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Armenia: Financial Leaders Praise Economic Plan

Armenian President Robert Kocharian spent most of last week in Washington and did not spend his time making speeches. Instead, he focused on his meetings with top U.S. political leaders and senior financial officials about his country's economy and the Nagorno-Karabakh dispute with Azerbaijan. But as RFE/RL's correspondent Andrew F. Tully reports, not everyone travelling with Kocharian was so quiet.

Washington, 3 July 2000 (RFE/RL) -- The government of Robert Kocharian, the president of Armenia, is winning high praise from world financial leaders.

Kocharian spent last week in Washington to meet with U.S. President Bill Clinton, Vice President Al Gore, members of Congress, and senior officials of the World Bank and the International Monetary Fund (IMF).

Kocharian's meetings focused on two subjects -- Armenia's dispute with neighboring Azerbaijan over Nagorno-Karabakh, and the state of Armenia's struggling economy.

Clinton linked the two during their meeting in the White House. According to U.S. National Security Council spokesman P.J. Crowley, Clinton told Kocharian that a lasting peace with Azerbaijan would go a long way toward improving Armenia's prosperity. Without peace, Clinton told Kocharian, he can expect few businesses -- foreign or domestic -- to feel confident enough to invest in his country, according to Crowley.

Nagorno-Karabakh -- an enclave in Azerbaijan that is populated mostly by ethnic Armenians -- has been a trouble spot since 1988. It led to brief armed conflict for the two countries in 1992. Since then, Armenian forces have occupied about 20 percent of Azerbaijan, and Azerbaijan has mounted a blockade against Armenia.

The conflict and the resulting blockade have had their effect on Armenia's economy by raising the cost of doing business. But they are not the only factors stifling private investment, according to Owaise Saadat, the World Bank's representative for Armenia. Saadat told RFE/RL that investors also face prohibitive business regulations -- some of them relics of the Soviet era -- and a legal system that, for example, does not ensure that business contracts are enforced.

Saadat calls the business-investment climate "very disappointing." He notes that there are 6 million Armenian expatriates in other countries -- mostly the U.S. -- who are influential and have the resources to invest in their native land -- but too often do not.

"We would like to see Armenia reap its potential, and it's not reaping its potential. And one of the reasons for that is constantly we hear that it's so difficult to do business there."

Nevertheless, Saadat says he is "cautiously optimistic" about the prospects for economic growth in Armenia. He says the World Bank views the Armenian economy as one of the best-managed among the countries of the former Soviet Union.

Saadat acknowledges that Armenia's economic reform program was interrupted by the attack on parliament in Yerevan on October 27 in which Prime Minister Vazgen Sarkisian and seven other people were killed. But on May 20, a new government was formed and political stability has returned. Saadat says the government's economic plan addresses the problems, and now it is time for the president to take action.

"I think if they keep on the reform track, if they accelerate it, they need to take some very bold decisions on governance, on corruption, on issues of civil service reform, on business environment. They have to improve the business environment."

Saadat's comments were similar to those of his counterpart at the IMF, Thomas Wolf. Wolf stopped short of endorsing the Armenian government's economic plan outright. But he said the program addresses all the right problems in the right ways. But Wolf said it is up to Armenia to decide when it is ready to act on the program.

The Armenian president's visit to Washington was clearly intended to focus on his meetings, not to make speeches. He spoke publicly only briefly at a dinner that Gore gave in his honor last Monday (June 26). He had no statement after his meeting with Clinton on Tuesday or after his sessions on Wednesday and Thursday with the IMF and the World Bank, respectively. A spokesman for the Armenian embassy in Washington (Haik Gugarits) said Kocharian deliberately wanted to keep his visit low-key.

But not everyone in Kocharian's entourage was so reticent. On Wednesday, the Parliamentary Assembly of the Council of Europe voted in Strasbourg, France, to recommend that Armenia and Azerbaijan be admitted to the body. Full membership rights are expected in November.

Officials of both nations welcomed the development as a step that could lead to a lasting settlement of the Nagorno-Karabakh dispute. In Washington, Armenian Foreign Minister Vardan Oskanian, who was traveling with Kocharian, echoed these sentiments. And he added that Armenia's and Azerbaijan's expected entry into the Council of Europe will be especially helpful to Azerbaijan.

"Azerbaijan will be required to make improvements toward democracy, and it [accession to the Council of Europe] will have a positive influence on regional stability and the [Nagorno-Karabakh] peace process."

Elin Suleymanov, a spokesman for Azerbaijan's Embassy to the U.S., agreed that the two nations' accession to the Council of Europe would improve the chances of reaching a peaceful settlement of the Nagorno-Karabakh dispute. But he expressed disappointment with Oskanian's statement singling out Azerbaijan as needing to improve its democratic processes.

"In fact, the Azerbaijan [expected] accession to the Council of Europe is an indication of very serious progress toward democracy made in Azerbaijan. I think both countries still have a lot of progress to make to reach -- to be in -- to be full democracies at some point. We are both countries in transition toward democracy. Yes, Azerbaijan needs to improve some things, and so does Armenia, so do other countries.

With sniping like this, it is not clear whether the two nations' entry into the Council of Europe and the negotiating skills of the U.S., Russia, and France can lead to a resolution of the Nagorno-Karabakh problem any time soon.