Tag Archives: construction in Yerevan

The Protest at Mashdots Park Continues

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These are some photos from this afternoon’s protest at Mashdots Park in Yerevan. The area was chaotic — on the far end of the park there was a backhoe digging up the sidewalk, making a tremendous amount of noise and polluting the air with exhaust fumes and dust. Today a group of about 10 people wearing yellow hard-hats, tools in hand, decided to show up in the hopes of dismantling the rows of kiosks. There were dozens of police on hand to face the peaceful protesters, even some in full riot gear which I thought was over the top. A news site called Asparez was streaming video of the protest live.

I couldn’t help thinking how absurd this whole affair is. The Yerevan municipality decided to contradict its very own law that it put into force last year banning these kiosks from existing on sidewalks in the first place. Then these activists keep returning day after day hoping to somehow take the park back on behalf of the public. In the meantime, none of the political parties are taking advantage of the opportunity to win votes in the coming parliamentary elections by lending their support.  The confrontations with the police are a bit pointless because they’re just doing their jobs — defending the position of the authorities. The protesters should realistically be taking up their beef with the city mayor and the Prime Minister, both of whom continue to be inconspicuously absent at each of these events. If you want to legitimately address the concerns of your citizens, go talk to them in person, not in press conferences or through police captains. Apparently, they have better things to do on a Saturday afternoon.

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I know one thing — so long as the protests keep moving forward and continue gaining support from fringe groups like these hard-hat wearing dudes, the authorities will have no choice but to cave. It’s just a matter of time.

Here’s a photo of my revolutionary family who are there almost every day — mom and baby, courtesy of News.am.

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A Sad Way to End the Year

Housing evictions–most of which were totally unjust–are evidently continuing in downtown Yerevan. Quite honestly, I thought everyone living in housing built at the turn of the 20th century and even before was gone by now, but that’s clearly not the case. People have managed to hold on, despite the fact that ample compensation for their real estate is on hand.

Here’s what Hetq reports:

On December 9, employees of the CES (Compulsory Enforcement Service of Judicial Acts; an arm of the Ministry of Justice), invaded the home of one of the families residing at Buzand Street #83, threw them out into the street and proceeded to demolish the apartment. The CES employees had a writ to evict the Abrahamyan’s. The family has been paid compensation in the amount of 33 million AMD (about $86,000). The money is sitting in a government escrow account and can be withdrawn at any time.

At first, the family was offered 36 million AMD for the 66 square meter house and the 78 square meter lot it sat on, but the Abrahamyan’s refused this initial offer. Afterwards, the “Bureau of Construction and Investment Program Implementation” (BCIPI) went to the courts, demanding that the property be registered as sold via compensation and that the residents be forcibly evicted, if necessary. Their suit was sustained.

The evicted family, Viloleta Sahakyan, her daughter-in-law and four grandchildren now live with different relatives.

“I have four children. We haven’t been able to all go to one house and be together. We’ve split up and I’ve been separated from my kids,” says Naira Abrahamyan.

Her mother-in-law, Violeta, moved in with her other son also living at Buzand #83. The CES visited them on December 9 and wanted to demolish the place as well but they couldn’t since they didn’t have proper authorization. On the day we arrived, Violeta Sahakyan was moving stuff to her son’s home left at the neighbors.

Her other daughter-in-law, Nuneh Hambardzumyan described how the BCIPI was able to obtain the property at Buzand #83 for businessman Hayk Beglaryan [son of noted businessman Barsegh Beglaryan, who owns the “Flash” chain of gas stations].

Every time I walk down Buzand and Aram Streets I feel depressed for the rest of the day. The shells of homes that were once standing are the eerie reminders of what Yerevan used to be. The unique architecture of these simple, yet graceful one or two-story structures and the narrow streets they were situated on  made me fall in love with Yerevan, its quaint corners and nooks, its heart and hearth. Old Yerevan was beautiful, unlike anything you can find in any other major city; it was genuine, comforting and without pretense, it was the vibrant soul of the city, tucked away behind protective high-rise monolith slabs of concrete housing. And now it’s gone.

