Turkish Forum

Month: October 2008

  • The United States, Europe and Bretton Woods II

    The United States, Europe and Bretton Woods II

    By George Friedman and Peter ZeihanFrench President Nicolas Sarkozy and U.S. President George W. Bush met Oct. 18 to discuss the possibility of a global financial summit. The meeting ended with an American offer to host a global summit in December modeled on the 1944 Bretton Woods system that founded the modern economic system.

    Related Special Topic Page
    Political Economy and the Financial Crisis

    The Bretton Woods framework is one of the more misunderstood developments in human history. The conventional wisdom is that Bretton Woods crafted the modern international economic architecture, lashing the trading and currency systems to the gold standard to achieve global stability. To a certain degree, that is true. But the form that Bretton Woods took in the public mind is only a veneer. The real implications and meaning of Bretton Woods are a different story altogether.

    Conventional Wisdom: The Depression and Bretton Woods
    The origin of Bretton Woods lies in the Great Depression. As economic output dropped in the 1930s, governments worldwide adopted a swathe of protectionist, populist policies – import tariffs were particularly in vogue – that enervated international trade. In order to maintain employment, governments and firms alike encouraged ongoing production of goods even though mutual tariff walls prevented the sale of those goods abroad. As a result, prices for these goods dropped and deflation set in. Soon firms found that the prices they could reasonably charge for their goods had dropped below the costs of producing them.

    The reduction in profitability led to layoffs, which reduced demand for products in general, further reducing prices. Firms went out of business en masse, workers in the millions lost their jobs, demand withered, and prices followed suit. An effort designed originally to protect jobs (the tariffs) resulted in a deep, self-reinforcing deflationary spiral, and the variety of measures adopted to combat it – the New Deal included – could not seem to right the system.

    Economically, World War II was a godsend. The military effort generated demand for goods and labor. The goods part is pretty straightforward, but the labor issue is what really allowed the global economy to turn the corner. Obviously, the war effort required more workers to craft goods, whether bars of soap or aircraft carriers, but “workers” were also called upon to serve as soldiers. The war removed tens of millions of men from the labor force, shipping them off to – economically speaking – nonproductive endeavors. Sustained demand for goods combined with labor shortages raised prices, and as expectations for inflation rather than deflation set in, consumers became more willing to spend their money for fear it would be worth less in the future. The deflationary spiral was broken; supply and demand came back into balance.

    Policymakers of the time realized that the prosecution of the war had suspended the depression, but few were confident that the war had actually ended the conditions that made the depression possible. So in July 1944, 730 representatives from 44 different countries converged on a small ski village in New Hampshire to cobble together a system that would prevent additional depressions and – were one to occur – come up with a means of ending it shy of depending upon a world war.

    When all was said and done, the delegates agreed to a system of exchangeable currencies and broadly open rules of trade. The system would be based on the gold standard to prevent currency fluctuations, and a pair of institutions – what would become known as the International Monetary Fund (IMF) and the World Bank – would serve as guardians of the system’s financial and fiduciary particulars.

    The conventional wisdom is that Bretton Woods worked for a time, but that since the entire system was linked to gold, the limited availability of gold put an upper limit on what the new system could handle. As postwar economic activity expanded – but the supply of gold did not – that problem became so mammoth that the United States abandoned the gold standard in 1971. Most point to that period as the end of the Bretton Woods system. In fact, we are still using Bretton Woods, and while nothing that has been discussed to this point is wrong exactly, it is only part of the story.

    A Deeper Understanding: World War II and Bretton Woods
    Think back to July 1944. The Normandy invasion was in its first month. The United Kingdom served as the staging ground, but with London exhausted, its military commitment to the operation was modest. While the tide of the war had clearly turned, there was much slogging ahead. It had become apparent that launching the invasion of Europe – much less sustaining it – was impossible without large-scale U.S. involvement. Similarly, the balance of forces on the Eastern Front radically favored the Soviets. While the particulars were, of course, open to debate, no one was so idealistic to think that after suffering at Nazi hands, the Soviets were simply going to withdraw from territory captured on their way to Berlin.

    The shape of the Cold War was already beginning to unfold. Between the United States and the Soviet Union, the rest of the modern world – namely, Europe – was going to either experience Soviet occupation or become a U.S. protectorate.

    At the core of that realization were twin challenges. For the Europeans, any hope they had of rebuilding was totally dependent upon U.S. willingness to remain engaged. Issues of Soviet attack aside, the war had decimated Europe, and the damage was only becoming worse with each inch of Nazi territory the Americans or Soviets conquered. The Continental states – and even the United Kingdom – were not simply economically spent and indebted but were, to be perfectly blunt, destitute. This was not World War I, where most of the fighting had occurred along a single series of trenches. This was blitzkrieg and saturation bombings, which left the Continent in ruins, and there was almost nothing left from which to rebuild. Simply avoiding mass starvation would be a challenge, and any rebuilding effort would be utterly dependent upon U.S. financing. The Europeans were willing to accept nearly whatever was on offer.

    For the United States, the issue was one of seizing a historic opportunity. Historically, the United States thought of the United Kingdom and France – with their maritime traditions – as more of a threat to U.S. interests than the largely land-based Soviet Union and Germany. Even World War I did not fully dispel this concern. (Japan, for its part, was always viewed as a hostile power.) The United States entered World War II late and the war did not occur on U.S. soil. So – uniquely among all the world’s major powers of the day – U.S. infrastructure and industrial capacity would emerge from the war larger (far, far larger) than when it entered. With its traditional rivals either already greatly weakened or well on their way to being so, the United States had the opportunity to set itself up as the core of the new order.

    In this, the United States faced the challenges of defending against the Soviet Union. The United States could not occupy Western Europe as it expected the Soviets to occupy Eastern Europe; it lacked the troops and was on the wrong side of the ocean. The United States had to have not just the participation of the Western Europeans in holding back the Soviet tide, it needed the Europeans to defer to American political and military demands – and to do so willingly. Considering the desperation and destitution of the Europeans, and the unprecedented and unparalleled U.S. economic strength, economic carrots were the obvious way to go.

    Put another way, Bretton Woods was part of a broader American effort to extend the wartime alliance – sans the Soviets – beyond Germany’s surrender. After all wars, there is the hope that alliances that have defeated a common enemy will continue to function to administer and maintain the peace. This happened at the Congress of Vienna and Versailles as well. Bretton Woods was more than an attempt to shape the global economic system, it was an effort to grow a military alliance into a broader U.S.-led and -dominated bloc to counter the Soviets.

    At Bretton Woods, the United States made itself the core of the new system, agreeing to become the trading partner of first and last resort. The United States would allow Europe near tariff-free access to its markets, and turn a blind eye to Europe’s own tariffs so long as they did not become too egregious – something that at least in part flew in the face of the Great Depression’s lessons. The sale of European goods in the United States would help Europe develop economically, and, in exchange, the United States would receive deference on political and military matters: NATO – the ultimate hedge against Soviet invasion – was born.

