Author: Chalian Meline

WORLD BANK DOWNPLAYS ARMENIAN ECONOMIC RECOVERY

Asbarez
-armenian-economic-recovery/
Feb 26th, 2010

YEREVAN (RFE/RL)-A senior World Bank official on Friday downplayed
official reports of renewed economic growth in Armenia and said
its government is still not doing to enough to tackle "oligopolies"
which the Washington-based institution believes hamper the country’s
development.

According to government statistics, the Armenian economy grew by 2.4
percent last month after contracting by 14.4 percent in 2009. Trade
and Economic Development Minister Nerses Yeritsian seized upon the
figure on Monday to declare the end of a serious economic downturn
that gripped the country more than a year ago.

Aristomene Varoudakis, head of the World Bank office in Yerevan,
questioned this claim, saying that the January growth only means that
"the acute phase of the crisis is over." "But it doesn’t necessarily
mean that the crisis is over because the economy contracted by 15
percent last year," he said.

"If it grows by 2 percent this year and perhaps 3 or 4 percent next
year, it will take three to four years for the economy to come back to
the income level of 2008," Varoudakis told a news conference. "So it
is very likely that the economy will remain weak for quite a prolonged
period of time."

Armenia’s Gross Domestic Product increased at an average annual rate of
around 10 percent in the decade preceding the recession. The Armenian
government forecasted late last year a GDP growth rate of 1.2 percent
for 2010. A senior official from the International Monetary Fund said
last week that it could exceed 2 percent.

Varoudakis stood by the World Bank’s view that renewed robust growth
is contingent on a greater diversification of the Armenian economy
that in turn requires a radical improvement of its investment climate.

He said the authorities in Yerevan have taken some "steps in the
right direction."

"But I think what is missing there is some bold initiatives, bold and
ambitious steps to reduce the role of oligopolies in the economy,"
stressed Varoudakis. "As long as some important markets, especially
for imports, are dominated by oligopolistic players, this reduces the
possibility for other market entrants, especially small enterprises
to grow and make money and invest in other sectors of the economy."

"Also, it will be very important to have transparency regarding
possible linkages between dominant businesses and public officials,"
he said, clearly referring to the widely held belief that the so-called
"oligarchs" enjoy high-level government patronage.

The World Bank’s managing director, Ngozi Okonjo-Iweala, issued
a similar warning, in blunter terms, when she visited Yerevan last
October. She said Armenia can not attain a higher level of development
unless its leadership improves tax administration, creates a "strong
and independent judicial system" and combats government corruption
in earnest.

Prime Minister Tigran Sargsyan has publicly acknowledged the need
for such reforms. Addressing parliament in November, he said the
oligopolistic structures "pose a very serious challenge" to the state.

Some observers believe, however, that he lacks the power and political
clout to take on them.

Varoudakis commented on the economic situation as he announced the
disbursement of two fresh World Bank loans to Armenia worth $12
million. One of the loans worth $7 million is designed to finance
infrastructure projects in 35 mostly rural communities across the
country.

The bank already financed such projects last year as part of its
efforts to help the authorities mitigate consequences of the crisis.

Its overall anti-crisis lending to Yerevan totaled $280 million
in 2009.

Armenian Economy Emerging From Recession

Eurasia Daily Monitor Volume: 7 Issue: 38
February 25, 2010 04:16 PM

Category: Eurasia Daily Monitor, Home Page, Economics, Armenia
By: Emil Danielyan
World

Bank Managing Director Ngozi Okonjo-Iweala (right) with Armenian Prime
Minister Tigran Sargsyan in October, 2009 at the opening of the bank’s
Yerevan office. (Photolur)

Armenia appears to be emerging from its first economic downturn in
over 15 years, which was triggered by the global financial crisis. The
latest macroeconomic data released by authorities in Yerevan suggests
that its unfolding economic recovery may well surpass government
expectations for this year.

After a decade of robust growth, the Armenian economy contracted by as
much as 14.4 percent in 2009 -one of the sharpest declines in GDP
registered in the former Soviet Union. Economists blamed it on a
slump in construction (a key driving force in the previous growth),
international prices of base metals (the country’s number one export
product) and multimillion-dollar remittances from Armenians working
abroad and in recession-hit Russia in particular.

