It looks quite impressive and futuristic on first glance — a hotel that bears an uncanny resemblance to the Death Star from the Star Wars films. Remarkably, however, the hotel will not be built in Las Vegas or Dubai. It is instead planned for Baku, capital of the Republic of Azerbaijan.

Fan IQ thinks that the project is an attempt to increase Baku’s chances of hosting the 2016 Olympic Games, and if so, the sports blog believes it might just have succeeded.

So although the 2016 Games are a long way off, if you’re a city that wants to host them, you better get your act together.

Baku, the capital of Azerbaijan, officially has it’s #$%@ together. They’re in the intense running for the 2016 Games - which will be announced next year - and I think they just took the lead.

How so?

Well, my friends, they’re going to build a hotel based off of the Death Star from Star Wars for the Games.

The full post is available on Global Voices Online.

Railway Station, Yerevan, Republic of Armenia © Onnik Krikorian / Oneworld Multimedia 2007

Sure to concern many already alarmed at the near monopolization of strategic areas of the economy by Russian companies, RFE/RL reports that the next asset to go will be the railways. However, as the news item says, the railway system has really suffered since independence and is usually a last resort not only for internal travel, but also for visiting neighboring countries.

Specifically this means Georgia as the railway obviously doesn’t run through Nakhichevan or to Azerbaijan proper as well as Turkey. Armenia is also not involved in a regional railway project involving Turkey, Georgia and Azerbaijan because of closed borders with the former and the unresolved conflict over Nagorno Karabakh with the latter.

The director general of Armenia’s rail network on Tuesday effectively confirmed its impending takeover by Russia’s state-run railway, a deal which will place yet another chunk of the Armenian economic infrastructure under Russian control.

The Armenian government called last year an international tender for the exclusive right to manage the struggling network for at least 30 years. Only the Russian railway and an Indian firm showed interest in the bidding, sending relevant proposals to Yerevan earlier this year.

The Indians pulled out of the tender last month, all but predetermining its outcome. Armenian media had for months claimed that the contest is a mere formality as the state-owned Armenian Railway’s handover to the Russians was decided by Presidents Vladimir Putin and Robert Kocharian in Moscow last January.

[…]

The impending deal is certain to be criticized by those government critics who believe that Russia’s growing economic presence in Armenia is turning into a stranglehold. Russian firms already dominate the Armenian energy and telecommunication sectors and are keen to acquire other industries. One of them is understood to have effectively purchased recently Armenia’s largest gold mining company from an Indian operator that fell foul of the authorities in Yerevan in January.

But according to Khrimian, more important is the fact that the new railway manager will have to invest at least $170 million in the Soviet-era network that has been operating at a fraction of its capacity ever since Armenia’s rail communication with the outside world was disrupted in 1992.

“Working in these blockade conditions, we have been unable to generate sufficient revenues to make capital investments in our train fleet and other infrastructure,” said Khrimian. “The investments will considerably improve the condition of our railway,” he added.

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After Myrthe reported that she was picking up up more accesses to her site from people searching on Google for Gagik Tsarukian (aka Dodi Gago) and his daughter, The Armenian Observer also reported the same, as did I. However, it was Observer who appeared to discover why exactly after Myrthe concluded it must have something to do with the recent marriage of Tsarukian’s daughter.

Observer even managed to find a video on YouTube showing the celebrations which more significantly gave us a rare and unique look into the controversial house that is home to perhaps Armenia’s richest and most powerful oligarch. Kronstadt on The Armenian Libertarian-Socialist Movement offers his opinion on Tsarukian’s estate in a country that can still be considered poor by international standards.

When I first watched this video, the first instinct was Anger – pure anger! But then one needs to sober up and look at all this in calm analytical and historical perspectives. This is not Oligarchy!!! “Oligarkhia” is a stupid apologetic term applied by the social scientists to some post-Soviet republics, with a connotation of “a peculiar case of capitalist development that went *slightly* off track” … as if Capitalism is designed to deliver general prosperity and long-term balance for all, but in some rare cases small anomalies such as oligarkia are possible. Bullfuckingshit. This is Capitalism, and that’s all there is to it. And oligarchy is the integral and inseparable part in its development.