    The “free world” alliance would not consist of a series of equal states. Instead, it would consist of the United States and everyone else. The “everyone else” included shattered European economies, their impoverished colonies, independent successor states and so on. The truth was that Bretton Woods was less a compact of equals than a framework for economic relations within an unequal alliance against the Soviet Union. The foundation of Bretton Woods was American economic power – and the American interest in strengthening the economies of the rest of the world to immunize them from communism and build the containment of the Soviet Union.

    Almost immediately after the war, the United States began acting in ways that indicated that Bretton Woods was not – for itself at least – an economic program. When loans to fund Western Europe’s redevelopment failed to stimulate growth, those loans became grants, aka the Marshall Plan. Shortly thereafter, the United States – certainly to its economic loss – almost absentmindedly extended the benefits of Bretton Woods to any state involved on the American side of the Cold War, with Japan, South Korea and Taiwan signing up as its most enthusiastic participants.

    And fast-forwarding to when the world went off of the gold standard and Bretton Woods supposedly died, gold was actually replaced by the U.S. dollar. Far from dying, the political/military understanding that underpinned Bretton Woods had only become more entrenched. Whereas before, the greatest limiter was on the availability of gold, now it became – and remains – the whim of the U.S. government’s monetary authorities.

    Toward Bretton Woods II
    For many of the states that will be attending what is already being dubbed Bretton Woods II, having this American centrality as such a key pillar of the system is the core of the problem.

    The fundamental principle of Bretton Woods was national sovereignty within a framework of relationships, ultimately guaranteed not just by American political power but by American economic power. Bretton Woods was not so much a system as a reality. American economic power dwarfed the rest of the noncommunist world, and guaranteed the stability of the international financial system.

    What the September financial crisis has shown is not that the basic financial system has changed, but what happens when the guarantor of the financial system itself undergoes a crisis. When the economic bubble in Japan – the world’s second-largest economy – burst in 1990-1991, it did not infect the rest of the world. Neither did the East Asian crisis in 1997, nor the ruble crisis of 1998. A crisis in France or the United Kingdom would similarly remain a local one. But a crisis in the U.S. economy becomes global. The fundamental reality of Bretton Woods remains unchanged: The U.S. economy remains the largest, and dysfunctions there affect the world. That is the reality of the international system, and that is ultimately what the French call for a new Bretton Woods is about.

    There has been talk of a meeting at which the United States gives up its place as the world’s reserve currency and primacy of the economic system. That is not what this meeting will be about, and certainly not what the French are after. The use of the dollar as world reserve currency is not based on an aggrandizing fiat, but the reality that the dollar alone has a global presence and trust. The euro, after all, is only a decade old, and is not backed either by sovereign taxing powers or by a central bank with vast authority. The European Central Bank (ECB) certainly steadies the European financial system, but it is the sovereign countries that define economic policies. As we have seen in the recent crisis, the ECB actually lacks the authority to regulate Europe’s banks. Relying on a currency that is not in the hands of a sovereign taxing power, but dependent on the political will of (so far) 15 countries with very different interests, does not make for a reliable reserve currency.

    The Europeans are not looking to challenge the reality of American power, they are looking to increase the degree to which the rest of the world can influence the dynamics of the American economy, with an eye toward limiting the ability of the Americans to accidentally destabilize the international financial system again. The French in particular look at the current crisis as the result of a failure in the U.S. regulatory system.

    And the Europeans certainly have a point. If fault is to be pinned, it is on the United States for letting the problem grow and grow until it triggered a liquidity crisis. The Bretton Woods institutions – specifically the IMF, which is supposed to serve the role of financial lighthouse and crisis manager – proved irrelevant to the problems the world is currently passing through. Indeed, all multinational institutions failed or, more precisely, have little to do with the financial system that was operating in 2008. The 64-year-old Bretton Woods agreement simply didn’t have anything to do with the current reality.

    Ultimately, the Europeans would like to see a shift in focus in the world of international economic interactions from strengthening the international trading system to controlling the international financial system. In practical terms, they want an oversight body that can guarantee that there won’t be a repeat of the current crisis. This would involve everything from regulations on accounting methods, to restrictions on what can and cannot be traded and by whom (offshore financial havens and hedge funds would definitely find their worlds circumscribed), to frameworks for global interventions. The net effect would be to create an international bureaucracy to oversee global financial markets.

    Fundamentally, the Europeans are not simply hoping to modernize Bretton Woods, but instead to Europeanize the American financial markets. This is ultimately not a financial question, but a political one. The French are trying to flip Bretton Woods from a system where the United States is the buttress of the international system to a situation where the United States remains the buttress but is more constrained by the broader international system. The European view is that this will help everybody. The American position is not yet framed and won’t be until the new president is in office.

    But it will be a very tough sell. For one, at its core the American problem is “simply” a liquidity freeze and one that is already thawing. Europe’s and East Asia’s recessions are bound to be deeper and longer lasting. So the United States is sure – no matter who takes over in January – to be less than keen about revamps of international processes in general. Far more important, any international system that oversees aspects of American finance would, by definition, not be under full American control, but under some sort of quasi-Brussels-like organization. And no American president is going to engage gleefully on that sort of topic.

    Unless something else is on offer.

    Bretton Woods was ultimately about the United States trading access to its economic might for political and military deference. The reality of American economic might remains. The question, then, is simple: What will the Europeans bring to the table with which to bargain?

    Tell Stratfor What You Think

    This report may be forwarded or republished on your website with attribution to www.stratfor.com

  • VOTE YES ON PROPOSITION 2 AT CALIFORNIA — A MUST SEE VIDEO

    VOTE YES ON PROPOSITION 2 AT CALIFORNIA — A MUST SEE VIDEO

    • A Must-See Video
    • Celebrities across California, including Stifler’s mom, will be voting YES! On Prop 2. You should too!

      Voting YES! will help stop animal cruelty in California.

      Watch our video and see how Prop 2 is good for your health, the economy and much more! The video is funny but the issue is serious!

      Support Calitics, click thru.

    Email to your friends in California and everywhere!

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  • NEAR EAST FOUNDATION CELEBRATES 90th YEAR;

    NEAR EAST FOUNDATION CELEBRATES 90th YEAR;

    Merhaba Sukru Bey,<[email protected]>
    Bugun aksam American Turkis Society ve Turkish Coalition of America’n ortaklasa dozenledigi konferansa gidecegim. Aksam gec vakit Istanbul’a donecegim, Londra’da butun gun kaldikdan sonra.
    Near East Foundation web sayfasindan bazi bolumleri gonderiuorum, Armenian genocide’la basliyor.

