Aram Sargsyan: The key to Armenia`s development is universal  diversification

ArmInfo.Leader of the "Republic" party, former Prime Minister of Armenia Aram Sargsyan, in an interview with ArmInfo, comments on the latest regional  transformations with the participation of Armenia. Discusses the  prospects and ways of development of the Armenian economy. Shares his  own vision of the place and role of Armenia in the South Caucasus and  in the world.

- Mr. Sargsyan, how did it happen that 30 years after gaining  independence we found ourselves almost where it all began in 1991?  And what role did Armenia's practically given up on the idea of  "Miatsum" with Artsakh play in all this?

-I don't think we had given up on the "Miatsum" idea (connection, Ed.  note), it's just that this model didn't work at this stage of the  settlement, or, more precisely, if it continued, it would work  against us. The fact is that, if I am not mistaken, problems similar  to those of Artsakh, starting with the formula adopted in 1964, are  resolved by the world on the basis of excluding the use of force, the  right of peoples to self- determination and territorial integrity.  And fitting the solution to the Artsakh problem within the framework  of this formula at this particular stage was possible precisely  within the framework of the principle of the right of peoples to  self-determination. And that was done. The main reason for the  current state of Armenia, in my opinion, is that all these 30 years  our economy has not gone beyond the framework of Soviet logic.  The  available opportunities were not diversified, the available natural  resources were spent completely out of line with the capabilities and  requirements of the 21st century. And in wars, as you know, it is not  armies that win, but states, which was perfectly understood in Baku,  realizing the potential victory, if not of their army, then of their  state. The Azerbaijani calculation was based on that, otherwise  Aliyev would simply not have dared to go to war.

-As for the economy, it is clear. What about the national idea around  which any state is built?

The greatest, main, cherished idea for the Armenian people, who have  been deprived of statehood for thousands of years, has been to have  their own Armenian state. And in the previous 30 years of  independence, in addition to omissions, we also had acquisitions.  Moreover, they are quite serious. But we, to our great regret, did  not want to see these acquisitions and achievements, preferring to  talk only about omissions and not wanting to compare our capabilities  with our desires. Accordingly, in my opinion, it was simply  impossible to come up with a better national idea than gaining  independence by Armenia and Artsakh. And it was around this idea that  the unification of all Armenians took place on a global scale. The  victory in the 1991-1994 war, with all its subsequent achievements,  is the result of this particular consolidation around this idea.  Armenia's lagging behind, in my opinion, began with the postponement  of the construction of a new nuclear power plant and the prolongation  of the terms of the existing nuclear power plant. Since the moment of  the privatization of the entire energy sector by Russia, that  completely swept away the competition from here. As a result, having  the only nuclear power plant in the South Caucasus and having fast  rivers, Armenia today produces the most expensive electricity in the  region. And this makes the prospect of founding any new production  facilities in Armenia less attractive than in the same Georgia or  Azerbaijan. For electricity, you know, you pay daily, and for the  transportation of manufactured goods once a week or a month.

-But recently there have been some changes in this direction.

- That's the truth, and the periodic visits of the U.S. ambassador to  Syunik, the brightly highlighted Syunik communication part of the  EU's program for providing financial assistance to Armenia is another  confirmation of this. By the way, it is in the supposed territory of  the crossing - on the "corridor", cherished by the  Turkish-Azerbaijani tandem, that the United States is going to  install a powerful solar power plant near the village of Lichk worth  from 4 to 6 billion US dollars. The American rationale is that the  number of sunny days in Meghri exceeds the number of sunny days in  the sunniest in Europe - Portugal by 1.8 times.  Thus, Lichk is a  completely profitable project from a business point of view.

- And from a geopolitical point of view?

