Armenia Has 2.2% Deflation In July; Inflation At 4.5% Year-To-Date

ARMENIA HAS 2.2% DEFLATION IN JULY; INFLATION AT 4.5% YEAR-TO-DATE

Interfax News Agency
July 31 2008
Russia

Armenia had 2.2% deflation in July and inflation of 4.5% since the
beginning of the year, the National Statistics Service reported.

In July, prices on food (including alcohol and tobacco) declined 4.4%
but prices on non-food goods were up 0.7%. The prices for paid services
rose 0.4%.

Prices were up an average of 0.6% each month compared with an average
monthly price rise of 0.1% in the first half last year.

The government forecasts inflation for the full year at 4% plus or
minus 1.5 percentage points. The IMF forecasts Armenian inflation in
2008 at 7%.

Armenia had 6.6% inflation in 2007.

Nagorno-Karabakh To Determine Its Status By Referendum – Bryza

NAGORNO-KARABAKH TO DETERMINE ITS STATUS BY REFERENDUM – BRYZA

Interfax News Agency
Aug 1 2008
Russia

MOSCOW. Aug 1 (Interfax) – Nagorno-Karabakh residents will decide
for themselves whether the republic will be under Azeri control or
be independent, U.S. Assistant Secretary of State and co-chairman
of the OSCE Minsk Group Matthew Bryza said after the meeting between
the Armenian and Azeri foreign ministers in Moscow.

Nagorno-Karabakh residents will make their decision at a referendum,
he said.

It is important to have bilateral relations based on trust and a
political will, he said. Bryza warned against blocking the talks.

The co-chairman of the OSCE Minsk Group, Yuri Merzlyakov, noted an
active role of the group in the settlement of the Karabakh conflict.

"The current process – the meetings between the presidents, foreign
ministers, means that the Minsk Group acts normally, and the sides to
the conflict, Armenia and Azerbaijan, have a constructive attitude
toward each other," Merzlyakov said after the meeting between the
Armenian and Azeri foreign ministers in Moscow.

Baku has lost control over Nagorno-Karabakh and several adjacent
districts in the course of a bloody conflict that began in the 1990s
between the Armenians and Azeris who fought for control over Nagorno-
Karabakh. As a result, about a million Azeris became refugees and were
forced to relocate. The UN Security Council slammed the seizure of
the Azeri territory and demanded a withdrawal of the Armenian forces.

Currently, talks on this problem are underway. The OSCE Minsk Group
co-chairmen representing Russia, the U.S. and France are seeking a
settlement of the conflict around Nagorno-Karabakh.

Azeri, Armenian Fms Discuss Nagorno-Karabakh In Moscow

AZERI, ARMENIAN FMS DISCUSS NAGORNO-KARABAKH IN MOSCOW

Interfax News Agency
Aug 1 2008
Russia

MOSCOW. Aug 1 (Interfax) – Armenian Foreign Minister Edward Nalbandian
and Azei Foreign Minister Elmar Mamedyarov are discussing the
Nagorno-Karabakh settlement in Moscow on Friday, a diplomatic source
in Moscow told Interfax.

"The meeting began. It will last the whole day behind the closed
doors," the source said.

A communique is likely to be spread after the meeting, he said.

The diplomat noted that the meeting is held at the proposal of the
OSCE (Organization for Security and Cooperation in Europe) Minsk
Group co-chairmen.

From: Emil Lazarian | Ararat NewsPress

People Living In Nagorno-Karabakh Should Determine Their Status Thro

PEOPLE LIVING IN NAGORNO-KARABAKH SHOULD DETERMINE THEIR STATUS THROUGH VOTING – U.S. DIPLOMAT

Interfax News Agency
Aug 1 2008
Russia

MOSCOW. Aug 1 (Interfax) – The people living in Nagorno-Karabakh will
decide themselves whether the republic should remain under Azerbaijan’s
jurisdiction or gain independence, said U.S. Deputy Assistant Secretary
of State for European and Eurasian Affairs Matthew Bryza, a co-chair
of the OSCE Minsk Group.

"That’s what the vote would determine [] by the people who are there,
I mean by the Karabakhs themselves," Bryza told journalists in Moscow
following a meeting between the Armenian and Azeri foreign ministers
on Thursday.

"It’s the basic principles that have been talked about before, I mean
the rough framework," Bryza said.

"None of this by the way is agreed, nothing is agreed until everything
is agreed," Bryza said. "What we have suggested – only what we have
suggested – is that the Armenian troops would pull out of the seven
territories around Karabakh, there would be international peacekeepers
that are brought in there, then there would be the return of internally
displaced persons and refugees, that there would be a corridor that
connects Armenia and Nagorno- Karabakh, and there would be a process
of voting, be it a plebiscite or a referendum, you can talk about
different words, but anyway, a voting process to determine the future
of Nagorno-Karabakh, its future status," he said.