[…]

As I watched this video the second time, I couldn’t help but recall the videos from pre-Castro Cuba… it was all the same. Cuba was a satellite puppy of America with very small white minority owning everything there was to own and indulging themselves in endless endeavours of bourgeois decadence, while the vast majority of population was living in shanty-towns and townships with no education, healthcare, regular food - toiling in sugar cane plantations and tobacco fields. And sooner or later people did rebel - people rebelled and as we have seen in so many other places the Communist forces hijacked the revolution.

My instinct is to wait - wait until the conditions have matured to the point when people will see that it is not the Individual leader or the Will to do good that is the question, but the Structure of the economical system that cultivates these material and cultural conditions, and the social and political contradictions and paradoxes. Until people themselves realise it that capitalism is not the right path to democracy, free-entrepreneurship and participatory-politics, until that day revolutions will either be shipwrecked or replaced by dictatorships.

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Writing for the Jamestown Foundation’s Eurasia Daily Monitor, RFE/RL’s Emil Danielyan says that Armenia’s trade with Russia has increased dramatically this year. The article follows more and more examples of Russian ownership and management of key economic assets in Armenia.

According to the most recent data posted by Armenia’s National Statistical Service (NSS) on its website, www.armstat.am, the volume of bilateral trade totaled $404 million in January-August 2007, up from $250 million registered during the same period last year. Much of the gain resulted from an almost 100% surge in Armenian exports to Russia, most of them alcoholic beverages and prepared foodstuffs. Even so, Armenian imports of Russian commodities and goods (notably natural gas) continued to account for most of the bilateral commercial exchange, rising by 50% to about $280 million.

Officials in Moscow and Yerevan have welcomed the growing commercial ties between their countries, which they say will reach a new high of $700 million in the full year 2007. Speaking after talks in Moscow on September 25, the Russian and Armenian prime ministers said they would try to ensure that Russian-Armenian trade hits $1 billion next year (Armenian Public Television, September 25). Armenian Prime Minister Serge Sarkisian instructed his ministers to closely work with their Russian counterparts to meet this target (Statement by the Armenian government, September 27). Nikolai Ryzhkov, a Russian lawmaker co-chairing a Russian-Armenian inter-parliamentary commission, came up with a more conservative estimate during a mid-October visit to Yerevan, predicting bilateral trade will likely pass $1 billion mark only in 2009 (Interfax, October 19).

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Transitions Online’s Steady State reports that Mr. Eldar Namazov, a possible candidate in next year’s presidential election in Azerbaijan and the former head of the administration under Heydar Aliyev, has accused the Azeri government of “selling out the occupied lands.” By this, of course, he means Nagorno Karabakh and the surrounding territories currently under Armenian control.

However, what was most interesting about the speech which Namazov gaveis that he accused the Azerbaijani authorities of supporting President Robert Kocharian in Armenia when they should be doing all they can to ensure the return of his predecessor, Levon Ter Petrosian. The blog implies that a concessionary peace deal which “favours Azerbaijan” is more likely with the first president in power again.

In Armenia, Mr. Petrossian is a candidate with democratic credentials, who is supported both by US and the EU. He also champions the “step by step” approach to Nagorno-Karabakh conflict resolution, which benefits the Azeri side more than the Armenian. It could be argued that the reason why Petrossian was overthrown in 1998 is precisely his approach to the conflict resolution.

Now USA pressures the current President Kocharian through its open support to the candidate Petrossian and through messages that the Nagorno Karabakh conflict should be resolved as soon as possible.

In fact, Azerbaijan will win more if Petrossian succeeds in elections, simply because he is for the “step by step” peace talks. HOWEVER, notes Mr. Namazov quite correctly, due to certain reasons, the Azeri media backs the Kocharian administration and portrays the Petrossian as the initiator of the war over Nagorno Karabakh.

[…]

From my own research work I can surely state that Mr. Petrossian was completely against the war and was the main broker of all cease-fire agreements. The question arises: why does the Azeri government support Kocharian and not Petrossian?

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AFP reports that the Iranian President Mahmoud Ahmadinejad has cut short a two-day working visit to Armenia. Ahmadinejad visited Yerevan to meet with his Armenian counterpart, Robert Kocharian, and to announce the opening of a new highway linking the two countries and plans to build a cross-border railroad as well as a hydroelectric power plant and wind power stations along the border.

No reasons for his unexpected and early return to Tehran have so far been given, but I’m sure there will be updates later on in the day.