    YUKSEL OKTAY [mailto:[email protected]]

    —————————————————————

    Founded during Armenian Genocide
    NEAR EAST FOUNDATION CELEBRATES 90th YEAR;
    FIRST U.S. INTERNATIONAL DEVELOPMENT ORGANIZATION;
    PIONEER OF AMERICAN PHILANTHROPY ABROAD
    “NEF@90: Celebrating Development; Honoring
    Philanthropy” is the theme of this year’s
    commemoration of the 90th anniversary year of the
    Near East Foundation (NEF), which was founded as
    Near East Relief in 1915 in urgent response to the
    Armenian genocide and deportations and in the process
    pioneered international humanitarian assistance. A
    series of celebratory events is being planned throughout
    the year, highlighted by a gala banquet to take place
    September 21 in New York City.
    During World War I, the Near East Foundation is
    credited with saving a million lives of Armenians,
    Assyrians, Arabs, Persians and others in the region,
    among them 132,000 orphans. Many an Armenian can
    trace their lives or those of their parents and
    grandparents back to Near East Relief orphanages and
    camps. NEF’s rescue mission and relief operation
    during war and subsequent reconstruction work in its
    aftermath employed techniques that reverberated
    through the following decades and are employed to this
    day. NEF’s approach created the models for the
    Marshall Plan, Truman’s Point-4 Program, the Peace
    Corps, the US Agency for International Development
    (USAID) and the United Nations Development
    Program.
    Commented NEF President Ryan A. LaHurd, Ph.D.,
    “While the Near East Foundation has an extraordinary
    record of past accomplishments, we remain on the
    cutting-edge of practice today. Currently we are at
    work in a wide range of development projects in a
    dozen countries of the Middle East and Africa, carrying
    out this organization’s historic mission–‘To help people
    the people of the Middle East and Africa build the
    future they envision for themselves.’”
    Corroborating that view, last year NEF received the
    prestigious Arab Gulf Programme for United Nations
    Development Organizations (AGFUND) International
    Prize for Pioneering Development Projects for 2004,
    for enhancing nursing as a career in Upper Egypt.
    Announced in Riyadh, the award came as a result of a
    competition with 83 projects from 32 countries on
    three continents.
    Also, the Near East Foundation received the 2004
    Freedom Award, the highest recognition granted by the
    Armenian National Committee of America for the
    organization’s “longstanding history of aiding the
    Armenian people and others in their darkest hours.” In
    February of this year, NEF was among those honored,
    and NEF’s President delivered the keynote address, at
    the “International Relief, Refuge, and Recognition”
    luncheon sponsored by The Armenian Assembly of
    America, The Armenian General Benevolent Union,
    and The Western Diocese of the Armenian Church of
    North American to honor Near East Foundation’s
    humanitarian response to the Armenian Genocide.
    Further recognition came in the 2003 museum
    exhibition, “Near East/New York: The Near East
    Foundation and American Philanthropy,” of 300
    photographs and objects from the Near East
    Foundation archive chronicling its early work. The
    show debuted at the Museum of the City of New York
    in Manhattan, and has subsequently toured this past
    winter to the Doheny Memorial Library at the
    University of Southern California. It will next be on
    view at the Armenian Library and Museum of America
    in Watertown, Massachusetts, opening April 24, the
    commemorative date of the Armenian Genocide. In
    2004 NEF’s history and its current work in Morocco
    and Egypt were featured in two, half-hour, television
    programs, produced for “The Visionaries,” a series on
    “philanthropies that make a difference” broadcast
    nationally on PBS.
    ORIGINS
    NEF was created in response to an alarming cable from
    American Ambassador to the Ottoman Empire Henry
    Morgenthau to the U.S. Secretary of State stating that
    the Turkish “destruction of the Armenian race is
    progressing rapidly,” and it was urgent that something
    be done. Within two weeks a group of civic, business
    and religious leaders, led by Cleveland H. Dodge,
    formed a committee, mostly comprised of distinguished
    New Yorkers, to rescue over a million people caught up
    in the tragedy. Dodge’s grandson, David S. Dodge, still
    serves the Near East Foundation, having been for many
    years the chair of its board of directors. He is
    representative of the intergenerational commitment of
    many of the founding families and their ongoing
    financial support through the years.
    The volunteer committee quickly met its $100,000 goal,
    thanks to donations from those early board members.
    By 1919 the committee was chartered by Congress and
    designated the primary channel for U.S. postwar aid to
    the region. From 1915 to 1930, Near East Relief raised
    $110 million for refugees—that is about $1.25 billion in
    today’s dollars—including $25 million in in-kind food
    and supplies. This remarkable outpouring occurred at a
    time when bread cost a nickel a loaf.
    More than one million people had been rescued from
    certain death by starvation and exposure. Some 12
    million people had been fed, and at one point between
    1919-20, an average of 333,000 people were fed daily.
    Forty hospitals were built. Over 130,000 children were
    housed, fed and taught in orphanages and provided
    with medical care. One of these Armenian children was
    Phoebe Kapikian, who thinking back to her memories
    of being a two-and-a-half year old in the village of Sivas
    recalled only “confusion…driven out…groups with
    bundles on their backs of things that belonged in the
    house going on ahead…60-70 children left behind and I
    was clinging all the time to my older sister Ashan…a
    long, hard journey….”
    She was piled into one of the many carriages hired to
    rescue abandoned orphans and taken to the Island of
    Syra. “The buildings already were in construction. We
    were taken care of very well by the Near East
    Foundation. We would rise on time, wash our faces.
    There was plenty of water. They tested every child for
    his or her capacity of how much they could read and
    write. So we had to go to school and we had food,” she
    explained, recalling her years at the orphanage.
    Nearing the age of 10, she was chosen to join a group
    of children being sent to England, later joining her older
    sister in America–thanks to the tireless efforts of
    Katharine Reynolds McCormick, an philanthropist who
    traveled the United States lecturing about the plight of
    orphans, raising funds and finding homes. “She was a
    mother for all that she did for me and my sister too,”
    said Miss Kapikian in an interview shortly before her
    death in 2004 after a rich life and career as a librarian in
    Queens, New York.
    Very early in the relief effort attention focused on
    helping the rescued orphans to become self-supporting
    and contributing members of the communities that
    absorbed them. Both in its orphanages and in foster
    care homes under NEF auspices, attention shifted to
    teaching agriculture and industrial skills, primarily at
    NEF demonstration centers. A generation of poultry
    raisers, dairymen, mechanics, shipbuilders, cabinet
    makers, masons, shoemakers, tailors and nurses grew up
    and moved out into their adopted countries. Thus
    NEF moved beyond relief to become the first true
    international development organization.
    In the Middle East, NEF became a symbol of American
    generosity and a prototype for the Peace Corps, besides
    its work with orphans, providing medical aid to six
    million patients. NEF was the vehicle for service to the
    region by hundreds of American volunteers—doctors,
    nurses, teachers, social workers. In short, NEF
    provided hope, home, training and education to a
    generation “without a childhood.” NEF saved the
    remnants of Armenians, helping resettle them in
    Armenia, Lebanon, Syria, Cyprus, Greece and the
    United States; and helped rescue other wartime victims
    including Assyrians, Greeks, Turks and Kurds. NEF
