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Eurasianet Organization
Jan 5 2005

CHANGES IN THE CIS: WHAT TO EXPECT IN 2005
Stephen Blank 1/05/05
A EurasiaNet Commentary

Ukraine’s Orange Revolution and the European Union’s decision to
begin membership negotiations with Turkey will have far-reaching
repercussions for members of the Commonwealth of Independent States
in 2005. Both of these events will lead to a greater engagement by
both the EU and the North Atlantic Treaty Organization in the
Caucasus and Central Asia. Sharper East-West rivalry may be the
result, but this engagement will also ensure that the struggle for
democratic change will not abate.

Though it received less press attention than the uprising in Kyiv,
the starting point for this process begins with the EU’s December 17
decision to start membership talks with Ankara. The move came more
than one year after Georgia’s 2004 Rose Revolution – an event that
considerably increased the EU’s interest in the region.

After Russia vetoed prolonging the Organization for Security and
Cooperation in Europe’s border monitoring mission in Georgia, for
instance, the EU offered, on December 30, to send in its own
monitors. Georgian President Mikheil Saakashvili’s reform drive
triggered an outpouring of millions in humanitarian and financial aid
from the organization, contradicting earlier observations that the EU
has no interest in the South Caucasus.

Talks with Turkey could play a key role in furthering this
engagement. It is likely that Ankara will attempt to raise awareness
in Brussels about the potential security threats to Europe that stem
from the Caucasus’ unresolved conflicts. [For additional information
see the Eurasia Insight archive]. With the opening of the
Baku-Tbilisi-Ceyhan pipeline scheduled to occur in 2005, Europe’s
incentive for clearing up territorial disputes will only increase.
Turkey could use this situation to emphasize its own possibilities as
a peace broker.

That, in turn, could make the reforms enacted by Turkey since 2002 in
its bid for EU membership a model for the region. When countries in
the Caucasus look at Turkey, they will see a country that has
democratized its political process, instituted greater civilian
control over the military and undergone a robust economic revival.

But Turkey is not the only example for the Caucasus. The recent
pro-democracy uprising in Kyiv can only further the cause of reform.
[For background see the Eurasia Insight archive]. Already, a
connection between Ukraine and the Caucasus has been made with the
partnership on display between President-elect Viktor Yushchenko and
Saakashvili.

Unlike Turkey, however, the Ukrainian democratic reform drive will
encounter harsh resistance from Russia. Yushchenko’s government will
try to enhance Ukraine’s ability to meet the requirements for closer
ties with both NATO and the EU — associations that could completely
rework security and diplomatic relationships across the CIS.

Russia, already rebuffed in Georgia and Ukraine, will put up a strong
resistance against any such transformation. Moscow’s criticism of the
Organization for Security and Cooperation in Europe’s human and civil
rights monitoring activities is already one tactic put to use in this
battle – and one that secured the prompt support of certain CIS
member states. Additional examples of such maneuvers should be
expected in 2005.

But as Russia attempts to play its hand to greater effect in the
Caucasus and Central Asia, the calls for democratic reform will only
increase – first in the Caucasus, then, to a lesser extent, in
Central Asia. An upsurge in domestic tensions in Azerbaijan and
Armenia, where examples of misgovernment are rife, is plausible,
while in Georgia, greater expectations will be placed on the
Saakashvili government to deliver on its promises for reform.

Paradoxically, though, the increased rivalry between East and West
for influence will come with enhanced opportunities for conflict
resolution. The status quo in Nagorno-Karabakh, South Ossetia and
Abkhazia appeared durable as long as there was no external pressure.
As competition between Russia and the West potentially heats up, such
conflicts could be used by both sides to demonstrate their usefulness
as peace brokers, and, thereby, solidify their influence in the
region.

Editor’s Note: Stephen Blank is a professor at the US Army War
College. The views expressed this article do not in any way represent
the views of the US Army, Defense Department or the US Government.

From: Emil Lazarian | Ararat NewsPress

TANER AKCHAM: “PURGE OF ARCHIVES IS QUITE IMPORTANT ADMINISTRATIVE
CULTURE” IN TURKEY”

ISTANBUL, December 29 (Noyan Tapan): The destruction of documents is
“an important part of our culture,” historian Taner Akcham, a
representative of the progressive Turkish intelligentsia, writes in
his large article concerning the purge of the Turkish archives. The
article was published by the “Radical” newspaper in its Sunday
appendix. In his article Akcham, at first, mentions the “Sabah”
newspaper’s publication from November 7 1918, where it is said that
the government looked for the documents testifying about the massacre
against the Armenians but couldn’t find them. The newspaper’s
indicated article writes “Taleat Pasha and his company, probably,
before leaving authority, ordered to destruct all the documents
witnessing about their giving directions on the massacre. Akcham
emphasizes that it was right, as the indictment against “the Young
Turks”, which was heard in the Istanbul Court Martial of the State of
Siege in May 1919, writes that the documents concerning the
administrative center of the “Ittihat” party and so-called Teshkilat
Mahsuse organization were “stolen”. In this connection the Prosecutor
said that Aziz Bei, the Chief of Security of the region, took away
with himself a lot of documents before Taleat Pasha’s resignation and
didn’t return them. Then Taner Akcham cites numerous examples
concerning the stealing and destruction of the documents and notices
that during the “Ittihat’s” power the following was written under all
the instructions and documents concerning massacres: “Read and
destruct after reading.” Akcham mentions the self-defense of different
officials in the courts, they reported that “they destructed the
documents as they received such an order.” In particular, Akcham sets
as an example the 1919 action against Osman Nuri Effendi, the Deputy
Director of the Chatalcha post office, who said: “I burned down all
the documents in accordance with the received order. My chiefs ordered
me to burn down the documents concerning the period of their power
from such-and-such to such-and-such date and I did it..” The author of
the article also sets other examples. According to the “Marmara” daily
newspaper of Istanbul, at the end of the article the Turk historian
notices: “As seen the destruction of documents is quite an important
“administrative culture”. For that reason some persons talk profusely
with the quiet of those who know that the documents have already been
destructed, that “nothing had happened with the Armenians, and all the
documents are in their places.” Perhaps, people of my generation will
find some documents about their greats and promulgate them, arguing
that beside those considering the destruction of documents as success,
there are also such people that want to discover truth”.

