The war in Nagorno-Karabakh became a disaster for the economy of the unrecognized republic. GDP fell by almost a third, exports of the unrecognized republic fell by half. How the region survives a year after the war – in the RBC report
How Stepanakert celebrated the anniversary of the end of the war
Stepanakert & mdash; a busy city, for which it is difficult to immediately tell that a year ago it was a target for heavy artillery. In some places, there are still echoes of the war: broken windows obscured by plywood, on the walls, like splashes, traces of fragments.
At the entrance to the city there is a billboard with a portrait of the smiling Russian President Vladimir Putin. The streets are filled with cars & mdash; taxi on the counter, regular buses & mdash; hairdressers and beauty salons have been opened, schools, toy shops and bookstores, wine bars and pubs are working. In the courtyards between the houses, linen is dazzling on the lines, children play in the playgrounds. A year ago, in every house in Stepanakert, at least one door was always wide open – & mdash; in a bomb shelter. Now they are closed and disguised, on some & mdash; locks. At the site near the Cathedral of the Intercession of the Mother of God, an elegant wedding & mdash; a couple is waiting for the operator's command and begins to climb the steps of the temple, the bride picks up a fluffy dress.
Photo: Alexander Atasuntsev/RBC
Before the war, according to official data, about 50 thousand people lived in Stepanakert. man, now & mdash; 60 thousand. The increase was due to refugees from those regions of Karabakh, which came under the control of Azerbaijan. In total, before the war, about 150 thousand people lived in the territories of the NKR, now & mdash; about 120 thousand (according to the estimates of the NKR Minister of Labor and Social Affairs Mane Tandilyan).
However, the problem of returning people to the region is still far from being solved & mdash; already now, the authorities are recording an outflow of the population, two sources in the government of the unrecognized republic told RBC. And it is caused primarily by the constant danger and the vague future of the region. The problem of people returning to NKR & mdash; “ the most important from the point of view of its survival, '' say the interlocutors of RBC. If people do not want to live there, it will just be land that Armenia will not need, says one of the interlocutors of RBC.
On the afternoon of November 10, on the anniversary of the introduction of Russian peacekeepers into Nagorno-Karabakh, 22-year-old Martik Yeremyan was buried in a cemetery on the outskirts of Stepanakert. More than a hundred residents attended the funeral. Yeremyan was shot dead three days ago, less than a kilometer from the Russian peacekeepers' checkpoint near Shusha, which Azerbaijan took control of. Three more people were injured. No one had a weapon & mdash; employees of the local water utility laid pipes for the peacekeepers at their request, the wounded said. The man who came down from the city controlled by Azerbaijan first shot Eremian in the head almost point-blank, then started shooting at the others. The killer was not found, but an officer's knife and several cartridges remained at the crime scene. The Azerbaijani Foreign Ministry called the accusations of murder a 'provocation'.
The war in Nagorno-Karabakh began on the morning of September 27, 2020 and lasted 44 days. On both sides, according to various estimates, from 6 to 10 thousand people died. On November 10, the leaders of Armenia, Azerbaijan and Russia signed a trilateral statement that ended the war. According to it, Yerevan agreed to the transfer of all seven regions of the “ security belt '', and Hadrut and Shusha also came under the control of Azerbaijan. Almost 2,000 Russian peacekeepers were deployed along the contact line.
Where did the refugees from Karabakh end up?
Yeremyan's murder is not the first. On October 9, a sniper shot and killed an Armenian tractor driver in the Martakert region. Moreover, at that time there was a Russian peacekeeper next to him. The NKR authorities believe that civilians are being shot deliberately in order to intimidate people and force them to leave. “ They (Azerbaijanis & mdash; RBC) want there to be no Armenian Karabakh, because without it there will be no Russian peacekeepers. But how to do it? Like this, & raquo;, & mdash; Foreign Minister of the unrecognized republic David Babayan presented his version of events to RBC. Incidents like this add to the unknown. There is no peace agreement between Azerbaijan and Armenia & mdash; instead, a declaration of armistice. A year later, the Russian peacekeepers did not have a clear mandate; it is not even known about the rules of their presence when they have the right to use weapons.
