Global Crisis Squeezes Life From Armenia Border Town

The global recession has ended a brief era of prosperity and left most people without jobs.

Global Crisis Squeezes Life From Armenia Border Town

The global recession has ended a brief era of prosperity and left most people without jobs.

Thursday, 25 June, 2009
In the town of Meghri, people can’t remember the last time a government official came to see how they live and to offer help. “They come only on the eve of elections,” one person said.

Though situated in the heart of Armenia’s mining region, Meghri, near the Iranian border and nearly 400 kilometres from the capital Yerevan, never had any industry or factories itself.

Karine Galstian, who gave birth to her second child only a month ago, is desperate to leave as soon as she can, because she sees no future for her children in Meghri.

She, her husband and two children, live off his monthly earnings as an electrician of about 65,000 drams (175 US dollars). “We also have a patch of land but we still only barely scrape a living,” said Galstian.

“I want to leave this place, as I see no future for my boys here. There is no hospital, not even a proper doctor.

“They could have created jobs here, but the crisis took away the ones that once existed.”

Galstian knows what she is talking about. Her brother recently joined the growing ranks of the town’s unemployed.

The riverside town of 4,500, ringed by mountains in the Syunik region, is visibly crumbling under the weight of the fallout from the world economic downturn.

Most locals worked at the two nearby complexes, a copper and molybdenum factory in the town of Agarak, a few kms away, and at the local gold processing plant based at Lichkvaz-Tey and Terterasar.

These two firms once employed more than 600 staff in total, and while they did, the life of thousands of Meghri residents – relatives of those 600 workers – improved.

Sirun Sargsyan recalls how jobs in the plants revitalised their remote community, “Seven years ago, we had only one newly-wed couple in the town to prepare gifts for, while this year we had 32.”

But while life for most residents of Meghri improved for several years, in the last few months it has turned into a bitter struggle for survival.

The first reports spread about the possible closure of operations in the mines of Lichkvaz-Tey and Terterasar in spring 2008. Then, in September 2008, the management of Tamaya Resources Ltd, the Australian company that owns the plant, decided to halt the work.

Anthony Ehlers, a representative of the company, told IWPR that the global economic crisis had made it difficult for Tamaya to attract the outside investment it still needed. For now, the ultimate fate of the mines remains unknown.

Work at the mines was suspended on June 1, 2008, and in August 2008 the last of the 350-strong labour force – the guards and drivers – were sent home on leave.

Sergey Tarverdian, a company driver, was one of the last to go. “We barely eke out a living,” Tarverdian lamented. “There is nothing in Meghri. Nobody cares about us.”

Meanwhile the copper combine at Agarak ceased operations in November 2008 and 250 more workers were suspended.

Geopromining Gold Ltd, owners of the plant, in February and again on June 19, announced that the plant would resume production but few people in Meghri have faith in that.

Sergey Hayrapetian, mayor of the town, says the crisis facing his community can only be solved with more active intervention by the state.

“The town budget for this year is simply unrealistic. We were planning to raise about 34 million drams in taxes, but I don’t think we will manage this because the number of unemployed people keeps growing,” Hayrapetian said.

“We have a few small wine producers here, and two private businessmen are producing dried fruits, but they don’t provide work for more than 30 people.”

Meghri residents will have to rely on their own fruit and vegetable harvest to generate some cash if the gold mines and the copper combine do not restart.

But they face another problem with a lack of cold storage facilities. “We’ve been planning to set up a refrigeration system so we can buy fruit from country farmers [at harvest time] and store it until winter, when we can sell the fruit for a higher price,” Hayrapetian said.

But they need money for that – money they don’t have.

For now, the local cannery buys the crops that generate the town’s only income at rock-bottom prices. Only 20 people work in the cannery in winter, and 50 in summer.

“The fruits in Meghri are something special,” said Melsida Baghdasarian. “But who cares? Their sale price in Kapan [the regional capital] is very low but to drive 400 kilometres to sell them in Yerevan would cost us a lot, so we’re better off throwing them away than going there.

“That’s why we have to give them to the cannery for below the real price.”

Karine Karapetian, assistant at a store in Meghri, says the economic downturn has left so many people in debt that her boss has forbidden them to sell anything on credit.

Various customers already owe the store around 1,000 dollars. “Since January, I don’t give anyone anything on loan,” Karapetian said.

“We used to do it when people were sure to receive their monthly salaries and could pay their debts, but now I can’t even manage to collect the debts that had accumulated before January.

“I pity them; many people don’t know how to get by. They come and ask for bread and sometimes I think I should give it to them – but then I realise that they have nothing to pay for it with.”

Ashot Qalashian, the deputy mayor, says one way out of the current impasse would be for the government to act on pledges contained in a decision made in 2000, giving Meghri so-called border zone status. In theory, this granted it access to certain privileges, exemptions and government programmes.

“But until now the [programmes] to create jobs, and conditions for the development of small and medium sized business and storage of agricultural goods have stayed on paper,” he said.

Meanwhile, Artyom Sargsyan, of the department of information for Syunik municipality, said the crisis in Meghri was not even mentioned at a meeting in March during President Serzh Sargsyan’s visit to Syunik.

Repairs to the local house of culture and plans to build a new irrigation system dominated the discussion instead.

In Meghri, local people still wait for someone in authority to take their problems more seriously. According to jobless ex-driver Sergey Tarverdian, “We simply live in the hope that there will one day be light at the end of the tunnel.”

Sara Khojoian is a journalist from, and a participant in IWPR’s Cross Caucasus Journalism Network.
Support our journalists