From: Emil Lazarian | Ararat NewsPress

Greek shares reverse losses at midsession on selective blue chip buying

AFX Europe (Focus)
Jan 04, 2005

ATHENS (AFX) – Shares recovered from early losses to head higher
midsession on selective blue chip buying as energy monopoly PPC
outperformed, gaining nearly 3 pct, brokers said.

PPC rose 2.87 pct to 21.48 eur, playing catch up with recent gains in
blue chip peers.

The Athens bourse benchmark general edged up 0.18 pct to 2,829.73
points after testing earlier the 2,800 point resistance level.

Europeýs largest betting company OPAP was off 0.39 pct at 20.50
eur. Daily To Vima reported that the governmentn may proceed with a
share placement in OPAP within January cutting the stateýs current 51
pct stake in the company.

Blue chips were 0.11pct. firmer.

Emporiki Bank, 11 pct owned by Franceýs Credit Agricole, gained 0.85
pct to 23.78 eur. Yesterday, a senior Emporiki Bank source said that
the bank intends to sell its subsidiaries in Armenia and Georgia as
part of the groupýs restructuring process.

Brokers described the move as positive, saying that returns from both
markets for Emporiki were marginal.

Bellwether National Bank was unchanged at 24.96 eur.

Index heavyweight OTE Telecom, Greeceýs largest phone company, lost
2.20 pct at 13.34 eur. Subsidiary Cosmote eased 0.13 pct at 14.94 eur.

Small caps were down 0.04 pct and mid caps advanced 0.90 pct.

From: Emil Lazarian | Ararat NewsPress

New York Times
Jan 4 2005

After Food and Shelter, Help in Coping With Unbearable Loss

By BENEDICT CAREY

Providing psychological services for millions who have lost family
members, homes and communities in Sri Lanka, Indonesia and other
countries will become critical in the coming weeks, officials from
the World Health Organization, Unicef, and other relief agencies say.

The scope of the emotional fallout will be impossible to predict. The
first priority, the officials said, is to deliver food, shelter and
drinking water. But the United Nations has already set up a network
for counseling in Sri Lanka and, on Friday, sent mental health
workers to the Maldives.

Any natural disaster takes a steep emotional toll, the experts said,
but this one is distinguished by its sheer size and scale. Studies of
earthquakes, fires, hurricanes and other disasters that have
devastated communities find that a majority of survivors eventually
learn to live with awful memories and to work through their grief.
But a significant number suffer either chronic mental distress or a
more immediate emotional numbness that can isolate them from others.

“At this point we have to be very careful not to label as a mental
health problem this natural psychological response to being displaced
in a split second, to seeing that everything you had now no longer
exists,” said Dr. Rachel Yehuda, director of the traumatic stress
program at Mount Sinai School of Medicine and the Bronx Veterans
Affairs Hospital. Those who are deeply scarred emotionally will need
long-term care, she said, not a few hours or days of emergency care
by grief counselors or other mental health workers.

After suffering a violent injury, or witnessing a catastrophe, some 5
percent to 10 percent of people suffer from lingering nightmares,
moodiness, nervous exhaustion and other symptoms of post-traumatic
stress syndrome, researchers say. These symptoms are considered
worrisome if they become chronic; they can appear months or even
years after the crisis.

Yet the rates of severe traumatic reactions can be much higher among
people sitting directly in the impact zone of a seemingly apocalyptic
event. After a 1988 earthquake that leveled the Armenian town of
Spitak, killing half its schoolchildren, researchers from the
University of California, Los Angeles, found that more than half the
town’s children suffered from post-traumatic stress and depression.
The rate was less than half that in Gumri, some 30 miles away, and
was negligible in Yerevan, the capital, 50 miles away.

“It’s very clear, the more extreme the experience, the higher the
risk of severe psychological reactions,” said Dr. Alan Steinberg, one
of the study’s authors. “Those people who were on the beach in this
case, or close, are going to be at highest risk” of chronic emotional
distress.

Even in areas farther inland, psychiatrists say, the grieving among
people who have lost homes and family members may be complicated by
the trauma and violence. When the final memory of a lost loved one is
violent, or suffused with guilt or helpless rage, experts say, it
interferes with the natural ability to mourn loss, leaving people
numb, at risk for serious depression, and cut off from others around
them.