    was at work in Armenia, Turkey, Persia, Lebanon, Syria,
    Palestine, Egypt and the Caucasus.
    PHILANTHROPY
    An unsurpassed achievement at the time and
    remarkable even today, all this was accomplished by
    pioneering philanthropic techniques which continue to
    be used today. Among the innovations, NEF produced
    a series of compelling posters created by top American
    illustrators. Their national fundraising campaign feature
    Madison Avenue-style slogans like “Hunger Knows No
    Armistice” and “Clear Your Plate—Remember the
    Starving Armenians.” NEF Bundle Days encouraged
    Americans to send used clothing overseas, which they
    did—by the tons. Celebrities became spokespersons.
    Child-actor Jackie Coogan spearheaded the NEF Milk
    Campaign; and cans of condensed milk were collected
    at screenings of his films at movie theaters around the
    country. He even visited the region, traveling on a
    “milk ship” out of New York. Americans were urged
    to “adopt and orphan,” being told “$60 a year cares for
    a child.” On International Golden Rule Sunday, families
    across the country ate a simple orphanage meal and
    donated the equivalent cost of their average Sunday
    dinner. Based on population, each American town and
    city was asked to contribute. President Woodrow
    Wilson issued proclamations and wrote endorsement
    letters.
    The lingering impact of NEF fundraising is evident in
    today’s attention-grabbing graphics on through celebrity
    endorsements. And the Milk Campaign continues as
    well. Twenty tons of milk were distributed by the Near
    East Foundation to malnourished children in the West
    Bank from December 2003 to early May of 2004. Since
    then milk, cheese and other local dairy products were
    delivered to the families of 836 children enrolled in all
    17 kindergartens in the cluster of West Bank villages
    north of Nablus, where NEF currently is at work on a
    range of development projects.
    Forty tons of water, much of it to be mixed with
    powdered milk for children, were trucked to Baghdad
    by NEF at the height of the Iraq war along an
    extremely dangerous route during U.S. bombings. Also
    despite extreme risk to humanitarian personnel, NEF
    delivered 50 sheep to the Abou Shashir refugee camp in
    Darfur, Sudan, for the special occasion of the recent
    Eid Al-Adha celebrations. For a brief time, despair in
    the camp lifted and life seemed almost normal for
    people who feel preyed upon by all sides. NEF was the
    only non-Islamic, Western agency participating in the
    feast with the local people of Darfur. An NEF
    shipment of medicines and blankets followed.
    FROM RELIEF TO DEVELOPMENT
    While providing emergency relief in these
    circumstances, the Near East Foundation has been a
    force for the human and economic development of the
    region since 1930, when it had successfully completed
    its refugee activities. NEF aimed for long-term change,
    particularly attending to vocational education and
    agriculture, including experimental projects and
    instruction in raising sheep, poultry and cattle and the
    use of fertilizer’s, seeds and mechanized farm
    equipment. NEF had become America’s first
    international development agency, teaching people skills
    that could permanently improve their lives. The idea
    expressed in the saying, “give a man a fish and he will
    eat for a day; teach him to fish and he will eat for a
    lifetime” became NEF’s watchword.
    “NEF’s approach has had far-reaching significance and
    has impacted foreign aid programming for the past half
    century,” according to Dr. Linda Jacobs, a Middle
    Eastern archeologist and current chair of the NEF
    board of directors. Dr. Jacobs previously was a
    member of the NEF staff. The Jacobs Family
    Foundation, set up by her parents Dr. Joseph and
    Violet Jabara Jacobs, has been a long-time generous
    supporter of NEF’s work, and her mother is NEF’s
    largest individual donor. The Jacobses represent yet
    another example of the intergenerational commitment
    of many NEF supporters through the years.
    4
    “Today this approach is termed ‘self help,’” Dr. Jacobs
    continued, “but NEF has been doing this since the
    1920s and 1930s, decades before it became widespread
    practice. And ‘self help’ remains a cornerstone on our
    development work internationally to this day. In
    dozens of programs we work at the grassroots where
    training, technology and community-based
    organizations touch people’s lives.”
    The NEF-American University of Beirut Institute of
    Rural Life and its specialists provided much of the
    leadership in the post World War II Middle East in the
    areas of education, economic development and health.
    Activities ranged broadly from water purification and
    sanitation improvements, to decreasing infant mortality
    and introducing malaria control, to home and welfare
    demonstrations and small industries employing women,
    to organizing schools and teacher training and
    developing rural cooperatives.
    The Near East Foundation’s first experimental rural
    development program was in Greece where they
    worked in 48 villages on land donated by the Greek
    government. The program consisted of training in
    practical farming adapted to local conditions, water
    management, basic education in literacy, and health
    maintenance. From the beginning the aim was to
    develop local leadership and create programs which
    could carry on after NEF staff departed. Using this
    Macedonian experiment, NEF’s work spread eastward
    to Syria, Lebanon, Jordan and Iran. Just one case in
    point, in 1946 the Iranian government asked the Near
    East foundation to establish a rural improvement
    program for 350 villages based upon their successful
    Macedonian model. Four years later in 1950, President
    Truman established the Point Four Program on
    international aid modeled on NEF’s work in Iran.
    “Many of the now standard ways of going about the
    business of international development,” Dr. Jacobs
    commented, “can be traced back to the Near East
    Foundation way before the 1960s cries of ‘power to the
    people’ and subsequent social movements. I cannot
    emphasize this enough since it is an amazing fact given
    the prevalent paternalism or worse at the time.
    PHILOSOPHY
    “From its earliest days the philosophy of the Near East
    Foundation has been never to impose an agenda, never
    to come into a community with preconceptions of what
    is best, but to listen and learn about the needs from the
    people themselves, then get down to work and help,”
    she continued. “The Near East Foundation has an
    enviable record through the years of valuing the dignity
    of people and respecting their opinions way before it
    was considered the preferred way to proceed,” she
    summed up, concluding, “And unfortunately many
    organizations involved in similar work still remain
    painfully remiss on this issue today.”
    Her opinion is reiterated by Steven W. Lawry, Ford
    Foundation staff person who was former representative
    for that Foundation’s Middle East and North Africa
    programs, based in Cairo. He had many opportunities
    to observe NEF in action up close. According to
    Lawry: “The Near East Foundation has made
    remarkable contributions toward alleviating human
    suffering over the many years since its founding. My
    belief is that NEF is best characterized as a humanistic
    organization, dedicated to giving vulnerable
    communities the capacity to shape sustainable solutions
    to their own problems. Their staff are dedicated
    professionals, highly trained and practiced in sociology,
    agriculture, engineering, urban planning and other fields
    relevant to development and change.
    “But they also understand the central importance of
    giving leadership to beneficiary communities in the
    design and governance of development and change
    initiatives. Importantly, NEF staff member bring to
    their work a profound respect for the dignity and
    knowledge of those they wish to serve. This results in
    interventions and programs that build community social
    capital and better enable individuals and communities to
    constructively address their problems over the longterm.
    In short, I personally have had very rewarding
