Author: Hambardsumian Paul

GOVERNMENT ALLOCATES NINE MLN DRAMS FOR SCHOOL REPAIRS IN KARMIR
AGHEGHI AND KURTAN COMMUNITIES

YEREVAN, August 12 (Noyan Tapan). According to the decision made
during the August 12 session of the RA government, nine mln drams
(about $17.3 thousand) will be allocated to the Karmir Agheghi and
Kurtan communities of the Lori marz. Noyan Tapan was informed from the
RA government’s press service that these funds will be allocated for
the repairs of school buildings of these communities which suffered
from the July 26, 2004 heavy hail.

RIA Novosti, Russia
Aug 12 2004

KYRGYZSTAN MAY BECOME RUSSIA’S MAIN MILITARY-POLITICAL BASIS IN
CENTRAL ASIA

BISHKEK, August 12 (RIA Novosti) – Kyrgyzstan may become “the main
military-political basis for Russia in Central Asia,” declared Kyrgyz
foreign minister Askar Aitmatov.

He spoke on Thursday at the Russian aviation base in the Kyrgyz town
of Kant where he arrived to congratulate the Russian soldiers and
officers on their professional holiday – the Air Force Day.

The minister pointed to the importance of the Russian aviation base
in Kant and reported that the Kyrgyz foreign ministry had extended
its patronage to it.

According to Mr. Aitmatov, the opening of the aviation base in Kant
in October 2003 shows the allied nature of relations between
Kyrgyzstan and Russia and the striving of the two countries to make
the Collective Security Treaty Organization (CSTO) “the foundation
for ensuring security in Central Asia.”

(The CSTO includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia
and Tajikistan).

“The opening of the aviation base shows that we want to pool our
efforts in combating the common threats within the CSTO framework,”
the minister said.

He also stressed that the Rubezh-2004 exercises of the Collective
Rapid Deployment Force held on the territory of Kyrgyzstan in early
August demonstrated the resoluteness of the CSTO members to react to
any terrorists’ and extremists’ threats, and also showed up the
possibility of delivering pre-emptive blows.

There are about 15 military and military-transport planes and about
700 servicemen at the Russian aviation base in Kant.

The U.S. military base is located 30 km from Kant, in Manas. It
appeared in 2002 within the framework of the U.S.-led anti-terrorist
campaign in Afghanistan. At present approximately 25 planes and 2,000
U.S. servicemen are permanently deployed in Manas.

Interfax
Aug 9 2004

Combined Armenian bank credit portfolios expand 18% in H1

Yerevan. (Interfax) – Credit portfolios held by commercial banks in
Armenia increased 17.9% year-on-year to an aggregate 126.3 billion
dram in the first half of 2004.

The National Bank of Armenia reported that they had increased 5.3% in
June from May.

The bulk – 81.2 billion dram – of credit investments (excluding
extended and overdue credits) was currency credits, of which 38.7
billion dram represented long-term loans. Investments in the national
currency combined to 38.2 billion dram.
The official exchange rate for August 6: 518.34 dram/$1.

Hurriyet, Turkey
Aug 7 2004

MEANINGFUL INAUGURATION FROM PRIME MINISTER

Turkish Prime Minister Recep Tayyip Erdogan will inaugurate the
factory established by Efrim Bag, one of the famous businessman of
Turkish Armenian society, in Tatvan where he was born.

Nemrut Bims is the first and only factory of Tatvan having 150
workers.

Efrim Bag said, ”our target is to increase the employment potential
to 1000 people and export our products to whole Europe.”

A NUMBER OF BENEVOLENT PROGRAMS IMPLEMENTED IN VILLAGE OF ZORAKAN OF
TAVUSH MARZ

IJEVAN, August 6 (Noyan Tapan). A building of the communal center is
being built in the village of Zorakan of the Tavush marz where
refugees from the village of Chardakhlu of the Shamkhor region of
Azerbaijan live. It’s built with the resources of the RA Fund of
Social Investments amounting to $100 thousand. The building will have
an adiministration, a cultural center, a library and a first aid
post. The family of Hovnanians will donate another $10 thousand for
this program. “The Memory Fund of Jinishian” will donate $18 thousand
for the purpose of solution of the problem of potable water in
Zorakan. Besides, upon the “Provisions for Job” program the internal
irrigation network with a lengh of 13 km has already been repaired in
Zorakan. And a program of irrigation of pastures is implemented with
the financing of the JTZ German organization.

