Author: Ekmekjian Janet

PRESS RELEASE
Eastern Prelacy of the Armenian Apostolic Church of America
138 East 39th Street
New York, NY 10016
Tel: 212-689-7810
Fax: 212-689-7168
e-mail: [email protected]
Website:
Contact: Iris Papazian
September 26, 2005
Ecumenical Symposium in New York and International Conference
In Massachusetts will Convene During Catholicosal Visit to Eastern Prelacy
NEW YORK, NY-An Ecumenical Symposium and an International Conference are
part of the many events scheduled during the visit of His Holiness Aram I,
Catholicos of the Great House of Cilicia, to the Eastern Prelacy.
His Holiness will arrive in New York City on October 19, beginning the
final segment of his visit to North America, which included visits to Canada
and California. Commemorative events in celebration of the 75th anniversary
of the establishment of the Seminary at Antelias, as well as religious
services and celebratory banquets are scheduled in a number of the cities
the Pontiff will visit.
An Ecumenical Symposium and an International Conference are two special
events that were planned to coincide with the Catholicos’s visit. His
Holiness will attend and participate in both.
Ecumenical Symposium
In conjunction with His Holiness’s visit, a special ecumenical symposium
has been organized on Saturday, October 22, 2005, at The Interchurch Center,
475 Riverside Drive in New York City under the general theme, “Challenges
Facing the Ecumenical Movement in the 21st Century.” The symposium, which
features The Rev. Dr. Samuel Kobia, Secretary General of the World Council
of Churches (WCC), as the keynote speaker, is jointly sponsored by the
Eastern Prelacy, the National Council of the Churches of Christ in the USA,
and the World Council of Churches (WCC).
Other speakers and participants include the Rev. Dr. Wesley
Granberg-Michaelson, General Secretary of the Reformed Church of America;
The Rev. Dr. Diane Kessler, Executive Director of the Massachusetts Council
of Churches; Bishop Thomas Hoyt, President of the National Council of
Churches of Christ in the USA; Rev. Dr. Robert W. Edgar, General Secretary
of the National Council of Churches; Dr. Anthony Kireopoulos, Deputy General
Secretary of the National Council of Churches; The Rev. Deborah DeWinter,
Program Executive for the United States, World Council of Churches; Fr.
Leonid Kishkovsky, Moderator of the U.S. Conference for the World Council of
Churches and Ecumenical Officer, Orthodox Church in America and a
representative from the United States Conference of Catholic Bishops.
Archbishop Oshagan, Prelate of the Eastern Prelacy, one of the hosts of the
symposium, will provide the welcome. The Symposium will start with prayers,
in the tradition of the Armenian Apostolic Church and a Meditation by Rev.
Prof. Robert Wright, General Theological Seminary.
Closing reflections will be offered by His Holiness Aram I. Attendance
to the all-day event is by pre-registration only.
International Conference
In celebration of the 1600th anniversary of the creation of the Armenian
alphabet, an International Conference will take place October 28 and 29, at
Harvard University, Cambridge, Massachusetts. The Conference is sponsored by
the Eastern Prelacy of the Armenian Apostolic Church of America, and Harvard
University’s Mashtots Chair, Department of Near Eastern Languages and
Civilizations, and the Davis Center for Russian and Eurasian Studies.
Scholars from the United States, Europe, the Middle East, and Armenia
will participate in the two-day conference, which will be attended by His
Holiness Aram I, who during the opening session on Friday evening will
address the gathering.
Papers pertinent to the alphabet and its creator will be presented by
the following specialists: James R. Russell, Mashtots Professor of Armenian
Studies, Harvard University, Massachusetts; Robert W. Thomson, Gulbenkian
Professor of Armenian Studies (emeritus), University of Oxford, Great
Britain; Gohar Muradyan, Senior Scholar at the Matenadaran, Yerevan,
Armenia; Abraham Terian, Director of St. Nersess Armenian Seminary, New
York; Michael Stone, Professor of Armenian Studies, Hebrew University of
Jerusalem; Karen N. Yuzbashian, Oriental Institute, Russian Academy of
Sciences, St. Petersburg, Russia; John Huehnergard, Professor of Semitic
Languages, Harvard University; Prods Oktor Skjaervo, Aga Khan Professor of
Iranian Studies, Harvard University; Lusik Stepanyan, Senior Scholar at the
Matenadaran, Yerevan, Armenia; and Akeksan Hagobyan, Senior Scholar at the
Institute of Oriental Studies in Yerevan, Armenia.
