Author: Khondkarian Raffi

INTERVIEW : CONDITIONS OF WB SME DEVELOPMENT CREDIT ARE UNIQUE
Artur Yernjakyan, Lilit Aslanyan

ArmInfo
2009-12-11 23:25:00

At the end of last year the Government of Armenia requested for
new credit proceeds from the World Bank. Subsequently, under its
assistance strategy, the WB decided to provide a credit of up to $545
million to Armenia during 2009-2012. From this credit $50 million is
intended for implementation of the program for financing small and
medium businesses in Armenia – whose development is identified by the
Armenian authorities as a priority during the ongoing crisis. The
ASME facility agreement was signed in February 2009 between the
Central Bank of Armenia and the International Bank for Reconstruction
and Development (IBRD) which is part of the World Bank Group. Under
the CBA guidance the proceeds have been disbursed through 8 Armenian
commercial banks since July this year. However, implementation of the
program is less favorable compared to other sources of financing. In
his interview to Arminfo, Michael Edwards, the World Bank Principal
Financial Advisor of the Private and Financial Sector Department,
has commented on these and other issues on the ASME facility.

Mr. Edwards, what portion of the ASME facility has been transferred
to the Central Bank and how much money will be utilized by the end
of this year?

To date the Central Bank has received 25 million on its account, i.e.,
half of the facility, and this money is being used by 8 commercial
banks which about have qualified for this facility. As of the end of
October, of these proceeds AMD 2.6 billion was provided to small and
medium businesses. We anticipate that by the end of 2009 lending will
increase. It was planned to disburse $10 million for the first year
and $20 million for the 2nd and 3rd years each. What distinguishes
this facility is that banks provide lending to SME businesses in AMD
(or USD if exporters) at a maturity of up to 5 years and its conditions
are highly competitive and unique in the market.

According to some banks, the conditions of the WB facility are
uncompetitive compared to other credit programs. Are you planning to
revisit the terms and conditions of this facility? Don’t you think
that it is being utilized at slow rates given its volumes?

In February, 2009 the credit proposal was presented to the WB Board
of Directors, and at that time none of us knew what the situation
would be like in the country. After the credit agreement was signed
Armenia received a number of credits, and, in particular, arrangements
were reached on extension of a sub-loan by Russia. Thus, the WB
ASME facility became one of the several sources for mitigating the
consequences of the global crisis. Since then we have revised several
of the credit conditions, namely, reduced the credit interest rate,
and allowed additional collateral and relaxed credit documentation
requirements. This was done in order to facilitate the process
of lending by banks. A considerable contraction took place in the
Armenian economy during the crisis, and only in the third quarter
some recovery was seen. During this period foreign remittances
considerably dropped. In these circumstances we believe that the
facility performance is good. This week we met with banks to make
sure that they would continue their active involvement in the program.

To what extent was the interest rate reduced and when?

In February when the facility was approved, the interest rate on the
Central Bank on-lending to banks was 8,5% and in early September it
was reduced to 7%.

While the Central Bank re-financing interest rate is 7%, the commercial
banks provide lending from these proceeds at 18%. Don’t you think that
during the ongoing economic downturn this margin is rather high given
that the Government provides financing to large enterprises at 10-11%
interest rate?

The WB did not set limits on lending conditions by commercial banks,
as we cannot distort the market. And that’s how we work with any
country. Therefore, banks are free to define their own interest rates
based on market circumstances and risk assessment. I would like to
mention that the SME sector is becoming more and more competitive
because the number of banks willing to provide lending to this sector
grows. Therefore, interest rates have begun to fall.

First of all, interest rate reflects the cost of risk. Some
banks provide lending without any security, for example, through
credit cards. This kind of lending has a rather high interest rate
because it also covers the existing high risks, while in general SME
credits are backed by collateral and often real estate is used as
a security. In this case the interest rates are lower. But interest
rates are determined also by other factors. For example, in Armenia
if a borrow is insolvent and unable to repay its debt, then litigation
for collecting the debt lasts very long, and seizure of assets itself
can take a year or even more. Unfortunately, it is another determinant
factor for credit pricing.

You mentioned that more relaxed documentation requirements are set.

Could you please give us some details on this? Can looser credit
conditions be set in future?

