Major points of the NKR Prime-Minsiter’s speech – Mr. Anushavan Danielyan
(Third Armenian Business Forum of Europe - Geneva 26-28th April 2002)

He started with the comparison of Karabakh’s economic situation before the war and current.
Industrial output - 180 mln USD (1988), 10 mln USD (2001)
Tones of meat produced - 100000 (1998), 2800 (2001)
14 thou. hectars of grapes out of 16 thou. been damaged during the war.
In 1995, after the end of war – 80% of economy and infrastructure has been ruined. Since that year – GDP growth per year is estimated at 5-8%.

Demography and standards of living.
Population growth in 2001- 18.7% higher, than in 2000.
2453 people returned to Karabakh for the last year.
Number of families with more than 3 children increased by 2-3 times.
The Government’s programme supporting those families is very efficient – providing with extra money for each new child, plus a free house after the 7th child.
Average wage is 26000 AMD (approx 47 USD)
Minimum wage level is 5000 AMD (approx 8 USD)

Business environment.
Increase on 15-30% on almost every position on the economy for the last year.
Export increased 2.6 times, Investments increased by 30% to the previous year.
Taxation and investment climate has changed dramatically.
Profit tax – 5% (25% in 1999) - Tax revenues are higher than in the previous years, despite tax rate reduction
Income tax – 5% (32% in 1999) – revenues increased.
Land tax – 6% (15% in 1999)
Property tax – 6% (12% in 1999)
Payroll taxes – 13%, planned to be 10% in 2003 (28% in 1999)
VAT the same as in Armenia – 20%.
In general, less shadow economy, more tax revenues.

Investments.
35-40 mln USD has been invested in 2000-2001.
The major investments were in:
Karabakh Telecom company (15 mln USD to be invested in 2002-2005) – Lebanese investors (non-armenians). There are problems with Armentel.
Golden watches (1.5 mln USD, 150 people employed, 100% of production is exported – semi-fabrics)
Sirkap Armenia Hotel (2mln USD, USA/Switzerland)
Nairi Hotel (0,65 mln USD Australia)
Spagetti production (0,5 mln USD, USA)
Milk production (0,4 mln USD, USA)
Tuti vodka production and construction works (1.5 mln USD, USA)
Two broiler plants, branches of Lusakert company (Armenia), built last year - 1000 tones of meat produced, 20% of production exported.
Armtekhnomashexport (0.3 mln USD – special grasses, tea for medical purposes)
Carpets production (ecologically 100% clean (paints based on natural grasses)

Hydro-energy. Currently 40% of all energy is received from Sarsang Hydro-station. Creation of 19 new hydro-energy plants is planned with investments from 5000 USD up to 70 mln USD.
Deposits of gold and silver in Drmbon are to be developed. (15-20 tones of gold, 100-150 thou tones of silver)

Any comments?

My personal opinion is that definitely things are changing in Karabakh quicker than in Armenia. Ordinary people there cry less than in Armenia, have more will, struggle harder, are able to understand much better what corporate interests are (wider vision of their own interests, than in Armenia). Problems are the same. Certain changes in Karabakh are very positive, but still the Government has no modern understanding of what is called social-economic policy. The problems of poverty, inequality, access to the basic services - healthcare, education and their quality were not mentioned at all, but they have a direct influence on the economic development results and its sustainability. Nevertheless things are changing, hope that norms of economic and social behaviour in Karabakh are also changing. As a 25% Karabakhci I really hope so:)