Poti-Caucasus Ferry Route at Risk

Thursday, June 7, 2007, #106 (1373)
Messenger.ge, Georgia
By M. Alkhazashvili
(Translated by Diana Dundua)

Armenia remains Russia's strategic ally in the South Caucasus. Armenia's economic sector has been for a long time tied to the Russian market although, currently, the Kremlin has no transportation links with Armenia.

Transportation blockade aimed to "punish" Georgia during the "spy row" last October has negatively influenced Armenia in the process.

Last year, Russia unexpectedly blocked the Kazbegi-Lars customs checkpoint - the only customs checkpoint controlled by Georgians on the Georgian-Russian border. Russian authorities argued the checkpoints needed renovations. The route continues to be blocked and it hurts not only Georgia's interests but also those of Armenia.

The checkpoint at the Roki Tunnel is not well- controlled, linking Russia with Tskhinvali separatist authorities.

Russia hoped that the Georgian administration would get accustomed to travelers and cargo passing through separatist-controlled customs checkpoints. However, the Georgian government is not supporting this idea. As a result, Russia has lost its transportation link with Armenia.

The railway connection with Russia is very important for Armenia too. Armenian experts calculated that Armenian economic sector was losing USD 500 million annually because of the closed railway via Abkhazia.

A while back, Armenia actively demanded that Georgia open the railway, although they also asked Russia to allow Georgians to control the customs checkpoints at Psou (Russian-Abkhaz border) and the Roki Tunnel. The Russian authorities did not do this and later imposed a transportation blockade.

But to support Armenia's interests, Russia was obliged to help create the Poti-Caucasus ferry route.

This ferry route doesn't make much sense as the cost to transport cargo appears to be very expensive and if the railway via Abkhazia is reopened, no one will need it.

According to the Chairman of Armenian Union of Industrialists and Entrepreneurs Arsen Kazarian, currently the Poti-Caucasus ferry route is not functioning, as it does not have any cargo to load. He also expressed dissatisfaction about the tariffs for the route.

Armenian authorities worry that the new ferry route will not last long. The Swedish company Reserve Capital Enterprising Corporation that controls the ferry intends to sell 45 percent of the shares in the near future.

According to the Armenian newspaper Aiots Ashkher, the Swedish company wants to attract funding from Armenian companies to reduce its business risk and to decrease possible losses to the company as well.

The newspaper reports that when the Poti-Caucasus ferry route was opened, the company bragged that cargo transportation would not take much time and it would be cheaper compared to the Poti-Ilichevsk ferry route. Now it is clear that the cost is approximately the same and cargo arrives in 2 days instead of 7.

At the same time the owner of the Swedish company wants to be the sole cargo transporter from Yerevan to Poti and this could put Armenians in a difficult position. If the existing problems are not solved, the Poti-Caucasus ferry route will have no future.

Thursday, June 7, 2007, #106 (1373)

Poti-Caucasus Ferry Route at Risk
By M. Alkhazashvili
(Translated by Diana Dundua)

Armenia remains Russia's strategic ally in the South Caucasus. Armenia's economic sector has been for a long time tied to the Russian market although, currently, the Kremlin has no transportation links with Armenia.

Transportation blockade aimed to "punish" Georgia during the "spy row" last October has negatively influenced Armenia in the process.

Last year, Russia unexpectedly blocked the Kazbegi-Lars customs checkpoint - the only customs checkpoint controlled by Georgians on the Georgian-Russian border. Russian authorities argued the checkpoints needed renovations. The route continues to be blocked and it hurts not only Georgia's interests but also those of Armenia.

The checkpoint at the Roki Tunnel is not well- controlled, linking Russia with Tskhinvali separatist authorities.

Russia hoped that the Georgian administration would get accustomed to travelers and cargo passing through separatist-controlled customs checkpoints. However, the Georgian government is not supporting this idea. As a result, Russia has lost its transportation link with Armenia.

The railway connection with Russia is very important for Armenia too. Armenian experts calculated that Armenian economic sector was losing USD 500 million annually because of the closed railway via Abkhazia.

A while back, Armenia actively demanded that Georgia open the railway, although they also asked Russia to allow Georgians to control the customs checkpoints at Psou (Russian-Abkhaz border) and the Roki Tunnel. The Russian authorities did not do this and later imposed a transportation blockade.

But to support Armenia's interests, Russia was obliged to help create the Poti-Caucasus ferry route.

This ferry route doesn't make much sense as the cost to transport cargo appears to be very expensive and if the railway via Abkhazia is reopened, no one will need it.

According to the Chairman of Armenian Union of Industrialists and Entrepreneurs Arsen Kazarian, currently the Poti-Caucasus ferry route is not functioning, as it does not have any cargo to load. He also expressed dissatisfaction about the tariffs for the route.

Armenian authorities worry that the new ferry route will not last long. The Swedish company Reserve Capital Enterprising Corporation that controls the ferry intends to sell 45 percent of the shares in the near future.

According to the Armenian newspaper Aiots Ashkher, the Swedish company wants to attract funding from Armenian companies to reduce its business risk and to decrease possible losses to the company as well.

