HSBC Holdings To Expand Activities In Armenia

HSBC HOLDINGS TO EXPAND ACTIVITIES IN ARMENIA

ARMINFO News Agency
September 23, 2006 Saturday

President of Armenia Robert Kocharyan received President and CEO of
HSBC Holdings plc. Stephen K.Green and the delegation accompanying
him, Saturday.

The presidential press-service reports the parties as discussing the
activity and plans of HSBC in Armenia, as well as the bank’s entry
into the country’s insurance market.

Robert Kocharyan mentioned that the bank’s credit portfolio has
occupied an important place in the economy of Armenia. At the same
time, he thinks that the banks should further take active steps towards
strengthening of the country’s financial sector. In his turn, Stephen
K. Green said that HSBC Holdings is currently working to expand its
activity in Armenia.

At present, HSBC is Adviser to Greek OTE in the sale of the latter’s
90% stake in ArmenTel company.

According to the ranking of Armenia’s commercial banks prepared by
Arminfo rating service, HSBC Bank Armenia ranks the first in the
country’s banking system with its $170.7 mln assets for June 30 2006.

As to crediting, the bank occupies the third place ($55.6 mln, 33%
of total assets). As to the share of economy crediting in the bank’s
crediting portfolio (over 55%, $30.8 mln), it is in the third place.

The bank is a leader in the market of mortgage crediting – $17.6 mln.

The bank completed the current year with $3,5 mln net profit, taking
the first place in the banking system of Armenia due to this indicator.

Kocharyan: Serious All-Embracing Market Reforms Observed In Armenia

KOCHARYAN: SERIOUS ALL-EMBRACING MARKET REFORMS OBSERVED IN ARMENIA

ARMINFO News Agency
September 23, 2006 Saturday

"I was against any other non-market mechanisms of interaction,"
said Armenian President Robert Kocharyan in an interview with "Vesti
Nedeli" TB program in connection with the rise of gas tariffs by
Russia. Presidnet Kocharyan said all-embracing market reforms in all
the spheres of economy are observed in Armenia. Infrastructure reforms,
first of all in the sphere of energy, were very serious.

"The energy system is effective. Where the system works and on
the basis of market relations, this transition (to market prices
-ed.) is always less painful. Price fluctuations are compensated by
the efficiency of economy, and often by the general process of pricing.

That is why I saw no problems here, though I had rather difficult
negotiations," Robert Kocharyan said. The president thinks that it
would be even strange considering the problem separate from the market
conjuncture "as market reforms in Armenia were implemented thoroughly."

In this connection, Robert Kocharyan brought the history of
establishment of Armenian-Russian joint venture ArmRosgazprom. "We
founded it in 1998, 45% of the shares belong to Gazpron, 45% to Armenia
and 10% to ITERA. I see no position where we lose something in this
deal. Gas supply to Armenia is at the highest level in the CIS in
conditions of the lack of own reserves. Multi-million investments are
made. Gas is effectively used on enterprises. And the venture itself
is rather profitable," the president said.

Foreign Minister Oskanian Participates In International Forum On Eur

FOREIGN MINISTER OSKANIAN PARTICIPATES IN INTERNATIONAL FORUM ON EUROPE’S STRATEGIC RESPONSES

ARMINFO News Agency
September 23, 2006 Saturday

Foreign Minister Vartan Oskanian participated in the 10th Bertelsmann
Forum, held in Berlin, Germany, on September 22, 23, reports the
press service of the Armenian Foreign Minstry.

The one and a half day conference convened on Saturday afternoon with
opening remarks by Germany’s Chancellor Angela Merkel, French Prime
Minister Dominique de Villepin, EU Commission President Jose Manuel
Barroso and Belgian Prime Minister Guy Verhofstadt. The audience of
100+ political leaders, which included former German Foreign Minister
Hans-Dietrich Genscher and US Secretary of State Henry Kissinger,
heard perspectives on Europe’s Strategic Responses, as the conference
is entitled.

Following the opening session, Minister Oskanian participated in a
panel on The Balkans and the Black Sea – a Litmus Test for Europe.

The panel also included the presidents of Bulgaria, Romania and
Azerbaijan, and the Prime Minister of Montenegro.

Throughout the discussion, Oskanian affirmed that the region’s litmus
test for Europe would be an effective European Neighborhood Policy,
the functionality and integrity of the Black Sea region, and practical
approaches to conflicts.

