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Tempers Flare over the Issue of Nagorno-Karabakh "Souvenir" Currency

By Elizabeth Owen | Sat, 26 Aug 2006

Over the past year and a half, two souvenir currency notes from Nagorno-Karabakh have unleashed a storm of accusations and counter-accusations between Azerbaijani officials and representatives of the Armenian-controlled, self-styled republic of Nagorno-Karabakh.

On the surface, the red and green notes, which have no monetary value, seem harmless enough. One diplomat even compared the notes to money used for the board game Monopoly. But for those directly involved in trying to achieve a Karabakh peace settlement ? in particular the governments of Armenia and Azerbaijan, along with Karabakh Armenian leaders ? there is nothing about that is taken lightly about the 1988-94 conflict.

At present, the Karabakh peace talks are deadlocked. Azerbaijan is adamantly opposed to any political arrangement that leaves Karabakh outside its jurisdiction. Armenia, meanwhile, will not accept a settlement that restores any level of Azerbaijani control over the enclave.

For Baku, the two-dram and 10-dram notes represent an attempt by the enclave to burnish its image as an independent entity. "Despite the fact that this is not real money, we cannot accept this and we strongly oppose any attempt at creating this currency," said Fikret Pashayev, economic counselor at the Azerbaijani embassy in Washington, DC. "It could create further tension in the region."

For Armenian leaders in the Karabakh capital of Stepanakert, the bank notes are seen as an attempt to reinforce their republic's right to exist. "Of course, my government is involved in this," said Vardan Barseghian, the US representative of the self-declared Nagorno-Karabakh Republic. "We see this as a promotion for Nagorno-Karabakh."

The bills are meant not only to reinforce a sense of national identity, said Barseghian, but, also, to encourage outside investors and even tourists to venture into the remote, mountainous region. Among the attractions touted for potential visitors are the 13th century Gandzasar Monastery, once a residence of the head of the Armenian Apostolic Orthodox Church.

Still, for a publicity campaign, details have been scarce. Posing as currency collectors, correspondents from the Baku-based daily newspaper Echo found out that the notes had been printed by ?sterreichische Staatsdruckerei, the Austrian State Printing House, a 200-year-old company now in private hands. The order was placed by the Educational Coin Company, a wholesale numismatic firm located in Highland, New York.
Barseghian characterized the print run as "not very large," but could not give an estimate of overall sales. The project, he stressed, "is more of a souvenir type thing."

That fact, however, apparently has yet to register with individuals selling the souvenir currency on the online auction site E-Bay. Prospective buyers have been told that the drams are already in use in Nagorno-Karabakh, described as "a breakaway region in Armenia." In late August, bidding reached a high of $6.50 for a pair of two-dram and 10-dram notes.

Azerbaijani diplomats in Washington raised the matter with the US State Department, Pashayev said, and reportedly received assurances from US officials that the Educational Coin Company could face "very severe punishment" if it continued with its promotion and distribution plans for the Karabakh currency.

Images of the Nagorno-Karabakh currency have been removed from the Educational Coin Company's website. David Laties, the company's secretary-treasurer, declined all comment on his firm's deal with ?sterreichische Staatsdruckerei. The State Department did not respond to a request for information on its own role in the affair.
"They [the Educational Coin Co.] need to be careful when they get involved in something that has a political side," Pashayev said. "After all, if some Armenian company tried to print money for Texas, no one in the United States would support this, either."

Meanwhile, representatives of Azerbaijan's embassy to Vienna filed a complaint with the Austrian government and met with Reinhart Gausterer, director general of ?sterreichische Staatsdruckerei, Echo reported. In a telephone interview from Vienna with EurasiaNet, Valentin Inzko, head of the Austrian Foreign Ministry's department for the South Caucasus, stated that Austria has subsequently allayed all of Azerbaijan's concerns.
"Azerbaijan understands that we are not involved in this, and that our position on Nagorno-Karabakh is unchanged," Inzko said. "This is a discussion between two private companies."

The Azerbaijani response to Nagorno-Karabakh's currency venture comes as no surprise, Barseghian stated. "Azerbaijan reacts to everything," he said. "They don't like anything."

"What's the big deal?" he went on to say. "The Nagorno-Karabakh Republic has been developing for the last 15 years. Azerbaijan has no influence whatsoever on what?s going on in Karabakh."