Today, the world is witnessing and participating in the formulation of a new system. There is no bi-polar system any longer: it has been destroyed. Some think that that formulation has already taken place, but in reality, it does not exist. Today, we do not know whether we live in a uni-polar, multi-polar or some other kind of world.

In studying history, it is obvious that after every significant war, certain processes take place. At the beginning of the 19^th century, after Napoleon was defeated and French expansionist tendencies were curtained, at the Congress of Vienna, the victors tool two significant steps. First, a new balance of power was established. The territories France had occupied were either returned or redistributed; French power and potential were curtailed. Secondly, new mechanisms were created so that similar events would not bi repeated, and thus peace would be secured in Europe. The Quadruple Alliance was created which, along with the Concert of Europe, more or less secured peace on that continent for about 100 years.

Similarly, at the end of the 19^th century when the balance of power was shaken by the reunification of Germany, the same two processes took place again. After the end of World War I, the victorious side reined-in Germany. The acquired territories were redistributed and new mechanisms were created to prevent similar occurrences again. They established the League of Nations Հ which didnղt work all that well.

The same happened after World War II. Again, Germany's power were restricted, the occupied territories were returned, a new balance of power was created, and new institutions - - this time much stronger and more stable (such as NATO, the UN and various financial institutions) - - brought peace and stability during next 45 years. Essentially, the victorious side created a new balance of power.

Now, after the conclusion of the Cold War, similar changes taking place. Even though no shots were fired, the Cold War was truly a war. When that old system collapsed, regions administered by the Soviet Union were Ձreturnedձ0 and became independent countries. Today, a new world order is in the works.

How is this different from what happened in the past? Those earlier wars ended with the capitulation of the defeated side. Thus it was very easy for the victors to quickly conclude the new processes.  The Cold War, on the other hand, ended without any side capitulating. Russia, as Soviet Union's successor, has inherited its entire economic and military potential.  It is not possible to impose a new system. Instead, new mechanisms and new methods are necessary to create a new system. Instead, new mechanisms and new methods are necessary to create a new system. This happening both along political and economic lines. Through the IMF, the WB, by allocating credits, by placing certain conditions in order for reforms to take place, by enlarging NATO, by creating new institutions and mechanisms within the OSCE, as well as by limiting arms capabilities Հ efforts are being made to create this new system.

But this will take a great deal of time, and not until the beginning of the 21^st century will it be clear whether the new world order will be uni-polar or multi-polar. On the one hand, Russia and China insist that it be multi-polar, with Russia. China is the US and the EU as the various poles. On the one hand there is the US viewpoint, which is that through international institutions, a new world order can be administered, without defining it as multi-polar or uni-polar. The problem is that the institutions that the US maintains can become these new mechanisms to ensure stability and peace are the same ones, which contributed to the collapse of the Soviet Union. A further problem is that since US influence is dominant in these institutions, Russia is reluctant to become engaged, and thus under the faade of one or another institution, fall under the administration of the US.

Today, that battle still rages. And the uncertainty about what kind of order will evolve creates serious problems in the formulation of our foreign policy. However, it is also true that with the disappearance of the magnetic poles around which satellite countries revolved, today, new subsystems are forming comprised of those same countries. Nowhere is that more clear than in our region, because, we found ourselves at the front lines of the Cold War. This new system, or sub-system, consists of the three Caucasian republics, as well as Russia, Iran, Turkey, and the countries of Central J Asia and the rest of the CIS. A system is that combination of countries where an occurrence in one definitely hasits positive or negative effect in another country - and this has indeed become a system. Look at 1 any of the countries that I have mentioned and imagine how an event in any of these countries would affect the others. Any economic crisis in Russia today would have its serious repercussions for Armenia, Azerbaijan and Georgia. The Karabagh conflict affects Turkey, Azerbaijan, Georgia and others. Oil-related matters and many other issues link these countries in so many different ways.

Systems are by definition either stable or unstable. At the beginning of the 191h century, the Congress of Vienna created a stable system. There was a balance of power, there was a consensus on common interests, and there were mechanisms that provided security against wars. The same was true after World War II. It was a stable, global system, and it lasted 45 years.

Today, in our Caucasian subsystem, those stabilizing mechanisms do not exist. There is no regional organization that includes all these states. The CIS includes all countries except Turkey and Iran. In the Black Sea Economic Cooperation, again, Iran is not a member. In the OSCE, where most are members, Iran is not. The Economic Cooperation Organization where Turkey, Iran and the countries of Central Asia are members; Armenia, Georgia, and the others are not. There is no single regional organization that is all-inclusive and contains all the countries of this system, where common problems are examined, and common solutions are found. There is no such stabilizing mechanism.