During a lively discussion on Kosovo, Minister Oskanian cautioned
against denying peoples their right to self-determination, simply
out of political expediency. If the world were guided by a fear of
setting precedents, he said, half the countries in the world today
would not exist. But there has to be strict criteria, he said, and
the chief principle should be whether the state can claim the moral
authority to rule.

The Bertelsmann Foundation is sponsored by the Bertelsmann Group,
the world’s largest publishing company.

Armenians Are Not A Burden In Any Country: Armenian President

ARMENIANS ARE NOT A BURDEN IN ANY COUNTRY: ARMENIAN PRESIDENT

ARMINFO News Agency
September 23, 2006 Saturday

Armenians are not a burden in any country. They are economically
active and enterprising and as a rule are actively integrated in
the economy of the country they live in, Armenian President Robert
Kocharyan says in an interview to Vesti Nedeli TV program (Russia)
when asked about the growing number of attacks on Armenians and other
Caucasians in Russia.

Kocharyan says that some patriotic moods are obviously rising in
Russia. There were years when Armenians felt themselves humiliated
in Russia but now the situation is changing. We should carry out
explanatory work with people to make this change tangible – first of
all, for Russia itself, says Kocharyan.

Asked about the level of knowledge of Russian in Armenia, Kocharyan
says that today it is lower than in the Soviet times. But for a small
country like Armenia it is simply indispensable to know foreign
language. "We simply can’t translate all necessary literature,
particularly technical one, into Armenian and in order to get full
value education it is necessary to know foreign language." "It’s
God’s will that we know Russian and I think we realize it." Kocahryan
says that broadcasting of Russian channels in Armenia is a very
important factor for raising the level of knowledge of Russian in
the country. "I would like the Russian side to be more active in
the matter. I think that any educated person in Armenia should know
Russian and one European language."

Asked if Armenia will live calmly in the next 1.5 years, Kocharyan
says: "I think yes. You mean elections? I think we have an immunity
in the matter."

Karabakh Army’s Air Defense Units Hold Drill

KARABAKH ARMY’S AIR DEFENCE UNITS HOLD DRILL

ARMINFO News Agency
September 23, 2006 Saturday

Stepanakert [Xankandi], 23 September: Air defence units of the
Nagornyy Karabakh republic’s [NKR] army have held a training exercise
in Karabakh.

The main task of the exercise was to discover and eliminate the
supposed enemy’s facilities used to carry out an air strike, our
Arminfo correspondent in Stepanakert has reported.

The command, in particular, noted that both commanders and soldiers
coped with their duties and displayed a creative approach.

NKR FM Congratulated His Armenian Colleague With Independence Day

NKR FM CONGRATULATED HIS ARMENIAN COLLEAGUE WITH INDEPENDENCE DAY

ARMINFO News Agency
September 22, 2006 Friday

NKR Foreign Minister, Georgy Petrossyan, has congratulated his Armenian
colleague, Vardan Oskanyan, with the Day of Armenia’s Independence.

"Within the past years, the Armenian people had laid the foundation
of two Armenian republics, having overcome all the difficulties,
creating and enriching its history. Our task is to strengthen the
achievements of independence in a quickly changing world", it is
noted in the message. Having highly appreciated the cooperation of
Foreign Ministries of Armenia and NKR, Petrossyan expressed hope that
the joint efforts of the two states will promote efficient resistance
to challenges, set to the Armenian people.

PRESIDENT OF RUSSIA CONGRATULATED HIS ARMENIAN COLLEAGUE WITH
INDEPENDENCE DAY

The President of Russia Vladimir Putin has congratulated RA President
Robert Kocharyan with the 15th Anniversary of Armenia’s Independence.

As the Kremlin press-office informs, the President of Russia noted
in hic message that "Armenia has always been and still is a reliable
friend and ally for Russia. We are united by centuries-old traditions
of cooperation, by close cultural and spiritual relations . I am sure
the Russian-Armenian relations will henceforth develop for further
deepening of strategic partnership and alliance", it is said in RF
President’s message.

PRESIDENT OF TAJIKISTAN WISHES ARMENIAN PEOPLE PEACE AND WELFARE

President of Tajikistan Emomali Rakhmonov has sent a congratulation
telegram to his Armenian colleague Robert Kocharyan on the occasion
of the Independence Day of Armenia, RIA "Novosti" reports.

Particularly, President Rakhmonov says that the good tradition of
friendly relations of the two countries and peoples is dear to
Tajikistan. "We intend to exert great efforts to strengthen and
develop these relations," he says. The president sends best wishes
to his Armenian counterpart on the occasion of the 15th Independence
Anniversary of Armenia. For conclusion, the president of Tajikistan
wishes Robert Kocharyan health, happiness and further success, and
peace and welfare to the Armenian people.

