Life should not be like this in Nagorno-Karabakh. The people were sold a lie. Today, numbering 150,000, existing should be somewhat more comfortable. Nagorno-Karabakh may be mountainous, but it is imbibed

with tremendous mineral wealth, timber and vast tourism potential. Even allowing for the isolation that comes from being an international pariah, the socio-economic potential should be well beyond where it currently lays.

With a 2017 estimated GDP of $563.6 million, according to International Monetary Fund figures this would leave the territory below Dominica and above Tonga, the 184th sized economy in the world from 190 listed.142 World Bank figures, from the same year, would place Nagorno-Karabakh almost in a tie with Dominica, 180th out of 188 economies ranked.143

It is a dire situation. Nagorno-Karabakh is the equivalent of one of the poorest places in the world. If one can count the territory as white and Christian, therefore European, one has to look up to 155th place in International Monetary Fund figures to find the next European state, Montenegro, whose economy stood at around $4.5 billion in 2017.

t is a bright autumn day when we head out of central Stepanakert, along Vagharsh Vagharshyan Street. Stepanakert reaches out across hills and valleys, undulating all the way. We pass the town’s ramshackle and hopeless Soviet era housing, mired in a state of benign neglect for a quarter century and more. Vagharsh Vagharshyan Street leads up, out of the centre. Eventually we arrive at the small and rundown army base, and get out on foot. Along Gyurjan Street and Gyurjan Lane, instead of the low-rent Soviet homes seen elsewhere, there is a gated community. High walled. Some big looking security guards eyeball us on our approach. They are correct to wonder who these foreign folks are. Locals would not have the impudence to hang around and stare at this place. Because this is where the modern day khans reside.

Stepanakert is the Armenian name for the town, meaning the ‘city of Stepan’, and is named after Armenian Bolshevik revolutionary Stepan Shaumian.144 This is somewhat provocative towards Azerbaijan. Shaumian, whose statue is prominent in the town, was in power in Baku during the early 1900s when communal violence claimed the lives of perhaps tens of thousands.145

Interestingly, however, the original name of the town was Khankendi, Turkic for “the khan’s village”.146 It was established as a haven for the Nagorno- Karabakh elite, its political and economic leaders.

In the area around Gyurjan Street and Gyurjan Lane the town’s new khans are making their homes. Perched on a mountain slope that allows them to overlook the town and its ordinary citizens. From the road outside one can just about make out the family home belonging to Hovsep Mikaelian.

One burly guard approaches. He speaks no English but it is pretty clear from his angry demeanour that I am not welcome although I am standing on a public street to admire the vistas.

This is where ‘new money’ resides, on a hillside overlooking the city. Their city. Along Kharkovyan Street we find a plush new villa under the final stages of construction. It even comes with a guard house. Who in this sleepy corner on the Caucasus needs security guards outside of his palatial home?

“This house Ruben Tatulyan,” grumbles our driver. We scramble onto Google to see who the owner is.147 Over the course of our week in Nagorno-Karabakh we come across Tatulyan’s fingerprints several times. Tatulyan has denied any links to the criminal underworld in Russia, claiming to be a law-abiding businessman and at one point was named as an official advisor to Armenian Minister of Foreign Affairs Edward Nalbandian. The United States Department of the Treasury suggests otherwise.

Why the “King of Russia’s Black Sea Coast” would quietly be building a home in Nagorno-Karabakh would only later become clear.

By the time we are heading back into town, it is still a crisp, cold, yet busy morning in and around Shuka, the main bazaar, located close to the centre of Stepanakert, just off Azatamartikneri Avenue.

Small traders hawk their wares, pressing shoppers to sample fresh fruits, vegetables, spices, pickles and some suspiciously grey-looking meat, allegedly fresh beef.

Dotted around are stalls selling Korean clothes and Chinese electricals.

Amid the cries of those hustling for customers, the air is fresh with the enticing aroma of freshly-baked breads – zhingyalov hats, a dough pancake filled with greens and herbs, and trteruk, a sweet bread.

The locals enjoy them with a local red wine, even in the early mornings, an alcohol buzz perhaps helping to offset the struggle of everyday life and, not least, the chilly wind of this particular day.