The Armenian government scrambled to alleviate the consequences of the
recession with heavy borrowing from Russia, the International Monetary
Fund (IMF), the World Bank and other international lending
institutions. It secured some $1.3 billion in anti-crisis loans, which
nearly doubled the country’s foreign debt by the end of 2009. A large
part of those funds was used to offset a serious shortfall in tax
revenues and thereby prevent major cuts in government spending on
social and other programs. The government has also been using such
loans to shore up the national currency (the dram), finance
infrastructure projects, improve small and medium-sized enterprises’
access to credit and provide direct financial assistance to mining and
construction firms. These anti-crisis measures have clearly not proven
sufficient to avert a decline in living standards in the
country. According to a World Bank report published in November 2009,
the proportion of Armenians living below the official poverty line
rose to 28.4 percent in the second quarter of 2009 from 25.6 percent
registered during the same period of 2008. `These developments are a
setback for Armenia after a decade of nearly double-digit growth –
and reduction in poverty from 56.1 percent in 1998-1999 to 23.5
percent in [late] 2008,’ said the report (Kapital, November 18,
2010).

Nonetheless, Armenian Finance Minister Tigran Davtian claimed
afterwards that Armenia is coming out of the recession with minimal
losses. On February 22, the Trade and Economic Development Minister
Nerses Yeritsian declared that the economic crisis was over. `I want
to assure you that we have come out of that crisis well,’ he told
journalists (, February 22).

Yeritsian pointed to official statistics that show the Armenian
economy grew by 2.4 percent year on year in January 2010, despite a
continuing downturn in the construction sector, which has been hit
hardest by the recession. According to the National Statistical
Service (NSS, ), Armenian economic growth returned
primarily because of a 6.5 percent rise in industrial output. The
manufacturing sector seems to have been significantly boosted by the
strong rally in recent months in the prices of copper and other
non-ferrous metals.

Armenian authorities and the IMF forecast late last year that GDP will
grow by only 1.2 percent in 2010. Mark Lewis, the head of an IMF
mission to Armenia, said the full-year growth rate should exceed 2
percent as he ended a two-week visit to Yerevan on February 17. He
reaffirmed the IMF’s positive assessment of the authorities’ handling
of the crisis and said the mission will recommend that the IMF board
disburses the next $74 million tranche of a $827 million stand-by loan
for Armenia approved in March 2009 (Arminfo, February 17).

`The authorities have successfully implemented a broad range of
policies to address the macroeconomic challenges in 2009 – and
macroeconomic policies are on track,’ read a separate statement issued
by the IMF. The statement at the same time stressed the need for
`Ccontinued structural reforms’ and `additional efforts to increase
competition’ in Armenia. That was a clear reference to the country’s
flawed business environment, which Western donors have long regarded
as a key obstacle to sustainable economic development (Arminfo,
February 17).

The World Bank, in particular, believes that a stronger rule of law is
critical for diversifying the landlocked country’s economy and making
it less vulnerable to future crises. Visiting Yerevan in October 2009,
the bank’s managing director, Ngozi Okonjo-Iweala, bluntly warned that
Armenia cannot attain a higher level of development as long as the
most lucrative sectors of its economy are controlled by a handful of
government-linked businessmen and other `oligopolistic structures.’
She also called for a sweeping reform of tax administration, the
creation of a `strong and independent judicial system,’ and a tougher
fight against government corruption (, October
19).

Armenia’s reformist Prime Minister Tigran Sargsyan subsequently
publicly acknowledged the existence of `oligopolies and a low level of
competition in the economy’ and pledged to do his utmost to remedy
the situation (Armenian Public Television, November 18,
2009). However, he has yet to follow up with any meaningful action.

The Armenian government is only raising more questions about the
seriousness of Sargsyan’s reform agenda with a continuing crackdown on
Khachatur Sukiasian, a wealthy opposition-linked businessman, and his
extended family. Last December, the government completed a highly
controversial confiscation of the Bjni mineral water plant belonging
to Sukiasian’s SIL Concern resulting from its refusal to pay hefty
fines imposed by tax authorities. Bjni and several other SIL Concern
firms were raided by tax officials and accused of tax evasion shortly
after the tycoon voiced support for opposition leader Levon
Ter-Petrosian in September 2007. The Sukiasian family rejected the
charges as politically motivated.

Earlier this month, the Armenian police briefly detained
Sukiasian’s younger brother Saribek before charging him with
intimidating a fellow entrepreneur. Officials from the London-based
European Bank for Reconstruction of Development (EBRD), which holds a
minority stake in an Armenian commercial bank controlled by the
Sukiasians, expressed serious concern about the case on February 16.
`We are glad that Mr. Sukiasian has been released, but that does not
improve the image of Armenia,’ Valery Razlogov, the Head of the
EBRD’s Yerevan office, warned at a news conference, adding: `Nor does
it strengthen the business environment here’ (Aravot, February 17).

