Armenia / Georgia
Armenia / Georgia


by Armine Avagyan

In the southern Armenia town of Kapan in the Syunik province, municipal administrator Edik Mirzoyan sees growth in the region reflected through the visitors he receives as part of his local government duties.

It used to be, Mirzoyan says, that most people sought financial aid or employment from the municipality. But now they have different needs. A handful ask for jobs, he says, "and the rest either are privatizing property or want to buy land for construction."

Syunik, the largest (in land mass) of Armenia's 13 provinces, produced 17.2 percent of the country's industrial output last year and 9.1 percent of its agricultural product. Industry, primarily mining, had gross production of $408 million in 2007, more than doubling the numbers from 2006.

Second only to Yerevan in volume of production, the Syunik province is home to about 153,000 who live in 102 rural communities and seven towns. Kapan, the provincial center, has a population of 43,000.

Economist Liana Alaverdian groups the towns of the province in terms of economics: "Goris and Sisian, specializing in agro-industry, and Kapan, Kajaran, Meghri specializing in the mining industry." It is the latter that has seen the most development in recent years, as investors from Germany, Australia and North America have exploited three large operations and several smaller ones.

In the town of Kajaran, the Zangezur Copper and Molybdenum Enterprise (ZCME) is the largest ore mining company in the republic, employing about 3,000, and is often the top taxpayer in Armenia. Last year, about $112 million in taxes was collected from Zangezur. (The second highest taxpayer, ArmenTel, paid $67.3 million.) Its ownership is 60 percent German, and 40 percent Armenian.

When it was privatized in 2004, ZCME's development plan called for some $240 million investment by 2020. By the end of this year it will have realized about $157 million of that goal.

Though by far the largest, ZCME is not the only mining company to see the potential in Syunik mineral reserves.

Dino Gold Mining Company, originally bought by the Swiss (2002), was sold to British Vatrin Investment Company in 2005. Since 2006 Canadian-owned Dandee Precious Metals controls 80 percent of Dino stock. The company employs 1,600 at its operation in Kapan and was Armenia's 37th highest taxpayer last year, at $5.2 million.

In 2007, GeoPromining, an internationally held company, bought the Agarak copper and molybdenum extracting enterprise from its American owners. With about 1,350 employees—many from the southernmost city of Meghri—the company paid $7.5 million in taxes last year, 17th among taxpayers.

Meghri is home to two gold mines which provide about 400 jobs. The mines were privatized in 2005 by Australia's Iberian Resources Ltd., which paid about $1.2 million in taxes last year.

American Global Gold made surveys on the territory of the Marjan mine, rich in deposits of various metals (gold, silver and copper) and located in the village of Arevis. In July the company announced it has started pilot exploitation of the mine and plans to have two processing plants and provide up to 600 jobs. The company says it has invested about $30 million in development.

Another new enterprise is expected to open in 2010 in Kajaran, as ZCME plans a second division of its mining operation. The molybdenum concentrate it now produces is processed in Yerevan and the copper concentrate is exported. ZCME says it can also extract pure copper in Armenia and is investing about 130 million Euros in a plant that will offer 500 jobs for that purpose.

This year, too, Armenian and Russian scientists have begun surveying uranium deposits in Syunik and say that if a sufficient amount exists, a uranium mine could prove a profitable investment.

Sisian, in the center of the Syunik province, hosts four major (native owned) stone mines and more than 20 processing plants, exporting Armenian basalt to Russia, USA and France as well as to the many construction sites throughout Armenia.

The largest stone processing company in Sisian—VH Stone—had been silent for several years due to financial loss, until launching reconstruction this year. New equipment has been installed and the locally owned company says it will soon be offering up to 350 jobs.

Natural costs

The economic benefits of mining growth in Syunik have come at a cost to ecology.

Ashot Avagian, head of Kapan's Orhus Environ-mental Information Center, says that the Artsvanik tailing dump, where ZCME deposits its waste, poses health risks to residents of Kapan. On hot, windy days, chemicals used in the processing expel heavy metals such as mercury and arsenic into the atmosphere.

"Besides," says Avagian, "water from mechanical cleaning falls into the Norashenik River. Although a structure has been built to prevent that water from mixing with irrigation waters, as of today they do mix. As a result most arable land in the neighboring villages is polluted."

Studies have revealed that heavy metals in cultured plants from the area exceed healthy concentration.

Inside Kapan, old, non-functioning mines still hold residue that, during heavy rains, bring hazardous substances to the surface that dry up and spread in the wind.