We always try to offer lending conditions which would allow banks to
use the source of financing. Similar SME programs are organized by
the World Bank in many countries, and, of course, we look for ways for
tailoring the financing to the circumstances of each specific country.

We always consider changes which are aimed to facilitate the receipt
of credit proceeds by commercial banks. For this reason, revisiting
the conditions is a dynamic rather than static process. As to any
further changes in the lending conditions in Armenia, if necessary
these can be revised. At any rate, we aim to involve new participants
in the program.

Can we assume that the list of the participating banks will change,
including through involvement of credit institutions in the program?

And, overall, what is your assessment of the involvement of commercial
banks in the program?

We have raised the question of renewing the list of participants with
the Central Bank. We expect that by the end of this year there will
be a new roster. As to credit institutions, the CBA – which selects
the participants of the program itself – has stated initially that
it is desirable to have only commercial banks in the program. For
credit institutions, so far as I know, the CBA has already asked
some micro-financing companies to determine their level of interest
in the program.

Earlier the Minister of Finance Tigran Davtyan made a statement that
the Government of Armenia is discussing with the IMF and the World
Bank issue of restructuring the existing and expected credits in
order to relax the lending conditions. Do you think that restructuring
is possible?

We do not distinguish between countries based on credit risks, i.e.,
all countries receive WB credits at the same interest rates. In
reality, the WB credits are inexpensive and for many countries they
represent the most favorable source of financing.

Thank you for the interview.

ERDOGHAN’S JUSTIFICATIONS SOUND RIDICULOUS

/PanARMENIAN.Net/
10.12.2009 18:47 GMT+04:00

/PanARMENIAN.Net/ The meeting between Turkish Prime Minister and U.S.
President correspond to Turkey’s interests, according to ARFD Hay Dat
Bureau Director Giro Manoyan. Erdoghan’s statement on the necessity of
progress in Karabakh process testify to Turkey’s inability to impose
its position on U.S. President, he told Thursday a news conference
in Yerevan.

"That enables Armenian authorities to declare their intention of
changing ‘football diplomacy’ rules and torpedo talks," he said,
characterizing Turkish Parliament’s failure to publish conclusion on
Protocols by December 7 as constitutional violation.

Besides, he said, Erdoghan’s statements on Turkish executive’s
inability to exert pressure upon the legislative sound ridiculous.

"The sooner Armenia speaks about Turkey’s violations of negotiation
process, the sooner it will protect itself from the imminent threat,"
he said.

ERDOGAN RULES OUT RATIFICATION OF PROTOCOLS WITHOUT PROGRESS ON KARABAKH
Emil Sanamyan

Armenian Reporter 10 December 2009

It is up to the Turkish parliament to ratify the agreements reached
with Armenia, and ratification depends on progress in the Karabakh
talks, Turkey’s Prime Minister Recep Tayyip Erdogan said during a
visit to the United States this week.

In October, Turkey and Armenia signed protocols on the normalization of
relations, under the terms of which Turkey would lift its land blockade
of Armenia, but the agreements can only take effect after parliamentary
ratification. The protocols make no reference to Karabakh.

In an interview with PBS’ Charlie Rose on December 8, the Turkish
prime minister said that he did not believe the Turkish parliament
would ratify the agreements without progress in the Karabakh talks.

In a press conference on December 7, he claimed that the parliament
would vote "independently." Mr. Erdogan’s political party has a
two-thirds majority in parliament. He recalled the March 1, 2003 vote,
in which the parliament refused to grant permission for the United
States to use Turkish territory for ground attacks against Iraq.

At the press conference Mr. Erdogan said that France, Russia, and
the United States, as mediators coordinating the talks, should infuse
"more excitement, more enthusiasm in the Karabakh peace process and
both Armenia and Azerbaijan need to rise to the occasion" to make
progress (…)

OHANYAN’S RECOGNIZED BY CITY OF FRESNO

Business Journal staff
Thursday, 10 December 2009 10:34

The City of Fresno recognized a local meat distributor today as part
of its Prime Time for Business program honoring businesses that have
achieved notable success.

Ohanyan’s Bastirma and Soujouk Manufacturing Company and International
Deli is the latest selection of businesses invited each month by the
Department of Downtown and Community Revitalization to appear before
the City Council to share their backgrounds.