The newspaper reports that when the Poti-Caucasus ferry route was opened, the company bragged that cargo transportation would not take much time and it would be cheaper compared to the Poti-Ilichevsk ferry route. Now it is clear that the cost is approximately the same and cargo arrives in 2 days instead of 7.

At the same time the owner of the Swedish company wants to be the sole cargo transporter from Yerevan to Poti and this could put Armenians in a difficult position. If the existing problems are not solved, the Poti-Caucasus ferry route will have no future.

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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.

Has Putin Downgraded Sergey Ivanov?

2007.03.10
Georgian Times

A chilling warning below from Ramaz Sakvarelidze, an independent political expert and a former foreign affairs adviser to President Saakashvili,"there is a high risk that Armenia, with its current policy, will soon be deadlocked".

“Georgia does not owe anything to Armenia,” says Ramaz Sakvarelidze

Russian President Putin’s decision to appoint Sergey Ivanov Vice-Premier of Russia prompted analogies with Georgian President Saakashvili’s move when he re-assigned Defense Minister Irakli Okruashvili to the Ministry of Economy. The Georgian Times asked Ramaz Sakvarelidze, an independent political expert and a former foreign affairs adviser to President Saakashvili, to comment on Ivanov’s reassignment.

Q: What was the rationale behind the cabinet shuffle in Russia? Would you assess it as [Ivanov’s] advancement or downgrading?

A: The whole world would like to weigh in on it. No one has the exact answer. I think Putin got rid of him. Ivanov had a rising political rating and perhaps he would lay claim to Russia’s presidency, whether or not it complied with Putin’s preferences. Ivanov’s policy was based on the so-called ‘hawks’’ policy—or forceful methods in politics. This ran counter to Putin’s political track.

Putin’s policy is also based on aggression, but it is built on economic levers. Putin has taken a step that may seem pretty familiar to us: he reassigned a high-rated Defense Minister to a position which is honorable but also less popular. In his place, Putin appointed the Chief of Tax Authorities, who may uncover some financial disorders in the Defense Ministry and thus fund evidence of Ivanov’s criminal accountability.

On the other hand, the appointment of the Tax Authorities Chief to the Defense Structure suggests the ministry is going to lose its high profile. Ivanov slipped out of control – he was leading an independent policy that did not fully coincide with that of Putin.

Q: Should we blame Ivanov’s ‘independent playing’ for contributing to tensions between Tbilisi and Moscow?

A: Certainly, the Defense Ministry has done the lion’s share in deteriorating Georgian-Russian relations.

Q: Do you mean the Georgian Defense Ministry as well, or should we just pile blame on Ivanov?

A: The Georgian Defense Ministry also played its part. After the demise of the Soviet Union, the Russian Defense Ministry and Intelligence Administration [known as GRU in Russia – GT] took over control of the Caucasus region. The Defense Ministry of Russia was trying to restore the Russian empire, while Putin does not seek to reinstate the USSR. The Russian President hinges expansion plans on economic levers. This is why there is infighting between President Putin and the Defense Minister. Putin does not want the conflict to erupt, as that would foil his plans of entering Europe. If Russia plays a positive role in regional conflict resolution, Europe will welcome Russia with applause.

Q: Let us leave Russia for a while and talk about Georgian-Armenian relations. Quite recently, Georgia, Azerbaijan and Turkey signed a contract to launch a new regional railway project. Armenia again found itself an outsider and expressed its protests. Does that mean we are going to upset Armenia?

A: Georgia does not owe anything to Armenia. From history we remember that in critical periods when Georgia was dependent on Armenia, Yerevan took steps that served its national interests best but which would compromise those of ours. Abkhazian events and its foreign policy choices in Europe are good examples of this.

Georgia should not feel remorse if it prioritizes its national interests. Armenia should realize soon that it has to become friendlier towards its neighbors. It has yet to be made clear what position Yerevan had towards Armenian military groups during the Abkhazia war. I think Georgia has made more good-neighborly steps towards Armenia than it was necessary. All three republics of the South Caucasus should be interested in playing a common geopolitical game. Therefore, we should forget old stories and look ahead. Georgia should think of developing more harmonic relations in the future. The same goes for Armenia. Armenia is running out of time. If we are talking about Russia’s plans related to conflict settlement, then there is a high risk that Armenia, with its current policy, will soon be deadlocked.

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.

Friendship stretching 556 km to the East and 1441 km to the West

2007.02.15
Georgian Times
By Maia Edilashvili

The visit by Turkish Prime Minister Recep Tayyip Erdogan and Azerbaijani President Ilham Aliyev to Tbilisi on February 7 dominated last week's regional news as several documents were signed in Tbilisi.

Baku-Akhalkalaki-Kars - New Regional Railway

Georgian President Mikhail Saakashvili described the Kars-Akhalkalaki-Tbilisi-Baku Railroad Project as a "momentous geopolitical breakthrough” after negotiating with visiting Turkish and Azerbaijani leaders on February 7. He underlined that this new regional railway will link Asia with Europe to become “a modern version of the new Silk Road.”

Speaking at a joint news conference, Saakashvili said: “This is a project that will lead to a geopolitical revolution in our region because this will be a new line that will connect not only our three countries, but that will also interlink the Asian and European regions with each other.” The project, which he said would cost “several hundreds of millions” of U.S. dollars, will bring “several hundreds of billions” in revenues.