The conference is open to the public. The sessions will take place at
Harvard University’s Center for Government and International Studies.
For information on both the Ecumenical Symposium and the International
Conference contact Iris Papazian at the Prelacy, 212-689-7810.
Ecumenical Leader
Catholicos Aram has been an active participant in the worldwide
Ecumenical Movement since the early days of his ministry, and is today an
internationally recognized and respected religious leader. For the past
fourteen years he has been serving as the Moderator of the Central and
Executive Committees of the WCC.
He became intensely active in inter-church dialogue, relations, and
collaboration in 1972 when he was appointed the Catholicosate’s
representative for ecumenical relations, a post he maintained until 1995
when he was elected Catholicos. Through these years he represented the
Church at major theological and ecumenical conferences, assemblies, and
consultations in different parts of the world.
As a strong supporter of inter-religious relations, dialogue and
cooperation, His Holiness has played a significant part in promoting common
values, mutual understanding and peaceful co-existence among religions.
Pontifical Divine Liturgy in New York
A large number of the faithful, especially from the greater Mid-Atlantic
area, are expected to attend the Pontifical Divine Liturgy on Sunday,
October 23, 1:30 pm, at St. Bartholomew’s Church, one of New York City’s
landmark churches. Parishes in the area are arranging bus transportation.
Contact your local parish for information.
A banquet at The Pierre, Park Avenue at 61st Street, will follow the
Divine Liturgy. Reservations for the banquet ($200 per person) can be made
by contacting Dr. Louiza Kubikian, 516-248-2955 or Sophie Khachatryan,
212-689-7810.
Complete details of the Catholicos’s visit are on the Prelacy’s web page
().

REFERENDUM WILL TAKE PLACE DESPITE ANYTHING
A1+
| 17:40:28 | 26-09-2005 | Politics |
Tomorrow in the Parliament a special session will be convened where
the draft Constitution will be discussed. At present the draft which
is to be presented by third reading is not yet distributed to the
Parliamentary fractions; it will be distributed either tonight or
tomorrow morning.
By the way, it is not yet clear if the special session will be
broadcast live or not. The NA deputy President Tigran Torosyan could
not answer the question, but he reminded that the opposition which has
decided to participate in the session does not have much possibility
as the regime of the third reading does not give much time for speeches
and questions.
Asked if there were enough changes introduced into the draft and if
they can say “Yes” to the draft Tigran T Torosyan naturally enough
said, “Yes, of course”. According to Tigran Torosyan, the editing
works are fulfilled, and the formulations are cleared.
Despite the announcements of other deputy Presidents and Armen
Roustamyan who said that the referendum may be postponed, Tigran
Torosyan said that nothing of the kind will take place.
As for the statement that the society is not ready for the referendum,
Tigran Torosyan disagrees with it, “Whether the society is ready or
not the responsibility falls on political powers. For that purpose
after the third reading we must make all efforts to raise public
awareness about it”.
The whole interview with Tigran Torosyan will be published in the
“Ayb-Fe” weekly.

A LIVELY DISCUSSION ON ARMENIAN ISSUE AT TURKISH WEEKLY
Baris Sanli
Journal of Turkish Weekly, Turkey
Sept 22 2005
For those people looking for a lively debate about Armenian Issue,
Journal of Turkish Weekly(JTW) provided such a medium for it, thanks
to Maral Der OHANNESIAN & Sedat LACINER. After Mrs. OHANNESIAN’s call
for a duel, Sedat Laciner accepted the invitation and the duo started
a lively discussion.
The first and the second part of these letters were published on JTW’s
Comments page. The discussions cover a wide range of topics from the
claims to DNA tests. Mrs. OHANNESIAN will set an example for both
Armenian politicians and people with her courage and her willingness
to discuss this issue. This braveness and firm belief in her version
of the history will help the two nations to better understand what
has happened.
