the summit.”

Institute for War & Peace Reporting
Aug 25 2004

ARMENIA DEBATES ETHNIC RIGHTS

Cool reception from Armenia’s tiny minority communities to a draft
law designed to help them.

By Zhanna Alexanian in Yerevan

A proposed new law intended to protect the rights of minorities in
Armenia has met with a lukewarm response from members of the
country’s
small ethnic communities even before a first draft is on the table.

When the team of experts designing the law complete their
deliberations, which have been going on for two months, the document
will be
sent for review at the Council of Europe and then submitted to
parliament.

Armenia is, in contrast to its south Caucasian neighbours Georgia and

Azerbaijan, virtually a mono-ethnic republic in which just 2.2 per
cent of the population is not Armenian. However, it is the first
country in the region to work on a law on its ethnic minorities.

“I think that passing a law on national minorities may set a positive

example for other countries of the region,” said Stepan Safarian, an
expert at the Armenian Centre for National and International Studies
and a member of the team drafting the law. “It will be important for
Armenia in terms of harmonising relations between the majority and
the minorities.”

This is not the first attempt to pass such a law. An earlier document

was rejected by the minority communities themselves. After that, in
January this year, the government formed a new Department for
National
Minorities and Religion which started drafting a new bill.

“We weren’t obliged to do this, but there was a recommendation,”
Hranush Kharatian, head of the minorities department, told IWPR. “The

framework convention on national minorities which Armenia signed up
to
[in 1997] recommends adopting a law in which their rights are
defined.”

Armenia’s constitution does not specifically refer to the rights of
minorities and they are barely mentioned in laws on education and
language. The new law will set out their legal rights in terms of
religious practice, education and language and will specifically
outlaw
discrimination against them.

“On the whole, legislation in Armenia is liberal towards national
minorities,” said Kharatian. “But if we have an appropriate law, they

will know their rights better. At the end of the day adopting this
law
signifies the state’s attitude towards its minorities.

“It’s true that the constitution forbids discrimination of any kind,
but banning discrimination or violence gives minorities a passive
right, whereas this law will above all give them active rights.”

There are more than 20 ethnic minorities in Armenia, chiefly
Assyrians, Yezidis, Kurds, Greeks, Jews, Russians and others. In the
last
Soviet census of 1989, minorities formed 6.7 per cent of the
population.
But the number has fallen drastically since then, in part because of
the mass flight of Armenia’s Azerbaijani population and in part
because of emigration.

The team of experts debating the new law includes government figures
and scholars. They have studied similar laws from around 20 other
countries, and have paid particular attention to the laws of Hungary
and
Yugoslavia (now Serbia and Montenegro).

However many minority leaders are cool towards the whole project.

“I am not in favour of passing this law, but as the discussion
concerns us I am participating in it,” said Irina Gasparian, who
represents
the Assyrian community. Around 6,000 Assyrians were living in Armenia

in 1989, but there are only about 3,400 here now.

Charkaze Mstoyan, chairman of the Kurdistan Committee, is strongly
against the law as a matter of principle, because he feels that the
act
of defining a separate identity for minorities is a form of
discrimination in itself.

“Passing a law like this is a form of national persecution and
infringes our rights,” he said. “If I am a citizen of the Republic of

Armenia, why should I have this label pinned on me?”

“There is a taboo on everything Kurdish here,” continued Mstoyan. “If

the president of the country were to declare just once that Kurds or
other peoples have lived together with us for centuries, if we were
to be mentioned officially, I assure you that the atmosphere in
Armenia would change.”

He said that the Kurds and the Yezidis, a Kurdish-speaking but
non-Muslim group, were leaving Armenia because of social problems, in

particular the poor educational system.

“School buildings are falling down, it’s impossible to hold lessons
there. The state has just forgotten about us,” he said.

Another problem for Kurds is bullying when they are conscripted into
the army, leading the Kurdish leader to ask aloud, “Will there be a
point in the law which stops a member of a minority group being
persecuted in the army?… I don’t think so. For members of our
community,
army service is a tragedy for the whole family. And another thing:
will there be a point in the law which allocates university places
for
Kurdish children?”

Hranush Aratian argued that the law was needed to protect minorities
against discrimination from organisations like the nationalist Union
of Armenian Aryans. This group is calling on ethnic minorities to
leave Armenia, and has called on the Jewish community in Armenia to
put
pressure on the Israeli government to change its position on the
Armenian Genocide of 1915.