The Jamestown Foundation

"TURKEY EITHER WILL NOT RATIFY OR WILL RATIFY WITH STIPULATIONS"

Aysor
Feb 25 2010
Armenia

"I am not an optimist in the issue concerning the Armenian – Turkish
relations", – said Hakob Avetikyan, the chief editor of "Azg"
newspaper today on the meeting with the journalists. He called the
present situation "complicated".

Hakob Avetikyan presented two scenarios of possible development of
the Armenian-Turkish relations.

According to the first one Turkey stays stiff in its disposition and
doesn’t ratify the protocols after which the tension in the region
grows. This situation will be followed with more difficulties in the
Armenian – Azerbaijani relations.

According to the speaker the second scenario supposes the ratification
of the Armenian – Turkish protocols with "big stipulations".

"Stipulations which can be not acceptable for the Armenian side", –
stressed the speaker.

"Turkey can ratify the protocols for Armenia to deny them", – H.

Avetikyan mentioned and added that in that case Turkey will "introduce
Armenia a criminal side".

TURKISH GENERALS DENY INVOLVEMENT IN COUP PLOT

PanARMENIAN.Net
25.02.2010 13:24 GMT+04:00

/PanARMENIAN.Net/ Chief of General Staff Gen. Ilker Basbug gathered
active duty military generals at an extraordinary meeting at the
General Staff in the Turkish capital on Tuesday evening, reportedly
to discuss the position of the armed forces in the wake of a fresh
wave of detentions of nearly 50 retired and active duty members of
the military as part of a coup plot investigation.

The meeting was attended by 15 generals, who evaluated the "serious
situation" that erupted amid the Ergenekon investigation being
conducted by the Istanbul Chief Public Prosecutor’s Office, according
to a statement posted on the General Staff Web site late Tuesday.

All generals who attended Tuesday’s meeting denied involvement in
the alleged plans and some even offered to submit their resignations
rather than be faced with such accusations. The generals, however,
did not discuss whether to issue a harsh statement against the Justice
and Development Party (AK Party) government over the detentions,
ôoday’s Zaman reported.

Dozens of senior officers, including a former Deputy Chief of General
Staff, retired Army General Ergin Saygun have been arrested on charges
of plotting a coup in Turkey. A former Air Force commander, retired
Army General Fyrtyna Ibrahim, a former Navy commander, Admiral retired
Omek Ozgen, a retired general Engin Alan are among the detainees.

According to the source, 10 colonels, four admirals, 17 generals
(some of them are retired) were arrested. 50 arrests were held in
Istanbul, Ankara and Izmir.

Over the past 50 years there were four military coups in Turkey:
on May 27, 1960, on March 12, 1971, on September 12, 1980 and on
February 28, 1997.

US turn screw on Ankara over Iran sanctions
By Daniel Dombey in Washington
Financial Times, Dubai, UAE Wednesday February 24, 2010

The US is stepping up pressure on Turkeys to back new sanctions
against Iran, highlighting the difficulties Washington faces in
forging a consensus on Tehran’s nuclear programme.
A report from International Atomic Energy Agency expressed fears last
week
that Teheran could be working on a nuclear warhead. But Turkey
remains unconvinced about imposing more sanctions and its relations
with the US are strained.
Ankara’s reluctance is all the more significant as the country is
presently on the UN Security Council and its Nato member.
`Turkey has as much reason to be concerned about the prospect about a
nuclear Iran as anybody.’ James Steinberg, US deputy secretary of
state, told the financial times.
Asked about statements Recep Tayyep Erdogan, the Turkish prime
minister, calling Iran a `friend’ Mr Steinberg added `We don’t need
them to label Iran. we need them to work with us to make sure that
Iran doesn’t become nuclear weapon capable’ the two allies needed to
find common tactical approach to try to achieve that objective.
Relations between the US and Turkey are being tested on other front.
Last week senor diplomats from each country had an angry exchange
outside a meeting between Hillary Clinton US Secretary of State, and
Mr. Erdogan.
Joseph LeBaron US Ambassador to Qatar wanted to interrupt so
Mrs. Clinton could meet the Emir of Qatar on time. According to the
State Department Turkish diplomats physically restrained him from
doing so.
Congress is to vote next month on whether to label the massacres of
Armenians during the Ottoman Empire as a `genocide’.
Turkey has previously warned passing the resolution which is baked by
138 of the 435 members of the House of Representatives would hurt
relations with the US.
Mr. Steinberg dismissed concern that military strike on Iran would be
likely after Teheran’s decision a week ago to shift almost all of its
stockpile of low enriched uranium to location where it could be
brought closer to
weapons grade material.
`Nobody is looking for a military solution’ he said `I mean nobody’.