ARMENIA TO HAVE NEW COAT OF ARMS AND ANTHEM STARTING FROM OCTOBER

YEREVAN, August 4 (Noyan Tapan). A competition for new coat of arms
and anthem has been announced, the results of the competition will be
summed up in early September. The Commission on Consideration of
Competition Proposals was established by the decision of Yerevan Mayor
Yervand Zakarian. Gagik Baghdasarian, Chief of the Organization and
Inspection Department of the Yerevan Mayor’s Office, told NT’s
correspondent that discussions with the participation of specialists
will be organized for the public discussion of the works submitted to
the competition. According to him, the new flag and the anthem of the
capital will be presented along with the coat of arms of Yerevan
approved in 1994 at the Erebuni-Yerevan holiday, which will be marked
in October.

Azeri party pickets Foreign Ministry over Armenian NATO visit

MPA news agency
2 Aug 04

BAKU

The United People’s Front of Azerbaijan Party UPFAP picketed the
Foreign Ministry at 1200 local time, 0700 gmt today in connection with
the forthcoming visit to Baku of an Armenian delegation to participate
in regular NATO exercises. MPA reports that despite police opposition
the protesters managed to picket the building and shout slogans for
20-25 minutes. The protesters say that despite the fact they back
Azerbaijan’s pro-West policies and cooperation with NATO, the UPFAP
will protest against any abasement of the republic and the Azerbaijani
people. The pickets demand that the Azerbaijani authorities do not
allow representatives of the occupying Armenian army to come to
Baku. The demand was handed over to Foreign Ministry representatives.

Azerbaijani news agency Turan reported on 30 July that the Baku
mayor’s office had refused to authorize the picket.

Noyan Tapan Highlights #29 (531)
26 July, 2004

ARMENIA HAS CAUGHT THE DUTCH DISEASE

By Haroutiun Khachatrian

When summing up the results of the economy growth of Armenia in 2003,
the government said the per capita GDP has rose 10 percent to 871
dollar by the end of that year, a more than ten percent growth against
the previous year.

This, by the way, means that Armenia is no longer among the poorest
countries of the world. However, if one decides to calculate the same
ratio in early July, 2004, he will get 1027 dollars per capita, or 18
percent above the level of the preceding year, despite the fact, that
the GDP itself had grown only 9.1 percent. The miracle was due to
another fact, which was not expected or planned by the Armenian
authorities, namely, the growth in the dram rate against the US dollar
(and other currencies circulated in Armenia as well). This year, the
US dollar has dropped almost ten percent to its value of 1999.

The drop of the dollar rate was not expected for the participants of
the market either. This can be seen from the events of the last week,
when the dollar dropped more than 20 drams in three days (causing
almost a panic among the population), then recovered almost as quickly
(see fig 1). The immediate impression was that this is a confusion
among the market participants themselves, although interventions of
some players cannot be ruled out as well.

However, what is more surprising is that not only the participants of
the market, but also the authorities failed to realize the real trend
of the currency market. The fact was really not predicted by any of
the Armenian officials, enough to say that the budget was projected
for the average rate of 580 drams per dollar during the year. It is
evident from the chart placed monthly by the Central Bank (see the
respective chart for May 2004 in fig 2) that the rise of the dram
against the US dollar started as early as in March 2003. There are two
main reason for it, an increase in exports and the even more sizable
rise in private transfers to Armenian residents from abroad (see the
material on this page for more details).

Whatever the reason, the analysts say that the phenomenon is a typical
case of the so-called Dutch disease, the increase of the national
currency. It is usually caused by huge exports of oil (as it was the
case of the Netherlands in 1950s, from where the name arouse) and
which is usually harmful for all other branches of the economy of that
particular country. Armenia is not an exporter of oil, “but we are an
exporter of people instead” a businessman said with smile. In fact,
the reason why the transfers of Armenians abroad have grown so
significantly, and how long this growth will continue, is probably the
most intriguing question to be replied.

