GOVERNMENT GRAVITATES IN RUSSIAN ORBIT.

Armenia’s Prime Minister Aram Sarkisian headed a governmental delegation to Moscow on a “working visit” on April 27-29. The unusually extended visit was Sarkisian’s second since last December. Flanking him was the defense minister, Lieutenant-General Vagharshak Harutiunian, foremost supporter of the Russian line in foreign policy and of the Sarkisian side in the internal power struggle in Armenia. Russian President-elect Vladimir Putin, who had conferred with Sarkisian officially last December while prime minister, declined to do so this time, undoubtedly to avoid the appearance of taking sides in the conflict which pits Sarkisian’s camp against Armenian President Robert Kocharian. Although the subject could not have failed to come up during Sarkisian’s visit, the Kremlin let it be known that Putin and Sarkisian only had a telephone conversation.

According to preliminary reports, Russian Defense Minister Igor Sergeev and Harutiunian agreed that Armenia would host some of the Russian troops which are due shortly to begin withdrawing from Georgia. The November 1999 summit of the Organization for Security and Cooperation in Europe required Russia to evacuate and hand over the Vaziani and Gudauta bases to Georgia in 2001. According to military sources in the Armenian governmental delegation in Moscow and in the Defense Ministry in Yerevan, the Armenian and Russian general staffs are currently discussing the logistical and financial terms for the transfer of up to one division of Russian troops from Georgia to Armenia. If thus rebased, those troops would supplement, not replace, Russian troops already based in Armenia. Such a redeployment would be viewed with concern by Turkey and with alarm by Azerbaijan, causing the latter country to redouble pleas for support from NATO countries.

In the economic negotiations, Russia (represented by First Deputy Prime Minister Mikhail Kasyanov) displayed leniency toward debtor Armenia. The Russian government will only call in US$5 million this year, out of the US$112 million worth of Armenian state debts to Russia. It will, moreover, accept reimbursement through Armenian goods, mostly to be used for post-war reconstruction in Chechnya, in the expectation that this form of repayment would also generate industrial orders and employment in Armenia. Although the word “cement” did not immediately surface, it should come as no surprise if the state-owned Ararat Cement Factory, run by the Sarkisian family in their native district, will profit from this arrangement (see the Monitor, November 5, 1999). Aram was that factory’s director; his elder brother Vazgen was the country’s strongman; after Aram succeeded the late Vazgen as prime minister last year, the third brother, Armen, took over the cement factory.

Moscow, furthermore, accepted to recalculate Armenia’s arrears for natural gas to US$20 million, instead of the US$30 million figure which had officially been cited the preceding week and which Yerevan termed “a misunderstanding.” The creditor is Gazprom’s affiliate Itera, which holds a monopoly on gas deliveries to Armenia. Cash-strapped like its parent company, Itera had the preceding week suspended gas deliveries to Armenia due to the mounting debts, but resumed the deliveries on April 24 just before Sarkisian’s visit to Moscow. The two countries are now supposed to finalize a schedule of repayment in cash and goods.

Russia’s Atomic Energy Minister, Yevgeny Adamov, encouraged the Armenian side to resist international demands to shut down the Soviet-era Armenian Nuclear Power Plant at Medzamor by 2004. The two aging nuclear reactors are considered unsafe by most international experts, by Armenia’s neighbors and by many in earthquake-prone Armenia. Adamov, however, blamed “outside forces interested in shutting down nuclear power plants on CIS territory. This sort of thing is happening to Lithuania’s Ignalina nuclear power plant, to be closed under foreign pressure [a reference to the European Union]. There is no need for Armenia to follow that example.”

In Yerevan last week, the pro-Sarkisian parliamentary majority handed Moscow a success and Kocharian a defeat by removing Armenia’s four electricity distribution networks from the privatization program and leaving them in state ownership. The parliamentary majority made this move promptly after a Russian consortium of the Itera and Rosenergoatom companies had lost a tender to privatize the four networks, leaving four Western companies in the contest. In the wake of that move, with Itera as sole gas supplier and with Medzamor in continued operation with the assistance of Rosenergoatom, the stage seems set for undiminished Russian control of Armenia’s energy sector for the time being (Izvestia, AFP, April 28; Noyan-Tapan, Snark, Armenpress, Mediamax, Itar-Tass, AFP, April 28-30).

The Monitor is a publication of the Jamestown Foundation. It is researched and written under the direction of senior analysts Jonas Bernstein, Vladimir Socor, Stephen Foye, and analysts Ilya Malyakin, Oleg Varfolomeyev and Ilias Bogatyrev. If you have any questions regarding the content of the Monitor, please contact the foundation. If you would like information on subscribing to the Monitor, or have any comments, suggestions or questions, please contact us by e-mail at pubs@jamestown.org, by fax at 301-562-8021, or by postal mail at The Jamestown Foundation, 4516 43rd Street NW, Washington DC 20016. Unauthorized reproduction or redistribution of the Monitor is strictly prohibited by law. Copyright (c) 1983-2002 The Jamestown Foundation Site Maintenance by Johnny Flash Productions