“If there’s a signature image of this catastrophe, it’s the loss of
children, the parents right there struggling for their own lives but
unable to protect or save their children,” said Dr. Robert Pynoos,
co-director of the National Center for Child Traumatic Stress, and a
professor of psychiatry at the University of California’s
Neuropsychiatric Institute in Los Angeles.

The risk that this prolonged grief can cause depression is greater
still, experts say, when the death of a loved one is not confirmed,
or the body is swept into a mass grave without being identified – as
has occurred in some areas hit by the tsunami.

In such circumstances, when the normal cultural rituals surrounding
death are disrupted, wild rumors often circulate, experts say. In
1985, volcanic ash and rubble killed some 80 percent of the
inhabitants of the Armero, Colombia, sweeping away the bodies. For
months afterward, there were stories and “sightings” of some of the
dead wandering in far-off places. Only after the corpses were found
two years later and proper ceremonies were conducted, did the
survivors accept their loss, according to a World Health Organization
report.

In 2001, a fire in Lima, Peru, killed some 270 people, charring many
bodies beyond recognition and depriving families of identifiable
remains to bury and mourn. In the resulting confusion, rumors
circulated that relief workers were stealing cadavers for medical
experimentation, or selling harvested body parts, the W.H.O. report
said.

In the weeks and months to come, experts say, relief workers can help
dispel such rumors, as well as identify survivors who are at risk of
prolonged depression or traumatic stress. The health organization has
issued guidelines for relief workers on how to deal with traumatized
victims, and a group affiliated with the University of Oslo is
planning a program to provide information on counseling to teachers
and others in the areas hardest hit by the disaster.

From: Emil Lazarian | Ararat NewsPress

Journal of Turkish Weekly
Jan 4 2005

EU Summit of December 17: A Victory or A Defeat for Turkey?

View: Dr. Sedat Laciner

After the Brussels Summit on 17 December 17 2004, The Prime Minister
Tayyip Erdogan and his companions were welcomed as the `conquerors’.
The welcome which was started at the airport continued with a `feast’
in the Ankara Kýzýlay Square. Although the Prime Minister Erdogan
said `We are not spoiled and will never lose our self-control’, the
tv-radio news and newspaper headlines were full of `how we pull up
stakes with Europe and European leaders, ` and `how we oppressed the
Greeks and get what we want’. However, the obstinate opponents of
Europe claimed that in December 17 Turkey sacrificed Cyprus in return
of the accession date. According to these people Turkey has gained
nothing even before the summit. If such is the case which one is the
real fact? December 17 is the date of `Turkish Entrance into Europe’
or is the date of gaining nothing by adding more concessions’ to the
existing ones.

***

First of all, when we look at the remarks before the Summit we see
that Turkey went to the EU Summit with `four red lines’:

1. An exact date should be given for the negotiations and this date
should not be open-ended.

2. Before the start of the negotiations Turkey can not take any more
steps in Cyprus Issue.

3. The aim of the negotiations should be full membership. The
alternatives which will distort the full membership, such as,
`privileged partnership’ or `B Plan’ can never be accepted.

4. Permanent derogations (limitations) can never be accepted by
Turkey.

***

At the end of the Summit each of these lines were exceeded. If we
handle them one by one, the first months of 2005 do not come true,
instead the EU, with a French insistence, determined October 3, 2004
as the starting date.

In addition, the exact date of the end of negotiations has not been
defined, it has been especially stated that the negotiations will be
open-ended. In other words, the negotiations between Turkey and the
EU might be continued forevermore. For this reason, December 17 has
not given guarantee for Turkey’ full membership. Until now, Turkey
has been waiting for 41 years, and according to the draft Turkey can
wait 41 more years without any progress.

Secondly, Turkey was the one who promise not to take a step in Cyprus
before the negotiations. Turkey and the TRNC (Turkish Republic of
Northern Cyprus) have realized all of the EU and UN requirements and
have made all of the concessions, however, Turkey faced with new
concessions in the Summit, also added that before solving the
problem, EU have declared the membership of the Greek Cypriots as the
only representative of the island despite all of the concessions
Turkey has made. Besides, though there have not been a signed written
agreement, Turkey has pledged to take a step in Cyprus Issue before
the start of the negotiations. The South (Greek) Cyprus with the
other 9 newly joined member countries will be included into the scope
of the Ankara Agreement until the October 3. Namely, an indirect
recognition will eventuate. This step does not mean that Greek Cyprus
will be recognized as the only legitimate Cyprus State, but should be
noted as a concession for Turkey before the negotiations. In other
words, the second red line is also dispersed. Turkey, before the
starting of the negotiations, takes a step in Cyprus.

Thirdly, Turkey had declared that essentially the aim of the
negotiations should be full membership, and the privileged
partnership would not be accepted. Although the EU leaders tell that
their ultimate aim is the full membership, the expressions of `if
Turkey does not assume the obligations of membership it must be
ensured that it is fully anchored in the European structures’ in fact
means a `kind preparation’ for a `privileged partnership’. There is
no difference between the Summits indirect `membership formula’ and
the `privileged partnership’ proposal of the German Christian
Democrats and the French opposition to Turkey. `Privileged
partnership’ can be defined as the enlarged definition of the customs
unity. Briefly, this red line has not been accepted in the summit.