Each day stallholders set out an array of handmade crafts, hoping to sell to the fewtouristswhostumbleontothisscene. A few hardy Americans and Europeans make it, but not many.

Official statistics show that around 15,000 tourists pass through the territory each year.148 South Sudan, the world’s newest country, mired in war for decades and now embroiled in civil strife, gets greater numbers. The administration in Stepanakert concedes that a majority of those 15,000 are Armenians or Armenian diaspora. Foreigners like us are in short supply.

Of those who do choose to holiday in Nagorno-Karabakh, too many are the thrill-seeking backpacking variety who, say those who eke out a living here, are somewhat thrifty. High-spending foreign visitors are, it seems, put off by newspaper headlines over a frozen war that periodically thaws and becomes a nasty tangle with Azerbaijan forces.

This lack of customers maddens Amanor Papazian. Her face grizzled and lined from three decades of working in all weathers at Shuka, Papazian has more than a few complaints:

“Every year there are more sellers and less buyers. Our own people struggle to survive. And the foreigners still don’t come.”

Papazian does not see the irony in her statement. Born and raised in Gyumri, Armenia’s second largest city, she arrived in Nagorno-Karabakh as part of an assisted emigration programme that helped thousands of poor families from Armenia resettle in the territory.

The Government of Armenia and administration of Nagorno-Karabakh have engaged in socio-gerrymandering but, while their concerns were purely political, it represented a fresh start for Papazian and thousands like her. She could herself be considered a foreigner, of course, but after nearly three decades toiling at Shuka, she believes herself every bit a citizen of Nagorno-Karabakh and, therefore, entitled to complain loudly.

“Sahakyan (Bako Sahakyan) and his lot make all the money, and we are left with scraps,” she says, waving her arm dismissively in the general direction of the office of the territory’s head. “The only people who make any money are the mafia, politicians and that lot in there.

“Dirty bastards.”

The subject of her ire then quickly switched to Blues Bar, a drinking establishment on Shahumyan Square. When we were in the town it had been closed for several weeks. A stone’s throw from Sahakyan’s offices and the National Assembly, Blues Bar had become an embarrassment that even the administration could not ignore.

Something of a Mecca for foreigners and upscale locals, this attracted a few working girls. The cheap local oghi, an Armenian spirit distilled from fruits or berries, cheaper local Kilikia beer and even cheaper girls, had proven a potent mix.

Throwing in even cheaper heroin, freely available as tonnes of the stuff is smuggled through Nagorno-Karabakh, only exacerbated the situation. The ‘farm gate’ price of one kilo of opium in Afghanistan is $100 at best.149 Before consignments reached the streets of Europe, some would get to users in Nagorno-Karabakh and Armenia, of course, where, due to high grade and low price, it had become almost as freely available as cigarettes.

With an increasingly bawdy reputation, the authorities were forced to step in and deal with the Blues Bar.

“The girls in there charged by the hour what I earn in two weeks,” says Papazian’s immediate neighbour in Shuka, Aykanush Tumanyan, speaking with some venom about Stepanakert’s burgeoning community of whores.

“I would ask you why they allow all these. But we saw. Sahakyan’s people were in there every night.”

Like Papazian, Tumanyan is also a relatively newcomer to the town. She and her husband arrived in the territory seeking a new life, and new markets for her spouse’s business enterprises.

Sadly, though, his commercial interests would ultimately lead to his demise and leave her swapping Gucci dresses to selling fake Gucci fragrances in an outdoor market. Her fall from grace is complete. Her husband’s business was drugs.

Khachik Tumanyan had – ironically – served with Soviet forces in Afghanistan in Leonid Brezhnev’s disastrous conflict there. His task, as one of Brezhnev’s loyal airmen, was to fly troops and munitions to Kabul, returning home with an empty aircraft, and then repeating the journey.

As an aspiring businessman, however, he quickly saw the opportunity and began filling his empty aircraft with opium on the return leg. His enterprise, and with others doing the same, had flooded the Soviet Union with cheap drugs and may have had more to do with the collapse of Moscow’s empire than the efforts of Ronald Reagan, Margaret Thatcher and the witless Mikhail Gorbachev.

In February 1989, the Soviets withdrew from Afghanistan.150

By then Khachik was no longer an airman. He had built a thriving business and was looking to expand his operations into new markets. Working from his hometown, Yerevan, he spotted another niche. Stepanakert.