The company, which started in 1975 with a deli at the corner of West
and Shields avenues in Fresno, now distributes its unique Armenian
meat products to fine delicatessens and specialty grocery stores
across the United States.

Owners Jerry Hancer and Marcus Garabetyan closed the original
location earlier this year in order to expand its reach and focus on
manufacturing. The company produces more than 15,000 pounds of meat
per week at its factory at 3296 W. Sussex Way, distributing bastirma,
soujouk, salami and prosciutto to markets as far as Los Angeles,
Chicago, New York, Michigan, Texas and Florida.

"Once you taste their product, you’ll wonder why it is not more
widely available," said Craig Scharton, Director of the Department
of Downtown and Community Revitalization. "It’s incomparable to what
you can find in most deli cases, and the product is a reflection of
the rich Armenian culture that we embrace as a community,"

S. SARGSYAN SAYS ARMEIA THANKFUL TO LATVIA FOR BALANCED APPROACH OVER NAGORNO-KARABAKH ISSUE

Panorama.am
17:10 10/12/2009

Armeia is thankful to Latvia for its balanced approach over
Nagorno-Karabakh issue, Armenian President Serzh Sargsyan told
reporters at a joint press conference with Latvia’s President Valdis
Zatlers.

"Armenia is thankful to Latvia since it sees our disposition and
demonstrates a balanced approach over Nagorno-Karabakh issue," Serzh
Sargsyan said.

He said, they had also referred to the regional conflicts during the
meeting with his Latvian counterpart.

We have reached a common conclusion that the conflicts be regulated
without force implementation, exceptionally peacefully and through
talks, in compliance with the norms of the international law,"
S. Sargsyan highlighted.

MENSOIAN: TRANSLATING THE ARF ROADMAP TO REGIME CHANGE INTO ACTION (PART II)
By Michael Mensoian

Armenian Weekly
December 9, 2009

The roadmap to regime change is a response to conditions that were
crystallized by the recently signed protocols which represent the
first step in the process of rapprochement between Armenia and Turkey.

The ARF has properly viewed these documents as being detrimental
to Armenia’s present and future national interests. In response to
this assessment, the party has announced its formal opposition to
the protocols. In Part I an explanation was offered as to how the
ARF can deliver on its roadmap to regime change. Although this is
a gargantuan task for which the ARF has the necessary experience
to undertake, it is the how of the undertaking that is crucial. The
response by the ARF, if it is to be effective, must be multi-faceted
in its objectives and multi-operational in its implementation. The
use of demonstrations and rallies within Armenia and throughout the
Armenian Diaspora are means to address the first objective: to prevent
ratification of the protocols by the Armenian Parliament. The need for
an informat ion gathering and distribution system, and the convening
of conferences where the objectives of the roadmap are presented to
selected audiences, were suggested as vital components of the effort
at regime change. The need to develop a program that would assist
journalists, legislators, advocacy leaders, and businessmen to hear
and view firsthand the conditions in Javakhk and to understand the how
and why of the Karabaghtsis’ demand for independence were discussed.

Part II considers the remaining two objectives of the roadmap: a viable
socio-economic program and preparing for the forthcoming elections. The
need to create a cadre of field workers to develop grassroots support
for the ARF’s initiatives to improve the standard of living of the
workers and their families, and to win their support for the ARF
candidates for president and parliament in the forthcoming elections,
is an absolute necessity to ensure a reasonable certainty of success.

The program to improve the quality of life of the worker and his
family must be doable and not campaign pie-in-the-sky rhetoric that
will appeal only to the most desperate members of society. Again,
the participation of Armenian men and women with expertise in the
fields of education, medical delivery systems, agrarian reform,
housing, rural infrastructure, etc. must be enlisted to formulate
practical programs that are not only on target, but can be achieved
with the limited resources that will be initially available. Promising
more than can be delivered is anathema to the long-term support that
the ARF requires. The Armenian worker has become cynical by having
relied on too many promises made and not kept. The inadequacies
of the oligarchic Sarkisian government in failing to include the
workers in an equitable sharing of the wealth that they have produced
must be relentlessly hammered home. More importantly, the ARF must
explain-point by point-how the Sarkisian Administration’s failures
will be effectively a ddressed by the program proposed by the ARF to
improve the workers’ quality of life.