***

Another Turkish requirement was that the EU cannot bring any
permanent limitation (derogations) in funds, agricultural politics,
free movement, etc. According to the Turkish officials any permanent
derogation damage the spirit of the Union, and in this respect Turkey
was quite right. A full membership which could not offer free
movement right has no meaning for Turkey, because, thanks to the
Customs Union and a 41-years-old relation with the EU, Turkey has all
the `privileged relationships with the Union’. Unfortunately, when we
look at the Decision of the Summit, the EU brought just the opposite
of Turkey’s demands onto the table, and during the Summit very little
could be changed. In other words, Turkey again has gained almost
nothing on this issue. The concessions for Turkey do not allow a
normal membership.

Consequently, Turkey went to Brussels with four basic `sine qua non’
but nearly none of these were accepted and all of these red lines
were exceeded.

***

If all of the Turkish demands were refused, in this respect can we
call it as `a great victory’?
Tayyip Erdogan and his team can be considered as heroes?

Answer is `Yes’.

Turkey has gained a victory in December 17 and Erdogan and his team
are to be appreciated because of their success in Brussels. Although
it is early to `shoulder them’ or to `prepare feasts in the public
squares’ they are to be congratulated.

Above all these, the `red lines’ which were defined before December
17 were really realistic requirements and if this fact was not
noticed by Abdullah Gul, Turkish Foreign Affairs Minister in Ankara
but soon has realized in Brussels. December 17 summit barely showed
that European public’s 1000-year old prejudices have stayed
unchanged. Until now, Turkey has not been considered as a `serious
candidate’ by the member countries of the EU. They have never deemed
Turkey as a `real European’ and a `real candidate’. The public
opinion which is manipulated by religionist extreme Christians, anti
Turkish Greek, Greek Cypriot, Armenian and PKK lobbies has formed a
great obstacle for Turkey to overcome.

In conclusion, the EU leaders’ will to take Turkey as a member is not
enough. If there is not a strong and real intention behind the back
of the documents signed, then the agreements are not considered to be
worthy. In this condition, the concepts such as, Cyprus, permanent
derogations, full membership, etc. lose their meanings. If there is
will in them these `details’ would gain importance.

In the Brussels Summit Turkey has strengthened this mentioned
good-will and has developed envision that Turkey is a real candidate
for the EU. Before and during the Summit Turkish leaders proved that
Turks are `true Europeans’, however they confronted the old racist
and discriminative European habits. Turkey passed the test; the EU’s
test is still in process. Because of this reason Turkish Prime
Minister Erdogan and his team should be congratulated. They became
successful in keeping Turkey on the way of the EU membership.

It can be said that, like the December 17, there will be more summits
in near future. Turkey needs time to erase all of the prejudices and
this period of time is taken from the EU. Besides, the defenders of
Turkey in EU have become more powerful. One may ask that Turkey who
has not erased these prejudices for 41 years could have erase them
until October 3? However, an important point should be considered
that the EU and Turkey have never reached a kind of relationship in
which they can truly communicate with each other: As said before, EU
had not considered Turkey as a `real candidate’. On the other hand,
Turkey only communicated with the EU leaders and did not realized
importance of dealing with the European public opinion. Also the real
intentions of the decision former makers in Turkey are a debatable
issue. Whereas, after the September 11, Turkey and EU are open to
listen and understand each other.
December 17 is a great victory for Turkey because the main need of
Turkey is not EU but the EU process, and Turkey took what it really
wanted.

January 2005

From: Emil Lazarian | Ararat NewsPress

Azeri opposition official blames government for Karabakh policy failures

Azadliq, Baku
30 Dec 04

Text of Xayal Sahinoglu report by Azerbaijani newspaper Azadliq on 30
December headlined “Another defeat of Ilham Aliyev’s diplomacy” and
subheaded “The authorities give up the idea of discussing the Karabakh
issue at the UN at the demand of the Minsk Group” and “Fuad
Qahramanli: ‘Under the Aliyevs, Azerbaijan’s foreign policy has been
in such a situation that not only Armenia and its allies, but also the
international community are speaking in the language of pressure to
Azerbaijan'”

Armenia’s occupation of Azerbaijani lands will not be discussed at the
UN. The reason is the Azerbaijani authorities’ commitment to the
OSCE. The Russian co-chairman of the OSCE [Minsk Group], Yuriy
Merzlyakov, recently publicized an agreement Azerbaijan and Armenia
reached three months ago. Armenia will allow the co-chairmen to
monitor the occupied Azerbaijani territories if the Karabakh conflict
is not discussed at the UN, Merzlyakov said.

The co-chairman’s statement shows that Azerbaijani diplomacy has not
gained even a minimum advantage, let alone serious success, in the
resolution of the conflict, a member of the presidium of the People’s
Front of Azerbaijan Party [PFAP], Fuad Qahramanli, said. Saying that
the co-chairmen are clearly speaking from Armenia’s position,
Qahramanli noted that as a victim of the aggression, Azerbaijan is in
a more difficult diplomatic position than Armenia.

