Armenians see Russian economic takeover

Nov. 26, 2006
The Sun News
By NAIRA MELKUMIAN

YEREVAN, ArmeniaThe recent acquisition of Armenia's dominant telephone company by a Russian company is raising concerns here that Moscow is attempting to exert economic control over the republic it once controlled politically.

The purchase of a 90 percent stake in ArmenTel, which holds a monopoly on telephone and Internet service in Armenia, by the Russian company Vympelkom only serves to strengthen Russia's economic hold on major economic assets in the republic.

The sale was announced shortly after the return of Armenian President Robert Kocharian to Moscow.

It was during that trip that Russian President Vladimir Putin announced that he considered Russia's position as only the third-largest investor in Armenia, behind Germany and Greece, as "shameful."

The purchase, the latest in a series of Russian takeovers in key areas of the Armenian economy, comes as public attitudes toward Moscow are cooling because of the effect Moscow's economic blockade of neighboring Georgia is having on the Armenian economy.

Many here are also becoming increasingly worried by signs of rising xenophobia in Russia toward Caucasians in general and Armenians in particular.

Already, Russian companies own the major producers of electricity and natural gas, as well as the country's rail system.

"Just take a look," said Aram Manukian, a leading opposition politician. "The energy sector, communications, and the railway system have all been given to Russia. All this essentially weakens Armenia's independence."

But Defense Minister Serzh Sarkisian, considered by most to be the second most powerful figure in the government, has rejected such charges.

"You won't find to this day any examples of how Russian capital in Armenia has been used as a tool for political pressure," he said at a recent news conference.

Since the collapse of the Soviet Union in 1991, Russian companies have poured billions of dollars of investments into Armenia. Some contend it just makes good business sense.

"Russia's desire to become established in Armenia as the most stable country in the South Caucasus is understandable, as the attitude toward Russian business is better here than in Georgia," said political analyst Anna Harutyunian.

But Aram Sarkisian, head of the opposition Democratic Party, said the government should not have ceded control of a key industry so easily.

"All power-generating operations are effectively in Russia's hands," he said.

"There are no problems with Russia. That country is our ally and I am in favor of deepening cooperation with it. But the government should control our strategic facilities."

By and large, the average telephone user, who has long complained of poor service, doesn't seem to care who owns the company as long as service improves.

"It doesn't matter to me who the operator will be," said Suren Minasian. "Ordinary consumers just need easy, high-quality communications."

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Contact Melkumian, a journalist in Armenia who writes for The Institute for War & Peace Reporting, at 48 Grays Inn Road, London WC1X 8LT, U.K.

Note: Above are excerpts from the article. The full article appears here. Clarifications and comments by me are contained in {}. Deletions are marked by [...]. The bold emphasis is mine.