Under the agreement between Azerbaijan and Georgia, Azerbaijan will allocate USD 200 million to finance construction and rehabilitation works for the Georgian portion of Kars-Akhalkalaki-Tbilisi-Baku Railroad. Georgia will have to repay the loan with 1% annual interest within 25 years. Tbilisi says the revenues from the Baku-Akhalkalaki-Kars railway will be used to cover the loan. It is estimated that the railway will have the capacity to transport 15 million tons of cargo annually.

While evaluating importance of the new railroad project, Saakashvili also said that after their gloomy past, the South Caucasus countries have only one alternative, which is to strive jointly for development of the region. Not a single country of this region, he added, should refrain from the global projects.

Here Saakashvili referred to Armenia, who voiced vigorous objection to construction of the Baku-Akhalkalaki-Kars railway, claiming that the project will further isolate landlocked Armenia. In 2006, as a result of insistent lobbying by Armenian Diaspora groups, the US Senate banned US-based Ex-Im Bank from financing the construction of the project. As an alternative to the Baku-Akhalkalaki-Kars railway, Yerevan is pushing for reopening the already existing Kars-Gyumri-Tbilisi railway. Presently, the railroad between the Turkish town of Kars and Armenia’s Gyumri is not operational because of trade blockades imposed on Armenia by Turkey and Azerbaijan.

Objections to the Baku-Akhalkalaki-Kars railway have been expressed in Georgia as well. Namely, some politicians—including Georgia's former Foreign Minister Salome Zourabichvili—expressed fears that project will be economically unjustifiable in the long run as the launch of the Baku-Akhalkalaki-Kars railroad will redirect the flow of cargo from Georgia’s Black Sea ports of Batumi and Poti, which could lead to significant financial losses for Georgia.

However, authorities downplayed these concerns. Georgian Economy Minister Giorgi Arveladze has commented: “Additional transport routes are of especial importance for us against the continuing economic blockade from Russia.”

A 29 km-long railway will be constructed on Georgian territory from Akhalkalaki to the Turkish border, and a 192 km section of already existing railway infrastructure will be rehabilitated. According to officials, project implementation will take about two and a half years.

Georgia's Gag Concerns and Neighbours' Promises

Following talks with Georgian and Azerbaijani leaders in Tbilisi on February 7, Turkish Prime Minister Erdogan said: “We are doing our best to allocate 800 million cubic meters of gas to Georgia from the Turkish share by this July. This is our promise.”

In recent months, Tbilisi has been striving to convince Turkey to give up part of its Shah-Deniz gas quota in order to lessen Georgia's reliance on costly Russian gas, but a final agreement has not yet been reached. As the Turkish media reports, Ankara is reluctant to give the highly anticipated go-ahead because it already has commitments to deliver part of its Shah-Deniz quota to Italy and Greece.

However, Saakashvili said at the February 7 press conference that Georgia would start receiving Turkey’s share of gas. “First, I want to say that we will be receiving Turkey’s quota as soon as Shah-Deniz is put into operation. At the same time, Azerbaijan will gradually increase gas supplies to Georgia. This means that the share of more reliable and cheaper gas in Georgia’s gas balance will increase,” he stated.

Making all efforts to diversify its gas supplies, Georgia currently receives gas from three suppliers: Russia's Gazprom, at USD 235 per cubic meters of gas; State Oil Company of Azerbaijan (SOCAR), USD 120; and Azerbaijan's Shah-Deniz, USD 62.

Turkish Prime Minister Erdogan noted that Turkey, like Georgia and Azerbaijan, faces energy-related problems. “But it is important to solve these problems based on solidarity between these three countries,” he added.

Saakashvili pointed out that the most important thing is that the three countries have managed to put into operation an alternative energy supply route. “This is an alternative route for Europe (to transport) oil and gas… That is why we call this cooperation (between the three countries) historic.”

Shah Deniz gas is being pumped to Turkey, and onward to Europe through Baku-Tbilisi-Erzurum pipeline. The USD 4.5 billion Shah Deniz project started December of 2006 and is expected to produce 8.6 billion cubic metres of gas each year.

New terminal of Tbilisi International Airport Festively Opened

On February 7, Saakashvili, Aliyev and Erdogan solemnly cut red ribbons at the new terminal of Tbilisi International Airport. The leaders of all three countries noted that the airport of European standards would be a precondition for the development of tourism and business in Georgia.

Speaking at the inaugural ceremony last Wednesday, Saakashvili said, "This is one of the best airports in Europe. Two years ago I promised to have it and we have done it. This airport is much better than the airport in Brussels, or the airport in Munich."

Construction of the new terminal began in January 2006. Teamed up with the Turkish construction firm Urban, TAV Georgia, which is a daughter company of Turkey's TAV Airport Holding (Tepe-Akfen-Vie), has been in charge of the construction. According to the deal struck in the autumn of 2005, the Turkish company acquired the Tbilisi Airport on BOT (Build-Operate-Transfer) terms with 15-year management rights.