The letters can be accessed from:

ARMENIA DISPATCH: 4 A BIT OF A PRIMER
by Erik Olsen
Gadling: Engaged travel for adventurers
Sept 21 2005
So I left off saying that Armenia is a country that is only beginning
to recognize its promise as a travel destination. My guess is that
many people don’t even know where Armenia is, and so I figured I’d
talk a little bit about the country.
Well, the fact is that Armenia is surrounded by a lot of folks
you probably HAVE heard of. Namely, Iran, Turkey, Azerbaijan,
and Georgia. And my guess is that with the exception of Turkey,
these countries are also not on the top of your travel list (although
perhaps we should all expand our horizons a bit…I am told that Iran,
for example, is a superb place to see). But Armenia especially deserves
consideration. Why? Because there are some things happening here right
now that are changing the face of the country, and because Armenia has
some unusual characteristics that make it a very appealing destination,
even if you’re just stopping by on the way to some place else.
The first big thing happening is modernization and Westernization. As
a former Soviet republic that only gained independence in 1991,
Armenia has been locked in a post-Soviet stupor that it is only now
emerging from….or so the folks I’ve been talking to tell me. Basic
democratic freedoms that are less vibrant in other countries nearby
are alive and well here. People feel free to speak their minds,
and they are building a culture of tolerance and freedom. People are
building successful businesses, examining their place in the world.
They want to play a larger role, and their culture It is a very
exciting time for Armenia.
Another thing is that Armenians (already very friendly and welcoming)
are particularly fond of Americans. They are a Christian nation
surrounded by Muslim nations. Many people speak English and/or
several other languages. I was out last night with a couple of guys
who between them spoke German, Spanish, French, Armenian, English
(perfectly), Japanese and Italian. The fact is, more Armenians live
outside of Armenia than inside the country. The reasons for this are
several, but include the genocide around the First World War, the
Soviet occupation and to seek a better life in general. Many of these
Diaspora Armenians, as they are called, ended up in the US, mostly
California, and so they are completely versed in American culture.
And now many of these so-called Diaspora Armenians are heading back
here to live and build up the country, to make it a viable Western
democracy, which, although there are some problems (corruption and
so forth) it is doing.
Anyway, I don’t want to speak in such detail about a place I’ve only
been visiting for a short time. What I write here is based partly on
what I’ve read, but also significantly on what I’ve learned in talking
to people on the streets and while hanging out in Yerevan. As I said,
I am impressed and excited for this small country. It is very much
the kind of place that Americans should celebrate and support.
Western-looking, entrepreneurial and enterprising, rich in culture,
friendly and open…I honestly think you should check it out. (and
if any of this seems rambling and nonsensical…forgive me. I was
out until 2 am last night and just woke up)

ARMINFO News Agency
September 21, 2005
THE ARMENIAN SAILING CHAMPIONSHIP, DEDICATED TO ARMEN ERITSIAN, A
FREEDOM-FIGHTER, WILL TAKE PLACE AT LAKE SEVAN
YEREVAN, 21.09.05. ARMINFO. On September 23-25, at lake Sevan
Sailing Championship of Armenia will take place the. The championship
will be dedicated to Armen Eritsian, a freedom-fighter, killed in the
Karabakh War, who was one of the founders of windsurfing in Armenia.
According to the report of Mher Tovmasian, the press-secretary of
Armenian Sailing Sports- Center, the opportunity of having the
championship is owed to Mr. Robert Kocharian, the President of RA,
who devotes much attention to sports in the country. “The competition
is organized to the perpetuate memory of our friend Armen and its aim
is to make surfing popular in Armenia,” said Mr. Tovmasian. He also
said that the organizers intend to re- establish the Armenian Sailing
Federation, that was closed in the early 90’s.
Vice Miss Europe Lusine Tovmasian will visit the participants.
Everyone who wants to take part in the competition, can take a free
bus that leave for Sevan on September 23, 6:00 P.M. from Yerevan,
Isahakian str. 28.