The second problem in this sub-system is that there is clear conflict of interest here. If in Europe there is a congruence of interests and ethnic homogeneity, in our region, these are absent. Political interests are completely different. And it seems each of us is heading in a different direction. This, too, is a destabilizing factor in this region.

As is evident then, the stabilizing factors in the region are essentially absent. At the same time, the destabilizing factors are many and can be divided into four categories.

The first category consists of domestic political factors. Today, our constitutions face serious legal challenges and these lead to serious complications. The distribution of internal political forces does not yet truly reflect domestic realities From Russia to Armenia, and everywhere in between, and even in a country like Turkey which has already had 80 years of experience in state-building, state structures have not yet evolved sufficiently to contribute to a country's internal stability. All these are serious destabilizing factors.

The next category is the political. The Cold War is indeed over, but unfortunately, the psychology and ideology of the Cold War is still being utilized, with different political intentions. This, of course, leads to the polarization of forces in our region. The continuing use of East-West categories obviously leads to serious polarization that does not benefit stabilization.

The third is the economic category. Here, there are problems on several levels. The first is the standard problem associated with transitional economies. This is a serious destabilizing factor, which we felt first-hand in 1996:Another destabilizing factor is the uneven distribution of natural resources in this region -- the existence of large reserves of oil in Azerbaijan and Central Asia, and their absence in the other countries. At the same time the imprudent and incorrect utilization of that potential by oil-rich countries is also dangerous.

Oil-related problems are evident at three different levels.

Globally, there is serious competition among the US, Russia and the European countries, to receive the largest possible share of that oil. That competition also leads to the further reinforcement of the polarization between East and West, which is best exemplified in the economic competition surrounding the oil reserves.

Regionally, the issue of pipeline routes and the division of the Caspian riches is also a bone of contention among the littoral states. Even more dangerous is the competition surrounding the passage of pipelines through the various countries. This is seriously evident in Georgia's politics, where the Georgia-Azerbaijan rapprochement is moving quickly; fundamentally intent on securing the passage of a pipeline through Georgia. This can create problems between Armenia and Georgia since Georgia is evidently making broad political pronouncements in support of Azerbaijan's regional ambitions, with the clear economic goal of securing a pipeline.

Domestically, most oil-rich countries are not democracies. The reason is that controlling the inheritance of the right to administer that wealth is their key concern. This naturally leads to dictatorship. Thus, most oil-rich countries today have totalitarian systems, lack democratic institutions and practice a denial of human rights. This can not lead to stability and peace.

Finally, the fourth category of destabilizing factors are the region's ethnic conflicts -- Karabagh, Abkhazia, Ossetia, Trans-Dniester, Chechnya -which are the most visible dangers to stability in this region. Until such time as there is a peaceful resolution of all these conflicts -- a resolution that is satisfactory to all sides -- it will not be possible to reach lasting peace and stability.

This is the situation in which Armenia finds itself as a member of this regional sub-system. Indeed, the end of the Cold War left no state in a more difficult, complex and vulnerable situation than Armenia. Not only is Armenia at the centre of Russian- Turkish-Iranian trilateral competition for influence in the Caucasus, but it is also right on the fault-line of Samuel Huntington's clash of Islamic and Christian civilizations. The significance of this should not be exaggerated, nor should it be ignored.

Armenia is also squeezed between two neighbors with which its relations have historically been uneasy, and often hostile, violent, and tragic. Armenia is the only country among the newly independent states with a NATO member state on one side (with which it has closed borders and no diplomatic relations), and a non-CFE member state on another.

To fully comprehend Armenia's critical geopolitical position, one might consider the colossal impact on the world's geopolitical framework if Armenia were to lose Zangezur -- a narrow strip on its southern tip that borders Iran --to Turkey or Azerbaijan. This transfer of a seemingly insignificant territory would create an uninterrupted land link between Turkey, Azerbaijan, and through the Caspian Sea, with the rest of the Turkic world. Russia's access to the Persian Gulf would be only through the Turkic buffer, and Iran would be fully encircled.

There is no other place on the map where such a small transfer of land would have such a global impact. This clearly demonstrates the unique and vulnerable situation in which we find ourselves. Thus, we must correctly define our foreign policy concerns and find correct solutions.

Our policy in the region must aim to remove all these destabilizing factors. We must strive to contribute to stability and peace in this region. To achieve this, our policy in the region must be based on six focal points:

 1. The strengthening of human rights 2nd democracy in this region.

Armenia must take a leading role in the building of human rights and democratic institutions. But we must first put our own house in order. We must improve the human rights environment in our own country; we must create a mature democratic society so that we may have the right to freely advocate the spread of human rights and democracy in the region. Only then will we be able to resolve other economic, ethnic and political problems. The Ministry of Foreign Affairs has already taken up this task; there have already been consultations with the President, and I think serious steps will be taken internally, in Armenia, towards these ends. As soon as possible, we must eliminate the death penalty and establish the institution of Ombudsman; our criminal code must be modified to correspond with European standards; we must ensure and guarantee complete freedom to all political parties and to the press; we must obviate the possibility of political prisoners. In this way, we will become legitimate advocates of the spread of these same values throughout our region. That will provide our foreign policy with the wide latitude necessary to become an effective factor in this region.