Dust full of heavy metals from mine blasting is a severe health hazard, especially so in Kajaran where the mine is close to the town.

Avagian says matters of environmental pollution can be easily solved, however, relying on methods used in countries that have experienced similar issues and overcome them.

Despite the availability of rich deposits and the growth of enterprises providing economic progress in Syunik, economist Alaverdian says it is unwise to "overload" one province with so much ore mining.

"At this pace of development the deposits will be exhausted soon," she says. "They increase production volumes every year and the deposits won't be able to last. This is because our republic lacks any doctrine for sustainable development," adding that every country needs to have regulations aimed at sustaining its resources.

Improving by degree

Last year $14.6 million was invested in construction in Syunik, compared to $5.9 million just two years earlier.

In the main city, Kapan, the majority of construction is for home garages, shops, car repair services, etc. The Zangezur company built the first large-scale construction in 15 years in Kapan when it opened a business center last year. And by the end of this year Kapan expects to have a new pedestrian bridge over the Voghji River linking retail outlets owned by a Russian investor who is paying for the bridge.

As in Armenia's capital, Yerevan, life in the city of Kapan has become more comfortable in recent years, but also more expensive.

The hard life of mining at least provides livable wages. But for many who do not have those jobs, life has become more difficult.

Ashot Harutiunian, 37, is a bus driver and his wife is a nurse. Together they are raising three school-age sons. The family of five exists on about $300 a month from the parents' combined income. Harutiunian says they need twice that.

"We always end up being in debt to the shop and still can't provide our children with proper food," he says.

Families in Kapan have seen a steady rise in the prices of goods over the past few years. Bread that used to cost about 23 cents now costs 77. Cooking oil has gone from about $2.10 to about $3.30 per liter. Likewise, the prices of cheese and meat have doubled—to about $3.30 for a kilo of cheese; $6.70 for meat.

But father of three Harutiunian adds that there is a degree of "improvement" to their living conditions.

"In the late 1990s our life was miserable," Harutiunian says. "Now it is simply bad."

In 2005, a branch of the Agricultural University of Armenia was founded in Kapan, bringing a fourth institute of higher learning, with about 1,000 students combined. (There are eight colleges in the province total, with about 1,800 students.)

Liana Avanesian, 18, studies at the department of economics of the Yerevan State Engineering University Kapan branch. "To tell the truth, I don't know what a perfect education looks like or how subjects are taught in other places to compare: I have what I have here. That is why I am generally content with the quality of teaching and the conditions of the university," says the student.

Liana says if she had opportunity to study in Yerevan, she would choose another profession, and regrets that choices are limited in Kapan. Nonetheless she has taken whatever opportunity was available. "I wish I could study somewhere related to theater and stage direction. I play musical instruments, write poems and songs. If I were in Yerevan, I think I would be able to offer my songs to singers, to sell my compositions. But here I have no chance to show my abilities."

Minding body and soul

Last year, Syunik province completed an optimization of its health-care system in which polyclinics were merged into larger medical centers. Now there are six medical centers, a psychiatric clinic, a blood transfusion center, as well as 11 centers of primary health-care and 101 maternity centers in the rural areas.

Presently there are 306 doctors in Syunik, but the medical institutions of the province are in need of 51 specialists. Yerevan would be the source for stocking Syunik's health-care needs, but specialists do not come to faraway regions to work because of the lack of attractive conditions. And, with a small population in the regions, there is also small remuneration for the work.

Armenuhi Karamian, a nurse in Kapan for 27 years, makes only $85 a month. "I wish I had a high salary so that I wouldn't even think of taking a chocolate bar from patients," she says, referring to the common practice in which nurses take "gifts" from patients for basic services to supplement their income.

Cardiologist Jasmine Stepanian doesn't complain of her financial state (her salary is 53,000 drams, about $175). Her children support her on wages comparatively higher than those of hospital doctors. Without her children's help, her salary would be insufficient, she says. "Doctors have to buy books, attend training sessions, go to Yerevan even if only to communicate, go to the theater, to grow personally and professionally. It all requires money..."

Stepanian wants health care to be completely free of charge in Armenia: "Private health care should exist in wealthy, developed countries, but our country is poor and so we shouldn't try to follow Europe's or America's examples," she says.

While health care remains a vital issue, the spiritual welfare of Syunik is being tended by the Armenian Apostolic Church.