The Standard (St. Catharines, Ontario)
September 21, 2005 Wednesday
Final Edition
EU’s door still open for Turkey: Close vote in German election could
prevent de-facto veto of Ankara’s membership application
by Gwynne Dyer, Special to The Standard
The near-tie in the German election, in which Chancellor Gerhard
Schroeder came from 13 percentage points behind conservative
challenger Angela Merkel in late August to less than one point behind
her by the Sept. 18 vote, has thrown German politics into turmoil,
but one thing is clear. The door through which Turkey hopes to enter
the European Union, which Merkel had promised to slam shut, is still
open. The entry negotiations begin Oct. 3 and Turkey is still a
candidate for full membership.
Merkel launched a high-profile campaign last month to block Turkey’s
entry, sending letters to EU leaders in other countries asking them
to offer Turkey not full membership but only “privileged
partnership.” “We are firmly convinced,” she wrote, “that Turkey’s
membership would overtax the EU economically and socially and
endanger the process of European integration.” In other words, Turks
are poor (though she did not object to other candidates like Bulgaria
and Romania that are not significantly richer), they’re Muslim, and
there are far too many of them.
It was a cynical appeal to the anti-Turkish and anti-Muslim
prejudices of German voters who are already uncomfortable with the
growing diversity of their county (about three per cent of Germany’s
80 million people are of Turkish origin), and fear a further influx
of immigrants if Turkey joins the EU. It was also bit late in the day
to raise such objections, since Turkey has been a recognized
candidate for full EU membership for the past six years. But if
Angela Merkel had become the leader of a strong majority government
in Germany, the biggest country in the EU, the Turks would have been
betrayed and rejected once again.
Turkey has tied itself into knots in order to meet the EU’s standards
for membership, and that has been a good thing for the Turks, who now
live in a far more just, equal and democratic country than they did a
decade ago. But they do feel that they have kept their side of the
bargain, and only six months ago, all three of the most powerful EU
countries, Germany, France and Britain, firmly backed Turkey’s
membership.
But then came the French and Dutch votes last May and June that
rejected the proposed new EU constitution and the whole scene turned
sour.
France wavered first, with new prime minister Dominique de Villepin
pandering to anti-Muslim sentiments in France by sounding very cool
about the prospects for Turkish membership. Then Angela Merkel in
Germany went further, advocating only “privileged partnership” for
Turkey — and though Chancellor Gerhard Schroeder still backed
Turkey’s membership, her election victory seemed so certain that
Turkish Foreign Minister Abdullah Gul felt compelled to warn that
“should (the EU) place anything short of full membership (on the
table), or any new conditions, we will walk away. And this time it
will be for good.” Only Britain still backed Turkey unequivocally.
To make matters worse, Turkey announced that while it would sign a
customs deal opening up trade with all 25 EU members, it would still
not recognize the government of the Republic of Cyprus, one of the 10
countries that joined the EU in May, 2004. French president Jacques
Chirac promptly tried to turn that declaration into a proof of
Turkish bad faith, insisting that it “poses political and legal
problems and is not in the spirit expected of a candidate to the
Union.”
In fact, it was quite reasonable, since Cyprus has been divided since
a Greek-Cypriot coup in 1974 that aimed to unite the island with
Greece triggered a Turkish invasion to protect the Turkish-speaking
minority. The government of the “Republic of Cyprus” rules only the
Greek-speaking part of the island. Last year, both the
Turkish-Cypriots and Turkey itself supported a United Nations plan to
reunite Cyprus while the Greek-Cypriots rejected it, so Abdullah Gul
felt fully justified in refusing to recognize the current government
in Nicosia as the sole representative of all Cypriots — but he did
promise “to establish relations with the new partnership government
that will emerge following a comprehensive settlement on Cyprus.”
Even the start of Turkey’s membership talks early next month was
looking in doubt. Cheat the Turks on that and they would surely walk
away, abandoning the vision of a broader Europe that rises above the
old mutual fear and suspicion between Christians and Muslims, and
also ending all hope that countries east of Turkey, like Georgia and
Armenia, might one day qualify for EU membership. The situation
looked pretty grim — and then Angela Merkel stumbled.