Meanwhile, the consequences of this rise in the dram rate (and of
course, the “storm” of the last week) are seen in the economy. In
fact, the exporters are not the only businessmen to suffer, as it
happens usually in the case of the Dutch disease. It has become a
tradition that business partners conclude their deals in dollars, with
payments to be performed in drams “according to the official rate of
the Central Bank of the payment date”. Due to this fact, the number of
those who suffered losses is much larger. An the authorities have no
leverages to protect them.

Poll shows majority of Lithuanians support further EU enlargement

Delfi web site, Vilnius
27 Jul 04

Two-thirds of Lithuanian residents support further enlargement of the
EU, and the majority of them are in favour of Ukraine’s admission to
the EU in the near future, a press release has said. The results were
obtained though interviews with people comprising a representative
sample of the country’s population, carried out by the public opinion
and market research centre Vilmorus on 8-11 July on the Foreign
Ministry’s request. As many as 62.6 per cent of respondents said they
supported further expansion of the EU, 12.6 per cent said they were
against it and 24.8 per cent were undecided. Those who back further
enlargement are mainly people aged 18-29 (67.3 per cent in their age
group ), 50-59 (66.7 per cent), 60-69 (68.2 per cent), as well as
schoolchildren (76.6 per cent) who were interviewed outside the scope
of the poll .

Those against the admission of new countries are mainly people aged
40-49 (14.9 per cent), university graduates (18.3 per cent), as well
as those whose monthly income per family member is less than 501 litas
176 dollars (19.9 per cent). The greatest number of the supporters of
EU enlargement live in Lithuanian towns, except five largest cities
(68.2 per cent), while the majority of its opponents live in Vilnius
(19.8 per cent).

The poll showed that people mainly support the admission of Ukraine,
Turkey, Croatia, Moldova and Georgia to the EU in the short term,
while opinions differ on the admission of Belarus, Armenia and
Azerbaijan.

As many as 36.9 per cent of those interviewed said they were in favour
on Ukraine’s admission in the short term; 31.8 per cent mentioned
Turkey; 31.7 per cent Croatia; 24 per cent Moldova and 20.3 per cent
Georgia.

The statement that Georgia should be admitted to the EU in ten years’
time was backed by 15.8 per cent of the respondents, while 14.6 per
cent said that this should happen in the long term. Ukraine scored
15.2 per cent and 10.0 per cent, respectively; Moldova 14.5 per cent
and 13.7 per cent; Croatia 10.7 and 7.8 per cent; and Turkey 9.5 and
7.7 per cent. Those opposing Georgia’s EU membership made up 15.3 per
cent, in case of Turkey and Moldova the percentage was 12.2 per cent,
Croatia 10.7 per cent and Ukraine 9.2 per cent.

Belarus’s entry to the EU in the short term was backed by 21.5 per
cent of the respondents, 12.6 per cent said this should happen in ten
years’ time, 16.3 per cent mentioned the long term and 20.2 per cent
said they opposed this altogether.

Armenia’s short term EU entry got the backing of 17.6 per cent of
those interviewed, 15.9 per cent said this should happen after a
decade, 15.2 per cent indicated the long term prospect and 16.2 per
cent said they were against its EU entry. In the case of Azerbaijan
the percentage was 14.7 per cent; 14.6 per cent; 15.7 per cent and
18.6 per cent, respectively.

Vilmorus interviewed 1,005 Lithuanian residents, aged 18 years and
older, from 18 towns and 58 villages after selecting them through
multistage random sampling. The margin of error of the results is 3
per cent.

Bilateral Jealousy Hinders development of Political-Economic Relations

Azg/am
24 July 2004

On July 22 Georgian Foreign Minister in his interview to the
journalists in the airport before leaving for Tbilisi, said that the
two countries should act as a united region in the relations with the
EU.