"We don’t know exactly when that would occur, all those sorts of
modalities would need to be negotiated," he added.

What is also important is that the parties trust each other and have
enough political will, Bryza said. He also warned against the danger
of a stall in the negotiations.

Yury Merzlyakov, the Russian co-chair of the OSCE Minsk Group, praised
the group’s active role in settling the Nagorno-Karabakh conflict.

"The way the process is going on, including meetings between the
presidents and the foreign ministers, means that the Minsk Group
is acting properly and that the conflicting parties – Armenia
and Azerbaijan – have constructive attitudes toward each other,"
Merzlyakov told journalists.

Baku lost control over Nagorno-Karabakh and several districts adjacent
to it in a bloody conflict between Azeris and Armenians in the
1990s. The conflict rendered about 1 million Azeris refugees. The UN
Security Council condemned the occupation of Azerbaijan’s territories
by Armenia and demanded that Armenian troops be withdrawn from them.

A negotiating process to settle the Nagorno-Karabakh problem is
currently underway with international mediation of the OSCE Minsk
Group, which is comprised of representatives from the U.S., Russia,
and France.

Azerbaijan: Meeting On Nagorno-Karabakh "Useful"

AZERBAIJAN: MEETING ON NAGORNO-KARABAKH "USEFUL"

Interfax News Agency
Aug 1 2008
Russia

MOSCOW. Aug 1 (Interfax) – An Armenian-Azeri meeting on Friday as
part of talks to settle the Nagorno-Karabakh conflict was "useful,"
but "a breakthrough is still a long way down the line," the Azeri
foreign minister said.

"The meeting was useful, we decided to hold more negotiations, but
a breakthrough is still a long way down the line," Elmar Mammadyarov
said in a comment on his meeting with Armenian Foreign Minister Edvard
Nalbandian, held in Moscow.

Mammadyarov said that, at their meeting, he and Nalbandian looked
at chances to remove "stumbling blocks that are obstacles at the
negotiations."

The Armenian minister said he and his Azeri counterpart had discussed
how to move forward "on the basis of proposals that the co- chairmen
of the Minsk Group of the OSCE put forward in Madrid."

The Minsk Group of the Organization for Security and Cooperation in
Europe is a body co-headed by Russia, the United States and France
and appointed to mediate in the Nagorno-Karabakh conflict.

Nalbandian also expressed the belief that there is a chance of
him reconvening with Mammadyarov at the next UN General Assembly
session. "There are sensitive issues, they should be handled
cautiously. We are trying to create an adequate environment for
negotiations to continue," the Armenian minister said.

Russia, Armenia, Azerbaijan Discuss Nagorno-Karabakh

RUSSIA, ARMENIA, AZERBAIJAN DISCUSS NAGORNO-KARABAKH

Interfax News Agency
Aug 1 2008
Russia

MOSCOW. Aug 1 (Interfax) – A Russian deputy foreign minister had a
meeting on Friday with the Armenian and Azeri foreign ministers,
discussing with them "the current state of and prospects for"
talks to settle the Nagorno-Karabakh conflict, the Russian Foreign
Ministry said.

The meeting between Russian First Deputy Foreign Minister Andrei
Denisov and the Armenian and Azeri ministers, Edvard Nalbandian and
Elmar Mammadyarov, was held in Moscow, where the two ministers had
arrived for a routine consultation as part of the peace process.

In the course of the consultation, the two ministers met with the
Russian, American and French co-chairmen of the Minsk Group, a body
appointed by the Organization for Security and Cooperation in Europe
to mediate in the two-decade conflict, the Russian ministry said in
a press release posted on its website.

Azerbaijan To Suspend Cooperation With Western Union, Moneygram

AZERBAIJAN TO SUSPEND COOPERATION WITH WESTERN UNION, MONEYGRAM

Interfax News Agency
Aug 1 2008
Russia

BAKU. Aug 1 (Interfax) – The National Bank of Azerbaijan has bound
commercial banks operating in the republic to suspend business
cooperation with Western Union and MoneyGram money transfer systems,
Interfax was told at the bank.

Commercial banks should not conduct any money transfer transactions
for the systems as of July 30.

The National Bank accounted the suspension of cooperation to the
fact that Western Union and MoneyGram continue money transfers to
breakaway Nagorno Karabakh.

