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Caucasus Report: September 7, 2007

Azerbaijan Showing Little Commitment To WTO

By Liz Fuller
September 7, 2007 (RFE/RL) -- More than five years after Azerbaijan first embarked on talks intended to culminate in membership of the World Trade Organization (WTO), those talks remain suspended pending the adoption by the Azerbaijani parliament of the necessary legislation on trade liberalization.

The fifth round of talks, originally scheduled for December 2006, has been postponed several times due to that failure and to the unsatisfactory responses Azerbaijan provided to specific requests for information. According to the website on August 25, the WTO secretariat has recently made clear that the fifth round of talks will take place only when Azerbaijan is prepared to get down to brass tacks and focus on specific issues.

The first round of talks with the WTO took place in June 2002, five years after Azerbaijan was granted observer status. Initially, the Azerbaijani leadership opted for a cautious and gradual approach: reaffirming in August 2005 the country's commitment to achieving WTO membership, President Ilham Aliyev warned that "haste is inadmissible," Turan reported. (That stance is very similar to that adopted in talks with NATO: while repeatedly emphasizing an interest in cooperation, Azerbaijan has still not formally expressed an explicit desire to join the alliance.)

In May 2006, the online daily quoted an unnamed government official as listing some of the problems still to be overcome, of which the most serious was the parliament's failure to start bringing legislation into line with WTO requirements. He said that of the 22 new laws that needed to be enacted and the 10 that required amendments, the parliament had only drafted a bill on standardization. In August 2006, Aliyev endorsed a program that envisaged completing the process by the end of 2007 with the aim of joining the WTO by 2010.

Slow Progress

Some progress has been made since then: on August 24, 2007, the daily quoted an unnamed government source as saying that more than 10 bills have been drafted, including on patents, trademarks, and intellectual property. As of September 2007, the United States Agency for International Development (USAID) will make available $3.7 million to implement a program to expedite the process of bringing Azerbaijan's legislation into line with WTO requirements.

That the executive should seek to offload to the legislative branch responsibility for the lack of progress in talks with the WTO is hardly surprising. But passing the required legislation is not the only sticking point. There are apparently more fundamental considerations at stake, both economic and political.

For example, Azerbaijan has been tardy in conducting bilateral talks with other WTO members: as of late May 2007, it had successfully concluded such talks only with Georgia and Moldova. A further obstacle may be Azerbaijan's determination to enter the WTO as a "developing" country, rather than a "developed" country. (Underscoring that argument, President Aliyev has stressed in several recent addresses that Azerbaijan is "one of the most rapidly developing countries in the world.")

Deputy Foreign Minister Mahmud Mamedquliyev, who heads the negotiations with the WTO, was quoted in June 2006 as pointing out that Georgia, Armenia, and Kyrgyzstan were all accepted into the WTO as "developed" countries and consequently encountered unspecified "problems."

Generous Subsidies

The rationale for seeking the status of a "developing" country, Adalyat Muradov, secretary of the State Committee to Prepare for WTO Membership, told on July 27, is that it would permit the Azerbaijani government to maintain subsidies to agriculture at 10 percent of GDP; for developed countries, the maximum is 5 percent.

Although agricultural output, according to Muradov, accounts for only 7 percent of Azerbaijan's GDP, the authorities clearly do not want to risk triggering massive protests on the part of the rural population by reducing the very generous subsidies and tax breaks to which farmers are currently entitled. (For example, the state covers up to 50 percent of the costs of machinery and fertilizers.) Nor is the Azerbaijani government keen to reduce the import tariffs currently imposed on agricultural produce, as doing so would drive prices down and make domestic produce less competitive, which could harm domestic producers.

Other unresolved issues include abolishing what the WTO terms "discriminatory" trade practices; creating equal conditions for domestic and foreign companies operating in Azerbaijan; and "regulating" monopolies. Here again, senior officials have proven reluctant to abandon protectionist measures: the National Bank, for example, objected in 2006 to a U.S. demand that the operations of branches of foreign banks in Azerbaijan should be regulated according to the legislation of the home country, not that of Azerbaijan.

The WTO insistence on dismantling monopolies is no less contentious. Azerbaijan has asked for an 11-year transition period to abolish Aztelecom's monopoly on international calls, far longer than the three years proposed by the United States and the European Union. On a personal level, the abolition of monopolies would pose a direct threat to high-level government officials who profit from controlling the import of specific commodities such as cigarettes, bananas, or cooking oil.