Overall, USD 90.5m has been invested in the project. EBRD and IFC have well provided a 54 m Dollar credit to TAV Georgia for the construction works. The latter has spent USD 65m on the reconstructed airport, which the investor says is the biggest, and has the most contemporary design in the region. The new glass-walled, square-shaped airport will handle 1500 passengers an hour and 2.8 m passengers a year. The new terminal has a total area of 24.000 square meters and three passenger-boarding bridges. Equipped with three telescopic platforms, it has a new round-the-clock checkpoint and a new luggage check-in system.

TAV is also constructing a new airport in Batumi, Adjara Autonomous Republic. The Turkish company has invested about USD 100 million into the two projects.

President Aliyev, who returned to Baku after the opening ceremony, was the first passenger to depart from the new airport.

New Project, New Memorial, New Triumph – Even in Football

On February 7, Azerbaijani, Georgian and Turkish leaders signed the Tbilisi declaration on Common Vision for Regional Cooperation between Azerbaijan, Georgia and Turkey. The declaration says that by realizing major regional projects involving oil and gas pipelines and a railway network, the three states are establishing “long-term and predictable” relations.

A declaration has been signed to launch the construction of an electricity transmission line that will link Azerbaijan with Turkey via Georgia. The document reads: “We agree to support the construction of a new electricity transmission line from the Republic of Azerbaijan through the territory of Georgia to the Republic of Turkey, as well as other appropriate projects, which will enhance electricity exchange between the Parties in future.”

On the right bank of the River Mtkvari in Tbilisi, Saakashvili and his Azerbaijani counterpart inaugurated a 5-meter memorial board for Heydar Aliyev, as a section of the river bank has been renamed after Heydar Aliyev, late President of Azerbaijan and the father of Ilham Aliyev. The monument is 556 km from Tbilisi to Baku and 1441 from Tbilisi to Ankara.

Georgian Parliamentary Speaker Nino Burjanadze commented that Heydar Aliyev was the political figure that "has contributed much in boosting strategic ties between Azerbaijan and Georgia."

After participating in the inauguration of the New Airport Terminal, Ilham Aliyev left for Azerbaijan, while the Georgian President and the Turkish Prime Minister attended a friendly Georgian-Turkish football match at the Boris Paichadze stadium, where Georgia's David Siradze scored the only goal of the game to defeat the Turkish National Turkish team 1-0.

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.

The Caucasus: where the east meets west and much, much more

Tuesday, February 13, 2007, #028 (1295)
The Messenger

The Caucasus is often spoken of as a gateway between Europe and Asia, and the 'east meets west' cliché is all too often applied. But is easy to forget that less than twenty years ago this wasn't so much the place where the east met the west, but rather where they faced each other down across one of the most heavily militarised borders in the world.

When President Saakashvili signed the Kars-Tbilisi-Baku railway contract and a declaration on regional cooperation with the Turkish prime minister and the Azeri president last week he talked about Georgia's border with Turkey-"one of the most transparent borders in the world"-but he emphasised that when he was growing up, the only thing the Turks on the other side of the border knew of Georgia was an enormous searchlight preventing them seeing what was happening on the other side, and presumably searching for would be defectors attempting a night swim across the short stretch of water, and away from the oppression of the Soviet Union.

Indeed, visiting Batumi in the summer, it is hard to imagine that the tourist infested beach at Sarpi (and the considerably calmer one on the Turkish side, where Georgians can now sunbathe sans visa) used to be the easternmost extension of the Iron Curtain.

The president also talked about the new railway turning Georgia from a dead end to an integrated part of a network, and as such this link is the culmination of the process that started when the searchlight was switched off and the Turkish border opened for ordinary people. Georgia's western orientation and cooperation with its neighbours is turning the entire region from a divide into a bridge-and a profitable and self sustaining one at that.

The Baku-Tbilisi-Kars railway is a link in a chain that stretches from china, through the Caucasus and under the Bosporus to the Atlantic Ocean. The new route will be the shortest way for goods and people to traverse the Old World overland, and what's more, Turkey, Georgia and Azerbaijan are doing it all by themselves, with no help from outside. The three countries are forging a region out of what was for so long a frontier, and it is truly a cause for celebration.

And it was certainly an uphill struggle getting this railway started. As the route bypasses Armenia, and thus does not include all the countries in the region, America and Europe were not keen. Russia also opposed the railway, partly out of concern for its ally Armenia, but also because the new route may compete with Russia's Trans-Siberian. But, like the Baku-Tbilisi-Ceyhan oil pipeline-once derided as the 'pipeline to nowhere', and now an integral part of Europe's energy security architecture-the railway has confounded its critics, and will be ready for business in a few short years.

These projects, and this regional cooperation, mean the Caucasus is turning into a place much more significant than the place where east meets west: it is becoming the place where the east is bound up and interlinked with the west, the region that connects these outdated stereotypes, and thereby overcomes them. This can only be a good thing for all concerned.

Irrespective how much Georgia wants to sugar coat it and how much Armenia wants to downplay because it relies on Georgia to access to the world, the reality speaks otherwise. I see this as Georgia caving in to Turkey and Azerbaijan to bring Armenia to its knees in order for it to make concessions on the Genocide recognition and Nagorno Karabakh.

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.

OSKANYAN: GEORGIA IS STRATEGICALLY IMPORTANT TO ARMENIA

YEREVAN, February 9. /ARKA/. Georgia is a country of strategic significance to Armenia, Armenian Foreign Minister Vardan Oskanyan said Wednesday in Armenian National Assembly.