Photo: Alexander Atasuntsev/RBK
About 27 thousand refugees continue to live in Armenia a year later. Many do not want to return to Karabakh. On the outskirts of Yerevan, a modestly furnished but spacious apartment is rented by the Mikaelyan family & mdash; 56-year-old Aida and 65-year-old Karlen. They are from the Hadrut region, were born and lived in the village of Tokh, after the war the President of Azerbaijan Ilham Aliyev came there. There they left three houses and all their property. When Aida talks about her relatives, her husband, smiling Karlen, tilts his head, presses his hand to his ear and listens attentively – he was wounded during the first Karabakh war. Aida and Karlen have five children & mdash; four daughters and a son. After the war, the eldest daughter left with her husband, a native of Tokh, to Ashtarak, a city a few kilometers from the Armenian capital. The second daughter is also with her fellow villager husband now in Vladikavkaz. The son left for Krasnodar. The youngest, 24-year-old Seda, stayed with them in Yerevan. Their only child who decided to stay and live in Karabakh & mdash; third daughter & mdash; moved to Martakert region. The older Mikaelyans are not going to return to Karabakh. “ Scary. We are live targets there. There is no status [of independence of the NKR]. Today the Russians are there, and tomorrow? In four years, what will be there? There will be a status & mdash; let's go there & raquo;, & mdash; says Aida.
Many had the dilemma & mdash; stay in Armenia and start from scratch here, or leave and start from scratch somewhere else, says the head of the Teryan Cultural Center; Lilit Melikyan. During the war, she organized assistance to hundreds of Karabakh refugees. The question of staying or leaving is relevant not only for the Karabakh people, but also for the Armenians of the Republic of Armenia, she says. Society is still acutely experiencing the events of the past year & mdash; and it is still far from their full acceptance, because for many it means, after all the horrors of the war, to start living peacefully next to Azerbaijanis. “ We have not stopped, we are still falling. The fact that we have a future is unambiguous, because any Armenian & mdash; like a cat, it always falls to its feet. But it just might not be in Armenia anymore, '' & mdash; she says. “ Before, we didn't think that they (Azerbaijanis & mdash; RBC) were so scary. And they turned out to be so terrible. And we will not be able to live with them in the world, & mdash; continues Melikyan, but after a pause adds. & mdash; But I'll try, because I don't want to leave Armenia. ''
“ We will never be part of Azerbaijan. This is our red line. They hate us & mdash; this is their state of mind & raquo;, & mdash; says Karabakh Minister Babayan and adds that if it happens that the entire Armenian Karabakh still comes under the control of Baku, then not a single Armenian will remain in it. But, he adds, “ we are like a badly wounded soldier '' one hand is missing, one leg is missing, we have lost our eyes, but we are still alive. '' “ And we will never give up Shushi and our other cities. But we understand that now we need to preserve what is & raquo;, & mdash; says Babayan.
What is left of the economy of the unrecognized 'tiger'
As a result of the war, the territory of the NKR was reduced by 80%. For the economy of the unrecognized republic, the conflict turned into disastrous consequences, says the Minister of Economy and Agriculture of the NKR Armen Tovmasyan. This is the second major problem & mdash; the region can become depopulated, if not because of the danger of physical destruction or expulsion, then because of economic insolvency. Two years ago, Yerevan financed about 50-60% of the NKR budget. Now money in Armenia makes up 90% of the budget of the unrecognized republic, Tovmasyan said in a conversation with RBC. In 2020, the NKR budget is about $ 254 million, the minister said. But, according to him, this year it is likely to grow, because additional money is needed for the restoration.
Photo: Alexander Atasuntsev/RBC
Over the past few years, the NKR economy has been growing by 10% per year. In 2019, in terms of dollars, the GDP of the unrecognized republic was about $ 713 million with a population of about 150 thousand people. Per capita of the unrecognized republic & mdash; $ 4803. This is even more than in Armenia ($ 4,623 in 2019, according to the World Bank) and Azerbaijan ($ 4,794). Due to the fast growth rates of the economy, the NKR even began to be called the “ Transcaucasian tiger. '' But over the year after the war, GDP fell by 28% and most likely next year the economic decline will continue, Tovmasyan said in a conversation with RBC.