The overall impression that emerges is that Azerbaijan has, at least until recently, been playing for time, possibly waiting for the "trickle-down" effects of the export of its Caspian oil and gas to cushion the impact of the economic liberalization that WTO membership necessitates.

Indeed, the example of Russia and Kazakhstan, both states awash with petro-dollars and that are still negotiating their respective WTO bids, may have been adduced in support of that strategy. But in early June 2007, Heydar Babayev, who is economic development minister and chairman of the State Committee to Prepare for WTO Membership, said that both President Aliyev and Prime Minister Artur Rasizade unequivocally support the idea of joining the WTO as soon as possible.

Whether that stated priority can overcome entrenched resistance within the Azerbaijani leadership -- in particular reluctance to release sensitive economic data, and induce the parliament to meet the presidential deadline for enacting the required legislation -- remains an open question.

Polls Suggest Armenian Presidential Race Is Wide Open

By Liz Fuller

Is Sarkisian's star falling? (file photo)

September 6, 2007 (RFE/RL) -- Prime Minister Serzh Sarkisian is far from being Armenia's most popular politician at the moment, even though he is widely seen as the favorite to win the presidential election due in early 2008.

One recent opinion poll ranks him in fourth place, after Foreign Minister Vartan Oskanian, opposition Zharangutiun party leader Raffi Hovannisian, and millionaire businessman Gagik Tsarukian, while a second poll found only 11 percent support for Sarkisian.

Sarkisian to this point had been seen as the most likely successor to incumbent President Robert Kocharian, who is barred by the constitution from seeking a third consecutive term.

The perception derives primarily from the control Sarkisian and his Republican Party of Armenia (HHK) exert over many government bodies, and from the vast financial resources at their disposal. Those levers are thought to have been the decisive factor in the HHK's landslide victory in the May 12 parliamentary elections. As in previous ballots, opposition parties cast doubts on the accuracy and fairness of the official results.

Powerful Figures

Gevorg Poghosian, director of the Armenian Sociological Association (ASA), on September 4 cited some of the hitherto unpublicized findings of a U.S.-funded opinion poll conducted by the ASA in July. That poll was the latest in a series of quarterly surveys designed and coordinated by the Gallup Organization. The U.S. International Republican Institute (IRI) began commissioning them last year with the aim of gauging public opinion on key issues facing Armenia.

One of the questions some 1,200 Armenians randomly interviewed on July 5-12 were asked to answer was: "Which presidential candidate would you vote for if the presidential elections were held next Sunday?" Poghosian told RFE/RL that Sarkisian ranked only in fourth place, behind Oskanian, Hovannisian, and Tsarukian.

Prime Minister Sarkisian and his party have vast financial resources at their disposal and exert significant control over many government bodies.

Poghosian refused to reveal what percentage of support each of the four could count on, saying that the collated results of respondents' answers to the question are not subject to publication. But he said the pollsters have informed the politicians in question about their respective ratings.

Poghosian did, however, disclose popular support, as measured by the ASA poll, for former President Levon Ter-Petrossian, who is reportedly considering running for president. He said it stands at about 1.7 percent. "I don't see popular demand for the first president's return to power," he added.

Of the potential candidates covered by the poll, only Hovannisian has publicized his rating -- 19 percent -- which is posted on the Zharangutiun website.

Oskanian, who like Hovannisian is a former U.S. citizen, signaled late last year that he too might join the presidential race, thereby fuelling speculation that he, rather than Sarkisian, might succeed Kocharian. Kocharian for his part has not yet publicly commented on his preferred successor.

A second opinion poll, conducted by the APR group, the findings of which were summarized on September 5 by the independent daily "Aravot," registered 11 percent support for Sarkisian; he was followed by Hovannisian with 8.4 percent and Ter-Petrossian with 2.9 percent. Over one-third of the unspecified number of people polled -- almost 38 percent -- were unable to decide for whom they would vote if elections were held now.

Recent statements by the Armenian Revolutionary Federation-Dashnaktsutiun (HHD), which signed a cooperation agreement with the coalition government formed after the May parliamentary ballot by the HHK and Tsarukian's Bargavach Hayastan (Prosperous Armenia) party, that it will field its own candidate in next year's presidential ballot rather than endorse Sarkisian's candidacy likewise call into question the perception that Sarkisian's victory is a given.