However, he said, it doesn't mean that Armenia, in turn, can be strategically important to Georgia.

Oskanyan said Georgia's importance is due to geography, since Armenia's all major transportation links go though Georgia's territory.

Commenting on Georgia's participation in Kars-Akhalkalaki-Tbilisi-Baku railway construction project that leaves Armenia on the sidelines, Oskanyan said that this fact wouldn't affect Armenian-Georgian relations.

In his words, Georgia displays restraint in this matter. The country decided to take part in the project because of its economic interests, to make cargo shipment cheaper. "This is Georgia's sovereign decision, which can't be influenced by Armenia", the minister said.

The railway is planned to be put into exploitation in two or three years.
The parties hope the railway's annual capacity to be 15 million tons of cargo. China and Kazakhstan are expected to join the project. M.V.-0--


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.

United Javakhk against construction Kars-Akhalkalaki-Baku railway

January 30, 2007
The Messenger

By M. Alkhazashvili
(Translated by Diana Dundua)

Javakheti Armenians in Samtskhe-Javakheti in southern Georgia live in severe poverty. Construction of the Kars-Akhalkalaki-Baku railway holds the promise of helping solve many economic and social problems in the area, but, as the railway does not serve the interests of Armenia, many locals are protesting its construction.

According to the Russian news agency Regnum the local Armenian organization the United Javakhk Democratic Alliance is against construction of the Kars-Akhalkalaki-Baku railway. Chair of the organization Shirak Torosian does not deny that this project will be economically profitable for Armenians living in the Javakheti region. But because the railway is against Armenia's interests he says they must protest its construction.

"Armenians living in Javakheti want Armenia to be powerful," explains Torosian, as quoted in the newspaper Rezonansi.

Minister of Economic Development Giorgi Arveladze commented on Torosian's statement, highlighting the profits the region would benefit from after the project's implementation.

If Georgia is conspiring with Turkey and Azerbaijan to isolate Armenia economically from the Caucasus region, how does it expect Armenians of Georgia to support them? This is more telling of Georgia's attitude than the Armenians who do not wish prosperity at the expense of impoverishing Armenia.

According to him, more than USD 300 million in investments will be put into the area, creating many new economic opportunities for the region, new jobs and closer cooperation with Tbilisi.

"Thus the Kars-Akhalkalaki-Baku railway construction is very significant for Akhalkalaki [Javakheti's main town] and for all of southern Georgia's development. It will provide the area with a better economic future and help it integrate into Georgia's economic life," Arveladze said.

Some argue that fighting against the project will perpetuate the Javakheti Armenians isolation from the rest of Georgia, deepening tensions and snubbing real opportunities to improve their economic livelihoods.

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.

Javakheti Activist Deported From Armenia

4, December 2006
ArmeniaLiberty
By Satenik Vantsian in Gyumri

An Armenian nationalist activist from Georgia’s restive Javakheti region was deported from Armenia on Monday shortly after being controversially handed a suspended one-year prison sentence in a trial denounced as politically motivated by his supporters.

A court in Gyumri found Vahagn Chakhalian, a young leader of the United Javakhk organization campaigning for the Armenian-populated region’s greater autonomy, guilty of illegally entering Armenia, dismissing his protestations of innocence. It backed prosecutors’ claim that he crossed the Georgian-Armenian border without a valid Georgian passport.

The court ruled that Chakhalian must return to Yerevan, his temporary place of residence, and stay there until the verdict’s formal entry into force. But witnesses said that as Chakhalian left Gyumri for the Armenian capital in a car he was apprehended by police and escorted to the Georgian border. His defense lawyer, Tigran Hayrapetian, told RFE/RL that local police officers showed him a written deportation order signed by the chief of Armenia’s national Police Service, Lieutenant-General Hayk Harutiunian.

Chakhalian, 24, was arrested on October 11 just hours after he, his parents, brother and another United Javakhk activist arrived in Armenia in a car and were reportedly stopped and beaten up by unknown men outside Yerevan. The activist, Gurgen Shirinian, sustained severe injuries and required hospitalization.

Chakhalian was released from custody two weeks later amid an outcry from a number of Armenian non-governmental organizations and 16 members of Armenia’s parliament. In a joint statement, the mostly opposition lawmakers accused the authorities in Yerevan of using the case to please the Georgian government which has been at odds with United Javakhk.

The violence and the ensued arrest also infuriated the radical group’s supporters in Javakheti. Dozens of them marched to the Armenian border to demand his release.

“I repeat that I never illegally crossed the border of the Republic of Armenia,” Chakhalian said in his concluding court remarks.

His mother Gayane also testified at the trial, challenging the prosecutors to explain why they did not level the same accusations against herself and the three other persons that entered Armenia with Chakhalian. “Why is it that only one of us is guilty of breaking the law?” she said. “Why don’t you try me as well?”

Hayrapetian, for his part, argued that they had no trouble passing through the Armenian border and customs checkpoints.

Chakhalian’s sympathizers link the case with United Javakhk’s rejection of the official results of the October 5 local elections in Javakheti that gave victory to Georgia’s governing National Movement Party. Alleging massive fraud, United Javakhk rallied hundreds of supporters in the regional town of Akhalkalaki. The demonstration turned violent, with the protesters seizing the local government building before being dispersed by police.

