GAME OF "EMBELLISHMENT"

The Board of Trustees of the All-Armenian Fund Armenia has said that the funds that will be raised during a telethon in 2013 will be used to repair the Vardenis-Agdara road passing through Kalbacar District. By creating infrastructure linking the occupied region of Azerbaijan to Armenia, Yerevan hopes to strengthen its position in Nagornyy Karabakh. Secondly, this road will help to create better conditions for stealing minerals, especially gold and copper, from Agdara and Kalbacar. Armenia currently operates a mine in the village of Heyvali in Kalbacar District. Gold produced here is transported to the Alaverdi metallurgical plant for processing. In short, the restoration of the road will ease the way from the mine to the factory.

Base Metals, a company owned by Russian businessman of Armenian origin Valeriy Mezhlumyan, is engaged in illegal gold and copper production in the occupied territories. This company is a "pillar" of the economy of self-proclaimed Nagor-nyy Karabakh. In 10 months of 2011, the company paid $ 8.3 million in "taxes". At first glance, the creation of infrastructure and activities of Base Metals can be perceived as the formation of a sustainable economy in the so-called "Nagornyy Karabakh Republic" proclaimed by Armenia in the occupied Azerbaijani lands. In reality, the situation, to put it mildly, is not as rosy as it seems.

The economy of the occupied region, presented as "the economy of the Nagornyy Karabakh Republic", is very small in volume. It is difficult to identify any significant sector of key importance.

In general, according to Armenian media reports, "the economy of Nagornyy Karabakh" is based on agriculture, and land has been distributed in it. If you trust these sources, 30,000 people are employed in the agricultural sector and there are 15,000 farms. Since 1999, the separatist region has supposedly fully provided itself with grain. However, it should be noted here that in spite of the increase in budget allocations for agriculture, the grain boom here has faded into oblivion.

Now there is an ore boom in the occupied territories of Azerbaijan, as indicated by the restoration of the notorious Agdara-Vardenis road. Another favourite area of top officials of the separatist regime is the construction of "elite housing", which also involves not private, but budget investment.

Speaking of the budget. A weighty part of it is the so-called annual "interstate loan" from Armenia, whose financial resources are very limited anyway. Both in Armenia and in the occupied territories, they are well aware that no one will ever return the "loan" even if both sides sincerely desire it. The Karabakh regime simply has no ability to return subsidies coming from Armenia.

If, for example, we take the "NKR budget" for 2011, the revenues of which totalled $ 168 million, and assume that the total "tax" revenues, including $ 12.4 million from the "largest companies", may be about $ 20 million, then it turns out that the remaining $ 148 million account for financial assistance from Armenia and the Armenian diaspora. For example, in 2011, the "interstate loan" from Armenia totalled $ 91.8 million. As can be seen, the Karabakh separatist regime will not be able to meet its own needs without subsidies, as it is very limited in sources of income.

The entire "financial system" of Nagornyy Karabakh is totally dependent on Armenia. The financial flows are managed and the rules of their regulation are defined by the Central Bank of Armenia. There are only branches of Armenian banks in the region. The Armenian currency - the dram - is used here. Although the separatist regime has announced the introduction of the "Karabakh dram", in reality it has become a commodity that is of interest only to numismatists hunting for exotic coins.

As can be seen, "the Karabakh economy" is not able to function independently and is entirely dependent on foreign support, which comes from Yerevan and the Armenian diaspora. It would be naive to believe that the region would be able to independently develop its own economy without this support. Nagornyy Karabakh is actually integrated into the economy of Armenia. The small amount of products produced in the occupied territories is sold only in Armenia, and if they have access to international markets, only as products made in Armenia. But how far can you go with this?

The economy of Armenia itself is going through hard times. Production has collapsed, and the minor industries that generate revenue are owned by Russia. In this case, dependence on a country, which is on the verge of bankruptcy itself, can only lead to negative consequences for the Armenians of Karabakh. It is also naive to rely on eternal assistance from the Armenian diaspora - someday they will get tired of pouring their money down the Karabakh drain.