Many of the homes looked solid enough, made from thick blocks of stone like tuf and basalt, as sturdy as churches were built centuries ago. But they are being torn down for the sake of “progress,” for greed at the expense of historical preservation. Even the building where Aram Manoogian, the leader of the first Armenian republic, lived hasn’t been spared–it’s located directly beside the SIL Plaza on the corner of Abovyan and Aram Streets (the later being named after Manoogian), and only the black stone facade is left intact, at least for the time being. If anything, that building should have been converted into one of several “home-museums” that you find throughout the city, but not this time. History matters very little to these businessmen-turned-government officials. The city’s past means nothing to them. Very little remains to show what Yerevan was like before 1918.

Anyway, many families in those parts never received proper compensation during the last six years or so–they were cruelly thrown out onto the street penniless, and in some areas all you see are empty lots now, demonstrating that the evictions were indeed pointless. But the Abrahamyans at least are entitled to $86,000. That’s a good sum of money, arguably enough to buy a two-room apartment in Nor Nork (Masiv) and probably even a small private home in Malatia, perhaps with cash left over for furnishings. The price of real estate plummeted in 2009, so there should be quite a few bargains out there. Why don’t they take the cash and get as far away from the madness in downtown Yerevan as possible?

Regardless, I think the government picked bad timing to evict this family, with the coming new year holidays especially. They should have waited anyway until they were able to find another place, it’s only fair. You can’t be expected to move out of your house until you have a new home ready and waiting, it’s common sense. But at least the Abrahamyans found temporary shelter. Now all they have to do is figure out where they’re going to permanently live.

Armenia’s Financial Woes

recessionAn interesting article about the current financial situation in Armenia that appeared in business new europe was reprinted on Hetq Online. Although I  am not a financial adviser or banker, I can’t say that I agree with everything that was reported in the article.

Here is one excerpt that is interesting to note:

The growth of banks like AEB [Armeconombank] has slowed considerably, but they are still in profit and see 2009 as a hiccup rather than a disaster. Armenian banks find themselves in a frustrating position now: they have the liquidity to make loans, but they can’t find anyone to lend to.

According to AEB’s Web site, the bank is currently offering mortgages for five-year terms at an annual rate of 14 percent. These types of plans, plus or minus a percentage point payable in five or seven years, have been offered for a while now by Armenian banks, and they’re obviously not great offerings by any means. I’ve seen rates as high as 20 percent or even more being advertised for short-term loans.

By contrast, mortgage rates in the US are now around 5.25 percent for a 30-year term and that’s now considered on the high side. And the rate for a 15-year mortgage is only 4.69 percent.

Thus the Armenian mortgage lending business can best be defined as basically legitimized loansharking.

But really, who would agree to sign on to such terms? Cash poor businessmen most likely, or people who have come into lots of money quite suddenly and have diversified their funds into several different sectors, be it real estate, consumer trade or what have you.

Imagine the following scenario. A new house becomes available in a part of Yerevan where having a home is considered very trendy these days, like Nork-Marash where lots of expensive homes have been built. The buyer, finding himself short on cash but eager to buy a house in a prestigious area, takes out the loan. The percentage rate doesn’t necessarily make much of a difference to him, he just needs some cash handed over to him fast so he can buy the home. Five years gives him plenty of time to pay off the loan in monthly payments while most of his capital funds continue to be tied up elsewhere.

No ordinary Armenian citizen could ever afford such a loan, not with a $200 monthly salary on the low end or even $2000 at the top tier. It doesn’t make any logical sense to consider such a mortgage loan, and it is certainly not a viable option anyway. So these loans being offered by Armenian lenders have never made much sense.

What about the over $1 billion in loans coming from Russia and IMF? Some of it is supposedly going to soften the drop in the GDP while another chunk is trickling down to businesses via the banking sector, like construction companies, to help them offset losses as a result of the crisis. It’s true that housing prices have fallen considerably since the beginning of the year, but a three-room apartment in central Yerevan can still fetch around $150,000, depending on the specific location, perhaps even more. For a tiny landlocked country like Armenia, that’s astronomical. By comparison you can buy a villa in the coastal town of Guardamar, Spain for under 100,000 euros.

Yet despite the construction crunch, building continues unabated. A new crane has just gone up at the foot of the slope that reaches the “Monument” area. Sure, some sites seem to be dormant, but that’s been the case for the last five years. Construction of a building starts, then comes to a halt for months on end before it resumes again. The cycle continues over and over. That’s why it’s been taking so long for these high-rise buildings to go up. That’s been the case throughout the Yerevan construction boom, it’s nothing new. These same companies that are supposedly hurting are getting money to support their business efforts. But do they really need the money? No one can tell. Try performing an audit on them to find out.