"The National Bank of Azerbaijan told the money transfer systems and
their oversight bodies before about the need to suspend money transfer
to the occupied territories of Azerbaijan warning that otherwise
Azeri banks would be prohibited to cooperate with the systems,"
a bank spokesman said.

Demanding Concessions From Yerevan

DEMANDING CONCESSIONS FROM YEREVAN
by Yuri Simonjan

WPS Agency
What the Papers Say (Russia)
August 1, 2008 Friday
Russia

TALKS OVER NAGORNO-KARABAKH WILL TAKE PLACE IN MOSCOW, PROTESTS IN
ARMENIA; Armenian and Azerbaijani foreign ministers are to meet in
Moscow and discuss Nagorno-Karabakh conflict settlement.

Armenian and Azerbaijani foreign ministers Edward Nalbandjan and Elmar
Mamedjarov are meeting in Moscow today to discuss Nagorno-Karabakh
conflict settlement. The Armenian delegation will be at a certain
disadvantage because radical opposition in Yerevan headed by the
first president Levon Ter-Petrosjan has scheduled a protest action
for this day.

Nalbandjan called a press conference prior to his departure for
Moscow and said that the negotiations with his Azerbaijani opposite
number had been arranged by the OSCE Minsk Group (United States,
France, Russia). The diplomat said that Mamedjarov and he intended
to discuss the OSCE Minsk Group’s Madrid offers, the ones on whose
basis the presidents of the two countries had pledged to continue the
peace talks. Made public in November 2007, the offers in question
constitute basic principles of conflict settlement. No details are
known to general public, but foreign intermediaries unanimously call
the plan "fair and well-balanced".

Discounting minor disagreements, Yerevan and Baku cannot agree
on what really counts and that is status of the Nagorno-Karabakh
Republic. Azerbaijan calls it its own territory, Armenia insists on
its sovereignty. Neither would even hear of a concession. For the
Armenians, however, the situation is further complicated by the
knowledge that any compromise with the Azerbaijanis – no matter
how minor – will be condemned by the opposition as a sign of
weakness. Nalbandjan called actions of the opposition in Yerevan
unacceptable. "Claims of the opposition that ex-president Robert
Kocharjan should be extradited to the Hague for the tribunal there
are worse then absurd. They are shameful," the minister said. The
opposition meanwhile continues the process of collection of signatures
on the petition and claims to have more than 100,000 already.

Supporters of Ter-Petrosjan who founded the Popular Movement and who
question the outcome of the presidential election earlier this year
(February 19) promise a major protest action in Yerevan today.

The West in the meantime keeps badgering official Yerevan to continue
the policy of compromises with the opposition. "Unless the authorities
in Armenia do something to heal the split, tension in Armenian society
will mount," David Kramer of the US Department of State said the other
day. "All elements of society must participate in the dialogue and act
responsibly but responsibility mostly rests with whoever wields power."

Rose Revolution’s Internal Struggle May Bear Fruit For Georgia

ROSE REVOLUTION’S INTERNAL STRUGGLE MAY BEAR FRUIT FOR GEORGIA

The Irish Times
August 1, 2008 Friday

GEORGIA LETTER:President Saakashvili’s ex-ally may yet become the
most dangerous thorn in his side, writes Dan McLaughlin

GEORGI, TBILISI’S singing cabman, sends another refrain from Aida
soaring out above the honking horns and hot metal of rush-hour traffic.

Leaning far back in the driver’s seat, because it’s broken or there’s
no other way he can squeeze into the battered hatchback, Georgi
peppers his serenade with bursts of fluent, slightly effete English.

"I am classically trained, but can only make $300 (EUR 192) a month
at the Georgian National Opera. Driving taxi I make double that in
few days. I also perform for private parties."

Black hair slicked neatly above dark eyes, a pendulous nose and a
quick, smiling mouth, Georgi could be a dead ringer for Caruso, were he
not semi-reclining behind the wheel of a wheezing Opel with a cracked
windscreen, an overworked horn and far too many miles on the clock.

As well as Georgian, English, Russian and a smattering of German,
Georgi speaks the Armenian of his ancestors and Azeri picked up from
worshippers at the mosque near his flat, and he has the voice of a
portly angel.

Yet cabbying is his best way to earn a crust. "Things are getting
better here," he sighs between high notes and unlikely overtaking
manoeuvres. "But it’s taking time."

Georgi is driving away from the home of Nino Burjanadze, one of the
trio of politicians who led the Rose Revolution, which swept away
Georgia’s old guard in late 2003 and inspired soaring hopes in a
nation weary of poverty, power cuts and all-pervasive corruption.

While Mikhail Saakashvili sparked with boundless energy and supreme
confidence, and Zurab Zhvania’s razor-sharp political brain whirred
behind an easygoing charm, Burjanadze (44) moved through the chaotic
events with calm assurance and a certain, stately sophistication.

