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Armenian-Georgian economic relations


MJ

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Despan News,

 

Georgia Hopes IMF Will Persuade Armenia To Restructure Georgia's Debts

(2/18/01)

 

Georgian Minister of State Gia Arsenishvili has said he is very pleased with

his one-day visit to Armenia where he and other members of a Georgian

government delegation requested that Armenia restructure Georgia's debts.

 

Although Armenia insists that Georgia pay at least 5m dollars this year,

Georgia hopes that the IMF will persuade Armenia to extend the payment

terms, because, as Georgian Finance Minister Zurab Noghaideli said, Georgia

"will not be able to pay this sum". Armenia, for its part, requested that

railway tariffs be further reduced and retail markets in the border areas be

turned into free trade zones.

 

Working groups have been set up to analyse the current state of affairs and

offer recommendations. The following is the text of a report by Despan

correspondent on February 18:

 

[Despan Correspondent] Georgia's debt to Armenia and future

Georgian-Armenian cooperation were the major issues discussed by Armenian

government and Georgian delegation yesterday [February 17]. The sides have

agreed to set up a bilateral working group which will complete the analysis

of the current state of affairs by April 1 and offer recommendations about

settling the existing problems.

 

The Georgian government delegation left for Tbilisi late last night. Here is

a report with the details of the visit.

 

The visit of Georgian delegation lasted one day. At Yerevan airport, Gia

Arsenishvili was met by his counterpart, Prime Minister Andranik Margaryan.

The first question to which Gia Arsenishvili had to answer upon his arrival

at the airport was about Georgia's debts.

 

[Gia Arsenishvili, the Georgian minister of state] Well, in what context can

debts be discussed? Of course in the context of debts.

 

[Despan Correspondent] Noteworthy to mention that Georgia's debt to Armenia

totals 19m US dollars. Georgia was supposed to pay out a part of its debt,

some 5m dollars.

 

[Zurab Noghaideli, the Georgian finance minister] We do realize that the

Armenian budget is facing rather serious problems, but we cannot exercise

different attitudes with different creditors. Consequently, we have opted

for this way, the way through the negotiations in the Paris Club. I believe

that Armenia will by all means take part in the Paris Club session.

 

[Vartan Khachatryan, Finance and Economics minister] This year, our budget

already envisages 2.7bn drams, that is about 5m dollars.

 

[Zurab Noghaideli] Yes, but we will not be able to pay this sum.

 

[Despan Correspondent] While the prime minister Margaryan and the Georgian

minister of state conversed face to face behind closed doors, other

ministers held negotiations. Armenia requests that Georgia maintain the

current discount fares for railway freights. These are the tariffs applied

to Armenian goods transportation through Georgia: the 24% discount on oil

products and the 17% discount on other goods.

 

[Yervand Zakaryan, minister of Transport and Communications] The main thing

is they should be economically acceptable and beneficial for both Armenia

and Georgia. This is the only basis for our stand.

 

[Merab Adeishvili, the Georgian minister of transport and communications]

Goods turnover was supposed to double. If not double, then, at least, it

should have risen a touch. However, on the contrary, the volume of goods has

diminished. Hence, we can say that price liberalization has not had a more

or less positive effect on the volume of goods turnover. However, we

maintain that it is unimaginable to reduce tariffs beyond the current level.

This is ruled out.

 

[Andranik Margaryan] Our industry is already running and we do hope that

goods turnover will grow.

 

[Despan Correspondent] Are we ready for this?

 

[Andranik Margaryan] Yes.

 

[Despan Correspondent] Alongside these issues, Armenia requests that retail

markets in the Armenian-Georgian border areas be declared as free trade

zones.

 

[Mikheil Chikviladze, the chairman of the Georgian Tax Department] It is a

rather complicated theme and we have already agreed that we need concrete

proposals to consider the proposals, because this issue cannot be settled

easily.

 

[Giorgi Gachechiladze, the chairman of the Georgian Customs Department] It

is the actual fact that unrecorded goods go in and out of the markets, thus

creating problems for both us and the Armenian side. We, the two sides, are

concerned about it and, therefore, we should find a way to somehow resolve

the problem and take the issue under control.

 

[Despan Correspondent] Gia Arsenishvili and the other members of the

delegation were received by President Kocharyan. The meeting was held behind

closed doors.

 

[Gia Arsenishvili] Here, actually, we discussed again all the issues we

discussed at the Cabinet of Ministers. However, this discussion was held at

a different level, it differed from that one in its depth. Viewing all this

through a historical perspective, we all are very pleased, I mean myself and

all the members of our delegation. The finance minister, as well as the

minister of transport and communications, had an opportunity to speak out

about all the problems that are to be resolved by Georgia and Armenia.

 

[Despan Correspondent] The visit of the Georgian minister of state to

Armenia ended at the residence of the Patriarch of the Armenian Church in

Echmiandzin. It must be mentioned that the problem of debts was a

domineering issue discussed at all the meetings throughout the visit. The

categorical tone of the members of government was somewhat neutralized by

President Kocharyan. Working groups have been instructed to settle a number

of issues. The Georgian side, for its part, is to think about the reduction

of railway tariffs, while the Armenian side is to think about the

restructuring of Georgia's debts. Some time ago, the International Monetary

Fund proposed that Armenia restructure Georgia's debts. Considering that the

IMF intends to resume its long-term program in Armenia, we can presume that

Armenia cannot disregard its recommendation. One way or another, working

groups will be working untill April 1.

 

They will work and take certain decisions, decisions which must be

acceptable to both sides.

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  • 3 months later...

Well, MJ!

Finally, something positive!

I have a feeling that this is not gonna workout. Gerogians won't pay their debts and the demands of armenian government on reduced transport tarifs and free trade zone will be forgotten.

 

Doesn't this article sound something "deja vue"?

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