Hersch Burstein, chairman of the Mordechai Navi society which
represent’s Armenia’s Jewish community of just 300 people, declined
to
answer IWPR’s questions, saying only that he was not taking part in
discussions on the draft law because he was not sufficiently informed
about
it.

Shavarsh Khachatrian, a specialist in international law and the chief

expert in the drafting group, argued that passing the new bill was
chiefly in the interests of the ethnic minorities themselves.

“They ought to explain why they reject the need to pass a law like
this,” said Khachatrian. “National minorities are a section of
society
which always get used when tensions are rising, either between states

or in anti-government movements. The problems that create the most
tension have to do with inter-ethnic relations, and that is why many
countries have adopted laws like this one.”

“We do not have minorities with separatist demands,” said
Khachatrian. “Historically, our state has not been intolerant towards

minorities. I think we have all we need to pass a normal law.

“How this law is used is another matter. That is connected with the
way our country is developing. It has retreated from democratic
values
and is moving towards authoritarianism.”

Zhanna Alexanian is a reporter with in Yerevan

ArmenPress
Aug 19 2004

SERGEI LAVROV SAYS RUSSIA SUPPORTS TERRITORIAL INTEGRITY OF
AZERBAIJAN

MOSCOW, AUGUST 19, ARMENPRESS: Russia supports territorial
integrity of Azerbaijan, Russian foreign minister Sergei Lavrov said
after negotiations with Azeri foreign minister Elmar Mamediarov
yesterday. Meanwhile, he said that Moscow “is ready to assist
Karabakh conflict resolution both as OSCE Minsk Group co-chair and on
a national level.”
“Moscow is strongly interested in resolution of the conflict based
on existing agreements. However, it can be resolved only by
conflicting sides, around the table of negotiations,” Lavrov said.
“We can’t decide for the sides if they do not have agreement
themselves,” Russian FM said. He praised resumption of negotiations
since the end of last year and voiced his expectation that talks will
continue.

ArmenPress
Aug 20 2004

SMUGGLING OF CATTLE STAVED OFF ON ARMENIAN-TURKISH BORDER

GIUMRI, AUGUST 20, ARMENPRESS: On August 19, border guards staved
off attempted violation of Armenian-Turkish border and smuggling of
cattle to Turkey on Verin Shen border line in Shirak region. Three
citizens of Armenian origin have been detained trying to smuggle
about thirty cattle to Turkey. The border headquarters in Giumri
handed over the violators to Armenian interior affairs regional
department. A criminal case is initiated into the case.
Illegal smuggling of cattle from Armenia to Turkey have increased
due to rise of meat prices in the neighboring country. The latest
case was reported in July in Zarishat border zone. Investigation is
under way into the case. During the seven months of the running year,
54 cases of border violations have been reported with total goods of
350,000 Russian rubbles confiscated, including cattle mainly.
According to border guard headquarters, mostly Armenian, Turk and
Kurd criminal groups are engaged in smuggling on the border lines.

Tulare Advance Register, CA
Aug 14 2004

Good Deeds; Good News

Often good deeds and good news go unnoticed. This column, which runs
every Saturday, provides an avenue to get those good deeds and that
good news into the paper.

Here are this week’s items:

Good deeds

Principal excited about Ag-science students

Sundale Principal Cliff Gordon is excited about the work the kids in
the school’s Ag-science classes continue to do, and a cleanup on
Friday was no exception.

“Ag-science is part of the curriculum,” Gordon said. “The kids do
different things in relation to beautification of the school. The
work they’re doing [Friday] is part of a last-minute, final cleanup
because we’re getting ready to plant grass for a new baseball and
football field.”

The students aren’t the only ones working. Sundale parent volunteers
put in an irrigation system for the 16 acres of land purchased by the
school for the recreation area. The site is just north of the school
on Lovers Lane.

No buildings will be constructed on the land. It’s reserved for
recreation like soccer, football, baseball and a little park for the
Sundale community.

In three weeks, the Ag-science students will cut Ber-muda grass from
a neighboring farmer and replant it at the school.

“They probably do a lot of our landscaping as part of their
curriculum,” Gordon said. “But, even though it’s part of the
curriculum, if a student says that’s not something they want to do we
find an alternative for them. None of them have to do it.”

Administrators said they hope to have the site ready for baseball in
spring.

FFA officer visits Washington, D.C.