Closing Ranks

HHK parliament faction leader Karen Karapetian on August 27 downplayed the HHD's disinclination to endorse Sarkisian, predicting that Sarkisian will win the election even without the HHD's support.

Karapetian further expressed confidence that Tsarukian's Prosperous Armenia, together with "many other parties and NGOs," will close ranks behind Sarkisian.

In the past, the findings of polls conducted by Poghosian's organization in the run-up to elections have served as a remarkably accurate indicator of the ultimate results. Opposition leaders have long accused Poghosian of permitting the Armenian leadership to misconstrue his findings as part of a broader effort to conceal and legitimize election fraud. Poghosian denies those accusations, insisting on the credibility of the ASA surveys.

(With contributions from Astgik Bedevian and Emil Danielyan of RFE/RL's Armenian Service)

Abkhaz Journalists Outline Grievances To President

By Liz Fuller

Journalists are not alone in turning to President Bagapsh directly (file photo)

August 28, 2007 (RFE/RL) -- The leader of Abkhazia recently met in Sukhum(i) with a group of independent journalists who issued a statement in July deploring what they termed official harassment and restrictions on media freedom in the breakaway Georgian region.

Sergei Bagapsh acknowledged that their grievances are at least partly justified, but it remains doubtful whether the de facto president's calls for the government bureaucracy to adopt a more cooperative stance vis-a-vis the independent media will be heeded.

Press Face Many Restrictions

The problems facing the independent print media in Abkhazia were outlined in detail in an editorial published in November 2006 in the independent weekly "Nuzhnaya gazeta."

That paper's editor, Izida Chania, listed spiraling printing costs; the reluctance of state-controlled printing presses to print independent publications; distribution problems; draconian tax laws that are applied only selectively; the absence of a legal framework to safeguard the functioning of a free press; and chronic stonewalling by government officials whom journalists approach for information.

A 115-page report released in June by the U.K.-based nongovernmental organization Article 19 makes the point that privately owned print media in Abkhazia, including "Nuzhnaya gazeta," constitute the sole alternative to either Abkhaz state television or Russian television channels, and often provide information that is not available from any other source. But most newspapers publish only weekly, in limited print runs, and are not available outside large towns.

Chania was one of five journalists who drafted an appeal to Bagapsh on July 27 following a roundtable discussion organized by the Abkhaz Journalists' and Publicists' Guild, reported on August 8. (Other roundtable participants included three parliament deputies from the opposition Forum of National Unity and the its executive secretary, Astamur Tania, who served as an aide to Bagapsh's predecessor as president, Vladislav Ardzinba.)

That appeal claimed that even though the Abkhaz authorities verbally profess their commitment to defending media freedom, the harassment of journalists -- including police control and constant summonses to the prosecutor's office -- has reached "Soviet-era proportions." They urged the Abkhaz authorities to endorse the open expression of diverging opinions, rather than seek to downplay problems and create the impression that "everything is going smoothly."

Going Right To The Top

An article published in "Nuzhnaya gazeta" on June 12 made the point that citizens frequently go directly to the president in exasperation after their complaints or requests are ignored by lower-level officials. Bagapsh reportedly sets aside Mondays for such meetings, and receives up to 20 people during one day.

At their meeting with Bagapsh on August 15, the same group of journalists raised the most important issues highlighted by Chania nine months earlier, including the lack of a legal framework for the media, tax policy, and access to information. (The widespread social repercussions in an impoverished postconflict society of limited access to information are discussed in detail in the Article 19 study.)

They also listed issues which they argued should become the subject of a broad public debate, including the privatization of large state-owned enterprises; the creation of industrial zones; migration; economic inequality between the republic's various regions; and the expansion of the tourist industry. They urged Bagapsh to intervene personally to overcome the "inertia" of middle-level bureaucrats.

The Article 19 study notes that since his election in early 2005, Bagapsh has sought to promote the more effective exchange of information between government and public. One of his initiatives was the creation earlier this year of a Public Chamber intended to serve as a means of communication between the state and civil society.

Several of the chamber's 35 members were present at Bagapsh's meeting with the editors, and he urged the chamber to work together with independent media outlets to facilitate the latter's access to government officials.

At the same time, he urged journalists to restrict themselves to "constructive" criticism in order to avoid exacerbating what his website termed the "standoff" between the media and the republic's authorities.