For some time Khachik’s business thrived there as well. But, as Nagorno- Karabakh’s door became increasingly open to various forms of transnational organised crime, he quickly became a small fish in a big pond. As such, his operations were an irritant to those who sought to control the territory.

He was gunned down just outside the town of Martakert, his death reported by local police as a robbery gone wrong. She says Aykanush Tumanyan knows otherwise. As do the police. As do the government. But no one talks about it.

In Nagorno-Karabakh it is bad politics, bad for the economy and, indeed, bad for one’s health, to speak openly about the territory’s most profitable industry. And to voice concerns regarding one of the biggest personalities in Stepanakert was bad for your health.

In 2017, influential Armenian news site reported: The United States Department of Treasury has announced financial sanctions against 10 “thieves- in-law” connected to a syndicate, including the Armenian Ruben Tatulyan also known by the nickname Robson... According to the United States Department of Treasury, the purpose of sanctions is to hit the financial infrastructures of a transnational crime syndicate. According to the United States authorities, in 2010 Ruben Tatulyan was designated “supervisor” in Sochi. In 2015 he was arrested during a meeting of thieves-in-law in Sochi...

Ruben Tatulyan is a member of the Investors Club in Armenia initiated by Prime Minister Karen Karapetyan and the tycoon Samvel Karapetyan.151

Tatulyan did not know Khachik Tumanyan personally. However he as good as pulled the trigger. Tatulyan did not like freelancers. They are loose ends in a business where control means everything. What do you do with loose ends? For the sake of business, you rid yourself of them.

While Aykanush Tumanyan and Amanor Papazian busied themselves in Shuka hustling a few Dram, across town in Gyurjan Street and Gyurjan Lane, it is a supreme irony that wealthy businessmen like Tatulyan and Mikaelian maintain huge villas overlooking the “village of khans”. The powerful in Nagorno- Karabakh today are not kings, but the masters of the criminal world. These are the new khans. Rich. Powerful. Well-connected.

Transnational criminals criss-cross the planet, conveying drugs, arms and trafficking women. Hundreds of billions of dollars of dirty money flow through the world every year, distorting local economies, corrupting institutions and fuelling conflict.

The game of cat and mouse between global criminal enterprises and law enforcement is one that is played out every day. Transnational organised crime thrives in the world’s black spots, failed states with no central government and having fallen off the international grid, like Afghanistan, Mali and Somalia.

Otherwise they rely upon pliant hosts, European outposts like Albania, vulnerable Pacific Islands and lawless nations like Venezuela and Yemen.

By contrast, Mikaelian grasped that operating from the leafy vistas and remote mountain pastures of Nagorno-Karabakh represented an almost too-good-to-be- true opportunity.

Every year its drug lords seek ways to export 9,000 tonnes152 of opium across Afghanistan’s borders and to industrial operations in Iran, Pakistan and Russia that refine the drug into heroin, ready for sale in Europe. Every year, the international community makes it a little more difficult. Every year, the narcotic industrial complex looks for new and reliable means of evading law enforcement.

The European Union acknowledges in its European Neighbourhood Policy report, that this Caucasus route, pioneered by the likes of Tatulyan and Mikaelian and now a key spoke in the global business, gained a significant role as a “smuggling and trafficking route”.

Throughout the 1990s, Europe experienced a heroin epidemic that was accompanied by increasing levels of users injecting the drug, together with growing concerns about drug-related HIV and HCV infection.

Yet that mattered little to either those providing political cover to the operation, or to the ‘businessmen’ who were facilitating it. It was so lucrative for Tatulyan that he was willing to protect his business at all costs. As Tumanyan would learn.

With a pliable government desperate for hard cash amid an international economic freeze, and a political leadership ready to enrich themselves, Tatulyan and Mikaelian would be among first of the ‘New Khans’ in Stepanakert. Others would quickly arrive.

“Many smugglers don’t even bother hiding their wealth,” said a British diplomat, quoted in Britain’s The Guardian. “It’s their way of saying ‘screw you’ to authorities.”153

Full list of endnotes and bibliography of the book Narco Karabakh, Harrold Cane VIEW