Grace Berryhill, 18, of Tulare was one of more than 100 FFA officers
who gathered in Washington, D.C., last month to strengthen skills in
leadership and citizenship and discuss national FFA business as part
of the National FFA State Presidents’ Conference.

Berryhill is the daughter of Bruce and Carol Berryhill. She is the
president of the California FFA Association.

The group attended the conference to prepare for their
responsibilities as delegates and committee chairs for the 2004
National FFA Convention, to be held in Louisville, Ky., Oct. 27-30.

FFA is a national youth organization of 464,267 student members
preparing for

leadership careers in science, business and technology of
agriculture, with 7,194 chapters in all 50 states, Puerto Rico and
the Virgin Islands. Information:

Former Tularean receives Fresno honor

Former Tularean Evelyn Michigian of Fresno was one of 40 Fresnan’s
depicted in “Fresno’s Finest Faces: Common Citizens Working for the
Common Good.”

This photographic exhibition by Jose Garza and Shari Savage was on
display at Fresno City Hall.

In addition to serving as librarian and administrative assistant to
the Fresno First Armenian Presbyterian Church Chancel and Choir,
Michigian serves as a volunteer staff member of United Way and serves
in the day surgery waiting room at Children’s Hospital Central
California.

Michigian graduated from Tulare Union High School with the class of
1943.

If you have a good deed to recognize, or good news to share, call the
Tulare Advance-Register newsroom at 688-0521.

CASE ON BEATING IN GAFE “BUNKER” INVESTIGATED IN PROSECUTOR’S OFFICE
OF KENTRON AND NORK-MARASH COMMUNITIES

YEREVAN, August 13 (Noyan Tapan). The case on the beating of the US
citizen David Bekker in the Yerevan cafe “Bunker” is in the
Prosecutor’s Office of the Kentron and Nork-Marash Communities of the
city. Alexan Andreasian, Prosecutor of the above-mentioned
communities, told NT’s correspondent that the case is at the stage of
study and the decision will be made in a set term on the basis of
investigation. To recap, as a result of the beating D. Bekker got
bodily injuries which, according to the investigation, were inflicted
by Arsen Harutiunian. According to the press publications, the latter
is the son of Colonel-General Mikael Harutiunian, Chief of the General
Staff of the RA Armed Forces.

TOTAL CAPITAL OF ARMENIA’S BANKING SYSTEM WILL GREW BY 25% BY 2005

YEREVAN, AUGUST 9. ARMINFO. Total capital of Armenia’s banking system
will grew by 25% or by 12.2 bln drams in the current and will reach
61.1 bln drams by 2005. Such is the forecast of commercial banks based
on their strategic plans of development. In particular, a 60.2% growth
of the total capital will be secured due to the expected increase in
the undistributed profits to 14.4 bln drams, which totals 23.5% of the
capital, and 25% due to the raising of the authorized capital, which
will total 39.1 bln drams by 2005. Thus, according to forecasts,
investments by non-residents into the authorized capital will make up
2.4 bln drams within 2004, as a result the share of foreign capital in
the authorized fund will increase by 2.4 per cent reaching 45.7%. The
tendency towards growth of foreign capital in the authorized one will
continue till 2007, reaching 49.2%. Alongside with this, a 33.6%
growth in the undistributed profits is expected, which will reach 21.2
bln drams by 2007.

By 2007, the total capital of Armenia’s banking system will reach 89.6
bln drams, in particular, as compared to the beginning of 2004, the
growth of this indicator will total 83.4%, 34% of which will be the
share of the authorized capital, 57.5% that of the undistributed
profits. In the given period of time, total capital of six commercial
banks will exceed $10 mln, that of the two banks $8-10 mln, the
capital of four banks will total $6-8 mln, that of the remaining 6
banks – $5 mln.

Capital-aggregate assets ratio will reach 18.1% by 2005 and 21.5% by
2007, meanwhile, this indicator was 17.1% at the beginning of 2004.

Transitions Online, Czech Republic
9 August 2004

Frozen Conflicts: Time to Challenge Russia

by Robert Cottrell

The frozen conflicts in Moldova and the southern Caucasus are becoming
top-level issues – and if the EU and the next U.S. president apply the right
pressure, Russia will change its position.

To call South Ossetia a “rebel region” or a “breakaway province” of Georgia
flatters it with the language of political struggle. Better to think of it
as a Russian-backed smuggling racket with a large piece of land attached.
The sooner the land returns to Georgian control, the better for everyone.
Georgia has an interest in South Ossetia’s peace and prosperity. Russia has
none.