2. Uniform and equal economic development in this region.

We must, be active in all regional economic initiatives, and especially oil matters. Today, the Silk Road is being re-created. Discussions are taking place regarding the placement of pipelines. Armenia must actively participate in these discussions, in order to find its appropriate place in this region. Armenia must insert itself in the TRASECA program, which begins in Europe, follows the Danube to the Black Sea, then from Batumi to Central Asia via rail lines or highways. Armenia must do so by immediately beginning to construct a superhighway from Poti to Meghri. This is a serious strategic issue for Armenia. It requires serious financial commitment and resources.

3. Strengthening and optimizing regional organizations.

Armenia must do what it can in order for CIS institutions to become effective and functional. We must remove unnecessary bureaucracy. The focus must be put on economic co- operation, on creating a free economic zone, and the member states must begin to see that such cooperation leads to individual economic gains. The other regional organization in which we must be very actively involved is the Black Sea Economic Cooperation (BSEC). During the last six months, Armenia chaired the BSEC, and during this period I must proudly announce that the Foreign Ministers of the member states initialised a charter in Yerevan, transforming the cooperation into an organization. The presidents of the BSEC member-states will sign the Charter on June 4-5, 1998 in Yalta, and the BSEC will have come one step closer to becoming an effective institution. Our policy must also pursue the de-politicization of this organization, so that the focus is placed on economic cooperation, a free economic zone is created, and thus political problems are minimized to allow for maximum economic gain by member states.

4. Contributing to the removal of the mentality of the Cold War.

This principle is predicated on the notion that with the disappearance of a bi-polar world, its underlying ideology should be scrapped with it. Armenia's whole security doctrine and its web of bilateral relations are guided by this element as it has successfully created a network of security arrangements complementary to each other, with contributions from both former Cold- War camps. Azerbaijan, however, continues to manipulate the Cold War psychology and utilizes pro-Russian, pro-American categories: where Azerbaijan is presented as a pro-American state, and Armenia is labeled pro-Russian. Our approach is completely different from Azerbaijan's. For us, there are no such categories. We have been conducting a policy of "positive equilibrium" by providing equal opportunity to all countries wishing to engage themselves in the region and in Armenia. For example, our cooperation with NA TO intends to complement our bilateral cooperation with Russia, to complement our collective security cooperation within the CIS; while Azerbaijan's cooperation with NA TO intends to counterbalance Russia's influence on Azerbaijan. Our approach is based on complementary theirs on confrontation. Azerbaijan's will lead to polarization, ours to rapprochement.

5. Engaging Turkey more positively in regional matters.

Our relations with Turkey must be on a new level and they must become a two-way street. Until now, Turkey has subjected Armenia to a blockade, has refused to have relations with Armenia or establish diplomatic relations. On the other hand, we have not responded in kind. Instead we have cooperated with Turkey in different arenas, specifically within international organizations, always with the hope of normalizing relations. This approach has not produced positive results. Today, our new policy requires that our actions and reactions be commensurate with Turkey's actions and attitudes. Our intention is not to confront Turkey, but to engage it.

The same is true of our policy on genocide recognition. We have included this issue in our foreign policy agenda and have stated that this subject must be included in our conversations with Turkey. Again, the purpose is not to set pre-conditions or confront Turkey. This is simply intended to lead to the removal of this barrier to our relations. As much as we say that we are able to set the Genocide aside (not for- get it, but put it aside) -- as we have done over the last six years -- still, it has weighed so heavily on our (and their) psychology, that it constitutes a serious obstacle to normalizing relations. If it is an obstacle, we must work to- wards removing that obstacle. The inclusion of genocide recognition on our foreign policy agenda must be viewed from this perspective.

6. The Peaceful resolution of the Karabagh conflict

This is possibly the most important regional problem facing us. Without a resolution of this matter, we will not be able to reach lasting peace or stability in this region. On this matter, Armenia has a new position and it has already been presented to the international community. That position is the following. Armenia is serious today in its approaches and in its desire to reach a peaceful solution. That is why we are being blunt and honest. We do not accept any preconditions to re-starting negotiations. Armenia will not accept a step-by-step approach; that is, returning the occupied territories before coming to a final understanding on Karabagh's final status.