PRESIDENT OF BELARUS CONGRATULATES ROBERT KOCHARYAN ON INDEPENDENCE
DAY OF ARMENIA

President of Belarus Alexander Lukashenko congratulated President
of Armenia Robert Kocharyan on national holiday, Independence Day,
BELTA agency reports.

In his message, President Lukashenko expresses satisfaction with the
mutual understanding, trust and active cooperation of Armenia and
Belarus. The president is confident in the further development of
Armenian-Byelorussian friendly ties.

PRESIDENT OF TURKMENISTAN SENDS CONGRATULATION MESSAGE TO PRESIDENT
OF ARMENIA ON OCCASION OF 15TH INDEPENDENCE ANNIVERSARY OF ARMENIA

President of Turkmenistan Saparmurat Niyazov sent a congratulation
message to his Armenian counterpart Robert Kocharyan on the occasion
of the 15th Independence Anniversary of Armenia.

In his message, President Niyazov, in particular, says that they in
Turkmenistan highly appreciate the present level of relations with
Armenia. The president is deeply convinced that these relations will
continue developing and strengthening for the welfare for the two
peoples. President Niyazov sincerely wishes the friendly people of
Armenia health, happiness and welfare, as well as peace, prosperity
and progress.

In Level Of I.T. Use By Society Armenia Is Comparable With African C

IN LEVEL OF I.T. USE BY SOCIETY ARMENIA IS COMPARABLE WITH AFRICAN COUNTRIES

ARMINFO News Agency
September 22, 2006 Friday

The level of IT use by society in Armenia is one of the lowest
in the world and is comparable to the indices of Ghana, Kenya and
Zimbabwe, says the executive director of the Union of IT companies
Karen Vardanyan.

Even though Armenia is quickly developing chip design very small
number of Armenians use IT in both everyday life and business.

In order to improve the situation Vardanyan suggests equipping schools
with relatively cheap portable computers – Armenia will need some
$15-20 mln for buying each such computer for $100. Besides it is
necessary to convince our people that IT are not just for leisure
but for raising the efficiency of work, syas Vardanyan.

From: Emil Lazarian | Ararat NewsPress

BAKU: Azeri DM Says Armenia Breaches CFE Treaty

AZERI DM SAYS ARMENIA BREACHES CFE TREATY

Azerbaijani news agency APA, Baku, in Azeri
21 Sep 06

Baku, 21 September: Azerbaijani Defence Minister Col-Gen Safar Abiyev
today received a delegation led by the deputy commander of the US
European Command, Gen William Ward.

At the meeting, Abiyev spoke about the military and political situation
in Azerbaijan and said that Azerbaijan was at war with Armenia, the
Defence Ministry press service told APA. "Although the OSCE Minsk
Group co-chairmen are dealing with the conflict settlement and the UN
Security Council adopted four resolutions demanding the unconditional
withdrawal of the Armenian armed forces from Azerbaijan’s territory,
Armenia does not implement these demands.

Armenia keeps a huge amount of unregistered weapons and ammunition
in Azerbaijan’s occupied territory. This means that Armenia openly
violates the Conventional Forces in Europe Treaty."

Gen Ward said that during the trip he had visited several units of
the Azerbaijani armed forces. He said that the process of bringing the
Azerbaijani armed forces into line with NATO standards was developing
successfully. He voiced his readiness to help the Azerbaijani armed
forces in this area.

Azerbaijani Military Victims Of A Peaceful Period

AZERBAIJANI MILITARY VICTIMS OF A PEACEFUL PERIOD
by Dzhasur Mamedov
Translated by Pavel Pushkin

Source: Voenno-Promyshlenny Kuryer, No. 35, September 13-19, 2006, p. 5
Agency WPS
DEFENSE and SECURITY (Russia)
September 22, 2006 Friday

One hundred and eighty-five soldiers died in Azerbaijan in 44 months

Non-Combat Losses In The Armed Forces Of Azerbaijan Manifest Difficult
Situation In The Army; According to the journalists’ military studies
center Doktrina, in the first eight months of 2006, irreversible
losses of the Azerbaijani army exceeded 36 people.