FORMER PRIME MINISTER OF ARMENIA FORECASTS 10% INFLATION IN 2010

ArmInfo
2010-02-24 18:01:00

ArmInfo. In 2010 inflation in Armenia will make up 10%, former prime
minister of Armenia Hrant Bagratyan said at today’s press-conference.

According to Bagratyan, Armenia’s all macroeconomic indices are twice
as low as those of Azerbaijan, and by the level of economic downturn,
which allegedly makes up 14.3% and in fact – 22%, Armenia holds one
of the last positions among CIS countries. The ex-premier expressed
his indignation at the fact that in 2009 the retail commodity turnover
grew by 1%. Bagratyan tried to economically ground the impossibility of
such growth, explaining that taking into account the decline of GDP by
14%, import – by 25%, export – by 34%, it is economically ignorant to
speak of some growth in retail commodity turnover. Moreover, Armenia
has even no reserves of the previous years or savings which could
change this index. As regards banking savings, their growth by 30%
was mostly conditioned by the AMD devaluation in March, which was
followed by indexation of foreign exchange deposits.

To note, in 2009 inflation in Armenia officially made up 3.4%.

Has the `reasonable term’ changed?

Armine AVETYAN | February 20, 2010

It seems that the `initiative policy’ of the Armenian government
related to the Armenia-Turkey relations comes to its end. The
government has almost taken all the necessary steps, including
inviting the Turkish President Abdullah Gul to the soccer match in
September 2008 and signing the Armenia-Turkey protocols. Now is the
time to solve the issue of ratifying or not ratifying the protocols.

At the end of the last week RA President Serzh Sargsyan sent to the NA
the protocols on Turkey-Armenia signed in Zurich on October 10, 2009.
A week after signing the protocols the Turkish government sent the
protocols for the discussion of the Turkish parliament. But the
parliament of that country hasn’t yet signed it. As the Turkish
officials have numerously stated they are waiting till there would be
certain progress in the resolution of the NKR conflict. But during
this period various RA officials of various levels have numerously
stated that Armenia waits for Turkey to ratify the protocols first.
For the ratification the Armenian side brings the deadline or
`reasonable timeframe’ April 24. However, most probably the standpoint
of the Armenian government has changed. At any rate, an RPA MP Rafik
Petrosyan stated yesterday that the deadline is March 4. Indeed,
Petrosyan didn’t bring this up on his own and expressed the attitude
of the RA government. Let us remember that the Foreign Relations
Committee of the US House of Representatives decided to vote for the
resolution 252 related to the Armenian Genocide. On the other hand,
the protocols are already in the parliament and according to the
legislation on international agreements they will be automatically
included in the big agenda of the upcoming NA session. And during the
last several days an opinion is heard that Armenia should itself take
certain steps in the direction of ratification and not just wait for
Turkey to ratify first. RA NA deputy-chairman Samvel Nikoyan finds it
convenient that the foreign relations committee starts to discuss
these protocols. And the president of the European Integration NGO
Karen Bekaryan thinks that there will be no problem if Armenia
ratifies the protocols first. Let us mention that often Karen
Bekaryan’s opinions match with the ones of the government. This means
that the government can no more keep back from their initiatives and
the adopted policies. And now Armenia should ratify those first to
embarrass Turkey. The second document that is being circulated in the
parliament is the bill sent by the government, which relates to the
changes in the RA legislation on international agreements. As a result
of the bill the RA President will have the power to cancel or annul
the procedures of adopting of international agreements. The President
will also have the power to assign the Foreign Affairs Minister to
inform the other side of the agreement of the cancellation of the
agreements. By the initiative of the government the RA President,
Prime Minister, Foreign Affairs Minister and other relevant bodies may
come up with the initiative of the cancellation and annulment of
international agreements. Let us recall that on December 10 of the
last year, a month before the hearing of the protocols in the
Constitutional Court of Armenia during the meeting with the President
of Latvia Sargsyan stated that he had assigned the relevant bodies of
Armenia to prepare necessary revisions to the legislation relating to
international agreements and that he had already sent this initiative
to the NA. And so the government has complied with this assignment and
sent a legislative initiative to the NA. This should also be discussed
in the Foreign Relations Committee of the National Assembly. The other
bill relating to this issue is brought up by the Dashnaktsution
faction, why which they are suggesting that besides the RA President
the NA should also have the power to object international agreements.
The ARF has numerously stated that in the event of ratifying the
Armenian-Turkish protocols certain appendices should also be attached
to the protocols. And with the bill it is suggested that the NA should
also object and make initiatives to annul international agreements if
the RA President doesn’t do so. In the opinion of the Dashnaks this
bill will not only make Armenia flexible in foreign relations but will
also raise the role and importance of the National Assembly in the
international arena. As of the mere process of ratification of the
protocols then it won’t have obstacles in the parliament. The
parliamentary majority RPA together with its coalition counterparts,
the Legal State and Prosperous Armenia will vote for the protocols.
The Foreign Relations Committee will also give positive assessments to
the bill submitted by the government. Indeed, if later the authorities
do not decide that such a bill is not necessary. And the bill proposed
by the Dashnaktsutyun faction will be adopted if the government shows
good will. ARF MP Artsvik Minasyan thinks that their draft is mutually
beneficial for the government as well. But it is not excluded that the
government will not even discuss the proposed draft of their former
counterpart. In that case, as Minasyan says it is not excluded that
they will benefit from their right of parliamentary opposition and
will at least demand discussion of the bill in the extraordinary
manner. Let us mention that yesterday Rafik Petrosyan stated that the
protocols will be discussed in the upcoming third NA 4-day session.