Of the four “frozen conflicts” in the Black Sea region, that of South
Ossetia has the merit of being the most straightforward. The separatist
“government” now in place there has nothing to be said for it at all,
whatever the factors that sent South Ossetia to war with Tbilisi more than a
decade ago. The presence of Russian “peacekeeping” forces, backing up the
South Ossetian authorities, ensures the continuation, not resolution, of
this conflict within Georgia.

The case of Transdniester, in Moldova, is almost as straightforward. There,
too, Russian troops and Russian diplomacy prop up an illegal separatist
regime that divides and cripples the country. They obstruct, rather than
facilitate, a constitutional settlement giving Transdniester extensive
autonomy, to which Moldova would readily subscribe.

A third frozen conflict, over Abkhazia, another rebel province of Georgia,
is comparable to that in Transdniester. Abkhazia’s history also gives it a
more persuasive claim to some form of special political status. Georgia is
ready to talk. But, again, by sponsoring and protecting an Abkhaz government
that appears to live mainly off smuggling, Russia obstructs a better
solution.

The fourth frozen conflict, over Nagorno-Karabakh, is different again.
Russia has an influence here, but so far a more constructive one, as
Armenia’s main political ally. Karabakh, an Armenian-populated part of
Azerbaijan, has formed a de facto union with Armenia since winning a war
of secession from Azerbaijan in 1994. The absence of a permanent
settlement stunts the economic and political development of Armenia and
Azerbaijan, and leaves both vulnerable to fresh waves of nationalism and
militarism.

TOP-LEVEL PROBLEMS…

At long last, these four frozen conflicts look set to attract the attention
they deserve–which is a step toward solving them. There are several reasons
for making this guardedly optimistic claim.

One is the election of President Mikheil Saakashvili in Georgia, following
last November’s “rose revolution” when crowds fed up with corruption and
vote-rigging drove out Eduard Shevardnadze.

Previously, the Caucasus had had no leader capable of capturing America’s
attention, still less its enthusiasm. (Shevardnadze had, at most, the
sympathies of some Washington veterans, not for his record in Georgia but
for his earlier role as Gorbachev’s foreign minister.)

Saakashvili has the charm and energy of youth, the advantage of good
English, and a clear commitment to liberal democracy, which he proposes to
apply to the whole of his country. His arrival on the scene, his popularity,
and his policies offer living proof that things can go right in the southern
Caucasus. That matters a lot to foreign policymakers, who need to believe
that success is at least possible before they get involved in any problem.

A second factor that may help thaw the frozen conflicts is the decline of
Western confidence in Russia. Until now the West has allowed Russia the lead
role in managing (or, rather, mismanaging) the problems of Moldova and the
Caucasus. But the Yukos case, together with the continuing Chechen War and
President Vladimir Putin’s suppression of free broadcast media, have
persuaded Western governments that Russia is moving away from them in its
political values and toward more authoritarian ones. They cannot trust its
intentions, as they tried to do when Putin came to power.

President George Bush’s freedom to review his Russian policy has been
hampered by his absurd declaration three years ago that he saw into Vladimir
Putin’s soul and knew he could trust the man. But, embarrassing as it may be
for Bush personally, the U.S.-Russia relationship has been getting so much
less trusting over the past year or two that a new and tougher U.S. policy
can only be a matter of time. The United States will certainly move in that
direction if John Kerry wins this year’s presidential election and if his
administration begins, as new administrations usually do, with a skeptical
review of the policies of its predecessor; and it will probably do so if
Bush wins and appoints a new secretary of state.

A third factor pushing frozen conflicts up the transatlantic policy agenda
is the eastward enlargement of NATO and the European Union, coupled with the
heightened U.S. interest–after 9/11 and the wars in Afghanistan and
Iraq–in what it calls the Greater Middle East, with Turkey at its
northwestern corner.

Moldova and the countries of the southern Caucasus suddenly find themselves
a center of strategic interest. They are neighbors of NATO and future
neighbors of the EU. As such, their stability must be watched and nourished.
They are a platform for displaying and projecting Western values to the
south and east.