- Undoubtedly, in any case, external investments in themselves are a  source of formation of security in the country in which they are  made. In this light, the diversification of the Armenian economy  seems to have no alternative. It is another matter that alternative  communication routes through the territory of Armenia may well become  a reality, however, only if they are under the control of the  Republic of Armenia. But there is one "but" here too - these  processes can take place only if the main problem between Armenia and  Azerbaijan is resolved - the issue of the status of Artsakh, at least  in the example of the Cyprus version, when the status issue is  officially postponed until better times. Until then, the conflict can  not be resolved.  No matter how much we carry out the delimitation of  the borders, as long as the status issue is not resolved, the  shooting will not stop. For example, a railway can operate without a  status. Since cargo transportation does not imply escort and all  possible risks on the territory of Armenia and Azerbaijan are  regulated by international treaties. The military will not be needed  for this. I have already voiced this proposal to Prime Minister Nikol  Pashinyan, proposing to start this process by restoring the shortest  5-kilometer Yeraskh section of the railway between Armenia and  Nakhchivan. Reconstruction of this section will allow connecting  Armenia and Azerbaijan through Kazakh. No one in the world will  understand us if, protesting against the blockade for 30 years, we  begin to refuse to unblock the borders today. And this can be the  very first step, which, at the same time, will be in our interests.  It is clear that Armenian trucks cannot travel through Azerbaijan  with Armenian license plates. As well as Azerbaijani cars across the  territory of Armenia. But Armenian goods can freely move through the  territory of both countries in Armenian cars, but with Russian  license plates and drivers. I proposed this to the Prime Minister as  well. And he completely agreed with my assessments.

-Does business know no borders?

-Definitely. And business knows how to calculate its own income.  Meanwhile, the reduction in the mileage will bring considerable  profit to Armenia in the most diverse vectors of our economy. For  some reason, we do not want to take advantage of the fact that we are  at the crossroads.

-On September 30, the Armenian government accepted as a donation a  25% stake in the GeoProMining Armenia subsidiary Industrial Company  JSC, which make up 15% of the total capital of ZMMC. Owner of  GeoProMining Roman Trotsenko announced plans to invest $ 3.5 billion  in joint projects with Armenia. Do you think that your vision of  Armenia's development is starting to come true?

-I am convinced that all countries of the world have accumulated  their initial capital through the correct use of their natural and  human resources. No country, including Italy, with its developed  tourism sector, has been able to develop the country through loans  and tourism, while maintaining and arming the army.  Armenia, in  turn, needs to learn how to properly and competently dispose of what  we have. What I don't see today is that the mines are being developed  using barbaric methods of the Stone Age, which leads to great losses  and inefficiency. Kajaran is the most interesting mines in Armenia  for foreign specialized companies. This is the only potential mine in  Armenia that meets international standards. The rest of the mines are  simply not interesting. Kajaran alone is capable of producing up to a  million tons of copper concentrate annually. Which is a fantastic  indicator, considering that in the best times all of Armenia produced  400 thousand tons of copper concentrate. It is important to note here  that when offering your concentrate for processing to any copper  smelter, the first thing we hear is the issue of annual supply  volumes. And the larger the scale, the closer the time frame and the  lower the cost of processing. So, in response to the proposal to  process a million tons of concentrate, these people will simply build  their own plant in Armenia, in Kajaran. Simply because such volumes  will definitely justify this construction.

-How are things going at the Kajaran Mine today?

- Today we do not use even a third of Kajaran's potential. The mine  is located on two banks of the river.  Only the right bank is  exploited. The left one is not exploited because there is a cemetery  there, and, as you know, we care more about the dead than the living.  Accordingly, no one even tries to do anything there.  30% of the mine  is on the right bank, 30% on the left bank, and the remaining 40% on  both sides of the river. Excavators cannot approach the riverbed,  fearing the collapse of the river banks and its overflow. 