Ahmadinejad cancelled a series of events on Tuesday and was due to leave the Armenian capital Yerevan for Tehran on a late-morning flight, an official in Armenian presidential press service said, without providing an explanation.

“There have been changes in the programme of the Iranian president’s visit. He will return to Tehran before the planned time,” the official said.

Ahmadinejad had been due Tuesday to visit a memorial to victims of the Ottoman massacres of Armenians between 1915 and 1917, a regular stop for visiting dignitaries. He had also been scheduled to visit Yerevan’s Blue Mosque and to meet with members of the Iranian community here.

[…]

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Armenian-Turkish border, Khor Virap, Ararat Region, Republic of Armenia © Onnik Krikorian / Oneworld Multimedia 2004

Following on news that illegal immigrants from Armenia are being detained in Istanbul, PanArmenian.Net reports that those held have not yet been deported. Thousands of Armenians are believed to work in Turkey, but as a sign of how House Resolution 106 might affect Armenian-Turkish relations, the Associated Press reports that other measures are currently being considered.

As the border between Armenia and Turkey remains closed and that there are no official diplomatic relations between Yerevan and Ankara, proposed retaliatory measures will include prohibiting and frustrating those commercial links which do exist.

Turkey should not punish the U.S. administration over a resolution in the U.S. Congress that calls the World War I-era killings of Armenians a genocide, but instead should impose sanctions against Armenia for supporting the measure, a top Turkish official said Tuesday.

[…]

“Bush and his team should not be punished,” Egemen Bagis, a foreign policy adviser to Turkish Prime Minister Recep Tayyip Erdogan, said on CNN-Turk television. “The reaction should be against Pelosi and her team.”

[…]

Bagis said Turkey should impose sanctions against Armenia because it supported the resolution.

“Turkey must impose sanctions against Armenia,” Bagis said. “Turkey has already done a list of what and when it will do, and the prime minister has already given necessary orders.”

The border between Turkey and Armenia is closed. But Turkey could cancel flights between Istanbul and Yerevan, as well as stopover flights to Armenia, and also prevent around 4,000 trucks from hauling goods to Armenia through neighboring Georgia.

Ironically, nationalists in Armenia and the Diaspora as well as Turkey will be the first to welcome such a move. This is yet another irony about the continuing discussion, debate and argument surrounding recognition of the Armenian Genocide. One supposes that not many Armenians will worry about the threat of “sanctions” although the possible effect on the economy is unclear.

After much speculation and earlier denials, RFE/RL reports that Armenia’s second mobile telecommunications network, VivaCell, has been sold to Russia’s main operator, Mobile TeleSystems (MTS), for $430 million in a takeover bid that should raise some questions about its timing just months before the 2008 presidential election early next year. The takeover is already raising concerns about Russia’s dominance and monopoly over key strategic areas of the Armenian economy.

The deal came after weeks of negotiations reportedly involving the governments of the two countries. According to reports in the Armenian press, the authorities in Yerevan have played a large role in convincing K-Telecom’s official owner, Lebanese tycoon Pierre Fattouch, to sell his rapidly expanding VivaCell network to MTS.

The Armenian government was similarly said to have been a driving force behind last year’s sale of the ArmenTel national telecom company, which operates the country’s second cellular network, to another Russian wireless firm, Vimpelcom. The $500 million acquisition came shortly after President Robert Kocharian’s visit to Moscow.

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Well, not officially, but effectively it has. Following on from the prime minister, Serzh Sarkisyan, raising pensions in the few months prior to next year’s presidential election, RFE/RL today reports that the State Budget will also reach record levels — $2.5 billion to be precise. However, no breakdown of how the additional money will be spent has been made available. Sarkisyan denies any connection between the increase and his presidential ambitions.

The full post is here.

The new headquarters of HSBC Armenia opened in central Yerevan in April 2007. Foreign banks representing more than a dozen countries are active in the Caucasus country and new large investments are expected in the coming months. (Onnik Krikorian for EurasiaNet)

EurasiaNet has a news commentary by Noyan Tapan’s Haroutiun Khachatrian on the booming banking sector in Armenia. According to him, even more multi-million dollar investments in the sector are expected in the coming months, and one local analyst says banking in Armenia is among the best in the Commonwealth of Independent States (CIS).