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.

RUSSIAN-GEORGIAN TENSION RAISE CONCERNS IN ARMENIA, BUT NO REAL IMPACT YET

CENTRAL ASIA - CAUCASUS ANALYST
Wednesday / November 15, 2006
Haroutiun Khachatrian

Armenia, a vulnerable country in both the geopolitical and geographical senses, stands to suffer serious damage due to the increasing tensions in the crisis in Russian-Georgian relations. The danger has several aspects. First, Armenia is a military ally to Russia, and risks to become separated from it by a potential member of NATO, which Georgia seeks to adhere to.

Second, the Russian-Georgian conflict, not to mention any instability in Armenia’s northern neighbor, would cut the most important communication link between Armenia and the outer world. As the land borders of Armenia with two of its neighbors – Azerbaijan and Turkey – are closed due to political reasons, Armenia can trade goods with the outer world only through Iran and Georgia, the latter serving more than half of Armenia’s foreign cargo turnover. Third, worsening Georgian-Russian relations could hinder vital supplies from Russia from reaching Armenia, first of all natural gas, which flows to Armenia through a pipeline crossing the territory of Georgia. Fourth, the large Armenian community of Georgia may be involved in the conflict, especially the Armenians living in the Samtskhe-Javakheti region of southern Georgia, whose living standards are poor and who are traditionally pro-Russian. The latter danger becomes more acute given the perspective of construction of the Kars-Akhalkalaki-Tbilisi railroad, which is to traverse the region, bringing fears among local Armenians that the region would fall into the sphere of Turkish influence. Finally, of vital importance for Armenia are not only its good relations with the immediate parties of the conflict, Georgia and Russia, but also with the western countries and in particular the United States. These relations might suffer should Washington protect Georgia more actively in its conflict with Russia.

Not surprisingly, the tension among Russia and Georgia provoked vivid discussions in the Armenian political elite. For the second time in less than a year, politicians – even those belonging to the parties of the ruling coalition – raised the issue of the necessity of a revision, or at least clarification, of the terms of the “Strategic alliance” with Russia. The first instance was in January, when Armenian politicians were surprised to learn that the “strategic partnership” with Russia did not protect Armenia from a sudden doubling of the price of the Russian natural gas. There is a consensus in Yerevan that in its actions, Russia does not always take into account the interests of its only ally in the Caucasus. The criticism was especially high after Konstantin Zatulin, a member of the Russian State Duma, said in an interview with a local newspaper that Armenia “does not support its strategic partner [Russia]” in its conflict with Georgia. If Armenian-Georgian relations are an obstacle for Russia’s relations with Armenia, we [the Russians] have the right to call on Armenia to choose: either you have normal relations with Russia or you have normal relations with Georgia,” Zatulin said.

The Armenian leadership has managed to escape such a pitfall, at least for the time being. The transport blockade of Georgian territory did not harm Armenian cargoes, as formally Russia banned only contacts with the Georgian transport operators, and Armenian businessmen never used their services. Ironically, Russia’s earlier actions had indeed hurt the interests of Armenian business, but this did not attract significant attention. It was the closure of the Verkhnii Lars (Upper Lars) checkpoint on the Russian-Georgian border last June, the only land link between Russia and Armenia. By closing it under the pretext of “repairs”, Russia sought to activate an alternative route through the territory of pro-Russian South Ossetia, not controlled by Georgian authorities. However, Tbilisi prohibited foreigners from using this route (and there were no other foreigners except Armenians which needed it), whereas the citizens of Georgia were free to use it. Thus, Armenian carriers were forced to switch to other existing options, namely, through the Black Sea ports of Georgia to Russia or Ukraine, causing another wave of grumble in Armenia. In any case, these latter routes were not affected by the Russian October sanctions against Georgia, and the Armenian businessmen did not suffer anew.

Armenia’s gas supplies are also unlikely to suffer, even if Georgia and Russia fail to reach a purchase agreement for the next year, similar to what happened last winter in the Ukraine. First, Georgia is unlikely to take gas set for Armenia, as this would be seen as an obvious hostile action in Yerevan. Second, in December, Armenia will inaugurate an alternative gas supply pipeline, from Iran, which can in principle fully cover the needs of Armenia, enabling Russia simply to cut its supplies through Georgia.

As for the Samtskhe-Javakheti issue, the surprise October arrest in Yerevan of Vahan Chakhalian, a radical leader of the Javakheti Armenians, was interpreted by most of experts as a gesture aimed to show the Georgian leadership that Yerevan would not support any actions capable to destabilize that sensitive region.

Yerevan has managed to keep stable relations with both conflicting parties, which was demonstrated in a series of recent contacts, including the Russian-Armenian summit meeting in Moscow in late October and a meeting between the foreign ministers of Armenia and Georgia, also in Moscow. The relations with Washington have not suffered either, as evident from the recent statements of American officials that the Millennium Challenge program of Armenia will not be interrupted despite the calls of human rights watchdogs.

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.

EU: Armenia, Azerbaijan, And Georgia Sign Accords

BRUSSELS, November 14, 2006 (RFE/RL) -- The EU today signed European Neighborhood Policy action plans with the South Caucasus countries of Armenia, Azerbaijan, and Georgia.

