YEREVAN DAYS: It's a dirty business, but Luv cleans up

Understandably, Omar Paxinos was unhappy about his hair. His problem was not so much the grey strands that still clung to the terrain above his thick eyebrows, as the state of his chin.

"These are a big cheat," he complained. "They don't work at all. They just slide across the bristles. Look!" His hand ran across five days' growth of an unwanted beard, which was interrupted only by a scraggy patch on one cheek where he had tried, but failed, to hack the whole lot off.

He was brandishing a packet of disposable razors bearing the blue and yellow livery of the manufacturers, Bic. They looked like the real thing. Same blue handles; same type-face; same plastic shields. But a close inspection revealed that the logo had been changed by one letter to read "Big". This mean little fraud, if the packet is to be believed, was cooked up in Korea.

We were standing on a hot morning in a market in the middle of Yerevan, the capital of Armenia. I was there, whiling away an hour before an interview. Neighbouring Turkey and Azerbaijan have long closed their borders with Armenia in a dispute over Nagorny Karabakh, where the ethnic Armenian majority seized control from Azerbaijan in a costly war. What better place to test the strength of the embargo than by a visit to the local markets?

Mr Paxinos, a 49-year-old Greek, had a more practical mission in mind. He was there to buy some new razors with blades that really worked. This time, he chose Gillette's. "These are genuine," he concluded, after squinting closely at the trademark. "You have to be very careful here, you know."

Indeed, Yerevan would send a shudder through any boardroom. The surrounding stalls were awash with bogus tat. There was soap powder that looked exactly like Ariel but was called Aria. There were cakes of Luv - rather than Lux - soap; boxes of tea bearing the same colours as Lipton, in which the words "Yellow Label" are altered to read "Yellow Quality"; jars of hand cream marked Palmolize - one letter adrift from Palmolive. And (my favourite in this cheats' catalogue), there was also a pair of shoes whose brand name had been altered to read "Reebeks".

Most would not have fooled the trained eye of a Westerner. But brand recognition is still low in the former Soviet Union after decades of Communist rule in which commercials did not exist. Moreover, many of the best-known logos are in English; only the advanced reader would recognise a one-letter change.

The presence of such dross in Yerevan is partly the result of a peculiar twist of the Byzantine politics of the Transcaucasus, with its tangled conflicts over oil, religion, and regional dominance. Armenia, which has a large, active diaspora, receives more aid from the United States than any other country with the exception of Israel.

It also takes delivery of some 200 lorry loads of goods each day from Washington's adversary, Iran, which is subject to US sanctions. Government officials stress that they are not actually violating America's complex sanctions laws. But Christian Armenia is getting on very well, thank you, with the Islamic fundamentalists - no matter that the fruits of this relationship are marketplaces laden with Korean or Turkish-made fakes.

As a result, Armenia's population of under 4 million is not starving, though it is poorly served. The capital, a stark city which sits in a plain overshadowed by Mount Ararat, is still strewn with the detritus of Soviet rule: filthy apartment blocks, crumbling roads, broken-down stadiums and monolithic statues. The country is still grappling with the all too familiar problems of an incomplete transition to a free market economy - corruption, unemployment, collapsed industries, and a loss of direction and purpose.

But, although land-locked and energy-poor, Armenia is getting by. "Consumer goods are no problem," says Gerard Libaridian, a senior presidential adviser. "The problem is the long term development. Can we break the next barrier - by importing raw materials, manufacturing exports, and being competitive in the market place?"

Armenians have had a rough time in the last decade, what with the 1988 earthquake, a war and an energy shortage that had them ripping up their own wooden floorboards and tearing branches off the city's trees to burn for heat. But Yerevan has begun to acquire dashes of elegance and pockets of prosperity. It is dotted with street-side cafes and kebab stalls. In the fine central square, illuminated fountains dance in time to the music of Mozart. Even the central hotel, the Armenia-1, no longer reeks of Soviet- style management. So it's a pity that some of the early fruits of the post-Soviet age to arrive in the markets are often outright fakes - blunt razors and bogus soap.