The remaining objectives demand that the ARF prepares for the
forthcoming Armenian parliamentary and presidential elections
in 2011 and 2013, respectively. The ARF must begin the task of
selecting viable candidates for president and parliament. These
potential candidates must become the face of this roadmap to regime
change. They should become household names and faces, and appear at
rallies, demonstrations, and conferences. The presidential candidate
must tour the diaspora explaining why the roadmap to regime change
is important for Armenia’s political viability, how it will be
implemented, and its relationship to the legitimate objectives of
Hai Tahd (the Armenian Cause). The candidate’s presence should be
used to raise funds to underwrite what will be an expensive program
if regime change is to be achieved. The presidential candidate should
meet with sympathetic journalists, business leaders, advocacy leaders,
and legislators (especially members of the United States Congressional
Armenian Caucus) wherever the ARF has influence in the diaspora.

Winning the presidency must be viewed as achievable. Should the party
fail to elect the president, at the very least the ARF must win a
sufficient number of parliamentary seats to be able to advance its
legislative program for the benefit of the citizens and the state.

Working from a position of strength within the administration
(assuming the ARF is not the administration) is more effective than
working outside the government structure. However, being part of the
administration has its potential liabilities should the ARF be unable
to deliver on its program or is cast as part of the problems that
continue to persist. In a related note, the ARF’s recent participation
in the Sarkisian Administration did not earn it any accolades.

The Sarkisian Administration must be aggressively attacked on its
record of having failed to improve the condition of workers and
their families; on having failed to ensure the basic norms of free,
democratic elections; of having failed to have Karabagh recognized
as a member of the negotiation process; and of having failed to
effectively represent to the Georgian government the issues confronting
the Javakheti Armenians. This is a battle for the political survival
of the jomeland (Armenia, Artsakh, and Javakhk) for a better day for
workers and their families and for the Armenian Cause. There will be no
second chance. Given the enormity of what is at stake, no one should
doubt that the present administration and its supporters will seek
to create obstacles to hinder the ARF from holding political rallies,
having access to television time and media coverage, and importantly,
organizing grassroots support. The ARF must be prepared to respond
immediately and effectively to any counter efforts by Yerevan, Ankara,
and possibly by the Minsk Group should attempts be made to undermine
its efforts at regime change.

Organizing grassroots support is a vital component in gaining the
necessary public support for the ARF’s roadmap to regime change and to
ensure voter support for its candidates in the forthcoming elections.

Winning the "heart and soul" of the Armenian worker and his family
is a sine qua non if there is any hope of achieving this fundamental
change. The results of the parliamentary election in 2007 (winning
16 of 131 seats) and the presidential election of 2008 (where the ARF
candidate received under 7 percent of the total votes cast) indicate
what needs to be done if regime change is to be successful. To sell
its program and to develop the required grassroots support required
for electoral victories, the ARF must train a cadre of paid field
representatives who will live and work with the people they seek to
influence. Their pay would be in the form of a stipend in addition
to required expenses for travel, food, and lodging, which would also
be underwritten by the party. Working in pairs for moral support and
safety (should that become a factor), these field workers could live
with local families who would in turn receive payment for their room
and board. The ARF field representatives must be properly trained,
provided with relevant materials, and adequately monitored and
supported.

It is vital that these field representatives operate under the
supervision of district committees for each of Armenia’s 10 districts
and the capital district of Yerevan. Monthly progress reports would be
filed by each team with their respective district committee, who would
then file a summary report to be sent to the Central Committee. The
Central Committee would compile a summary report for distribution
to ARF regional central committees and from there to their local
gomidehs. Appropriate authorities would decide what material would be
released for public distribution. Being informed is a key requirement
to keep members and all segments of the Armenian community within
the homeland and the diaspora energized. These field workers would
be on the front line and would form an indispensible component in
implementing the roadmap. The field workers would be responsible for
explaining the roadmap’s objectives, to link the inadequacies of the
present administration with the solutions proposed by the ARF, and
to gai n support for the ARF candidates for parliament and president
in the forthcoming elections.