“It is clearly seen that the co-chairmen are speaking from Armenia’s
position, which is something that challenges the impartiality of the
negotiations within the framework of the OSCE and the resolution of
the problem in accordance with the principles of international law. If
the OSCE Minsk Group is dealing with the resolution of the conflict,
it should be monitoring the occupied territories despite any
problem. The co-chairmen should investigate the accuracy of the
information about Armenians settling in the occupied territories. It
turns out that if Azerbaijan had not given up the idea of discussing
the Karabakh conflict at the UN, the OSCE Minsk Group would have
remained indifferent towards the settlement of Armenians in the
occupied lands. This is a serious problem of Azerbaijani diplomacy and
the reason why it has emerged is the foreign policy which was once
conducted by [the late Azerbaijani President] Heydar Aliyev and is now
being conducted by his son [Azerbaijani President Ilham Aliyev].”

He said that the good-for-nothing foreign policy Heydar Aliyev and his
son have been conducting for many years has dealt a serious blow to
Azerbaijan’s international standing. Therefore, the international
community challenges Azerbaijan’s territorial integrity.

“Under the Aliyevs, Azerbaijan’s foreign policy has been in such a
situation that not only Armenia and its allies, but also the
international community are speaking in the language of pressure to
Azerbaijan. Only Islamic countries supported Azerbaijan when the
Karabakh issue was put on the UN agenda. It is a logical result of the
setbacks in our foreign policy that the world community actually
questions Azerbaijan’s territorial integrity.”

Saying that it would be illogical to await any outcome in Azerbaijan’s
favour from the negotiations in the present circumstances, Qahramanli
believes that responsibility for this situation lies with the
authorities.

“The government has been promulgating for a long time the idea that
our country will increase its international allies as a result of its
oil policy. It becomes clear today that no progress has been made at
all. On the contrary, the number of Azerbaijan’s international allies
has begun to decrease.”

Qahramanli chided the government for the fact that the occupied lands
are being used as a means of pressure on Azerbaijan.

“The Foreign Ministry has not expressed its attitude to what has
happened so far. It proves once again that as a state entity, the
authorities do not have the will, political power and diplomatic
capabilities to resolve the Karabakh conflict, which is considered to
be the country’s main problem.”

From: Emil Lazarian | Ararat NewsPress

Armenia – Index of Economic Freedom 2004

Rank: 42
Score:2.58
Category:Mostly Free
View PDF

Quick Study

Trade Policy2.0
Fiscal Burden2.3
Government Intervention2.5
Monetary Policy2.0
Foreign Investment2.0
Banking and Finance1.0
Wages and Prices3.0
Property Rights3.0
Regulation4.0
Informal Market 4.0

Population: 3,068,000
Total area: 29,800 sq. km
GDP: $2.3 billion
GDP growth rate: 12.9%
GDP per capita: $761
Major exports: diamonds, copper ore, scrap metal, machinery and equipment
Exports of goods and services: $691 million
Major export trading partners: Israel 21.0%, Belgium 18.3%, Russia 13.9%, US
8.3%
Major imports: natural gas, petroleum, mineral products, prepared foodstuffs
Imports of goods and services: $1.2 billion
Major import trading partners: Russia 16.4%, Belgium 10.2%, Israel 9.7%, US
8.0%
Foreign direct investment (net): $89 million

The Republic of Armenia remained committed to the gradual pursuit of a
democratic society and free-market economy in 2004. President Robert Kocharian,
weakened by political instability and opposition attempts to secure a
no-confidence referendum, became more willing to use authoritarian measuresagainst his
critics. The government will look to improve political and economic relations
with neighbors Russia, Turkey, and Azerbaijan; the latter two have maintained a
trade embargo with Armenia over the disputed region of Nagorno-Karabakh.
Economic policy continues to be guided by the economic and fiscal policies and the
poverty-reduction strategy developed in cooperation with the World Bank and
the International Monetary Fund. Reforms should provide improvements in the
banking sector, transparency, and enforcement of anti-corruption measures.
Privatization of state-owned enterprises, begun in 1994 following an aggressive land
privatization program in 1991, has been slow. According to the Economist
Intelligence Unit, of the nearly 900 businesses that the government has offered for
privatization, 320 were divested in 2003. Armenia’s government intervention
score is 0.5 point better this year. As a result, its overall score is 0.05
point better this year.

Trade Policy

Score:2.0
According to the World Bank, Armenia’s weighted average tariff ratein 2001
(the most recent year for which World Bank data are available) was 2.5 percent.
Most imports are free of prohibitions, quotas, or licensing, but the
government imposes a value-added tax on certain imports to support its industrial
policy, and the European Bank for Reconstruction and Development reports that
cumbersome customs procedures act as a non-tariff barrier.

Fiscal Burden

Score:2.0
The Embassy of Armenia reports that Armenia’s top income tax rate is 20
percent. The top corporate tax rate is 20 percent. In 2003, government expenditures
as a share of GDP decreased 0.5 percentage point to 18.9 percent, compared to
a 0.6 percentage point decrease in 2002.

Government Intervention

Score:2.0
The World Bank reports that the government consumed 10.1 percent of GDP in
2002. In 2003, based on data from the Ministry of Finance and Economy, Armenia
received 5.7 percent of its total revenues from state-owned enterprises and
government ownership of property. Based on the newly available, more reliable
data on revenues from state-owned enterprises, Armenia’s governmentintervention
score is 0.5 point better this year.