After independence, local authorities reopened the church in the village of Geghanush, which had served as a warehouse in Soviet times and has now become the spiritual center of Kapan.

But people who had been denied spiritual life for 70 years during communism had no tradition of observing religious rites. Only recently has the Church become a central part of life in the region.

Saint Mesrop Mashtots church opened in Kapan in 2001, built by natives of Kapan living in Armenia and abroad. For years, Kapan, Kajaran and surrounding villages had only one priest. Now there are three; one serves in two villages and two travel to the town churches.

Churches have also been built or restored in three more villages.

Rev. Galust Darbinian, the priest in Kapan and Kajaran, says people have lost a lot in terms of spiritual growth over 70 years. "The changes in recent years have been significant. Baptism and weddings have grown in number. There are about 40-50 weddings a year. One can't say the spiritual life is perfect, but there is progress. Definitely, people here are a bit more indifferent to the Church as compared to other regions." The priest says he is encouraged, though, by the youth of the province.

"Many of them approach to ask questions," he says. "We also frequently visit kindergartens and schools to fill the gap."

Staying, returning, immigrating

The Syunik town of Kajaran always differed from other towns of Armenia for its lack of emigration, even in war time. (Parts of the province, especially Kapan, suffered heavy shelling during the 1988-92 war in Karabakh.) On the contrary, people from other places of Armenia have always been moving here.

"The latest official data says the population in Kajaran is 9,125, but actually there are 12-13,000 people living here," says the mayor of Kajaran Vardan Gevorgian. "Many people live here, who have not been registered, and 320 have been accepted for work at the mining plant from various towns of Armenia within the last year alone."

Buying or renting an apartment is becoming a serious problem in Kajaran today as the population continuously grows with no new residential houses being built. The town's 2,360 apartments are all occupied.

Kapan was an industrial town in Soviet times. But like Vanadzor and other factory-based areas, the collapse of the USSR brought the closing of plants and loss of jobs.

According to the Organization for Security and Cooperation in Europe (OSCE), however, Syunik now has the country's lowest rate of migration, 1.2 percent, registering only 1,800 migrant workers.

Serzhik Hovhannisian, 50, moved to the Russian town of Tyumen, leaving his family in Kapan in 1995. He worked there for more than 10 years, doing construction and repair jobs. "Of course, I did not know the craft, but I learned, because I had to provide for my four children," he says. He is not happy he had to leave: "But we accommodated ourselves somehow to provide for the family." By the time he returned he had managed to pay for his three daughters' university educations and to buy a house.

Hovhannisian returned to Kapan in 2007 where he now has a job using the skills he learned abroad.

"You will have a job if you are a good worker," Hovhannisian says. "The thing is, it is not permanent, it is seasonal work, and I wish I had it permanently."

Mayor Armen Karapetian says about 3,000 residents have returned to Kapan over the past two years. He bases the number on registration for kindergartens and schools and applications for city utilities.

Keeping its youth is a challenge for Kapan. Young people who attend universities in Yerevan are mostly reluctant to return. Those who manage to find work in the capital settle there.

Artur Ghukasian, 20, graduated from the Yerevan State Economic University this year and has been accepted to the Master's program. He came to Kapan for summer vacation to see his parents, but was in a hurry to return to the capital, where he has been living for the last four years.

"There are few opportunities for entertainment in Kapan," he says. "We, the young people, mainly go to the memorial complex across from the artificial lake, because there is some interest in that. But in Yerevan there are lots of sources of entertainment."

He mentions that his friends from Kapan studying in Yerevan do not want to return either, because life there is different.

"I imagine my future here only in 10-15 years," the young man says. "I have plans; if I achieve something I will return and will realize them. But I will stay in Yerevan for now."

Zara Avetian, 24, who graduated university in Kapan, says it is mostly cafes and Internet clubs that offer entertainment after work. "Or we just walk. It's a bit more active in summer; we have wonderful nature, and many go to the country for vacation." But she says she would like to have cinema and theater. (In fact there is an active theater in Kapan.)

"I wake up every day thinking I will not stay in Kapan, but go to sleep thinking I will. Half of my family is in Moscow, the other part is here. I am just back from Moscow, where I went with the thought of not returning, but I did return. I missed Kapan."

And yet, she sees her future outside Kapan. She is not very content with the education she has received here and thinks she'll continue it somewhere else some day.

Originally published in the November 2008 ​issue of AGBU Magazine. Archived content may appear distorted on your screen. end character

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