More Armenian Foreign Direct Investment Games

According to Nikolay Pavlov, Russia’s Ambassador, and Alexander Zaytsev, trade commissioner to Armenia, Russia will be extending a $500 million dollar loan to the people of Armenia, to support Russia’s existing Armenia projects; specifically construction of a new power-generating unit and modernization of the railways.


The new power-generating unit could possibly be the multi-billion dollar nuclear power station that Armen Moffsissian has promised, an absolute must during this crisis period. Or it could be the 5th block of the Hrazdan gas fired power-generating unit, which has soaked up the best part of a billion dollars through its ten or more years of construction, but recently transferred to HyRusGasArt on the promise that Russia would invest a further two hundred million dollars to finally bring it into operation. Or maybe it could be Yerevan’s new gas-fired power-generating unit, for which Japan provided a $140 million credit in 1999, the construction of which started in 2005, and although Moffsissian has been uncommonly silent about that major project, no doubt now close to completion. Or it could be one of the Araks hydro-power plants, or a host of other impressive Armen Moffsissian energy projects.


Modernization of the railways does not however present so much of a quandary; Armenia’s entire system was handed over to Russia a year ago, on the understanding that Russia would invest $570 million. According to the Armenian media, to date the investment has amounted to a 1.8 million dollar repair of an electric locomotive in Georgia, the purchase of modern apartments, the import of numerous ‘Jeeps’, and enormous salaries for the company executives who will soon be occupying the new Russian rail administration offices at the head of Kocharian’s Northern Prospect. Gurgen Sargsyan, Armenia’s recently appointed Minister of Transport, and an exceptionally level-headed official amongst an otherwise impressive gang of regime bandits, recently said.... “Not everything, that is invested, may be considered investments". Armenia now knows the truth of those words.

As has happened so many times before in Armenia that which on the surface appears to be healthy foreign direct investment, in practice turns out to be a regime-backed financial scam. In the same way as the 5th block of the Hrazdan gas fired power-generating unit has for the past ten years served as a multi-hundred-million-dollar money spinner for the regime, so now is the Armenian railway system. In this instance a $500 million Russian credit is being imposed on the people of Armenia, to pay for investments promised by one of the various Russian companies which have methodically taken over the vast majority of Armenia’s billions of dollars worth of state assets.

Armenia’s state propaganda machine prefers to explain that this $500 million is for funding small and medium business development projects - a sum somewhat larger than the five or ten million dollars the regime normally manages to find to titillate the Armenian fancy. But in practice Russian investors are again being allowed to get away with this highly corrupt, fraudulent and illegal multi-billion dollar activity. Why, because within the ranks of those Russian foreign investors will be found a dominant representation of Armenia’s bandit regime.

So whilst Armenia plunges ever-deeper into the crisis which the regime has long been preparing, with enthusiastic support from the World Bank and the IMF, Kocharian and Sargsyan will continue to divert massive funds to their personal indulgence – funds that rightfully belong to the people.