Monetary Policy

Score:2.0
Between 1994 and 2003, Armenia’s weighted average annual rate of inflation
was 4.01 percent.

Foreign Investment

Score:2.0
Armenia offers equal official treatment to foreign investors, who have the
same right to establish businesses as native Armenians in most sectors of the
economy. Unless specifically authorized, foreign investment is not allowed in
consumer co-operatives, collective farms, government enterprises, and
enterprises of strategic significance. The government continues to restrictownership of
land by foreigners, although they may lease it. The International Monetary
Fund reports that there are no restrictions or controls on the holding of
foreign exchange accounts, invisible transactions, current transfers, or
repatriation requirements.

Banking and Finance

Score:2.0
The central bank adopted a reform and consolidation program in 1994 after
several banks had collapsed. The banking system is improving as supervision
increases, regulation becomes more efficient, and minimum capital requirements are
increased. The Economist Intelligence Unit reports that all banks now adhere
to international accounting standards; under the revised standards, several
banks were closed, and the number of banks fell from 58 in 1994 to 22 at the
beginning of 2003. Foreign banks account for 40 percent of banking capital.The
Ministry of Finance and Economy, which regulates the insurance industry, allows
the presence of foreign insurance companies. The last state-owned bank,
Armsberbank, was sold in September 2001.

Wages and Prices

Score:2.0
According to the U.S. Department of Commerce, `The state continues to control
prices for utilities and public transportation, keeping them artificially
low. From time to time, the government conducts rationed sales of basic foods and
other consumables (sugar, powdered milk, matches, soap) to the most needy
groups at prices much lower than market prices.’ In January 2002, the Armenian
State Repository set new prices (which are used to calculate the tax on
exploitation of natural resources) for nonferrous, rare, and precious metals. At the
beginning of 2004, the government raised the minimum wage.

Property Rights

Score:2.0
Private property is guaranteed by law, but neither legal enforcement nor the
judicial system provides adequate protection. According to the Economist
Intelligence Unit, `A further consideration [for investors] is the underdeveloped
and corrupt judiciary, which is a substantial impediment to the enforcementof
contractual rights and obligations, thereby keeping business risk high.â=80=9D The
U.S. Department of Commerce reports that `the Constitution’s provisions do not
insulate the courts fully from political pressure, and in practice, courts
[are] subject to pressure from the executive and legislative branches and some
judges [are] corrupt. Lengthy public trials sometimes [are] a problem.â=80=9D The
same source also notes that Armenian courts `are becoming increasingly
independent. The Ministry of Justice is gradually limiting its involvement in civil
cases.’

Regulation

Score:2.0
A corrupt bureaucracy often applies regulations haphazardly, and political
strife hampers the progress of any reforms. The Economist Intelligence Unit
reports that `a high level of corruptionâ=80¦results in firms directing activity
underground in order to reduce their vulnerability to extortion by government
officials.’ According to the U.S. Department of Commerce, `Changes in legislation
are only rarely announced or publicly disclosed before implementationâ=80¦.
[B]ureaucratic procedures can be burdensome and time consuming when an investor
negotiates a contract with the Armenian government, as the contract may require
approval by several ministries.’ Corruption continues to affect business. The
U.S. Department of Commerce reports that `bribery is widespread andis the most
common form of corruptionâ=80¦.’

Informal Market

Score:2.0
Transparency International’s 2003 score for Armenia is 3. Therefore, Armenia’
s informal market score is 4 this year.

From: Emil Lazarian | Ararat NewsPress

Centre for Public Opinion and Democracy, Canada
Jan 4 2005

Armenians Look Forward To European Union

(Angus Reid – CPOD Global Scan) – Many adults in Armenia want their
country to join the European Union (EU), according to a poll by the
Armenian Center for National and International Studies (ACNIS). 64
per cent of respondents support Armenia’s accession into the
continental alliance.

Since 2001, Armenia has been a member of the Council of Europe. The
country has officially set a goal of “progressive integration into EU
models and standards.” There is currently no timetable for the start
of accession talks.

As far as the benefits the EU could bring to Armenia, 29.4 per cent
of respondents expect an improvement to the economic situation, while
16.7 per cent look forward to a just resolution of the
Nagorno-Karabakh dispute.

The Nagorno-Karabakh region is controlled by ethnic Armenians – who
consider the area an independent republic – but is claimed by
Azerbaijan as part of its territory. A war broke out in the early
1990s between both nations, ending in an unofficial truce negotiated
by Russia in 1994.

Polling Data

Are you in favour of Armenia’s accession to the European Union (EU)?

Yes
64.0%

No
11.8%

Difficult to answer
24.2%

What are your expectations from Armenia’s accession to the EU for
state and society as a whole?

Improvement in economic situation
29.4%

Just resolution of the Karabagh issue
16.7%

Development of education and science
in accordance with European standards
9.7%

Decrease of corruption
8.7%

Establishment of irreversible democracy
8.1%

Raising the level of national security
7.3%

None
11.9%

Difficult to answer
8.0%

Other
0.2%

Source: Armenian Center for National and International Studies
(ACNIS)
Methodology: Interviews with 2,002 Armenian adults, conducted in
December 2004. No margin of error was provided.