She may yet end up as chancellor of Germany at the head of some
awkward three-party coalition — the outcome may not be known for a
month or more — but it would not be the kind of strong, cohesive
government that could impose a de-facto German veto on Turkish
membership of the EU. And it could even be the Comeback Kid himself,
Gerhard Schroeder, a strong supporter of Turkey, who forms the next
German government.
As for Cyprus, EU ambassadors agreed in Brussels last Monday that
while Ankara must eventually recognize the government of Cyprus, that
can happen at any point in the entry negotiations, which are expected
to last up to 10 years. That leaves plenty of time for a settlement
that includes Turkish-Cypriots, too, so Ankara will go along with it.
One more crisis has been surmounted and the talks will begin Oct. 3
as planned.
Gwynne Dyer is a London-based independent journalist whose articles
are published in 45 countries.
From: Emil Lazarian | Ararat NewsPress

+++++++++++++++++++++++++++++++++++++
Armenian National Committee of America – Western Region
104 North Belmont Street, Suite 200
Glendale, California 91206
Phone: 818.500.1918 Fax: 818.246.7353
[email protected]
++++++++++++++++++++++++++++++++++++++
PRESS RELEASE
Wednesday, September 21, 2005
Contact: Talin Gregorian
Tel: (818) 500-1918
ANCA-WR WRAPS UP LOCAL SUMMER INTERNSHIP
LOS ANGELES, CA – The Armenian National Committee of America-Western
Region (ANCA-WR) recently wrapped up its Annual Summer Internship
Program, which took place at the regional offices in Glendale, CA.
The internship program is an opportunity for Armenian American youth
to gain the experience of grassroots community outreach by working on
a variety of issues of concern to Armenian American communities such
as increasing Armenian American political activism at the local level
and developing economic links between California and the Republic of
Armenia.
`This internship allows us to further advance our grassroots efforts
in the Armenian American communities. Having the opportunity to help
the youth perfect its grassroots and advocacy skills will ensure that
the Armenian Cause will continue to advance,’ said ANCA-WR Board
member Leonard Manoukian.
This year’s interns were chosen from a large pool of young Armenian
American community-leaders and activists. Through the extensive
application process completed by the ANCA-WR Executive Board, Kaiane
Habeshian and Shant Krikorian were selected for the six-week program.
Kaiane Habeshian, a resident of Waltham, MA, is in her second year at
Brandeis University in Massachusetts where she plans on double
majoring in Biology and Spanish. For the past three years, Kaiane has
been a copyeditor for The Armenian Weekly. She is also currently
playing a key role in establishing an Armenian Student Association at
her university.
Shant Krikorian who is a resident of Glendale, CA is in his first year
at the University of California, San Diego (UCSD). He has grown up as
an active member of the Armenian American community, having been a
Patrol Leader in the Homenetmen Glendale `Ararat’ Chapter’s Scouting
Division. He was also most recently a board member of the
Transnational Council of the European Union Center of California.
The ANCA is the largest and most influential Armenian American
grassroots political organization. Working in coordination with a
network of offices, chapters, and supporters throughout the United
States and affiliated organizations around the world, the ANCA
actively advances the concerns of the Armenian-American community on a
broad range of issues.
From: Emil Lazarian | Ararat NewsPress

TELEGRAM & GAZETTE (Massachusetts)
September 13, 2005 Tuesday, ALL EDITIONS
New crosses to grace outside of Armenian church
WORCESTER
The Armenian Church of Our Savior consecrated two new exterior
crosses Sunday. The largest cross will replace the existing one on
the dome, and the smallest will replace the existing one on the gable
at the front end of the church. His Eminence Archbishop Khajag
Barsamian, primate of the Diocese of the Armenian Church of America,
shown in the center of the top photo, leads the consecration
ceremony. The purchase of the crosses was made possible through a
donation from Margaret E. Bedrosian of Worcester and her family in
memory of her late husband, Edward. In the photo at right, Mrs.
Bedrosian, left, receives a hug from fellow parishioner Margaret
Kazarian of Worcester.