The republic is at a critical moment in its history. The roadmap for
regime change demands a full scale offensive that requires harnessing
human resources and fund raisingefforts far beyond anything the ARF
has ever attempted.

It must be recognized that Armenia is being pressured to normalize
relations with a government whose leaders remain unrepentant and
as anti-Armenian as their political progenitors who carried out the
systematic murder of some 1.5 million innocent Armenian men, women, and
children using the most heinous methods conceivable. The protocols are
documents that speak to Turkish interests, are supported by the Minsk
Group (France, Russia, and the United States), and are detrimental
to Armenia’s interests-dismissive of the injustices expressed in
Hai Tahd and contemptuous of Armenia’s sovereignty. That should be
sufficient to motivate any Armenian.

TURKS ARE INTERESTED IN REALTY
By Siranuysh Papyan

AZG DAILY
10-12-2009

Armenia – Turkey

Real estate workers say Turks are interested in the Armenian realty.

Have the Armenian real estate agencies already sold an apartment or
land to any Turk? According to the head of the Kentron real estate
agency Vahe Danielyan though they did not make such a deal but they got
a number of mails which are apparently sent by Turks. Vahe Danielyan
says that there was great number of mails on the eve of the signing
of the Armenian and Turkish protocols. Though the authors present
as Tom or use any other non-Turkish name, nevertheless the mails are
sent by Turks. "Turks are interested not in apartments but in factory
lands near Yerevan", says Vahe Danielyan noting that the authors of
the letters said they wanted to come to Armenia after October 11,
signing of the Armenian and Turkish protocols, to find an appropriate
version for them.

In answer to the question whether they will have the same feeling when
showing lands to Turks as they would have when showing to French or
English people, Danielyan said that from the point of business there
should be no difference.

The head though is afraid that the real estate market will activate
a little, but we have to think that if Turks open the border today
they may close it after six months and we will not have opportunities
to take our values back.

The head of the Cascade Realty agency Vardan Avagyan says by
legislation a foreigner does not have the right to buy land in
Armenia. "In other words, they have the right to buy realty but the
land on which it is, is not their property". Nevertheless, Vardan
Avagyan notes that by the opening of the Armenian and Turkish border,
the realty market will activate and adds that mainly shops, factories
will be sold which will cause much change.

Cascade Realty has not yet stipulated any deal with any Turk. And
the realtor Armen thinks the nationality does not matter as he is
already tired of the lack of deals.

UPHILL TURKEY-ARMENIA PROCESS SIGNALS PROBLEMS FOR ANKARA: TURKISH NEWSPAPER

ArmInfo
2009-12-10 16:01:00

ArmInfo. Failure to implement the Ankara-Yerevan normalization deal
will likely strengthen ‘genocide bills’ in US Congress, The Hurriyet
Daily News reported. Prime Minister Recep Tayyip Erdogan’s talks
with U.S. President Barack Obama at the White House earlier this week
have mostly been viewed as a success by analysts. However, an uphill
reconciliation process between Turkey and Armenia may be the sign of
a creeping deterioration in U.S.-Turkish ties next year.

The newspaper reports that in a letter to some major Armenian-American
groups last week, Obama also said, "Normalization between Armenia
and Turkey should move forward without preconditions and within a
reasonable timeframe."

Erdogan told Obama that reopening the border before progress is
achieved in the Nagorno-Karabakh conflict would ruin Turkey’s ties with
Azerbaijan and be viewed as completely unacceptable to Turkish voters.

"The normalization process between Turkey and Armenia is very much
related to these issues (of improvement of the Armenian-Azerbaijani
ties)," Erdogan told reporters at the White House. His remarks were
seen by some that the Turkish parliament would most probably not
ratify any normalization deal with Armenia before strong signs are
observed for an end to the Armenian occupation of Azerbaijani lands.

But even at a time when Washington is pushing for the normalization
process to be implemented "without preconditions and within a
reasonable timeframe," analysts agree that strong progress toward
putting an end to the Nagorno-Karabakh dispute seems unlikely, at
least in the short term. These all point to a potential stall in the
Turkey-Armenia reconciliation process. Obama, who as a candidate
had pledged to recognize the Armenian killings as "genocide" if
elected president during last year’s election campaign, reversed his
position as president this year and fully backed the Ankara-Yerevan
normalization process, saying he would refrain from any move that
would jeopardize the process. The Obama administration is expected
to continue to oppose congressional "genocide" recognition resolutions.