Other poll highlights: Armenia-Diaspora Agenda, Foreign Policy
Agenda, Minorities, Youth Matters, Education.

From: Emil Lazarian | Ararat NewsPress

Colin L. Powell Holds A Media Availability En Route To Bangkok, Thailand

.c The Associated Press

Thailand

Colin L. Powell Holds A Media Availability En Route To Bangkok,
Thailand

xfdtr STATE-POWELL-BANGKOK 1stadd

XXX check the number.QUESTION: What’s his name?

POWELL: His name is Blackman. I’ll get the spelling for you.

QUESTION: And on the criticism?

POWELL: There is always, you know, commentary about how one of these
things unfolds. And why didn’t everybody know instantly what the
requirement was going to be. And, I accept that. It’s what
happens. But, I’m the one who is sitting there on a Sunday after
church, trying to make sense of what has happened, with reports coming
in from all over the region. When you think you are dealing with
something that has hit Phuket, and then suddenly you get reports about
the Maldives, which as a nation of islands and atolls, sits about an
average of three feet above sea level.

And you start to try to figure out what are the implications of that?
And when you think you’re starting to get a handle on it, and you see
your task forces being set up with AID hard at work, AID setting up
task forces, State Department, Defense Department, all getting alerted
within the first dozen hours or so.

And, immediately our ambassadors in the region declared disasters. And
once they do that, they are free to give money out of their
contingency funds to the countries concerned, up to roughly
$100,000. It’s just something to get started, to show our commitment,
but also to give these countries an immediate infusion of cash.

And then by Monday morning, we had responded to the appeal of the
International Federation of the Red Cross/Red Crescent. Our military
had started to Task Force organize themselves and start to dispatch
troops. And, we started to get a better assessment of what was going
on. And then, in late Sunday I discovered that the wave had gone all
the way across the ocean and hit Kenya and Somalia.

And so, from my perspective, having been through many of these, in a
period of four days, five days, I think a great deal was
accomplished. And the reason I emphasize this is I don’t think the
American people should be given the impression that their president
and their government was not hard at work on this from day one.

BUSH: One purpose of this trip that is important to recognize is that
the people that are on the ground right now are working 24 hours a
day, whether they’re AID workers or other folks from the State
Department, or the hundreds, maybe thousands of international relief
workers that are in these communities. And they need encouragement.

My experience is that if you don’t go say, thank you to the people
that are true heroes, that are acting on their sense of compassion and
doing it under extraordinary circumstances — this won’t be pretty —
that you’re not in the way when you come a long distance and say,
thanks.

So, I know that the Secretary is very sensitive about making sure we
don’t get in the way, but I also think we need to be mindful of the
fact that there’s a lot of work being done and someone needs to put an
arm around somebody and say, thank you for a job well done.

POWELL: And one other element, of course, is that it will draw a lot
of public attention, international attention to the need and hopefully
as a result of that, generate additional support, especially from the
private sector.

QUESTION: Mr. Secretary, apart from the humanitarian, which obviously
takes priority, what do you see as the political stakes for the U.S.
involvement in this effort in countries like Indonesia, Muslim
countries, Sri Lanka and for the region as a whole?

POWELL: We have good relations with all of these countries, even
though there have been disagreements on specific policy issues such
as, of course, Iraq. So, I think the political implications of us
responding promptly and responding, frankly, to the satisfaction of
the governments concerned, despite all the commentary about our
response the governments that we are responding to and are helping
were pleased from the very first night, Sunday night, when they were
called. And then when the president called their heads of government
and heads of state about 24 hours after I talked to the foreign
ministers. They were very pleased that the United States was
responding in this manner. And I think that can translate into a
political effect.

Hopefully, this might give us a little bit of traction in resolving
the conflict in Aceh, if the two sides would realize that this is a
time to not be arguing and fighting with each other, but to help their
citizens. And the same thing in Sri Lanka. Both sides are suffering
as a result of this tragedy: LTTE, as well as the government. And to
the extent it sort of quiets things in these conflicts, then maybe
there is an opportunity for political momentum. The point I have been
making all week long is that we are not doing this because we are
seeking political advantage or just because we are trying to make
ourselves look better with the Muslims. We are doing this because
these are human beings in need, in desperate need and the United
States has always been a generous, compassionate country and a
generous, compassionate people and this is what we do.

We did it in the Caribbean earlier this year in almost the same way:
small increments of money, and then finally when we got the full scope
of it, went to the Congress and got $120 million. And that’s my
experience as to how these things unfold.

One more.

QUESTION: This one is for Governor Bush. Could you tell us in some
detail as to how it arose that you came on the trip, whose idea it was
and when it was presented and what you thought of it?

BUSH: Well, I got a call from Secretary Powell, and then I got a call
from the President and I said, yes. And I was honored to be asked.

POWELL: Follow up?

BUSH: It really was that simple. This was kind of I had to clear my
.today or tomorrow, I don’t know what day we’re in right now, Monday
is the start of life again not just in the real world, but in state
government world. And so, I had a bunch of things I had to change
around, but it wasn’t a problem at all. I was honored to be asked.

