By Hrach Melkumian
An electronics plant in Yerevan handed over to Russia in payment of Armenia’s external debt has become part of the Russian military-industrial complex, its new executive director said on Thursday.
“From now on Mars is subordinated to the Russian industry ministry’s unit dealing with defense industry,” said the director, Radik Vanunts.
But he complained that its Armenian workforce’s lack of access to defense-related Russian documents is a serious impediment to the Mars company’s revival promised by the governments of the two countries.
Mars and four other state-run Armenian enterprises were placed under Russian ownership in 2002 in return for Moscow’s agreement to write off Yerevan’s $100 million debt accumulated since the collapse of the Soviet Union. The most valuable of those assets is Armenia’s largest thermal power plant located in the town of Hrazdan. The three other enterprises are research institutes that used to work for the Soviet defense industry.
The Russians formally took over Mars in August 2003 and claim to have invested about $400,000 in the company since then. According to Vanunts, the plant has already manufactured five samples of “radio stations” designed by a Russian research center. But he said it continues to stand largely idle because of the sensitive character of its planned operations.
“Foreign citizens are not allowed to familiarize themselves Russia’s secret documents which is needed for us to produce one or another item,” he explained. He said the Russian and Armenian prime ministers discussed the issue at a recent meeting in Moscow.
Mars was built in 1989 by the Soviet government which invested hundreds of million of dollars in hard currency to install state-of-the-art Western equipment there. However, the ensued Soviet break-up condemned the factory to a long period of inactivity. It operated at a fraction of its capacity under its previous director, Stepan Demirchian.
The equities-for-debt agreement has been criticized by Demirchian and other leaders of the Armenian opposition who say that it will deepen Armenia’s economic dependence on Russia. The government, however, has strongly defended the deal, saying that large-scale capital investments promised by the Russians will breathe a new life into the moribund enterprises.
Still, Yerevan indicated its dissatisfaction with the agreement’s implementation last month when Foreign Minister Vartan Oskanian urged the Russian side to honor its investment commitments during a visit to Moscow.