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By Emil Danielyan

The presidents of Russia and Armenia finished two days of talks in Yerevan on Saturday with upbeat forecasts about the development of bilateral commercial links. Presidents Vladimir Putin and Robert Kocharian signed a ten-year program of economic cooperation which they said could lead to the integration of the two economies. However, they announced no final deal on which concrete Armenian enterprises will be fully or partially transferred under Russian control in payment for Yerevan’s $100 million debt.

“The visit is extremely important for further developing the Armenian-Russian relationship,” Kocharian declared.

The two men said in a joint communiqué that the talks proceeded in an “atmosphere of full mutual understanding and agreement.” Speaking at a joint news conference, Putin stressed their “convergence of views” on issues of international security, including the need to strengthen the Russian-dominated defense alliance of six former Soviet states.

“Russia views Armenia as a reliable partner,” he said, underscoring the latter’s significance for Moscow’s continued influence in the region.

The Russian leader arrived in the Armenian capital on Friday on an official visit aimed at expanding the already close ties between the two allies. Officials from both countries say they want to complement their political and military cooperation with closer economic relations.

Russia accounted for less than a fifth of Armenia’s external trade -- nearly $100 million -- in the first half of this year, considerably less than the European Union. Much of this was supplies of Russian natural and other energy resources.

Yerevan now plans to give the Russians substantial stakes in several state-run enterprises of its military-industrial complex and the energy sector. The two presidents reached no specific agreements on that but pledged to work out the list of those state-run businesses before the end of the year.

“I hope that we will be able to tell you about a [final] solution before the end of this year,” Putin told reporters. According to Russian Deputy Prime Minister Ilya Klebanov, the parties may strike the deal as early as next month. Klebanov said it will lead to the creation of joint ventures involved in the production of “electronic parts” and the energy sector.

“This will result in the start of a serious industrial growth in Armenia, “ he added.

Armenia used to play an important role in the Soviet defense industry. Many of its large factories and research centers have been in decline since the collapse of the empire and its command economy. Two of them, the Yerevan-based Mars Electronics firm and the Institute of Mathematical Machines, are strongly tipped to become Russian-owned.

The official Russian delegation accompanying Putin comprised a large group of businessmen, including top executive’s from Gazprom, RAO UES and other energy companies showing interest in the Armenian energy sector. Their meeting with Armenian energy officials resulted in the setting up of a special “coordinating council” tasked with overseeing joint energy projects. Russian Energy Minister Igor Yusufov said stronger involvement in Armenia is of “strategic importance” for his country.

In Klebanov’s words, RAO UES, Gazprom and its ITERA subsidiary intend to take part in the upcoming international tender for Armenian power distribution networks. All of them were defeated in the previous bidding which ended in failure in April. ITERA will this time team up with the Spanish utility Union Fenosa, he said.

Kocharian assured reporters that the assets-for-debt scheme was suggested by the Armenian side and denied the media speculation that it is part of the Kremlin’s efforts to make his country more dependent on Russia. He said: “This proposal was made by ourselves. Nobody is trying to foist anything upon us.”

“We must realize that we are talking about a mutually acceptable deal and not about a solution to one’s problem at the expense of the other,” he said.

Putin also sought to reassure the Armenians that the deal will be beneficial for them. “It’s not about the debts, it’s about attracting Russian capital into the Armenian economy,” he said.

On the unresolved Nagorno-Karabakh conflict, Putin reiterated Moscow’s readiness to facilitate a compromise settlement of the conflict. “Russia will support any solution acceptable to both states (Armenia and Azerbaijan) and is ready to act as its guarantor,” he said.

The statement by the two presidents also referred to Tuesday’s terrorist attacks on the United States, saying that they highlighted the need for joint international efforts to fight “international terrorism.” Putin called for the creation of a new global security system to successfully cope with terror attacks similar to ones which rocked America. Putin said the existing system is no longer effective for combating international terrorism which he described as “the main threat of the new century.” He said it is therefore “unfair” to blame US security agencies for failing to stave off the terrorist hijackings of four passengers jets.

In a Wednesday statement made on behalf of Armenia, Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan, Kocharian said the six signatories to the Collective Security Treaty are ready to provide support for a global fight against terrorism. Putin, however, sounded cautious about Moscow’s support for possible retaliation attacks on suspected terrorist targets. He argued that the world’s leading powers must not “act like bandits” and strike “from behind the back.” He said the international community should take anti-terrorist steps only after obtaining “trustworthy and reliable” evidence.

Earlier in the day the Russian leader laid a wreath at the Tsitsernakabert memorial to the victims of the 1915 genocide of Armenians in the Ottoman Empire and met with Catholicos Garegin II at his official residence in Echmiadzin.
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