In 1988, right after the Presidential election, my dad asked me to go
to Yerevan with my son, in Armenia. An incredibly devastating
earthquake, nothing in terms of the magnitude of the death here. But I
think 75,000 people may have died, as I recall. And we went and it
made a big difference: the fact that a family member would go — this
was on Christmas Eve — go to a far of place. These hardened Soviet
Communists were crying as they saw my son hand out medicine and toys
to children that looked just like him in this hospital that was needed
a whole lot of help. And so, I think family matters in a lot of places
outside of the United States just as it does in the United States. And
the fact that whoever came up with the idea, whether it was the
President or I don’t know, Secretary, isn’t it always the President
that has the best ideas?

POWELL: Yeah.

QUESTION: 1/8When did you make the decision? 3/8

BUSH: I suggested he go.

(laughter)

POWELL: Thanks Jeb. Let’s see, I’ve got to keep my days straight, but
by Wednesday the scope of it was becoming so clear that we started to
think about a trip. Andrew and I were sitting in my office, I think
either Wednesday or Thursday morning, looking at each other saying
we’ve got to go. And then the President, in order to show his concern
and deep interest, asked if Jeb would go and I immediately called Jeb
when I got the President’s suggestion. And he, in typical fashion, he
was ready, willing and able. I am very pleased that he was able to
clear his calendar.

Let me ask Andrew Natsios if he would like to say a word.

NATSIOS: I would just add a couple of things we are beginning to see
on the ground that are a little disturbing to us because of the scale
of them. We are beginning to see real psychological problems among
many of the survivors. People are going into shock basically. They
are paralyzed, they can’t act, essentially because they have lost,
many of them, their entire families, their whole neighborhoods, their
houses, their businesses, everything is destroyed. You see this in
many emergencies but not on this scale. And so the two things that the
Secretary and the Governor just mentioned actually do contribute to
this. We’ve noticed when we see the people, large numbers of people in
shock, the visits of very visible high-level people will restore a
sense of hope that they are not being forgotten, they are not being
lost. I mean, we will get that when you visit one of these sites. You
see the change in people by the fact that you are there, it makes a
big difference.

The second thing, which the Secretary also mentioned, is getting
people to work again. One therapy that we use is simply getting people
to do something. It is a sort of form of occupational therapy. If
they are in shock and then they start getting a job to start cleaning
up the mess, it does have an effect psychologically that gets their
body functioning again and they have some sense of hope. So, the jobs
program that the Secretary mentioned that we just committed $10
million dollars to in Sri Lanka is not a lot of money, I mean 50 bucks
a month, something like that. Very small amounts of money in people’s
pockets will allow them to buy necessities on their own but also will
get them moving and it will show that progress is being made in
cleaning the mess up. Because just the physical evidence of the mess
is a reminder every hour of every day that everything is gone. And if
we can begin to get them moving, working as a community again, it has
an effect psychologically, economically and just physically on the
infrastructure.

POWELL: The other thing I might add, is when you were asking about
visits and the impact of visits, the Indonesians really wanted to have
this ASEAN summit for the purpose of bringing people to the scene, not
out to the actual scene of the disaster, but to Jakarta. And it
started out with ASEAN, and then it became ASEAN and others, and now
it has become a fairly large international conference. And these sorts
of things do have an impact in terms of generating support, bringing
public attention to the crisis but also giving a sense of optimism and
hope to the people who will see this and realize they are not alone,
folks are coming to help them.

OK?

END

01/03/05 14:55 EST

From: Emil Lazarian | Ararat NewsPress

THIS YEAR WAS SUCCESSFUL FOR AGRICULTURE, – RA MINISTER OF AGRICULTURE
STATES

YEREVAN, December 30 (Noyan Tapan). The year 2004 has been successful
for Armenia’s agriculture: the gross product growth made 13.2%, while
the specific weight of agriculture in the RA GDP was 21%. David
Lokian, the RA Minister of Agriculture, stated this at the December 30
press conference. According to the minister, the year 2005 will be
favorable for the sphere of agricultire in terms of investments: in
particular it is envisaged to carry out the work of 120 million
dollars within the framework of the Millennium Challenges program (the
US), as well as to do the work of 200 million dollars by resources
provided by the Lincy Foundation. It was also noted that under the
terms of two credit programs implemented in the sphere of agriculture,
medium-term credits to be given to Armenian farms in 2005 will be
provided for 1-3 years, while long-term ones – for 7 years. Crediting
of farms will be implemented through banks, and the interest rate of
credit resources provided to banks will be reduced almost twice and
will make 1.5-3%. The minister expressed the view the extension of
credit repayment term and the reduction of interest rate will
contribute to updating agricultural equipment and increasing the
production volume. D. Lokian stated that in 2004, farms were leased
about 272 units of agricultural equipment, including 36 tractors. 51
Chinese tractors complete with all necessary farm tools were also sold
to farms at reduced prices. It was noted that 12 tons of nitric
fertilizer has been stored. In the spring of 2005, the ferilizer will
be sold to farms at a discount – 50 kilogrames for 3,700 drams (about
7 dollars). According to D. Lokian, 3 thousand tons of fertilizer was
provided to farms this autumn on the same conditions.

From: Emil Lazarian | Ararat NewsPress