Yerevan’s Garegin Nzhdeh Square illustrates the transition involved. The square’s sidewalks are packed with street traders, one of the clearest signs that Armenia’s “shadow economy” lingers. The lines of people at three nearby automatic bank tellers waiting to pay utility bills or get cash, however, suggests a parallel trend: the old Soviet image of banks as just a place where extra money could be stored is beginning to fade.

Armenia’s ongoing high rate of economic growth (12.1 percent for the first six months of 2007, according to official statistics) largely explains the trend. In 2000, average monthly salaries stood at roughly $55, while today they average $205. With incomes rising, residents are turning to bank loans, with interest rates ranging from 15-22 percent, to expand their purchasing power still further.

Since 2004, the banking sector has expanded at a rate of between 10 to 20 percent a year to stand currently at more than $1.6 billion. In the first six months of 2007, banking assets’ value climbed by $244 million, or about 83 billion dram, according to the Central Bank. Nonetheless, in terms of the ratio of total bank assets to Gross Domestic Product, Armenia ranks as an outsider country. This ratio, commonly used by specialists to evaluate the banking sector, was just over 19 percent by the end of 2006. In most post-Soviet countries, it can stand as high as 50 percent.

[…]

But more banking activity could mean higher inflation, a situation often seen in rapidly growing economies which consume large sums of money in a short time. The Central Bank has hoped that a stock market, planned for introduction in the coming year or two, could help keep that risk even lower, but, for now, as bank investment grows, the outcome is far from certain.

Bankers say that inflation could provide a clue. Despite earlier fears that inflation for July 2007 compared with December 2006 might be as high as 4 percent, the increase ranked a mere 0.6 percent. This slight jump, despite above-average growth in the banking sector, has suggested that money supplies have not yet outstripped economic activity. For now, the bets are on that the Armenian economy has room to absorb still more.

The full article is here.

EurasiaNet has a thought-provoking story on development in Armenia’s eastern neighbour which is accompanied by some great images by Azeri photographer Rena Effendi. We all know that economic growth in Azerbaijan has gone through the roof and is somewhere around 30 percent per annum at present, but what about the rest of the country? As is the case in Yerevan, the economic boom appears to be affecting only the capital — and I daresay only parts of that too.

Two separate worlds uneasily coexist within Azerbaijan. One is Baku, the country’s oil boom capital, a metropolis increasingly slick with skyscrapers, ritzy clubs and high-end boutiques. But travel not too far outside this city of 2.9 million, and the picture suddenly changes.

Azerbaijan’s regions — especially in rural areas – are trapped by the twin troubles of unemployment and underdeveloped transportation. Monthly salaries here (about $120-$150) are less than half what they average in Baku, according to official statistics. Driving a private taxi is one of the most common jobs for local males.

An irregular rate of economic development drives the disparity. Jobs for qualified specialists may be hard to come by in Baku, but opportunities for ordinary workers in construction, restaurants and retail abound. While official data does not exist, young people are increasingly coming to Baku for university, and then staying in the capital for work afterwards.

“As a result, we have an abnormal economic misbalance when up to 90 percent of the country’s GDP is being produced by Baku, while the rest of the country produces about ten percent,” commented Rasim Huseynov, a Baku-based independent economic expert.

The growing economic gap can be seen most vividly in lifestyle differences. Baku is packed with bars, nightclubs and discothèques, bowling clubs and entertainment centers attended equally by men and women. By contrast, not a single nightclub or discotheque exists outside of Azerbaijan’s capital.

“It is boring to live in the village,” complained 17-year-old Mobil Mammadov, a resident of the village of Asrik near the Armenian border. “There’s no Internet, newspapers are not delivered. We can only watch the state television channel, which is not interesting at all.” Entertainment for young people in Mammadov’s village amounts to “Futprognoz,” a take-off on the computerized betting system Totalizator, which can be accessed in towns throughout the South Caucasus.

Mammadov’s dream is for an Internet café to come to his village – the closest one is 25 kilometers away in the regional center of Tovuz. “I heard about the Internet from friends who use it in Baku,” he said. “It seems exciting.”

A whopping 77 percent of Azerbaijan’s estimated 700,000-800,000 Internet users live in Baku, with only six percent living outside of major regional cities, according to Osman Gunduz, head of the Internet Forum of Azerbaijan. The government has launched a program to diversify computer access by providing what Communications Minister Ali Abbasov terms “preferential prices” for the machines, but its impact on the regions is not yet known.

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