ARKA News Agency, Armenia
Sept 19 2005
MEMBER OF UAE SUPREME COUNCIL TO VISIT ARMENIA
YEREVAN, September 19. /ARKA/. The member of the Supreme Council of
the United Arab Emirates (UAE), Emir of Sharja, Sultan Mohammad
Al-Kasimi is to be on an official visit to Armenia on September
19-21. The press service of the RA Foreign Office reports that during
the visit he is to hold meetings with RA President Robert Kocharyan
and Premier Andranik Margaryan. Sultan Mohammad Al-Kasimi is to visit
the Tsitsernakaberd Memorial to Genocide victims, National Picture
Gallery of Armenia, where Days of Culture of Sharja are to be opened.
He is also scheduled to meet with students of Yerevan State
University, visit the RA National Academy of Sciences and
Matenadaran. Sultan Mohammad Al-Kasimi is also to visit Sevan and
Dilijan. P.T. -0–

Azerbaijan: Country outlook
COUNTRY VIEW
ECONOMIST INTELLIGENCE UNIT
PUBLICATION DATE: September 07, 2005
OVERVIEW: Although the Economist Intelligence Unit’s baseline forecast
assumes that the president, Ilham Aliyev, will continue to consolidate
his authority and remain in power over the forecast period, there is
still a small risk that an aggressive attempt to restructure the
political scene could antagonise members of the ruling elite, leading
them to challenge his authority. There is also likely to be unrest
surrounding the forthcoming parliamentary election. The economy is
expected to continue to grow rapidly, owing to external investment in
the energy sector and rising energy production. Real GDP growth is
forecast to reach 20% in 2005, owing to a substantial increase in oil
output, and will accelerate to 25% year on year in 2006, as gas
production begins to rise in tandem with oil volumes. As there are only
limited sterilisation tools available, the authorities will allow a
slight nominal appreciation of the currency against the US dollar, which
will keep inflation in check. The current-account deficit is forecast to
swing into substantial surplus in 2006, as oil production is ramped up.
Domestic politics: The political scene will be dominated in the short
term by the approach of the parliamentary election, which will be held
on November 6th 2005. Although Mr Aliyev is likely to survive
politically the tensions that will build as the election approaches, he
will probably emerge weakened from the process. Largely thanks to a
changed international context, the opposition is thus expected to be
stronger and more influential after the election. It has become
increasingly clear that the government’s long-standing strategy of
manipulating elections and excluding the opposition from power is less
viable than before. International pressure for increased political
liberalisation, particularly from Azerbaijan’s most important ally, the
US, has increased considerably in recent months, and the government is
now more likely to shy away from the sort of blatant electoral
manipulation seen in the past.
International relations: One development that is increasingly affecting
Azerbaijan’s foreign policy is the greater stress by the US government
on the promotion of democracy. In the past the US was willing to work
with the semi-authoritarian leadership in Azerbaijan, since it was
preferable to the chaos that dominated the country in the years
immediately following independence. Although this policy has now
changed, the difficulty for the US will be to judge the amount of
pressure that it will be able to exert on Azerbaijan’s leadership
without triggering an upheaval. The new US policy will also create
problems for Mr Aliyev. He will find it harder now to fulfil one of the
main objectives of Azerbaijan’s foreign policy–namely, promoting closer
ties with the US, with the goal of fending off interference from its
larger neighbours, Russia and Iran, and avoiding the animosity of
smaller countries in the region, such as Armenia and Turkmenistan.
Policy trends: Economic policy will focus on the challenge of
maintaining macroeconomic stability during a period of rapid economic
growth. The fiscal stance will be loosened slightly, so that spending
increases on welfare projects to alleviate poverty and to stave off
potential social unrest. A tightening of monetary policy is therefore
likely to be required. The level of official debt, both domestic and
foreign, will remain low, but the issuance of domestic debt will
increase as a way of mopping up any excess liquidity linked to by
hard-currency inflows. However, inflation is still likely to be higher
than in recent years, because of the limited number of policy tools at
the disposal of the Azerbaijan National Bank (ANB, the central bank),
and because the bank will be reluctant to let the exchange rate
appreciate significantly. In the event that the authority of Mr Aliyev,
comes under serious challenge, this would result in a bout of political
instability, and even limited reforms would be put on hold. However,
every effort would be made to ensure that the operating environment for
oil companies remained favourable.