    experiences with the Near East Foundation and the
    qualities of professionalism, service and imagination
    that characterize their work.”
    5
    In 1964 the Near East Foundation began working with
    the newly-independent African countries on agricultural
    development, recruiting hundreds of technicians trained
    in livestock improvement, water management, and
    scientific crop improvement. As its work evolved, NEF
    established a separate African Endowment Fund that by
    1980 funded development of experimental projects in
    new areas. In the 1980s the Near East Foundation
    responded to the threat of famine in Mali with a
    program that embraced livestock rehabilitation, village
    seed and cereal banks, agricultural credit, literacy, and
    soil and water conservation. Even before the end of
    Lebanon’s civil war, in 1988 NEF had launched a
    vocational training initiative in that country, including
    projects to assist those disabled by the war to find
    employment.
    In the competition between population growth and
    food shortages in Africa and the Middle East,
    throughout the 1980s NEF continued to work on
    agricultural improvement tailored to local conditions
    and the strengthening of local institutions and
    communities—what historically they had been very
    good at accomplishing. Increasingly NEF worked in
    cooperation with other donor agencies to implement
    projects ranging from beekeeping in Sudan and
    Swaziland to community development projects in Egypt
    and Jordan and seed and cereal banks in Mali.
    It was in Mali that Steve Lawry of the Ford Foundation
    first became acquainted with the Near East Foundation.
    He was there supervising a University of Wisconsin
    team researching forest rights and management. “The
    locally-based NEF team asked us to help evaluate their
    efforts to build an efficient, low-cost system for better
    harvesting rainwater for agricultural and forestry
    purposes. What we found was astounding,” he still
    sounds astounded to this day.
    “NEF staff had designed a simple water harvesting
    technology based on surveying natural water run-off
    patterns and constructing, with village volunteer labor,
    low-level earthen ridgelines that channeled water to
    cultivated areas. The practice reduced stress to crops
    and improved food security. It represented in
    important ways an adoption and extension of traditional
    and locally-familiar water conservation techniques.
    ‘However, traditional harvesting practices were limited
    to individual farms, “ Lawry continued, “To successfully
    extend the design to a larger water catchment area,
    NEF helped community members work through a
    number of complex questions around land tenure, water
    rights and labor management. NEF staff worked with
    intelligence and sensitivity at every level, the technical as
    well as the social, in helping shape an intervention that
    yielded sustainable benefits and could be managed by
    the local community permanently.” He remains an
    NEF fan to this day and later, as the Ford Foundation
    representative for the Middle East and North Africa,
    recommended Ford funding for a variety of NEF
    research and community development initiatives.
    CENTER FOR DEVELOPMENT SERVICES
    A major NEF milestone occurred in 1990 with the
    establishment of the Center for Development Services
    in Cairo, with assistance from the Ford Foundation to
    support their initiatives in community development.
    The center maintained that early focus on self-help in
    dozens of programs and brought together a cadre of
    professionals who could become a “think tank” of
    practicing development workers to refine techniques
    and mentor local talent. Current projects range widely
    from a number of local Egyptians initiatives on through
    working with street children to recover their lost
    potential in five Arab countries and a six-country
    initiative on Islamic philanthropy.
    Lawry again: “After working in the country for several
    years, NEF leadership had concluded that the most
    enduring contribution it could make to Egypt would be
    to help establish an Egyptian development support
    organization, embodying many of NEF’s own traditions
    of professionalism and service, but bolstered by the
    added knowledge, experience and legitimacy that
    Egyptian staff would bring to the fore over the longterm.”
    He adds, “It is rare for international development
    organizations to design initiatives with the explicit aim
    of putting themselves out of business. But this was
    6
    effectively the goal of NEF in establishing the Center
    for Development Services as a resource for Egyptians
    to struggle with complex problems on their own
    terms,” he continued, adding, “This initiative
    distinguishes, in my mind at least, NEF as a humanistic
    as well as a technical assistance organization.”
    One of those Egyptians was Montasser Kamal, a
    medical student 20 years ago at Cairo University when
    he first became associated with the Near East
    Foundation’s work in Egypt, and later at manager at the
    Center for Development Services. “NEF has had a
    profound impact on my life,” he states categorically,
    “work ethos, team work, mutual respect and having an
    investigative mind are all qualities which I gained while
    at NEF, and which I carry with me to this day. As
    NEF ‘pushed the envelope,’ its ethos was embraced by
    its staff throughout their professional and even personal
    lives and in turn by the communities where NEF
    worked.” Dr. Kamal also obtained a Ph.D. in medical
    anthropology and is now with the World Health
    Organization.
    He elaborates further: “NEF has without doubt come
    to be one of the most influential institutions in the lives
    of many disadvantaged people in Egypt and other
    countries of the Middle East. NEF also became
    influential in my life and the lives of many other
    development practitioners in the region. The influence
    of NEF, however, cannot be attributed to the scale of
    its financial resources, which was always modest.
    Rather, the influence can be attributed to the ability of
    NEF’s leadership to tackle key cutting-edge
    development issues before they became ‘flavor-of-themonth’
    and pursing them long after others were swayed
    away from them because of their inherent challenges.
    “The abilities to make timely decisions, charter new
    strategic directions, and create alliances have helped so
    many poor because, in part, these were qualities that
    inspired new generations of professionals to enter the
    field of development,” he believes.
    In 1991 NEF began working in Lesotho in southern
    Africa on a comprehensive rural development program
    based on the creation of a local non-governmental
    organization called GROW. In 1993 an Appropriate
    Technology Training Center was established in
    Morocco to promote technical alternatives for
    development by rural women. That same year they
    started a micro-credit program in the rural villages of
    Jordan.
    PALESTINE
    In 1994 NEF enhanced its program in West
    Bank/Gaza by supporting water resources with the
    Palestinian Hydrology Group to help save some 400
    springs and ponds. Other programs included a
    community health unit at Birzeit University; specialized
    training for United Nations Development Program
    personnel in multi-village development; technical
    assistance to U.N.’s Relief and Works Agency providing
    education, health and social service to 2.8 million
    registered Palestinian refugees in the West Bank, Gaza,
    Lebanon, Jordan and Syria; job creation and building up
    technical expertise.
    “The needs were enormous,” commented Dr. Vartan
    Gregorian, president of the Carnegie Foundation, an
    Armenian, long-time NEF supporter and member of its
    International Council. “If Palestinian selfdetermination
    and home rule had to become a reality; if
    its economy had to be viable, its economic
    infrastructure had to be secured and strengthened.
    Hence NEF had established several important
    programs.”
    In 1998 NEF expanded its urban development work in
    some of the poorest sections of Cairo, which in Ford’s
    Lawry’s opinion “were decisive in saving a low-income