SOSO TSINSADZE EXPRESSES HIS OWN OPINION, GEORGIAN EMBASSY SAYS

PanARMENIAN.Net
18.02.2010 10:56 GMT+04:00

/PanARMENIAN.Net/ Soso Tsinsadze has no right to make statements
damaging the image of the Georgian state, the Georgian Embassy in
Armenia said.

"Soso Tsinsadze is not a representative of the Georgian Foreign
Ministry. Diplomatic Academy of Georgia is a private higher education
institution. So, Tsinsadze just expresses his own opinion, as a
former adviser on political issues to three Georgian Presidents,"
the source in the Embassy told PanARMENIAN.Net.

Last week, Tsinsadze told Novosti Azerbaijan news agency that
"he doesn’t doubt that Azerbaijan would destroy Armenia and regain
territories during a couple of months."

ACCORDING TO ALEXANDER ISKANDARIAN, U.S. PRESIDENT AGAIN WILL NOT PRONOUNCE WORD "GENOCIDE" ON APRIL 24

Noyan Tapan
Feb 18, 2010

YEREVAN, FEBRUARY 18, NOYAN TAPAN. "I do not think that U.S. President
Barack Obama will pronounce the word "genocide" on April 24 as in that
case the U.S. will lose the instrument of influencing Turkey," the
Director of the Caucasian Institute, political scientist Alexander
Iskandarian stated at a February 18 press conference. According
to his observation, one of the main "sponsors" of Armenia-Turkey
rapprochement, the U.S., gradually increases its pressure upon Turkey
for the Turkish parliament to ratify the protocols. According to A.

Iskandarian, Turkey itself does not hurry to ratify them giving as a
reason the lack of progress in the Nagorno Karabakh problem or some
hindering comma or something else.

In response to the question of who is more interested in the opening
of the Armenian-Turkish border A. Iskandarian mentioned that the U.S.,
Russia and Europe equally want it, they just use different methods
to achieve their goal. In political scientist’s opinion, if Russia
were against the normalization process of Armenia-Turkey relations
it would not permit its launching.

A. Iskandarian excluded that OSCE Minsk Group’s format will be changed
in the near future or another structure will be engaged in the Nagorno
Karabakh conflict negotiations. He also considered improbable the
predictions that Azerbaijan will resume operations against Karabakh.

As to a possible war between the U.S. and Iran, A. Iskandarian
absolutely excluded such a development declaring that the U.S. is
"stuck into" Iraqi and Afghan problems and has no new possibility of
breaking out a new war.

NO MENTION OF ARMENIAN GENOCIDE IN ‘APRICOT STONE’

Tert.am
16:04 ~U 17.02.10

Despite recent reports from Turkish and Azerbaijani media, there
is no mention of the Armenian Genocide in the song "Apricot Stone"
by Eva Rivas, the contestant who’ll be representing Armenian in the
upcoming 2010 Eurovision Song Contest.

"The song was created by Karen Kavaleryan; he is Armenian by ethnicity,
but he’s never been to Armenia; thus, it can be said that this [the
song] is also his story. And Eva was born in Russia, and the song is
also very dear to her heart," said Rivas’ producer, Valerie Saharyan,
who noted that the hint at the song being about the Armenian Genocide
is simply the Turks’ unfounded claims.

"If we begin to dissect the song thoroughly, then perhaps it’s
possible to find a certain connection in some parts, but ‘Apricot
Stone’ is the songwriter’s and singer’s life story," she said.