The agreements offer aid, improved trade, and more political cooperation in exchange for political and economic reforms.

But EU External Relations Commissioner Benita Ferrero-Waldner told RFE/RL, they don't even mean what the EU would call a "membership perspective."

"The neighborhood policy is not for membership. I have to say that very clearly. But at the same time, this is the policy of today. Therefore, the future is clearly not prejudged," Ferrero-Waldner said. "But these countries have to use this momentum now to do everything to get the experience that we have, the knowledge, the possibilities of cooperation. We want to help them, because best practices are there already. And the easiest thing is to look at what others have done in order to become successful."

'Ring Of Friends'

Brussels wants a "ring of friends," which eventually could include countries such as Israel, Jordan, Moldova, Morocco, and Ukraine.

Those countries would get access to the EU's vast internal market. In return, Brussels would get the promise of reforms -- and, ideally, the regional security that successful reforms would ensure.

Under the agreements, the EU offers economic help and help in reforming the justice, energy, education, health and other sectors.

'Frozen Conflicts'

Brussels has also said that the accords should help defuse separatist disputes in the three South Caucasus countries.

In Georgia, Abkhazia and South Ossetia are trying to secede, while Azerbaijan has a dispute with Armenia over the Nagorno-Karabakh region.

The foreign ministers of Armenia and Azerbaijan are meeting today to discuss Nagorno-Karabakh.

Azerbaijani Foreign Minister Elmar Mammadyarov says the Nagorno-Karabakh peace process is moving in the right direction:

Strategic Region

In recent years, the South Caucasus has gained greater strategic significance for the EU and the West.

Since its 2003 Rose Revolution, Georgia has pursued a more pro-Western course. It has made good headway with political and economic reforms -- although the problem of implementing legislation on the ground still remains. And in September, Georgia was offered an "intensified dialogue" with NATO.

Speaking today at the European Parliament in Strasbourg, Georgian President Mikheil Saakashvili praised closer ties with Brussels. He called for deeper EU involvement in Georgian political and strategic issues.

"At every negotiation, let's say on the conflict issue, everywhere there should be EU representatives present," Saakashvili said. "Georgia is certainly strongly in favor of EU involvement. We should make sure that in every energy issue [EU representatives] should be present, in a conflict issue they should be present, because energy is a European issue, a conflict issue is a European issue, wider economic cooperation is a European issue."

While Armenia has made some successful economic changes, its political reforms remain sluggish at best.

Azerbaijan is the region's exception. With huge oil and gas deposits, the country's economy is growing rapidly -- and expected to continue apace.

But questions remain about Azerbaijan's rampant corruption, dubious electoral practices, and rights abuses. Drunk on oil and gas, its detractors say, Azerbaijan can act with virtual impunity.

Standards For Energy?

And with the EU always ready to diversify its energy supply to avoid dependence on Russia, critics have said the union is prepared to compromise its own standards in exchange for access to Azerbaijan's vast energy reserves.

In an interview today with RFE/RL, EU foreign policy chief Javier Solana denied the charge: "Most of [the EU's] energy doesn't come from Azerbaijan. For us Azerbaijan is not a source of energy as other countries are. We would like Azerbaijan to develop because it's an important country and we would like Armenia to develop because it's [also] an important country."

The EU has defended its stance, saying that the countries in the South Caucasus are coming from different starting points -- and must be judged accordingly.

The EU's special representative to the South Caucasus, Peter Semneby, said it's better to embrace these countries than to leave them out in the cold.

"The problems would be larger if the two countries were left outside completely. That would mean that developments would be totally unpredictable; there would be immense dangers. The two countries are now included in a cooperative framework with the European Union which also includes a perspective for the future," Semneby said. "It would be much easier to control the risks in the short term, and in the longer term to find a solution based on mutual benefits in a new reformed neighborhood that will look very different from the one we have today."

(Interviews conducted in Brussels by RFE/RL Armenian Service director Harry Tamrazian and RFE/RL Azerbaijani Service acting Director Kenan Aliyev.)

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.

Armenia balancing between Russia and Georgia

Worsening relations between Georgia and Russia continue to pose a difficult problem for Armenia, as it tries to maintain some form of balance in its relations with the two sides.

By Haroutiun Khachatrian for Eurasianet (09/11/06)

The effect of these tensions for the Armenian economy remains a paramount concern. Armenian President Robert Kocharian’s 30 October – 1 November state visit to Russia, which included meetings with Russian President Vladimir Putin and Prime Minister Mikhail Fradkov, was a case in point. In remarks to reporters, Kocharian noted that while Russia’s transportation blockade with Georgia could pose difficulties for bilateral trade between Russia and Armenia, "serious [Russian] investment projects" would help compensate Yerevan for any economic damage done by the Georgian embargo, the ITAR-TASS quoted Kocharian as saying.

Those investments appear to be growing. Russian energy giant Gazprom’s acquisition of a controlling stake in the country’s gas distribution network and, through this, potential control over an Armenian section of an Iranian gas pipeline, its recent takeover of the fifth unit of the Hrazdan electricity plant, and Russian company Rusal’s modernization of aluminum manufacturer Armenal are among the most prominent of these "serious" investment projects. Unlike neighboring Georgia, Armenia will see its current US$110 per 1,000 cubic meters price for Gazprom gas frozen until 2009 in return for transferring ownership of the Hrazdan unit to the Russian company, the government has announced.