Electricity and gas supplies provided 7.8% of Nagorno-Karabakh's GDP in 2019. Now the production of electricity in Karabakh has dropped by almost 3.5 times, the unrecognized republic has lost 29 out of 36 hydroelectric power plants. In this matter, it also began to depend heavily on Armenia, although back in 2019, Karabakh even produced surplus electricity. NKR is fed through the narrow Lachin corridor, but the line capacity is not enough – & mdash; Because of this, power outages often occur in NKR in the last year, Tovmasyan says.
Another problem & mdash; water. The Karabakh Armenians lost control over the sources of the Tartar and Khachinchay rivers, which before the war provided 80%, and now & mdash; 98% of all water needs of the region, says NKR Foreign Minister David Babayan, in the past & mdash; specialist in water resources. Not only the water security of Karabakh, but also of Armenia has been violated, he says and shows on the map a small area on the border of the Kalbajar region, where the sources of the Arpa and Vorotan, which fill Lake Sevan, are located. “ It was impossible to give this piece in any case, '' & mdash; Babayan says with irritation. However, restoration work is underway, a reservoir is being built in the village of Badara, Tovmasyan says.
In the production structure of Nagorno-Karabakh's GDP, mining and open pit development (gold, copper, building stones) have always prevailed & mdash; 13.7% of gross value added in 2019. Here the situation is not as critical as in other areas & mdash; The Karabakh Armenians were able to retain the main mines near Martakert, but lost some in the Kelbajar region. The export of the unrecognized republic fell by half.
Photo: Alexander Atasuntsev/RBC
Tourism was also severely affected. 2,400 people for the entire past year & mdash; dozens of times less than it was before the war, Tovmasyan says. Almost all of them & mdash; Armenians. The fact that there were almost no tourists was confirmed to RBC and the director of a large hotel in Stepanakert, until 2018 by the Minister of Culture, Youth and Tourism of the NKR Sergey Shakhverdyan. The business survived due to the fact that since winter, some of the rooms are constantly occupied by Russian builders, he admits. The pace of construction & mdash; a rare but obvious indicator that has increased compared to last year. Housing is being restored in Stepanakert and its environs and new ones are being built for refugees from Hadrut, Shushi and other Armenian cities that came under the control of Azerbaijan. Part of the money for this comes from the diaspora, mainly Russian, says Tovmasyan.
How agriculture and winemaking can survive
Another pillar of the region's economy was agriculture & mdash; it accounted for about 10% of GDP in 2019. After the war, Karabakh lost half of its livestock and 75% of arable land. The volume of agriculture decreased by 54%. Azerbaijan got most of the agricultural machinery.
In 2019, up to 11 thousand tons of grapes were grown in the unrecognized republic, now & mdash; about 5 tons, gives the example of Grigory Avetisyan, owner of Kataro, one of the most famous wineries in Karabakh. Avetisyan lost his plant and 15 hectares of personal vineyards & mdash; he, like the Mikaelyan family, was born in the village of Tokh. The enterprise was also located there. Kataro known primarily for its red wine from the Khndokhni grape variety, which grows mainly in Karabakh. Before the war, according to Avetisyan, his company produced about 100 thousand bottles a year.
Photo: Alexander Atasuntsev/RBC
Avetisyan left the village on October 20 & mdash; the day before the Azerbaijani military entered it. I didn't take anything out of the factory & mdash; I was sure that it would not come to the surrender of the entire district. He wants to resume production of & mdash; for this he took out a loan and re-bought tank barrels in Bulgaria, equipment in Italy. In the spring and summer of next year, he expects to pour out the first bottles of white, rose and red wine. Avetisyan wanted to start making wine in Karabakh again, but both Russian and Armenian banks, to which he turned, refused to give money for this & mdash; too risky, so the winemaker had to start from scratch near Yerevan & mdash; in the small village of Dzoraghbyur, a 20-minute drive from the capital. His younger children now go to school here. He carries grapes from Karabakh & mdash; 18 hectares of rented vineyards remained on the Armenian side.
The fact that Armenian banks refuse to lend to the unrecognized republic was confirmed to RBC and Minister Tovmasyan. This is hampered not only by the risks associated with the war, but also by the debts of the population, he says. The only chance for Karabakh to restore agriculture & mdash; make it modern and greenhouse & mdash; Before the war, there were almost no greenhouses in the unrecognized republic, everything was grown the old fashioned way, Tovmasyan says.
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