The fact that Europe and America now have a clear reason to want these
countries as reliable allies gives an equally compelling reason to want an
end to the frozen conflicts, which destabilize these countries from within
while also posing wider threats. A recent study from the U.S.-based German
Marshall Fund describes the conflict zones as “unresolved fragments of
Soviet Empire [which] now serve as shipping points for weapons, narcotics,
and victims of human trafficking, as breeding grounds for transnational
organized crime, and last but not least, for terrorism.”*

… DESERVE TOP-LEVEL DIPLOMACY

Of all the frozen conflicts, it is Karabakh that has so far come closest to
a solution, in 2001. The Azeri president of the day, Heidar Aliev, died
before he had quite overcome his hesitations, but the broad outlines of a
deal remain clear to both Armenia and Azerbaijan.

Broadly speaking, Azerbaijan would cede Karabakh to Armenia. In exchange,
Azerbaijan would get back other territories that Armenia has occupied since
the civil war, plus a narrow corridor of land across Armenia, giving
Azerbaijan access to its exclave of Nakhichevan, which is wedged between
Armenia and Iran.

The deal will be done when Ilham Aliev, the new president of Azerbaijan, has
the self-confidence to do it–unless Russia interferes, worrying that peace
and stability would draw Armenia, its main ally in the southern Caucasus,
too close to the West. Russia could use its considerable military and
economic leverage within Armenia to that end; or it might hint at tilting
its foreign relations in favor of Azerbaijan, reawakening Armenia’s fears.

Karabakh is a special case. Russia’s role there is important, but secondary.
For the other three frozen conflicts, persuading Russia to cooperate will be
three-quarters of the work needed to find a solution: the regimes in
Transdniester, Abkhazia, and South Ossetia survive thanks only to Russian
military and diplomatic support.

Russia is not making it easy. As it retreats from democracy, so its
political workings become more opaque, and its true intentions even harder
to discern. But whatever the mix of signals Russia sends out, they have one
fairly constant theme. It is the desire for respect and authority in the
world. So this is the front on which the West should challenge Russia.

The West should tell Putin, directly and preferably publicly, that Russia’s
proclamations against crime and terrorism and secessionism elsewhere in the
world cannot be taken seriously as long as Russia goes on sponsoring
criminal regimes that undermine regional security and cripple legitimate
governments in its own back yard. It should say that the miserable bit of
local leverage that Russia gets from manipulating the frozen conflicts in
Georgia and Moldova is far less than the wider respect and authority that it
forfeits by doing so.

The West needs to put the case in exactly those blunt terms if it wants to
make Russia shift its position. Untruth and evasion are an integral part of
Russian foreign policy. Challenging those untruths and evasions is the
necessary first step toward changing the realities they obscure.

Russia will shift its position, if pressed in the right way, because
Abkhazia, South Ossetia, and Transdniester don’t really matter very much to
it in the end. A few crooks in Russia profit from their rebellion
commercially, and a few nationalists in the Russian Duma politically. But
they are not worth much of Putin’s political capital. If these problems can
be taken to the top, they will be settled more easily than by argument at
lower levels, where narrow lobbies fight their corners.

This top-level diplomacy will be a job mainly for the United States, whose
president can command Putin’s attention in a way no European leader can. But
the European Union has much complementary work to do.

First, the EU must echo America’s political message. Second, it must follow
through on the idea of its “New Neighborhood” policy, offering the Black Sea
countries more access to EU markets and more EU aid, in exchange for
good-government reforms. Third, it must use its leverage with Turkey, a
candidate for EU membership, to persuade Turkey to normalize relations with
Armenia. If Turkey were to reopen its borders to Armenia, which it closed as
a gesture of support for Azerbaijan, it would reduce Armenia’s siege-induced
dependence on Russia, give Armenia’s economy a boost, and so encourage
conditions for a Karabakh peace deal.

An argument with Russia over the frozen conflict zones will be doubly worth
having, because by winning it, and by helping Georgia and Moldova emerge as
normal countries, the West will help Russia, too. It can only improve
Russia’s security and prosperity to have strong and settled states on its
borders. Russia half-knows that, too, but needs to be prodded into acting on
it. The year or two of hard haggling needed for the West to change Russia’s
behavior would be time well-spent.

* see: “A New Euro-Atlantic Strategy for the Black Sea Region,” ed. R Asmus,
K Dimitrov, J Forbrig; GMF, 2004; Page 21. The book is also available in
PDF.

—

Robert Cottrell is The Economist’s correspondent for Central and Eastern
Europe, and a member of TOL’s advisory board. A former Moscow correspondent
for The Economist and for the Financial Times, he visited Georgia and
Armenia in July.