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As Neighbors Fear Armenian Designs...An Embargo Is Biting But How Hard?


Business Week International Spotlight On Armenia

AS NEIGHBORS FEAR ARMENIAN DESIGNS...AN EMBARGO IS BITING -BUT HOW HARD?

The defining event of modern Armenian history was the massacre, verging on genocide, of up to 1.5 million Armenians in the eastern provinces of the Ottoman empire in 1915. Armenians around the world have not forgiven Turkey for the massacres. Today, the descendants of the emigres fervently root for the Republic of Armenia, the tiny nation that gained independence with the dissolution of the former Soviet Union, in its undeclared war with feighboring Azerbaijan over the disputed territory of Karabakh, a highland area inside Azerbaijan inhabited by ethnic Armenians.

Says Deputy Foreign Minister Gerard Libaridian: "Anyone familiar with Armenian history will understand that the Republic of Armenia will not tolerate any expulsions, pogroms, massacres, or genocides of Armenians again."

POINT MAN. Libaridian, like many other officials in the Armenian capital of Yerevan, is an American academic turned active patriot. He brushes aside suggestions that Armenians want to regain lands across their present borders: "We have no claims on anyone and wish to live in peace with all our neighbors." He is also the point man in negotiations with neighboring Azerbaijan over how to end the six-year war over Karabakh. Armenian officials insist that the Armenian state is not involved in the Karabakh conflict at all. Since the populace declared its desire to join Armenia in 1988, the Karabakh conflict has evolved from cheap pistols and shotguns to something akin to a conventional war, replete with tanks, aircraft, and surface-to-surface missiles. Upwards of 20,000 have been killed to date, leaving Azerbaijan devastated--and with the Armenians (according to Yerevan, only the Karabakh Armenians) occupying some 20% of Azerbaijan. An uneasy ceasefire held over most of the summer and negotiations over Karabakh's future status continue.

Yet the cost to Armenia for its support--tacit or otherwise--has been high. Energy supplies have been reduced to a third of normal because Azerbaijan has cut off natural gas shipments passing through its territory, and industry has been largely stilled. The winter of 1993-94 found the citizens of Yerevan shuffling around in great coats with candles in their pockets, increasingly dependent on international aid.

In fiscal 1993 and the first quarter of fiscal 1994, the U.S. gave Armenia $312 million--$91 per person--the highest per capita aid to any former Soviet republic. An additional tranche of $75 million was secured during President Levon Ter Petrossian's state visit to Washington in August.

U.S. aid to Azerbaijan, in contrast, has been blocked by Congress until Azerbaijan stops all aggression against Armenia and Karabakh--though all fighting for the past year has been well within Azerbaijan and outside Karabakh. Such one-sided U.S. support for Armenia worries other neighbors, who feel that if Armenia's de facto absorption of Karabakh is allowed, Yerevan's appetite for other traditional Armenian lands in Georgia or Nakhijivan might be whetted. Chief among the worriers are the Turks.

The Azeri embargo is a constant theme in any conversation in Armenia and is cited as the reason why international aid should be pumped into the land-locked nation of three million. While it is true that Armenia is suffering, some of the claims seem exaggerated. Last winter, the international press reported that all the trees in Armenia, including the botanical garden in Yerevan, were being cut down for fuel. This year, most appear to have regained full height.

But the energy crisis is very real. One controversial solution is to reopen the Matsamor nuclear reactor. Located about 30 km south of Yerevan near a major earthquake fault line, the reactor was shut in 1988 and is viewed by Western experts as inherently unsafe. But the government is seeking Western aid to raise the $70 million needed to refurbish the plant.

The alternative, says Energy Minister Steve Tashjian--another American--is to court environmental disaster by the continued overexploitation of hydro-energy. The main source of this is Lake Sevan, which Yerevan says has dropped 18 meters over the past 30 years. Western observers point out that if the water had ever been at that level, Lake Sevan would inundate all existing roads, railway tracks, and towns along the shore.EDITED BY JOHN E. PLUENNEKE Thomas Goltz in Yerevan


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