By Emil Danielyan
The governments of Armenia and Russia said on Saturday they have agreed the main terms of a scheme to settle Yerevan’s $94 million debt to Moscow after months of negotiation.
Officials in Yerevan publicized what they said is the final list of enterprises that will be handed over to Russia as part of the deal. But it remained unclear whether the Russians have agreed to write off Armenia’s entire debt in exchange for that.
Details of the deal were due to be unveiled by Russian Deputy Prime Minister Ilya Klebanov and Armenian Defense Minister Serge Sarkisian at a news conference on Saturday. But it was cancelled after Klebanov unexpectedly left Yerevan early in the morning.
A spokesman for Sarkisian, Seyran Shahsuvarian, told reporters that the two men, who co-chair an bilateral commission on economic cooperation, “finalized” the assets-for-debt agreement late on Friday. He said the agreement encompasses Armenia’s largest thermal power plant located in the central town of Hrazdan, the Mars electronics factory in Yerevan and three research institutes that used to work for the Soviet defense industry.
Shahsuvarian said that the two sides have not yet determined the precise cost of the five entities and will finish their “calculations” in the first quarter of 2002. Asked about what proportion of Armenia’s debt will be written off, he replied: “Nothing is certain yet, the results will emerge after the joint audit [of the enterprises].”
“There will be separate documents for each of the enterprises containing results of the audit and other calculations and setting the procedures for their transfer,” he added.
Klebanov said on his arrival in Yerevan on Friday that the deal will cancel Armenia’s entire debt. But judging from the Sarkisian spokesman’s remarks, this will by no means be the case.
The Russians had reportedly pushed for the inclusion of the more lucrative Armenian mining companies and power grids in the repayment scheme.
Western donors were strongly opposed to the handover of the power grids. But they have approved in principle the Armenian government’s intention to repay the Russian debt with its business assets.
An official from the International Monetary Fund told RFE/RL last week that “in general the IMF is not against this approach.” Garbis Iradian argued that the deal will allow Armenia to save about $20 million budgetary funds each year and attract Russian investments in some of its stagnating industries. But he said the IMF is worried that the Russian companies that are likely to obtain Armenian equities are mostly state-owned.
“According to the information that we have, most of those enterprises are owned partially or completely by the Russian public sector. And this is against the spirit of privatization,” Iradian said.
Hrant Bagratian, Armenia’s former prime minister who presided over the start of the privatization process in the early 1990s, was much more critical of the swap agreement with Russia. “Either we are going to fool the Russians by giving them equity that is hard to convert into cash, or the Russians are going to fool us by getting hold of assets that we could have sold to others at a higher price,” Bagratian told RFE/RL in an interview.