Nagorno-Karabakh Republic President Arkady Ghoukasian last Thursday addressed the prestigious Los Angeles World Affairs Council. In his remarks he discussed the current socio-political situation in Karabakh, as well as the official posturing of the Karabakh government vis-a-vis the resolution of the Karabakh conflict. Below is the English translation of his remarks at that event. Ladies and Gentlemen, It has been seven years since my last appearance before this prestigious organization in 1999. Since then, the world, the United States and Karabakh have experienced significant events. I certainly cannot fail to mention the September 11, 2001 terrorist act nor the destructive consequences of Hurricane Katrina last year. Trust me that we were shaken by these events as well. Instability persists in a number of regions of the world. Unfortunately, there is a danger that this instability could spread to neighboring regions. We remain hopeful, however, that people will find in themselves the power and the wisdom to solve pressing problems without violence. As far as the Nagorno Karabakh Republic is concerned, the only sphere where there has practically been no progress in the past seven years is the Karabakh peace process. Rest assured this is not something of our doing. Unfortunately, the Azerbaijani leadership still prefers to act contrary to the logic of historical development, which does not contribute to conflict resolution and only adds serious obstacles on the road to viable peace and stability in our region. The Azerbaijani leadership had the same illusory sense of superiority when it introduced a total blockade of NKR and unleashed a full-scale war against us. That illusion of superiority, as well as Azerbaijan’s refusals to end the fighting, which was at the time repeatedly confirmed by international mediators, ultimately resulted in the defeat of the Azerbaijani armed forces, and the complete or partial loss of the seven districts around NKR. In other words, the current status quo is a natural and logical result of Azerbaijan’s failed aggression. Today, official Baku is trying to intimidate us by pouring oil revenue into its military budget. This approach of the Azerbaijani government has absolutely no prospect for success. There is no military solution to the Karabakh issue. A war would only bring great losses and suffering to the peoples of both nations. The Azerbaijani leadership must give up these foolish and suicidal hopes for revenge and resolve all issues, no matter how complex, at the negotiating table with the equal participation of Nagorno Karabakh as a full-fledged party to this conflict. Azerbaijani calls for a military solution of the Karabakh question only reflect the absence there of democratic traditions of civilized dialogue with political opponents, where the other side’s interests must also be taken into account. A peaceful settlement of the conflict with Azerbaijan tops NKR’s foreign policy agenda. Conceptually, our approach to conflict resolution is based on the understanding of the new rules in international relations, which, when strictly followed, provide all nations and states with an equal opportunity to safeguard their interests. It is this international trend that gives us hope for a political settlement of the Karabakh conflict. At the same time, any peace agreement cannot undermine the historical choice made by the people of NKR in favor of independent, democratic development. Our preference for a peaceful settlement should not be construed as a sign of weakness. We will be able to defend our homeland in case of war. Should Azerbaijan choose to once again resort to military action, it will receive an appropriate response from NKR’s proven Defense Army, which is capable of successfully dealing with the most difficult problems when it comes to the security of the Nagorno Karabakh Republic and its people. But to reiterate, the conflict cannot be resolved through war, and to rely on increased military spending, to hope for revenge–would be a terrible, I would say suicidal miscalculation. When it comes to settlement scenarios, any option that would undermine our security or put in doubt Nagorno Karabakh’s independence from Azerbaijan would be completely unacceptable. I am certain that any effort to address the issues of territories and refugees in isolation from the most fundamental issue of Nagorno Karabakh’s status would be a fruitless one. There are no taboo subjects for us, but this does not mean that we are ready to make unilateral concessions. The extent of our compromises depends directly on the extent of compromises made by the Azerbaijani side. We chose the way of independence to be able to realize our natural rights and freedoms, which were harshly abused by Azerbaijan’s leaders. Time has shown that we chose the right path. Take a look at the Azerbaijani government’s behavior towards Nagorno Karabakh. They are threatening to annihilate us, if we refuse to become part of Azerbaijan. Is this a serious approach? Can civilized leaders win over their neighbors to live together through threats or blackmail? This is simply illogical. The people of Nagorno Karabakh harbor no animosity towards the Azerbaijani people. The situation in Azerbaijan is fundamentally different. There, hatred towards ethnic Armenia’s is cultivated on the state level. Reflection of this is that in Azerbaijan the Nagorno Karabakh conflict is presented as an ethnic Armenian-Azerbaijani conflict, which in itself creates a serious obstacle to resolving one of the central issues of this conflict – establishment of historical reconciliation between the two nations. The Nagorno Karabakh Republic is a reality recognized by many in the world. We were able to defend our independence in the war forced on us by Azerbaijan. Moreover, in a relatively brief period of time we were able to overcome the war’s consequences and build a state, which by many criteria places us ahead of many recognized states. It is my conviction that our republic’s accomplishmen’s are fundamentally based on a conscious choice that we made in favor of democracy and civil society. This path was not without its trials and tribulations. The turning point in the history of our