By Atom MarkarianA regional bank’s Turkish president has denied political implications behind the small amount of crediting being issued to Armenia – one of its eleven member states.
In a press conference following the 7th annual meeting of Black Sea Trade and Development Bank (BSTDB) governors that ended in Yerevan today Mustafa Gurtin said that unlike the Black Sea Economic Cooperation, which is a political organization, the BSTDB is a financial institution.
“If we start fighting among ourselves at least theoretically we can go bankrupt,” he said.
“Introducing politics, even diplomacy, in the Bank’s operations is the best way leading towards a disaster.”
Armenia is the chair in the BSTDB Board of Governors this year and the governor is Finance and Economy Minister Vardan Khachatrian.
The Black Sea Trade and Development Bank (BSTDB) is an international financial institution established in 1998 by 11 Black Sea basis countries, including Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine.
With an authorized capital of over $1.4 billion, the Bank based in Thessaloniki, Greece, supports economic development and regional cooperation by providing trade and project financing, guarantees, and equity for development projects supporting both public and private enterprises in its member countries.
Despite its significant share of capital in the Bank, Armenia still benefits insignificantly from its projects.
Black Sea Bank President Mustafa Gurtin, of Turkey, gives a controversial explanation to this.
“We started that experience three years ago. Then we were having real difficulties in finding suitable projects to finance here in Armenia,” he told RFE/RL.
In 2004 Armenia managed to get credit of only $2 million, which is nearly five times less than the country’s capital in the Bank.
The Bank is still working in the red. In 2004, the Bank suffered a loss of about $300,000, while in 2003 it was nearly $5 million.
Despite Gurtin’s assurances of the absence of political implications in the Bank’s activities, Azerbaijan’s representatives did not attend the Yerevan meeting.
But it didn’t prevent the rest 10 governors to decide that the next governor will be Azerbaijan and the next annual meeting of the Bank will be held in Baku.
Another controversy arose over the election of the Bank’s President.
The BSTDB President is to be elected every third year. Russia demands that this rule be respected and even proposed its representative.
“Turkey insists that there has been this agreement with other large countries since the establishment of the bank. Now Russia motivates that there is no such thing in the regulations,” Finance and Economy Minister Vardan Khachatrian explained, adding that the solution to this issue has been postponed.
Asked whether this controversy may affect the future of the Bank, the minister said:
“The BSTDB is a viable institution and it is unlikely that the differences between Russia and Turkey will result in the Bank’s collapse.”
The BSTDB nevertheless finances one project in Armenia – a $4 million crediting program for small and medium-sized enterprises realized jointly with the Izmirlian Foundation.
“In the three years since I first came to Armenia looking for projects, lots of things have changed for the better. We are more than glad to see that,” says the Turkish businessman, adding that the proofs of this improvement can be seen in the streets of the Armenian capital.
Gurtin hopes that they will not have problems in terms of financing suitable projects in Armenia in the coming years and as a proof mentions that the annual meeting of governors was followed by the singing of a $500,000-worth credit program with two Armenian food producing companies - Valetta and Oval.
Loans will be issued for five years at an annual interest rate of 9 to 11 percent.