The official Yerevan is likely to be concerned about the position
Georgia has undertaken in the relations with EU. Tbilisi authorities
spare no efforts for emphasizing their country’s importance among the
three Caucasian countries, their devotion to Europe.

Salome Zurabishvili’s statement is likely to please the Armenian
side. In the airport Vartan Oskanian explained what it means “to act
as united region.” “It is really desirable, as the European
structures want that too. Unfortunately, there are problems in our
region and Azerbaijan is the only obstacle for being united. But we
will try to coordinate our cooperation with Georgia inthe best way. If
Azerbaijan wishes, it can join us”, Oskanian said.

Zurabishvili met with RA President, RA Prime Minister and RA NA
Chairman, besides meeting with her colleague. She evaluates her first
visit to Armenia positively. “We are determined to deepen our economic
relations. The political relations are very good, but they need to be
deepened too,” Zurabishvili said.

Vartan Oskanian also evaluates the visit of Georgian Foreign Minister
to Armenia positively.

There are two main blocks in our relations: business cooperation,
economic issues that will be discussed more thoroughly during the
visit of RA prime Minister to Tbilisi in the course of the
inter-governmental sitting. Duringthis visit we were more concentrated
on the conceptual issues, projects and programs. Regional issues,
general processes of our cooperation were touched upon. We discussed
railroad, gas pipeline, oil pipeline and transportation, transit
programs in general, as well as the Armenian-Georgian cooperation
within the framework of TRANSECA. There are certain agreements, but
according to the foreign minister, at present, there are no results
yet. We agreed to deepen cooperation and coordinate our activities in
other issues, particularly, in the European direction,” Oskanian said.

On June 14 Yerevan, Baku and Tbilisi joined “Larger Europe. New
Neighbors” EU initiative that envisages new level of relations between
the Caucasian countries and the EU. As we stated already, Tbilisi
tries to leave behind its two neighbors. Supposedly, Yerevan is
concerned about Georgia-NATO relations. The three Caucasian countries
cooperate with NATO on equal level within the framework of
“Partnership for Peace” program. The probable fast entry of Georgia to
NATO, the Georgian authorities often talk about, may cause dividing
lines in the Caucasus.

The integration into the European structures will be discussed during
the meeting of Zurabishvili with Andranik Margarian. “Emphasizing
Armenia=80=99 and Georgia ‘s determination in the European integration
issues, the sides pointed out the big possibilities for cooperation,
especially, taking into account the involvement of the Caucasian
countries into “New Neighbors” EU program,” writes the pres release of
RA President’s Press Office.

Robert Kocharian and Salome Zurabishvili stated that the level of the
bilateral economic relations doesn’t keep in line with the real
possibilities and intentions of the two countries. Kocharian
emphasized the importance of the economic cooperation issues and
intergovernmental committee’s activities. Let’s remind that RA Prime
Minister will leave for Georgia on July 25-27. Kocharian emphasized
“the high level of the Armenian-Georgian relations that are based on
mutual trust and friendship of the two peoples” during the meeting
with Zurabishvili.

Notwithstanding the fact that the Armenian-Georgian relations are
called friendly, there are many complicated issues in the
Tbilisi-Yerevan relations. The existence of a common border causes
some complications in the relations, as usual. In this respect, the
Armenian-Georgian relations can be no exceptionto the rule. On the
other hand, the relations between the two peoples lack mutual
trust. The lack of trust in the relations of the two countries is
conditioned by different, sometimes contradicting vectors in their
foreign policies. Very often Georgia is considered as a territory
divided in many parts that hinder the Armenian-Russian relations. In
its turn, Georgia considers Armenia as “Russia’s backdoor” and the
Russian soldiers located in Armenia as destabilizing factor for the
whole region.

Many other issues existing between Armenia and Georgia can be pointed
out. The most undesirable one among them is the mutual mistrust of
the common Armenian and Georgian towards each other. No one tried to
hold a poll to find out how much the Armenians mistrust the Georgians,
but a year ago, as a result of a poll, the Georgians found out that
they mistrust the Armenians most of all among their neighbors.

By Tatoul Hakobian