On 3 November, announcement was also made that the Russian firm VimpelCom has purchased a 90 percent stake in ArmenTel, the country’s main mobile telecommunications carrier. The government will retain the remaining 10 percent stake in the company.

Despite these signs of robust business ties, concerns about Russia’s position toward Armenia have been growing since mid-October, when nationalist Russian parliamentarian Konstantin Zatulin, a member of the pro-Kremlin party United Russia, protested at a 17 October meeting of the Russian-Armenian inter-parliamentary commission in Yerevan that Armenia "does not support its strategic partner [Russia]" in its conflict with Georgia. Zatulin, who has previously cast himself as pro-Armenian on the issue of the disputed territory of Nagorno-Karabakh, called on Yerevan to choose between "normal relations" with Russia or Georgia, the daily newspaper Haykakan Zhamanak reported.

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Zatunin’s statements met with almost unanimous protest by the Armenian political elite, although some, like Armen Ashotian, a member of the governing Republican Party, have stressed that the remark is the view of one politician, not the official position of the Russian Federation.

Nonetheless, Armenian officials have continued to address the Russian-Georgian dispute cautiously. "Current Russian-Georgian relations are these countries’ internal problem," Prime Minister Andranik Margarian said at a joint press conference on 24 October with Belarusian Prime Minister Sergei Sidorski. "Armenia […] should not interfere with the resolution of this problem."

Margarian, however, has stated that Armenia is ready to "help with the [...] solution" for the impasse between President Putin and Georgian President Mikhail Saakashvili if asked by Russia or Georgia.

So far, neither Moscow nor Tbilisi has shown interest in mediation. At a 1 November meeting on the sidelines of a Moscow gathering of the Organization of Black Sea Economic Cooperation, Armenian Foreign Minister Vardan Oskanian and Georgian Foreign Minister Gela Bezhuashvili met, but details on the conversation were scarce. In a succinct statement, the Armenian Foreign Ministry stated that the two men discussed "issues of bilateral relations, the influence of Russian-Georgian relations on the region and possibilities for softening the current tension," the news service Mediamax reported.

Before the talks, Georgian Ambassador to Armenia Revaz Gachechiladze, in a 30 October meeting with National Assembly Chairman Tigran Torosian, thanked Armenia for its "balanced approach."

Greater speculation about Armenia’s relations with Georgia and Russia has surfaced in media coverage of the 10 October arrest of Vahagn Chakhalian, one of the leaders of the Miasnakan Javakhk, or United Javakhk, non-governmental organization in Georgia’s predominantly ethnic Armenian region of Samtskhe-Javakheti. Chakhalian was jailed for two months pending trial for having allegedly "illegally" crossed Georgia’s border with Armenia. On 30 October, he was released. Some local publications have argued that the release was at Russia’s request.

Chakhalian’s arrest surprised most Armenians since no visa regime exists between the two states; the arrest of an ethnic Armenian for entering Armenia struck many as strange. Some members of the opposition, including the Dashink Party of former Nagorno-Karabakh warlord Samvel Babayan, said the arrest had been made at the request of Tbilisi officials who wanted to curtail United Javakhk’s support for ethnic Armenians in Samtskhe-Javakheti. (The leader of a rival non-governmental organization to Miasnakan Javakhk has gone even further, charging that Chakhalian was working with Georgian special services to destabilize the region and push ethnic Armenians out of the area.) The movement’s opposition to the construction of the Kars-Tbilisi-Akhalkalaki railroad, which will connect the region with Turkey, was seen as the reason for such action.

Both pro-government and opposition publications share strong opposition to this project. Yerevan fears the line would further isolate Armenia, currently hemmed in by blockades on its borders with Turkey and Azerbaijan. On 19 October, the pro-government daily newspaper Hayots Ashkharh published an analysis that argued that the railroad would damage ties between Armenia and Georgia, and urged the Saakashvili government not to harm its relations with Armenia for "a US$200 million bribe by Turks and Azeris."

The opposition newspaper Haykakan Zhamanak, a pro-Western publication close to former President Levon Ter-Petrossian’s Armenian National Movement, has taken a different approach. In its 19 October issue, the paper argued that Russia could use Miasnakan Javakhk to put pressure on Georgia. The newspaper Iravunk followed that line on 3 November, saying that Miasnakan Javakhk’s "strongly pro-Russian" position and activities are "certain to worry Armenian Prime Minister […] Margarian and [Defense Minister] Serzh Sarkisian" as they pursue dialogue with the West.

The government, to date, has not responded to the allegations.

EurasiaNet provides information and analysis about political, economic, environmental, and social developments in the countries of Central Asia and the Caucasus, as well as in Russia, the Middle East, and Southwest Asia. The website presents a variety of perspectives on contemporary developments, utilizing a network of correspondents based both in the West and in the region. The aim of EurasiaNet is to promote informed decision making among policy makers, as well as broadening interest in the region among the general public. EurasiaNet is operated by the Central Eurasia Project of the Open Society Institute.


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.