International assumptions: As a result of the ongoing strength of oil
demand and our long-standing forecast for a slowdown in the growth of
supplies from both Russia and other non-OPEC producers, we expect prices
for dated Brent Blend to average US$55.5/barrel in 2005. This price
projection includes a risk premium to reflect the growing concerns over
global spare capacity in crude oil and tight refined capacity. As OPEC
production gradually rises, global stocks will continue to build
(particularly once the US driving season ends), and we expect prices to
ease slowly from current highs. However, prices will be subject to
occasional sharp increases. Geopolitical concerns and price expectations
will encourage consumers to continue to make forward purchases, as well
as to stock up in anticipation of uncertainties and perceived tightness
ahead. By 2006 we expect an annual average price of US$53.5/b for Brent.
Economic growth: A surge in oil production at the Azeri-Chirag-Guneshli
(ACG) oilfields, which began in February, pushed up real GDP growth to
18.9% year on year in the first seven months of 2005, compared with 9.4%
in the year-earlier period. We expect the economy to expand by 20% year
on year in 2005, reflecting strong growth in oil production and
extremely high oil prices. Growth will accelerate to 25% year on year in
2006, owing to the completion of the first phase of development of the
Shah Deniz gasfield and further rises in oil output. Economic expansion
will also be supported by continued large-scale inflows of foreign
direct investment (FDI) into the oil and gas sector, which is undergoing
a rapid and intensive phase of development. Capital investment in
January-July 2005 reached Manat14.8trn (US$3.1bn), up by nearly 10% year
on year. Capital investment now accounts for about 50% of GDP.
Hydrocarbons development and production will drive economic growth over
the forecast period. However, strong growth will be limited to oil and
related sectors, such as communications, and hotels and catering, with
the contribution to GDP of the broader non-oil economy set to decline
gradually.
Inflation: High FDI inflows related to hydrocarbons development pushed
up consumer price inflation to 15.7% year on year in April, but the
ANB’s decision to raise interest rates in subsequent months slowed
inflation to 12.8% year on year by July. Hard-currency inflows, combined
with additional inflows related to the rapid growth in oil exports (not
all of which will be sterilised by channelling them in the overseas oil
fund), will continue to exert inflationary pressures, although seasonal
declines in food prices will temper month-on-month consumer price
inflation. Average annual consumer price inflation is expected to be 12%
in 2005, and will fall to 8.5% in 2006 as monetary policy tightens
further. Decelerating inflation will be helped from the second half of
2006 by a decrease in FDI as hydrocarbons activity enters a less
intensive phase of development, and as some export earnings are diverted
into the SOFAZ oil fund.
Exchange rates: Although the government sterilises part of the oil
windfall by depositing foreign currency in its overseas oil fund,
hard-currency inflows are still affecting the economy and boosting the
money supply. The ANB will allow the manat to appreciate slightly in
nominal terms over the forecast period, in order to restrain the
expansion of the money supply and contain consumer price inflation. The
recent rise in interest rates will not help to prevent further real
appreciation, although the amount of speculative capital that is likely
to be attracted into domestic assets will be very small, given that
there are few attractive assets on offer. Some of the products of the
non-oil sector will be priced out of their export markets by the
stronger manat.
External sector: With the hydrocarbons sector at an intensive stage of
development until the middle of 2006, import spending will be extremely
high over this period. Foreign investment projects in Azerbaijan’s
hydrocarbons sector require substantial imports of capital goods and
services, since Azerbaijan’s industrial base is insufficiently developed
to service oil and gas investors. High oil prices in 2005 will ensure
that the current-account deficit decreases significantly, and it will
swing into substantial surplus 2006, when exports of crude oil and gas
surge. The first tanker of oil from Azerbaijan’s ACG oilfields will be
shipped to Western markets towards the end of 2005, while the export of
gas from the Shah Deniz field will begin from mid-2006. The external
deficit in 2005 will be entirely covered by FDI.
SOURCE: Country outlook