Ilham Shaban: "It would be most profitable for the Armenian population of Nagorno Karabakh to join the Azerbaijani state projects on restoration of the destroyed infrastructure in the occupied lands of Azerbaijan"

- President of Armenia Serzh Sargsyan said that he offered to Azerbaijani President Ilham Aliyev to invest into Nagorno Karabakh to demonstrate Azerbaijanis' interest in the welfare of Karabakh and the safe life of its population. "Perhaps, after it the Karabakh Armenians would speak for living within Azerbaijan", announced Sargsyan. How much can Azerbaijan invest directly and indirectly into Nagorno Karabakh?

- Let's first consider the economy of Nagorno Karabakh. By official data, the GDP of Nagorno Karabakh made just a little bit more than $200,000,000 at the 10% growth by results of the last year. At the same time, budget spendings reached $180,000,000.

What does it mean? It means that the complete production and even more is being spent. Such a small gap between GDP and budget is an economic nonsense. By the latest statistical data, in January-July of 2008 Nagorno Karabakh produced industrial goods just for $46,000,000  in real prices. The share of the state and nongovernmental sectors in the structure of industrial production made 21.4% and 78.6% (19.7% and 80.3% respectively in the same period of 2007). At the same time, Khankendi accounts for the half of the volume of industrial production.

In January-July of this year, Nagorno Karabakh sold 1,372.3 tons of poultry and meat, which is 83.7% of the indicator of the same period of the previous year. They produced 18,880.8 tons of milk (100.3%), 11,171,300 eggs (132.8%). Through 7 months of this year Nagorno Karabakh conducted construction works in the amount of $33,000,000, which is 100.1% as compared to the same period of 2007. This year the sowing areas reached 70,000 hectares.

The Drmbon combined cycle plant where 1,200 people work, is the biggest enterprise of Nagorno Karabakh. Last year they produced and processed 320,000 tons of ore. Another leading enterprise is Karabakh Telekom - the operator of telecommunication network of Nagorno Karabakh.

The "Nagorno Karabakh" leadership can hardly raise foreign investments into its economy. In 2006 then-leader of "Nagorno Karabakh Arkadi Gukasyan admitted in his interview to Spanish El Pais and Regnum news agency that through the past 8 years they had managed to raise private investments in the amount of about $80,000,000. The investments are mostly made by Armenian diaspora, notes Gukasyan.

As for tourism, despite all talks about the visit of tourists from the Armenian diapora, the figures are too low and the leadership of "Nagorno Karabakh" prefers not to call them. Real tourism can develop here on quite a different basis: close neighbors, for example, an Azerbaijani from lower Karabakh, come here for rest, spend money here and leave. This process really has prospects.

I would like to note that earlier this year then-leader of "Nagorno Karabakh" Bako Saakyan voiced concern with the process of credits repayment. A special session of the government was held on this issue and the session participants stressed that credits, received since 1998 have not yet been repaid.These credits (1.5 bln drams), allocated from the budget funds, were aimed for the agricultural needs. It means that agriculture does not bring any significant incomes, otherwise, such debts would have never appeared.

Yes, it should be admitted that Nagorno Karabakh have no significant energy problems: people in most settlements receive "blue fuel" and electricity. Nagorno Karabakh consumes no more than 100 mln cubic meters of gas and a little more than 200 mln KW-Hs of energy. Russian gas is supplied from Armenia and Sarsang hydroelectric power station generates up to 150 mln KW-Hs of energy.

It means that Nagorno Karabakh's economy depends on external donations and Armenian budget. Therefore, not only investments but also revolutionary methods of reformation and management are required to raise it.

- Which Azerbaijani banks, mobile operators and holdings may open their affiliates in Nagorno Karabakh?

- Let's begin with communication: it can be profitable in Nagorno Karabakh. It does not even require large investments. The geographical location of this territory helps to cover the territory with minimum expenses. Yet it would be more difficult to attract subscribers, for there are even less than 20,000 subscribers in the whole Nagorno Karabakh. Even if our companies offer a good tariff package, this customer basis would hardly ensure the "profitable" level, as the main part calls to Armenia and time is needed to redirect the flow.

Azerbaijani banks may also enter this market but the financial system of Nagorno Karabakh is so small that such a bank can hardly be imagined, if significant changes do not occur in the economic structure of Nagorno Karabakh.

Yet, all I am speaking of is related to private structures with market mechanisms, while the economic establishments with a state capital, any state corporations can not only establish business in Nagorno Karabakh by opening new jobs there within a short period of time, but also implement most socioeconomic projects, even if they have lower scale as compared to the capacities of these structures.

- Then which economic projects would be most favorable for Armenians of Nagorno Karabakh in case Azerbaijan and Armenia attain peace?

- I consider that if peace is attained it would be most profitable for Armenians of Nagorno Karabakh to take part in Azerbaijani state projects on the restoration of the destroyed infrastructure in the occupied lands of Azerbaijan.

It is no secret that by preliminary calculations of the Azerbaijani government, the restoration of this infrastructure will require $10 bln and over 40,000 workers (almost a half of the real population of Nagorno Karabakh). Higher figures are also indicated.

Thus, Armenian population of Nagorno Karabakh could earn at least $2 bln by taking part in these projects. If these funds are invested by Azerbaijan, it would be the participation of official Baku in the social problems of Nagorno Karabakh. These are very large indirect investments by Azerbaijan aimed at the settlement of the social problems of Nagorno Karabakh.

Now compare the support, received from the Armenian diaspora, with these new emerging opportunities and you will see that 20 years of "steady fight" did not give anything to Nagorno Karabakh's economy and moreover, they turned this wealthy land into a parasite. Moreover, it is necessary to be a realist and realize that Azerbaijanis must live and work without problems in Khankendi and vise versa in order to attain peace and stability. Then even impossible things may come true.

/Day.Az/