    community in central Cairo from being forcibly
    removed to make way for historic conservation and
    tourism projects.” He says the Center for Development
    Services demonstrated that the community, though
    poor, was stable and had a variety of closely-knit
    economic and financial arrangements that created large
    numbers of service and small-scale manufacturing jobs.
    “Importantly, and perhaps ironically,” he commented,
    7
    “the research also found that the volunteer efforts by
    community members had over the years been decisive
    in saving many revered Islamic monuments from
    collapse, while wealthier groups had long-ago
    abandoned the district for the suburbs.
    “The Center’s research findings were taken up by the
    staff members of the Aga Khan Foundation, who were
    leading restoration efforts in the district, and used to
    convince Cairo local government authorities that
    displacement would destroy vital social and economic
    support networks and that the community should be
    allowed to remain,” he summed up.
    While working at the Center Dr. Montasser saw NEF’s
    pro-poor ethos and participatory modus operandi in
    development in action, up front and personally. He
    credits NEF’s approach with “substantially helping to
    alleviate the suffering of poor women, men and children
    in the region” in both urban and rural areas—and
    impacting the professional development community in
    the process. “The work of NEF in urban development,
    in health programming, in local community
    development and in economic development has helped
    so many poor to stand up for their right and to become
    sufficient,” he says. “NEF was there to see them
    through and is still there to tap into these communities
    as a resource to help others in need.
    “NEF works in many areas where poverty has alienated
    people and government apathy has left societies
    disenfranchised,” he continued. “In the context of this
    all too common picture in developing countries, the
    extraordinary work of NEF was felt and will be felt for
    many years to come. The poor and underprivileged
    who have become independent and vocal; the women
    who are now more assertive and financially
    independent; the youth who are now working and are
    fully engaged in the affairs of their community; and the
    men who are now more actively engaged in the
    governance of the resources in their communities—are
    all extraordinary examples of how local development
    can change lives if done properly.
    “Through gradual and sustained effort, profound
    changes in the lives of people NEF works with have
    taken place,” he reaffirmed. “From dependent,
    expected handouts with a sense of political
    hopelessness, NEF has helped people to be
    independent active members of society who are socially
    engaged in a process of change.
    “Perhaps one of the most extraordinary achievements
    of NEF has been to bring the voice of the poor to
    policymakers,” he added. “In the absence of
    democratic processes, people’s voices are often lost to
    the more powerful. That is not the case where NEF
    works. Where NEF works, people now know that
    power is not a zero-sum game and that they have an ally
    who can help them bridge this power gap in various
    effective and constructive ways. I remember the time I
    was working at NEF, when the concept of citizen
    participation in development was paid lip-service at
    best. NEF had embarked on a change strategy by
    which all its projects and programs had to demonstrate
    that they were participatory in nature. It was not easy.
    It is still not easy. But progress has been made, and
    NEF has come to set the ground rules on how to
    encourage participation and create the social sphere for
    it take place.”
    CURRENTLY
    Today the Near East Foundation continues to provide
    qualified specialists to transfer technical skills and
    training, leverages funding for projects with strong local
    support, and extends its reach through inter-agency
    cooperation. “Being the oldest, nation-wide,
    international assistance organization in the United
    States gives us certain advantages,” commented NEF
    President LaHurd. “We have the history and
    experience that attracts a constantly-growing group of
    affiliates and contacts as well as highly-qualified staff.
    And with few exceptions they are all nationals from the
    countries in which they work.
    “So we operate with a strong network of partners and
    the confidence and trust of local authorities—right now
    in 12 countries,” Dr. LaHurd continued. “Our Cairo
    regional office and Center for Development Services
    are both highly regarded in the Middle East in
    8
    particular. That we are the largest publisher of
    development materials in Arabic is just one of many
    reasons we are so well respected.”
    An up-to-the-moment report on the Near East
    Foundation’s current activities is available at their
    website www.neareast.org and detailed descriptions of
    their projects country-by-country in their 2004 annual
    report also is online at the site. What is particularly
    noteworthy is how their successful approaches in one
    country are replicated in others where they work. A
    case in point, the generation of supplemental income
    from fish farming in irrigation ponds of poor farmers
    pioneered in the 1980s in Jordan and now expanding
    wonderfully in the Jordan Valley—going soon to Gaza
    and Sudan when funding is available.
    For Abou Baker, a 60-year-old farmer in an agricultural
    community in the Gor Al-Safi district south of the
    Jordan Valley, fish farming brought in $700 last
    November, a traditional down-season, increasing his
    family income 15-20 percent. This was very important
    to him, since he is getting older…now 60; lost a leg
    because of a landmine accident, has a family of 14 to
    support on his small farm burdened by water shortages,
    high production prices, and poor marketing. Abou
    Baker was one of 25 small farmers who received
    fingerlings, fish feed, and technical and financial
    assistance when NEF initiative a fish farming program
    in his area in 1999.
    Then there is the Near East Foundation’s pioneering
    work in micro-credit dating from long before it was chic
    and used in many countries where NEF works, like
    Sudan. Here the so-called “popsicle lady” lives, a
    widow with a family to support and doomed to beg in
    the streets…until receiving her $200 NEF loan. She
    bought a refrigerator with a freezer and every evening
    fills small plastic bags with juice. Next morning she
    heads to the nearby elementary school and sells them to
    school children at recess—and supports her family. She
    was able to repay the loan in a year.
    In Jordan NEF’s micro-credit activities have recently
    taken a new twist—home improvement loans for the
    urban poor. While in Lebanon, where NEF has had
    long-term involvement in landmine issues, they are now
    providing loans to disabled victims and their families
    and caretakers. Like Abo Khalid, a blind man who used
    his $700 loan to furnish his small kiosk with goods—
    tea, newspapers, cigarettes, children’s candies. His
    average monthly income of $300 helps feed his
    children. Thanks to NEF-provided-credit, wheelchairbound
    Ali was able to establish a small maintenance
    service center for computers and electronic
    equipment—and a reputation for high quality work.
    Both have been freed from previous dependency on
    others, regained control over their lives, and become
    fully productive members of society.
    The Near East Foundation also has particular expertise
    in desert environments, both adapting agriculture to the
    harsh conditions and desert reclamation, including 10
    years of research on trees best suited to Mali’s Sahel,
    ultimately fruitful in every sense of the word. Now
    NEF’s involvement with reclaimed desert around
    Egypt’s Lake Nasser could in time become the largest
    agricultural project NEF has ever undertaken in that
    country.
    Speaking of large, the Near East Foundation has
    completed planning and is now seeking funds for what
    could prove to be the most far-reaching initiative in
    NEF’s entire history of development work in Africa,