Armenia has two goals: to find a peaceful resolution to the conflict, and to reach a lasting peace in the region. Armenia and Karabagh believe that Nagorno Karabagh has the full, legal, historic, cultural right to become an independent state, or to become part of Armenia. But because we also wish to reach a lasting stable peace in the region, and be- cause we know that Azerbaijan will not agree to independence, Armenia will not, at this point, advocate either independence or unification. We are however, quite clearly stating that Karabagh cannot be part of Azerbaijan. Instead, we are calling on everyone to sit around the table, without preconditions, and look for a way between these two extremes to find a status that will satisfy Armenia and Karabagh and Azerbaijan. This will probably be an agreement-based status defining the relationship between Karabagh and Azerbaijan, having at its core the principles of a horizontal relationship.

These are the ways Armenia intends to be- come engaged in this region, as we pursue our national interests. Thank you.

QUESTIONS AND ANSWERS

Q. Is the Karabagh issue interrelated with Hay Dat (Armenian Cause) or not?

A. Depending on how you look at it. You may relate these just as you may separate them. It depends from what point of view we are looking at the issue: there may be historical, political, le- gal aspects. As of today, I think, it is in our interests not to join those two. Otherwise, we would also support Turkey in its statement that the resolution of the Karabagh problem would improve Armeno-Turkish relations. Thus, I think, those two issues should be separated and each of them should be given specific attention.

Q. Is it justified to have two Armenian states in the Caucasus? Wouldn't it be legitimate for the people of Karabagh to declare their choice of rejoining the Motherland?

A. I have already mentioned that at this stage of developments, we do not need to seek for Karabagh either to be independent or to rejoin Armenia. The reason is that this would not indeed sustain peace and stability in the region. In that case we will find ourselves in a continual war. I would like to mention once again that this is relevant to this very stage of development of the problem. If Azerbaijan does not take an appropriate initiative, if there is no adequate initiative from them during the next 2-3 years and we do not, all of us, have a resolution of the problem, then I think, will Karabagh's rejoining with Armenia be- come a much more realistic issue. That would probably be a legitimate action: as we cannot all sit and wait for Azerbaijan's forces to strengthen and force a military capitulation of Karabagh. In that case, our guarantee of peace will be for Armenia and Karabagh be one unit so as to be able to face such a danger.

This is still at the negotiation stage. There are possibilities to find a resolution to the status issue that would also bring peace. It would also help solve our economic problems. Only after being forced to set this idea aside may we think of other ways of resolving this issue. -How are Turkey-Georgia-Azerbaijan and

Q. Turkey-Israel-Azerbaijan alliances viewed from Armenia's angle?

A. These are the rights of each of these countries. There are common interests and these processes cannot be avoided in today's circum- stances. Only after we know the kinds of goals they have, we will be able to evaluate them and state whether these are positive or negative for us. At first glance, of course, there is no doubt that the creation of such zones around us may have negative consequences.

Regarding the second tripartite agreement I should say that it has been stated many times that that is not an activity aimed at any third country. Whatever I said about the first three- sided agreement is relevant for the second one too. Of course, we should carefully observe these processes. In any case, these are processes in which Armenia cannot directly participate nor have any influence.

Q. According to the scenario of the resolution of the Karabagh issue that you have talked about, how do you see the realities of the guarantees for Karabagh's physical security?

A. First, I should mention that if there were any political agreements reached between Karabagh, Azerbaijan and Armenia, they would carry certain mechanisms of security guarantees. This is a rather serious problem. In fact, once a resolution satisfies each of the sides, it becomes a less significant issue. It is another matter if any solution is dictated to any of the sides. In these cases, the problem of security becomes much more significant. Under conditions of a peaceful and agreed resolution of the problem, however, the issues of security are pushed further down in I priority.

Of course there is no intention, however, to take any risks on this issue. We have clearly stated our priority of the security problem. Regardless of what kind of political agreement is signed, there will be guarantees of security at certain levels. The first one (that I consider the most important) is at the local, domestic level. That is to say, Nagorno Karabagh will keep all its military forces. Furthermore, the Lachin corridor will remain as a link with Armenia.

The second level is the one of agreements: all of them. These include the establishment of buffer zones, the withdrawal of heavy artillery, and other mechanisms.

The next is the level of international guarantees, which will be given by at least the three co-chairing countries France, the USA and Russia, as well as some guarantees given by inter- national organizations such as the OSCE and the UNO. Of course, as I have already mentioned, the first level of the three mentioned above is the most important for us. I believe, by means of these three levels, as well as by the previously settled important political agreement there will be enough security guarantees to prevent any military actions.

Q. You suggest a transitional status for a Karabagh that is not independent but outside Azerbaijan. This is very similar to the status of San Marino or Liechtenstein. Where will such a transitional status eventually lead?

A. I have not said anything about a transitional status. I mentioned that this would be a final and negotiated one. In other words, Karabagh will get its final political and legal status. That status will not mean that it will be within the Azerbaijani state. It will be a status based or, contracting principles that would provide horizontal relationships between these two political entities.