democracy came in 2000, when our republic overcame the last vestiges of the post-war syndrome, and firmly committed itself to the path of democratic development. Elections serve benchmarks for any democracy. And in this case too we have much to be proud of. Elections in Karabakh, and this is confirmed by all international observers including those from the United States, are conducted on a high level and without major violations. Some of the polls are won by the political opposition. This was the case during the 2004 municipal elections, when an opposition candidate was elected mayor of the Karabakh capital. Over the last several years, our electoral laws have undergone substantial changes towards democratization and transparency. Next year, there will be presidential elections in Karabakh. Although I myself will not participate as a candidate, I will use the established institutions to do everything I can so that the positive democratic trends in our country continue and deepen. In the last several months we in Karabakh have been discussing a draft of our future Constitution. This process involves political parties as well as non-governmental organizations. The product of this discussion will be a document that reflects the fundamental values of our people and a social consensus about the administration of our state. Our citizens will judge the constitutional proposal at a referendum set for December 10, 2006. I would note that while these, and other, democratic processes are welcomed by our international partners, NKR remains an internationally unrecognized state. In practice, this means that we are denied the opportunity to receive aid from the international community, such as loans and financial assistance from international organizations: this, in a context where our people have lived through war that caused so much damage to Nagorno Karabakh. Even the refugees resident in NKR have been denied help from international organizations. These refugees are left outside their purview. But can these people be blamed for living in a state that is not internationally recognized? This is a case when political considerations ought not to trump basic humanitarian needs. I am happy to welcome the United States’ leadership in this matter, and specifically the continuing program of U.S. humanitarian assistance to the war-ravaged people of Karabakh. I extend to the American people and its government our most sincere appreciation for this vital assistance. In spite of the lack of assistance from international organizations, life in our republic continues to dynamically develop. Our economic development also gives us something to be proud of. We have enjoyed sustained economic growth in the last several years. Structural reforms continue to improve conditions for a market economy and entrepreneurship. We pay particular attention and provide state support to small and medium businesses. Over the past decade, the average annual increase in our Gross Domestic Product (GDP) has been about 10 percent. Thanks to our liberal tax laws there has been an increase in private investmen’s in NKR’s economy. In the last seven years, such investmen’s have totaled 80 million U.S. dollars. These investmen’s come primarily from our compatriots in the United States, France, Russia, Australia, Switzerland, Lebanon, Canada and other countries. Local entrepreneurs are also increasing their business activity, and the share of domestic investmen’s is increasing daily. Today, Nagorno Karabakh exports its products to Armenia, the United States, Russia and countries of the European Union. Compared to 1999, our export volume has increased 16-fold. Just recently, at the beginning of October of this year, 77 members of the U.S. Congress wrote to President George W. Bush to stress the need to expand the United States’ relations with Nagorno Karabakh. Using this opportunity, I would like to share our vision of our relations with the United States and other countries. First, it is difficult to overestimate the U.S. role as a mediator in the peace process. In my view, the United States, and other leading international players interested in maintaining stability in our region, should actively prevent Azerbaijan’s campaign to again militarize the Karabakh conflict. In this regard, several steps could be envisioned, including an international embargo on weapons supplies to Azerbaijan, particularly keeping in mind that this country is already in violation of its commitmen’s under the Conventional Forces in Europe (CFE) Treaty. I would also call on the mediator-countries to initiate the signing of a separate memorandum between the parties to the conflict that would state their commitment to resolve the existing disagreemen’s through peaceful negotiations and reject military means. Such a step could serve as a clear demonstration by the parties of their commitment to civilized solutions to problems, while the document itself could serve as the basis for future regional security arrangemen’s. Second, the level of relations between NKR and the world cannot and must not be determined by Azerbaijan. Believe me that were it up to Azerbaijan there would be no democratic or economic development in Karabakh. Moreover, since we are dealing with a totalitarian, extremely aggressive, and dangerous regime, Azerbaijan could well try to deliver on its threats to completely wipe out our homeland. Certainly, such a regime cannot be permitted a veto in matters of Karabakh’s development. Therefore, we would like to see a much more active U.S. and international role in Nagorno Karabakh’s democratic and economic development. While we have our accomplishmen’s, there are plenty of unresolved issues, where we need the help of the international community, and we certainly still have a lot to learn. In conclusion, let me say that Nagorno Karabakh is one of the most beautiful corners of the world. This is a country of kind, wonderful people, unique cultural heritage, and natural settings of astonishing beauty. Today, Karabakh has the necessary infrastructure for doing business, as well as for recreation and tourism. I would like to invite you to Karabakh, please come and see it with your own eyes. Thank you for your attention.