With the probable failure of the Turkey-Armenia normalization process,
the Armenian-American groups and their congressional backers are
planning to re-launch a strong campaign for the passage of two
"genocide" resolutions pending in the House of Representatives and
the Senate, the lower and upper chambers of Congress, respectively.

But in a year of election-related uncertainties in 2010, if such a
bill, by any chance, is passed by either the House or the Senate, the
Ankara-Yerevan normalization deal would be imperiled and U.S.-Turkish
relations could suffer in a major and lasting way, as Turkey has
already warned. Important congressional elections will take place in
November 2010, with the whole 435-member House and about one third
of the 100-member Senate to be renewed. And election years are times
when the influence of ethnic and interest lobbies are the strongest
in U.S. politics, the Turkish newspaper writes.

ARMENIA CLAIM THAT H1N1 DOES NOT DIFFER FROM ORDINARY FLU, BUT URGE CAUTION

PanARMENIAN.Net
08.12.2009 18:13 GMT+04:00

/PanARMENIAN.Net/ Chairman of the RA NA Standing Committee of Health
Ara Babloyan told a press conference on Dec. 8 that the virus H1N1 (
"swine flu") has the same pattern that an ordinary flu. There is no
need in taking special measures against this virus.

"Closure of schools and kindergartens is a classical measure to prevent
the possible epidemic, rather than the measure taken in connection
with a complicated situation in Armenia. But as the H1N1 virus is
not fully studied and is prone to mutation, everybody must be alert
and cautious, " Ara Babloyan stressed.

According Ara Babloyan, WHO recommends to vaccinate not the whole
population, but people at risk: small children, people with chronic
illnesses, the elderly and pregnant women. He informed that the
French Embassy in Armenia for the last three days has been vaccinating
against H1N1 citizens of France, located in Armenia.

Ara Babloyan informed, that 40 patients suffering from H1N1 influenza
are currently registered in Armenia.

MASSACHUSETTS SENATE CANDIDATE CAPUANO OPPOSES HISTORICAL COMMISSION

armenian weekly
December 7, 2009

The Congressman states positions on ANCA Questionnaire; Special
Election is Tuesday, Dec. 8

Congressman Mike Capuano (D-Mass.), affirmed his positions on a
number of issues of concern to the Armenian-American community
in his responses to the ANCA Questionnaire for candidates for the
U.S. Senate seat from Massachusetts. Concerning the provision in
the Armenia-Turkey Protocols for a historical commission, Capuano
responded that: "I consider the Armenian Genocide to be settled
historical fact and I oppose establishing a commission or any other
entity to reexamine that fact."

Capuano clearly expressed his support for the independence of the
Republic of Mountainous Karabagh and for providing continuing US
humanitarian and developmental aid to the republic, noting that he
has voted for such aid in the past and "will continue to support this
funding moving forward." Providing aid directly to Artsakh is a key
item in the legislative agenda of the Armenian National Committee of
America as it both assists the people of the republic and bolsters
its international legitimacy.

The congressman stated that: "I am in favor of continuing military
parity through funding provided by the U.S. to both Armenia and
Azerbaijan. I believe it is essential that we not exacerbate any
potential military conflicts in the region." He also expressed his
support for Section 907 of the Freedom Support Act that limits U.S.

aid to Azerbaijan until it lifts its blockades of Armenia and Artsakh.

While he supports using legislative and diplomatic tools to urge
Turkey to end its blockade of Armenia, he did not support linking
Turkey’s ability to purchase U.S. arms to ending the blockade.

"Mike Capuano’s forthright opposition to the establishment of a
historical commission, which would undermine decades of genocide
research, is consistent with his long record in Congress of speaking
out for justice for the Armenian Genocide" stated ANC of Massachusetts
Co-Chairman Dikran Kaligian.

The ANCA Questionnaire is distributed to candidates for federal
offices so that the Armenian-American community can be informed of
their positions on critical issues of concern before casting their
votes. The Democratic and Republican primary election will be held
Tuesday, Dec. 8 to fill the U.S. Senate seat that fell vacant with
the death of Senator Ted Kennedy.