Meanwhile, the main resources, and with a high percentage of copper,  molybdenum and gold, are located in the riverbed and in its vicinity.  Thus, today we are exploiting less than 30% of the potential of this  mine.  We develop it by barbaric methods, according to Soviet,  inflated standards, the ZCMC management flies by helicopters,  including these costs in the final balance, and everything is mired  in corruption. I'm not even talking about how ZCMC acquired the  owner. The Kajaran Mine, the largest in terms of proven reserves of  copper, molybdenum and gold, was taken from the state through "night  privatization". After that, the new owners not only got their money  back in just a year, but also made a profit of $ 40 million. And  today Robert Kocharian not only tries to disown corruption in this  shameful deal, but also accuses the government of corruption when it  returns back a part of ZCMC shares. The first person of the state at  that time, Kocharian, could not have been unaware of what was  happening, he knew for sure that the number one enterprise in the  country was being sold for only 140 million dollars. He could not  help but know that in the first year alone, Kajaran brought the new  owners $ 180 million.

-Let's get back to the deal:

-Assessing the deal positively in the sense that the state, in the  end, acquired a share in ZCMC, I assess negatively its process, which  took place again at night. In particular, it is not clear to me why  someone gives gifts to the state and what this someone will receive  as a gift in return. By the way, earlier I presented to the Prime  Minister's attention my approaches to Kajaran. I believe that the  license for the left bank of the river from ZMMC should be taken  away, since having a license for its development, the company does  not do this. This license should be issued to any non-offshore  company with work experience in this field.  After that, of course,  competition will begin between them, which will make the corruption  schemes at ZCMC obvious to everyone. As a result, in a few years ZCMC  will either sell the shares of the new company or merge with it. The  latter, by the way, will open up an excellent opportunity to move the  river bed above the mine along the right bank, so that the ecology  does not suffer and to start developing Kajaran by 100%. Which will  be a great asset for the state. I consider it wrong to give the  entire Kajaran and not only Kajaran to the monopoly of one company.

At the same time, the processing of even 400 thousand tons of copper  concentrate already requires the construction of a copper smelter in  Armenia. And not only the plant, but also a new nuclear power plant  with a capacity significantly exceeding the capacity of the existing  nuclear power plant. Moreover, according to significantly superior  Russian and French technologies.    

-That is, diversification is needed again:

- I consider the diversification of property in Armenia a necessary  condition for maintaining the country's economic and energy  independence and creating an effective economy. The same applies to  water resources. And, in my opinion, the Prime Minister expects  offers of cooperation from the Iranian side in this direction. Iran,  by the way, already buys "soft" water from us for irrigation of the  Mazandaran plain.  The cost of one cubic meter ranges from $ 6 to $  8. Western companies are also interested in our water.  They have  already announced their readiness to invest up to $ 6.4 billion in  the program of water resources management in Armenia. The French  calculated that as a result of the construction of a new nuclear  power plant and Meghri hydroelectric power station, Armenia will be  able to dictate prices for electricity in the region. And I am  convinced of the correctness of their calculations. Today our  electricity is the most expensive in the region, but if we do  everything right, we will get the cheapest electricity.

- What is stopping us, Russia?

-  Let's conditionally call it jealousy. Which, at the same time,  gives rise to phobias in our government and an unwillingness to risk  their own chair. Serzh Sargsyan really wanted to take advantage of  the opportunities offered to Armenia, but he was afraid of a possible  change of power through the involvement of the fifth column, he was  afraid of the war. Because Armenia was defended by Russia.

- The war has taken place:

- Quite right. And if we do not want a repetition of what happened,  then we need to act within the framework of a completely different  logic. If we want changes, we need to stop walking in circles and  stop doing what we did before. Otherwise, there will be no changes. I  openly and everywhere say that our vector is in the direction of  ensuring security, sovereignty, etc. there should be a vector to the  UN. If we want to clarify our borders, to clarify maps, then we  should do this at the UN. Since any trilateral initiative, joint with  Russia and Azerbaijan, is in reality four-sided. There is invisible,  but Turkey is always present. The 9th clause of the unfortunate  statement of November 9th was introduced at the request of Erdogan. I  am convinced of this, since it was Erdogan who, since 1999, has been  seized by the idea of a fix on the exchange of Meghri for Artsakh.  Fortunately, he does not have the possibility of implementing it and,  I am sure, he will not it. You and I do not want this, the Armenian  leadership does not want this, the collective West, in particular,  the United States, does not want this, and Iran does not want this.