According to journalists’ military studies center Doktrina, in the
first eight months of 2006, irreversible losses of the Azerbaijani
army exceeded 36 people. This figure is more than the figure of losses
in the relevant period of 2005 amounting to 29. Overall, at least 39
servicemen died in the full year 2005. The irreversible army losses
in 2004 amounted to 35. Thus, these sad figures have a trend of growth.

Relying on the information confirmed at various times by officials
of security agencies it is possible to say that of the 36 servicemen
who died in the first eight months of 2006, 35 served in units of
the Defense Ministry and one served in the State Border Guards Service.

In 2005, 35 servicemen died in the Defense Ministry, three servicemen
died in the State Border Guards Service and one serviceman died in the
Interior Forces. In 2004, 31 servicemen died in the Defense Ministry,
three servicemen died in the State Border Guards Service and one
serviceman died in the interior Forces.

The quantity of dead officers grew in 2006, too. Eight servicemen
were in ranks from lieutenant to colonel, one was a warrant officer
and the remaining 27 were soldiers and sergeants. Among the servicemen
who died in 2005, were 33 soldiers and sergeants, two warrant officers
and four officers in ranks from lieutenant to major.

In 2004, majority of the dead servicemen were soldiers and sergeants
(27) and five were officers.

Analyzing the reasons for deaths of the servicemen of the Azerbaijani
army it is possible to draw a conclusion that the so-called "factor
of the Armenian bullet" is gradually moving to the background. In
2005, soldiers and officers died mostly from bullets from enemy
positions. Monitoring printed and electronic mass media of Azerbaijan
in eight months of 2006, showed that eight servicemen died as a result
of various accidents, ten died "from the Armenian bullet," one exploded
on a mine, two died as a result of a fire, five committed suicide,
three were buried by a snow slide, six died from hazing and one
died from sunstroke. In 2006, only 11 ("Armenian bullet" and a mine
explosion) of the 36 cases of deaths of servicemen can be qualified
as deaths in combat operations. The remaining 25 servicemen died in
non-combat situations.

In 2005, 22 servicemen died from enemy bullets (overall, 39 servicemen
died), two servicemen were killed by a snow slide, two exploded on
a mine and five died as a result of accidents (traffic incident,
unknown bullet, mysterious circumstances and other), four died from
bullets of their fellow soldiers and four committed suicides. Hazing
prevailed among the reasons of deaths in 2004. Ten servicemen died
as a result of that, nine servicemen were killed by enemy bullets,
four died from accidents (electric shock, drowning and other), two
died because of snow slide and four exploded on mines.

Overall, the year 2003, can be considered the most unfavorable of
the last years for the Azerbaijani army. Deaths of 75 servicemen
were registered in 2003. Thirty-four servicemen died from Armenian
bullets. The army lost also 13 servicemen from hazing, eight servicemen
as a result of suicides, seven servicemen exploded on mines and seven
servicemen died from diseases.

Twenty servicemen were wounded in the first eight months of 2006,
due to various reasons. This quantity is a little lower than in 2005
(forty-four servicemen were wounded in 2005, which was the highest
parameter in the last few years). Of the servicemen wounded in 2006,
the Defense Ministry accounted for 18 people, the military prosecutor’s
office accounted for one person and State Border Guards Service
accounted for one serviceman (forty-one servicemen of the Defense
Ministry, two servicemen of the Interior Forces and one serviceman
of the State Border Guards Service were wounded in 2005).

In 2006, like in the last few years, the overwhelming part of the
wounded were soldiers.

We need to pay attention to the reasons for the wounds. First place
belongs to enemy bullets and explosion of mines and other kinds of
ammunition accounting for six wounded each. Then follow hazing (3),
fires (2), catastrophes (2) and accidents (1). We need to mention also
the data for 2005, when 35 servicemen were wounded by enemy’s bullets,
two were wounded by mine explosions, five were wounded because of
accidents, one was wounded because of hazing and one was wounded
because of a suicide attempt.

We can draw a sad conclusion. Between January 2003 and August 2006,
that is in 44 months, the armed forces of Azerbaijan lost at least
185 servicemen. Of this quantity deaths of 89 servicemen were combat
losses (75 from Armenian bullets and 14 from mine explosions) and
96 deaths happened outside of the combat situation (33 from hazing,
23 because of accidents, 21 because of suicide, 11 from snow slide,
seven from diseases and one from sunstroke). During the same period
more than 119 servicemen were wounded.

According to analysts of Doktrina, losses of this scale are
unacceptable for such a small country as Azerbaijan and show that
condition of the army is intolerable. Experts see the reasons for
growing quantity of servicemen’s deaths in the arbitrary actions,
lawlessness, irresponsibility, and inaction of laws, corruption,
inept command and other negative phenomena dominating in the army.