    involving nine countries and over 100 million people. It
    would support local governance in West Africa’s huge
    Niger River Basin under severe environmental threat
    and competing demands, building upon successful
    approaches modeled in Mali since the 1980s.
    NEF continues its investment in the people of the West
    Bank, most intensely involved in a cluster of villages
    north of Nablus in a wide range of projects, from
    traumatized children and nutrition, to environmental
    issues and community organization, to good drinking
    water and youth centers, even helping train two
    promising Palestinian athletes bound for the Athens
    Olympics.
    It is a particularly rewarding site to see kindergarteners
    from the six participating West Bank communities
    clapping their hands and bursting into grateful song
    when they see the NEF team approaching to distribute
    their packages of dairy products. Later, when group
    pictures were taken, the children held their milk cartons
    9
    high above their heads and loudly cheered. As the
    mother of Sabreen from Ijnisniya put it: “I feel so
    happy when I see my child drinking the milk, especially
    the chocolate-flavored—she loves that kind. We put
    the cheese and yogurt in the fridge to eat later. I am so
    happy that we have these important foods for such a
    price. You know how bad our economic situation is
    nowadays, and without this program, we could not get
    these milk products for our children.” While there had
    been some absenteeism in the kindergartens at the
    beginning of the school year, during the “Cup of Milk”
    distribution date—there was absolutely none.
    In over 70 villages in the Souss-Massa Dra’a area of
    southern Morocco where NEF has been working, in
    literacy alone, 92 percent of women participating say
    they have learned to read, and 72 percent can now add
    and subtract and report using their skills regularly.
    Fifty-thousand people in southern Morocco—women
    in particular—have gained new self-esteem, education
    and income because of NEF’s programs over the years.
    Women like Fatima Bouhassi from the village of
    N’Kob, who can now read and write, has completed
    NEF-sponsored midwife training, and gathers all the
    other village women in her house and shares everything
    she learns. Using innovative theater techniques, NEF
    promoted Morocco’s new and history Family Code that
    took effect last July, governing women’s position in
    society and status. With seven women playing various
    roles for illustration and clarification, NEF field staff
    discussed the new laws, particularly marriage, divorce,
    child custody and inheritance, with large groups of
    village women. So unique, it got attention from the
    BBC in news reports.
    The little white house at the GROW compound in
    Mokhotlong, home to NEF Lesotho country director
    Ken Storan, has some new visitors, named Hlompho,
    Tumeliso, Rorisang, Thabang, Tiisetso…. The latter is
    about one-and-a-half years old—his exact age is
    unknown. Before being embraced by Ken, he lived by
    himself, most of the time in a cold house, sometimes
    outside, even in the rain. Hungry and skinny upon
    arrival, two months later he had gained seven pounds
    and could stand up by pulling on a chair. Tiisetso also
    can breathe easily since his pneumonia is gone; and has
    learned to smile and laugh, and likely will soon walk and
    run too.
    This is what the AIDS pandemic really means and the
    Near East Foundation is helping children—the most
    vulnerable victims of disease and poverty—in many
    countries in Africa and the Middle East. Beyond
    providing individual children with emotional and
    physical warmth, safety, rehabilitation from
    malnutrition and sickness or care with terminal illness;
    reconnection with family or caring adoptive homes,
    schooling and mentoring; the Near East Foundation is
    combating the AIDS calamity with an integrated and
    comprehensive approach that combines health,
    agriculture, infrastructure development and more.
    In Swaziland, which has the highest HIV infection rate
    in the world, close to 40 percent, NEF is using that
    comprehensive approach in 18 chiefdoms in the
    northern Hhohho area of the country. NEF works
    with people like Lussy Tfwala, chairperson of the water
    committee of Nkonjaneni homesteaders. They had a
    water source in the mountains above, but no means of
    getting it except by making hours of trips up and down
    steep slopes, carrying water by oxen cart and upon their
    heads. With NEF support, the committee, once
    organized, successful obtained $17 from every
    homestead family who would benefit from a domestic
    water supply, for the engineering, materials and heavy
    machinery needed. Contributing their labor, association
    members carried the material up the mountain and dug
    kilometers of trenches to bring the pipes from the water
    source to local taps. Four homesteads share a tap and
    take rotational responsibility for maintenance chores.
    The amount each homestead contributed has become a
    fund for repair and maintenance costs, augmented by a
    small monthly fee, for ownership leads to responsibility
    and commitment.
    This Nkonjaneni association now has the skills,
    organization, data to build on, new ways to assign
    community responsibility, and the means to sustain
    their critical water supply. It demonstrates NEF’s
    approach: true development is not primarily about the
    project, but more about the capacities built in the
    community that sustain NEF undertakings long after
    their staff has moved on.
    And last year the Near East Foundation returned to
    Armenia, for the first time since their expulsion by the
    10
    Soviets in 1927, to work with street children. Actually
    they were the only foreign agency allowed to operate in
    the Caucasus even after the Sovietization of the region,
    and supervised the welfare of 17,000 children in
    Armenia alone until being forced out. NEF
    Chairperson Linda Jacobs received an overwhelming
    reception that left her deeply moved by the often tearyeyed
    Armenian representatives who greeted her so
    warmly in every sector– government, education, social
    welfare, religion—and ordinary citizens.
    IN CONCLUSION
    The final word on the Near East Foundation goes to an
    Armenian, the Carnegie Corporation’s Dr. Gregorian.
    “It is an honor and a privilege for me as an Armenian,
    Iranian, Middle Easterner and an American to pay
    tribute to the Near East Foundation as it celebrates its
    90th birthday.
    “NEF is not a charitable institution. It is a
    philanthropic one. It invests, it welcomes investors. It
    builds. Its aim has always been ‘to help people help
    themselves.’ It aims to assist the people of the Middle
    East and Africa in their quest of autonomy in the social,
    economic and cultural realms. It provides people
    know-how, wants to endow them with hope, to assist
    them in their struggle against poverty, disease, hunger
    and injustice. That is the mission of NEF. NEF stands
    for dignity. It stands for our community with mankind.
    It stands for the best ideals and impulses of the
    American people, its idealism, altruism and generosity.”
    Dr. Gregorian concludes eloquently: “You, who are a
    rescuer of a nation, planter of seeds of hope, promoter
    of economic and social progress in the Middle East and
    Africa, symbol of America’s faith and goodwill, we
    congratulate you for generating knowledge, generating
    goodwill, generating hope, generating progress.
    Building bridges of brotherhood and sisterhood in a
    world that will transcend religion, ideological, ethnic,
    regional and racial conflicts, especially now when more
    than ever we need to stress common values and bonds
    that unite the ‘People of the Book,’ the Jews, the
    Christians and the Muslims. May you continue your
    good work. May you bring peace to the region.”
    Near East Foundation
    90 Broad Street, 15th Floor • New York, NY 10004, USA
    Phone: +1 (212) 425-2205 • Fax: +1 (212) 425-2350
    www.neareast.org
    Press Contact
    Andrea M. Couture
    212-425-2205 x17
    [email protected]
    Copyright © 2005 Near East Foundation, All Rights Reserved.