Five years on, the Rose Revolution team is no more: Zhvania is dead,
poisoned by a gas leak; Saakashvili is a less bouncy, more bruised
president; and Burjanadze has just parted ways with her old ally
after a long period of discontent.

A defining moment, it seems, was Saakashvili’s decision reached last
November to use riot troops to disperse thousands of protesters who
accused him of promoting his friends while crushing his opponents,
and failing to raise living standards and fight graft.

Unease among Saakashvili’s supporters in Washington and the European
Union grew when police raided and temporarily closed an opposition
television station, and he ultimately agreed to hold early presidential
and parliamentary elections.

He and his allies won both quite comfortably, but his image as a
champion of western-style democracy in a volatile part of Russia’s
backyard was tarnished.

The fractious opposition could not find a leader capable of really
challenging Saakashvili.

But now Georgians, who are tired of waiting for their lives to improve,
are wondering whether the woman who was his strongest partner is
poised to become his most dangerous adversary.

"I had some differences of views with the former team. And I thought
it was right that we moved in different directions," Burjanadze said
in the leafy conservatory of her Tbilisi home.

"We share the same strategic priorities . . . but we differ on tactical
points. I saw that I was not strong enough inside the system to do
what I thought was right. So I left."

Burjanadze, who is married with two sons, has created the Foundation
For Democracy and Development to help strengthen Georgian civil
society and move towards the nation’s commonly-held priorities –
accession to Nato and the EU, and restoration of Tbilisi’s control
over two Russian-backed separatist regions, Abkhazia and North Ossetia.

She finally split with Saakashvili after a dispute over which
candidates to put forward for the elections in May.

But her calls for a "broader section" of decision-makers, for
government to become "more transparent and closer to the people", and
for an end to "revolutionary methods of ruling" sound like indictments
of Saakashvili’s alleged reliance on a small clique of trusted advisers
and his penchant for bold, but sometimes heavy-handed, moves.

"I was saying this openly . . . and the president and others often
said I was right. But I wanted real change. Perhaps now it will come,
and they will do what I asked."

Burjanadze insists that her "political divorce" from Saakashvili
"was quite civilised", but she holds no qualms about the prospect of
challenging him for power at a later date.

"I think I will be back in active politics in the near future . . . I
would create my own party, but will co-operate with others.

"But for now my political ambitions and party can wait until my
foundation is fully established."

If Nino does challenge Misha, as the former allies are universally
known in Georgia, then she is likely to be Saakashvili’s toughest
opponent.

Georgi the singing cabman, and millions of his compatriots, can only
hope that a battle between the heroes of the Rose Revolution finally
prompts it to bear belated fruit.

From: Emil Lazarian | Ararat NewsPress

Armenia Aims To Firm Up Three-Year Gas Price Deal With Russia By Sep

ARMENIA AIMS TO FIRM UP THREE-YEAR GAS PRICE DEAL WITH RUSSIA BY SEPTEMBER
by Andrew Neff

World Markets Research Centre
Global Insight
August 1, 2008

Armenian Energy and Natural Resources Minister Armen Moysisian told
reporters this week that the government is expecting to sign a new
gas price deal with Russia’s Gazprom in September. Interfax reported
that Gazprom plans to increase its gas export price for Armenia to
$165US per 1,000 cm, up from $110US per 1,000 cm at present. Gazprom
CEO Alexei Miller met with senior Armenian officials in May, with the
two sides agreeing to bring Russian gas prices to Armenia up to the
"European" level by 2011 (seeArmenia: 20 May 2008:). Moysisian told
reporters that Armenia is looking to sign a three-year deal with
Gazprom, although he said that the price has yet to be determined.

Significance:At the moment, Armenia is entirely reliant on Russian
gas imports to meet domestic demand, giving it little leverage in
price negotiations with Gazprom.

However, Armenia, which is also linked to Iran via a new pipeline
and will eventually have the possibility of sourcing gas from Iran,
managed to lock in a bargain price of $110US per 1,000 cm back in
2006 for a three-year period by agreeing to hand over various energy
assets to Russian entities (seeCIS: 7 April 2006:). Armenia is likely
looking to strike a similar deal with the Russian gas giant this
time around in order to keep prices stable–even if higher, at $165US
per 1,000 cm–through the end of 2011. The Russian gas firm may not
be so amenable to a three-year freeze in prices this time, however,
given the lack of assets that Armenia has to offer in exchange, so
a deal under which Russian gas prices to Armenia rise each year over
the next three years is perhaps a more likely outcome.