Observers also think that it is necessary to seek the reason for the
non-combat deaths in existence of the atmosphere of impunity in the
army. If everyone from commanders of military units to top-ranking
officials of the Defense Ministry keep avoiding punishment the sad
army statistical data will keep growing.

What Happens To Russia When – Not If – Oil And Gas Prices Begin To R

WHAT HAPPENS TO RUSSIA WHEN – NOT IF – OIL AND GAS PRICES BEGIN TO RETREAT?

Source: Newsweek International, MSNBC.com, September 25, 2006
Agency WPS
The Russian Business Monitor (Russia)
September 22, 2006 Friday

News stories about Russia these days follow a predictable theme. The
country is resurgent and strong, and the West must adjust to this
new reality. But that story line is wrong. Russia is weak and getting
weaker.

Take the conventional index of power-military might. Yes, Moscow is
testing advanced missiles systems and talks buoyantly about countering
a US antiballistic-missile system with a new generation of warheads
that can evade interceptors. Yet note the failure earlier in September
of the highly touted Bulava submarine-launched missile. The United
States experiences such mishaps, too, of course. But in Russia they
are signs of something deeper. It is no secret that, for all Russia’s
new oil wealth, its Army remains poorly trained, malnourished and
demoralized. Alcoholism, suicide and corruption are rife. Weaponry
is aging and newer models arrive at a trickle: India has bought more
Russian tanks since 2001 than the Russian Army.

Russia gets credit for economic growth-nearly 7% in 2006, according
to the IMF. But the boom has been propelled mainly by rising energy
prices. What happens when-not if-oil and gas prices begin to retreat?

New investment in production capacity is insufficient to sustain
current levels of exports. Meanwhile, economic reform has stalled,
state control over strategic economic industries has increased and
foreign investment remains low. Of the $648.1 billion in foreign
investment worldwide in 2004, only $11.6 billion went to Russia. Not
surprisingly, Russia rates poorly in globalization rankings. The
2005 Foreign Policy/A.T. Kearney survey placed it 52nd in a list of
62 countries-a drop of five places from 2004.

Russia’s human capital is being ravaged. The population is declining
by some 750,000 annually because of low birthrates and unusually high
death rates among males; it is also aging rapidly and will therefore
become increasingly less productive. Alcoholism remains pervasive, as
does drug use. Russia has the highest rate of tuberculosis in Europe.

AIDS has yet to crest. Suicide is one the rise. According to WHO
data on 46 countries between 1998 and 2003, Russia, with 71 cases
per 100,000 of the male population, topped the list.

A nation’s power also rests on the strength of its institutions.

Here, too, Russia is growing weaker. Putin’s authoritarianism has
brought order to a once chaotic political scene. But Parliament has
been neutered. So have independent civic organizations, political
parties and media. The secret police, military and security
services-no friends of the rule of law-occupy prominent political
positions. Official corruption flourishes.

Abroad, Russia’s influence continues to ebb. Its closest
allies-Kyrgyzstan, Tajikistan and Uzbekistan-are poor and
politically unstable. Energy-rich Kazakhstan and Turkmenistan
resent Russia’s grip on their exports. Armenia, loyal but penurious,
remains embroiled in the Nagorno-Karabakh conflict with increasingly
prosperous Azerbaijan. The Kremlin’s meddling in Georgia has deepened
Tbilisi’s determination to join NATO and strengthened anti-Russian
sentiment. Belarus’s dictatorial president envisions union with Russia,
but his Soviet-style political order repels many ordinary Russians.

On the wider global stage, Putin displays seeming strength and new
confidence. Russian support is key to the negotiations over Iran’s
nuclear program. Its Security Council veto gives it an important say
on various international issues, from Kosovo’s independence to the
United Nations peacekeeping force in Lebanon. Yet Putin’s rhetoric
increasingly strikes themes of Great Russia-imperial, nostalgic,
nationalistic. However much it resonates with a particular Russian
political class, that rhetoric can itself breed weakness.

You see this in the sharp rise of race-related hate crimes in Russia.

Right-wing racism and Russia-for-Russians chauvinism augur ill for
a multiethnic, multiconfessional Russia, which has near 25 million
Muslims.

So, the received wisdom is wrong. What the West must live with
is a weak Russia. And history shows that states that talk loudly
while carrying a small stick often overreach, creating problems for
themselves and others.