  • Armenians for Obama Meets with VP Nominee Senator Joe Biden

    Armenians for Obama Meets with VP Nominee Senator Joe Biden

    LOS ANGELES, CA–Armenians for Obama Chairmen, Areen Ibranossian, met with Senator Joe Biden during a fundraiser at the Pacific Design Center in the heart of Los Angeles.

    During the course of the meeting Ibranossian was able to discuss with the Senator numerous issues relating to Armenian-Americans as well as the work being done by Armenians for Obama.

    “It was an honor and a pleasure to meet Senator Biden. During our conversation I thanked the Senator for his long standing support of Armenian Genocide recognition and especially his leadership in ensuring military aide parity for Armenia and Azerbaijan,” stated Ibranossian. “Senator Biden’s deep understanding of foreign affairs and his commitment to truth and justice were on display as we spoke and I was inspired by his passion and energy,” continued Ibranossian.

    Senator Biden also thanked Armenians for Obama for its hard work and dedication to electing Senator Obama the next President of the United States. “After detailing some of the work that Armenians for Obama has been doing, Senator Biden expressed his sincere thanks and appreciation for the community’s support and encouraged Armenians for Obama to continue to educate and mobilize voters over the course of these last 19 days,” commented Ibranossian.

    Senator Biden also commented that in an Obama-Biden administration openness and honesty would be the prevailing rule in regards to the Armenian Genocide.

    Armenian National Committee of America-Western Region Chairman, Vicken Sonentz-Papazian, was also able to meet with Senator Biden in a separate meeting at the same fundraiser.

    Armenians for Obama is a nationwide voter registration, education, and mobilization effort dedicated to electing Barack Obama President. Based in Los Angeles, and with chapters and affiliates across the nation, Armenians for Obama will harness the energy and enthusiasm for Barack Obama’s candidacy to ensure record high Armenian American turnout in critical battleground states.
    Friday, October 17, 2008
  • Armenia, Russia Review Economic Ties Ahead Of Summit

    Armenia, Russia Review Economic Ties Ahead Of Summit

     

     

     

     

     

    By Hovannes Shoghikian

    Senior government officials from Armenia and Russia reviewed economic links between their countries and mapped out more bilateral projects ahead of Russian President Dmitry Medvedev’s visit to Yerevan on Monday.

    The Russian-Armenian intergovernmental commission on economic cooperation wrapped up a regular meeting in Yerevan just hours before the start of Medvedev’s first trip to Armenia in his current capacity.

    “We all got convinced once again that Russian-Armenian economic cooperation has a great deal of potential for further development,” Prime Minister Tigran Sarkisian, the commission’s Armenian co-chairman, said at the end of the meeting. He said the two governments should continue to “work consistently” to achieve that development.

    Opening the meeting earlier in the day, Sarkisian expressed hope that the Armenian and Russian presidents “will positively evaluate the results of our work.” Citing Kremlin sources, Russian news agencies have said economic issues will dominate Medvedev’s talks with President Serzh Sarkisian.

    “Economic cooperation between our countries continues to develop steadily and it is quite natural to hope that bilateral trade will reach $1 billion this year,” the commission’s Russian co-chairman, Transport Minister Igor Levitin, said for his part.

    The Armenian government said in a statement that Russian-Armenian trade was high on the meeting’s agenda along with the fate of Armenian enterprises that were handed over to Russia in payment of Yerevan’s $100 million debt to Moscow. Most of those enterprises, notably the Mars electronics factory in Yerevan, have stood idle since then.

    According to Levitin, the Russian government would like to give Mars to a private Russian company which he said is ready to revitalize it with large-scale investments. “But the plant’s efficient and competitive functioning requires either the creation of a free economic zone or a techno park,” Levitin told journalists. He said he hopes the Armenian government will agree to the proposed tax breaks.

    The two sides also announced an agreement to set up a Russian-Armenian joint-venture in Armenia that will manufacture bitumen, a construction material used for paving roads and streets. Armenia is heavily dependent on its imports from abroad. Levitin said the plant will not only meet domestic demand but also export some of its production.

    The commission apparently avoided discussing in detail possible Russian involvement in other, far more large-scale, economic projects planned by the Armenian government. That includes the construction of a new nuclear plant and a railway linking Armenia to neighboring Iran.

    “The issue is still in the discussion stages as experts are preparing to make feasibility evaluations,” said Sarkisian. “So naturally, decisions will be made only after the [feasibility] studies are over.”

    (Armenian presidential press service photo: Dmitry Medvedev and Serzh Sarkisian meet near the Russian Black Sea city of Sochi on September 2.)

  • Karabakh Deal ‘Possible’ In 2008

    Karabakh Deal ‘Possible’ In 2008

     

     

     

     

     

    By Ruzanna Stepanian

    A senior U.S. official said late Friday that the Nagorno-Karabakh conflict could be resolved before the end of this year and that the likelihood of another Armenian-Azerbaijani war has decreased since the recent crisis in Georgia.

    “It’s possible,” Assistant Secretary of State Daniel Fried told RFE/RL when asked about chances of a breakthrough in the Karabakh peace process in the coming weeks. “But possible does not mean inevitable, and there are hard decisions that have to be made on both sides. If this conflict were easy to resolve, it would have been resolved already.”

    Fried argued that Armenia and Azerbaijan were already very close to cutting a peace deal when their presidents held U.S.-mediated talks on the Florida island of Key West in early 2001. The deal fell through in the following weeks.

    Commenting on possible attempts by one of the conflicting parties to resolve the Karabakh dispute by force, he said: “I think that danger, which always exists, has somewhat receded because the war in Georgia reminded everyone in this region how terrible war is. There are some who are always tempted to talk in fiery language. But war is no joke. It’s a bad option.”

    The U.S. diplomat spoke to RFE/RL after holding talks in Yerevan with President Serzh Sarkisian, Prime Minister Tigran Sarkisian and representatives of Armenia’s main opposition alliance. Efforts by the United States and other international mediators to help settle Karabakh conflict were high on the agenda of the talks.

    Fried said he also urged the Armenian leaders to release opposition members that were arrested following the February presidential election on what the U.S. considers politically motivated charges. “My message was it’s important to get past this and resolve it,” he said. “The longer people remain detained, the longer there will be a cloud.”

    Fried said the Sarkisian administration should “deal with the consequences” of Armenia’s post-election unrest with the kind of “great leadership and courage” that it has shown in seeking to improve relations with Turkey. He also made the point that the democratization of Armenia’s political system will be a “slow process.”

    “Obviously, Armenia has a great deal to do to build democracy,” he said. “Let’s be realistic. This is going to be a slow, incremental process. It needs to go in the right direction and it needs to move forward.”